Leadership in Non Profit Organizations - Essay Example

?  Leadership in Non Profit Organizations Introduction The researcher contends that non profit organizations are different from the for-profit organization not only in terms of their mission, vision, organizational structure or funding methods, but also in terms of the external environment and threats and challenges that they face. A preliminary review of the literature has revealed that there is a lack of research on leadership specifically in the context of non-profit organizations. This is noteworthy omission as the non-profit organizations have traditionally made a large impact on the socio-cultural and economic uplift of the people, and governments across the world rely on their partnership and support for welfare activities. As such, it is essential to assess what leadership style may be most suitable in the context of the environment in which non-profit organizations operate. There is however, another difficulty in leadership studies related to non profit organizations. This lies in the fact that leadership effectiveness can not be measured simply in terms of revenues or any other objective economic indicator. As such, it becomes difficult to objectively assess the effectiveness of leadership in non profit organizations. The current research therefore proposes that effective leadership should be able to positively impact on the job satisfaction of the employees, which in turn leads to highly motivated and committed workforce. The proposed research is therefore directed at assessing the leadership styles in the non-profit organizations in the USA and their impact on the satisfaction levels of the employees. The research is expected to provide insights about the leadership styles that are best suited in the context of the non-profit organizations.  2. Literature Review  2.1 Non-profit Organizations: Concept, Growth and Development of Non-Profit Organizations   A non-profit organization can be defined as a group organized for purposes other than generating profit and that does not issue stock shares or distribute its surplus funds to its members, directors, or officers (Young, 2001). The purpose of Non-Profit organization is to serve the public, and not the owners and the members of the organization. There are a variety of non-profit organizations in different sectors, like sports, education, health, social services and artistic groups. Non-profit and non-government organizations are legally comprised entities that work independently from the government. The history of a non-profit sector is embedded in the broader political culture and social improvement of a country or a region, and is also impacted upon by cultural and religious factors. The evolution of US non-profit organizations and non-profit sectors is associated with development of constitution of the US society. In contrast to the US, the non-profit sector development in the Great Britain was closely attached to the changing social needs and political confederacy of the time (Anheier, 2005). Non-profit sector is highly developed in U.S due to its relatively low level of social welfare spending and it seems to be the largest among other countries (Agard, 2011). There are more than 8,00,000 charitable non-profit organizations in the United States, majority of them are Universities, hospitals and churches and these entities make up the major part of the sector in terms of assets and employment (Agard, 2011). According to the John Hopkins’ comparative non-profit sector study, over half of the hospital beds are in the non-profit hospitals, half of all colleges and universities are non-profit institutions, 95% of all orchestras are non-profit organizations, 60% of all social service agencies are non-profit (Salamon, et al, 2003). The non-profit sector has a rich and diverse history in the United States. In USA the non-profit organizations are mainly active in three fields: education, culture and recreation, social service. (Salamon and Anheier, 1996). In the context of European countries as well, the establishment of the voluntary organizations started during the Victorian period. In the U.K, 22.5% of students in primary and elementary schools are in non-profit organizations, and 10% of dwelling units are built or rehabilitated by non-profit organizations (Salamon, et al, 2003).  2.2 Leadership In Non-Profit Organizations Like in any other sector, leadership is of paramount importance in the non-profit sector also. Before understanding and exploring the type of leadership that is necessary in the non-profit sector, it is necessary to understand the basic tenets of leadership. James MacGregor Burns defines leadership as “Leadership is acting – as well as caring, inspiring and persuading others to act – for certain shared goals that represent values – the wants and needs, the aspirations and expectations – of themselves and the people they represent (Burns, 2003, p. 23). A numbers of leadership theories have evolved over the years, such as trait, behavioral, situational and contingency, transactional and transformational leadership theories. While the trait, behavior and contingency theories form the basis of most of the modern theories, it is the two main theories (transactional and transformational leadership theories) that have acheived attention in the recent years. 2.2.1 Transactional and Transformational Leadership Theories Transactional leaders are those who believe in motivating people by reward and punishment. The concept is that the leader has to give something to the followers in exchange of accomplishing some task. (Oster, 1995). On the other hand, a transformational leader is one who can encourage his or her followers to transcend or overcome their private and self-interest for the larger benefit of their team, group, organization or society. A transformational leader is able to consider and prioritize the long-term needs of the group rather than their own momentary needs. Transformational leaders are also able to successfully convert followers into actual leaders.  In contrast, with transactional leadership, the relationship between the leader and the follower exists only to meet certain self-interests that are momentary (Bass, 1985). According to Bass, the best kind of leadership is one where there is a combination of transactional as well as transformational leadership. However, in recent times, there appears to be a higher focus on transformational leadership as it has been recorded to be more effective (REFERENCES).  2.2.2 Non-Profit Organizations Leadership Research A preliminary review of the available literature and research indicated that while leadership has been studied substantially in organizations, there is very little focus on studying leadership in the context of non-profit organizations. There is some evidence of research that has evaluated the leadership styles in a few non-profit organizations. A research conducted in a non-profit organization (IKSU) found that the leaders adopted a coaching style of leadership (Larsson and Storhannus, 2008). They indulged in roles that promoted team building and exhibited supportive behavior. The leaders favored the relationship style of leadership as the nature of their work was stressful and often frustrating and the leaders were able to provide support and guidance by adopting a relationship orientation. The researchers commented that because the non-profit organization does not have an ambitious goal or a scheme of profiting,  the employees needed to be motivated using intrinsic rewards. By showing appreciation and adopting a supportive and communication behavior, the leaders were able to infuse confidence, inspiration and motivation to work. The leaders were also found to rely on delegation and hence needed to develop the employees to excel themselves and take on added responsibility. Leaders also involved the employees in the decision making process that further created a sense of involvement and generated commitment from the employees (Larsson and Storhannus, 2008). The above study shows that leaders in the non-profit organizations adopt a transformational leadership style to keep the workforce engaged and motivated.   In another research, it was found that there is no actual difference in which leadership style works or not in the non-profit or for-profit organizations. The researchers extensively studied several non-profit and other organizations and concluded that in any type of organization, the best leadership style was that of a combination of transformational and transactional leadership (Adeyemi-Bello, 2001) In another research, the researchers found that most successful leaders in the non-profit organizations were those who were able to modify their leadership style over the lifecycle of the organization. The leaders who were able to shift between relationship based and task based styles and adopt internal or external orientation as needed at the different stages of the organization’s growth, were able to make a more effective impact on the growth (Hillel, 2006). According to Kotlyar & Karakowsky (2007), when it comes to the Non-profit sector, transformational leadership is ideal, because of the strong foundation that it has to work towards bringing around a change in individuals as well as the organization. As non-profit organizations do not have the goal of making money or generating profits, motivation and passion are two key terms to succeed. One of the key limitations of transactional leadership is that it has an end goal towards profit. For example, the key motivation for encouraging an individual is by offering rewards in transactional leadership. At times, even fear of punishment becomes motivation. However, in a non-profit organization, there is less scope for immediate or extrinsic rewards. In fact, for most of the non-profit organization, work is done on a voluntary basis. Therefore, it is expected that a transactional leadership may create conflicts when enforced in a non-profit organization (Kotlyar & Karakowsky, 2007). In addition, it is always recommended that non-profit organizations opt for an organization structure that is horizontal and does not have a big divide between management and employees. A transformational leadership gives encouragement to such a type of organization structure. (Pielstick, 1998).     Transactional leadership, the leader holds the key and helps the others follow by example. Hence, a transformational leader would be able to set forth the right example by leading from the front. Such a leader is able to ensure that his or her team is working together for the common goal, a scenario that is ideal for a non-profit organization. Hence, they are able to provide the right kind of inspiration as well as individualized consideration. Such leadership holds the key in the modern era, where non-profit organizations are facing challenges because of lack of funds and lack of governmental support (Alimo-Metcalfe. & Alban-Metcalfe, 2001).  3. Research problem   The above review of the literature highlighted several facts related to leadership in non-profit organizations. It was seen that there is very little research targeted at assessing the popular style of leadership in non profit organizations or studying the impact of leadership style on the organizational performance. Limited number of studies have concluded that non-profit organizations are either similar to the for-profit organization (Adeyemi-Bello, 2001) and hence do not deserve a separate area of research; or have found varying results like leaders need to keep changing their styles over the life cycle of the non-profit organization (Hillel, 2006); or that the leaders need to adopt a mix of relationship and task orientation (Larsson and Storhannus, 2008). Also, non of the studies reviewed have used an objective measure of leadership impact as these have been based on interviews and opinions of the managers and the employees.   The current research therefore contends that it is essential to study the leadership styles in non-profit organizations and to assess the impact that different styles have on job satisfaction (an indicator that reflects employee motivation, commitment and productivity.    4. Methodology The research proposes to study the prominent styles of leadership adopted by leaders in non-profit organizations in the USA. For this, a sample of 10 non-profit organizations is to be selected on the basis of judgmental sampling method. The selection of the sample is based on the consideration of time and resources needed in order to interview and interact with the organizations. As such, it is expected that the sample selection would be most suitable if the organizations’ offices are within the reach of the researcher. Other overriding factor for sample selection is the consent and the availability of the leaders in the target non-profit organizations to participate in the research. A random sample selection method is generally believed to be more effective as all the selected participants have an equal chance of inclusion and hence provide  a more representative sample of the population under study (Creswell, 2007). However, a random selection of the sample would have required more resources and time for the research to be completed, and hence the researcher proposes to use a non-random convenience sampling method.   In addition to the selection of the organization, the researcher will also select employees within the organizations to participate in the survey. For this again, it is expected that the researcher will have to depend on the consent and permission and discretion of the organization’s management to provide him with the employees. It is expected that the researcher will be able to gather at least ten employees from each of the ten organizations, hence making the total sample size equal to 100. Next, the employees in the selected organizations would be requested to fill the research questionnaire, that is based on the Multifactor Leadership Questionnaire that measures leadership styles and orientations of their managers. The questionnaire is to be modified to measure only transformational and transactional leadership styles only. The modification is undertaken as the original version of MLQ is copyrighted and not freely available, and also because the focus of the research is on these two types of leadership styles. The research questionnaire (presented in appendix A) is to be scored in the following manner: For questions 1- 6 Strongly  Agree      5 Agree                   4 Neutral                  3 Disagree              2 Strongly Disagree  1 For questions 7- 10 Strongly  Agree      1 Agree                     2 Neutral                  3 Disagree               4 Strongly Disagree  5 The respondents are asked to fill the questionnaire by marking the response that they conform to. The data analysis is to be undertaken in the following manner: 1. The individual scores are calculated by adding the codes of each of the responses on the 10 questions. A score of between 10-25 is considered to be high on transactional leadership, while a score of 25-50 is considered to be high on transformational leadership. 2. The 100 respondents scores are then to be segregated into transactional leadership style (with scores between 10-25) and transformational leadership style (scores above 25) 3. In addition to the overall calculation of what percentage of employees rate their leaders as transformational or transactional, each organization will also be analysed in terms of its leadership style In addition to the leadership style survey, the selected employees are also expected to provide their responses on a job satisfaction survey (see appendix B). The responses are coded and scored as: Yes    2 No    1 The responses for each employee can range between 60 and 30. The higher the score, the more satisfied the employees.  In order to find the relationship between leadership style and job satisfaction, the scores from the modified MLQ are correlated with the scores from the job satisfaction survey. A high coefficient of correlation would mean that transformational leadership style (which is predicted by a high score on the modified MLQ) is related with a higher job satisfaction (which is predicted by a high score on the job satisfaction survey).  The above analysis is expected to be undertaken using excel worksheets and software.   5. Conclusion Non-profit organizations play a very critical role in today’s society and a high onus of their efficacy lies on the leader of the organization. Theoretically, it is clear that transformational leadership is best suited for non-profit organization. It would be interesting to study what leadership styles are adopted ( transformational and transactional) in non profit organizations through empirical research.     Appendix A 1. Your manager is someone who builds Trust Strongly  Agree      Agree      Neutral     Disagree    Strongly Disagree 2. Your manager always acts with integrity Strongly  Agree      Agree      Neutral     Disagree    Strongly Disagree 3. Your manager inspires others to do their best Strongly  Agree      Agree      Neutral     Disagree    Strongly Disagree 4. You manager encourages you to be innovative Strongly  Agree      Agree      Neutral     Disagree    Strongly Disagree 5. Your manager personally guides and coaches people Strongly  Agree      Agree      Neutral     Disagree    Strongly Disagree 6. Your manager rewards achievement Strongly  Agree      Agree      Neutral     Disagree    Strongly Disagree     7. Your manager is involved in fire fighting at the last minute Strongly  Agree      Agree      Neutral     Disagree    Strongly Disagree 8. Your manager does not get involved with the job of employees Strongly  Agree      Agree      Neutral     Disagree    Strongly Disagree 9. Your manager hesitates in making important decisions Strongly  Agree      Agree      Neutral     Disagree    Strongly Disagree 10. Your manager appears to be manipulative Strongly  Agree      Agree      Neutral     Disagree    Strongly Disagree       Appendix B: Job Satisfaction Survey (Source: Wellness Council of America, 2004) 1.     I look forward to going to work on Monday morning. Yes    No 2.     I feel positive and up most of the time I am working. Yes    No   3. I have energy at the end of each work day to attend to the people I care about. . Yes    No 4. I have energy at the end of each work day to engage in personal interests. Yes    No   5. I have the time and energy in my life to read books that interest me. Yes    No 6. Most interactions at work are positive. Yes    No 7. I have good friends at work. Yes    No 8. I feel valued and affirmed at work. Yes    No 9. I feel recognized and appreciated at work. Yes    No 10. Work is a real plus in my life. Yes    No 11. I’m engaged in meaningful work. Yes    No 12. I feel free to be who I am at work. Yes    No 13. I feel free to do things the way I like at work. Yes    No 14. My values fit with the organizational values. Yes    No 15. I am aligned with the organizational mission. Yes    No 16. I trust our leadership team. Yes    No 17. I respect the work of my peers. Yes    No  18. I have opportunities to learn what I want to learn. Yes    No 19. I feel involved in decisions that affect our organizational community. Yes    No 20. Creativity and innovation are supported. Yes    No 21. I feel informed about what’s going on. Yes    No 22. I know what is expected of me at work. Yes    No 23. I have the materials and equipment that I need in order to do my work right. Yes    No 24. I have the opportunity to do what I do best every day at work. Yes    No 25. My manager cares about me as a person. Yes    No 26. I know someone at work who encourages my development. Yes    No 27. My opinions count. Yes    No 28. My coworkers are committed to doing quality work. Yes    No 29. My manager reviews my progress. Yes    No 30. I am fairly compensated. Yes    No    References Adeyemi-Bell, T. (2001). The impact of leadership style on organizational growth Work Study, 50 (4): 67-98 Agard, K (2010). Leadership in Nonprofit Organizations : A reference Handbook. Thousand Oaks, CA: Sage Alimo-Metcalfe, B. & Alban-Metcalfe, J. (2001). The development of a new Transformational Leadership Questionnaire. The Journal of Occupational & Organizational Psychology, 74, 1-27  Anheier, H (2005). Nonprofit Organizations: An Introduction. New York : Routledge Bass, B. M. (1985). Leadership and Performance Beyond Expectations. New York: Free Press. Burns, J (2003). Transforming Leadership: A New Pursuit of Happiness. New York: Atlantic Monthly Press. Hillel, S. (2006). Leadership Styles and Leadership Change in Human and Community Service Organizations. Nonprofit Leadership and Management, 17(2): 179-194. Kotlyar, I., & Karakowsky, L. (2007). Falling Over Ourselves to Follow the Leader. Journal of Leadership & Organizational Studies, 14 (1): 38-49 Larsson, L. and Storhannus, P. (2008).Understanding leadership in successful Non-profit organizations: a case-study of IKSU.(Doctoral Dissertation). Retreived from Essays.Se. Oster, S. M. (1995). Strategic Management for Nonprofit Organizations: Theory and Cases, Oxford University Press, New York Pielstick, C.D. (1998). The transforming leader: A meta-ethnographic analysis. Community College Review, 26(3): 5-34 Salamon, L, Sokolwski, S. and List, R. (2003). Global Civil Society. The John Hopkins Comparative Nonprofit Sector project. Retrieved from: http://www.wingsweb.org/download/global_civil_society.pdf Salamon, L and Anheier, H. (1996). The Emerging Nonprofit Sector: An Overview. Manchester : Manchester University Press Wellness Council of America, (2004). Job Satisfaction Survey. Retrieved from: http://www.welcoa.org/freeresources/pdf/job_satisfaction_survey.pdf Young, D. R. (2001). The influence of business on nonprofit organizations and the complexity of nonprofit accountability: looking inside as well as outside. American Review of Public Administration, 32(3), 3-19 Read More