What are the management problem faced by NGOs - Dissertation Example

? Literature Review: The UN definition of an NGO or a non-governmental organization is a legally established organization formulated by legal persons that functions individually without any assistance from any government. In the cases where NGOs are being funded completely or partly by governments, the NGO will keep its non-governmental standing by eliminating government representatives from participating in the organization (Gamboni, 2006). The word is usually relevant only to organizations that follow some wider social purpose that has political characteristics, but that are not openly political organizations such as political parties. According to a definition by World Bank, the NGOs are "private organizations that pursue activities to relieve suffering, promote the interests of the poor, protect the environment, provide basic social services, or undertake community development" (World Bank, 2007). A 1995 UN report on the global authority predicted that there are approximately 29,000 international NGOs. National numbers have risen even higher than that: The United States alone has an estimated number of 2 million NGOs, among which most were formulated in the past 30 years. On the other hand, we see that Russia has 65,000 NGOs. Many of the NGOs are created every day. In Kenya only, around 240 NGOs come into being with the passing of every year. Many different types of organizations are now defined as being NGOs. There is no commonly recognized description of an NGO and the word carries diverse meanings in different situations. Nonetheless, there are some important features. Undoubtedly, an NGO must be liberated from the direct control of any government (Lewis, 2006). Also according to Lewis (2006), there are three more widely recognized features that eliminate specific types of bodies from consideration. An NGO will not be established as a political party; it will always remain non-profit-making and it shall never take part in any criminal activities, and most importantly it will be non-violent. These features relate to general usage, because they equal the conditions set for acknowledgment by the United Nations (Lewis, 2006) The borders can sometimes be slightly diminished: various NGOs may in reality be closely related to a political party; many NGOs create revenue from activities that are commercial, predominantly consultancy contracts or publication sales; and a minute number of NGOs may be related to intense political disputes. However, according to Nanda (2010) an NGO is never founded as a government bureaucracy, a criminal association, a party or a rebel group. Thus, an NGO is majorly projected as an autonomous volunteer association of people working together on a constant basis, for some mutual drive, other than attaining government office, generating revenues or taking part in illegal doings. Furthermore, according to Nanda (2010) the term NGO is very comprehensive and includes many different types of organizations. In the arena of development, NGOs vary in size from large charities based in the North such as CARE, Oxfam and World Vision to community-based NGOs in the South.  They also comprise of research institutes, professional associations churches as well as lobby groups. An increasing figure of NGOs are involved in both operational and sponsorship workings. Moreover, some of the advocacy groups, while not being openly involved in planning and executing projects, concentrate on particular project-related concerns (Willitts, 2002). According to Ronalds (2010), NGOs are existent for a range of purposes, typically to promote the political as well as social goals of their associates. The examples of this could include cultivating the state of the natural environment, boosting the adherence of human rights, enlightening the general masses about the welfare of the disadvantaged, or demonstrating on behalf of a corporate agenda. However, there is a plethora of such organizations and their aims cover a comprehensive range of political and philosophical situations. This can also effortlessly be practical in private schools as well as athletic organizations. There are a number of ways to classify NGOs. Below mentioned is the typology the World Bank uses for categorizing the NGOs: 1. Operational NGOs: The primary purpose of operational NGOs is the strategy and execution of development-related projects. One classification that is regularly used is the division of the NGOs into relief-oriented or development-oriented organizations; they can also be categorised according to whether they pressure service delivery or contribution; or whether they are spiritual and irreligious; and whether they are more community-based or private-oriented. Operational NGOs can also be divided into the categories of community-based, national or international. 2. Advocacy NGOs: The main purpose of Advocacy NGOs is to protect or endorse a specific reason. As conflicting to operational project management, these organizations normally try to increase awareness, recognition and understanding by awareness raising, press work as well as various activist events (Ronalds, 2010). NGOs inability to sustain financial resources Among all the resources that are crucial for the functioning of an NGO, resources in the form of ‘money’ are the most vital ones. According to Norell (2006) in the absence of this resource, we cannot successfully activate other resources in the agency or community. Hence, it is true that the success or failure on any NGO lies in its ability to sustain its financial resources (monetary resources), or to convert its other resources in such a way that revenues can be generated, or to carry out activities and projects that will lead to the creation of money. Many large scale NGOs may possess annual budgets in the hundreds of millions as well as billions of dollars (Norell, 2006). For example, if we look at the budget of the American Association of Retired Persons (AARP), which is an NGO, we see that it was over US$540 million in 1999 (Mukasa, 2002). Backing such huge budgets demands substantial fundraising efforts on the portion of most NGOs. Chief sources of NGO funding can be seen as membership dues to the public, the sale of goods and services to customers, international grants from institutions as well as national governments and lastly, private donations from beneficiaries. Numerous EU-grants provide funds available to NGOs (Mukasa, 2002). Government funding of NGOs is quite debateable, as according to David Rieff (2010), "the whole point of humanitarian intervention was precisely that NGOs and civil society had both a right and an obligation to respond with acts of aid and solidarity to people in need or being subjected to repression or want by the forces that controlled them, whatever the governments concerned might think about the matter." Some NGOs refuse to accept any kind of funding from governments or intergovernmental institutions, as is the case with Greenpeace. As Mukasa (2002) implies, the result of this change is that the resources of the NGOs are depleting. At the very same instant, more and more funds are being required in order to cater to the growing requirements and adopting methods that are better and more efficient for helping the people. It is almost always not possible to get more aid from the Government. The lack of funds is a major problem for most NGOs as without the capital required, it is impossible for them to function properly (Mukasa, 2002). According to Fisher (1998) some problems that can be identified while looking at the perspective of the NGOs’ inability to sustain financial resources, is the fact that given the high costs of living in present times, it is virtually impossible for people to contribute as much money as they did previously. Moreover, due to the lack of coordination between the agencies that are located in a specific area, it is always possible that one and the same person is being approached to collect money and for a similar purpose (Hailey & Smillie, 2001). Moreover, according to Hailey & Smillie’s (2001) point of view, high-profile business giants also prefer to invest in business ventures which will result in profitable returns instead of giving out their money to charitable institutions. Also, the donors almost always have no information about the standing and workings of an NGO and might be discouraged to donate money due to the lack of information provided to them. Also, the attempts made by the agencies are not systematic; hence they may push the donors away by making them look less credible than they actually are (Hailey & Smillie, 2001) NGOs ineffective governance bodies Ineffective governance in NGOs is also one of the major problems that they could face that will almost always lead to conflict and instability. According to Spierenburg & Wels (2010) an NGO’s sustainability, also defined as its ability to serve its customers over a long period of time, depends mostly on the quality of the governance in an organization (Spierenburg & Wels, 2010). Moreover, in their opinion the NGO’s ability to carry out activities successfully with the stakeholders of the NGO to improve the organization’s governance is primarily based upon a number of individual competencies such as the people, cross-cultural and language skills, energy, motivation as well as attitude and lastly the complete understanding of the basic workings of the NGO governance (Spierenburg & Wels, 2010). For an NGO, ineffective governance is one of the most common problems regarding the management style. Research regarding this area has resulted in a number of common difficulties and problems that NGOs experienced. One of the most mentioned ones was that of the processes of decision-making. Pressures often built up between the staff and senior level of the NGOs because of the staff hopes that they would be equal associates in the decision-making process (Mukasa, 2006). Another major problem regarding the governance of the organizations had connections to the relations between board members and staff. These were born largely out of the boards’ incapability or reluctance to carry out their duties of governing the organizations. Board members often did not possess the time or the relevant knowledge to be able to carry out these duties successfully. Therefore, senior staffs were often left to make policy decisions with almost no support from board members of the NGO (Mukasa, 2006). The governance image of many NGOs is quite multifaceted. Most nonprofits are administered by self-perpetuating and on most occasions, self-appointing boards of trustees. “Though trustees are not elected by society at large, their essential purpose is to hold an organization in trust for the benefit of society, as specified in its papers of incorporation and grants of tax exemption” (Lewis, 2005). Another problem is regarding HR issues the likes of recruitment, assignment and layoff and human resources development in addition to administration and lastly everyday supervision of the staff (Vilain, 2006). NGOs were seen to be fragile at staff career progress. Very often organizations also were deficient in a career arrangement in which staff could grow. In addition to this, they were not efficient at the budgeting requirements for staff training. In certain situations where the organizations were growing fast, it created difficulties for many who were not able to keep up with the difficulties of their work. Not every employee working for non-governmental organizations are volunteers. Paid workers normally receive lower pay than in the private sector. Their supporters usually do not get paid in monetary terms and only devote little of their freedom in order to carry out their duties. Sometimes they only possess little structural and specialized skills (Mukasa, 2006). The substantial quality of preparation provided or lack of status attached to preparing NGO workers has been a major cause of poor organizational management (Ahmad, 2002). Ineffective governance meant that the administration of the board of governors don’t perform the responsibilities assigned to them at their optimum point; they lack somewhere. At their very best, the board gives out a clear picture of the joint efforts of the individuals who are responsible for advancing the NGO’s mission statement goals and its welfare in the long-term. However, not having a clear picture or a snapshot of the NGO’s aspirational future can result to the governance problems within (Mukasa, 2006). Building on this, according to Mukasa (2006) inefficiencies as well as tensions always result if there is no clear definition of the responsibilities, relationships and the authorities of the staff and board in the NGO. The problems which fall under the category of the arena of ineffective governance bodies mean that there is some problematic hindrance in the successful management of the NGO (Mukasa, 2006). He further explains that this can include a difficulty in monitoring or evaluating programs or services. Monitoring provides a picture of whether an organization is on track. Failure to monitor the NGO effectively will mean that there is a danger of going in the wrong direction if the problems are not corrected on time efficiently (Ahmad, 2002). According to Peace Corps (2010), the problem mainly results from the inefficiency of the board, that has the function of monitoring as well and evaluating and reviewing the results obtained. There is a requirement for talented, committed and willing people, which is actually a huge challenge to find. A lack of diversity in the board will mean that there is an increase in ineffectiveness of the board and a decline in the leadership base. Hence, it is important to find board members with relevant expertise for e.g. legal or fiscal. Also, there must be commitment to carry on with the aims and objectives of the NGO (Peace Corps, 2010). Lack of transparency and accountability of organizational funds Another major problem that can cause hindrance in the proper management of the NGOs is the issue of accountability. NGOs are progressively noticeable and assorted, from small common NGOs to multi-billion-dollar budgets colossus, such as CARE or Human Rights Watch, largely backed by governments. NGOs’ fast and often unconstrained progress has raised some serious questions regarding the transparency and accountability in their operations (NGOWatch, 2006). Accountability can be broadly defined as being held responsible by or being answerable to others, or as an individuality issue – being answerable to ethics or missions and one’s own sense of obligation. (Ebrahim, 2003) Accountability is, hence, seen as “a vital mechanism of control” (Mulgan, 2000) which gives prominence to the previously undetectable (Mulghan, 2000) therefore providing the stakeholders which are affected by the decision-making of the organization, with relevant information to encounter and respond to these actions. According to Unerman & O’Dwyer (2005), with the tightest view of accountability, the NGO equal is a certain form of identity accountability where the management of an NGO may only consider themselves to be accountable to those who are directly involved in the managing or funding of the NGO. For the intermediate point on accountability, the management of an NGO will consider themselves accountable only towards the ethical, social as well as environmental values of the entities that have the power to affect the NGO’s likely capability to reach out towards its mission and goals. The broadest position on accountability will assume that the organization will be held accountable by all those who are directly impacted by their actions. According to Hailey & Smillie (2010) accountability, authority, and responsibility are closely related terms. (Hailey & Smillie, 2010) Various entities have different perceptions of the concept of financial accountability and transparency in NGOs. Among these, few believe that it is extremely honest and open, while others argue consistently that all of the NGOs are corrupt and have absolutely no credibility. As always, none of these polar opposites is true and the truth lies somewhere between these two. Moreover, Hailey & Smillie (2010) implied that it can be argued that some of the NGOs are usually not doing any actual work. In reality, the just maintain their accounts very well. However, on the other hand, there are those who are actually working for the betterment of the society and should be given the necessary credit for that. Their quality of work is very high-standard however, their account-keeping rules are poor. Sometimes, this can occur due to the lack of proper accounting staff employed. At other times, this may be a result of faulty policies regarding budgeting or pressures from the organization. Hailey & Smillie (2010) also suggests that problems regarding accountability in an NGO will mean the board of director’s negligence to accept liability to give out a degree of the application of the power to the employees. The various categories in which the administrators can be held liable are non-feasance such as ignorance or corruption, mal-feasance such as waste, damage or negligence and over-feasance such as vanity or dictorial power. Corruption in NGOs Moreover, corruption is also a major part of the management problems faced by the NGOs. According to Wilson-Grau (2003), corruption in NGOs is the most common and dominant feature these days, owing to the individualistic desires and needs. Instead of maintaining their loyalties towards the betterment of the society, and elimination of evils, the employees and the stakeholders will always focus on personal achievements or gains. Moreover, the power given to the authorities is usually abused in a lot of ways and mostly for individualistic goals. This means that there is a violation of the code of ethics in the organization (Wilson-Grau, 2003). If the power handed over to the individuals is not abused, then it is usually accompanied by responsibility and accountability. Building on that, according to Lewis (2003) there are a number of ways to improve the moral guide or ethics regarding the code of conduct of an organization, if there are any. Firstly, there should be a decentralization of the political control and democracy should be instilled so that no party has the authority to makes rules or decisions on its own. Moreover, total dependency on bureaucrats should be completely avoided. Lastly, the judicial powers should be taken from the officials who tend to violate the code of ethics (Lewis, 2003) Poor organizational management ?. Poor organization development According to Jackson (2011) organization development is ‘a concept, organization-wide effort to increase an organization's effectiveness and viability’ (Jackson, 2011). As implied by Lewis (2003), it was apparent in many NGOs that the task of organization, defined as two or more people working collectively toward one or more common goal(s), was poor within most. Therefore, this created a hindrance in an NGO becoming more effective over time at achieving its goals (Lewis, 2003). As a result, it caused the NGOs to suffer from management problems the likes of poor interpersonal and group processes, ineffective communication routes, inadequate ability to cope with organizational problems of all kinds, ineffective processes of decision-making, less appropriate leadership style, worsened skill in dealing with destructive conflict, and higher levels of trust and cooperation among organizational members (Jackson, 2011). ??. The quality of actual management program and project evaluation of expertise The poor quality of the actual management program also contributed to the issues faced by the NGOs. According to Jackson (2011), an NGO is constituted of many levels of hierarchy. This means that these various levels of hierarchy have to work together in order to carry the mission forward. However, issues at any one level result in issues throughout the organization as everything is inter-related (Jackson, 2011). Wilson-Grau (2003) implies that there are conflicts among the board of directors relating to the style of management that is prevalent throughout the organization. Also, there is the aspect of diversity. This means that many people bring in many ideas. Most of them tend not to agree with each other, and it’s the administrator’s job to bring the organization to a unified decision (Wilson-Grau, 2003). Also according to Rengasami (2010), many of the board members face the issue of less commitment levels as they climb to the top of the hierarchy. Many of the board members also find the work boring and tedious at times and delegate it to their subordinates (Rengasami, 2010). ???. Lack of effectiveness of management In many NGOs, most of the activities and time were poorly managed as they often drifted out of the laid rules. According to Rengasami (2010), organizational management is characterized by how the NGO and the entities will function and how to get it to function in a better way. Many of the NGOs face poor organizational development because the leaders fail to identify unfavourable or undesirable situations and make no effort to make it better (Rengasami, 2010). According to Morrison & Milliken (2000) this is a continuous process of diagnosing and taking action against the various management problems presented. As this cycle continues, the functions which are unfavourable for the NGO would be eliminated from the root. However, unsuccessful elimination leads to improper functioning of the organization and can cause a lot of problems such as the wastage of funds, conflicts as well as unrest in the organization (Morrison & Milliken, 2000). ?V. Lack of efficiency Lack of efficiency was also one of the major management problems that NGOs faced. According to Al-Arashi (2010) the lack of effectiveness as well as efficiency may not be categorized as dishonesty in a traditional sense, i.e. stealing the public money, but these inadequacies, or acts of inefficiencies will become evident in multi-million dollar projects that pay for steep staff salaries, conferences and employee holidays as well as over-priced hotels and expensive villas for their comfort (Al-Arashi, 2010). V. Accountability of funds and resources As mentioned previously, Wilson-Grau (2003) implied that it can be argued that some of the NGOs are usually not doing any actual work. In reality, the just maintain their accounts very well. However, on the other hand, there are those who are actually working for the betterment of the society and should be given the necessary credit for that. Their quality of work is very high-standard however, their account-keeping rules are poor (Wilson-Grau, 2003). Sometimes, this can occur due to the lack of proper accounting staff employed. At other times, this may be a result of faulty policies regarding budgeting or pressures from the organization. Wilson-Grau (2003) also suggests that problems regarding accountability in an NGO will mean the board of director’s negligence to accept liability to give out a degree of the application of the power to the employees. The various categories in which the administrators can be held liable are non-feasance such as ignorance or corruption, mal-feasance such as waste, damage or negligence and over-feasance such as vanity or dictorial power. LIMITATIONS OF THE STUDY: The limitations of this study is that the information obtained is telling the truth, the information collected is sufficient to answer the research sub-questions and that the data that was obtained conveys comprehensive information of NGOs operation. Another limitation is that we are assuming that the information obtained through these sources is accurate as well as complete. We are also keeping in mind the consistency and the reliability of the findings of the researchers. At the same time we assume that the researchers don’t possess any kind of bias and are not inclined towards a certain opinion, which could result in incorrect and erroneous findings and results. Lastly, it is slightly difficult to obtain a large pool of information about NGOs in general because of their slightly dormant state of affairs. We are assuming that there has been no window-dressing in the records which gives them a favourable position in the public eye, and are not overlooked due to negligence in the book-keeping. All these limitations could affect the reliability and validity of the data obtained and the results could deviate from the actual and correct ones. SIGNIFICANCE OF THE STUDY: The entities that can benefit from this study are the NGOs, donor agencies, managers of the NGOs as well as the NGO beneficiaries. NGOs might benefit from it in a way that they will be able to identify with the problems mentioned above and put their finger on the wrong decisions that they are making at present. Identification of the errors is the first step towards the successful resolution. Hence, this can prove to be very beneficial for the NGOs that are trying to improve their operations and increase their funding. For the donor agencies as well as the beneficiaries, this is important because it provides them with an insight of the framework of an NGO, and its operations. By using this information, they can judge the credibility of an NGO and also better relate to it in the form of the knowledge of how their funds are being utilized and for what purpose. Lastly, for the managers gathering information about the existing and the potential problems is very important because this data helps them improve their processes and eliminate hindrances from their levels of hierarchy. Also, they are able to clearly identify where the problem lies within the organization and the steps that should be undertaken to resolve them. CONCLUSION: It can be concluded that there might be a vast variety of management problems faced by NGOs that will include their inability to sustain financial resources, their ineffective governance bodies, corruption issues faced by NGOs, lack of transparency and accountability as well as poor organizational management problems. All of these issues can be hindrances in the operations of the NGOs and it is vital to eliminate them in order to successfully reach out for the achievement of the aims and goals of the organizations. SUMMARY: An NGO or a non-governmental organization can be defined as a legally established organization formulated by legal persons that functions individually without any assistance from any government. Many different types of organizations are now defined as being NGOs. Undoubtedly, an NGO must be liberated from the direct control of any government. However, various NGOs may in reality be closely related to a political party; many NGOs create revenue from activities that are commercial, predominantly consultancy contracts or publication sales; and a minute number of NGOs may be related to intense political disputes. NGOs are existent for a range of purposes, typically to promote the political as well as social goals of their associates. As of now, the resources of most of the NGOs are depleting. At the very same instant, more and more funds are being required in order to cater to the growing requirements and adopting methods that are better and more efficient for helping the people. It is almost always not possible to get more aid from the Government. Hence, it is beneficial to look for other options in order to sustain operations. Good governance is also one of the major factors that contribute to the growth as well as sustainability of NGOs. An NGO’s sustainability, also defined as its ability to serve its customers over a long period of time, depends mostly on the quality of the governance in an organization. However, inefficiencies as well as tensions will result if there is no clear definition of the responsibilities, relationships and the authorities of the staff and board in the NGO. Another major problem that can cause hindrance in the proper management of the NGOs is the issue of accountability. Moreover, the power given to the authorities is usually abused in a lot of ways and mostly for individualistic goals. This means that there is a violation of the code of ethics in the organization. There might also be problems regarding the management styles within an NGO. However, it is vital to come up with a solution to diminish these issues in order for the NGO to function smoothly. References: Arts, B. 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Retrieved 30th March, 2011 from http://books.google.com.pk/books?id=wuBH8wF7MBUC&pg=PA6&dq=ngo+management&hl=en&ei=g4GTTbOQC9Cq8QPf2OHmAw&sa=X&oi=book_result&ct=result&resnum=2&ved=0CCoQ6AEwAQ#v=onepage&q=ngo%20management&f=false Nanda, B. R. (2010). NGO management: With case studies. Retrieved 30th March, 2011 from http://books.google.com.pk/books?id=RPDdYgEACAAJ&dq=ngo+management&hl=en&ei=g4GTTbOQC9Cq8QPf2OHmAw&sa=X&oi=book_result&ct=result&resnum=6&ved=0CDsQ6AEwBQ Ronalds, P. D. (2010). The Creative Imperative: Creating the next generation NGO. Retrieved 30 March, 2011 from http://books.google.com.pk/books?id=xrU5an17hfkC&pg=PA12&dq=ngo+management&hl=en&ei=g4GTTbOQC9Cq8QPf2OHmAw&sa=X&oi=book_result&ct=result&resnum=9&ved=0CEgQ6AEwCA#v=onepage&q=ngo%20management&f=false Spierenburg, M. & Wels, H. (2006). Culture, organization and management in South Africa. Retrieved 20th March, 2011 from http://books.google.com.pk/books?id=5NVtk92dOCYC&pg=PA102&dq=ngo+management&hl=en&ei=UoOTTZ2BAcmZ8QOOuNXmAw&sa=X&oi=book_result&ct=result&resnum=2&ved=0CCwQ6AEwATgK#v=onepage&q=ngo%20management&f=false Read More