Emerging Leadership in Nonprofit Organizations - Literature review Example

? Non-Profit Leadership Song Liu 0405020 Donna Rogers 11/17 Introduction The modern societies in the world economy have been increasingly inclined towards the formation of associations, foundations and similar kinds of organizations to serve the human races with emphasis on the grass root level of economic development. In common, these associations are referred as Non-Profit organizations, working with a motive to raise sustainability rather than being principally focused on profit generation. Arguably, the proliferation of these associations may permanently change the relationship between state and the citizens. This can extend the services they provide to a far beyond level but is found at a limited and negligible degree within the profit sector (Center for Creative Leadership, 2011). Contextually, leadership can be found as playing a pivotal role in shaping the success potentials of non-profit organizations, differentiating them from profit sector in almost every dimension (Phipps & Burbach, 2010). Arguing critically concerning this issue, Ruvio, Rosenblatt & Hertz-Lazarowitz (2010) and Vanderpyl (2009) advocated that leadership in non-profit sector is much more challenging as compared to profit sector. In this essay, challenges faced by the non-profit organizational leaders will be assessed from a multidimensional perspective, taking into account the demand for leaders in the non-profit sector, their roles in contrast to the commercial sector, their skills and traits along with the underlying demographic influences. Accordingly, recommendations based on the set of skills required by non-profit leaders to bring future intended changes, will also be discussed in this essay. Demand for leaders in the nonprofit sector The prime purpose of a non-profit organization is to respond to every kind of welfare needs identifiable in a particular community or society. Correspondingly, the procurement of resources is performed on the basis of reserves and funds available, rather than through profit generation. The ability to consistently deliver these services of non-profit organizations depends more on the quality of the applied business model. This implies to the ability of skilled leaders to develop and practice effective business model in order to gain efficiency is very much in demand in the non-profit sector. Accordingly, the demand for the leaders in this sector has increased significantly in the recent days, with the growing complexity issues that further necessitate an all-inclusive and competitive business model (Ruvio, Rosenblatt & Hertz-Lazarowitz, 2010). According to a survey carried by Bridgespan Group, the non-profit sector around the world will require 640,000 new senior managers, equivalent to 2.4 times the number currently employed and by 2016. In a more precise form, this particular sector is forecasted to grow a demand for 80,000 new senior managers per year (Tierney, 2006). Apparently, it is observable that a leadership gap currently persists in the non-profit sector that has in turn made the sector witness unavoidable challenges in conducting effective and smooth operations in the welfare of the entire human society. This shortage of skilled leaders in the non-profit sector further increases their demand. As argued by Ebrahim (2010), the non-profit sector currently witnesses shortcomings in terms of accountability. Thus, bearing a strong resilience with societal development and sustainability, such a pitfall in non-profit organizations is likely to result in major lack of organizational efficiency. It is also in this regard that skilled leaders are in massive demand within the non-profit sector today. Again, although the importance of non-profit organization is being credited all around the world by various groups of stakeholders, its commercial capacity building in offering promising career opportunities and likewise, availing adequate quantity of human resources lacks owing to deficits in its leadership attributes, contributing to a greater demand for efficient leaders (Vita & Fleming, 2001). Role of Leaders in Commercial and Non-Profit Sector Non-profit organizations can be identified as considerably different from commercial organizations in terms of its functioning prospects and structural demands. It is fundamentally due to the fact that unlike commercial organizations, non-profit organizations are principally focused on conducting philanthropic activities considering social interests with prime significance. The role of leaders in these two sectors also varies due to these underlying differences between the value-based and objective-oriented functionalities of commercial and non-profit sectors respectively. A leader in non-profit organization is said to be successful when he/she ensures the organization to grow by expanding the resource base, discovering new communities to serve, satisfying the interest groups and identifying new approaches to innovative and efficient service delivery among others. Therefore, both good leadership and good management roles are required to be played by leaders to succeed in both the sectors as stated by Bennis & Nanus (1997). Besides, empowering and inspiring the volunteers, resolving forecasted as well as unforeseen obstacles and making necessary changes to allow the beneficiaries to learn and grow are enlisted as the primary roles of leaders in a non-profit organization. Performing these roles often becomes a challenging issue for non-profit leaders given the limitation of financial resources. In contrast, and much vividly, the roles and responsibilities of leaders in profit sector is to develop policies with a motive to create maximum revenue in the benefit of the organization, even though the pressure to consider societal welfare persists. Adding to that, controlling and supporting the team in the commercial organizations is equally an important task for profit sector leaders, which involves both monetary and non-monetary aspects. But, leaders in the non-profit sector need to focus on non-monetary aspects with greater significance, where their roles are no more restricted to managerial operations, but move beyond motivating, steering or channelizing the set values amid the team. It rather gets inclined to ignite a common set of values to serve the society. Being at the heart of creativity in profit and non-profit sectors, efficient leaders have always been the top most priority requirements (Ellis & Mishra, 2004). Skills and Traits of an Effective Nonprofit Leader In simple words, a leader of a non-profit organization is one who directs the people, allocates the availed capital and manages intellectual resources of the organization. Leaders in non-profit organizations are bestowed with the responsibilities to maintain organizational efficiencies and simultaneously, ensure useful services to clients at the least possible cost. To perform these responsibilities efficiently, leaders need to inspire, encourage and empower the team having in-depth knowledge and understanding of their team’s moral values, ethos and pathos. Thus, possessing strong capabilities to steer the team, principally with the use of non-monetary incentives can be regarded as an essential skill for effective leaders in the non-profit sector. In addition, the leader must be searching outside the organization for support either in terms of volunteers to execute the intended operations or in terms of procuring adequate funds from contributors, potential allies, media or other leaders in the business or public sectors. Therefore, the leaders in this sector must essentially possess a trait to inspire those who care about the society and are willing to volunteer time or money to address them. It can be apparently noted that conflicts between the demands of the clients, public as well as private sector partners, volunteers and donors among others needs to be unambiguously reflected by the leaders’ traits in the non-profit sector (Nanus & Dobbs, n.d.). When it comes to the function of non-profit organization, the leader of the non-profit organization must possess requisite skills to ensure that the organization is financially sound and fully accountable as well as transparent to the community it serves. It is worth mentioning in this context that to secure the position of the organization for future, a leader must be capable to forecast challenges of limited resources and manage frequent changes in accordance with the alterations taking place in the external environment. To face these challenges a leader should inherit flexibility and innovative skills along with the traits of quick adaptation to threats and opportunities (Nanus & Dobbs, n.d.). Demographic Variables Comparing with the leaders in the non-profit sector, the leaders of commercial firms can be observed as younger, more dynamic and energetic. It is principally owing to the fact that this particular group is strongly motivated on the basis of short-term orientation benefits and individualism cultural traits. In contrast, non-profit leaders are commonly observed to be much matured and experienced in the field, focusing on long-term orientation as well as believe in collectivism culture within the workplace. The primary cause of such variations can be observed in depth with reference to the associated demographic variables like age, income, and geographic influences among others (Suttle, 2013). As discussed above, the leaders of non-profit sector are commonly matured than the leaders of commercial organizations. Similarly, when it comes to income, the commercials leaders are offered more wages in comparison to the non-profit organization leaders. The fact that both the leaders are from different working cultures, it is worth mentioning that leadership qualities will also differ. It can be concluded that commercial sectors’ leaders focus more on task oriented leadership whereas the non-profit organization leaders focus more on relations oriented leadership behavior. Additionally, in case of non-profit sectors, high level of motivation and deep inter-relationship is required. In order to deliver high quality of philanthropic work to the society, the leaders must ensure interpersonal relationship among themselves, wherein a high level of tolerance capability for business uncertainty is demanded (Holloway, 2012). To be noted, unlike commercial business leaders, who belong to urban areas in majority cases, leaders in the non-profit sector are found to have their roots in semi-urban or rural areas. Besides, this particular group of leaders is also commonly identified to be in their semi-retirement phase, which implies the basic reason of differed motivational needs and leadership qualities as compared to the commercial sector (Clohesy, 2010). Diversity can be classified into surface-level diversity and deep-level diversity. The former includes age, gender, culture gender and language in common attributing to demographic factors; while, the latter signifies immeasurable and unmodified diversity strongly influenced by verbal and non-verbal behaviors (Hansmann, 1996). Thus, relating to the dimensions of non-profit leadership, demographic diversity can be identified as persisting in the surface-level, whereas the commercial sector depicts deep-level diversity. Skills of Non-Profit Leaders for Future Changes Leaders are the ultimate deciders in the non-profit sector and accordingly, it is the leader’s shoulders on which the responsibility of smooth functioning of the organization depends largely. It is in this context that given the impacts caused by continuous alterations in the external business environment, non-profit leaders are also needed to be adequately proficient in managing changes within their organization. Therefore, besides being innovative, taking tactical strategies to anticipate future challenges necessitates many more qualities within a leader in non-profit sector. In accordance to the facts discussed above, it is clear that main problem associated with the non-profit firms is revenue allocation and motivating the teams through non-monetary benefits principally. Therefore, a leader of a non-profit organization should find the way for funds need to run the organization with maximum utilization of the resources availed to obtain productive returns. In order to mitigate these challenges and obtain greater operational efficiencies, the improvement in the working condition shall be necessary to be considered by the leaders in the non-profit sector and making the non-profit organization a place for career growth that shall attract more volunteers. Additionally, providing greater support to the small non-profit organization and working in alliance may further ensure the sharing of information and thereby, it is suggestible that leaders should explore the opportunity to collaborate with organizations of different sizes (Clohesy, 2010). Conclusion Based on the above discussion it is clear that commercial and non-profit organizations vary on different grounds. Correspondingly, it can be affirmed that running a non-profit organization is a huge challenge in comparison to the functioning of a commercial organization. It is worth noticing in this context that vividness required in the leadership qualities of decision enforcers in profit sector is higher in comparison to the leaders in the non-profit sector, while the later faces challenges in retaining greater productivity through non-monetary measures. Thus, the leaders of non-profit organizations need to be more competent, resourceful, knowledgeable, and creative in order to maintain the organization sustainability in the long run getting involved in philanthropic works in benefit for the environment and the human race from a value-based perspective. It is apparent from the above discussion that irrespective of facing substantial problems in maintaining deep-level diversity and the required vividness, the profit leaders are observed as performing well owing to a considerable aid delivered through rigorous researches in the field. However, leadership issues faced in non-profit sector is comparatively still an unexplored area of research that limits adequate support for the leaders to perform their duties efficiently. Conclusively, it can be admitted that a greater need for research exists in the field of non-profit leadership that could be beneficial for the sector to act in a more beneficial manner to the society. 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Holloway, B. J. (2012). Leadership behavior and organizational climate: an empirical study in a non-profit organization. Emerging Leadership Journeys, 5(1), 9- 35. Nanus, B & Dobbs, M. S. (n.d.). Leaders who make a difference. Retrieved from http://media.johnwiley.com.au/product_data/excerpt/56/07879466/0787946656.pdf Phipps, K. A. & Burbach, M. E. (2010). Strategic Leadership in the Nonprofit Sector: Opportunities for Research. Institute of Behavioral and Applied Management, 137-154. Ruvio, A., Rosenblatt, Z. & Hertz-Lazarowitz, R. (2010). Entrepreneurial leadership vision in non-profit vs. for-profit organizations. The Leadership Quarterly 21, 144–158. Suttle, R. (2013). The demographic variables that affect a business. Retrieved from http://smallbusiness.chron.com/demographic-variables-affect-business-24344.html Tierney, J. T. (2006). The nonprofit sector’s leadership deficit. Retrieved from http://www.bridgespan.org/getattachment/a74c3ca1-3837-45c3-aa7b-1876a73e80fd/The-Nonprofit-Sectors-Leadership-Deficit.aspx Vanderpyl, T. H. (2009). Romantic Idealism: Transitioning from For-Profit to Non-Profit Leadership. Journal of Strategic Leadership 2(1), 13-26. Vita, C. J. D. & Fleming, C. (2001). Building Capacity in Nonpro?t Organizations. The Urban Institute. Read More