The NGO revolution as challenge and opportunity for organizational theory.

• Date: 01 January 2012
• Author: Bruton, John M.

1. INTRODUCTION

   "Insanity is doing the same thing, over and over again, but expecting different results." Albert Einstein

   For a number of years there has been recognition of the need to expand the foundations of organizational management and broaden its focus. Boyacigiller and Adler (1991) criticized the "inappropriate parochialism" of management theory, Mangaliso (2001; Mangaliso, et al, 1999) has called for expanding the foundations of management theory by incorporating different perspectives and traditions, and Ellerman (1999) recognized the potential of emerging and non-traditional organizational forms to the advancement of management theory. Murrel (1999: 3) claimed that organizational theory is in need of redirection and redefinition and needs to "reclaim its soul as a field of social and cultural change ... [by] thinking of organizations in dramatically different ways than we have traditionally", Bruton (2010) called for research on management's role in addressing "poverty and the world's poorest billion" and the Academy of Management issued a call for research on evolving and non-traditional organizational forms (Academy of Management Journal, 1998). Daft and Lewin (1990: 1) recognized that "organization studies have been a source of recurrent disappointment for practitioners and academics alike," and they launched Organization Science with the goal to broaden the boundaries of inquiry into organizations, and to loosen the straightjacket of acceptable; empirical research as a means of opening our field to new ideas" (Daft and Lewin, 1993: i). In spite of this interest, the need remains to expand organizational theory beyond its western foundations and to eliminate the US-centric approach to management (Hitt, 1999). Otherwise, "organization theory is in danger of becoming isolated and irrelevant to leading the emergence of new paradigms" (Daft and Lewin, 1993: i)

   At the same time, there has been an "associational revolution" in the nonprofit sector that has been called the most significant social and economic development of the twentieth century (Boulding, 1991; Salamon, 1994). Resulting, at least in part, from recognition that social, economic, and environmental problems transcend, and may inherently contradict, traditional organizational roles and boundaries, this revolution has spurred millions of people into action to improve their conditions. Redirecting trillions of dollars in resources and directly affecting hundreds of millions of lives, this has required creating new methods of addressing people's needs--new forms of organizing, new qualities of leadership, new methods of communicating and decision making, new means of inter- and intra-organizational cooperation, new methods for planning, learning, and adapting, and new definitions of organization/environment interactions. In short, it has created a new paradigm for organizing and managing.

   Unfortunately, these two movements--one a call to broaden the focus and purpose of organizational management, the other an associational revolution that is creating new paradigms for management--have remained separate; management theorists rarely look to the nonprofit sector for theory development. Stone, Bigelow, and Crittenden (1999) reviewed articles on strategic management in nonprofit organizations for the period 1977-1999. They searched "the most prominent management journals" and identified a total of 65 articles reporting empirical studies of nonprofit management, but 47 of these were in journals specifically focused on nonprofit organization and management. Over the twenty year period only 18 articles were published in the management literature, or less than one article per year. I searched the same journals for the period 1999-2010 and found a similar result: collectively in prominent management journals approximately one article per year has been published related to nonprofit management.

   1.1 Limitations of the Management Literature

   Even when authors attempt to extend the reach of management theory into nontraditional areas, they seem trapped in their thinking on acceptable methods and sources. An Academy of Management Journal Special Research Forum on Emerging Economies examined "whether Western theories are generally applicable in emerging economy environments and whether these contexts permit development of new concepts or modification of old ones (Hoskisson, Eden, Lau, and Wright, 2000: 252). The studies, however, were limited to formal for-profit organizations and so excluded the opportunities presented by civil sector organizations. And the issue explicitly considered the potential for application of traditional, western-based theory in emerging economy organizations and ignored the potential for a reverse flow of learning. G. Bruton (2010) briefly reviewed the management literature relating to management and global poverty. He searched "16 journals that could be considered academic journals that management scholars could target" (:6) using "key terms such as poverty and bottom of the pyramid ... informal firms, microfinance, and microlending" (:6). He did not include any journals focused on nonprofit or nongovernmental organizations, the organizations most involved in poverty alleviation, or economic development journals, the field most directly concerned with poverty alleviation, and he did not include nongovernmental organizations in his search. Not surprisingly, by limiting the search to mainstream management journals and topics, he found only 3 articles addressing poverty. This is analogous to looking for evidence of birds under the ocean--the lack of evidence is related more to where you are looking than a paucity of birds.

   This myopia is perhaps not surprising, as "management" has become synonymous with "business management" in management theory. According to Drucker (1999) "management writers ... do not even hear the word 'management'; they automatically hear 'business management'". And management theorists are unable to accept the legitimacy of organizational research outside of traditional settings. They are still trapped in the mindset aptly describe by Daft and Lewin more than 20 years ago: "Reviewers for established journals seem to value papers whose theses are anchored in established theories or that use "legitimate" methods, thus implicitly creating a publication barrier for research that falls outside mainstream topics or methods" (Daft and Lewin, 1990: 1). If organizational theorists could break out of the "normal science straightjacket" they might recognize opportunities to explore nontraditional organizational forms for new examples and new inspiration.

   1.2 Opportunity to expand Organizational Theory

   The experiences of nonprofit and nongovernmental organizations provide such an opportunity to expand organizational theory and practice, provide models for transformative organizational change through investment in human capital and local initiatives, and provide new philosophical concepts for organizing and managing to expand and enhance international management theory (Ellerman, 1999; Mangaliso, et al, 1998). These organizations must contend with multiple and diverse environments marked by turbulence and uncertainty; must link dispersed and often hostile constituencies; must cope with rapidly changing stakeholder needs and demands with little control or authority over key actors or resources; must contend with internal diversity and conflict; and must face persistent uncertainty in funding and continuity. According to Fowler and Malunga (2010: 4) the challenges facing NGO management include "diverse cultures need to be blended without losing their individual values; nationalism needs to be mitigated, ... strategies and operating procedures need to be aligned, but without becoming homogenized; financing models, income allocations and overhead cover need to be negotiated; governance and power distributions have to be rebalanced and existing partnerships need to be revisited and rationalized."

   This paper attempts to unite these two unconnected but potentially mutually supportive movements. It uses the lens of management theory to examine intermediary level NGOs (IOs), a unique organizational form that became prominent and grew dramatically in the mid-1980s in response to the changing priorities in development (Carroll, 1992). By examining the origins and role of IOs it suggests opportunities to expand the scope of organizational theory, as well as an opportunity to contribute to meaningful social and economic change.

2. NGOS AND ECONOMIC DEVELOPMENT

   This organizational revolution is centered on a broad set of nonprofit and voluntary organizations There is considerable confusion over terminology. Nongovernmental organizations and nonprofit organizations collectively are commonly referred to as the 'civil society sector' (Salamon, et al, 2004: 56 note 2) or...