In this occasion we are going to study the relation between the management practices and the corporate performance inside of a nongovernmental organization (NGO), the region where it was centered this research was Middle East and specifically in Lebanon. The guide article of this analysis is “The effect of management practices on corporate performance. An empirical study of non-governmental organization in the Middle East” by Michael Soto Chalhoub and published in Journal of Management.
This article highlights the increasing importance of the NGO´s role in developing countries, those regions don´t count with well equipped governments and their private sectors don´t show big efforts to invest in neither public goods nor services, that´s why NGOs have had to intervene into the civil society issues, undertaking developmental projects sponsored by international organizations.
According to the UNDP definition NGO is “any non-profit organization, group or institution that operates independently from government and has primarily humanitarian, cooperative or developmental rather than commercial objectives”. Despite having a clear differentiation among NGOs, profit oriented organizations and public institutions, all these entities work in the same sphere, this fact suggest that NGOs as well as the rest of organizations should be measured through performance indicators in order to confirm the accomplishment of their objectives. In NGO´s case is particularly difficult to assess that performance because the results of its projects are completely perceived in the long term.
NGOs are object of several environmental factors that influence their organizational performance, here are highlighted some of the most influential ones.
Societal tensions: conflict situations left government agencies with little control to develop their functions, that´s why NGOs enter to the stage, complementing the government functions.
When societies are highly dependent on the government welfare system, a major exposition to market forces could weaken this structure and make people vulnerable, so the NGOs are there to meet social and economic needs.
Issues such as growing communication technologies, the media awareness about global problems, the increasing professional job supply in the NGOs´ sector and the changing political ideologies have encouraged the increase of NGOs consolidation.
This article analyzes a research which emphasizes the effects of certain organizational factors (strategic plan longevity, management techniques, and industrial relations between others) in the corporate performance. Lebanon was the elected place to develop this research because this country offers more liberal regulations for the civil society activities. In this research was formulated some hypothesis that were confirmed or rejected according to NGO mangers´ responses. This essay shows the most important findings of this research:
A better performance in NGO´s operations is determined by the consolidation of a long term strategy. Thanks to the unstable stages that society must face, the NGO´s strategy should be as flexible as possible in order to adapt the organization to the changing environmental requirements, a long term strategy is the only alternative that can meet those challenges because it can “be specific enough to clearly define the purpose and directions of the organizations but broad enough to be flexible and accommodate rapid changes affecting its external environment”.
It was demonstrated that older NGOs have better outcomes than the younger ones due to their maturity, that experience gives organizations more credibility and confidence towards their stakeholders. It could be easier for them to obtain funds from their donors for the projects that NGOs plan to execute.
NGOs in the Middle East don´t show structured management systems; indeed what managers consider appropriate is a flexible structure in order to get a better adaptation to the situation´s requirements. Also due to the particular nature of these organizations, managers expressed that it is difficult to implement a strict management system to all employees, especially by the fact that exists various types of employees (full timers, part timers and volunteers).
When NGOs have good relations with industrial sector and government and posses a good reputation in society, the funding sources increase their contributions to the NGOs´ developmental projects and employees feel happy to be working in “good will” organizations. A positive reputation gives credibility and reliability to the NGOs.
Those organizations that focuses in one or few fields get to develop a competitive advantage because their expertises help them to deliver tangible results more effectively and efficiently.
External factors affect the NGO´s performance but in the Lebanon´s case the political influence is more notable because many NGO´s are owned by Lebanon politicians and the NGOs´ mission changes according to the political context, so the NGOs act according to the interests of the their political affiliation. This situation affects enormously the NGOs´ performance and it is a concern that civil society should resolve thoroughly.
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