Study About Non Governmental Organizations Business Essay


Over the course of a lifetime, human beings make countless decisions, most of which are repeated decisions. In repetitive decision making, individuals can rely on their prior knowledge and experiences. Experience helps the decision makers cope with the complexity of the real world. Consider, for instance, product decisions: Malls, catalogue companies, Internet auctions, and other types of markets offer consumers a virtually infinite set of possibilities to satisfy their needs. Fortunately, adult decision makers already know a lot about groceries, clothes, household devices, computers, TVs, or automobiles. They already hold preferences for certain brands, they can rely on advice from friends and consumer magazines, and, most important, they have a huge repertoire of behavioral routines. Development of routines allows decision makers to maintain mastery of the situation [1] . Once a behavioral solution to a decision problem has been learned and stored in memory, individuals can use this knowledge when they reencounter the same kind of problem. Under situational and processing constraints, routinization enables individuals to quickly arrive at a decision.

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Recurrent decision making involves feedback learning. In most cases, the behavior's consequences indicate whether one has made a good or bad choice. Thus, experience helps the decision maker discern good and bad alternatives. Once a good or satisfying solution to a decision problem has been formulated, it can be added to the routine repertoire. Therefore, decision makers who are confronted with familiar decision problems can capitalize on their behavioral knowledge. They become aware of potential solutions on recognition of the situation (Klein, 1999). In contrast, individuals facing a novel decision problem are ignorant in the beginning (otherwise these problems would not have been novel to them). They must search for behavioral candidates, evaluate the consequences of these behaviors, and apply some sort of decision rule to identify a promising solution. As such, experience makes an important difference: Recurrent decisions are anchored on learned solutions or routines, whereas novel decisions are not. As we see later, routines systematically influence each step of the decision process.

Non-governmental organizations (NGOs) have become relevant and interesting

subjects of study in the social sciences, not only because of their substantial growth

in numbers, but also because NGOs are claimed to represent a distinctive category

of organizations that differs from market or state organizations. Many attempts have

been made to categorize and study non-governmental organizations in comparison

to state and market actors [2] 

The literature is just as diverse as the NGO community itself. The NGO literature

roughly focuses on four topics. First, the literature tries to explain why NGOs exist

in the first place. Various explanations exist, but they all are functional in character;

NGOs exist because they are believed to perform better than state and market organizations or to complement state and market activities. Second, the literature focuses on explaining the expansion of the NGO community in the past decades. This expansion is predominantly explained by the promise for successful performance of NGOs. However, this promise did not uphold, the performance of NGOs appeared problematic. This initiated a third strand of NGO research into the exploration of NGO problems in relation to NGO characteristics and NGO behavior. However, there is legitimate reason to question the assumption that NGOs can be treated as a coherent group of actors. A fourth strand of research therefore focuses on the study of diversity within the NGO community, as a way to explore causes of variety in NGO behavior and performance. [3] 

The promise of successful NGO action

NGOs are often presented to be the solution to many problems: they are believed to be able to complement, substitute, or countervail state or market organizations, thereby compensating for market or state failure. Various theoretical explanations are given for this. For example, NGOs would meet 'residual demand' not covered by state organizations (public goods theory); or NGOs are the logical providers of services that are characterized by information asymmetry, because for profit organizations can take advantage of this asymmetry (contract failure theory) [4] . Others argue that NGOs are capable to 'work easily with or complement the resources of family and informal networks [5] . It is also argued that NGOs are solutions to the free-rider problem that the state often experiences and it gives the state a way out to deal with diversity, to minimize bureaucratization, and to enhance experimentation. In addition, it gives the state a way out with concern to insoluble, political, and sensitive social problems [6] .

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These various advantages of NGOs can be categorized in two perspectives on the function of NGOs: a political view and an instrumental view. In the latter view, the NGO community is perceived as purely instrumental: it comprises of clusters of organizations that provide support and services which the state or the market does not provide at all or not as well [7] . From this perspective, NGOs are studied as effective and efficient service providers doing the job better than state or market organizations. In contrast, the political perspective focuses on the political role of NGOs. Within this perspective we find nuanced differences in views. One idea is that NGOs function as a countervailing power to the market or/and the state, adding to the creation of a system of checks and balances in society. The political function of NGOs is then to 'strengthen civil society and hence democracy by improving interest articulation and representation' (Clarke, 1998:50). A slightly different perspective on NGOs as political actors is that they represent 'the institutionalization of existing patterns of political contestation between civil society and the state and within civil society itself [8] . In addition, NGOs are also described as 'a collection of individuals engaged in a struggle for respect and recognition as human beings with dignity' [9] .

Related to the academic discussion summarized above, one can also identify various political views on the functions of NGOs. Liberals perceive NGOs as preferred channels of substitution of state or market action aiming at socio-economic development. Neo-liberals see NGOs as channels of service provision complementary to the state [10] . From a more leftist stand, NGOs are perceived as vehicles for democratization contributing to the transformation of society [11] . In other words, NGOs either fill in a vacuum between market and the state or become arenas of 'political contestation' as a 'response to the hegemony of formal institutions' [12] .

The debate about the role and function of NGOs has not been resolved. Moreover, the question is whether this debate is a matter of 'either … or'. Some argue that NGOs are both instrumental and political in character by characterizing the role of non profit organizations as 'protectors of both pluralism and privilege, sites of democracy and control, sources of innovation and paralysis, instruments of and competitors to states' [13] . Nevertheless, the outlook is predominantly optimistic: NGOs are perceived as promising actors on the global scene. They would either be better service providers than state or market organization or they would contribute to a better and fairer world. It was this optimism that induced the growth of the NGO community in the past decades

Broken promises: Explaining problematic NGO performance

For a long time, the optimism for successful NGO performance was shared by academics. This resulted in fairly rosy accounts of NGO actions and behavior(Clarke, 1998). Since the 1980s, however, the political and instrumental role and behavior of NGO has been studied more critically. This led to studies pinpointing not only the strengths but also the weaknesses and problems of NGOs: NGOs failed to reach the poor, worked in some places but not in other places, or lacked internal democracy or downward accountability (Edwards and Hulme,1996). Various organizational problems were identified, such as problems of establishing legitimacy and ensuring accountability, of buttressing the philanthropic base, and of balancing professionalization with voluntarism (Salamon and Anheier,1997b:116-128). In other words, NGOs were accused of not fulfilling both their political and instrumental roles satisfactory. The identification of not only the strengths but also the weaknesses of NGOs resulted in a heated and continuing debate about NGO performance and accountability (see for example, Edwards & Hulme, 1996; Brown & Moore, 2001;Choudhury & Ahmed, 2002). This led to a new question in NGO research: how to explain these problems in NGO performance? The explanation for these problems is often sought in the common nature of NGOs which is argued to induce problematic performance. One explanation is that NGOs do not solely focus on representing the interests of disadvantaged groups, but also on defending their own organizational interests (Uphoff, 1996). In other words, the disappointing performance of NGOs is explained by the quality or budget maximizing behavior of NGOs (Hansmann, 1987; Beigbeder, 1991). Another explanation is that NGOs are responsible and accountable to multiple stakeholders whose expectations range between an instrumental and a political view of NGOs. This creates multiple and conflicting accountabilities to various principals, such as donors, governments, beneficiaries, the board, and the employees (Brett, 1993; Edwards & Hulme, 1996; Fowler, 1996; Tandon, 1996; Wills, 1996; Vakil, 1997; Hilhorst, 2002). Stakeholders, such as the government, may even be internally divided about their expectations towards an NGO (Fisher,1997). This forces NGOs to address all their stakeholders' accountabilities and expectations, demanding a multiplicity of activities and 'creative packaging' (Smith,1996:326). The consequences of these contradicting expectations can be described as follows (Edwards and Hulme, 1996:13):

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The above indicates that NGO structures and behavior are related to the expectations of the dominant coalition of stakeholders. Hence, stakeholders have an impact on the organization's structures and operations. Since these stakeholders have different interests and opinions, we may expect NGOs to be necessarily ambiguous, creating organization problems and hindering effective action (Edwards and Hulme, 1996;DiMaggio & Anheier, 1990). Recently, it is argued that NGOs are increasingly confronted with stakeholders that emphasize the instrumental nature of NGOs - where NGOs are seen as cost effective instruments for service delivery - whereas NGOs themselves are inclined to emphasize their political role. Biggs and Neame (1996), for example, argue that important stakeholders have developed 'a formal, linear, mainstream approach to development planning,' in which development is perceived as 'a set of predictable outcomes to be achieved through the ordering of project inputs and outputs …'. This approach inhibits a strong belief in the possibility to accurately measure development outcomes.

In summary, NGO researchers, in their search for explanations for NGO problems, often consider NGOs as a coherent group of actors that show similarities in their characteristics and behavior. This is illustrated in the availablity of many publications that discuss the common nature of NGOs. For example, economists try to explain why NGOs are inherently inefficient or slow to respond to growing demand due to the absence of ownership, constraints in access to capital, and lack of means to control the client and the worker (Hansmann, 1987). Publications studying NGOs from an organizational or management perspective discuss NGOs in relation to issues such as management and leadership (Lewis 2001, 2003; McClusky, 2002), learning capabilities (Edwards, 1997), organization change (Powell & Friedkin, 1987; Christensen & Molin, 1996) and innovative capabalities (Corder, 2001). However, the question is to what extent this assumption of NGOs as a coherent group is legitimate.

The consequential humanitarian aid NGO

If decision-making follows a logic of consequence, we should find sequential reasoning, prospective reasoning, maximizing behavior, information-driven decision-making, and expert decision-making. Decision-makers in an NGO with a consequential mode of decision-making perceive their work as providing aid where they feel they can be most effective with a particular budget. Effectiveness can be defined in many ways, but an NGO will at any time try to meet their organizational goals in an efficient way. For example, an NGO might start projects that are believed to help the largest number of people; or an NGO might go there where others do not come. A project is ended if the goals of the project are accomplished, or if the project is problematic in terms of effectiveness and efficiency. The decision to start humanitarian aid projects is made on the basis of information. Experts formulate various alternatives for action and a decision is made by assessing information on issues such as the scope of a humanitarian crisis, the number of people in need, the needs in terms of hunger, illness or displacement, and the number of other aid agencies present in the area. These issues will be evaluated with an eye to the goals and the future plans of the organization. The organizational goals form the basis for the budget and the formal policy plans of the organization. These describe in which global areas the NGO plans to be active, and with what type of activities. We expect the NGO to attach a lot of value to detailed written project proposals that entail a budget, a project plan, and a deadline. The locations and humanitarian activities will probably be selected based on information about the humanitarian crisis situation and related to the goals and policies of the organization. This implies that both the location and the activities might vary through time, depending on the policies, the situation, and the needs at hand. The termination of projects will be based on an extensive formal evaluation of a project in order to determine whether a project has achieved its goals or whether there are legitimate reasons to terminate the project because of ineffeciency and ineffectivity. This indicates that an NGO in which consequential decision-making is dominant will end projects quite regularly. Important indicators of success of projects are for example: the number of people who received aid; the fact that the implementation of the project activities corresponded with the formal project plan; that the project spendings did not cross the planned budget; and timely implementation of the project. We expect the organizational policies and procedures to closely match the actual decision-making outcomes and processes. The organizational members will regularly use policy papers, procedures, and guidelines in the decision-making process. The NGO has several specialized departments, such as regional or thematic departments, in which people with the same kind of expertise (per region or type of aid) are brought together. This expertise is a defining factor in decision-making. The hierarchical line of decision-making is clear to all organizational members. In addition, the organization has an administrative system that facilitates the collection and exchange of information. Filing and documenting decisions, next to evaluation and assessment mechanisms, are important means to control the decision-making process. We expect that projects will be closely monitored through regular financial and activities reports.

The appropriate humanitarian aid NGO

If decision-making follows a logic of appropriateness, we should find rule-based decision-making based on instant, analogous, and retrospective reasoning, and obligatory behavior. Decision makers in humanitarian aid NGOs that resemble the model of appropriate decision-making will make decisions based on organizational experiences. Hence, those organizational members who have been working in the organization for a substantial period of time, and therefore know the organizational experiences, have a defining impact on the outcome of decision-making. Actions in the past determine the decisions for the future. There is a clear understanding of what the organization should do or should not do. People decide in an appropriate way, because they are convinced that there is only one right way to act in relation to the organization's purpose. There is an almost unconscious way of acting. This way of working has developed through time and reflects the organization's history. We expect humanitarian aid NGOs with an appropriate decision-making mode to help those countries where they feel they are obliged to go. The urge to go somewhere is a result of a consideration process in which the expectations of the public, the press, the receiving countries, and the organizational values and beliefs are taken into account. Former experiences are also important factors in the decision making process. If the organization had a presence in the area before, we expect that the decision to initiate humanitarian projects will be taken quite automatically. In addition, project activities will be regularly extended. If a project has been successful in the past, in the sense that the organization's trust has not been damaged, we expect an almost automatic approval of the project. The decision-making process is an individual activity. Internalized rules provide the organizational members with clues for how to act. Most of the time, the decision maker will immediately know what to do. Since the organizational values of trust and obligatory action are so much engrained in the individual, we hypothesize that there will be few conflicts within the organization. Project proposals and other decisions regarding the initiation and termination of project activities will not be debated. The organizational members make decisions based on the internalized value system. We will not see the use of manuals, decision-making procedures, and policy plans describing the organization's future plans. There is little specialization of work, and the organization has a low degree of hierarchy. We hypothesize that the aid flow to countries and organizations is relatively stable. As the NGO provides aid, expectations for the future are created in the recipient countries and the NGO will feel a commitment to continue its activities. We also expect that the organization's activities are relatively stable; as the organizational members have a clear sense of what kind of aid projects fit the organizational purposes. Hence, NGOs develop long-lasting relationships with the recipient countries. Ending projects will not happen easily and regularly, because the feelings of commitment in the organization are strong. Whenever projects end this is only after a long process of deliberation and consultation. In case a project is ended, the organization will ensure that the project is taken over by others or that the people on the spot can take care of themselves.

The garbage can humanitarian aid NGO

The defining characteristics of garbage can decision-making are simultaneous and individually prospective reasoning, entrepreneurial behavior, and decision-making by coupling. If an NGO has a garbage can model of decision-making we expect to find the organization to be very dynamic and turbulent. There will be lots of discussions about decisions to be taken. Decisions are highly debated because there is no agreement on goals and organizational preferences. We expect that every now and then this internal turbulence is part of newspaper headlines, as some participants might have an interest in making the turbulent dynamics within the organization public. In addition, we expect to find fluid participation in decision-making fora, for instance, in the form of high turnover of staff. Decision-making is largely informal. In such a context, we expect to find decisions that do not reflect the formal goals and policies, if they exist. Therefore, the decisions taken will not reflect a coherent pattern regarding the selection of locations, target groups, and activities of humanitarian aid projects. This is a result of the coincidental character of the decision-making process. The activities will not be focused but spread broadly, depending on individual ideas about humanitarian aid. Every project proposal will lead to a discussion on the values and mission of the organization. There will be lack of agreement on questions such as: What is good humanitarian aid? What kind of activities should we employ and which not? When do we leave somewhere? Where should we go and where not? When should we start a project? The initiation and termination, as well as the location and activities, of humanitarian aid projects will to a large extent be arbitrary, and can better be explained by group dynamics than by the organization's structure and policies or a shared value system.


The impact of external factors: The crisis context and the stakeholders

This study indicates that especially the presence of garbage can decision-making is dependent upon external, contextual constraints. The law of diminishing alternatives in combination with a persistent organization to continue working according to the preferred decision-making mode led to garbage can decision-making as a last resort in some of the cases studied. This had to do to with external dimensions in the country of aid provision, as discussed in Chapter 1. We have seen how these circumstances led to a lack of alternatives of actions to chose from. This obstructed both consequential and appropriate decision-making, even though preferred in the organizations studied. Since we have observed these dynamics in both organizations and they were linked to contextual constraints often experienced by humanitarian aid NGOs, we hypothesize that the law of diminishing alternatives and garbage can decision making as a last resort might be a more common phenomenon experienced by humanitarian aid providers. A future relevant research question would be if other humanitarian NGOs that face limited alternatives as well as internal pressure to follow the preferred decision-making mode will also experience garbage can decision-making. The question then is to what extent humanitarian aid NGOs have an inclination to continue to work according to their preferred decision-making mode and to what extent these NGOs are influenced by external constraints, both in the headquarters' country and in the project country. In other words, to what extent is the law of diminishing alternatives for action a coincidental or a general phenomenon in humanitarian aid NGOs