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Why has it taken World Vision so long to configure its worldwide partnership organization structure and governance processes? What do you think of the federated partnership model they have settled on? How appropriate are the governance processes and mechanisms? 2
What advice would you give to the International Board regarding the AIDS Hope Initiative? Should WVI pursue this as a major strategic priority? What advantages do you see? What concerns do you have? 6
If the International Board approves the initiative, what advice would you give to World Vision's management (Dean, Hirsch, Rich Stearns, Wilfred Mlay, Ken Casey)? How should they implement this new priority? Specifically, how should they deal with the resistance that they have encountered both inside and outside the organization? 8
World Vision was founded in 1950 by Bob Pierce. Though Pierce's being action oriented and innovative, he was not enough in setting long-term goals and in developing management tools and creative strategies which made the organization inadaptable to daily changes and dependent on the donors.
There were lately established offices in Latin America countries and WV's loss of contacts in Southeast Asia. Successor of Pierce, Mooneyham, saw the need to change the focus from Southeast Asia to Latin America. As sustainability of the sponsorships was questionable, Mooneyham proposed to build up a children hospital in Cambodia. It was turned down by the international board. Later WV Australia and New Zealand built up Mooneyham's pre-planned hospital which was a first step of the internationalization and caused change in mission statements in 1973. Accordingly, WV International was established by US, Canada, Australia, and New Zealand. Problems started revolving around after the establishment of WVI due to unclearness of responsibilities between the units and having different targets. This also caused cultural problems in the organization. Moreover WVI shared the same location with WV US in Los Angeles.
When Tom Houston became president of WVI, there was discontent in the organization. He conceived the idea of Area Development Program (ADP) which he thought would help developing the national offices. This would pave the way for finding local solutions to local problems. Graeme Irvine, successor of Houston, set new core values in 1990. After a long marathon of 24 drafts, board approved new mission in 1992. In 1995, WV Partnership decided on "federal model". With this model, it was aimed that all partners would be self-sufficient; but they would share the common language, systems and operations.
In 1998, Stearns assumed the presidency of WV US. He carried out reorganization and increased the efficiency in WV US, by developing strategies and sales channels for the donor acquisition and retention with Tandon, VP of Marketing in four years. The key driver for their success was the attention they paid to the customer satisfaction.
Hirsch became president in 1996 and initiated HIV/AIDS strategy in December 2000 pushed by Mlay, African Regional Vice President and Stearns, WV US president. Casey was assigned as the director of AIDS initiative and asked to prepare strategies to proceed. This was the time to set a new strategy for WVI and decide to continue or to quit. There would be some internal and external resistances against this new initiative. These would need to be handled carefully by considering organizational, international, local, and cultural issues.
Why has it taken World Vision so long to configure its worldwide partnership organization structure and governance processes? What do you think of the federated partnership model they have settled on? How appropriate are the governance processes and mechanisms?
It took WV partnership organization to configure structure and governance processes about 25 years. During this period, five people assumed the presidency of the organization facing a transformation.
International Partnership, Central Control
Challenging the Central Control, The need of local involvement , ADP
Since organization's environment has changed over time, WV needed to adapt itself to internal and external environments. During Mooneyham's presidency, they needed to improve their mission from transfer organization to transformer and to establish an international partnership in order to adapt internal dynamics. Houston struggled to deal with the conflicts among support, regional and international office aroused from lack of communication and cooperation and realized the need of local involvement. Irvine led the new structure of enabling all partners self-sufficient while continuing common language, systems and operations. Hirsch initialized AIDS initiative which could enable the organization to focus on global learning.
In this context, they needed to change their strategy when needed, when conflicts occurred, or by suggestion. Expansion of the organization also forced it to redirect the strategy.
Vision was updated and changed by each successor president. Presidents tried to develop the organization's vision. There were many reasons retarding the development of the organization. During the transformation, each president faced conflict among the managers and directors from national offices, international office, and support offices. The main reason for that was missing communication, cultural differences and cooperation among the headquarters, support offices and national offices. Shortly, the organization was lack of integrating mechanisms. (Hill, 1994) The presidents should have set conflict management tools. They could have assigned the decision responsibility to a specific department or they could establish coordination/execution teams. (Hedlund & Dunning, 1993)
In 1973, internationalization process was triggered by the countries that want to have equal rights as US office. In 1978, During Hooneyman's presidency, conflict occurred because of the lack of power allocation between operational and fund-raising groups. After 10 years, during the Houston's presidency, similar conflict occurred again among the field and support offices, and international office. Division of responsibilities was not clear and this caused major communication and cooperation problems in the organization.
Since WV was going to "internationalization", everybody in the organization should have been aware of the cultural differences. The new structure should have been negotiated at all levels and shaped accordingly. (Hills & Gancel, 1997) Cultural environment should have never been ignored and management styles should have been compatible with the cultural environment. Presidents ignored the mid/low-level employees' views. For example, during the presidency of Mooneyham, fund-raising teams felt frustrated. The reason for that was that interdependencies between the units were not set properly and units' successes were ignored by the management. At least, change in the structure and mission could be discussed with the employees. (Hills & Gancel, 1997)
After adaptation of formal declaration of internationalization in 1978, before setting the federal model in 1992, the organization was maintaining global strategy. The structure was centralized. Know-how and operations managements were centralized, national offices were implementing headquarters' strategy. In 1990, the first step was taken to transfer know-how to national offices, Area Development Program (ADP).
In 1992, after creation of covenant of partnership, the organization's structure took a customary shape. With this covenant, each partner agreed on know how transfer to national offices. The organization's capabilities would be interdependent and dispersed, and national offices would be self-sufficient while sharing the common values and operations.
As stated in the case, according to Brant Myers, senior Vice President of Operations (Barlett & Curran, 2005:6):
"â€¦That should result in centralizing the things that can be done better and cheaper that way and decentralizing other things that can be managed more effectively on the front lines. . . . We learned that the biggest misreading of federalism is to call it decentralization. The key to federalism is to ensure the right of intervention held by the leader at the centerâ€¦"
Organization has interdependent network. According to the case, International council was located in highest level of chart. Members of this council were international board members. In addition to setting and assessment of the goals, this council was also making recommendations to the International board regarding global strategies and policies. International board was responsible for strategic plan and budgetary approvals and international policy. Regional programs and strategies were shaped at Regional forums. These forums also proposed representatives to the WVI Board. The partnership office was the executive groups of the organization and supported daily operations. There were also partnership support offices in Europe and US to make lobby. Regional offices, the number of which was four, were responsible for planning and programming the operation of 48 national offices. National offices were support or field offices or both. They had a right to represent on the international council and voting of regional representatives. Branch offices and Intermediate stage offices were deemed as transitional office to full interdependency. Although Branch offices were managed by national advisory committees, WVI had the legal and management responsibility. Intermediate stage offices were governed by local boards and their critical decisions such as budgetary, appointment and termination were approved by WVI. Fully interdependent offices were considered as nonprofit organizations. They did not need any approval from WVI for the items which were stated in covenant.
The federated partnership they settled on would enable the organization to transfer know-how to the national offices. By doing that, they would be able to increase organization's national responsiveness. Headquarters were responsible for strategic management and financial control of the organization. With that structure, although center of competencies and support offices were centralized to support the local entities, in addition to operation and marketing operations, decision making responsibility was decentralized and national offices could design and offer their services to the local needs. That's why, national responsiveness was enhanced. The negative side of this structure is that transfer of know-how was limited to the other nations. With this structure, coordination between central and local offices is important. Additionally, this structure enabled the organization to reduce their overhead costs stemmed from centralized operations. (Hill, 1994)
What advice would you give to the International Board regarding the AIDS Hope Initiative? Should WVI pursue this as a major strategic priority? What advantages do you see? What concerns do you have?
WVI should keep working on this initiative as a major issue, since this initiative will provide added value to the organization. The biggest advantage of pursuing this initiative would be developing and transferring a new know-how in a different subject. With the structure and strategy proposed by Casey, the organization would focus on the third dimension, global learning, in addition to local responsiveness and cost perspectives. This means that it would be possible to create know-how on local and transfer it to different entities. This would require the transnational strategy from the organization. (Hill, 1994) This initiative could serve a key to new opportunities for the organization's expansion. People in the organization would discern with a proper planning and strategy every kind of project could be done.
It is obvious that implementing HIV/AIDS initiative will challenge the organization in terms of strategic and structural changes. According to the proposed organization chart, the structure would be more centralized than WVI's. Since WVI has sources and management capabilities in national offices, AIDS Hope initiative could exploit these existing sources. Even though employees didn't know how to deal with AIDS crisis, their capabilities could be exploited in certain operations like logistics, project management etc. This would require matrix organization which could possibly causes power conflicts among the directors and managers. (Hill, 1994)
It is also obvious that in the beginning, managers and employees will resist to this new initiative. They could manipulate the data related to the new initiative. Therefore, getting prepared the managers and employees is crucial. Additionally, it is very important to use data management and performance management systems in order to monitor the initiative's initial phase and to prevent probable problems before they occur.
The structure would be based on matrix structure which field and operation managements could exert their influence on. Therefore coordination and integrating mechanisms should be set properly. In other case, this could cause conflicts and ambiguities which could increase the costs and hence the initiative's future. In order to curb these possible problems, cultural issues should be studied. (Hill, 1994)
Another concern would be the donor base. According to surveys, donors were not keen to donate the AIDS issue. In this case, the organization would need to find new ways to increase its fund-rising for the new initiative which existing donors were very reluctant to donate. Cost of fund rising activities would needed to be afforded by the national offices. Key funding countries would not be willing to afford the costs arising from this initiative. Regional directors exerted their influence on the decisions, since national directors were directly reporting to them. With the matrix structure, it would be another predicament among the managers.
Employees in national office and public's resistance would be another concern. Since AIDS had been perceived as the punishment of the God in Africa, public would not feel itself comfortable about it. So this means initiative could confront difficulties to get the support of the nations suffering from the crisis. At this point cultural analysis needs to be engaged to this strategy.
If the International Board approves the initiative, what advice would you give to World Vision's management (Dean, Hirsch, Rich Stearns, Wilfred Mlay, Ken Casey)? How should they implement this new priority? Specifically, how should they deal with the resistance that they have encountered both inside and outside the organization?
Hirsh and Stearns acted as initiators. This was good for the initiation, since it implied top-management commitment. However, if this initiative was considered as "top management's business", this initiative could not have deep and wide dimension and can stagger. WVI should deeply study its structure and procedures. Planning the change and giving the decisions at high levels would not be beneficial for the strategy. The new structure should be negotiated at all levels and shaped accordingly. Cultural environment should never be ignored and management styles should be compatible with the cultural environment. Managers who will perform this change needs to be prepared for the international issues. Cultural issues and differences take important role at this point. Participants should be aware of different meanings of different behaviors. (Hills & Gancel, 1997)
While Casey was concerned about the fund rising issue, marketing department was concerned about the cost ratio which was a result of having different aims.
Since national, support and international offices will have different priorities with shared operations; it is obvious that AIDS initiative will confront internal and external resistance. National offices will be in dilemma of national responsiveness and integration. At this point, reluctant but strong managers can affect the progress. (Hills & Gancel, 1997) Because of that, the management needs to involve and listen to every management and employee level from headquarter to national offices. It is also very important to figure out the cultural differences. Therefore, performing culture audit can emphasize the differences among employees and their expectations. (Hills & Gancel, 1997) Additionally, management should encourage the informal integration mechanism though the organization. This can be done by arranging trainings for the employees, choosing appropriate managers who are team players, applying performance management and scorecard systems, socializing the employees. (Hill, 1994)Additionally, negotiation skills of the employees should be developed and everybody in the organization should have the same level understanding of the international business and its requirements. (Hills & Gancel, 1997)
External resistance would be stemmed from public's AIDS perception. The initiative will need to struggle to destroy this perception. The public needs to be informed about the HIV/AIDS crisis. In order to that, initiative should understand the culture and its meanings in the region. Strategy should be compatible with the cultural environment. (Hills & Gancel, 1997) Another external resistance would be donors' perception. Donors would feel suffered from donating to this initiative, because AIDS is perceived as if it happens to sinful people. Additionally, the organization's image had been focused on child. Since childhood and sinful people images contradict, the marketing and operation departments should struggle to blend these images to attract and convince the donors.