ASSESSMENT NUMBER: 2

ASSESMENT TITILE: APPLICATION OF LEADERSHIP

THEORIES TO NGO

COURSE CODE: MGMT20215

COURSE NAME: LEADERSHIP AND GOVERNANCE

STUDENT NAME: BHUPATHI MANOJ NANDA

STUDENT NUMBER: S0246279

ASSESSMENT DUE DATE: THURSDAY (8-May-2014) 12.00 PM

AEST

Request ID 47077Student Manoj Nanda Bhupathi (S0246279)Course MGMT20125 - Leadership and Governance

Period/Year T1/2014Campus MEL

Campus Lecturer Zhou JiangAssessment Item Assessment item 2-ReportOriginal Due Date 08-05-2014

Days Sought 10Days Granted 10Comments

New Due Date 18-05-2014Timestamp 2014-05-08 11:57

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Executive summary:

Due to globalisation, many countries are able to meet the

economic requirements with establishment of new companies.

Though there is a lot of economic progression, despite there

are people suffering from basic needs to survive. It is

important for every organisation to take up certain measures

to wipe out these problems. Nongovernmental organisations

specially focus on these issues. These are the organisations

formed with an intention to serve the society despite of their

individual desires. To run such an organisation a strong

leadership is essential. For communicating the vision of the

organisation with the followers and to achieve its mission a

particular leadership style is not prominent. A leader should

be dynamic in switching on to the best style that suits to the

situation. Apart from nongovernmental organisations, there are

some profit organisations taking the responsibility for social

development. Apart from certain limitations, it is welcoming

fact to have such an organisations in the society, which are

helping to build a strong nation.

This report illustrates the interconnectivity between NGO,

leadership and organisational culture. Firstly this report

explores the concepts of NGOs. Secondly, it details practical

implication of NGO concepts with one of the existing NGO

(Desire society). Thirdly, it explains the importance of

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leadership and style of leadership suitable for NGOs.

Fourthly, it highlights influence of organisational culture on

NGO performance. Then, it explores the concepts of CSR and CSR

in Indian context. Thereafter, differentiates corporate

companies with and with CSR. Finally, it presents the CSR of

Tata steels. There ends the report with conclusion and set of

references.

Table of Contents

Executive summary…………………………………………………………………………..2

Table of Contents…………………………………………………………………………….3

1. Introduction to NGO………………………………………………………………………..4

2. Implication of NGO concepts to Desire

society………………………………………….....6

3. Leadership in NGO………………………………………………………………………....8

4. Organisational culture in NGO……………………………………………………………...9

3

5. CSR and CSR in India……………………………………………………………………..10

6. Difference between organisation with CSR and Without

CSR……………………………11

7. Tata steels CSR……………………………………………………………………………12

8. Conclusion………………………………………………………………………………....12

9. References…………………………………………………………………………………14

1. Introduction to Non Government Organisations:

Ngo’s are formed to serve the society and to uphold the

community interest rather than to make profit. They have

independence to observe performance of the government and

provide suggestions for improvements. There are certain NGOs

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which are appreciated both by government and private sector

and can help in negotiating the conflict between both the

bodies and helps in bringing up the consensus. Finally, their

sovereignty from public and private sectors allows them to

craft a shared vision for their society. NGOs rally volunteers

and other assets to accomplish their vision. With the progress

of time, NGOs are the initiators for the key societal

movements to battle for betterment of the society. With the

emerging egalitarianism, numerous NGOs came into existence.

NGOs provide protective nets to the civil society against

helpless and poor people.

The term “NGO” was coined in United Kingdom and came in

existence when some private organisations helped to heal the

havoc of the war (Aviles, 2012). First international NGO was

established in the year 1839 and named as Anti-Slavery

International (Aviles, 2012). Today, United Nations estimated

that there are 40,000 million various International NGOs

varying in size, sector they serve, issues they address

(Aviles, 2012). Whatever, it may be a large or small

organisation, either it may serve women or children, either it

may address human rights or environment issue, their scope is

to work for the betterment of the society. Mostly NGOs are

found by the people who are passionate to help the society for

a particular cause. Not just passion towards the cause, but

also related information, expertise, assets and associations

are essential to establish and run an NGO. Proper planning and

proper execution of the plan builds good NGO. In this report,

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we shall discuss the structure for building a valuable and

sustainable Ngo and we shall also discuss about the

responsible leader for running a successful non profit

organisation. This report addresses the key ingredients of Non

profit organisation like, vision, mission and activities. It

covers the role of a leader in enduring the responsibility of

relationship with various groups of community like, people

they serve, fund raisers, government and various stakeholders.

It provides suggestions to overcome various challenges it

might face. Finally, this report helps in building a

transparent, responsible and rightful NGO.

An NGO can be Rightful, when the people believe that it deals

with a need in the society and its members put that community

need above their individual interests. NGO survival is

deserved when it has comprehensive, appropriate mission

focused on congregating a social need. Not just a good mission

but also good governance is essential to run a rightful NGO. A

rightful NGO can be driven only with powerful leadership, who

can drive people and task in a precise way. An NGO with

ethical leader makes a transparent and responsible NGO.

According to Wyatt (2004) “An NGO, being responsible indicate

signifying often that it uses its funds prudently and doesn’t

take benefit of its special rights to pursue activities

converse to its non profit status. An accountable NGO is

transparent, readily opening its financial statement and

proceedings to public inquiry by funders, beneficiaries, and

others”.

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Every NGO must be responsible in answering the public. Main

responsibility is to answer to all the stakeholders, funders,

people to be served and the society. Expectation of the

responsibility differs from one group to the other. Funders

expect their funds to be used for the anticipated reason,

administered well and efficient to meet the presumed

objectives. People to be served expect to facilitate with

their needs and expects to care for them with value.

Expectation of the society can be meet by conducting community

meetings, by press meets and by releasing annual reports.

Consistency of the NGO can be maintained taking regular

feedback from the community.

All the organisations activities should be visible to the

society and should be explicable to how its agenda is

executed. Transparency can be attained by providing apt and

precise information about its programs, funds, rules,

regulation and decisions. Transparency provides a break to

learn and effort better. It creates a learning environment

through collective feedback.

All the three terms Rightfulness, responsibility and

transparency are interdependent on each other. When an NGO is

not responsible for the society it is not Rightful. If the

NGO is not transparent it is responsible. Therefore, being

transparent and responsible, assist in building a rightful NGO

with a precise mission to the society. During this process of

achieving these key aspects of NGO, obtaining faith from the

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community is most vital to serve the society in the better

way.

As a part of strategic planning process, cyclic analysis and

verification of the mission is part of an NGO. If at any

instance, there is a disagreement about the mission, or if NGO

losses its confidence within the group or the society,

reviewing the mission is considered to be necessary.

Translating its mission to reality by manifestation of various

programs and activities can bring a great difference to the

society (Wyatt, 2004). All the programs should be selflessly

planned and executed by expertise to obtain a long term

endowment.

As, ‘Drop and drop become mighty ocean’, solution to all

universal challenges frequently begin with a small

proceedings. When we react to the challenges and stand up for

the cause, it makes a difference to the society by taking

appropriate actions. For instance, conducting tutor programs

to educate the students who cannot afford for their education

in the schools. Whatever the challenge it may be, support for

the cause and obtaining necessary resources is very important

to establish the foundation and to administer ones mission.

Here comes the concept of Non Government organisation.

It’s not just intentions make an NGO, to perform the required

actions collection of resources like resources in terms of

volunteers to perform the activities set up by the

organisation, raising the fund of the organisation and to have

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supervise appropriate checks and balances for the set out

goals. To build an effective and efficient NGO, funds,

proficiency, dedication, support is a mandatory (Aviles,

2012). Effectiveness and efficiency of NGO refers to

consistency of the activities carried out with the progress of

time. Effectiveness and efficiency of NGO more elaborately

mean having a magnifying view of shared vision and mission.

2. Implication of NGO Concepts to Desire society:

This report discuss about one of the effective NGO of India

which has a vision of plummeting the fatality rate in case of

HIV/ AIDS infected children and also to reduce the disgrace

and prejudice associated with HIV/ AIDS infected children. It

was founded in the year 2005, with an objective of serving

HIV/ AIDS infected children in terms of health and wellbeing

in Hyderabad and various other metropolitan cities like

Mumbai, Bangalore, Vizag. Its intention is to provide care

homes for underprivileged HIV/AIDS infected children. In this

report we shall discuss various elements and aspects

considered by Desire society that made me to consider it as an

effective NGO.

Vision of Desire society is “to reduce the stigma and

discrimination associated with HIV/ AIDS and lessen the death

case among the people living with HIV in India” and having a

mission to “improve lives of the people struggling with impact

of HIV/AIDS pandemic, especially children and women and to

provide cost effective relief services, medical, social and

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educational support to the victims helping them to achieve

full life potential”. Organisation is taking additional

responsibilities to widen its mission and to ultimately attain

its vision.

Organization body of this NGO is a board of 7 members

consisting of President, vice president, general secretary,

Treasurer, and two executive members. Board plays crucial role

in decision making, recruiting new employees, procurement of

medicines and fund raising activities. Board conducts regular

meetings to monitor its performance. General Secretary

addresses the meetings.

Desire society, it is a trustworthy NGO, which gained the

attention of the society and made it think about the abandoned

HIV/ AIDs children. All the members of the organisation took

up the responsibility of serving the infected children above

their own interests. Its mission is to provide services in

terms of medical, economical, health, social support to the

HIV/ AIDS infected children and women and to improve their

lives. This mission made it unique from the other NGOs.

Achieving such a unique mission requires a good governance

framework and a lot of organisational effort in achieving that

mission. It is attaining its mission consciously with the

progress of time. All the board members of the organisation

are thriving to see lot of smiles on the infected children of

HIV/ AIDS by providing them care they are in need.

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Desire society is accountable to the society by providing

quality care to the underprivileged HIV/AIDS infected

children. For instance, Desire society is responsible for

happiness in Swathi’ s life. Swathi is an infected child of

HIV virus. When she was admitted, she was a 3 year old baby

with 3kg weight, at that point of time her father was died and

her mother was in hospital affected by HIV virus. Her mother

lost hope in her. But, desire society took a serious intention

for betterment of Swathi’s health condition. After providing

required treatment by their doctors, precisely after 4 weeks

desire society could able to see some changes in Swathi’s

health condition. She was treated with antiretroviral

medicine, because of which she could able to survive for a

long. Within 3 months, she gained her weight from 3kg to

12kgs. This life changing story of Swathi, from sadness to

happiness is a best example of accountability of this NGO to

all its funders and all its stakeholders

Desire society conducted various activities for improving the

lives of HIV/ AIDS infected children. Under such activities,

one such activity conducted by desire society was child

nutrition and health care program and could able to see

productive results at the end of the project. Detailing all

the aspects of its activities at various stages through

various means like, website and press meets, it could able to

prove its transparency.

Desire society has strength of 65 children of age group up to

18 years with the facilities for residency, health care,11

dining hall, class rooms, computer laboratory and play ground.

It is attaining its progress by using its funds effectively

and maintaining its transparency by providing all the required

facilities to the infected HIV/ AIDS children. As a part of

strategic planning process, Desire society, expand its mission

by providing the quality education to the infected HIV/AIDS

children, despite of the existing mission.

3. Leadership in NGO:

Managing different kind of people with different perspectives

and different attitudes is a vital task to run an NGO. All

NGOs need dedicated leader for transforming the vision of the

organisation into reality. Board of directors are the

responsible leaders of the NGO. They take an extra step of

responsibility to make sure all the resources and funds are

allocated appropriately and they manage resources efficiently

and conduct effective programs. Effective NGO develop various

contingencies in leadership at all levels. Developing

leadership skills and encouraging new talent motivates them to

reach the organisation goal.

Leadership has a strong impact in successful running of an

NGO. Transformational leadership style is the most suitable

style of leader for running an NGO. In this style of

leadership employees are motivated to work towards

inspirational goals giving importance to their self

actualization needs than any other external influences (Shiva

& Saur, 2011). Transformational leaders motivate their

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follower in sacrificing individual needs and work towards the

target. We can also observe transactional leadership in some

of the NGOs; it is the exchange of ideas, beliefs, thoughts

between the leaders and followers. Some of the aspects of

transformational leader such as strengthening the

organisational structure, maintaining its stability and

encouraging the group in terms of personal appreciation,

motivates other group members to work for the cause and

establish a good organisational stability. Contemporarily,

there is much focus given to transformational leader than

transactional leader in successful running of an NGO because

of some of the drawbacks in its nature.

NGOs face lot of challenges in various terms than that of a

profit organisation. To resolve the challenges a strong

transformational leadership is essential. Transformational

leadership is most appropriate style of leadership that is

adopted in countries like India because of sociability aspect.

Transformational leader is task focused and people oriented.

He takes up each responsibility to monitor activities in

person. According to Bass & Avolio (1990) transformational

leadership has five dimensions. Firstly, Transformational

leaders believe in building trust on their followers and also

attain respect from them through consideration, despite of

their individual needs. Secondly, maintain high standard of

ethics by the leader, so that followers get inspired by the

leaders approach. Thirdly, vision and mission statements

should be properly communicated to the followers by the

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transformational leaders through communication as a medium.

Fourthly, leader should assist his followers in overcoming

various challenges. In support to this statement schmid (2006)

argues that leaders create helpful environment and provide

legality required for the organisation to achieve its mission

and vision. Fifthly, personal attention to every member of the

team and providing problem solving techniques, training,

coaching, mentoring is to be carried out by a transformational

leader. Application of transactional and transformational

leadership helps in optimising the role of the leader in non

government organisations (Rowold & Rohmann, 2009). A

transformational leader should posses all these traits to make

a good NGO. Hardy(2007) argues that a leader of an NGO should

posses certain skill set like, vision and strategic planning,

innovative ability, risk taking, ability to create and uphold

intensification, network building skills and good

communication skills.

4. Organisational Culture in NGO:

Organisational culture in NGO makes it effective and

efficient. There is interdependency between organisational

culture and leadership. For building an effective NGO a strong

organisational culture is essential parameter. Articulating

leader’s vision and rallying the followers towards its vision

is an important characteristic of organisational culture.

Schein (1988) explores various stages in building a strong

organisational culture. In the first phase, hiring individuals

of who posses same values as that of a leader. In the second14

phase, selected candidate adapts to the organisational

environment by imbibing certain ethical values and norm of the

organisation. Thirdly, leader sets up example for the

followers in following the governance structure. Maintaining

these three phases in NGOs helps in building a good

organisational culture. Setting up an appraisal system helps

in monitoring the governance framework of the organisation.

Transformational leaders in NGO need to respond to various

external and internal stimuli for sustaining in the society.

So, transformational leadership is just to ally people towards

vision through the process of change, but also adapting strong

organisational culture. Schmid(2006) argues that leaders

change the organisational culture and their behaviour in

accordance with the leadership style they choose in the

organisation. Schmid (2006) also argues that if a leader is

unable to fit in certain situations, best possibility is to

choose a new leader with suitable traits.

5. CSR and CSR in India:

With the globalisation, corporate sector is booming its

economy and enabling its existence feel by the society.

Development of social environment apart from economical

success is very important to avoid the social dissatisfaction.

Since, the government is not able to meet the social needs in

India. It is essential responsibility of the corporate sector

to support the government in terms of necessary needs like in

India. Poverty is a major problem which cannot be solved by

government alone, corporate sectors should take initiatives in15

eradicating such problems. Basically, Poverty is because of

improper education. By providing quality education in rural

areas can eliminate the poverty crisis in India. So, all

corporate sectors should take up the challenges in overcoming

the scarcity of resources. Quality education can help the

rural poor to develop their skills and improve their standard

of living. Corporate organisations gain profit from society

and no company can earn profit apart from involvement of

society. In other word, no organisation exists without social

involvement. This indicates direct proportionality between the

organisation and society. It must go parallel. If the

government efforts are supported by the corporate bodies, this

may help in curing the chronic disease of poverty and

unemployment in countries like India.

According to World Business Council Corporate social

responsibility is “The continuing commitment by business to

behave ethically and contribute to the economic development

while improving the quality of life of the work force and

their families as well as the local community and the society

at large”. According to Tanimoto and Suzuki, (2005) CSR is a

notion, whereby companies prove their accountability to the

society by merging both social and economical aspects into

their business operations.

CSR is not a recent theory which is in practice in India. It

was in existence before Gandhi era (Rishi & Moghe, 2013).

Contemporary approach of CSR is participation of employees in16

accomplishment of CSR. Chahaud et.al (2005) developed four

models of CSR in India. Firstly, during 1850’s when wealthy

merchants donated funds to the society for building the

temples. Secondly, it was Mahatma Gandhi leadership lead to

Ethical Model of leadership. During this period, financial

donations and investment for society development were

undertaken for providing schools, medical centres, etc. It

gained a strong support from wealthy business man like Tata

family. Thirdly, after independence in the year 1947, there

was an emergence of static model, where it followed

socialistic economy with government undertaking. Focus was on

relationship between society and worker relationship with

certain legal proceedings. In the fourth phase, CSR is a

catalyst between non profit and profit organisations. Where,

corporate sector started involving CSR as a part of business

strategy. This made Indian government to liberalise and

deregulate Indian economy, making this model a ‘liberal

model’. In last phase, ‘stakeholder’ model of CSR, in this

model apart of companies economical benefit. Companies take

initiative in contributing to the society. All these models of

CSR have been suitable in Indian environment.

6. Difference between organisations with CSR and

organisation without CSR:

Ultimate target of both the organisations is to make profit,

but there is some difference which makes them reflective in

the society. Organisation with CSR, though there aim to make17

huge profits and sustain in the economy, but they include CSR

as one of its objectives. Hard core profit making

organisations might hold the profits within the organisations,

where organisations with CSR, takes up certain challenges to

eradicate certain issues in the community. They have different

boards with different vision and mission. They have different

governance structure and different organisational culture.

Profit organisations with CSR must be accountable for the

resources they used and should have a monitoring body to

evaluate the flow of funds and to maintain transparency within

the community. Companies with CSR get tax benefit depending

upon various parameters, where as hardcore profit

organisations are not exempted from tax.

7. Tata Steel CSR:

(Gosh and Chakraborti, 2010) TATA steel social work was

launched on February 1, 2003, following certain governance

procedure. It aims at elimination of poverty, malnutrition,

HIV/AIDS control, preserving the environment, women

empowerment and so on. They want to visualise their vision by

2015. Tata steels ltd. is located in the state of Jharkhand in

India. This state is facing lot developmental issues in terms

of literacy, malnutrition, infrastructure, which are hindering

the development of Jharkhand state. Tata steels took

initiatives in providing stable solutions to all this

problems. It adopted 95 villages located around the area of

steel plant with 229 teams working for the well being of the18

society. It is conducting various projects to attain the

desired outcome.

Table1. Showing the projects taken up by Tata steels and

Desired outcomes.

There is a positive progress in all the projects taken up till

date. All these projects prove the corporate social

responsibility of Tata steels. It has got a good governance

structure to monitor all these activities. Inspired by the

projects conducted by Tata Steels many small enterprises are

also contributing towards the social cause.

8. Conclusion:

A clear mission and vision, relevant activities and effective

programs, planning, managing, executing, effective leadership,

strong associations and diversified funding plays a vital role

in establishing an effective NGO. By performing SWOT analysis

and developing appropriate solutions to the issues faced

maintains effectiveness of NGO. Starting an NGO, is one of the

best way to create a lasting change for the community. It is

medium through which, associations can be formed and this

helps in viewing a wider vision. Desire society took a great

19

challenge in betterment of well being of HIV/ AIDS infected

children providing them with food, shelter, Medication and

education. The leadership, governance structure and

organisational culture in this organisation make it to be an

effective NGO, which is sustaining in the society more than 10

year. For an NGO, leadership is a key task in order to sustain

in the community. Leaders should be dynamic in preferring

leadership style according to various contingencies in the

organisation. This report, illustrate transformational and

transactional leadership styles, which can have a positive

impact on NGOs success. Transformational style of leadership

is more relevant to NGOs, where followers are driven through

the medium of change. Transformational leader focuses both on

process and followers. This subtle nature of transformational

leader makes the followers to build trust and work towards

their goal above their individual interest. Different

dimensions elaborated by Bass and Avolio (1990) helps in

understanding the strategies very precisely. Good culture

leads to good organisation and good organisation lead to good

society. Having a standard organisational culture with a set

of rules, regulations, norms, and ethical values delivers best

outcomes. It is vital for every NGO to follow dynamic culture

and maintain organisational stability. Not just organisations

helping to society in terms of various essential needs. It is

also responsibility of every public enterprise to take up the

challenge in eliminating the poverty and assist the government

for social development. Countries like India, where there is a

drastic economic progress, it is also essential to progress in20

terms of social development. All the corporate sectors must

engage with government and must take a collective

responsibility in eliminating certain social turmoil. However,

there exists difference in certain parameters like vision,

mission, etc, in organisations with CSR and without CSR.

Certainly, some NGO should come forward in building the

relationship between hard core profit organizations and

government making them realise the severity of problems faced

by the community. Efforts of Tata steels must be appreciated

in development of a poor state like Jharkhand in India.

9. References:

Aviles, H, B, the NGO handbook, bureau of internationalinformation programs, United States department of state.

Bass, B, M, & Avolio, B, J, A 1990, 'Developingtransformational leadership: 1992 and beyond', Journal ofEuropean Industrial Training, 4, 1, pp. 21–37.

Chahaud, T, Emmerling, J, Kolb, D, Kubina, I, Repinski,G, and Schläger, C. (2005). Corporate Social and EnvironmentalResponsibility in India- Assessing the UN Global Compact Role.

Bhupathi, M, N, 2014, Desire society website, [online],

[Accessed 9 may 2014], available from

http://www.desiresociety.org/.21

Ghosh, A, & Chakraborti, C 2010, 'Corporate SocialResponsibility: A Developmental Tool for India', IUP Journalof Corporate Governance, 9, 4, pp. 40-56.

Hardy, B 2007, 'LEADERSHIP IN NGOs: Is it all thatdifferent than the For-profit sector? ’, Canadian Manager,2007.

Mahalinga Shiva, M, & Suar, D 2012, 'TransformationalLeadership, Organizational Culture, OrganizationalEffectiveness, and Program Outcomes in Non-GovernmentalOrganizations', Voluntas: International Journal of Voluntary & NonprofitOrganizations, 23, 3, pp. 684-710.

Response from the Interview with Satish Pillai (Chief-CSS, Tata Steel) at TSRDS office at 3:00 pm, Tata Steel,Jamshedpur) on February 1, 2008.

Rishi, P, & Moghe, S 2013, 'Integrating Corporate SocialResponsibility and Culture as a Strategy for HolisticCorporate Success in India', Journal Of Corporate Citizenship,51, pp. 17-37.

Rowold, J, & Rohmann, A 2009, 'Transformational andtransactional leadership styles, followers' positive andnegative emotions, and performance in German nonprofitorchestras', Nonprofit Management & Leadership, 20, 1, pp. 41-59.

Schmid, H 2006, 'Leadership styles and leadership changein human and community service organizations', NonprofitManagement & Leadership, 17, 2, pp. 179-194.

Schein, E, H, 1988, ‘Organizational culture andleadership: San Francisco’, Jossey-Bass Publishers.

Tanimoto, K. and Suzuki, K. (2005), ‘Corporate SocialResponsibility in Japan: Analyzing the participationcompanies in global reporting initiative’, Working Paper208.

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Wyatt, M, 2004, A handbook of NGO governance, EuropeanCenter for Not-for-Profit Law, Hungary.

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