A Heuristic Model to Measure Nonprofit Management Deficiency

Abstract

(ProQuest: ... denotes formulae omitted.)1. IntroductionFor nonprofit organisations, research has established that there is a strong correlation between board performance and organisational performance (McDonagh 2006; Nicholson, Newton and McGregor-Lowndes 2012; Willems, Huybrechts, Jegers, Weijters, Vantibborgh, Didee and Pepermans 2012). The implication of this finding is that improving the performance of the board will lead to improvement in the performance of the organisation. To improve their performance, nonprofit management teams need actionable information that will enable them to identify their strengths and weaknesses (McDonagh 2006; Nicholson, Newton and McGregor-Lowndes 2012).Current models used to measure the performance of nonprofit boards are often difficult to implement with a considerable delay before results are available or they produce results that have not been rigorously tested to validate the accuracy of their measurement of performance (Heiberg and Bruno-van Vijfeijken 2009, Herman and Renz 2006). Many studies have attempted to develop models that can measure nonprofit management performance but the results are generally inconclusive leading to a lack of consensus as to which is the best approach (Herman 1990; Moxham 2010; Taysir and Taysir 2012). There is no agreement that one performance measurement model is better than another and the findings from one study sometimes do not support the findings of another study (Cornforth 2012; Barnard and Lesirge 2012; Bhardwaj and Vuyyuri 2005; Holland, Chait and Taylor 1989; Ostrower and Stone 2010). There is also a positivist orientation evident in the current approach (Cornforth 2012), looking at how well the board as a whole carries out their responsibilities. The result is a lack of focus on management deficiencies and individual board member competencies.2. Problem StatementResearchers have been trying to develop a technique for measuring management deficiency in a nonprofit organisation (NPO) for more than 30 years. Traditional, analytical techniques have failed to find a solution that has broad acceptance.3. Research QuestionWill heuristic methodology provide an acceptable, approximate solution to the measurement of management deficiency in a nonprofit organisation?4. Purpose of the StudyThe purpose of this study was to demonstrate that the factors that contribute to management deficiency in an NPO can be identified and measured using a heuristic methodology. The objective was to build a heuristic model that will measure individual management deficiency and produce an assessment of management strengths and weaknesses for the board members of nonprofit organisations.5. Research Methods5.1 Defining the Adopted ApproachThere is a direct relationship between nonprofit board performance and the overall performance of the organisation (Alexander, Hearld and Mittler 2011; McDonagh 2006; Nicholson, Newton and McGregor-Lowndes 2012; Willems, Huybrechts, Jegers, Weijters, Vantibborgh, Didee and Pepermans 2012). It follows that poor board performance will result in poor performance for the organisation. Further, it is reasonable to assume that, if a board is performing poorly then that is largely attributable to the competencies and personal attributes of the individual board members (Balduck, Rossem and Buelens 2010). There is also evidence that most nonprofit organisation failures are the result of inexperienced, week management (Productivity Commission 2010). In other words, management deficiencies are the primary cause of NPO failures. Therefore it is equally important to investigate why a board is performing poorly as it is to investigate what leads to a board performing well. Identifying the individual management deficiencies of board members would provide a management team with actionable information that would assist them to target their management development programme to addresses areas of weakness. …