ABSTRACT
This chapter moves beyond a crude state/market binary divide and considers questions of strategic management and governance within a growing area of ‘third sector’ organizations, neither part of traditional government (though often now funded by it) nor conventional firms with shareholders. This hybrid grouping of non-governmental organizations (NGOs) includes various subcategories: voluntary and ‘social movement’-based organizations (where the organization is aligned with a social group with a strong identity, e.g. voluntary organizations that work against racial discrimination or for better health services for people and families affected by mental health problems), worker owned co-operatives and mutually owned organizations, and a new wave of social enterprises which may be more ‘business-like’ in nature. As these organizations have grown in scale and professionalized their management, so they
have adopted more generic management models, including some strategic management practices. However, there is a lively debate as to whether such strategic management practices can be readily transposed, or whether the distinctive and mission-driven identity of NGOs makes inter-sectoral diffusion problematic. The chapter starts with an overview of recent policy and organizational developments
in the NGO field. It then examines the simplest case of the entrepreneurial school, also applicable to some social enterprises. It moves on to consider the extent to which generic strategic management models may be appropriately adopted in these NGO settings as they grow their scale and commercial operations or whether they require customization (and concluding they still require substantial adaptation to the mission-based nature of NGOs). It finally highlights governance and accountability mechanisms – and their possible weaknesses – as a theme of great interest in this sector (some introductory elements of the dilemmas faced by small NGOs are highlighted in the US-based case reported in Box 5.1).
