Study to throw lifeline to not-for-profit organisations01 July 2011

UQ Business School PhD student Aastha Malhotra’s concern for the health of not-for-profit organisations (NFP) in Australia, India and Canada has resulted in research into the very business models which could become their lifeline.

The first stage of Ms Malhotra’s study concentrated on the challenges facing NFP organisations today by investigating their evolution and management styles.

“Some of the problems not-for-profits have to deal with include scarcity of funding, government regulations and tightening controls, along with volunteer shortages and overall rising costs of their services,” Malhotra explained.

She said that after completing the first of stage of her research, it was clear that NFP groups needed to explore and examine their approach to dealing with the complexities of today’s environment, rather than maintaining their existing business methods.

She identified three management styles:

  • The traditional model (up to 1960’s) where organisations focused on compassion and volunteerism;
  • The contemporary model (1970-1990’s) which saw acceptance of formal management and focused on for-profit practices and running the business as a well-oiled machine; and
  • The hybrid model (1990’s – current) which attempts to use both traditional and contemporary models and focuses on financial aspects whilst trying to help people build skills.

“The three models are all so different, but all exist simultaneously,” Ms Malhotra’s said. “This causes a number of conflicts and one of the possible consequences of these competing practices is that organisations are not meeting the needs they originally set out to achieve.

“My research will attempt to understand each one better because each has its own positive outcomes, and we also need to be aware of negatives to ensure we do not make the same mistakes again.“

Ms Malhotra’s PhD Supervisor Professor Ray Zammuto said “Aastha has embarked upon truly ground-breaking research. Her work is extremely important and she has produced a whole new conceptualisation and typology of the sector.”

In the next stage of the research, Ms Malhotra will interview NFP groups to collect data for case studies which will look at the way groups are managing their organisations and changes in policies. The third and final stage will analyse and assist those cases by determining which aspect of each model would work best.

“The social and welfare needs of people are ever-increasing and so NFP organisations will be more in demand for services like employment support and child welfare. The NFP’s are going to have to find a way to make themselves sustainable,” she said.

NFP groups include those providing services for child and youth welfare, the handicapped and the elderly; self-help and social services; and shelters and emergency prevention and control groups. The Australian not-for-profit sector includes approximately 600,000 organisations, contributes approximately $43 billion annually, and employs almost 900,000 individuals. (Contribution of the Not-for-Profit Sector Research Report, 2010)

Ms Malhotra is looking for not-for-profit organisations that have been established for more than five years to be potential case-studies. All data will be kept private and confidential. If you are interested in being a participant, please contact:

Aastha Malhotra PhD Candidate, UQBS. Email: a.malhotra@business.uq.edu.au or ph 0421528770.

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