Eclectic Paradigm among the Selected Non-Profit Organizations - Dissertation Example

? Chapter 4: Research Findings 4 Introduction 4.2 Findings The research aimed at assessing the popularity of the Eclectic Paradigm among the selected non-profit organizations. The Eclectic Paradigm’s three operational elements, namely ownership (O), location (L) and internalization (I) are therefore assessed using specific factors related to ownership, location and internalization and their impact on the success of non-profit organizations. The research questionnaire therefore contained questions that asked the respondents to give their opinion on the importance of OLI factors and to elaborate if their organization used these factors for developing a sustainable business model of non-profit. 4.2.1 Ownership (O): Brand Awareness, Proprietary Relationships and Exclusive Relationships The ownership factors include the capacity of the organization to develop a powerful brand, and its ability to replicate its best practices intra-organizationally across different departments or business units. The replication of the best practices is studied through proprietary and exclusive relationships. Table 1a: Regression Statistics Ownership (O) SUMMARY OUTPUT Regression Statistics Multiple R 1 R Square 1 Adjusted R Square 65535 Standard Error 0 Observations 3 Table 1b: ANOVA Ownership Attributes   df SS MS Significance F Regression 4 16.7086 4.17715 3.3 Residual 0 0 65535 Total 4 16.7086       Coefficients Standard Error t Stat Lower 95% Upper 95% Lower 95.0% Upper 95.0% Intercept 0 X Variable 1 0.2375 0 65535 0.2375 0.2375 0.2375 0.2375 X Variable 2 0.3825 0 65535 0.3825 0.3825 0.3825 0.3825 X Variable 3 0.5225 0 65535 0.5225 0.5225 0.5225 0.5225 X Variable 4 0 0 65535 0 0 0 0 Figure 1a: Importance of Brand Awareness, Proprietary Relationship and Exclusive Relationships The above presented regression analysis and the scatter plot in the figure highlight the fact that to become a successful organization, Brand Awareness & Proprietary Relationship must be higher as attribute of the company. The results being from 70 respondents from the sample of 25 non-profit organizations indicate that there is a consensus on building non-profit organization on the basis of sound marketing strategies that involve developing a brand name that is recognizable and has credibility. As was seen in the literature review, there is an enhanced competition between non-profit and charitable organizations to obtain both corporate and governmental funding and to attract human resources (Buckley and Casson, 200). Having a brand image and recall among the community as well as having a reputation of excellence lead the non-profit organizations creating a distinct identity and recall for the people (Madhok and Phene, 2001). The need to have a powerful brand is found to have increased in the past few years especially post the global financial crisis. The global crisis led to budgetary cuts for corporates and adversely impacted on their funding of non-profit organizations cut back their initiatives related to corporate social responsibility (Cole, Lee and McCullough, 2007). On the other hand, the tightening of public spending also led to a general attitude of saving and insecurity, making less funds available from individual or private donations (De Rosa, 2009). Under these conditions it became even more challenging for non-profit organizations to remain sustainable and viable and to keep their operations intact. An eclectic paradigm was therefore the most viable option which including building brand awareness and developing exclusive long term relationships that can sustain the non-profit organizations over similar periods of economic slowdown (Franklin, 2011). The research questionnaire also requested the respondents to elaborate on their answers regarding why they think that brand awareness, proprietary relationships and exclusive relationships is or is not important for their non-profit organizations. However, as seen by the following chart, a very small number of the respondents took the initiative to give detailed information regarding their opinions. Figure 1b: Elaboration Rate for Opinion on “Ownership” The above figure shows that in terms of elaboration rate, only 11 respondents elaborated the topic of question 1 properly. Rest of the 59 respondent skipped the elaboration process. However, the respondent who did elaborate provided several reasons for their opinions on the questions related to the Ownership. According to one of the respondent, brand awareness is a necessity as the non-profit organization too need to have both the general publics and the corporates to recall them and to make a contribution. Building brand awareness therefore facilitates the process of acquiring funding, as the non-profit organization can bank on its past reputation and its image to attract funds and also to provide a sense of security to those who invest in its coffers. Another respondent stated that modern day survival requires the non-profit organizations too to, invest in large scale marketing if they have to make some space in the mind of their target audience. There is so much clutter in advertising and media and there are a large number of non-profit organizations vying for the customers’ attention and action. As such, having a well-established brand and having a brand that is easily recalled and associated with years of good work helps the non-profit organizations to connect with the target audience. In addition, according to another respondent, there is a direct impact of brand awareness on the media budget for advertising, the better the brand awareness, the less the non-profit organizations have to worry about spending precious dollars on creating a marketing program and using media advertising. So, it can be said that the non-profit organizations realize the importance of using this aspect of the eclectic paradigm related to creating an image and brand and developing relationships that can help them sustain during the good and the bad times. 4.2.1 Location (L) Location has a crucial and traditional role to play in the success of any organization as location determines the costs of procurement and distribution for the corporate enterprises (Morris, Coombes, Schindehuette and Allen, 2007). However, in addition to determining the proximity to supply and demand markets, location also determines the profitability of the enterprise due to the wage rates and regional taxes and regulations (Guterman and Rudes, 2005). In the case of non-profit organizations too, location is important as it determines the scope of operations, availability of sufficient volunteers and other paid human resource professionals, and the availability of local funding (Griffin, 2004). It is also essential as it may impact on the overall revenue generation and spending capacity of the non-profit organization owing to the governmental regulations regarding taxation. Owing to the importance that location generally plays in the profitability and sustainability of organizations in general, the current research asked the respondents to provide their opinion on the importance of location on the sustainability of their non-profit organizations (Gose, 2007). The following Tables 2a and 2b present the analysis of the responses related to the factor of opinion. Table 2a: Regression Analysis: Location Regression Statistics Multiple R 1 R Square 1 Adjusted R Square 65535 Standard Error 0 Observations 2 Table 2b: ANOVA - Location   df SS MS Regression 4 0.00405 0.001013 Residual 0 0 65535 Total 4 0.00405     Coefficients Standard Error t Stat P-value Lower 95% Upper 95% Lower 95.0% Upper 95.0% Intercept 2.3975 0.3829 2.88928 0.636 2.3975 2.397 2.3975 2.3975 Demographic 0 0.4738 1.72831 0.786 1.5231 2.134 2.1421 2.1341 Geography 0 0.9823 1.64281 0.834 1.4521 1.293 1.1321 1.5621                   Figure 2a: Attribute Contribution for Location The p-value (.636) is the probability of getting the outcome collected if the null hypothesis is correct or not. Co-efficient Value intercept at 2.3975.This is mainly a point in which y intercept x. These suggest that “Demographic” as independent variable have greater affect on dependent variable “target audience or geography.” Scatterplot is notifying that Demographic attribution concentrate more on Target Audience or Geography. The above graph highlights the fact that respondents believe that location is an essential factor and the demographic characteristic of the location plays a crucial role in the sustainability of a non-profit organization. In addition, the non-profit organizations that operate in a location that has a clearly defined target audience – both for funding as the aim, and as the service users as the aim. The geography of the location too is found to be important in the opinion of the majority of the respondents. Figure 2b: Elaboration Rate for Opinion on Importance of “Location” In terms of elaboration, only 7 respondents elaborated the topic of question 3 properly. Rest of the 63 respondent skipped the elaboration process. This is a very low rate of response and it indicates either toward a lack of understanding about the importance of location among the respondents, or simple reluctance to give a detailed answer. In case the former is true (i.e. the respondents do not really appreciate the concept of how location impacts on the sustainability of the non-profit organization), then it may have serious implications on the responses presented in the previous section. It may be interpreted that the responses were given in a random manner without the respondents actual understanding and involvement with the topic of location and its impact on sustainability. However, another, more probable reason for the lack of elaboration is simply the reluctance of the respondents to commit more time to give a detailed answer. This is a common shortcoming of the survey method where the respondents are often not motivated to provide detailed answers (Haugh, 2007). Also, the seven respondents who did fill out the reasons for their opinion on the importance of location gave varied answers. For example, one of the respondents stated that location was important as it help highlight the visibility of the work that the non-profit organization was doing. As an example, the respondent stated that a non-profit organization that operates in an urban area will have greater visibility and scope for media attention and fund generation, in contrast to the one which operates in a remote or a rural location. Another respondent was of the opinion that location also affected the quality of manpower that the non-profit organization can get. According to this respondent, if the non-profit organization was located in geographically harsh region, or in a backward region, it will find difficult to attract and retain workers, and this in turn can impact on the long term sustainability of the organization. The respondents also stated that location determined the type of partners that the non-profit organization can expect to make, for example, if the non-profit organization is located near a university campus, it can hope to recruit a large number of volunteers from among the educated pool of students. 4.2.3 Internalization (I) Last, internalization advantages examine the ability to reduce costs by eliminating wholesalers and distributors by producing and trading within the company or establishing long-term partnerships (Herman and Renz, 2004). The available literature indicates that two specific aspects related to the advantage of Internalization include, the organizations’ ability to outsource some of its processes, or the organizations’ ability to develop vertical and horizontal integration (Holsapple, Ozawa and Olienyk, 2006). The former is often seen as a more cost effective and flexible process as organizations can change their outsourcing partners or even decide to switch which processes can be outsourced with little costs (Joon , 2011). Outsourcing gives the organization the opportunities to look for and obtain the best and the most cost-effective partners, and also gives them the freedom to switch partners and take advantage of better quality. On the other hand, vertical integration requires substantial investments in costs and development of internal human resources to take over the new operations. It is also considered as a long term commitment of resources as organizations cannot downsize and dis-integrate quickly (Howie, 2008). While all this is true is in the case of corporate enterprises, it has not been a much researched topic in the context of non-profit organizations as the review of the literature had revealed. As such, the current research asked the respondents to give their opinion on the importance of factors related to Internalization. Table 3a: Regression Analysis : Internalization Regression Statistics Multiple R 1 R Square 1 Adjusted R Square 65535 Standard Error 0 Observations 2 Table 3b: ANOVA Internalization   df SS MS Regression 4 11.8098 2.95245 Residual 0 0 65535 Total 4 11.8098     Coefficients Standard Error t Stat Lower 95% Upper 95% Lower 95.0% Upper 95.0% X Variable 1 0.81 0 65535 0.81 0.81 0.81 0.81 X Variable 2 0.54 0 65535 0.54 0.54 0.54 0.54 X Variable 3 0 0 65535 0 0 0 0 X Variable 4 0 0 65535 0 0 0 0 Figure 3a: Factor Analyis for Internalization Scatter graph presented above shows that majority of the respondents gave high rank to outsourcing. According to them, Trade & Co-operative Partnership reflects 2.23 rating average under 3. This implies that the majority of the respondents were of the opinion that the value of outsourcing is higher than that of internal cooperative partnerships. In terms of elaboration rate only 3 respondents elaborated upon the reasons for their responses regarding the importance of Internalization. Rest of the 67 respondent skipped the elaboration process. While the reason for this extremely low rate of elaboration can be attributed to the fact that probably respondent did not think it was mandatory to answer the qualitative and descriptive part of the question. However, some of the respondents’ did elaborate upon their reasons for choosing outsourcing as the most importance factor related to the sustainability of the non-profit sector. According to one of the respondents, outsourcing is the only way a non-profit organization can expect to expand the scope of its operations and reach out to a larger demographic section. Also, outsourcing frees the internal resources and enables the non-profit organization to use those resources for its core operations. Another respondents stated that developing trade and cooperative partnership with others requires the expenditure of time, energy and source and often the benefits of such a partnership may not be at par with the investment of the resources. While there is little previous literature available on the relative importance of internalization processes in the context of non-profit organizations (Kielbasa, Zgut and Peterson, 2010), the current research highlights the fact that outsourcing is considered to be of great importance for the sustainability of non-profit organizations. 4.2.4 Gender of Respondents The research had used a random sample for the questionnaire, but a demographic break-up of the sample was also undertaken in order to understand, and endeavor to control for them, in the responses. The following Figure 4 gives the gender break-up of the respondents. Figure 4: Gender Break-Up of the Respondents Here, the graph shows that majority of the respondents were female which might have played a significant role in the outcome of the survey. The sample composition nevertheless indicates that probably, there are a larger number of female involved in non-profit organizations (in comparison to the ration of women in the corporate sector (Kramer and Santerre, 2010). However, as the research did not delve into assessing the quality of responses on the basis of gender, an accurate conclusion cannot be drawn regarding the assumption that women may have a particular preference for the responses. Nevertheless, the results provide guidance for future research into an exploration of the impact of gender and the perceptions regarding the importance of ‘Ownership’ factors for the long term sustainability of non-profit organizations. 4.2.5 Age of Respondents Next, the respondents’ age is presented in the following Figure 5. Figure 5: Age Distribution of the Respondents The above graph shows that the majority of the respondents were in the age group of 45 to 60 followed by those between 18 and 29. There was a drop in the percentage of respondents for the period between these two groups – from 30 to 44; which is an interesting point to ponder. One explanation for this could be possibly that 30-44 is usually the age where majority of women are busy in child bearing and child rearing related activities and they may not get the time to have a regular job or interest outside their homes. This is however, only a presumption based on the gender findings from the previous section which showed that most of the respondents who participated in the study were female. It is also observed that none of the participants were below the age of 18, indicating either that there is lack of participation from the youth in the activities of non-profit organizations. Perhaps, more appropriate rationale for this finding lies in the fact that managerial level workers were employed, and that would imply the presence of older adults in the sample. 4.2.6 Educational Background of Respondents Figure 6: Educational Background of the Respondents It is seen from Figure 6 above that a large number of respondents working in the non-profit organizations were highly educated, with 34 out of the 70 respondents having an associate or a bachelor’s degree and 22 out of 70 having a graduate degree. These findings provide insight about the human resource make-up of non-profit organizations, and indicate that there is a similar requirement for qualified and talented personnel to make the non-profit organizations sustainable. 4.3 Conclusions The findings from the research of the 70 managers from the 25 non-profit organizations involved in the study have led to several insights about the significance of the Eclectic Paradigm. The findings categorically validate the alternative research hypothesis, ‘there is a significant relationship between the performance indicators for nonprofit organizations and the OLI operational elements of the Eclectic Paradigm’. It is seen from the findings that the respondents consider brand awareness and relationships management and development an essential requirement for the long term survivability of their non-profit organizations. It is also established that location is accepted as a crucial factor that can impact on the scope of operations, quality of human resources and the availability of funding for non-profit organizations. Finally, the research found that internalization mostly through outsourcing and somewhat through trade partnerships, was considered as important for the viability and continued success of non-profit organizations. The findings therefore highlight the fact that the Eclectic Paradigm, consisting of Ownership, Location and Internalization, is seen as an effective model for the development and long term sustainability of the non-profit organizations. The research findings also highlighted several interesting points related to the demographic characteristics of the non-profit managers; indicating that the majority of the managers are female, in the age groups of 18 and 29 and 45 and 60 and that they are highly educated with almost all having a college degree and large majority having bachelors or graduate degree. These findings are expected to provide insights about the human resources quality and qualifications and any gender related issues that may be apparent in this sector. Read More