Can They See the Forest for the Trees? – A Contingency Perspective on the Control Package of a Non Governmental Organization

Published on September 23, 2010 | Author: Oscar Hellman, John Kärrbrink

Management control has primarily been used in contexts of for-profit organizations. The result of this is that the control concepts in nonprofit organizations are often not as well developed as their for-profit equivalents. Due to this, it is common that nonprofit organizations struggle with control problems. A sector that struggles with this problem and have been blamed of inefficiency are Non Governmental Organizations (NGO:s) and charity organizations. NGO:s have recently faced an increasing pressure from donators to show achievements. The consequence is that NGO:s implement control systems to show and ensure achievements but do not always reflect on the control consequences. To reach this required efficiency, an organization needs to have a properly designed control package that takes into account contextual factors and makes sure that there is a fit between control elements in order to direct employees toward the organizational objective.
 

The purpose of this thesis is to describe and analyze how contextual factors affect the control package of the NGO Vi Agroforestry. Further, the degree of internal fit in the control package is assessed, and suggestions are provided on how it can be improved. This study focuses exclusively on nonprofit NGO:s and only concerns the employee behavioral part of the control package.

 
Through a qualitative research method and an abductive approach, we have conducted a case study on Vi Agroforestry. The empirical data was collected from observations on the case organization and twelve semi-structured interviews with individuals on all organizational levels. This study indicates that dependence is an important factor to consider when designing control packages in NGO:s. To satisfy donators, NGO:s implement control systems to align with the requirements of what donators require. This results in too comprehensive and formal control packages that are costly for the organizations and create unintended behaviors. Further, this study shows the importance of considering the entire control package relationship with dependence and not only the formal elements of the control package.

Most of the theories about contingency factors relate to for-profit organizations, so our suggestion is to investigate how contingency factors can be adjusted to describe the control package of NGO:s. Further on, we propose an investigation of how dependence forces NGO:s to implement control systems and how organizational behaviors is affected.
 

Hellman, O. & Kärrbrink, J. (2010). Can They See the Forest for the Trees? – A Contingency Perspective on the Control Package of a Non Governmental Organization. Bachelor’s Thesis. Institute of Business Administration. University of Gothenburg.

 

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