Enterprise Organizations a new breed

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Enterprise Organizations - a new breed?

• The costs and benefits of this emerging
  organizational archetype in the disability field.
• Pamela Spall

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A respondent to the research wrote -

• The trend towards marketisation is of major
  concern. Managerialism in the human services
  sector has introduced managerial practice such as
  strategic planning, performance
  indicators/appraisals, risk management, quality
  assurance etc which have had a major impact on
  community services and their capacity to respond
  to individual, family and community needs in a
  meaningful and flexible way. Increasing
  accountability and reporting obligations, the
  impact of funding reforms, complex legal and
  industrial matters, increasing pressure for
  formalization and professionalism, economic
  rationalism --- make these extremely challenging
  times! (720)

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Defining Marketisation

• Split between the role of purchasing of service
  through contracts and delivery of services
• introduction of managerial concepts such as
  strategic planning, performance systems
• equating the community services sector to a
  quasi-market that operates along competitive lines

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Defining Marketisation (continued)

• Implementing quality systems which are customer
  focused and enable choice
• generating income through commercial activities
• engaging in market segmentation and other market
  positioning type behaviours.

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Values and beliefs
Structures
Systems
An Organizational Archetype
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Two types of archetypes or footprints
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Description of ideal archetypes

• Non-enterprise Archetype
• Values and Beliefs
• supports state role of public good
• opposes neo-liberal contractualism
• needs based
• coercive role with the state
• linkages with like nonprofit organizations

• Enterprise Archetype
• Values and Beliefs
• supports state role of public good
• supports neo-liberal contractualism
• consumer choice
• mixed role with state
• linkages with wide range of institutions

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Description of ideal archetypes

• Non-enterprise Archetype
• Systems
• limited flexibility in human resources
• limited technical and technological capacity
• cost management accounting
• mixed centralized and decentralized
  decision-making
• little strategic planning
• individual and group service delivery
• no formal quality system

• Enterprise Archetype
• Systems
• flexible human resources
• skilled in technical and technology
• accrual accounting
• mixed centralized and decentralized
  decision-making
• highly developed strategic planning
• managed care
• formal quality system

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Description of ideal archetypes

• Non-enterprise Archetype
• Structure
• hierarchical and functional
• limited structural flexibility
• participatory model of governance - more rowing
  than steering

• Enterprise Archetype
• Structure
• flatter more organic structure
• scope for flexibility, dependent on context
• executive model of governance - more steering
  than rowing

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This paper will

• Establish whether an enterprise and
  non-enterprise organizational archetype exists in
  the disability sector
• examine some of the similarities and difference
  between enterprise and non-enterprise
  organizations around demographic profile, values
  and beliefs, systems and structures, and
  managerial demographics

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This paper will

• Discuss the implications for the sector in terms
  of costs and benefits of the enterprise
  organizational form.

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Existence of Enterprise and Non-enterprise
Organizations
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Agency demographics - no difference between
enterprise and non-enterprise

• Whether they were religious/charitable or of
  non-government status
• number of service outlets operating
• primary disability group served
• presence of paid workers.

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Significant difference - enterprise and
non-enterprise organizations
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Values and beliefs - no difference between
enterprise and non-enterprise

• Social justice beliefs
• myth of pure virtue operative (i.e. nonprofits
  are more ethical, more caring)
• cost competitive tendering and competition does
  not improve efficiency or is beneficial to the
  sector.

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Values and beliefs - significant difference
between enterprise and non-enterprise

• Beliefs around consumer choice and other quality
  concepts

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Systems and structures - significant difference
between enterprise and non-enterprise

• Enterprise organizations had
• greater flexibility in HRM systems
• enhanced information and performance systems
  through use of technology and benchmarks
• improved financial management systems including
  accrual accounting and financial delegation

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Systems and structures - significant difference
between enterprise and non-enterprise

• Development of marketing systems such as service
  differentiation and diversification into new
  markets and income sources
• highly developed strategic planning processes
• decentralization of decision-making systems
• implementation of quality systems
• reduced internal hierarchical organizational
  structures.

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Structures and systems

• Non-enterprise organizations had -
• not implemented or
• very little implemented

• Enterprise organizations had -
• mostly implemented

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Financial income of organizations

• 91.8 of all organizations were dependent on
  government as their largest source of funding
• on average, organizations were reliant on
  government for 72.4 of their total income
• 17.6 of income was obtained from sources other
  than government

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Manager demographics - no difference between
enterprise and non-enterprise

• Gender
• age
• political beliefs
• years working in current organization or the
  community services sector
• level of education

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Manager demographics - significant difference
between enterprise and non-enterprise

• Enterprise managers had a greater extent of
  influence on policy decision in the organization
• a greater number of enterprise managers had
  occupied a position in the public sector for
  either 6 - 10 years or 11 - 15 years
• a greater number of enterprise managers had
  occupied a position in the private sector

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Benefits of enterprise organization

• More sustainable model
• Larger resource base
• Longer history and collective experience
• High credibility and legitimacy in community
• Multi-service nature to spread risk
• Better equipped in terms of skills and resources
  to respond to change.

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Benefits of enterprise organization

• More geared up in terms of system and structures
  for accountability and funding reform
  requirements
• Range of strategies to diversify income base
• Able to attract and retain skilled staff
• Externally recognized quality system

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Benefits of non- enterprise organization

• More responsive to local needs
• As newer organization can be more innovative and
  flexible
• Able to be more cause related
• Doesnt have any historic legacy so can design
  new responses
• Less formal approach is often likened to an
  individualized approach

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Cost of Enterprise Organization

• Due to size more difficult to be innovative
• Model might be better suited to less residual
  service delivery interventions
• Overlooked by government in terms of funding
  increases
• Due to its size can be likened to a bureaucracy

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Cost of non-enterprise organization

• Less robust in day-to-day management
• no critical mass to endure change
• requires a greater commitment of management
  committee
• limited structures and systems to meet
  accountability and other funding reform
  requirements

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Cost of non-enterprise organization

• Prone to be permanently failing
• no externally recognized quality system
• limited capacity for income generation
• few incentives to attract and retain skilled
  staff
• locked into a value base

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Question

• Whether either the enterprise or non-enterprise
  organization is a better model to survive in the
  changed market environment?

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If the Goal is to -

• Accommodate, grow and sustain a diversity of
  organizational forms then it will be necessary to
  strengthen the organizational do business
  capacity of a range of organizations

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Non-enterprise organizations require

• Greater technical assistance - technology,
  financial management functions, performance and
  quality systems

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Enterprise organizations require

• Support and ideas in social entrepreneur
  initiatives in income generation

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All organizations require

• Increased skill building around change management
  and surviving transformational change