Panel proposal - ISTR/EMES Research conference, CNAM, Paris, April 2005

Panel Session: Dilemmas, Discrepancies and

Paradoxes of Nonprofit Management
Convenor: Dr. Jill Mordaunt
Lecturer in Social Enterprise
Open University Business School
Walton Hall
MILTON KEYNES
MK7 6AAUK
Telephone: ++44 1908 654728/655987
Fax:
++44 1908 655898
E-mail:J.Mordaunt@open.ac.uk
Other contributors: Dr. Oleg Koefoed, Philosophical leader, Kesera
E-mail:khora@city.dk
Dr Julia Burdett
E-mail: julia.burdett@which.net
Professor Rob Paton, The Open University Business School
E-mail: r.c.paton@open.ac.uk

Panel proposal - ISTR/EMES Research conference, CNAM, Paris, April 2005

Panel Session: Dilemmas, Discrepancies and Paradoxes of Nonprofit

Management
Overview
This panel will consist of four papers addressing important, non-rational dimensions
of non-profit management and leadership. They all concern the way in which
dilemmas, discrepancies and paradoxes arise, are enacted and are perceived in
voluntary and nonprofit organisations. The issues these papers raise are apparent in
every part of the sector throughout the world.Hence they will interest the international
audience that ISTR conferences have come to represent.
In the first paper, the author will examine the ways in which the operation of
organisational defences makes identification of the underlying problems difficult. She
will focus on the issue of accountability and the difference between the ways in which
this is espoused and how it is deployed in practice. As these processes are generally
unrecognised, they present paradoxes why dont managers and boards do what they
say they believe they should do?
The second paper, by the leader of an organisation based in Denmark that seeks
engage creatively with profound social change and all the risks that that entails. He
explores how to stay loyal to values (whilst at the same time challenging the banal
way this concept is generally used) and how to sustain the motivation of volunteers in
the absence of the usual incentives.
In the third paper the author presents the findings from an empirical study on
Community Law Centres (CLC) in the UK.These have community control as a core
founding value. She finds, however, that whilst this has symbolic significance for
them, in practice the CLCs adopt strategies that amount to community involvement.
The final paper will focus on how leaders construct the sorts of challenges discussed
in the papers (and in other literature), and the tools for thought and capacities they
need to develop in order to engage positively with those challenges.It uses wellfounded theoretical ideas developed in other contexts, but illustrates them and
demonstrates their relevance with data and examples from current research on third
sector chief executives.The implications for nonprofit leadership development are
discussed.
Abstracts for all the papers are attached.

Panel proposal - ISTR/EMES Research conference, CNAM, Paris, April 2005

The Emperors New Clothes: why boards and managers find accountability
relationships difficult.
In their book on corporate governance, Lorsch and McIver (1989) document that
boards said they felt confident in their ability to question the CEO of their
organisation about matters of concern. Yet in their observed performance, board
members rarely did this and if they did problems would be first raised outside the
board amongst themselves and in a rather covert way.There have been huge efforts to
make both corporate boards more accountable yet, for example, Enron occurred after
10 years of reform in corporate governance in the USA. Similar issues may be
observed in nonprofit organisations. Board performance rarely reflects the rhetoric
implicit in regulatory and legislative requirements. This paper will explore some of
the issues that may underlie this failure of boards to perform up to expectations,
suggest some ways forward and identify the challenges that will require addressing.
Boards (and the organisations they govern) face paradoxical accountability
expectations that stem from a number of sources. Firstly the meanings of
accountability are slippery but rarely are the different meanings made explicit
even when, eg,political accountability sits in tension with managerial or market based
conceptions of accountability.Secondly, nonprofit organisations have a very diverse
stakeholder environment with quite different sets of expectations of and demands that
they make of the organisation (see, eg, Cornforth and Mordaunt, 2004). Third, the
various stakeholders have differing abilities to hold the organisation to account.As
Leat (1988) observes the obligation to offer account varies. Required accountability
flows from the organisational environment: the legal, political and economic context
in which the organisation operates. By contrast, proactive or voluntary accountability
flows from organisational values: the belief that the organisation should in its actions
and working methods consciously seek to align itself with certain groups and
interests. This combined with the discretion (in theory at any rate) to choose between
different policies or courses of action creates dilemmas for boards and managers. In
voluntary organisations the cause of the end user is often the passion that drives the
organisation. Yet, the differential powers of stakeholders to hold the organisation to
account, means that some external stakeholders generally wield greater power than
beneficiaries.
This differential power between stakeholders to demand accountability and to apply
sanctions if it is not offered, poses serious dilemmas for nonprofit managers. Too
much attention to the powerful stakeholders means that the interests of beneficiaries
can be overlooked or ignored: the organisations purposes may drift from serving
beneficiaries (as in the stories) to ensuring that external accountability demands are
met. But equally insufficient attention to these stakeholders can lead to the
organisation losing legitimacy and therefore also losing resources. Both the external
demands for accountability and the sense of obligation on the part of manager and
trustees to offer account to members and service users are real. But they often sit in
tension with one another and external stakeholders increasingly want evidence of
performance that may interfere with work with beneficiaries or may direct
organisational energies elsewhere. The problem facing managers and boards is how to
take the demands of external agencies and their beneficiaries seriously without getting

Panel proposal - ISTR/EMES Research conference, CNAM, Paris, April 2005

taken over by them.Drawing on the work of Hampden Turner (1990), this may be as
in Figure 2:
Figure 2 Dilemmas of accountability
High

Commitment
to local
community
and/or
beneficiaries

Decoupled
reporting: wasteful
and risky

Nepotism,
corruption

Low
Commitment to Funders

Creative
integration

Conformance
inhibits
responsiveness

High

However, this paper will suggest that moving towards this creative integration is not a
straightforward negotiation based on identifying the problems and agreeing solutions.
There are deep-seated and powerful organisational defences (Argyris, 1990) in play
that involve appearing to ignore obvious serious problems as the courtiers did withthe
naked emperor in the Hans Christian Andersen fairy story. These stem from the
interplay between personal, organisational and societal values and the ways in which
these are addressed and communicated within nonprofit organisations (Keegan and
Lahey, 2003). Unless these issues are recognised and better ways forward are
developed, achieving creative integration will be impossible to achieve.
Bibliography
Argyris, C. (1990) Overcoming Organisational Defenses, Needham Heights MA,
Allyn and Bacon.
Cornforth, C.J. and Mordaunt, J. (2004) 'The governance of the voluntary and
community sector - the starting point'. In: Developing an Integrated Governance
Strategy for the Voluntary and Community Sector: volume of evidence, Newcastle
upon Tyne: The Foundation for Good Governance, pp. 7-14.
Hampden-Turner, C. (1990) Charting the corporate mind: from dilemma to strategy.
Oxford: Basil Blackwell.
Kegan, R. and Lahey, L.L. (2001) How the Way We Talk Can Change the Way We
Work, San Francisco, Jossey-Bass
Leat, D. (1988) Voluntary organisations and accountability, London, NCVO.
4

Panel proposal - ISTR/EMES Research conference, CNAM, Paris, April 2005

Revolution from within? - non-profit management in a philosophical

organisation

How do you stay loyal to your values, given that one of the challenges of
your organisation is to break through the empty phrases of most valuebased management? How do you keep up motivation and devotion, when
you have no access to traditional levers such as power and money? This
paper deals with two themes that, all while being blatantly banal, remain
central and paramount in their challenge of everyday life in a small, not
very wealthy, organisation. Rather than presenting ready-made answers,
the author will present reflections over problems that are best viewed from
a seriously playful inconsequentialism. And present them through the
optics of a genealogy for revolutions, that is central to the organisation
itself and its potentiality.
Kesera is an organisation based in Copenhagen, Denmark. Its declared
aim is to work for pan-creation. This slightly hermetic phrase covers a
less hermetic, but not less difficult attempt to initiate processes leading
from suspension, over expansion and reflection, and on to what the
leaders boldly name revolution. It works on a financially unstable ground,
in a climate where the shift of governing power in 2001 meant a drastic
reduction in support to autonomous non-profit organisations. It also works
in a network-like organisation, with two leaders being mostly on the road,
and one staying mostly in London. Like many other non-profits, it works
through volunteers, interns, and occasional salaried part-timers, when
times are good. This condition means that the survival of the organisation
would seem to depend on finances. However, the organisation has
managed to stay afloat during periods of financial draught, indicating that
the survival may actually depend on other factors.
The author claims that the central aim to keep in mind in this organisation
is to stay ahead of its own value frame. Therefore a brief explanation must
be given. The philosophical composition of this explanation is a
controversial recombination of the philosophies of Gilles Deleuze and
Felix Guattari, Jacques Derrida, Giorgio Agamben, Bruno Latour, and
Bernard Stiegler.
Beginning with revolution, this will be defined as the abrupt,
discontinuous leap from one rhythm of development to another one.
Revolutions are discontinuous, and they are always the product of
collectivities. For this leap to be made possible, a potentialisation of the
collectivity must take place, enabling it to leap, collectively. For such a
potentialisation to take place, a process of reflection and empowering is
needed. In this process, elements constituting the collectivity must be
made to react upon a possible line of flight building from a process,
initiated from within itself, rather than drawn in from a known horizon.
But in order to make this probable, an event must be instantiated, giving
the way to a suspension of known truth, and recognizable horizons. This
suspension opens up for attention towards a virtuality that bridges

Panel proposal - ISTR/EMES Research conference, CNAM, Paris, April 2005

between proto-subjects and super-subjectivations. This is, in short, what

the organisation attempts to create in its environment.
The twist here is that such processes are highly risky to work with. All the
steps are improbable and need great amounts of attention, timing and
decisiveness to take place at all. And given these inputs, they still remain
improbable taking place only rarely. This is to a certain extent when you
deal with the world around the organisation. Their attention can, to a
certain extent, be turned towards you when you need it. But within the
organisation, people set their lives at stake, even if for a short while. They
themselves give up their subjectivities, hoping for suspensions to take
place. This means that no other levers truly count within the organisation.
There is less tolerance for slips, for dead periods, for lack of inspiration,
from the people working within. There is a high risk of breeding
unsatisfied volunteers, hoping in vain for constant renewal of horizons as
they go though not necessarily able to grasp the suspensions offering
themselves.
The answer, as far as this author is concerned (and being one of the three
leaders of the organisation), is to give up on most levers of control far
more than we would normally accept in any organisation. A very high
amount of unpredictability must be built into the very behaviour of the
organisation, constantly challenging everybody to go a bit further,
building almost exclusively on trust. The organisation survives and
develops from a combination of an extreme focus on process, a very high
loyalty towards the ideas of the organisation (not its structure), and a
readiness to follow the potential whenever it appears. This is, admittedly,
slightly off from your average organisation management (business first,
safety first, structures first), and there is no guarantee that it works.
However, if an organisation offering the option of revolution is to survive,
nothing less offers an acceptable path or the devotion of nomadic
volunteers.

Dilemmas and challenges in managing community involvement: the case of

Community Law Centres (CLCs) in England

Based on empirical doctoral research, this paper explores the means employed by
CLCs in England to underpin and encourage community involvement in their
organizations. This research used a case study strategy to undertake a qualitative
study of four CLCs in which semi-structured interviews were undertaken with key
organizational participants and an analysis made of key organizational documents.
The CLCs which took part in this study were complex organizations in that not only
were professional staff employed by lay management committees (governing bodies)
but they were also membership organizations providing services beyond their

Panel proposal - ISTR/EMES Research conference, CNAM, Paris, April 2005

membership and receiving income both through contracts and grant aid, thereby
acquiring multiple accountabilities and stakeholders.
The study on which this paper is based was located within the field of social policy
and drew on three bodies of literature: organization theory, voluntary sector
organization and specialist literature focused on CLCs. These bodies of literature
came together to suggest organizational dilemmas arising in the operation of
management committees and problematic relationships between management
committees and staff. They also suggested that environmental factors, specifically
funding, might affect organizational behaviour.
The study used the concepts of community control and professional
accountability to investigate the organization and operation of CLCs in England. A
founding principle of CLCs has been community control mainly by representation
on their management committees and by the recruitment of volunteers from client
communities to assist in service delivery. The study found that while the concept of
community control retained a strong symbolic value for organizational participants,
in practice community involvement was a more achievable aim and also identified
six tiers of community involvement.Part of this study examined the strategies
employed by practitioners to operationalize community involvement and explored the
challenges associated with this operationalization.
This paper explores different strategies used by CLCs to achieve community
involvement. It concludes that the aspirations of founders expressed in governing
instruments were enduring influences on these organizations ability to achieve their
manifest aim of community involvement; that certain environmental factors
intervened more decisively than others to undermine the achievement of this aim and
threaten organizational survival; that staffs commitment to successful organizational
processes for managing community involvement were dependent on the
acknowledgement by all organizational participants of the equality of the partnership
between management committee and staff in managing the organization; and that
service delivery volunteering, although allowing the physical presence of
communities within the organization, was not a means by which communities
influencedorganizational decision making.
The management of community involvement is of contemporary interest to both
policy makers and practitioners in the third sector. A number of social policy
initiatives in the UK use the rhetoric of community involvement as a means of
extending democratic and consumer participation and addressing social disadvantage,
and seek to harness voluntary and community organizations in the implementation of
these policies. In the study of CLCs on which this paper is based, the concept of
community involvement was also found to be critical in embedding CLCs in their
client communities and contributing to their sustainability and survival. This paper
would also be of interest to an international audience because it extends knowledge
about the management of organizational processes in voluntary and community
organizations.

Panel proposal - ISTR/EMES Research conference, CNAM, Paris, April 2005

How leaders construct dilemmas (and dilemmas construct leaders)

This paper offers a social-constructivist perspective on the way the intense challenges
of leadership in social enterprises (broadly understood) are experienced and
addressed.In doing so, these challenges - of accommodating incompatible
expectations, of making workable sense of ambiguities, inconsistencies and
uncertainties - are located in the broader context of (post-) modern society, and the
mental demands of modern life (Kegan, 1994).One aim is to explore the application
in social enterprises of models and theory developed in other contexts, and to show
their value and relevance in such contexts.To this end, the paper uses data drawn
either from the literature or from the authors current research with Chief Executives
of a range of nonprofit organizations and it starts by briefly illustrating a range of
such tensions and challenges.
Next, two lines of theory are introduced.The first concerns the nature of the tools for
thought that help in making workable sense of the perplexities of management, and
what it is that they help leaders to do namely, to achieve some distance or
perspective, to dis-embed themselves, so they can see the wood and not just lots of
trees. Hampden-Turners dilemma theory is used as an illustration.The second is the
adult, constructivist-developmental psychology of Kegan and others (Wilber, Torbert,
etc). Their research concerns the psychological capacities that are required to handle
such tensions, ambiguities, inconsistencies and dilemmas and that are gradually
induced by facing them.
This leads to the final section of the paper, and the underlying purpose of the analysis.
To the extent that these theories resonate and capture important aspects of the
experience of social enterprise management, they have important implications for
leadership development.These are discussed in the final section of the paper, along
with some comments on the sorts of development activities that are likely to be
effective, and how they may be provided.