Enterprise Organizations - a new breed?

1. Enterprise Organizations - a new breed? The costs and benefits of this emerging organizational archetype in the disability field. Pamela Spall

2. 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)

3. 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

4. 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.

5. Values and beliefs Structures Systems An Organizational Archetype

6. Two types of archetypes or footprints

7. 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 Description of ideal archetypes

8. 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 Description of ideal archetypes

9. 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 Description of ideal archetypes

12. 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

13. This paper will: • Discuss the implications for the sector in terms of costs and benefits of the enterprise organizational form.

14. Existence of Enterprise and Non-enterprise Organizations

15. 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.

16. Significant difference - enterprise and non-enterprise organizations

17. 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.

18. Values and beliefs - significant difference between enterprise and non-enterprise • Beliefs around consumer choice and other quality concepts

19. 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

20. 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.

21. Non-enterprise organizations had - “not implemented” or “very little implemented” Enterprise organizations had - “mostly implemented” Structures and systems

24. 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

26. 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

27. 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

28. 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.

29. 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

30. 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 • Doesn’t have any historic legacy so can design new responses • Less formal approach is often likened to an individualized approach

31. 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

32. 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

33. 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

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

35. 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

36. Non-enterprise organizations require Greater technical assistance - technology, financial management functions, performance and quality systems

37. Enterprise organizations require Support and ideas in social entrepreneur initiatives in income generation

38. All organizations require Increased skill building around change management and surviving transformational change