Isomorphic pressures on Ecuadorian NGOs, an essay

Isomorphic pressures on Ecuadorian NGOs, an essay

Vincent Gravez, Ecuador1

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his essay explores isomorphic pressures on Ecuadorian NGOs and tries to understand how those pressures shapes this field of activity. It first briefly presents the socio-political context of the modern Ecuador in relation to NGOs, describes the neo-institutional theory used, and finally tries to decipher the nature and the influence of isomorphic pressure on NGOs. Main conclusions are that there are clear evidences of a significant numbers of isomorphic pressures on Ecuadorian Civil Societies Organizations and that both Central State and Donors originate strong driving isomorphic forces that, if not considered, may endanger permanence of Ecuadorian Third sector‟s organizations. The relevance and benefit of pursuing a specific investigation to the Ecuadorian „Third Sector‟, using the neoinstitutional theory, is then briefly discussed. For the last decades, non-for-profit Civil Society Organizations (referred here indistinctly as NGOs, Civil Society Organizations or „the Third sector‟) played an important role in providing services and knowledge to Ecuadorian society. Favored by its geo-climatological position, this small Andean South-American country (14 million inhabitants) is known a one of the „megadiverse‟ country; it has 11% of the animal diversity and 6% of the species of plant of the planet with less than 0.2% of its surface. It also gathers a rich cultural and ethnical diversity with 15 Indigenous nationalities, 14 different languages and uncontacted communities in the Amazonian jungle. Contrastingly Ecuador‟s primary resources richness (e.g. oil, mines, wood) have been largely exploited to the sole benefit of a powerful elite with only scarce social redistribution. As a result, the high level of poverty, the poor level of education, the lack of basic infrastructure and services together with its cultural and biological richness have made of Ecuador a very attractive country for international cooperation and philanthropic donors. As a consequence - and helped by a lax legislation -, the „Third sector‟ develops rapidly in Ecuador. The Third sector represents now 59.124 organizations (Foundations, Associations, Indigenous organizations, etc.) legally registered, figure that can be contrasted with the 180.000 existing firms. For the purpose of the analysis, and before using the neo-institutional theory lens, we will first describe succinctly what are doing NGOs, characterize the actual socio-political context in Ecuador and described key stakeholders related to NGOs. The third sector provides a large array of services and knowledge to society: capacity building, health care for poorest, conflict resolution, investigation, planning, think tank, 1

This essay has been done in 2013 in the frame of the Organizational Analysis MOOC (Prof. Mc Farland, Standford University through Coursera Inc.). Author contact: ec.linkedin.com/in/vincentgravez

and so on. In the past, lot of these services have, at least partially substituted the State responsibility toward its population. In present time – with the advent of leftwing governments leaded by President Rafael Correa since 2006 -, Ecuadorian society witnesses dramatic changes with a dominant position of a strong and centralized State. Accordingly, the State as a whole has noticeably recover its responsibility in providing services, infrastructures and a normative framework with some consequences for all the component of the society. It must be noted that South America had been only slightly impacted by the 2008 financial crisis showing positive figures of economic and social development when other regions were strongly impacted. As a result main NGO‟s donors (e.g. International cooperation agencies) are reallocating funds to other priority regions. To provide their services and goods and reach their objectives, NGOs, relate with different component of the society: the State, its Beneficiaries, Partners and Donors. First, probably any ONGs have to maintain relations with the State through its different components. Ecuadorian Central State has shifted to be one of the main stakeholders to cope with through a plethora of Ministries, under-secretariats or State agencies. Local level governments (provincial, City hall, parishes and communities) are also important interlocutors since it is generally necessary for NGOs to coordinate field interventions with local authorities. For a NGO, those who receive primary benefit of services and good provided, the Beneficiaries can be as various as local stakeholders (e.g. users of a specific natural resource), local population, poor communities, but also components of the State itself (from Ministries or State agencies receiving inputs aiming at designing public-policies to Public servants receiving training) as well as communities of practitioners (networks of practice, Cooperation agencies) when knowledge is disseminated. NGOs seldom work alone and rather cooperate with large networks of Partners composed of other NGOs, Universities, network of practice and firms, though it seems that this last being more the exception than the rule. Finally, NGOs depend greatly on Donors for funding their activities. Funding comes from a wide array of sources, from International Cooperation agencies (e.g. USAID, German‟s GIZ, Spanish Cooperation agencies, etc.), International foundations, the State itself, some firms and the public at large.

The pertinence of the neo-institutional theory perspective in our case is that this theory is not about individual organization but rather deals with organizational fields (in our case the Ecuadorian Third sector‟s organizational field). This theory considers organizations in their environment and how this environment shape, in turn, these organizations. In this aspect neo-institutional theory belongs to the “open system” theories‟ class as proposed by Scott (2003) where we observe the predominance of the environment - i.e. the external world -, as driving forces modeling organizations. An “organizational field” - the focus of this theory - is an intuitive concept to grab (think for example to car industry, International cooperation agencies, Health care agencies and so on) and it has been defined by scholars as composed of “organizations

that, in the aggregate, constitute a recognized area of institutional life” (Dimaggio & Powell, 1983 in McFarland & Gomez, 2013). In their process of creation this leads to increase interaction among members in an organizational field, inter-organizational patterns, hierarchies and coalition‟s formation, flow of information and mutual awareness (Ibid.). Scott (2003) proposes a general useful framework which will help us to summarized key organizational elements (technology, participants, social structure and environment) of the Third sector‟s organizational field (Table I). Table I: Synthesis of key organizational elements of the Third sector‟s organizational field. Technologies/tasks Provide services and goods though diverse methods Fundraising Link with national and local authorities Participants 59.124 organizations (Foundations, Associations, Indigenous organizations, etc.) actually registered NGO‟s Professional staff Social structure Relates with: Central State (Ministries, Secretariats, State agencies) and Local governments Donors Beneficiaries Network of practice Network of practitioners (partners) Goals Institutional objectives are mainly to deliver services and goods, building capacities and sharing knowledge Environment Return of a strong centralized Ecuadorian State recovering its responsibility to provide services and infrastructure to its population National and regional evolving context that imply reduction of donors‟ capacity

Now that we start to have a clearer overview of the Third sector‟s organizational field in Ecuador, let‟s dig deeper in the Neo-institutional theory to understand how the environment influence the organizations in that field and try to derive some learning. Neo-institutional theory poses that organizations struggle for their survival by conforming to cultural norms in its organizational field. In this aspect, neoinstitutional theory focuses on conformity to social and cultural scripts and/or normative constraints. These scripts or constraints are sets of beliefs molded by social interaction, which provide models, schemas and guideline for governing behaviors. But why do organizations conform? Because - as poses by the neo-institutional theory , the key resource for organizations is “legitimacy”. That is, organizations are expected to look-like a typical organization of their organizational field to be considered legitimate. By conforming, organizations are not only rewarded by legitimacy but also by an increasing ability to mobilize resources - because funds are frequently allocated in a categorical fashion (McFarland & Gomez, Ibid.) - together with the opportunity to provide internal order, i.e. actors derive identities from their adherence. The process through which homogenization among organizations is achieved has been described as “isomorphism” (Dimaggio & Powell, Ibid.). On continuation we will describe different isomorphic pressures (or forms) and try to explain how those apply to Ecuadorian Third sector‟s organizational field and how they relate to the different stakeholders detailed above. We will finally summarize this in a table for a quick overview (Table II).

The first process that could lead to homogenization is “competitive isomorphism”, i.e. certain form of organization - i.e. doing things - doesn‟t work or are sub-optimal. For a biologist, this process would resonate with natural selection where only most advantageous innovations are retained. Though different by nature from their for-profit counterpart, NGOs have “naturally” adopted some managerial strategies like separation and specialization of tasks, hierarchical structures, diversification of sources of funding and strategic use of information. NGOs have also largely integrated practices like networking and organizational learning based on large network of practice. “Institutional isomorphism” adopts three forms. The “Coercive form” relates to political influence, being those formal or informal. Plenty of examples illustrating this form would immediately come to mind to anyone working in the Ecuadorian‟s Third sector. Coercive pressures relate primarily to Central State will to rule the NGO functioning. May 2010, in one of its widely broadcasted diatribe, the President R. Correa, denounced the existence of about “50.000 NGOs most of which operating in the country without control, without accountability and escaping taxes”. In the following months, a series of Ministerial decrees were issued bringing Ecuadorian and International NGOs operating in Ecuador a new strict regulation framework making compulsory the registering in a unified system of information, clear accountability mechanisms, transparency about the origin and use of funds, between other. In the process, 17 international NGO were prohibited to operate in the country and generally speaking all the Civil Societies Organizations went into a close scrutiny by different State agencies. Another powerful tool of coercive pressure from the State is of course embedded in the fiscal administration. Breaking with decades of lax supervision, a modern fiscal system obliged now the Ecuadorian Third sector to a transparent and precise financial reporting. The atmosphere of suspicion toward NGOs (some were suspected to get involved in political activities against the government), the rumor of the existence of blacklists and extreme zeal of some public servants questioning NGOs functioning were also contributing to establish - in a more informal ways – powerful coercive pressures. Not only State, but also donors, can also be important sources of isomorphic pressure. As stated above, funds are allocated in a categorical fashion. Thus, programmatic priorities of donors are likely to influence the NGOs‟ objectives and activities. Since proper reporting is key in the relations with donors, specific tools of planning and measuring success – like the famous Logical framework - are widely adopted by NGOs, inclusive in their in-house planning. At field level also, donors‟ paradigms (e.g. „gender approach‟, „right-based approach‟, focus on specific „vulnerable population segment‟ like HIV-AID, etc.) have deeply permeated into NGOs‟ own paradigms, in Ecuador and world-wide. Both sources of coercive forces are important since they can endanger survival of the organization: the one through prohibition, the second by reducing funds. The “Mimetic form” of “Institutional isomorphism” is another pressure that would tend to homogenize organizations in an organizational field. In that case, organizations adopt standard responses to uncertainty by copying what is perceived legitimate or successful in other organizations. As seeing in the “Competitive isomorphism”, a source of standard response can certainly be found in managerial practices of successful firms. For example, the success of collaborative working, - e.g. open-source software programing - probably resonated for NGOs since

they were already immersed in large networks of partners (not competitors). Of course successful partners or influential International NGOs that were able to put on the table important issues with great influence in shaping public-policies (Care International, Greenpeace, WWF, etc.) were – consciously or not – important sources of inspiration for shaping actual NGOs, whether in their functional structures, communication of fundraising strategies. As a matter of fact, NGOs also draw important lessons from their beneficiaries. Creative and efficient ways of doing things and solving problems are often nested in traditional and communitarian practices. Since it is frequent, among Ecuadorians NGOs, to find respectful and horizontal approaches to solve local issues together with communities through dialogue and participation, this situation also contribute to shaping in turn NGO‟s practices. Finally, a third “Institutional isomorphism” form is the “Normative form” that is more associated with the way professionals in an organizational field define the condition of their work, “the way things are done”. Most NGOs, above a certain level of legitimacy (a key resource in neo-institutional theory) rely on professionalized and trained staff. In Ecuador, they mostly receive formal education in Universities and are linked with tight networks of professionals in similar areas. During their careers, professional tend to change from a NGO to another according to opportunity and turn-over needs. As a total those networks of professionals bring with themselves specific ways of perceiving things and doing things. This normative pressure is of course more visible when thinking to the numerous professional associations (generally called “platforms”) - at National, Regional or International levels – that NGOs are generally enthusiasts to build together with other NGOs. Those networks allow NGOs in similar organizational field to share learned lessons, agree principles, disseminate best practices and issue collective statements to influence public policies. These platforms are obvious ways of homogenizing perceptions and practices. Isomorphic pressures presented above are summarized in the following table (Table II) for a quick overview. Table II: summary of isomorphic pressures for the Ecuadorian Third sector‟s Competitive Institutional isomorphism isomorphism – Coercive form General (and Separation and firms) specialization of tasks Hierarchical structures Diversification of sources of funding Strategic use of information Networking Network of practice State Ministerial decrees and related rules for NGO functioning Fiscal system Suspicious attitude, zealous public servants and (supposed) blacklists Beneficiaries

organizational field. Institutional isomorphism – Mimetic form Managerial practices of successful firms

Ways of doing things nested in traditional and communitarian

Institutional isomorphism Normative

practices Successful Practices of successful partners or influential International NGOs

Partners

Donors

Professionalized and trained staff Network of professionals belonging to NGO‟s staff Professional networks (platforms)

Programmatic Donors „strategies Planning and Monitoring and Evaluation tools (e.g. Logical framework) Other paradigms (e.g. gender approach, rightbased approach, etc.)

What do we get from using neo-institutional theory to analyses isomorphic pressures on the Ecuadorian Third sector? First, we can affirm that there is clear evidence of a significant numbers of isomorphic pressures on Ecuadorian Civil Societies Organizations. Second, that both Central State and Donors constitute strong driving isomorphic forces, i.e. forces that, if not considered, may endangered permanence or integrity of organizations. Third, that, discriminating pressures according to the different stakeholders (the specific approach used in this essay) allows some fine tuning in how these pressures may influence homogenization of Ecuadorian NGOs. Neo-institutional theory proves to be a valuable theory to use when analyzing Third sector‟s organizational fields (see a similar study in Hasmath & Hsu, in press) like the one of the Ecuadorian‟s. Through its lens, objective pressures shaping organizations goals, strategies and practices can be inferred. However, due to the limited constraints of this particular essay, getting to (i) unveil causal effect between pressures and adaptation strategies and, (ii) objectively assessing in what measure Ecuadorian NGOs are homogeneous due to these isomorphic pressures, are out of reach. The present essay can however be a starting point to establish a sensible procedure and method for a deeper exploration of this issue. The relevance of pursuing such research would provide answers about the questions of how do Ecuadorian Third sector‟s organizations do cope with the dilemma of conforming to an “external” appearance that may possibly conflict with their own identities and cultures and what are the management strategies that can be advised.

References: Hasmath R. & Hsu J. (in press).- Isomorphic Pressures, Epistemic Communities and State-NGO Collaborations in China. The China Quarterly, 1-18, Accessed at: http.//www.academia.edu. McFarland D.A. & Gomez C.J., 2013.- Organizational Analysis. Daniel A. McFarland, Charles J. Gomez Publ., 1-180. Scott R., 2003.- Organizations: rational, Natural an Open Systems. 5th Edition, Englewood Cliffs, NJ: Prentice-Hall.