Organisational Development in Business Associations in Third World Countries

by Rainer Mueller-Glodde

Business associations have specific characteristics:

1. As a meso level institution they have an interface function between enterprises and the society. Through lobbying, they are influencing the socio-economic, legal and technical environment in favour of entrepreneurial activity, through services they are communicating demands from the society and support the members in shaping the enterprises.

Lobbying is known in associations in Third World countries. It is the starting point for all activities of associations. Services are mostly not provided - not because people are unwilling but because services are unknown as genuine functions.

2. Associations are, just like trade unions, political parties or churches, organisations that represent subjective opinions. They differ in the way they are forming opinions and making decisions internally. Do members, organs, and staff participate or is the president exclusively representing his personal position?

In many countries of the Third World, especially in authoritarian ones, associations appear to be organisations of the pure presidential type. Changes in leadership usually cause abrupt changes in policy and discontinuity causes inefficiency.

3. The motivation of the voluntary members is located on a continuum between altruism - one wants to do something in favour of economy and society - and political, economic and personal interests. The reasons for certain politics and activities of associations are sometimes hard to understand from the outside. This is sometimes called "collective irresponsibility".

In traditionally authoritarian and strictly hierarchical societies there is a latent danger that individual members exploit the association in favour of their own interests, in democratic societies such an attempt will provoke the members' resistance.

4. Entrepreneurs who volunteer in associations usually practice the same leadership style as in their businesses, regardless of whether this is appropriate or not. The micro entrepreneur who dominates his business in a centralist fashion will as a president manage the association in the same way. However, since the quality of decisions in an association is less relevant than the integration of the organs and the members in the formation of opinion and decision processes, the micro entrepreneur's leadership style will eventually lead to complications.
   

5. Voluntary and professional staff interact in an association. In the case of qualified professional staff, this may create a constructive and stimulating atmosphere. The "tunnel vision" like in an isolated business is less likely. For service provision, professional staff is indispensable.

In associations in the Third World, it is unlikely to meet qualified professional staff. First, because services are not provided, second, because they are considered to be confidants of the president and thus are chosen on other grounds than professional competence and are exchanged in case of a change in the presidency. No staff or weak staff as well as frequent changes at the top prevent the development of organisational know-how and institutional memory.

6. Associations of entrepreneurs are generally self-confident organisations that take pride in their performance. In Third World countries as well, their traditions may go back as long as 200 years. Due to lack of comparison, other forms of organisational life and practice are unknown. Thus, the pressure to change the association is minimal.

As a consequence, associations in the Third World often have the character of an entrepreneur club than that of a service enterprise.

As for the transformation of entrepreneur clubs into service enterprises by way of organisational development, the following theses are brought forward:

• From a static point of view, entrepreneur clubs may seem to be a hopeless object for interventions of international cooperation. However, a dynamic analysis emphasizes the search for personalities and configurations of individuals who, due to their openness, may be won for ideas and visions of change and who are willing to support and disseminate them.

• Due to its self-confidence, an association will rarely subject its whole organisation to change. In addition, the path from an entrepreneur club to a professional service organisation cannot be planned since the latter is unknown, unimaginable and thus unthinkable. Initial planning exercises, carried out jointly with voluntary and professional staff, will thus only touch upon subareas of the association and concentrate on "repairs" (example: increase in courses offered, purchase of a computer, initiation of a data bank). If efforts concentrate on repairs within the frame of the existing paradigm, impacts will hardly be sustainable. There must be room for a vision that the whole association will change in an open, ongoing process of planning, implementation and evaluation which is gradually creating a new paradigm.

• It is highly likely that the unique concentration of interventions on a single group within the association (president/board - professional staff - members) will under the conditions of high staff fluctuation lead to loss of know-how. Chances to achieve sustainable impact are higher if a constructive balance can be struck between the groups: professional staff see themselves as service providers for the members and as the creative element in the association, members demand adequate performance from the board and staff, the board is in permanent contact with the members and sees the staff as the association's human capital that needs to be invested in and is required to perform. Should one of these groups fail - weak president, bad staff, quarrelsome members - there is a chance that the other two groups will initiate action to keep up the performance standard of the association.

• Organisational Development will then essentially aim at improving communication structures through working groups, discussions about objectives and planning, moderation, training and advice and at supporting the stakeholders in that process. Individual capabilities will remain unchanged in such a process - the centralist president remains centralist. However, it may be possible to change the organisational environment in the association gradually, so that expectations of the other stakeholders will not match with this management style. As a consequence, results may first lead to a better definition of needs concerning the services provided by the association (information, consulting, training, support) and a corresponding supply, second, they may lead to more elaborated proposals vis-à-vis the public and civil society domains concerning the creation of an enabling environment for member businesses.

• Enabling the comparison with other associations is an effective instrument for mobilising associations. This can be a mission abroad, to initiate reflection about where the entrepreneurs are standing with their association and where they intend to go. It can also be the reunion of several associations within a network in order to stimulate ongoing comparison and a certain competition among their members, boards and staff. It can also be a benchmarking process in order to render the comparison of performance between associations more objective.

• Sustainable impact is achieved when new voluntary and professional staff follow (or have to follow) the norms, rules and structures of the new association paradigm and do not fall back onto the "club" level. This means as a consequence that organisational development interventions in associations need long-term planning and high intensity.

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