comparison between different leadership practices between NGO & profit organizations

comparison between different leadership practices between NGO & profit organizations

Executive Summary
The following report includes the discussion about NGO, its meaning and what are the several characteristics of NGO. It also includes the comparison between different leadership practices between NGO (non government organizations) and profit organizations. The report also includes the application of different leadership theories in NGO’s, primarily the participative leadership theory and servant leadership theory. Finally a conclusion has been drawn from the analysis of all the above factors.


NGO (non-governmental organizations) are private, non-profit, voluntary, self-governing and professional organizations that have legal characters and concerned for the welfare of the public. They include transnational and private international players who transcend national boundaries. NGOs are made up with individuals or group of individuals who don’t represent any government and independent from their governments. Leadership practices in NGOs are different from profit organizations. In this report, key characteristics of NGOs will be analyzed and leadership practices between NGOs and profit organizations will be compared. Along with this, some leadership theories and their relevance in NGOs will be discussed.

Characteristics of NGOs

NGOs are as non-membership development oriented organizations that provide services directly to the needy people for their welfare The NGOs are different due to their origins and philosophy. Some NGOs were established by professionals or academics in opposition of the politics of government, corruption and patronage (Robins, 2010). Some are based on religious principles while others were established as quasi-consultancy concerns in response to donor funding initiatives. Some NGOs focus on gradual changes through development of human resources by fulfilling their needs and claiming on government services.
NGO covers a range of organizations within civil society from political groups to sports clubs. But it is argued that all NGOs can be regarded as civil society organizations but all civil society organizations are not NGOs. The concept of NGO came into action after 1945 with the establishment of United Nations Organizations that identified the need to give a consultative role to organizations that are not classified under government or member states (Lewis, 2006). So, NGOs have different forms and play different roles in different countries. They are regarded as part of the third sector or not for profit organizations. These organizations fulfill activities to reduce sufferings, protect the environment, promote interests of the poor, provide basic social services and undertake community development.
There are some features that differentiate NGOs from government organizations when they are performing similar roles and responsibilities. NGOs have the capacity to do experiment and learn from new experiences. They can link processes with outcomes and able to enlist the energies and commitment with intended beneficiaries. Following are the characteristics of NGOs:
Relationship with intended beneficiaries: The relationship of NGO with intended beneficiaries is based on the principles of voluntarism rather that control that happens in government organizations (Hailey, 2006). So, intended beneficiaries are included in program design and management. Through this, programs have better chances of success because they are more relevant and attractive.
Task-oriented approach: NGOs have a task oriented approach that allows them to achieve organizational development that promotes diversity and change instead of control and uniformity in the organizations that influence progress and growth.
Private set-up: NGOs should have private set up and have autonomous in its activity and independent of direct control of government (Hailey, 2006). NGOs should be non-profit and it is define clearly through its voluntary character.
No relationship with political party: NGOs should not be considered as political party or don’t have any relationship with any political party. They should not have aim to attain political power through these organizations. NGOs should support development and welfare of public.

Compare and contrast leadership practices between NGO and profit organizations

The leaders in NGO face extraordinary challenges at personal and organizational level. They have to do work for long hours with limited resources in uncertain and volatile economic and political environment to provide help for members of their communities. The leaders of NGO are isolated and unsupported by the society (Arora, 2012). In NGOs, there is leadership deficit because of shortage of talented leaders and growth of non-profit sector. So, it is required to develop new leaders and provide essential support for current and future leaders. For NGO leaders, leadership development programs must be incorporated with best practice and current experience rather than traditional approached of leadership development.
NGO leaders incorporate successfully with the environment in that they work. They can operate in three different worlds such as the global aid world, urban world and rural areas where development is required. NGO leaders adapt new leadership roles to manage the stress that arises from work pressure, demands of organizations, shortage of finance and internal conflicts within organization (Hailey, 2006). The unrealistic and artificial demands increase pressure for NGO leaders. Along with this, tight project schedules and over-hasty projects result in developmental bad practices that influence the credibility of NGO leaders in negative manner. These unrealistic demands have a negative impact on the ability of NGO leaders to achieve long term goals and develop financial sustainability.
Apart from this, culture influences the leadership practices of NGO leaders. In NGO, the more participative and collective leadership style is shaped by the collectivist nature of society that found in the developing countries. For example, in Uganda, NGO leaders face cultural pressure related with the expectations of their staff that results to play paternalistic role. In this role, they make hard decisions and play a more professional managerial role (Lekorwe and Mpabanga, 2007). They have to fulfill the expectations and financial demands of community and manage the power distance between themselves and their staff. Many NGO leaders have natural consequences of the high levels of commitment and shared sense of ownership.
In addition of this, it is found that NGO leaders have followed more participatory leadership style. Leaders are sharing decision making with their staff members and encouraging more participatory culture in their organizations. At the same time, successful NGO leaders manage the issues individually while appearing to be highly participative (Hailey, 2006). Many NGOs have collective decision making and participatory leadership with clear hierarchies of authority. For participatory leadership, it is important that leaders listen and respond according to the staff members views. They are able to manage cross functional teams and different decentralized operations (Bhose, 2003). So, the success of leaders depends on their willingness to listen, show empathy, meaningful communication and ability to motivate and convince the staff members.
NGO leaders demonstrate high levels of emotional intelligence. Emotional intelligence describes one’s ability to feel, use, understand and learn from own emotions and other’s emotions. With high level of emotional intelligence, leaders can motivate themselves and others. Along with this, high levels of self-awareness, leaders are able for self-management, socially aware and can manage diverse range of relationships (Bhose, 2003). Emotional intelligence represents the intangible aspects of leadership that is important within organization.

For profit organizations
Leadership is based on personal experience and traits of leaders but it is not helpful for developing the practices for leadership of change. Organizations (profit) face leadership challenges when they are still viable for changing world. So, to lead people in the changing environment, it is important for organizations to develop leadership development programs. For this, leaders in profit organizations follow collective leadership practices through combining future sense making with strategic thinking (Northouse, 2012). It is important for them to keep informed about the new trends in products, services and leadership in external environment, so, they can generate innovative workplace practices and operations for products and services.
Leaders become a co-creator of learning culture and take the organization from good to great companies. In the change leadership decision making, leaders face issues of complex, ambiguous and intractable. So, it is suggested for them to reflect, seek counsel from conflicting views and wait for critical events to unfold before making decisions because these decisions have long term impact on the organization (Lussier and Achua, 2009). Along with this, emotional intelligence is important for leaders and it is the ability of them to connect with the emotions, hopes, dreams and anxieties of their employees. At the same time, it set clear boundaries and expectations for employees that determine the personal commitment for the organization and self-learning of employees.
Leaders can gain continuous knowledge, experience and insights from other leaders through connecting them and identifying their actions and leadership practices that lead to success.  In profit making organizations, leaders should develop trans-cultural competence and understand personal values and values of diversity that helps to relate all people of different departments of the organization. In leadership development programs, leaders can develop many skills such as action learning, facilitation, mediation and process consulting (Northouse, 2012). They can use these learning to solve business issues, improve workplace practices, effective group communication, resolve conflicts and provide solutions for increasing the productivity and operations of organizations.
Leaders always represent the image and reputation of the organization. So, it is important that leaders to aware about the consistent and authentic leadership style that follows in business and personal life. Along with this, formal and informal communication is important for sustaining the changes in the organization and change the behavior of others. In profit making organizations, coaching and mentoring are important for leadership development in changing circumstances (Bush, 2010). Apart from this, profit making organizations develop a culture where conversation about the performance, weak points and suggestions for improvement are discussed openly and frankly. This culture prepares people for adopting changes that lead sustainable improvement, growth and reduction of insecurity about performance and employment.
In profit organizations, leaders develop principles for treating the people and achieving the goals. They develop standards for excellence and set examples for others. In the complex and changing environment, they set short goals for people that motivate them to work together and achieve large objectives (Lussier and Achua, 2009). They create opportunities for people when people are confused about the growth and development. Along with this, leaders want to make some difference, so, they create an ideal and unique image of the organization. They motivate people to achieve the vision of organization and people see many opportunities in the future.
Additionally, leaders look for new opportunities and innovative ways to improve the productivity and performance of the organization. They take risks and experiment new things and process. Risk taking includes mistakes and failures but they accept all those as learning opportunities (Bush, 2010). Along with this, leaders in profit organizations develop collaboration and build spirited teams. They understand that mutual respect is important for extraordinary efforts. They develop an environment of trust and human dignity that strengthen the power of others and feel others valued and powerful.
So, the leadership in NGO and profit organizations is different due to the nature and experience of leaders, expectations of society and staff members, demands of organization and objectives of organization (Phipps and Burbach, 2010). The culture of both organizations and environment in which both leaders are operating is different. At the same time, emotional intelligence, decision making and self-management are important for leadership in both NGO and profit organizations.

Application of leadership theories in NGOs

In the changing environment, leadership is seen as key organizational assets. It is important for leaders to develop the skills to make the difficult situations and cope-up with the challenges of external environment and culture of different countries. NGO leaders work in a collaborative partnership and learn new networking skills to resolve conflicts of different cultures and backgrounds (Northouse, 2012). Along with this, it is important for leaders to develop new competencies, networks and alliances with external partners and suppliers.
In NGO, there are four types of leaders such as:
Paternalistic: This kind of leaders demonstrates a patriarchal or matriarchal style of leadership. This approach is helpful to develop personal and kinship relationships. They motivate others for great loyalty and have strong and close relationship with their staff members or volunteers (Hailey, 2006). But for outsiders, they appear as autocratic, dependent on hierarchical ways of working and dependent on traditional relationship that is not sustainable for long term.
Activist: This kind of leaders are actively engaged in advocacy and lobbying work. They are charismatic, highly motivated and focused on single problem at one time. They are capable to control the anxiety and irritation, concerns for local communities and groups to gain political imperatives (Hailey, 2006). They can motivate and energize followers with clear messages at the cost of dealing with managerial and organizational issues.
Managerialist: These kinds of leaders are important for their managerial and administrative capabilities. They show an instrumental ability to manage organizations and effectively establish reliable systems and structures of organizations (Hailey, 2006). Along with this, leaders manage diverse workforce and establish their roles and responsibilities clearly. When they are not comfortable with change or managing diverse workforce, they display a professional approach to development that has good record of raising funds, meeting deadlines and undertaking commissions.
Catalytic:  This kind of leaders acts as strategic catalysts within NGO. They are able to promote and implement change in the organization. They are capable to take long term strategic view and managing tough decisions related to strategic priorities with organizational values and identity (Hailey, 2006). The success of leaders depends on their ability to delegate work to talented staff members and engage actively with external stakeholders, develop strategic alliances and build variety of networks in spare time.
There are various kinds of leadership theories such as participative, transactional, transformational, trait, and Great man, contingency, situational, behavioral and strategic leadership. All these theories are not used in NGOs but some are applicable and relevant for NGOs and some theories are used in NGOs at some extent.

Participative Leadership theory

Participative leadership theory is related the leadership behavior of leader in that he/she includes all members of the team or organization in the development of the strategies for achieving organizational goals and objectives. In this style, leader plays a facilitator role rather than assign works and order for completing assignments (Northouse, 2012). This leadership style motivates other employees to participate in the decision making process of organization and give their valuable suggestions and ideas for leaders. It develops their creativity and expresses their abilities and talents in front of management that is not possible in other type of leadership style.
This leadership theory is applicable and relevant for NGOs because in NGOs, all members are treated equally and leaders behave equally with all members. They want to encourage the participation and involvement of staff members in all planning and decision making of the organizations, so that, employees can feel valued and motivated (Lussier and Achua, 2009). Along with this, the involvement of staff members in decision making increases the understanding of issues and takes appropriate actions to solve these issues. When employees are involved in decision making, they become more committed, less competitive and more collaborative for achieving joint objectives.
It is found in previous research that NGO leaders have followed participatory leadership style to share decision making with their staff members and encourage participative culture in the organizations. They can manage the highly participative leadership style and collective decision making in their organizations. So, participatory leadership theory is applicable and relevant in NGO because collective management, collective decision-making and successful team working is important for the success of NGOs (Bush, 2010). The NGO leaders are able to listen properly and act accordingly that is required for participative leadership style. It is essential for NGO leaders to manage cross functional teams, decentralized operations and diverse workforce that is possible through collective or participative management and leadership. Apart from this, NGO leaders are able to work in a participative manner, sharing their decision making authority and leadership role and work in a collective style (Lussier and Achua, 2009). Thus, participative leadership style is the most relevant and useful for NGO leaders.

Servant leadership theory

In 1977, Robert K. Greenleaf defined and explained the servant leadership theory firstly. He explored that servant leader makes good decisions by considering ethical and social responsibility and creating motivation for employees to manage the challenges of work in future. This leadership theory is used by developed and emerging organizations to manage employees’ performance (Awan, Qureshi and Sadiya, 2012). So, it is applicable in NGOs to manage the performance of employees and improve the productivity of organizations through motivating them. In the servant leadership, leaders can motivate employees through intrinsic and spiritual satisfaction and lead the employees effectively. They can provide help for employees to complete organizational tasks.
The servant leaders are responsible for doing work for completing basic desires of employees through considering their personal interests in motivation. Basically, the servant leadership means services to others in that leader plays a servant role and works for the growth and welfare of employees rather than establish power distance. Along with this, this style follows holistic approach to work where personal and integrity values are given to employees, so, they perform well in the organization and maintain work life balance in their personal lives. It promotes a sense of community through establishing the logic of community among employees, so, they accomplish goals and objectives of organization successfully.
Apart from this, this leadership style shares power of decision making with employees and encourage the skills, abilities and knowledge of employees in the organization. Along with this, servant leaders develop motivated employees that lead to successful organization. The positive views about the servant leadership style that is more effective and applicable in non-profit sector rather than transactional or transformational leadership style. In this, motivated leaders do extra efforts to motivate their employees (Hannum, et. al., 2011). It is difficult to motivate the employees without giving them any tangible benefits or rewards for the improvement in their performance. In NGOs, employees are motivated through intrinsic motivation such as praise, positive feelings and promotion rather than extrinsic motivation like money, rewards and other financial benefits.
So, the servant leadership style is applicable and relevant for the NGOs all over the world to increase motivation and performance of the employees. The motivation level of employees is important to increase the work performance of employees, their satisfaction, outcome and commitment (Awan, Qureshi and Sadiya, 2012). NGOs require new leadership style that helps to manage and lead the employees to perform well within and outside the organization for the welfare of society and human beings. For effective leadership, leaders should have some abilities such as emotional intelligence, helping nature, motivational skills, empowerment, and conceptual skills. In servant leadership, leaders should be motivated himself and provided spiritual motivation to staff members to increase the work performance. So, for non-profit organizations, it is important that leaders should improve themselves as spiritual leaders.
Servant leadership style is effective and applicable in non-profit organizations for increasing the satisfaction and commitment of employees and decreasing the employee turnover. Servant leadership style is related with the outcomes or performance of the employees in every type of organization. Along with this, it is found that servant leadership style is appropriate for the effective management and development in the non-profit organizations. In the non-governmental organizations, employees are much motivated to perform their tasks in effective manner. At the same time, through employee motivation, leaders are able to manage and direct the workforce of non-governmental organization.
Framework of servant leadership
(Source: Awan, Qureshi and Sadiya, 2012)
There is a positive relationship between servant leadership style and performance of the employees. It is an effective leadership style that empowers employees to perform their roles in the non-profit organizations. At the same time, it is found in some studies that performance appraisal and rewards have impact on the commitment and performance of employees but in non-profit organizations employees are motivated through intrinsic motivation tools (Awan, Qureshi and Sadiya, 2012). The performance appraisal of employees influences the performance of employees because it provides specific information and requirement of motivation to increase the performance and achieve organizational goals.
So, in the changing environment, it is important for leaders to manage the human resources effectively and increase their motivation to improve the productivity and performance of the organization. The leaders of NGOs can increase the motivation of employees to gain competitive advantage, reduce employee turnover, improve productivity and work performance (Hannum, et. al., 2011). Along with this, it is considered by leaders that personal & social life, organizational structure and management style & organizational culture and environment of the organization influence the motivation level of employees.
Thus, servant leadership theory is relevant and applicable in non-profit or non-governmental organizations. Employees are the life of any organization and to achieve organizational goals, it is important that employees are highly motivated and achieve their performance targets effectively. Through this leadership style, NGO leaders can motivate their employees spiritually and intrinsic motivation tools that improves their performance and satisfaction from the job. With the help of motivated employees, NGO leaders can achieve organizational goals and objectives in effective manner.


On the basis of above discussion, it can be concluded NGOs are private and independent organizations that are not linked with any political party or organizations. They work for the welfare of society or human being with the aim of non-profit. The activities of NGOs have no control of any political or government organization. They are different from governmental organizations in terms of relationship with intended beneficiaries, private set-up, task-oriented approach and no relationship with political parties. Along with this, the leadership styles in NGOs are different from profit making organizations. Profit making organizations focus on development of leadership to manage employees and attain competitive advantage to gain profits in their business while NGOs follow leadership style to encourage the participation of employees in decision making and motivate them to provide best welfare services for required people. So, participative and servant leadership style is the most relevant and applicable in non-governmental organizations.


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