Mission-based strategic management: a link between operational and grassroots effectiveness

NPOs usually start as direct forms of democracy where ranks and files members conceive the mission and impulse the action (Haugh, 2007; Kreutzer & Jager, 2011, Kelley et al, 2005). Their grassroots effectiveness refers to... [ view full abstract ]

NPOs usually start as direct forms of democracy where ranks and files members conceive the mission and impulse the action (Haugh, 2007; Kreutzer & Jager, 2011, Kelley et al, 2005). Their grassroots effectiveness refers to NPOs’ proximity to beneficiaries, social bonds, embeddedness in the community (Valeau, 2014). Over time, as NPOs develop professionally, technical conformity and economic considerations often take over (Hwang & Powell 2009). Their operational effectiveness aims to maximize ratios related to the resources acquired and services produced (Sowa et al, 2004; Kanter & Summers, 1987). However, nonprofit literature, in particular case studies, repeatedly shows the negative effect of this professional development on grassroots community (e.g., Kelley et al. 2005; Kreutzer and Jäger 2011; Reid and Karambayya 2009; Valeau, 2015).
H1: operational effectiveness is negatively related to grassroots effectiveness

We argue that the tension between grassroots and operational effectiveness is not ineluctable. Most scholars working in the field of NPOs agree on the overarching role of the mission (e.g. Ebrahim et Rengen, 2010; Mintzberg, 1983), but some of them recommend that the mission should be defined and updated in a concrete manner (Drucker; 1990 ; Mac Donald, 2007). We define strategic effectiveness as the ability to constantly reactualize the mission through developing and monitoring new projects. Strategic effectiveness would therefore positively relate to both: operational and grassroots effectiveness.
H2: Strategic effectiveness is positively related to operational effectiveness (H2a) and grassroots effectiveness (H2b)

Method
This study has been conducted in partnership with the French Nonprofit Movement (FNM). The present questionnaire was added as an optional extension of a broader online survey aimed to collect demographic data about members of FNM. Among the 2375 nonprofit organizations which participated in the first survey, 227 filled out our questionnaire i.e. a 9.55% rate. The mean paid staff was 41.91 with a standard deviation of 67.6. Our variables were introduced through the following question: “Compared with other nonprofit organizations of your sector of activity, would you say that yours is effective in terms of …?” 15 aspects of effectiveness were thus introduced: definition of the mission, implementation of the mission, development of new projects, innovation, monitoring and evaluation, relationship with rank-and-file volunteers, relationship with beneficiaries, relationship with customers, relationship with donators, relationship with public, finance management, lobbying, management of paid-workers, management of rank-and-file volunteers.

Results
Table 1 provides the exploratory factor analysis for dependent effectiveness variables. As expected, 15 elements of effectiveness loaded on 3 factors accounting for 63.8% of global variance: strategic effectiveness (α = .90); grassroots effectiveness (α = .83) and operational effectiveness (α = .75).

Table 1. Exploratory factor analysis

Figure 1 displays the final research model presents the following fit (χ2 = 174.5., df = 83, p = .000; CFI = .95; NNFI = .94; RMSEA = .070; AIC = 248.58). Our results did not confirm hypothesis 1 as the relationship between operational and grassroots effectiveness is non-significant (β = .143, ns), but fully confirmed hypotheses 2a and 2b, strategic effectiveness is positively and strongly related to operational effectiveness (β = .515, p = .000) and to grassroots effectiveness (β = .485, p = .000).

Figure 1. Final structural equation model

Discussion
Launching and planning new projects may be important for all organizations (Mintzberg), but it is even more crucial in NPOs, because of their multidimentional effectiveness and of the diversity of stakeholders (Herman & Renz, 1997; Jun et al, 2013). As expected, strategic effectiveness played a pivotal role in the development of NPOs, impacting both, their operational and their grassroots effectiveness.