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

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)

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

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.

Values and beliefs Systems Structures An Organizational Archetype

Two types of archetypes or footprints

Description of ideal archetypes 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 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 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

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

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

Existence of Enterprise and Non- enterprise Organizations

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.

Significant difference - enterprise and non-enterprise organizations

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.

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

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

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.

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

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

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

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 years or years a greater number of enterprise managers had occupied a position in the private sector

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.

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

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

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

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

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

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

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

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

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

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