1. Social innovation in NGOs Management Mihai Lisetchi, PhD candidate Faculty of Economics and Business Administration, Timisoara, Romania European Summer School on Social Economy (ESSE 2011) July 18 - 23 2011, Bertinoro

2. Objectives of the presentation: Clarification of the concepts: innovation, social innovation, NGO (what are we talking about?); Creating an overview of the main features of the NGO management; Identifying the social innovations in NGOs management.

3. Innovation Concept (1/2) Sources of innovation: the manufacturer innovation (an agent innovates in order to sell the innovation); the end-user innovation (an agent develops an innovation for its own - personal or in-house). Innovation typology (Brooks, 1982): - purely technical (such as new materials), - socio-technical innovations (such as transportation infrastructure), - social innovations - radical innovations (discountinuous and disruptive changes) - incremental innovations (minor changes) Note: invention (as an idea) vs. innovation (the economically viable outcome)

4. Innovation Concept (2/2) Innovation – a change that increase value: new goods, a new quality of a good, new method of production, the opening of a new market, new sources of supply of raw-materials and half- manufactured goods, new organizations, new business models, new services, and new management and marketing techniques. Definition: "Innovation is the multi-stage process whereby organizations transform ideas into improved products, service or processes, in order to advance, compete and differentiate themselves successfully in their marketplace." Baregheh et al. (2009) The participatory dimension of the innovation: from organizations to communities

5. The „Socialization” of the Innovation Overlapping meanings of social innovation: - social processes (like open source methods and techniques), - social purpose (microcredit, distance learning, etc.) - social entrepreneurship; - public policy and governance Direct vs. indirect definition Definition: “Social innovation refers to innovative activities and services that are motivated by the goal of meeting a social need and that are predominantly diffused through organizations whose primary purposes are social.” (2006), Geoff Mulgan Participatory dimension of social innovation

6. NGOs and Social Innovation - Role of organizations and networks of organizations in the dissemination of social innovation - NGOs as engines of social cohesion - Typological diversity

7. Why am I interested in NGOs? NGOs in Romania: prominent social actors: o 62,000 registered organizations in Romania today; o in 2008, NGOs attracted Euro 1,25 billions;.

8. NGO concept (1/2) Terminology: o (politological criteria) non-state actors (EU) or non- governmental organizations (France); o (commercial criteria) non-profit organizations (US); o correct name: non-profit non-governmental organizations  (political criteria). Organizational behavior: o function like private commercial entities; o similar scope to public agencies (social needs).

9. NGO concept (2/2) Definition: o an organizational category, o formed by institutionalised entities, o of private nature, o dedicated to social needs, o independent from public institutions o and not interested in political power (i.e. political parties) o or profit (i.e. commercial private organizations).

10. NGOs distinctiveness (1/2) Reason of being -> organizational behavior A commercial enterprises-NGOs comparative perspective: organizational goal - social need; management structure -dual management structure; role of the governing board - representative of the market; leaders’ compensation - the volunteer work of the leaders; decision making power distribution within the governance process - not depending on shares;

11. NGOs distinctiveness (2/2) service-market torque – payer not beneficiar (funder-NGO provider-beneficiaries); ways of obtaining resources - non-commercial activities (i.e., attracting grants) and to the economic activities; human resources - both paid and volunteer staff; principle of profit sharing – non distributing shares. Obs.: absolutness (volunteering in public institutions); type of incorporation

12. Toward an organizational continuum The hybrid organization trend: NGOs perspective: commercial enterprises management tools and models ->finding solutions to NGOs financial challenges For profit perspective: mainstream management (shareholders interests) -> multistream management (stakeholders’ interests, good for the community) - Dyck and Neubert (2009).

13. Conclusions The complexity of the NGO concept impose a permanent search for innovation both at organizational level and networks level seeking to improve organizational models and management methods In order to create changes which increase the public trust in such organizations, generating legitimacy and thus, creating value for these organizations Further research is very necessary.

14. Thank you for your attention! Mihai Lisetchi lisetchi@gmail.com Questions & comments