Organizational change and leadership within a small nonprofit organization: A qualitative study of servant-leadership and resistance to change
vii Table of Contents Acknowledgments v List of Tables x CHAPTER 1. INTRODUCTION 1 Introduction to the Study 1 Statement of Problem 2 Background 4 Significance of Study 14 Purpose of Study 14 Rationale 15 Research Question 16 Definition of Terms 16 Assumptions 17 Scope and Limitations 18 Nature of the Study 18 Organization of the Remainder of the Study 19 CHAPTER 2. LITERATURE REVIEW 21 Introduction 21 Organizational Change 22 Resistance to Change 33 Leadership 37 Servant-Leadership 46
viii CHAPTER 3. METHODOLOGY 58 Introduction 58 Researcher’s Philosophy 59 Restatement of the Problem 60 Purpose of the Study 60 Research Design 61 Validity and Reliability 62 Research Question 64 Qualitative Research Method 64 Data Collection Instruments 67 Sample 68 Data Collection 72 Ethical Considerations 73 Summary 74 CHAPTER 4. DATA COLLECTION AND ANALYSIS 75 Introduction 75 Coding and Analysis Process 77 Emerging Themes 77 Personal Attributes Analysis 78 Common Themes (Research Question) 79 CHAPTER 5. SUMMARY, CONCLUSIONS, AND RECOMMENDATIONS 103 Introduction 103 Summary 104
ix Conclusions 108 Recommendations 112 REFERENCES 115 APPENDIX A. INTERVIEW QUESTIONS FOR VOLUNTEER STAFF MEMBERS 131 APPENDIX B. PARTICIPANT DEMOGRAPHIC INFORMATION 133
x List of Tables Table 1. Demographics for This Study 78 Table 2. Relationship Between Resistance to Change and SL by Variable 98 Table 3. Servant-Leadership Characteristics and Themes From Importance of Leader Displaying Characteristics 106 Table 4. Servant-Leadership Characteristics and Themes From Resistance to Change 107
CHAPTER 1. INTRODUCTION
Introduction to the Study The natural servant, the person who is servant first, is more likely to preserve and refine his hypothesis on what serves another’s highest priority needs than is the person who is leader first and who later serves out of promptings. (Greenleaf, 1970, p. 8)
This chapter presents a brief introduction to the research conducted in the past. The research design was that of the case study. This study includes an overview and discussion of nonprofit organizations as they strive to grow and continue to serve the local, national and global community in various ways (e.g., spiritually, mentally, and physically). In addition, this chapter defines the nonprofit organization, organizational change, resistance to change, and servant-leadership. Chapter 1 also discusses leadership and servant-leadership, the newest model of leadership and the research question of whether servant-leadership could be the best model of leadership within the nonprofit organization when organizational change is introduced. The rationale behind the research and research questions were also addressed, as well as the significance of this research. Definition of terms, assumptions and limitations are discussed next and finally, organization of the remainder of this study is provided.
2 Statement of Problem Change is inevitable in today’s business world. According to Robbins (2003), in order for organizations to keep up with a “dynamic” and changing environment, organizations as a whole, as well as their employees, must experience change. Organizations are continually changing as a result of major shifts in the environment (e.g., in regulation, technology, competition, globalization), as well as planned efforts from within to obtain increase profitability, effectiveness and quality (Whelan-Berry & Gordon, 2000). All organizations that experience change struggle with people-related problems such as confusion, low morale, turnover and decreased productivity among its workers (St. Amour, 2001). Many small nonprofit organizations are composed of volunteers and a few paid employees. Volunteers choose to be part of the organization and they often have a passion for the organization’s vision (Glasrud, 2007). Lose of for profit staff and nonprofit volunteer staff could have a detrimental impact on the organization’s ability to continue to function. Volunteer staff members who hold critical positions and choose to terminate, often leave a gap that is harder to fill than replacing employees in not for profit organizations. Individuals volunteer for a variety of other reasons in addition to having a passion for the organization’s vision, such as shared values, skills development, religious beliefs, community benefits, altruism, social contact and to obtain employment (Bussell & Forbes, 2002). When any of these reasons cease to exist, volunteers have the option to immediately terminate their services, leaving the organization with a position to fill that does not offer compensation. To some volunteers, leadership has played an important role in the success of the smooth implementation of changes that have occurred during over
3 10 years of experienced as volunteers in various nonprofit organizations. For example in some cases, whenever changes occurred that volunteers felt were not conducive to the reason they were volunteering and that was brought upon them without any type of notice from the leadership, they rapidly terminated their services, many times with no explanation given to the leadership. Other times, if a change occurred without explanation or knowledge of the upcoming change on the part of the organization’s leadership, and volunteers felt their services were minimized, they too, would terminate their services. Still, other times, if changes occurred that included more stringent rules or methods of providing certain services as a volunteer, some volunteers would terminate their services. Additionally, many times, when change was presented by organizations’ leadership, the volunteers were taken by surprise, in that they were unaware that changes were imminent, yet these volunteers were the ones affected by the change. In these cases, when volunteers terminated their services, a void was left in the nonprofit organization which negatively affected those benefiting from the services of the organization, which heavily depended on its volunteers. This was especially true when the volunteers who chose to terminate their services possessed years of experience and service in these nonprofit organizations. Further, those experienced volunteers who chose to continue their services were often burdened with extra duties until new volunteers could be found and trained. In contrast to the phenomena that some volunteers faced when experiencing change in nonprofit organizations, as aforementioned, some volunteers were notified that changes were to take place, well in advance and were invited to be part of the change. For example, volunteers were actively involved in most facets of the change and reassured
4 that they would be trained, if necessary, to facilitate the changes that were to take place. Though some volunteers still chose to terminate their services, most of them chose to continue their services. In correlation to volunteers in the nonprofit organization and the leadership, when change occurs, does it matter what type of leadership is being use in relation to resistance to change on the part of volunteer?
Background With his definition of servant-leadership, in 1970, Greenleaf started the initiative that has continued to increase in its influence on society through the years (Spears, 1998). Greenleaf’s (1977) conception of the term servant-leadership was birthed out of reading Hermann Hesse’s Journey to the East. In this story which is being narrated, Leo, the main character, is accompanying a group of men who are on a mythical journey. Leo is a servant and as such, he not only accomplishes the menial chores along the way, but also sustains the group of men with his spirit and in song. When Leo disappears, the group of men falls into disorder and abandon the journey. The narrator, who happens to be one of the men comprising the group, after wandering for years, meets by chance Leo and is admitted in the Order that sponsored the journey. During this time the narrator discovers that Leo, whom he knew as a servant while on the journey, is the supposed head of the Order and its guiding spirit as well as a great and noble leader (Greenleaf). According to Greenleaf, the story revealed that the “great leader is seen as servant first, and that simple fact is the key to his greatness” (Greenleaf, 1977, p. 21). Though Greenleaf first used the term servant-leadership, its conception goes back to thousands of year old humanistic and religious teachings (Burkhardt & Spears, 2002).
5 After years of reviewing and analyzing Greenleaf’s original writings, Spears (1998), President and CEO of the Robert K. Greenleaf Center for Servant-Leadership identified 10 characteristics of the servant-leader, which he believed were critical to the development of the servant-leader, but are not exhaustive: listening, empathy, healing, awareness, persuasion, conceptualization, foresight, stewardship, commitment to the growth of people, and building community. The 10 characteristics are described by Spears (1998) in the following way: 1. Listening: Leaders have been traditionally valued for their communication and decision-making skills. Servant-leaders must reinforce these important skills by making a deep commitment to listening intently to others. Servant-leaders seek to identify and clarify the will of the group. They seek to listen receptively to what is being said. Listening, coupled with regular periods of reflection, is essential to the growth of the servant-leader. 2. Empathy: Servant-leaders strive to understand and empathize with others. People need to be accepted and recognized for their special and unique spirits. One must assumed the good intentions of co-workers and not reject them as people, even when force to reject their behavior or performance. The most successful servant-leaders are those who have become skilled empathetic listeners. 3. Healing: Learning to heal is a powerful force for transformation and integration. One of the great strengths of servant-leadership is the potential for healing one’s self and others. Many people have broken spirits and have suffered from a variety of emotional hurts. Although this is a part of being human, servant-leaders recognize that they have an opportunity to help make whole those with whom they come in contact. 4. Awareness: General awareness and especially self-awareness, strengthens the servant-leader. Making a commitment to foster awareness can be scary—one never knows what one may discover! Awareness also aids in understanding issues involving ethics and values. It enables one to view most situations from a more integrated position. 5. Persuasion: Another characteristic of servant-leaders is reliance upon persuasion, rather than positional authority, in making decisions within an organization. Servant-leaders seek to convince others, rather than coerce compliance. This particular element offers one of the clearest distinctions between the traditional authoritarian model and that of servant-leadership. The servant-leader is effective at building consensus within groups. 6. Conceptualization: Servant-leaders seek to nurture their abilities to “dream great dreams.” The ability to look at a problem (or organization) from a
6 conceptualizing perspective means that one must think beyond day-to-day realities. For many managers this is a characteristic that requires discipline and practice. Within organizations, conceptualization is, by its very nature, the proper role of boards of trustees or directors. Unfortunately, if the board of trustees becomes involved in day-to-day operations (something that should always be discouraged) they may fail to fulfill their visionary function. Servant-leaders must seek a delicate balance between conceptualization and day-to-day focus. 7. Foresight: The ability to foresee the likely outcome of a situation is hard to define, but easy to identify. One knows it when one sees it. Foresight is a characteristic that enables servant-leaders to understand the lesson from the past, the realities of the present, and the likely consequence of a decision for the future. It is deeply rooted with the intuitive mind. Thus, foresight is the one servant-leader characteristic with which one may be born. All other characteristics can be consciously developed. 8. Stewardship: Robert Greenleaf’s view of all institutions was one on which CEOs, staffs, directors, and trustees all play significant roles in holding their institutions in trust for the greater good of society. Servant-leadership, like stewardship, assumes first and foremost a commitment to serving the needs of others. It also emphasizes the use of openness and persuasion, rather than control. 9. Commitment to the growth of people: Servant-leaders believe that people have an intrinsic value beyond their tangible contributions as workers. As such, servant-leaders are deeply committed to the personal, professional, and spiritual growth of each and every individual within the institution. In practice, this can mean making available funds for personal and professional development, taking a personal interest in employees’ ideas and suggestions, encouraging worker involvement in decision making, actively assisting laid- off workers to find other employment, and so on. 10. Building community: Servant-leaders are aware that the shift from local communities to large institutions as the primary shaper of human lives has changed or perceptions and caused a certain sense of loss. Thus servant- leaders seek to identify a mean for building community among those who work within a given institution, Servant-leadership suggests that true community can be created among those who work in businesses and institutions. (pp. 4–7)
These 10 characteristics play an important part in ascertaining whether servant-leadership impacts resistance to organizational change either positively or negatively and will be discussed more in-depth in chapter 2.
7 Nonprofit Organizations Information on nonprofit organizations is limited as it relates to statistics, in that the latest numbers date back over 3 years. In the most recent report spanning from 1996– 2004, by the National Center for Charitable Statistics (NCCS), there were 850,455 public charities and 104,276 private foundations in the United States listed as being registered with the Internal Revenue Service (IRS). Also, 463,714 other types of nonprofit organizations (e.g., fraternal organizations, civic leagues and chambers of commerce) were listed as being registered with the IRS. In addition, there are approximately 377,640 congregations in the United States serving their communities (NCCS at the Urban Institute, 2006). Nonprofit organizations do not have stockholders and no one can receive any residual assets they may possess. In nonprofit organizations, profit is not the primary goal, though they are not restricted from being profitable for such purposes as upkeep of facilities, maintaining and upgrading equipment, repaying debt, and adopting new technology (Stahl, 2004). A 501(c)(3) nonprofit organization is exempt from federal income tax if its existence is for charitable, religious, educational, scientific, and literary reasons, as well as testing for public safety, fostering amateur sports competition, and preventing cruelty to children or animals (Department of Treasury, 2005). Examples of qualifying organizations include chapters of the Red Cross or Salvation Army, parent– teacher associations, old-age homes, charitable hospitals, alumni associations, schools, boys’ or girl’s clubs, and churches. On the other hand, P. Hall (1987) defined nonprofit organizations as groups of individuals who join together (a) perform public tasks delegated to them by the state; (b) provide services for which there is a demand that state
8 and for-profit organizations will not fulfill; or (c) influence policy in the state, the for- profit faction, or other nonprofit organizations. Pakroo (2005) argues that the term nonprofit is often being used carelessly in describing all types of groups that are bound together by “a desire to achieve a mission, rather than to make a profit” (p. 14). Speckbacher (2003) agrees that nonprofit organizations are built around mission. In literature, three types of nonprofit organizations are usually differentiated: philanthropic, mutual benefit and advocacy organizations (Lewis, Hamel, & Richardson, 2001; O’Neill & Young, 1988; Rudney, 1987). The definition of a charitable or nonprofit organization in American law can be traced back to the Statute of Charitable Uses (43 Eliz. I c4) enacted by the English Parliament in 1601, which has been described as “the starting point of the modern law of charities” (Douglas, 1987, p. 43). Ott (2001) argues that in order to understand the history of the nonprofit organization, one needs to “appreciate the multiple contexts and cultural milieus through which it evolved over the history of modern civilization” (p. 112). Further, Ott maintains that the philosophical roots of nonprofits can be when studying the early Greeks, Romans, Jews, and Christians. According to M. H. Hall (2001), nonprofit organizations only became a significant part of the American way of life in the recent past as in 1940, there were only 12,500 charitable tax-exempt organizations as opposed to the over 1 million today. There are several differences between nonprofit and for-profit organizations. For example, Gross (2005) posits that one of the major differences in their reasons for existence is that the ultimate goal of for-profit organizations is to make a profit for their stakeholders by providing a product or service that the public will purchase, whereas the ultimate goal of the nonprofit organization is to meet “some socially desirable need or
9 goal of the community or its members” (Gross, 2005, p. 15). In contrast, Oster (1995) maintains that the most distinctive difference between nonprofit and for-profit organizations is their tax status—nonprofit organizations are tax-exempt. Disadvantages, as well as advantages of nonprofit organizational status exist. The four primary advantages of being a nonprofit organization are nonprofit organizations are tax-exempt, they can receive tax-deductible donations, they quality to receive grants, and sustain lower cost for some expenses such as advertising, filing fees, and postage (Warda, 2004). On the other hand, the disadvantages to being a nonprofit organization include, though they are allowed to make profits, they have no control over those profits; they are usually not allowed to contribute to political campaigns, as well as limited to the amount of lobbying they can do; their finances are open to public scrutiny; and they are limited to only performing certain functions under the tax-exempt laws (Warda, 2004). Volunteers Within the Nonprofit Organization One of the most distinctive aspects of the nonprofit organization is the volunteer who plays an important role in most aspects of the organization (Hager, 2004). One cannot reasonably discuss the nonprofit sector without addressing the volunteer who is an integral part of the nonprofit organization (P. Nelson, 2001). Four of five charities utilize volunteers which is validated, as in 2009, the USA Freedom Corps and the Corporation for National and Community Service, in concert with the Bureau of Labor Statistics, received results from the Current Population Survey concerning volunteers revealing that 61.8 million Americans volunteers in some type of charitable organization (Bureau of Labor Statistics, 2009). The volunteer represents one of the most unique aspects of the nonprofit organization and rarely can one mention the nonprofit organization without
10 addressing the volunteer (P. Nelson, 2001). Mason (2004a) indicated that over 80% of nonprofit organizations rely on volunteers. Additionally, a survey (Mason, 2004a) of 1,800 nonprofit organizations revealed that less than half of volunteer coordinators, of which they are present in only one of eight nonprofit organizations, spend less than 30% of their time managing volunteers. This information is important in endeavoring to establish what leads volunteers to continue volunteering in organizations. The reality that volunteers are an integral part of nonprofit organizations (Hager, 2004), is important in discovering if volunteers within nonprofit organizations resist change positively or negatively in relation to the type of leadership leading the change. Voluntarism is defined as those actions assumed freely by individuals, not compelled by biological need or social custom, made mandatory or driven by government, or primarily targeted at economic or financial gain, viewed as advantageous by participants or the greater society. Volunteers are extremely valuable to nonprofit organizations as they play important roles in their operations (Hager, 2004). For example, in one nonprofit organization, a church, volunteers operated a free nursery for young children ages infant through 5 years as opposed to having the children sit in services with their parents and causing distractions which affect the rest of the congregation. Volunteers, in this instance, improved the quality of services while reducing costs to the parents, as well as the church (Hager, 2004). Though volunteers are important to the nonprofit organization, there are some challenges with utilizing volunteers instead of paid employees such as retention. For instance, in one nonprofit organization that was observed continuously for several years, volunteers habitually terminated their services without notice, averaging time in the organization of 6 months to a year. These volunteers sometimes left a gap in operations,
11 especially if they were volunteer staff in key positions. The reasons these volunteers terminated their services ranged from not feeling appreciated to not willing to embrace the leadership’s new vision when change occurred. This is not likely to occur in other types of organizations. In an interview, Drucker posited that nonprofit organizations are far more demanding in that more demand is placed on the volunteer because the paid staff receives a salary while the volunteer only receives self-satisfaction for services rendered. Further, according to Drucker (as cited in Sterne, 1989), an important phenomenon of the nonprofit organization is, whereas over 30 years ago, the volunteer was the person who arranged flowers in the vase, now a volunteer can be not paid or a part of the organization’s volunteer staff who might be managing the function. Leadership Individuals who are given positions of authority are not automatically leaders, yet, people continue to confuse and equate authority with leadership (R. Heifetz, 1995). Consider the many monarchs or corporate leaders throughout history who had the authority to lead because of their bloodline or inheritance, but for whatever reason, lacked leadership. According to Senge (1999), many important organizational leaders are not at the top of the hierarchy. Leadership has been defined in many ways because of disagreements and confusion regarding its definition. There are almost as many different definitions of leadership in existence, as there are individuals who have endeavored to define them (Bass, 1990a). An example of the many ways in which leadership can be and has been defined can be likened to the over 50 terms that the Eskimo language uses for the word snow (Levey, 1992). For instance, one definition of leadership is the “centralization of effort in one person as an expression of the power of all” (Blackmar, as
12 cited in Bass, 1990a, p. 11). Also, Bass noted that Stogdill defined leadership as the process of influencing the activities of an organized group (e.g., the military), in its efforts toward setting and achieving goals. In contrast, Fairholm (1998) defines leadership as “an intensely personal activity limited by our personal paradigms or our mental state of being, our unique mind-set” (p. 15). However, according to Bass, leadership is the interaction between two or more group members that frequently necessitates a structuring or restructuring of a given situation and the perceptions and expectations of the group members. Does servant-leadership impact resistance to organizational change on the part of the volunteer and employees any differently than other types of change? Organizational Change Organizational change defined broadly, refers to those “changes that organizations undergo as a result of careful problem diagnosis, strategy planning, solution implementation, and assessment and follow-up” (Rusaw, 1998, p. 28). During the last two decades, few organizations have been immune to the global economic forces that require large-scale change in order to survive. Technology, deregulation, and globalization which enable the coordination of activities and real-time exchange of knowledge and information, have changed the environment in which organizations compete,, as well as add value to the markets and cultures in which they operate (Mohrman, 1999). Kotter (1995) agrees, as he suggests that organizations continuously change in response to significant shifts in areas such as technology, competition, regulation, and globalization, as well as internal, predetermined efforts to achieve increased profits, quality improvement and effectiveness. Unfortunately, many of these