“A Framework to measure performance in an International NGO: AEGEE Case study”

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“A Framework to measure performance in an

International NGO: AEGEE Case study”

September 2010

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“A Framework to measure performance in an International

NGO: AEGEE Case study”

Master Thesis

September 9, 2010 Ioana Dinica S1942557

Supervisor: Dr. Mrs. M.A.G. van Offenbeek Referent: Prof. dr. L. Karsten

University of Groningen

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Preface

This paper represents the last step towards finishing my master’s degree in

International Business and Management.

This thesis would never have become a reality without the help and support of

different people and organizations. I would like to express my gratitude to the

board of AEGEE Groningen, who allowed me to focus research on their

organization. Also, the input from AEGEE Europe, Volunteers for Ideas and

Projects, Unity is Strength Foundation, Institute for Cultural Diplomacy,

Yparticipate and IntiWawa was extremely important to the research and I would

like to thank each representatives of these organizations for their cooperation.

I am grateful to my supervisor Mrs. Offenbeek for her guidance and feed-back

that always determined me to improve this research.

In the end, I cannot conclude without expressing an enormous thank-you to my

family and my dear and closest friends, who have been my support and strength

throughout the process of writing this paper.

With this thesis, I am finishing one phase of my life and I am looking forward to

the next one, where I hope to find as many challenges and have as many

satisfactions as I had during my studies period.

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Management summary

AEGEE Groningen, student organization, is an antenna of AEGEE Europe. The organizations’ main goal is to promote a unified Europe without prejudices, to create an open and tolerant society of today and tomorrow, and to foster democracy, human rights, tolerance, cross-border cooperation, mobility and a European dimension in education. The president of AEGEE Groningen, Martin Pool, agreed to this research at the end of his term because the organization was in search of a competitive advantage that could differentiate it from the other organizations on the student organizations market.

This master thesis is intended to answer the need of a particular student organization (AEGEE Groningen). This study aims to offer substantial insight to AEGEE Groningen management board on how their organizational performance can be measured and monitored, offering them an instrument to do so. The research question is: “What is the most appropriate framework for measuring the performance of an international student organization? (i.e. AEGEE Groningen)”. In order to answer the research question, the following sub-research questions have been developed. They have been structured according to the steps used for constructing the performance measurement framework. The sub-research questions for the diagnosis phase are: 1. What is the current situation of AEGEE Groningen? , 2. What are the main characteristics of AEGEE Groningen that have an effect on the organizations performance? , 3. What are the main challenges and threats the organization is currently facing? , 4. How does AEGEE Groningen conceptualize and experience performance? and 5. How does AEGEE Groningen currently measure performance? The sub-research question for the design phase is 1.Which are the most important criteria which AEGEE Groningen has to include in the performance measurement framework when analyzing and measuring its performance? and for the implementation phase is 1.Can the resulting framework be adopted at an international level and be diffused to all AEGEE antennas?

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5 were conducted in order to gather all the necessary data for designing the performance measurement framework. All the information from the interviews and the soft system methodology were then integrated with the literature findings, leading to the framework for AEGEE Groningen.

AEGEE Groningen is currently an organization struggling to become a viable alternative for Groningen’s students. In order to achieve this goal for the last two years the organization has tried to professionalize its activities. They started to apply and use different procedures and regulations for a more efficient and sustainable development; they started a project evaluation strategy and looked at different methods to assure efficient know-how transfer. Still, the organization has an inefficient communication strategy, which leads to a low awareness level of the organization amongst students. On the longer term this can harm the development of the organization, as AEGEE Groningen could risk not being able to attract new members.

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6 independently. The results from the project evaluation are integrated in the internal processes perspective and therefore aggregated to the overall performance framework.

This paper focuses on the first two phases of the cycle-the diagnosis and the design. The implementation phase that could allow important adjustments to the designed framework will be conducted after the defense of this paper and therefore the feed-back and changes could not be included. The performance measurement framework design tried to comply with all the requirements the board made, but there were design choices that were made independent of their input.

This master thesis answered a specific need a specific organization had. Even more, at a certain moment it tried to generalize the results of this study to the youth organizations sector. Even if there was not a relevant sample of interviewed organizations regarding this subject, the tendency was towards individualized performance measurement frameworks instead of a very general one. This topic is still open for research and the results could offer substantial insights on youth organizations and their future development.

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Chapter I- Introduction

This master thesis represents a design-oriented study, which combines theoretical and practical findings on student organizations, and resulted in a solution offered to AEGEE Groningen’s for their need to measure their performance. Specifically, by means of this research paper insights on how performance can be measured to AEGEE Groningen management board were outlined. This master thesis starts with providing a general introduction in field of International Non-Governmental Organizations (INGOs) and then narrows down to a focused category of INGOs, student organizations. At the moment there is a gap in the literature related to this particular category, therefore, many theoretical findings that have been researched and attributed to INGOs in general have been transferred also to student organizations.

AEGEE Groningen is a student organization which is active in a very competitive environment, and who wants to become a real alternative for Groningen’s students. During the last two years the organization has been subject to an internal process of structuring and professionalizing. The process is yet in development, but the organization needs stability and a stronger competitive advantage. One possibility and at the same time one of the biggest challenges for them is to find a suitable and easy applicable performance measurement framework. Having a performance measurement framework at their disposal would enhance an analysis of the changes that were effective and the ones that were unsuccessful and could help at creating a long term strategy for the organization. The challenge comes from the difficulty to build a performance measurement framework in such a way that the organization can effectively use it and benefit from its advantages.

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10 problem analyzed in this paper, and thus the objective of this thesis will be presented. The chapter concludes with a short description of each of following chapters.

1.1 Problem orientation

It has been more than a decade since NGOs moved from being considered “ladles in the global soup kitchen” (Fowler, 2000, pg 600) to a real force which has enough power to transform politics and economics at a global level (Edwards and Fowler,2002). This situation occurred after significant worldwide changes such as the end of the Cold War, an increasing discontent with the politics conducted by governments and also with the necessity to serve different causes (Fowler, 2000).

The term non-governmental organization (NGO) has various definitions and interpretations; depending on the context in which it is used. A governmental organization is “any non-profit, voluntary citizens group, which is organized on a local, national or international level” (Rahman, 2003, 1). Task-oriented and driven by people with a common interest, NGOs perform a variety of service and humanitarian functions, bring citizen concerns to governments, advocate and monitor policies and encourage political participation through provision of information. Some are organized around specific issues, such as human rights, environment or health. The non-profit sector (NPS) is considered one of the three sectors of the economy, along with the private and the public sector. Over the last decades, the NPS has experienced a great development, increasing both in size and in activity. Salomon and Anheier (1996) state that in 1995, the Non-Profit Sector (NPS) was a 1.1 trillion industry which employed 19 million full-time workers (including volunteers). The NGO sector (including both local and international NGOs) is extremely diverse, as these organizations can be either small, local initiatives, or large, international, bureaucratic entities with many employees and budget of millions. In such a diverse and dynamic sector, Lewis (2001) states that the resources available can be unpredictable, and NGOs are becoming concerned about their survival.

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11 managers face or the accountability of these organizations (Edwards and Fowler, 2002). One can interpret this particular interest as a curiosity to see if the existing theories on business organizations would apply to the NGO field. In order to survive and adapt to the changes of the global market, many nonprofit organizations adopted the traditional business models to help them improve their effectiveness and efficiency. The lessons from the private sector have proven useful to nonprofits, particularly in such areas as strategic planning, marketing, finance, information systems, and organizational development (Sawhill and Williamson, 2001). But there is one essential component which cannot be fully embraced by nonprofits: they have not been able to duplicate a crystal clear way to measure their performance (Sawhill and Williamson, 2001).

Besides the characteristics, challenges, problems and threats that NGOs and INGOs have in common, there are also some particularities specific to INGOs (Jayawickrama and McCullagh, 2009). Some have been empirically tested, while others still remain a task to be achieved in the future for the sector (Jayawickrama and McCullagh, 2009).These characteristics will be outlined in chapter II.

1.2 Problem statement

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12 encouraged to become an active member in the society. These organizations are voluntarily based, run by students and evaluated by them.

As more and more INGOs change their structure in order to cope with the competition and the developments of the society, the student organizations also have to prepare to face the challenges other INGOs face. Some of the changes which have been observed and described are the creation of a new vision and mission for the organization, the organizational culture’s transformation, the need for global networks and a restoration of the meaning of organizational work (Britton, 1998).

This paper looks at providing some elements about a certain category of INGO, student organizations. Using AEGEE Groningen as an example, a thorough investigation on issues related to performance measurement and its importance for the development of this type of INGOs will be outlined. The results of this research can represent a first attempt to present from an empirical perspective features specific to student organizations, to raise awareness about this category and also to provoke other scholars’ interest in this area.

This master thesis is intended to answer the need of a particular student organization (AEGEE Groningen). This study aims to offer substantial insight to AEGEE Groningen management board on how their organizational performance can be measured and monitored, offering them an instrument to do so.

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13 currently measure performance? The sub-research question for the design phase is 1.Which are the most important criteria which AEGEE Groningen has to include in the performance measurement framework when analyzing and measuring its performance? and for the implementation phase is 1.Can the resulting framework be adopted at an international level and be diffused to all AEGEE antennas?

1.3 Organization of Thesis

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Chapter II-INGOs-description

In order to design a performance measurement framework for an organization, one has to grasp all features related to the organization. Therefore, not only internal elements are necessary but also features related to the environment and external factors that surround the organization. As the student organizations’ category has not been researched, the characteristics and challenges of the sector that includes them are presented in this chapter.

2.1 Classification: Main sectors of INGOs

The area of non-profit organizations (NPOs) has been representing a major focus of research for scholars from a variety of disciplines in the last decade (Helmig, Jegers& Irvine Lapsley, 2004). The interdisciplinary interest in NPOs research has its foundation in the distinctive features of this type of organizations, in their operational complexity, in the difficulty to fully understand them.

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15 There are at the moment different classifications available, which are intended to clarify the blurriness of the nonprofit sector, therefore of the NGOs also. There are similarities amongst them, but in the same time there are differences. Some of the systems appeal more for a country classification, while others focus more on those organizations that transcend the local and national boundaries. For this reason, neither scholars nor practitioners in the nonprofit sector could agree on the most suitable classification system. At the moment, there is not an accepted system for the whole sector, this situation creating difficulties when trying to analyze and understand certain categories. For example, even if student organizations exist at an international level and are part of many international organizations (United Nations, Council of Europe, Unesco) they are not presented distinctively in any of the classification systems.

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16 provided from the practitioners or from the academic environment, and can be related to their main characteristics, main fields of activity, to their focus and even to the challenges they are subject to.

2.2 Characteristics of INGOs

The problem of a proper definition and a thorough system to classify the variety in the NPS sector, leaving the problems related to the internal functioning of the NGOs and INGOs aside. Each of the systems developed has had a contribution in the understanding of the nonprofit sector, but there are still elements that are characteristics to the sector and do not come to surface from the classification systems. Therefore a brief description of the main characteristics of the INGO sector will be described next.

INGOs are active players in increasing the strength of civil society in developing countries, as they most often represent the voice of these societies on a global scale. Using their influence, their power and their connections INGOs advocate for the needs of these countries. INGOs not only offer training for local NGOs on all areas related to management practices, but they also facilitate the dialogue with major donors and funding networks. There is a clear distinction between the level of power and influence a national NGO has compared with an INGOs, but due to this most national NGOs have benefited from the experience and knowledge of INGOs in their development.

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17 2.2.1 Student organization’s characteristics

There have not been found papers that approach this category, still there are particular features that are common to the majority of student organizations, both national and international.

Amongst the most important ones are the fact that they are entirely formed and managed by students, none of the members receive payment for their activity, all act on voluntary base, the board tenure is usually one year and the main financial support they receive is from the local governments and private companies. These features bring both positive and negative implications for this type of organizations. On the one hand, from an individual perspective becoming a member of such can contribute to both a personal and professional development. The interaction with other colleagues from different cultures and nationalities helps one to develop his/her communication skills, his/her ability to work with people that come from different backgrounds and learn to cope with possible disagreements and divergences that may appear in a constructive and professional way. Also, the voluntary service in a student organization, the project based work, the responsibilities, deadlines and the mixture of work; study and fun are valuable qualities for every potential future employee. On the other hand, from the organizational perspective, the features mentioned above harden the development of the organization itself. This tension concludes in lack of strategy focus. The absence of professional consultants and specialists, due to a lack of funds is noticeable when dealing with problems such as financial aspects, performance measurement, human resources motivation, managerial perspectives and strategy plans.

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2.3 Major Challenges for INGOs

The shift to a very professional approach in the way the nonprofit sector is managed is beginning to receive more and more interest from both the academia and the sector itself. The increasing trend of moving from amateur administration to professional management is the biggest challenge of INGOs today, especially for those who are active in the fundraising area (Helmig, Jegers and Lapsley, 2004).

Independent of their desire, INGOs are dependent on their donors, especially the financial ones. This close relationship can sometimes lead to aspects related to the efficiency and effectiveness of the organization to be analyzed. This dependency leads to a need for INGOs to build some systems to tackle the problem of accountability (Lewis, 2001). Many NGOs and INGOs reject this idea of change, as they see it as something which has an external, sometimes unreliable motivation. Other drivers for change in the INGO area are related to legitimacy, credibility and reputation (Edwards and Hulme, 1996). Most critics addressed to INGOs are related to their inconsistency in legitimacy as they advocate for their cause, according to Fowler (2005).

According to Fowler (2005), in order to face today’s challenges and also their competitors, NGOs and INGOs have to rethink their mission, to create strategies in order to achieve it and also to work on building a stronger identity. To accomplish that, they have to evaluate their roles, responsibilities and especially accountability. Also, this need increased the pressure they experienced and forced them to prove their efficiency (Beckwith and Glenzer, 2002) through an increased level of professionalism, inter-organizational relations and a thorough proof of their performance.

2.3.1 Accountability

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19 accountability, INGOs risk not obtaining the necessary funds to function properly. The need for accountability has become a central part for INGOs, since they started to increase in size and also in their scope (Lewis, 2001).

2.3.2 Funding

Another challenge for the non-profit sector was and will continue to be the access to funds. The sector has become very competitive, and it is becoming harder for any organization to find the necessary funds to carry out their activity. Fowler (2005) observed that the way resources will be divided amongst INGO will be done according on the relationships created between different INGOs, or between INGOs and companies from the business world. INGOs have turned to this new ways of cooperation, as they help increase the leverage rate and also diminish the competition for different financing amongst INGOs. This trade off of becoming something in between non-profit/for-profit organizations for obtaining the necessary funds has a negative impact, especially on the organizational values, on the identity of the organizations, on what the management and government wants (Fowler, 2005).

2.3.3 Identity and image

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2.4 Conclusions

In order to develop a suitable performance measurement framework for a specific INGO, one has to understand the functioning of that organization and also the sector specifics this organization belongs to. Scholars’ views on these challenges, from accountability, developing strategies, image, professionalism and management practices differ significantly and this can create confusion. An example of divergent views is related to the idea of accountability. While Lewis (2001) believes that under-and-over accountability should be avoided, Ebrahim (2003) concludes that upward-accountability should be enabled and the downward one should be limited. This contradiction cannot be answered easily, as there are so many perspectives to look from. For student organizations, these challenges are even more pregnant as these organizations cannot adapt very quickly to them. Student organizations cannot rely on under-accountability and over-under-accountability. Over-under-accountability implies high costs, which are incompatible with student organizations characteristics while under-accountability sets a lower standard for the organization.

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Chapter III-Performance measurement tools available for INGOs

In order to be able to find the means necessary to help NGOs design better a performance measurement framework, in general, it is necessary to understand that this sector is still changing and the challenges faced are increasing in size and diversity. These changes and challenges have been presented in the previous chapter. This chapter will first describe the necessity of designing a performance measurement system for INGOs and afterwards outline the performance measurement frameworks available. Scholars and practitioners have not agreed on a suitable and reliable performance measurement framework. This is due to the fact that none of the frameworks delivers fully what it promises and also because they are designed from a general level, trying to include very diverse organizations.

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22 The methods used in the private environment have proven to be insufficient for measuring whether the mission was achieved or not in INGOs (Kaplan, 2001). The inefficiency of the actual methods is recognized even by the for-profit organizations, as all of them can measure past performance, but cannot predict much about long-term value creation. Forbes (1998) argues that the attention given to the performance for the nonprofit sector is justified but that results are inconclusive. He points out that NGOs do not have the means to use a normal method, such as shareholder return, due to the type of services they offer. There were even scholars who state that NGOs should present nonfinancial indicators of the quality and quantity of their services, but lacked to provide a tool to do that (Herzlinger, 1996).

There are many reasons for which NGOs in general are unable to offer a measurement for their activities. First, this measurement of their development contains complex both tangible or physical elements and also intangible factors of human and organizational processes and capacities. Secondly, it is extremely restrictive to attribute the success of a cause to the work of an NGO (Fowler, 1996).

Even if there is a general acceptance that the process of designing a performance measurement framework is very hard, there are still some tools which are currently used. This impossibility is linked to the nature of the non-profit sector, its characteristics and particularities (Fowler, 1996). The existing frameworks were created from the NGO’s need to have an efficient way to show to their audience the way they were performing. The next section will shortly present the three of the most discussed or used frameworks in the NPS sector.

3.1 Three Tiered Measurement Model

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23 same logic system that lies at the base of the balance score card. Thus, it incorporates the elements needed to measure performance. Another advantage is the fact that this framework is linked to the strategy of the organization, allowing it to make amendments to the goals (either short or long term) based on the feedback received. Project management performance measurement has to look upon finding the proper way to measure the outcomes of the project, rather than the inputs.

3.2 Balanced Score Card

The balanced score card is a framework used to measure performance measurement. It was build at the beginning of the 90s by Kaplan and Norton, and was initially designed for companies. It looks at measuring performance from four perspectives: financial, learning and growth, internal processes and customer. The financial one is the most important one for companies, but the results provided by the other three are aggregated and together offer a clearer image about how a company is performing at a certain point. There are different opinions regarding the use of the balanced score card for INGOs. Some find this framework appropriate to served INGO’s needs, while other scholars consider it too complicated and therefore not suitable with INGOs (Elkington, 1994; Norman and MacDonald, 2004).

As previously mentioned, strategy is a critical element in assessing success for any type of organization. INGOs have more difficulties in setting strategic goals as there is an often unrealistic estimation about what they could achieve with their limited amount of resources. Therefore, when designing the balanced score card (BSC) the first step should be a realistic evaluation of the strategic possibilities the organization has. Afterwards, the perspectives for the BSC can be set, as this tool has to be in connection with the core areas of the strategy (Evans, 2006).

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24 group of constituencies (Speckbacher, 2002). The financial perspective which is fundamental for the profit sector, is not in the center of attention for INGOs (Kaplan and Norton, 1996). The balanced score card for INGOs maintains the financial perspective, but adds measurement indicators for another three perspectives: the customer one, the internal process one and the learning and growth one (Kaplan and Norton, 1996). The next figure present the balanced score card framework for companies.

Figure 1: The Balanced Score Card for Private Companies. Source: Kaplan and Norton (2001) The balanced score card is built on the mission of the organization, and is in close relationship with the strategy of the organization. The BSC can be the diagnosis for strategy and it cannot be better than the main objectives set by the management.

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25 accountable for how they respond to the society needs and not to quantify how much money they spend. The adapted BSC for NGOs is presented in the next figure.

Figure 2: The Balance Score Card for NGOs. Source: Kaplan (2001).

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3.3 Triple Bottom Line

The triple bottom line is a rather new method of measuring the performance of a company. It has received both positive and negative feed-back and it is still debatable the manner in which it provides some trust-worthy results. It has represented the trend at the beginning of the new millennium for areas such as management, investing, consulting and mostly in INGO circles but received little interest from scholars. The triple bottom line method was designed and presented by Elkington, in 1994. Using this method, companies not only focus on the economic perspectives and values but also on the impact they have at an environmental and social level. There can be both a positive but also a negative impact. The idea behind this concept is that the success of an organization has to be measured using other techniques than financial ones, more specifically the social and environmental performance (Elkington, 1997). The TBL promotes the idea that social performance can be measured objectively and the results should also be used to improve it. For these measurements, the TBL uses information that is already existent in the organization, in different departments. For this reason, (Norman and MacDonald, 2004) believe that the TBL should be used as an additional measurement besides the financial one and not as an individual one.

3.4 Conclusions

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27 lack the necessary funds to pay a consultancy firm to develop such an individualized framework. One of these categories is represented by student organizations.

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Chapter IV-Research design and methods

This chapter outlines what is being investigated in this paper and explains research choices. This master thesis aims to offer substantial insight to AEGEE Groningen management board on how their organizational performance can be measured and monitored, offering them an instrument to do so. AEGEE Groningen’s board or directors were surprised by the suggestion of a third part to design a performance measurement framework, but after discussing about the prospective positive implications using such a framework could have, they accepted the proposal. The organization lacked a performance measurement framework/system/tool for various reasons. One was the lack of funds to pay a consultancy firm to design it, another the lack of members with an academic background capable of doing such a task and last because they did not see the long term benefits of using such a system/framework/tool. The board agreed to this research being conducted in their organization after discussing and presenting the positive benefits using a performance measurement framework could have on the long term for the organization.

The performance measurement framework was designed after a close analysis of the organization, keeping constantly in mind the board requirements and integrating the theoretical findings. The final result will be presented to the new board of AEGEE Groningen, and the implementation phase of the process will follow. Along the research process, the idea of expanding the framework designed for AEGEE Groningen to the youth organization sector emerged and this possibility is tackled in the seventh chapter. This research offered new insights to better understand the student organization subsection, that I had not fully grasped in my volunteering years. Throughout this paper, I added a theoretical perspective to my practical knowledge, which led to a better understanding of the area of international student organizations.

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29 surfaced. Moreover, there were few papers which approached the performance measurement in INGOs and none in student organizations. Having these elements at my disposal, the process of building the performance measurement framework for AEGEE Groningen began. In the initial phase data from literature sources and from the organization helped familiarize with the particularities if the organization. A period of desk research followed, after which the Soft System Methodology Approach was implemented, and last interviews with AEGEE Groningen’s board members were conducted. All these stages are outlined next.

Currently in Europe, a small number of student NGOs are internationally active, having national and local branches in almost every European country. Amongst them there are AIESEC (Association Internationale des Etudiants en Sciences Economiques et Commerciales), BEST (Board of European Students of Technology), ELSA (European Law Students Association) and AEGEE (Association des Etats Généraux des Etudiants de l’Europe or also known as the European Student’s Forum).

4.1 Case selection

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30 framework. This change in research strategy brought some draw-backs in terms of designing the framework, as not all aspects were disclosed during the discussions and interviews with the board members. This lead to some independent decision making based on theoretical findings and practical observations.

4.2 Design

The soft system methodology (1982) is divided into seven steps: 1) problem situation unstructured, 2) problem situation expressed, 3) relevant systems and root definitions, 4) conceptual models, 5) comparison between the problem situation expressed and conceptual models, 6) changes and 7) taking action. These steps represent the logical flow of action that should be taken whenever a problem occurs, even if in practice the order to use them is not necessarily sequential. In this research the first four steps were used. This was a research choice because using these steps offered the necessary elements for diagnosing the current situation of the organization and designing the performance measurement framework. The elements offered by step 3-relevant systems and root definitions- and step 4-conceptual model were used to construct upon Norton and Kaplan’s (1992) balanced score card model. The last three steps correspond to the feedback and implementation phase. As this was not yet possible for AEGEE Groningen, due to time constraints and change of management they were not applied.

The first step defines the problem unstructured; while the second by means of the Rich Picture (picture that represents the problem situation) helps both the external consultants and the specialists within the organization to clarify and better understand the problem that needs to be tackled. The third step helps structure the reality by means of relevant systems, while step 4 defines the ideal system that will be confronted with the reality in the implementation phase.

4.3 Timeline of research

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31 Timeline for Data Collection

Activities/Period (2010) April 16-23 May 23-25 May June

Desk research

Preliminary data gathering

(informal discussions)

Meeting for Rich Picture

Questionnaires(sent) to AEGEE

Europe and answers received

Questionnaires(sent) to other youth

NGOs and answers received

4.4 Data gathering and analyzing methods

This section will outline the data gathering and analysis methods for each of the three phases (diagnosis, design and implementation) according to each of the sub-research questions.

The methods used in the diagnosis phase were desk research, interviews and the first four steps from the Soft systems methodology approach. Desk research implied an intense study of the documents which are related to the organization; AEGEE Groningen, its history, the annual reports (2008 and 2009), the organization chart, responsibilities of the board members, the website, official AEGEE Europe documents, promotional materials, funding strategies. The results of this phase were outlined in Chapter V and represented elements that led to diagnose the organization.

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32 The list of board members and the interview scheme are outlined in Appendix 1 and 2. The questionnaires responses are presented in Appendix 3.

Using the Soft System Methodology Approach (1982) method, together with the board, useful and relevant information about the organizational process surfaced, many problems that seemed to be ignored were discussed. Together with the board we drew the Rich Picture of the organizational processes that surround the performance area of the organization, but also features related to the management processes. The Rich Picture can be found in Appendix 4. Data from all the methods presented above were integrated with step 3 and 4 from The Soft System Methodology and allowed the design of the performance measurement framework. The third and fourth steps of The Soft System Methodology were used to structure the elements and design an ideal performance measurement framework. The results provided by these methods were integrated within a simplified version of the Norton and Kaplan’s (1992) balanced score card, and thus the performance measurement framework was designed. Nonetheless, as the whole research process was very flexible and new information constantly emerged, results from all data gathering methods used were integrated in the framework. In the last chapter the possibility of using a generalized performance measurement framework for the youth NGOs was discussed. To gain insights on the opinion of AEGEE Europe’s member (6 members) and on other youth representatives’ questionnaires (5 representatives) were sent. The two answers from the AEGEE Europe’s representatives offered the official attitude towards implementing a generalized framework inside the AEGEE network.

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Chapter V-Diagnosis Phase: AEGEE Groningen

The following chapter presents general information about AEGEE Groningen and answers the sub-research questions which were developed for the diagnosis phase. The presentation of the organization will follow McKinsey 7s framework (Peters and Waterman, 1982) and will be outlined in the first part of the chapter. The 7s framework relies on describing seven important factors for effective strategic execution and assures that an organization is successful when it manages to integrate the three ‘hard’ S’s (strategy, systems and structure) with the four soft ones (shared values, skills, style and staff) (Peters and Waterman, 1982). The relationship and interaction between the seven factors can help make a diagnosis of how an organization is functioning at a certain point in time. The second part of this chapter will offer the answers to the sub-research questions using the results from the research methods used.

AEGEE is the acronym for Association des Etats Généraux des Etudiants de l’Europe or also known as the European Student’s Forum. It represents the biggest interdisciplinary student association in Europe, being active in 43 European countries (AEGEE Report 2009). AEGEE Europe has a European structure, with the European Board of Directors and the 240 antennae which form the network. More information about AEGEE can be found in Appendix 8.

5.1 AEGEE Groningen- description

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34 The hard elements of the 7s Framework (Peters and Waterman, 1982) are supposedly easy to define and are directly influenced by the management, while the soft elements are less tangible and are culture influenced. The most important for a company is not to be successful at some of the elements, but to assure an interdependence and cohesion between all seven. Next, a short description of each of the 7S’s for AEGEE Groningen will be presented followed by a short presentation of how the seven elements are linked and interact in the researched organization. 5.1.1 Strategy

According to the statements of all board members and from the data collected from AEGEE Groningen reports (2008, 2009) the organizations does not have a strategy. The closest element to a strategy is a series of internal objectives (increase the level of professionalism within the organization, to help binding the members locally, to help the members interact amongst themselves by organizing more cultural activities) that have been established by the current board (AEGEE Report 2009) at the beginning of their term in May 2009. Not only there is a lack of strategy, but also there are yearly changes in their organizational planning that on the long run can affect the organization as no continuity is assured. This is due to the yearly board tenure and to the lack of a long term strategy. Moreover, no clear action plan or at least responsible for achieving the internal objective arose during the discussions had with board members or from any of the reports analyzed.

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35 5.1.2 Structure

AEGEE Groningen is organized in Committees and working groups, both of these organize projects. The difference between the two is that while the committees have a fixed structure, the working groups are more flexible. The Groningen antenna is managed by a board of directors, of six members elected by the General Assembly each year. The General Assembly is a meeting where all members are present, each with a right to vote in every aspect related to the development of the organization.

The board of directors represents the organizations’ management. At this level, decisions are made and afterwards communicated to the members and implemented. It is an organism which is not involved in organizing the projects, but in assuring that the organization functions towards fulfilling its objectives. The organizational chart for AEGEE Groningen is presented in the figure above and in the brackets the number of such entities is presented.

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36 of the committees is set in that respective committee, while making a certain investment is the board’s responsibility. The communication methods used rely on both normal channels (meetings) but also on more modern methods (mailing, news-letters, and blog).

Another aspect related to the structure is the relationship with AEGEE Europe. AEGEE Europe works as the liaison that holds the network together, but does not interfere in the organizational processes of the antennas. This autonomy and freedom is characteristic to all the relationships between AEGEE Europe and all the antennas and it is considered to be a proper solution to coordinate the network, offering sufficient discretion in designing, organizing and adapting to the local needs.

The structure of AEGEE Groningen points out and suggests the importance given to the project evaluation that has to maintain a very important position within the performance measurement framework. Also it offers some indications of who should be in charge of implementation, in terms of highest power within the organization and also who should have access to the results. The relationship with the AEGEE network is important, when discussing the possibility of implementing a generalized performance measurement framework with the network.

5.1.3 Systems

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37 members with the University contribution and other sources and that is the AEGEE Goningen budget. More elaborated versions can be found when looking at projects developed with European Union’s funds as there are stricter requirements regarding budgeting. The management control system and information system are closely linked with the structure of the organization, as the board has the biggest authority and is supervised by the General Assembly. 5.1.4 Shared Values

AEGEE Groningen shares the same vision and mission as AEGEE Europe. Both the vision and the mission represent a strong and powerful drive within the organization. None of the board members at AEGEE Groningen feels the need for creating an additional vision and mission for their organization as they have embraced the European one and act according to it. This data result from the answers to the questionnaires sent.

AEGEE Groningen members share strong values and they are fond of them. These values are presented in Appendix 8. They make sure that in all their activities the AEGEE brand is undamaged and that they promote the vision and values of their organization. Therefore, in order for the performance measurement framework to be implemented these values have to be kept very close and integrated in the framework. This could be used at better persuading the members to react proactively to the performance measurement framework designed.

5.1.5 Skills

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38 project being a member of AEGEE Groningen. Still, there are many areas within the organization where certain skills are required and that are currently lacking, thus having a negative impact on the organization. One example is the human resources area, where AEGEE does not focus enough and which may be responsible for the disproportion between active and passive members.

The skills profile of AEGEE Groningen’s member leads to minimum requirements for the performance measurement framework. As the diversity in terms of academic background and interests is high, the framework has to be easily understood and simple to use.

5.1.6 Style

The style of management at AEGEE Groningen can be characterized as informal, with a participative management both in managerial but also organizational aspects. Due to the average age of the members there is no ranking imposed by age, only by the level of involvement in the organization and the results achieved. The board of directors has more power, but they cannot enforce a certain attitude as AEGEE is an organization which relies on volunteering activity, therefore a member is free to join and leave anytime he/she feels like. There is quite a disproportion between the active and passive members in the organization and there is an increasing, worrying trend within the members to become only passive. This attitude can lead to a reduction of the activities developed, the learning opportunities and the organizational development.

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39 5.1.7 Staff

AEGEE Groningen does not have any employees or staff. The board members are the closest example of staff, as they have greater responsibilities and assume their positions for one year. There are no gaps in the ‘management positions’, but this does not imply that anyone who wants to have a position that implies responsibilities can have it. There are very rigorous selection processes, which are meant to select those suitable for a specific position.

The fluctuations in terms of member related figures- new members joining, members leaving the organization, the percentage of active members in comparison with passive one – together with the absence of employees affects the design of the performance measurement framework. The framework has to be very simple and easily transferred from one generation to the other, if the yearly board tenure is taken into account.

5.2 7S McKinsey Framework Analysis

After having described all the 7S’s which characterize AEGEE Groningen, it is even more important to look at the interrelations between the seven elements and identify if there are gaps and inconsistencies between them. The suggestions to check the alignment between the elements, made by the inventors of the 7s Framework were developed mainly for companies. Still, an attempt to translate the suggestions to INGOs is made. The first one is to look if there is consistency between AEGEE Groningen’s shared values and the hard S’s. The second one is to analyze the hard elements and establish how well they support each other and the last one is to focus on the soft elements, how they support one another, but also the hard ones.

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40 environment for the values to better influence the members. The analysis of the hard elements is inconclusive, because even if the systems and the structure are interrelated, an important piece of the puzzle-the strategy- is missing. The soft elements, the most difficult not only to measure but also to assess, have some flaws in their interdependence. A special interest should be given to the element related to the members’ skills. The lack of specialist on key areas can affect the organization, but the quick solution of hiring professionals cannot be applied at AEGEE Groningen, because it is a student organization. The average tenure of an AEGEE member of 1 to 2 years, hardens even more the process of professionalizing the members in the key areas. One possibility could be the development of simple standard procedures for new members to learn in order to face most of the problems that may appear. Even if from the first analysis, AEGEE Groningen has many flaws from inefficiency to strategy-lacking, the volunteers’ enthusiasm and confidence in their organization and its potential is overwhelming.

5.3 Diagnosis of AEGEE Groningen

The following section will answer the sub-research questions based on the organizational analysis and the data from the Rich picture and interviews.

What is the current situation of AEGEE Groningen?

AEGEE Groningen is currently still struggling to position itself on the student organization market and become a stronger competitor to the many other student organizations in Groningen. Asked what was their impression of AEGEE Groningen now, all board members outlined that the organization was better in the present than when they joined. One member said that “I think AEGEE Groningen is becoming much more professional and a better team player. We are working together with other locals much more this year than before.” Another emphasized that AEGEE Groningen is a real alternative for “every student who wants to do more with his time and wants to develop.”, while somebody sees it as a “as a very dynamic organization with many changes that have to be handled”.

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41 perspective (‘the network behind it’, ‘diversity of activities’, ‘learn a lot on different fields’, ‘our projects’), while others looked upon more intangible elements to describe the positive aspects like (“the open-minded attitude”, “ an organization entirely run and formed by students gives us freedom and power to do the things we consider useful for our own interests and needs”). The bad external communication with the prospective members is one of the weakest points, as this only broadens the awareness deficit the organization has on the student organizations market in Groningen. Other mentioned points were that “we change strategies too quickly and we don’t have enough time in one year term to finish all the objectives we set”’ and that “We have different ideas but some are very hard to put into practice and we get lost in our initiatives.”

To resume, the organization is not visible to its main target, students, both because it lacks a strong PR division and communication campaign but also because it mainly approaches Dutch students and not international ones. The main target, the Dutch students are more aware of the other student organizations and their benefits and need to be persuaded by AEEE Groningen to join. This could be achieved using innovative communication campaigns and thus the organization could focus only on the target they seek for, Dutch students. The organization is expanding and, therefore, is still in the process of constructing many processes, or establishing clearer procedures. One example the president gave throughout our discussion was the knowledge transfer process, which has been implemented for three years. It has produced significant improvements on the boards’ activity, as they avoid repeating the same mistakes. From an outsider’s perspective, there is a clear desire from AEGEE Groningen to improve their activity, their processes and be able to become an alternative to their competitors.

What are the main characteristics of AEGEE Groningen that have an effect on the organizations performance?

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42 activity and the shifts in establishing the objectives. From the discussions and also interviews the element that all board members would include when measuring performance would be a more close analysis of the members activity. This leads to the conclusion that all aspects related to the members-from selection processes, learning processes, project related activities- all influence the overall performance of the organization.

What are the main challenges and threats the organization is currently facing?

Questioned about the challenges and threats they see for the organization the answers were diverse, covering different areas. Trying to maintain as many members active is a challenge that arose in different forms in the board’s answers- “attract enough new active members to stay alive” or “we get bigger it is harder to hold members close/participate to AEGEE- Groningen”. Another area of interest that should be tacked in the future is the potential of the PR departments, which “can help us raise our awareness”. In terms of threats there were many pragmatic answers ranging from “the government’s proposal to withdraw the grants for students. This would decrease significantly the number of students wanting to join” to “decrease in student interest towards getting involved in extracurricular activities. From the information provided by AEGEE Europe this is a general trend”.

As the number of student organizations is expanding in Groningen, AEGEE has to look for a competitive advantage against its competitors. As there is no clear image that AEGEE is presenting to its target groups, due to the different activities it develops (from social society projects to hitch-hiking competitions), every competitor represents a threat.

As the Local Affairs Director said, one of the biggest challenges for AEGEE Groningen is “to get bigger, but not more stuck”. This can be translated into trying to expand the organization without losing members or transforming them into passive ones.

How does AEGEE Groningen conceptualize and experience performance?

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43 activities developed plus the number of active members plus the amount of formal and informal learning plus our PR results plus the later impact on the community by means of our alumnae”. Other members of the board found it difficult to offer a definition, and simply stated that it represents how successful AEGEE is at a certain moment. Another definition was the total amount of activities and their impact on the members, while one member explained as following:” performance is our activities and how our activities are being received and joined by our members. (So in what way they are taking part and how active they are and how they see AEGEE)”. These differences were related to the understanding of the concept of performance by different board members, with their respective function and background. The PR responsible defined performance using PR terms and indicators, while the president included more overall elements.

How does AEGEE Groningen currently measure performance?

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44 and are irrelevant for the project outcome. According to the European Affairs Director, “if a project does not raise the necessary amount it is changed in order to fit into the budget. If there are no funds, the project is canceled.” This attitude can be understood from the difficulties student organizations manage to raise money for their projects, but this does not imply that such an important element in the project evaluation has to be overlooked. Money is important and can increase the quality of a project by assuring better speakers, better conditions or even certain awards for the participants.

5.4 Relevant Systems and Root Definition

The elements provided by the Rich Picture have to be translated into relevant systems according to the Soft System Methodology approach (1985). The definition of the relevant systems leads to the next stage, building a conceptual model (Checkland, 1985). For AEGEE Groningen’s case there is only one system looked into-the performance measurement one. After the decision of which relevant system is important for the purpose of this research, the root definition can be constructed. The root definition offers an ideal version of how the respective system should look like. In order to develop the root definition, there is a tool that can help in including all the elements in the definition. This tool is CATWOE, and the answers to all the questions raised in the CATWOE represent elements of the relevant system to be designed (Checkland, 1985).

The mnemonic CATWOE comes from the following questions: Customers- who are the victims and beneficiaries of the system?

Actors-who does the activity?

Transformation-what is the transformation process?

Weltanschauung-what world-view is used?

Owner-who can stop the transformation process or who stops the system?

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45 For AEGEE Groningen the following CATWOE can be described:

C= AEGEE members and third parts (prospective students, possible donors and University representatives).

A= AEGEE Groningen and its board of directors.

T= no performance measurement of the organization into an applicable performance measurement framework. (the performance measurement framework itself)

W=performance measurement framework can transform AEGEE Groningen into a real competitor on the student organizations market.

O= the board of directors.

E= organizational resources, limited knowledge to the board of directors.

The root definition for the performance measurement system at AEGEE Groningen is the following: An AEGEE Groningen owned system aimed to transform the absence of a performance measurement framework into an applicable performance measurement framework through a series of analysis and processes done by the board of directors, so that both AEGEE Groningen and its members benefit from the results.

5.5 Conclusions

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46 implementation phase and help the board gather the necessary data. The results of the performance measurement framework could represent important insights to include in a communication campaign to attract new members. The organization does measure performance on a project based level, but does not aggregate it to an organizational level. It does not measure indicators at an organizational level, either.

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47

Chapter VI-Design Phase: The performance measurement framework for AEGEE

GRONINGEN

This chapter presents the second phase in the process of creating a performance measurement framework for AEGEE Groningen. In the previous chapter, using the 7s McKinsey framework (Peters and Waterman, 1982) the operational diagnosis of the organization was outlined. In this section, using the data from the diagnosis phase, existing frameworks and theoretical findings the design phase will be explained. In the design phase the key objectives to be measured and the measures themselves have to be included (Bourne, Mills, Wilcox, Neely and Platts, 2000). The authors also agree that both the objectives and the measures have to derive from the organization’s strategy in order to ensure cohesion between them.

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48 almost simultaneously so that the organization can have an effective performance measurement system. This can be transposed to INGOs and particularly to student organizations, even if I strongly agree with the opinions that any organization should first develop the strategy and afterwards the performance measurement frameworks. AEGEE Groningen is also aware of the necessity and benefits for implementing a long term strategy and according to the president’s statement the new board will have as a main priority setting this strategy.

The board of AEGEE Groningen had a series of requirements to make, in order for the framework to be implemented. A part of these requirements surfaced during the organizational diagnosis using the 7s framework.

6.1 General requirements

The framework has to be very simple to use and implement, flexible and to include project evaluation. These features are correspondent to the special characteristics the organization has. Its simplicity in implementation and understanding comes from the lack of knowledge related to the field of measuring performance and also to the fact that the board tenure is one year. The know-how transfer will include also the framework so it has to be understood by the future generations without being explained by the designer. As AEGEE Groningen is an organization whose main activity is to organize projects for their members (students) the framework will also have to include a suitable measurement framework for the individual projects, which will have to be aggregated to the organizational one.

6.2. Performance measurement framework

6.2.1 Framework model

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49 board’s requirements. Besides the advantage of including non-financial measurements which offer a more comprehensive picture of the organization, the BSC also joins together in causality systems covering the organization Nørreklit (2000). The following causality relationship is proposed by the inventors of the BSC measures of organizational learning and growth-measures of internal business processes-growth-measures of the customer perspective- financial measures (Kaplan and Norton, 1996). Even more, the measures of the learning perspective drive the measures for the internal processes which in turn drive the customer perspective and these drive the financial measure. In order to offer a comprehensive picture of the organization, the BSC has to include both mix of outcome measures (lag indicators) and performance drivers (lead indicators)( Nørreklit ,2000).

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50 learning, informal learning and trainings throughout the organizing-participation cycle of a project.

The project evaluation which is very important for the organization is related to the internal process and therefore the results of the evaluation forms for each project will be integrated in the internal processes perspective.

6.2.2 Performance measurement framework design

The overall performance measurement framework includes as previously presented the three perspectives from Kaplan and Norton’s (1992) balanced score card, the ‘member’, internal processes and learning and growth perspectives. In the original model of the BSC and also in the one later developed for NGOs, Kaplan and Norton included for each perspective four elements to be taken into account: objectives, specific measures for the objectives, targets and initiatives. In the AEGEE Groningen framework the same elements are preserved, with the exception of the initiative indicator. It will only be taken into account when such initiatives exist, in any of the perspectives but its absence will not influence negatively the overall perspective. It is highly advisable as Kaplan (2001) suggested, quantifying these initiatives as these represent a factor of organization development. Taking into account that the first implementation of the framework can cause difficulties for AEGEE Groningen, for short to medium term (one to three years), the initiative indicator will not be an obligatory element to be taken into account.

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51 for student organizations as those which look over the results usually are not looking for figures, but more on critical analysis taking into account the profile and field of activity of the organization. The problem arises when once the data are available, they are not completely reliable. This could happen when there is a high level of subjectivity from those offering the data or implementing the performance measurement framework (e.g. feed-back results or the board’s tendency to portray reality in better terms) that will offer a biased perspective. In those terms, one possibility would be to compare the qualitative data with other student organizations that develop the same kind of activity. But that implies other student organizations measure also their performance. A situation that is not happening at the moment due to the reasons presented in the previous sections.

The performance measurement framework for AEGEE Groningen is presented in the following Figure.