Measuring Deficiencies in Nonprofit Management Lawrence C. Hunt, Organisational Scientist, Faculty of Business, Education, Law and Arts, University of Southern Queensland, Australia Mehryar Nooriafshar, Senior Lecturer, Faculty of Business, Education, Law and Arts, University of Southern Queensland, Australia Chandrasekhar Krishnamurti, Professor, Faculty of Business, Education, Law and Arts, University of Southern Queensland, Australia The Annual International Conference on Cognitive - Social, and Behavioural Sciences icCSBs 2015 January

Introduction The Problem: The boards of nonprofit organisations need a simple, practical technique that will measure their performance. Traditional, analytical approaches to solve this complex, multi- dimensional problem have failed to find a solution that has broad acceptance. The Approach: Focus on individual competencies, select management deficiency as the dimension of management performance to measure and adopt a heuristic methodology. The Objective: Identify factors associated with nonprofit management performance and build a heuristic model to measure individual management deficiency in nonprofit boards. icCSBs 2015 January

Methodology Build a model framework to identify factors associated with management performance. Develop techniques to quantify the factors. Adopt the heuristic methodology known as simulated annealing to: Build an initial form of the heuristic model to obtain an initial solution. Refine the model to obtain new solutions. Plot the solution path mapped out by each new solution. Continue until an optimal state is reached. Validate the solution produced by the model by establishing that there is an alignment of the model results with an assessment of individual management deficiency obtained by an individual performance ratings method. icCSBs 2015 January

Results The heuristic model produced a detailed assessment of management deficiency across the factors for each board member. The results produced by the model for a large sample enabled the relationships between each factor and management performance to be analysed. Factors Board Members’ Deficiency RatiosAverage Age Resistance to Change Commitment Skills Experience Knowledge Individual Deficiency icCSBs 2015 January

Results Validating the Model’s Results Random Sample: 50 NPO board members Average management deficiency ratios: Heuristic model: 0.337Performance rating method: T-test for significance of the difference between two means: Null hypothesis: There is no significant difference between the two means Critical region: t Computed value of t: t = Conclusion: Do not reject the null hypothesis This statistical analysis established that the results are aligned which effectively validated the results produced by the model icCSBs 2015 January

Results Primary Factor Average Deficiency* Average Board Deficiency Age Resistance To ChangeCommitmentSkillsExperienceKnowledge 27%39%58%52%37%42%50% Summary of Results: Primary Factor Average Deficiency * Average management deficiency results for a random sample of 57 NPO board members icCSBs 2015 January

Implications for Policy/Practice Future research into NPO board performance should focus on individual board members’ competencies and personal attributes. The methodology adopted in this study: Provides a foundation for the application of heuristic modelling to further research in this and related fields. Could be applied to solve the long standing problem of measuring nonprofit organisation performance. The development of an online application of the model will provide NPO boards with a performance measurement technique that is easy to use and produces immediate, practical results. icCSBs 2015 January

Conclusions The heuristic model below does produce an acceptable, approximate measurement of individual management deficiency, D, for an NPO board member: where a = skills factorb = experience factor c = knowledge factord = commitment factor e = resistance to change factor f = age factor icCSBs 2015 January

Conclusions The analysis of the detailed results produced by the model for a random sample of 57 NPO board members led to the following conclusions: The main competencies an NPO board member should possess are management skills, management experience, relevant knowledge and commitment. There is a positive relationship between age and management performance. icCSBs 2015 January

Conclusions For volunteer-only NPOs, sound management practices and long term planning are not related to management performance. In general, the experience gained from years of serving on the board, combined with the accumulated knowledge of the organisation’s norms and management processes, forms the means by which the organisation is managed. icCSBs 2015 January

Identify and Measure Management Deficiency in Nonprofit Organisations Lawrence C. Hunt, Organisational Scientist, University of Southern Queensland. Mehryar Nooriafshar, Senior Lecturer, University of Southern Queensland. Chandrasekhar Krishnamurti, Professor, University of Southern Queensland. The Annual International Conference on Cognitive - Social, and Behavioural Sciences icCSBs 2015 January