Challenges in Organizational Management: A Case Study of Oxfam Australia

This essay analyzes the challenges experienced in the management of Oxfam Australia, a non-governmental organization. Relevant organizational change theories and strategies are also discussed.

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Organisational Learning and Change
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Introduction
Oxfam Australia stands as one of Australia’s most renowned non-governmental
organizations. The fully accredited organization is a branch of Oxfam International
Confederation whose main purpose is to eradicate poverty in the world. In addition to tackling
poverty, the organization also attempts to curb the global climatic changes, food shortages,
inequalities, worker rights and emergencies such as earthquakes and tsunamis. Since its
conception in 1995 by a section of independent non-governmental organizations, Oxfam
International has impacted many people worldwide ‘Oxfam’ is an abbreviation derived from
Oxford Committee for Famine Relief. The organization was found in Great Britain in 1942.
Apart from receiving donations and distributing them to the needy, Oxfam is also involved in
business activities which entail the production and selling of home decors, toys, books, food,
drinks, musical instruments, and kitchen appliances. The money raised in these business
practices is amassed and used to serve the organization’s primary objectives. Oxfam Australia’s
headquarters are located in 130-138 Leicester St, Carlton VIC 3053, Australia.
Enjoying the benefits of one of the biggest non-governmental organizations in Australia,
Oxfam cannot evade the challenges that come with the increasing size. As a large non-
governmental organization, Oxfam Australia requires efficient management strategies. The
organization’s policies should be sound, comprehensive and effective so as to realize the
company’s goals and objectives. Organizational and financial management practices should be at
their best so as not to shun discourage Oxfam’s major supporters who range from donors,
activists, corporate partners, groups, state committees, and members. Oxfam Australia consists of
many other affiliate branches in other towns in Australia. In recent times, however, the
organization has been undergoing a series of challenges that need to be addressed as soon as

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possible. This essay attempts to scrutinize and analyze the challenges experienced in the
management of the non- governmental organization. Relevant organizational change theories and
strategies are also adequately discussed.
Internal and External Analysis of the Organization
According to the organization’s financial report for the financial year 2017/2018, Oxfam
operated at a net deficit of 2,987,000 dollars. This was due to the organizations’ failure trim
down their expenses. In 2017/2018 year, Oxfam’s expenditure was 100,763,000 dollars. Does
the burgeoning expenditure raise questions such as what are the expenses incurred by the
organization? What percentage goes to charity? According to the financial report, only 67.3% of
the organization’s funds are allocated to the programs initiated by Oxfam (Fernandez and
Rainey, 2017, n.d.). The report also recorded that 23.1% of the funds go to fundraising, media
and marketing purposes. The remaining 10.6% is allocated as an administration cost.
Since the original goal of the organization is poverty eradication, it is expected that a
larger percentage should be directed to charity. It is expected, for instance, that the organization
spends about 80% of its income on charity programs. Ten percent of 100,763,000 dollars
translates to an approximate of 10,763,000 dollars is spent on administration costs. This
instigates the question of how many employees are under Oxfam Australia. According to their
website (Oxfam.org), there are about 670 employees under the organization. In 2014, Oxfam
paid an approximate £700,000 on pay and benefits for the top seven organization officials. We
can thus accurately conjecture that the board and the executives eventually bag home a lot of
money, which leads to an ever-increasing expenses account to the non-governmental
organization (Fernadez and Rainey, 2017, pp. 9). The financial report reveals that among the

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eighteen non-executive directors and executives, the staff received an annual remuneration of
1,075,000 dollars in 2018. This was an increment from 2017’s, 1,042,000 dollars. The data
means that about 10% of the administrative costs are incurred on the salary payments of the 18
non-executive and executive directors. Therefore, there needs to be an adjustment of the salary
and remuneration policies in the organization.
Observance of ethical values and beliefs by the staff is a fundamental requirement for any
organization. Ethics and morality shape not only the beliefs but also the perceptions by the
societal members. Unconventional practices by employees and staffs paint a distorted image of
the organization (Langham, 2018, n.d.). Unethical superior board members are a tragedy to an
organization. According to an article ABC News, Barbara Miller narrates of an ensuing scandal
that resulted due to unscrupulous and unethical behaviors portrayed by some of Oxfam’s top
staffs. Langman, 2018 captures an ABC News article first posted on 14th February 2018, a
section of senior members of Oxfam had paid local women in Haiti in return for sex. These
senior Oxfam employees are reported to have paid the Haiti woman at the aftermath of the Haiti
earthquake in 2010.
Not only do the results of such hideous acts pose danger to the image of the company but
also causes substantial losses to the organization. For instance, soon after the breakout of the
Haiti transgression news, Oxfam Australia’s chief, Helen Szoke, asserts that the scandal had
already negatively impacted the organization’s donations (ABC News). The British Government
had reduced its donation to Oxfam Australia by 50 million dollars (ABC News). After the news,
Minnie Driver, Oxfam’s celebrity ambassador, resigned from her role (ABC News). To prevent
such consequences, Oxfam Australia, as an organization, is required to ensure the moral
standpoints of its many employees are thoroughly checked before joining the organization.

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The areas that require change and readjustment are financial management, human
resource management and Oxfam’s general objectives. Therefore, Oxfam Australia should work
on improving its financial management such that the expenses are partially reduced and their
income is increased. The ethics of Oxfam’s employees should also be put under inspection.
Observance of the ethical standards should be duly investigated before and after the
organization’s staffs are employed. Lastly, for the efficient provision of services to the poor,
Oxfam should focus on its original idea of eradicating poverty and providing food supplies to the
poor (Gilliland, 2014, pp.253). Other agenda, despite their necessity, should be left to other
organizations. Oxfam should restrain from business activities because, in most cases, these
businesses end up incurring losses rather than bringing profits. The profits raised in these
business enterprises, if any, are used in expanding the businesses, rather than helping the poor.
Literature Review
In his book The Theory and Practice of Change Management, John Hayes scrutinizes the
processes required for change management in any organization. Change management borrows a
lot from a person’s academic skills, effective performance, workplace skills, and interpersonal
skills. The ability to apply change management theory is of high importance in any organization.
For any organization to survive and succeed in the modern-day competitive environment,
successful change management strategies need to be employed. Change management is “the
continuous practice of renewing the trends, direction, composition, structure, and capabilities of
an organization so as to meet ever-changing preferences of both internal and external customers”
(Morris, Hammond and Snell, 2014, pp. 405). Teleological, dialectical, life cycle and
evolutionary theories are some of the theories in organizational management change.

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Teleological Theories
Teleological organizational change theories hypothesize that each organization has a laid
out goal to which the entity moves towards (Hayes, 2018, n.d.). The theory assumes that each
entity is purposeful and adaptive. Teleological theories hold that the entity itself sets its definite
goal or objective, takes actions and monitors its action towards the goal. The theory does not
prescribe any order by which the entity follows towards its goals. The action and the inherent
purpose of the actor determine the possibility of reaching the goal. The teleological theory
stresses that learning, implementation, and evaluation of actions rest on the actor.
The teleological theory attempts to suggest that organizational change occur
independently as entities are purposeful and rational. It suggests that the organization itself set
itself the goals it wants to reach. Nonaka and Toyama also assert that apart from the purpose of
the actor, the limit of the action is also crucial during the process of organizational change. For
instance, although a manager may be willing to implement a particular change, he or she is
constrained by the available rules, regulations, and rights in the organization. Teleological theory
somehow gives an entity the characteristics of a rational human being who thinks as per the
logic. Just like a person starts his or her own projects and sets his or her goals, entities are
assumed to do the same. Organizational change and development result from improvement of the
understanding organization just as communication for humans, organizing as ration and sense-
making (Dailey and Browning, 2014, pp. 22). Entities are presumed to follow their set strategies
so as to reach their targets and goals.

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Dialectical Theories
Dialectical theories are derived from the Hegelian aphorisms which assume that entities
are always in a continuous struggle and conflict for priority (Edwards 2017, pp. 21). The theory
suggests that each entity naturally competes against each other for the betterment of itself. By
this, all organizations are involved in a colliding environment where each entity fights for its
own, forming typical ‘man-eat-man’ environments. In this theory change and stability occur in
reference to the balance of power between antagonistic organizational parties (Wisdom, Chor,
Hoagwood and Horwitz, 2014, pp.490). According to the dialectical theory, changes occur when
two rivaling parties are engaged in a conflict.
In mainstream organizations, change is seen in constant struggles between different
interest groups. Change occurs when there are conflicting goals between two or more groups of
interest. For instance, in our modern setting organizations, change may be realized when
employees down tools demanding for an increment in their wages and salaries (Hargrave and
Van de Ven, 2017, pp. 320). The management and the labor force are the two conflicting interest
groups discussed by the theory. Although the management may wish as possible to keep the
wages as low as possible so as to reduce the costs, the labor force demands a higher pay so as to
better their lives. The distribution of management costs and employee benefits is critical in the
battles within the organization staff (Kenney and Zysman, 2017, pp. 61). The two parties engage
in a battle, each trying to gain a favorable outcome. Effective human resource management
practices balance the objectives of the management and that of the employees. Education,
participation, facilitation, negotiation, subtle manipulation, explicit and implicit coercion are
some of the methods used by managers to deal with demanding employees (Hem 2018, pp. 93).

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These methods reduce the incidence of alienation and disputes between employees and
management.
Battles involving salaries, working conditions, and wages are all a manifestation of
dialectical organizational change theories. The management and the employees reach an
agreement of which neither is the management nor is the employee made better off by making
the other worse off. This trade-off concept is referred to as Pareto-improvement, derived from
Pareto-optimality (Farahabady, Lee and Zomaya, 2013, pp.2673). Pareto improvement refers to a
point which an allocation of one party does not necessarily make him better off while making the
other party worse of.
Life- Cycle Theories
Life-cycle theories assume that change happens in a defined systematic route. Change is a
process that involves the progression of processes through a definite sequence of stages. The
series of stages are cumulative such that each acts as a precursor of the other. Organizations
undergo a determined sequence of organic growth from its conception to its termination
(Schlesinger and Doyle, 2015, pp. 310). Many life-cycle theories suggest that many
organizations start at start-up births, proceeds to adolescent’s exponential growth, then to
stationary maturity which is later followed by the organization’s death. The processes of an
organization evolve from one stage to the next (Welch and Paavilainen‐Mantymaki, 2014, pp. 3).
In an effective organization, decisions should be made in the correct sequence, during the right
timing and intensity (Teece, 2014, pp. 9). The theory suggests that change, development, and
progress if an organization is realized in a prescribed sequence.

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Life-cycle theories, like dialectical and teleological theories, somehow liken the change
and development of humans to that of organizational entities. In conventional life-cycles,
scholars describe the five common stages which must follow the other. Organizational life cycles
include birth, growth, revival, maturity, and decline. Just as it is unusual to see a child skip a
development stage, we also expect organizational entities to follow the sequence of birth,
growth, revival, maturity, and decline, to the letter.
Evolutionary Theories
The fourth set of management change theories is evolutionary theories. These theories,
just as their name suggests, posit that entities change and develop according to variation,
selection, and retention. Although variations may lack purpose, the specific variations are based
on merit and best fit. Nohria 2017 tries to bring across the fact that organizational entities do not
become successful just by chance; they become so due to the fact that they have the deserving
properties qualifying them to succeed. The decline or flourish of an organization depends on one
thing; whether the firm is fit enough for survival and competition (Hirsch, 2017, pp. 205). Only
the best are fit to survive and compete. Darwin’s survival of the fittest and natural selection
detail can be related to many disciplines in social and economic perspectives (Morita, 2018,
pp.149). Our ecological behavior is partially shaped by our variation chance and natural
selection. Organizations too are shaped by variation, natural selection, and perseverance.
For organizations, selection occurs through the stiff competition between in the industry.
Selection, according to these scholars, is done by the environment. Organizations that best fit the
resource base of the environmental niche are likely to selected (Kuratko, Covin and Hornsby,
2014, p. 651). Retention refers to the power of an organization to persist and perpetuate in hard

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environments as an added advantage to a firm aiming positive change (Schaltegger, Lüdeke-
Freund and Hansen, 2016, pp. 265). The ability of an organization to persevere through tough
economic, social and cultural environments is a sign of a successful organization.
Evaluation
Possible Strategies and Recommendations
After almost 80 years in service, Oxfam International is not likely to be at its declining
stage, regarding the life-cycle theory. Oxfam is continually opening office branches worldwide
and thence, the organization is either at its growth or revival. However, why is Oxfam facing
challenges experienced by organizations at their death beds? Su, Baird and Ellison assert that in
different stages in the life-cycle of a developing organization, different strategies should be
employed so as to achieve organizational effectiveness. The scholars further suggest that
strategies devised and executed with a cross-sectional perspective are likely to be beneficial to a
mature organization. Strategies based on longitudinal perspectives mainly focus on new and
growing organizations. Oxfam challenges may be due to the usage of the same strategies they
have been using since the companies strategies. Use of new strategies can be possible if the
company removes some of ‘static’ managers and top executives. When an organization feels that
its well-being is jeopardized by any individual, regardless of his position, the individual in
question should be removed (Gililand, 2014, pp. 251). New but experienced managers should be
recruited in Oxfam.
Another strategy that Oxfam can use to improve on its efficiency is specialization. In his
1776 masterpiece, The Wealth of Nations, Adam Smith first coined the concept of specialization
as a requirement for any entity that pursues success. Smith used an example of iron pin

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production. In his observation, Smith observed that the production of a single pin may involve
eighteen steps or processes. In a day, a person working independently could produce about ten-
twenty pins (Mail Online, 2019). However, if ten men are employed, with each man assigned a
specific role or step in pin production, the ten could produce about 48,000 pins per day (Smith,
2015, pp. 4). This means that on average, each person could produce 4800 pins; about 50 times
he could have produced single-handedly. Due to the fact that humans have been endowed with
different abilities and skills, they should specialize in their best areas of expertise (Austin,
Stevenson and Wei Skillern, 2012, pp. 374). Scholars agree that specialization not only increases
efficiency but also augments growth and output.
Conclusion
To sum up, organizational change demands a combined effort of theoretical concepts and
strategies. Organizations’ managers should familiarize with organizational change theories so as
to make sound decisions regarding organizational and institutional management actions and
practices. Organizational change theories include teleological, dialectical, life-cycle and
evolutionary theories. All the theories suggest that change occurs in different phases and stages
due to different events and instances. It is also healthy for an organization to deal with
manageable tasks. In cases where an organization is in its expansion, the management should not
neglect the original objective aimed during the entities conception. As a non-governmental
organization, Oxfam Australia requires effective managerial practices and policies to enable the
smooth running of affairs within its enterprises. Challenges that may arise due to diseconomies
of scale should be streamlined by an effective reliable strategy. Strategies should be based on the
existing organizational change theories supporting positive institutional and organizational
change. It is recommended that organizations should improve their strategies so as to reach their

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goals. For the case of Oxfam, financial management, ethical observance, and focus on a single
objective are necessary for the company’s progress. To enhance its role in providing material
requisites to the poor and eradicating poverty, the organization is tasked to work on improving
on its budget. Budget deficits caused by escalating wage bills discourage fundraisers and
financiers. The concept of specialization is also discussed in the essay. The concept of
specialization encourages us to focus on particular areas, leaving other areas to other players in
the industry. This works to ensure competence into the player’s field and ends up improving on
efficiency. Organizations using specialization end up saving a lot of valuable time, effort and
resources in handling other issues, which may not necessarily be in line with the organization’s
original intention.

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