Leadership Theory to Evaluate the Analysis of Non-Profit Organizations

This report provides an analysis of leadership theories applicable to non-profit organizations. It begins with an introduction to leadership and organizational leadership, discussing the perspectives of Douglas McGregor's Theory X and Theory Y. The report emphasizes the importance of identifying the ...Read More

Running head: LEADERSHIP THEORY TO EVALUATE THE ANALYSIS
Leadership Theory to Evaluate the Analysis
Nickole Nesby
Northcentral University
August 13, 2017

1LEADERSHIP THEORY TO EVALUATE THE ANALYSIS
Introduction
Leaders are someone who leads from the front and people follow them
because they have the capability to do so. Organizational leadership is a move
towards betterment of an any organization or a group be it a non profit organization or
any company . To become a great leader a person has to understand the point of view
of others and have a clear idea of his own and should be able to align the both
together. According to Douglas McGregor a psychologist and a Management
professor said about two different approaches, which he named as “Theory X” and
“Theory Y”. In both the theory he talks about involvement of the employees in the
organization and their effectiveness which leads to growth and it does form an
integral part of the organization (Adams,2013).
Theory X tells that – “Hell or high water, we are going to get it done”. He
motivates the employee that whatever the situation may have arose, we will achieve
success. Theory Y tells that – “I need your help… how are we going to do this”? We
can see in both the situation he is saying “we” and thereby helping in involving the
employees.To be an effective leader it is very important to identify the leadership
theory that will be applicable for a given situation in an organization (Adebanwi &
Obadare, 2016).
A non profit organization is integral part of our modern society. Most of the
non profit organization tends to make impact on the organization both economically
and socially. Non profit organization is a integral part of the social economy and it
includes broad range of activities that is public economy and mutual interest. Non
profit organization faces a lot of pressure in fundraising and identifying the donor.
These organization made new strategies and uses the internet as an efficient platform
to communicate their goals and mission (Galaskiewicz, 2016).

2LEADERSHIP THEORY TO EVALUATE THE ANALYSIS
Body
As we discuss governance and leadership strategies for non profitable
organization. It is a process of providing leadership, direction and accountability for a
non profit seeking organization. A non profitable organization comprises of a board,
hired employees and volunteers. The board comprises of director who takes the
important decision and formulates strategies and considered to be the leader of that
organization (Erakovic et al., 2015).
Non-profit Strategic Management and Leadership
1. In a nonprofit organization the leaders make strategies and make structures
and processes in an organization and its governing body
2. The leaders in a nonprofit organization shall makes strategies so that they
devote their time and attention in order to analyze the changing environment
and makes changes in the organization (Grant, 2016).
3. Nonprofit leaders should actively seek to understand underlying causes of
mission-related issues and use this awareness to focus organization activities.
4. In a nonprofit organization the leaders shall prioritize on the organizational
goals the organization so that they are able to have excessive control of the
organization by funding sources, government regulators, or other external
influences.
5. In a nonprofit organization the leaders shall be able to draw a sustainable
business model for the organization so that they focus on fund raising, funding
sources (Felício, Gonçalves & da Conceição Gonçalves, 2013).

3LEADERSHIP THEORY TO EVALUATE THE ANALYSIS
The roles that are played by a leader in a non profit organization and it help in the
growth of the organization. The following are the leadership qualities
 Responsibility to care
Since the organization is formed for non profit and therefore the leader’s most
important KPI is to take care while taking any decision, whatsoever in relation to the
organization. A leader therefore stays accountable for the decision that is being taken
by him or her.
 Responsibility of loyalty
The leaders in a non profit organization shall act in a good way to take the
organization forward. It is expected out of the leader to take decision which acts in
equivalence with the interest of the organization (Gonzalez, Rodriguez &
Sossa ,2017).
 Responsibility of compliance
One of the most important points which the leader shall keep in mind is that the leader
should honour mission, vision and policies of the organization. They should abide by
the laws or rules that are set by the organization, which will set an example for others.
There are several theories that have been laid down which acts as pillars of leadership.
Leadership Trends and Theories in a Non profit organization are as follows:
1. Trait Theory

4LEADERSHIP THEORY TO EVALUATE THE ANALYSIS
In this type of theory the leadership is based on characteristics or behaviour of an
individual. Some of these behaviours that is in relation to leadership are intellect,
open to changes, extraversion, attention to detail and sincerity (Hendrickson et
al.,2013).
2. Functional Theory
This theory says that the leaders should understand the need of the followers and see
that their needs are fulfilled.
3. Transactional Theory
According to this theory the leader should set goals for the individual in the
organization and asses those performances and therefore reward or punish them
according to their performance.
4. Transformational Theory
Under this type of theory the leaders look upon the ultimate goal and try to motivate
their followers through motivation so that their vision could be achieved.
5. Environmental Theory
In this type of theory the leaders try to create a situation the members of the group
help each other keeping good co-ordination amongst them to achieve the goal. This
type of situation that is created motivates the individual to achieve the required goal
for the benefit of the group (Kiragu, 2016).
6. Contingency Theory

5LEADERSHIP THEORY TO EVALUATE THE ANALYSIS
It says that a leader should change its theory according to the situation. There is no
fixed theory that can be applied for each and every situation that may arise.
7. Participative Leadership
In this type of theory the decisions are taken with equal participation from all the
members who are affected by that particular decision (McVeigh et al.,2016).
8. Great Man Theory
The theory tells us that some people are born with the qualities of a leader and are
born leaders. They have those qualities inherent within them (Nooteboom &
Termeer,2013).To explain how the leadership theory work an example is taken to
show problems and theories implied to solve the problem.
Example of a non profit organization
Northwest printing press is a seventy year old government organization which was
established as a non-profit seeking organization which is used for printing and
publishing government newspapers, articles, magazines used for government bodies
such as rehabilitation centres, nongovernmental organizations, government
undertaking organizations (such as railways, airlines). This printing press used to be
the highest manufacturer a decade back but started lose its ground from then. Most of
the workers in the organization are working for more than a decade and know each
other very well. They have good coordination between them, but the problem was
there was no fixed goal. There was no inspiration of any kind from the leader and the

6LEADERSHIP THEORY TO EVALUATE THE ANALYSIS
workers have no idea where the organization is heading towards (Owoye &
Onafowora,2017). Mr. Harry who is the director of the organization in order to
resolve the problem undertook Environmental theory as the solution of the problem.
Mr Harry was unable to identify the real problem that prevails in the organization. He
thought that there is lack of coordination and he thought that the environmental theory
will solve the problem (Popescu & Predescu, 2016).
Suggestion from the above example
After analyzing the scenario I would suggest that Mr Harry should change his
leadership theory. As it can be seen from the above mentioned case that problem was
that the workers were de-motivated and there was a gap of communication between
the leader and the workers. There was no precise goal that has been communicated.
When there is a goal and the workers are motivated and inspired to achieve that goal
the workers give their full effort to achieve it (Strøm, D’Espallier & Mersland, 2014).
Leadership theory works under four factors.
Inspirational Motivation
The Transformational leadership provide mission, values, vision to the
workers. It will give the workers a sense of motivation and challenge. This will bring
a positive attitude amongst the workers, which help to boost their moral.
Intellectual Stimulation
It helps to be creative and innovative
which will help the workers to come up with
new ideas and they should be given chances to
implement these ideas.

7LEADERSHIP THEORY TO EVALUATE THE ANALYSIS
Idealized Influence
The leader will act as a role model to inspire the workers as a part of the
process so that it influences the workers to strive for the best performance and
achieving goals (Valente, Dredge & Lohmann,2015).
Individual Consideration
The leaders should reward the workers for their creativity and achievements
which will further motivate them to keep up their performance.
Fund raising in a nonprofit organization
The people who fund and donate in a nonprofit organization are becoming more
sophisticated when they are make choices. Hence, the nonprofit organization shall
understand that the donor market is changing and the stakeholders have to become
more imperative. It will be crucial for the organization to go back to the basics of
organizational fund raising strategy and culture to ensure that the organization is on
the right track for continued growth (Reich & Gregory,2014).
The following are the ways to raise funds
a) Capital campaigns: A capital campaign refers to a campaign to generate
donations for a specific initiative, such as a new facility to replace the aging
one or a new large-scale program.
b) Membership: If the organization in such that membership makes sense, by all
means, offer membership to the members.
c) Events: Fundraising through events is extremely common in the non-profit
organization. In a weekly newspaper it is found that any number of local
events is being put on by nonprofits organization (Renz,2016).

8LEADERSHIP THEORY TO EVALUATE THE ANALYSIS
d) Earned income: Earned income refers to fees charged for services offered or
revenue from goods which organization sells.

9LEADERSHIP THEORY TO EVALUATE THE ANALYSIS
References
Adams, C. (2013). The role of leadership and governance in transformational
change towards sustainability. Global Responsibility, (9).
Adebanwi, W., & Obadare, E. (2016). Governance and the Unending Search
for Leadership in African Politics. Governance and the Crisis of Rule
in Contemporary Africa: Leadership in Transformation, 1.
Erakovic, L., Erakovic, L., Jackson, B., Noonan, C., & Watson, S. (2015).
Board leadership and governance for clear-sighted CEO succession at
Air New Zealand.
Felício, J. A., Gonçalves, H. M., & da Conceição Gonçalves, V. (2013). Social
value and organizational performance in non-profit social
organizations: Social entrepreneurship, leadership, and socioeconomic
context effects. Journal of Business Research, 66(10), 2139-2146.
Galaskiewicz, J. (2016). Social organization of an urban grants economy: A
study of business philanthropy and nonprofit organizations. Elsevier.
Gonzalez, A. C., Rodriguez, Y. E., & Sossa, A. (2017). Leadership and
Governance Decisions in Family Business Performance: An
Application of Fuzzy Sets Logic. Journal of Small Business
Strategy, 27(1), 51.
Grant, R. M. (2016). Contemporary Strategy Analysis Text Only. John Wiley
& Sons.
Hendrickson, R. M., Lane, J. E., Harris, J. T., & Dorman, R. H.
(2013). Academic leadership and governance of higher education: A

10LEADERSHIP THEORY TO EVALUATE THE ANALYSIS
guide for trustees, leaders, and aspiring leaders of two-and four-year
institutions. Stylus Publishing, LLC.
Kiragu, E. M. (2016). An investigation of healthcare systems and institutional
performance vulnerability and variance to leadership and governance
interventions: a case of the IPPF Ghana and Kenya chapters (Doctoral
dissertation, Strathmore University).
McVeigh, J., MacLachlan, M., Gilmore, B., McClean, C., Eide, A. H.,
Mannan, H., & Sprunt, B. (2016). Promoting good policy for
leadership and governance of health related rehabilitation: a realist
synthesis. Globalization and health, 12(1), 49.
Nooteboom, S. G., & Termeer, C. J. (2013). Strategies of complexity
leadership in governance systems. International Review of Public
Administration, 18(1), 25-40.
Owoye, O., & Onafowora, O. A. (2017). 3 Understanding Africa’s governance
structures and its economic growth performance. Democratizing Public
Governance in Developing Nations: With Special Reference to Africa,
38.
Popescu, G. H., & Predescu, V. (2016). The role of leadership in public
health. American Journal of Medical Research, 3(1), 273-273.
Reich, N., & Gregory, L. D. (2014). Direct marketing, as an avenue for
fundraising, provides nonprofit organizations with the ability to fulfill
their missions and donors the opportunity to support a worthy cause.
There are concerns, however, when sophisticated marketing practices
target potentially at-risk consumers. Demographic studies clearly show

11LEADERSHIP THEORY TO EVALUATE THE ANALYSIS
that the percentage of elderly Americans, aged 65 and over, is rising
with a corollary... Journal of Consumer Policy, 37(1), 143-145.
Renz, D. O. (2016). The Jossey-Bass handbook of nonprofit leadership and
management. John Wiley & Sons.
Strøm, R. Ø., D’Espallier, B., & Mersland, R. (2014). Female leadership,
performance, and governance in microfinance institutions. Journal of
Banking & Finance, 42, 60-75.
Valente, F., Dredge, D., & Lohmann, G. (2015). Leadership and governance in
regional tourism. Journal of Destination Marketing &
Management, 4(2), 127-136.