What do organizational leaders think about the necessary steps to avoid crises?

What is it about?

This study explores which governance practices nonprofit leaders consider necessary to avoid organizational crises. Further, it explores whether these leadership mental models of crisis resistance depend on the organizational context. This helps determine whether practical learning points are organization specific or can be applied broadly. With a multilevel sample of 304 leaders from 44 Belgian nongovernmental development organizations, an exploratory path analysis reveals that nonprofit leaders consider continuous improvement, as a governance practice, particularly relevant for effective organizational crisis resistance. A multilevel analysis also shows that variations in leadership mental models cannot be explained by the organizational variables used in this study (organizational size, leadership group size, operational activities, and languages in the leadership group). This article concludes with a discussion of consequences for further research.

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Why is it important?

Nonprofit organizations (NPOs) and nongovernmental organizations (NGOs) must prepare for unforeseen events that might endanger the sustainable deployment of their activities. Such ressure has increased as a result of more performance-based funding for nonprofits, in combination with the growing trends of social media and short-item news reporting. The smallest mistake or even an unchecked negative rumor about an organization can be quickly dispersed and can create a substantial social media storm that potentially harms the organization’s reputation, which in turn can reduce the support of various stakeholders. A sudden drop in available resources in the short run can endanger an organization’s survival, resulting in an organizational crisis. Thus, NPOs find it increasingly important to actively think about their crisis resistance, which can be defined as the extent to which an organization can avoid or recover from organizational crisis situations.