NGO transformation: institutional entrepreneurship in Indian microfinance

Abstract

PurposeInstitutional theory is inspired by the problem of how different organizations operating in different environment have similar structures. The similarity is catalyzed by isomorphic forces, active within a given organizational field. Despite the force of isomorphic process, there is emergence of new organizations in through institutional entrepreneurs. The emergence of NBFCs through transformation of NGOs within the given context of Indian microfinance sector creates a space for examining the institutional entrepreneurship. The paper studies the institutional entrepreneurs of Indian microfinance, and attempts to make some proposition on institutional entrepreneurship.Design/methodology/approachIt brings out the commonalities among the institutional entrepreneurs, and how they have rationalized their actions within the given context. The paper aims to extend the current understanding of institutional entrepreneurship to the emerging field of Indian microfinance.FindingsThe institutional entrepreneurs were at the periphery of not‐for‐profit sector before transformation. The leaderships of institutional entrepreneurship are well‐networked, and have better access to resources. The institutional entrepreneurs have rationalized their action, by aligning their interest with that of other influential stakeholders. The new form is legitimized through patronizing practices like credit rating by professional agencies etc.Research limitationsThe study is based on secondary literature and the studies on all the selected organizations are not necessarily value‐neutral, and hence there are possibilities of interpreting the process of institutional entrepreneurship in an inadequate way.Originality/valueThere are very few works on microfinance from the institutional theory's perspective, and this may be a fresh attempt to look at the process of transformation of NGO‐MFIs from the lenses of institutional entrepreneurship.

A realist evaluation: how institutional entrepreneurs build adaptive not-for-profit healthcare organisations

“…detached from decision-making processes) are more likely to enact change because they are less embedded in the politics of institutionalised practices [25,95,189]. Only two of the reviewed studies, however, indicated that IEs were in a peripheral position and two studies did not state the social position of the IE [117,177,185,190]. In the remaining studies, all IEs held central, strategic roles within the NFP, including directors [118,187,188,191], senior managers [37,116,180,183,189],…”

“…The process of institutional work, however, was in response to the uncertainty (e.g. The second step is concerned with the rhetoric that IEs employ after they have identified an opportunity to try to "sell" their vision or idea [117,175,176,182]. Rather than simply bring attention to what is happening in the field and call for change, IEs seeking to build adaptive capacity create an environment conducive to the prospect of change.…”

“…Their vision was situationally appropriate to the political uncertainty in the field, thus IEs were able to visualise their idea in the new environmental landscape. Other examples of visioning strategies have shown that IEs tailor their vision to the interests of their audience [117,177,180,183], use ascendant "win-win" messages to appeal to multiple interests [178,180], provide credible visions with substance (e.g. worked examples, historical comparisons, and hard data) [179,181,184], and find ways to make their message tangible, for example, by giving a name to an ambiguous situation [178,184] or using anecdotes, analogies, metaphors and visual tools [183][184][185].…”

“…Often this includes IEs investing time by both formally and informally talking with, and listening to, various groups of stakeholders within the organisation [118,179,183]. On the opposite spectrum, evidence shows that partiality in the way of siding with, or actively promoting, one-sided views or interests [117,176,179] or committing to certain political or economic goals [118,[186][187][188] is a sign of obtrusiveness and may hinder support and commitment for change from within the organisation.…”

“…To date, the discourse of institutional entrepreneurship has been applied to research on change and transformation in financial services [114], accountancy firms [112], healthcare [95,115] and NFPs [116][117][118]…”