Ou CST Ou-Cst

Organizational Understanding Component
Submitted by
Abinash Mohapatro (25053)
Neeraj Kumar Lal (25081)
Nitin Gupta (25030)
V. S. Ravi Kumar Tadimalla (25050)
Rohit Garg (25041)
K. Somanadha Babu (25044)
Organisation Traineeship Segment

PRM 2004-‘06
Submitted to:
Prof. Nivedita Kothiyal
Organisation: Community Services Trust, Salem
August 2005
Institute of Rural Management, Anand

Community Services Trust Organisation
Understanding
ACKNOWLEDGEMENTS
We wish to acknowledge our indebtedness to IRMA and Community Services Trust (CST),
Salem for providing an opportunity to learn about an organization as part of our Organisation
Traineeship Segment.
We would like to thank G. George, Director, CST, our reporting officer for his valuable
support and cooperation throughout our stay. We express our sincere gratitude to the staff of
CST for their valuable support during our visits to the block offices.
This project would not have been possible without the guidance of our faculty guide Prof.
Nivedita Kotiyal and we would like to express our gratitude for her support.
Abinash Mohapatro
Neeraj Kumar Lal
Nitin gupta
V. S. Ravi Kumar Tadimalla
Rohit Garg
K. Somanadha Babu
-ii-
Abinash, Neeraj, Nitin, Ravi, Rohit, Somanadha
Understanding
Executive Summary
Title: Organisation Understanding

Organisation: Community Services Trust, Salem.
Reporting Officer: G. George, Director.
Faculty Guide: Prof. Nivedita Kotiyal
Students’ Names: Abinash Mohapatro, Neeraj Kumar Lal, Nitin Gupta, V. S. Ravi Kumar
Tadimalla, Rohit Garg, K. Somanadha Babu.
The objective of this component was to understand the various aspects of an organization, it’s
functioning and how it copes with the various influences, both internal and external. Different
frameworks were used to understand the organisation from different perspectives and
interpretation is based on our own understanding of the subject. Information for this purpose
was gathered through unstructured and semi-structured interviews, focused group
discussions, unobtrusive observations, and analysis of organizational records. Using the
universal business model as the basis, various aspects of the organization have been studied
and presented. Universal Business Model is a generic framework like McKinsey 7S
framework which has helped us in data collection. Apart from this, our own understanding of
organizations from our coursework has been used to make inferences about aspects like
culture, environment, strategy etc. Our limitations were time and language. Nine weeks were
too short to have a comprehensive understanding of the organisation.
Community Services Trust (CST) is an NGO involved primarily in promotion and nurturing
of women SHGs and to a minor extent in child rights in partnership with the government and
is working mainly in two districts of Tamilnadu, namely Salem and Namakkal.
The major finding has been that despite the constraining influence of its partnership with the
government, the organisation has made substantial contribution to community empowerment
through women’s SHGs, which has been its mission. Due to the resource constraints, that the
organisation has been facing, it has not been able to match its staff requirements necessary to
consolidate the results achieved so far with a stable human resource policy leading to lack of
role clarity and switching of responsibilities between employees. Because of the same reason,
it has not been able to recruit any professionals till now and all employees have come from
grass roots. It has resulted in the concentration of power in Director – a very committed
activist who is also the founder of the organisation – and absence of a second line of
management leading to all strategy and policy level decisions being made by him only. High
turnover rate in the organisation has also affected the evolution of a strong culture. The
organisation is currently undergoing major changes as it is going to start its own micro-credit
operations. As a result, recruitment of a few professionals, improvement in infrastructure, and
drastic changes in assigned roles of the block level workers has been taking place.
Some of the important conclusions pertain to the importance of professional assistance,

financial stability and systems, especially HRM systems, to properly channelise its efforts
which currently are not well-coordinated and to protect itself from the negative influences of
external environment so that it can better realise its vision.
-iii-
Understanding
TABLE OF CONTENTS
S. No. Topic Page No.
ACKNOWLEDGEMENTS ii
Executive Summary iii
List of Abbreviations v
1. INTRODUCTION 1
2. ORGANISATION IDENTITY 1
3. ORGANISATION STRUCTURE 4
4. PARTICIPANTS 10
5. DELIVERABLES 13
6. ACTIVITIES 13
7. ENABLERS 16
8. INFLUENCES 19
9. CULTURE 23
10. INFERENCES FROM THE ORGANISATION
UNDERSTANDING COMPONENT 26
11. LEARNINGS FROM ORGANIZATIONAL
THEORY PERSPECTIVE 28
12. CONCLUSION 35
References 36
-iv-
Understanding
LIST OF ABBREVIATIONS
1. CST: Community Services Trust

2. BCO: Block Coordinator
3. DCO: District Coordinator
4. FS: Field Supervisor
5. ABCO: Assistant Block Coordinator
6. BDO: Block Development Officer
7. SHG: Self Help Group
8. PO: Project Officer
9. VTP: Vocational Training Programme
10. EDP: Entrepreneurship Development Programme
11. NGO: Non Governmental Organisation
12. PLF: Panchayat Level Federation
13. BLCC: Block Level Coordination Committee
-v-
Understanding
-vi-
Understanding
1. INTRODUCTION
1.1 Objective
The objective of this component is to understand the various aspects of an organization, it’s
functioning and how it copes with the various influences, both internal and external. It is also
an opportunity to put to test the concepts of Organisation Theory as learnt from the class
room in a practical organizational context. The current study is a part of the Organisation
Traineeship Segment which is an academic requirement for the fulfillment of Programme in
Rural Management.
1.2 Methodology
Using the universal business model as the basis, various aspects of the organization were
studied. Information for this purpose was gathered through a mix of different tools which
along with their respective rationale for usage are mentioned below: unstructured interviews
in the early stages to understand what kind of information we can get from which employee
and to find out what aspects of organisation understanding are very obvious and which are
not; semi-structured interviews to know more about the organizational aspects which might
not have been captured by the checklists prepared for employees; focus group discussions to
triangulate information given by employees from different locations and also to understand
aspects like culture in depth (regular review meetings of different level of staff from the
blocks helped in conducting these discussions); unobtrusive observations which would help
avoiding the possible bias that creeps in while using any of the above tools; and analysis of
organizational records like past annual reports and project appraisal reports. Apart from this,
our own understanding of organizations has been used to make some inferences.
1.3 Limitations
Time is a constraint, as a comprehensive study of an organization cannot be done within a

period of 8-9 weeks. Language also was a constraint as only a couple of senior staff members
understood English and not all of us were familiar with local language.
-1-
Understanding
2. ORGANIZATION IDENTITY
Community Services Trust (CST) is an NGO registered under Indian Trust Act, 1882 working
mainly in two districts of Tamilnadu, namely Salem and Namakkal. At present, it is mainly
involved in promoting the SHG network apart from other projects associated with education
and child rights on a modest scale in these areas.
2.1 History
The history of the organization dates back to 1988-89 when preliminary work was done to
bring it into existence independently from an already existing NGO named ‘Tribal Network’.
Starting from the inception itself, it was a slew of events outside the organization that brought
it to a stage at which it exists now. The founder of the organization, Mr. George, was working
with the local press and was playing an activist role along with a few NGOs in this part of the
state. His association with the backwardness of tribal areas in Yercaud and Kolli Hills (two
predominantly hilly areas and backward regions) and his belief in communities being
empowered to take control of the local resources and becoming self-reliant had propelled him
into this activist role. His experience has given him an understanding of the deprivation of the
people in these areas. His job of being a journalist covering the NGO activities provided him
with good contacts with the NGO network in the area around Salem. The NGO “Tribal
Network” had requested Mr. George to set up an extension of their organization in these two
tribal areas assuring him of all the necessary support, both financial and organizational.
Although reluctant at the initial stages because of the hesitation to involve in organizational
work, Mr. George decided to take up the challenge with the assurance of support from friends
and well-wishers. Tribal Network had faced financial problems, because of which the assured
financial and organizational support never came through. However, as work had already
started in these regions, Mr. George could not go back and so he had to set up an organization
by himself and that was the beginning of CST as a separate legal entity in 1990. Initial efforts
were primarily activist in nature as the founder considers himself to be an activist and a field
worker rather than an organisation head. His belief in Swadeshi and self-rule led him to
mobilizing people and making them know about their rights and privileges. Realising the
importance of implementing projects aimed at women and children empowerment, especially
amongst the tribals, the founder started applying for government projects. The founder had a
-2-
Understanding
small team of two assistants who were drawn by his activism and worked with him with the
same commitment. However, it was not a team of like-minded people that came together but
was one cobbled up with whoever was available at that time and it worked from the founder’s
residence. Viewed from the organisation structural perspective, it was a flat structure
operating with a single-minded objective.
As time passed by government had responded with projects under the social welfare
department. CST implemented small projects like Child development Centre, formation of
social action groups, and consultative programmes emphasizing rights of women and
children.
2.2 Vision, Mission and Core Objectives
2.2.1 Vision: “CST aspires for a community with peace and justice for all and Community
empowerment towards an egalitarian society free from all social evils prejudices and taboos.”
CST would like to see itself as a National NGO in the future. This vision was adopted at the
very early stages itself as this emerged from the founder’s idea of community empowerment.
2.2.2 Mission: “To serve the poorest of the poor, neglected, uncared tribal and rural slum
population in the Salem and Namakkal districts in Tamilnadu.” Service is accomplished
through holistic development that is culturally valuable, socially acceptable, ecologically
sound, and practically human and gender sensitive. The tribal aspect of the mission was there
since the beginning and the geographical extent was added with the picking up of the Mahalir
Thittam project.
2.2.3 Core Objectives: To attain the vision of community empowerment following objectives
have been set: Protection of human rights
Development and empowerment, socially and economically
Health improvement
Child development
Village development
Tribal development
Environment protection
-3-
Understanding
However, the current focus is mainly on economic empowerment through the SHG-bank
linkage model which indirectly must have focused to a few of the other objectives like health
improvement and social empowerment. Despite having these lofty vision, mission and core
objectives at the organisation level, how much of it is exactly internalized by the employees
is still doubtful. For instance, when asked to write about the mission of the organisation by
the Director, almost all the Block Coordinators, who form the middle level management,
failed to pinpoint the crucial aspect of empowerment. They have been working with the idea
of CST as a social service organisation which is perceived as a benefactor of women, but not
as a facilitator of empowerment. This benefactor-beneficiary perception along with the
association with the government has been responsible for the typical culture in the
organisation which is described in a later section.
3. ORGANIZATION STRUCTURE
Physical deployment and Functional composition: As the organization works in two districts
and ten blocks, the staff is deployed at two levels - one at the district headquarters level and
the other at the block office level. The head office of the organization is located in Salem and
it also serves as the district office for Salem. The Director, the project coordinator and the
district coordinator for Salem work from this office. In addition to them, one office manager
(who is also the block coordinator of Yercaud block) and two assistant office managers are
present. The district office of Namakkal is located in Namakkal town. This office has three
coordinators, one project coordinator, responsible for Mahalir Thittam (in charge of the SHG
network existing in the district), one responsible for training, and the third – an additional
position for this district which is not a permanent part of the structure – for other projects
being currently implemented in the district. The training coordinator is also the district
coordinator for Namakkal. This office again works as the block office of Namakkal. So the
office also has the block coordinator, three field supervisors for general programmes, two
field supervisors specifically responsible for an insurance program of the organization, one
block manager and one auditor. The remaining nine block offices are located in Salem,
Yercaud, Taramanglam, Omalur, Magudanchavadi and Konganapuram in Salem district, and
Kolli hills, Vennandur, and Pallipalayam in Namakkal district. Each block is headed by a
block coordinator and supported by Assistant Block Coordinator, Field supervisors as full
time staff and Auditors and Cluster Assistants as part time staff. The number of posts
-4-
Understanding
functional under different designations varies from block to block depending upon the
requirement. In Magudanchawdi there are two field supervisors, and three auditors in
addition to the block coordinator, assistant block coordinator and block manager. The
corresponding numbers in Vennandur, Kolli hills, Omalur are two & zero, one & zero, two &
one respectively. All the blocks have auditors who are recruited on a temporary basis. ABCOs
and auditors are a new addition since the past two years. It has been found that the BCO has
been involved in too many activities which involved traveling away from the block office to
the head office, to the field and to the local government offices. This necessitated the creation
of a separate position to handle the activities of the BCO and thus was created the position of
ABCO. Internal auditors became necessary as the groups had their accounts audited only
once in a year leading to improper maintenance of their accounts until the auditing time.
These aspects are significant as they stand testimony to the theory that organisation structure
changes in order to meet the contingencies that arise from time to time and such change is
never a very smooth and planned change. The structure is depicted in figure 1.
3.1 Roles and responsibilities
The Director is involved in both external and internal activities. He is responsible for external
contacts like partnering governmental agencies and independent development organizations.
His main responsibility is to ensure an adequate performance to these external relations to be
assured of funds and marketing. Internal activities comprise monitoring and controlling staff
members, monitoring and evaluating projects and conducting meetings with external support
agencies and internal programme implementation staff. The external financial auditor is
appointed by the governing board to monitor the financial status of CST, Salem. The financial
auditor, though very important for the functioning and maintenance of financial health of
CST, is not part of the organization. The Project coordinator who represents the next
hierarchical level is responsible for getting the projects issued from the government and
taking care of their administration. The project coordinators are performing the role of
interface between organization and the government. They have the responsibility to submit
the reports of the progress as well as routine information regarding different government
projects undertaken by the organization to the concerned government departments. The
project coordinator receives these reports from district coordinators who supervise the
-5-
Understanding
Board of Directors
Director
District
Project Coordinator District Project
Coordinator SALEM Coordinator Coordinator
SALEM NAMAKKA NAMAKKAL
L
Block Block Block Block

Coordinator Coordinator Coordinator Coordinator
Assistant Block
Coordinator
Block Field Auditors

Manager Supervisors
Office
Manager Cluster Assistants/
Cluster Coordinators
Figure 1 (Auditors and Cluster Coordinators are not full time staff of the organisation)
different projects in their respective districts. Ideally these positions could play the role of
boundary spanning, however currently they are not doing so due to lack of capability and
resources. The block coordinators are the persons responsible for all the activities of the
-6-
Understanding
organizations in respective blocks. They have been given enough power to decide about the
personnel recruitment, responsibility allotment among them and to supervise every
conceivable function there. They report directly to District Coordinator though they too have
to interact regularly with the Director and inform him about the routine developments. They
have to meet weekly with the district coordinator and project manager at the district office.
The roles and responsibilities are further elaborated below:
3.1.1 District Coordinator: The DCO’s (District Coordinator) responsibility is to oversee the
activities of the block coordinators. This is done through weekly block review meetings
conducted at the district office. They generate and maintain the consolidated records of all
activities carried out at the district level. As the nature of activities differs from district to
district, there has been necessity of this position. Currently there are 3 DCOs in Namakkal
district (one for Mahalir Thittam, one for training, and one for other projects) while in Salem
district there is one DCO. As per the organizational structure they are next in line to the
Director of the organization along with the Project coordinators.
3.1.2 Block coordinator: The BCO conducts weekly meetings of animators (leaders of SHGs)
and passes on the information regarding any new project. She is also involved in group
formation at village level as she visits the villages to encourage the women for this purpose.
Other than these BCOs are also responsible for interacting with the banks with which SHGs
are to be linked, with BDOs who are responsible for grading of the SHGs (along with a
representative from another NGO) and at times with the District Collectors whenever they are
called for meetings.
3.1.3 Assistant Block Coordinator (ABCO): Next to BCOs are the ABCOs who have their
jobs coupled with the responsibility of a field supervisor. The responsibility of an ABCO is to
perform the duties of BCO during her absence and to assist her in discharging her
responsibilities. In addition she is the person responsible for the trainings. There are four
types of trainings provided to the SHGs: Animators and representative (A & R) training, SHG
members’ training, entrepreneur development programme training and vocational training
programme. Of these the first two are directly given by the ABCOs and other two are
arranged by the governments and other external agencies. It was observed that this
responsibility at times is shared by the BCOs as well.
-7-
Understanding
3.1.4 Field supervisors (FS): Next in the hierarchical level are the field supervisors. They
have been given the responsibility of visiting each group at least once a month falling under
the block. But in reality, geographic spread of the villages and lack of assured communication
to ensure that members are present during the FS’s visit makes this target difficult. One other
reason for not being able to reach the target is the inadequate number of field supervisors.
Considering this reality the Director expects that even if thirty percent of groups are visited
each month, then the FS has done her job. There are some variations in their responsibilities
across the blocks as well. In some blocks the area of supervision is clearly divided among the
Field supervisors whereas in other blocks this division is a matter of convenience. Basically
Field Supervisors have to monitor whether the groups are regular in their savings, meetings,
loan repayments etc. and to solve the problems faced by the group members if that is possible
at their level or communicate to the higher ups. They are also supposed to check the books of
accounts ensure their regular maintenance and report the monthly figures to the block office.
In some of the blocks additional responsibility of training the groups is also entrusted on
them. Some field supervisors are recruited for the special purpose of promoting insurance
among the members.
3.1.5 Internal Auditors: As already mentioned block offices have internal auditors who are
recruited on temporary basis for three to four months. They have to audit the record books
being brought by the animators of the SHGs at the block level. In this way the regularity of
the accounts is ensured and errors are minimized. The internal auditors are given training by
the external auditor at the head office in Salem.
3.1.6 Block Manager: Block manager is another post at the block office. She has the
responsibility of looking after the regular functioning of office, making arrangements for
events, maintenance of equipments and stationery and recording of queries by members
during the absence of the BCO and the ABCO and this is mainly a support function.
Due to the fact that the organisation is facing the paucity of staff due to resource constraints,
above mentioned responsibilities are not rigidly associated with the designations. Depending
upon the situation and availability of staff these responsibilities keep shifting among the
above mentioned posts. In addition, CCOs are also the designated posts at the block level.
-8-
Understanding
The blocks are divided informally into a few clusters and CCOs are the persons in charge of
these. But they operate from the field itself and their job is to ensure the flow of relevant
information between groups and block level staff. They are the women already heading some
SHGs or at least members.
3.2 Workplaces
The organization operates from others’ premises at all the levels – main headquarter, district
headquarter and block offices. In most of the blocks government has provided buildings for
SHG related activities which are being used by the organisation as its offices and these are in
the same premises as of the BDOs. As NGOs for Mahalir Thittam are recognized by the
government in each block, wherever offices are built, respective NGOs can avail of them for
their work. In the other blocks, office spaces have been rented. The head office operates from
two different premises, the older one being still retained to avoid problems with
communication arising out of change of address. Financial constraints are clearly reflected in
the limited amount of space rented for office space at all levels. Also, there are no sitting
arrangements for all the staff members. Their work is mostly carried out by sitting on the
floor. The block review meetings, SHG meetings and training programmes also happen in the
same way and, at times, even the Director attends these meetings sitting on the floor. A kind
of camaraderie is visible among the staff, probably because of this seating arrangement. The
other facilities are to the basic minimum.
3.3 Reporting Structure
The organization does not manifest rigid pattern of reporting structure across its rank and file.
But for some posts it is more formalized than others. Director is the head of the organization
and he is at the top of the reporting structure. District coordinators directly report to him.
They also report to the project coordinator regarding the routine information related with the
government projects to be passed to the concerned government departments. But on many
occasions, Director interacts with the block coordinators directly. They in turn are reported by
all the block level staff – field supervisors, block managers, and auditors as and when present.
Field supervisors receive the reports from CCOs. Although animators are independent in
terms of their positions from the organization, they have certain obligations for reporting of
-9-
Understanding
the activities of the SHGs to the organization. They provide the necessary routine information
to the FS on monthly basis. Other than these distinct reporting structures apparent in the
organization as already mentioned, other staff works by sharing the information informally
and performing the duties in mutually reciprocal manner.
4. PARTICIPANTS
4.1 Managers
There are only two levels of posts recognizable to discharge the function of managers in the
sense that they have the discretion to take decisions on their own. The first being the Director,
who is responsible both for the policy decisions which needs much of his time interacting
with external agents and second the BCOs, the persons responsible for getting the work done
in the blocks. Other than these two positions, it doesn’t seem that any other has much of
discretionary powers to take important decisions.
4.2 Workers
All the other employees along with the above mentioned posts may be considered as the
“workers or clerks”. But from the importance to the organization’s functioning point of view,
field supervisors are the most important and critical to the organization as they are the
interface between the organization and the target beneficiaries i.e. the women members of the
SHGs from whom the organization draws meaning for its sustenance. The posts of BM and
auditors at the block level are at best that of support nature.
4.3 Partners and Alliances
The organization throughout its short history had worked with many different partners. These
include various welfare departments of state government and the Central Social Welfare
Department. Also it had the opportunity to work with the DANIDA foundation of
Netherlands in the area of community health through a programme called Community Health
Action Programme.
-10-
Understanding
But at the present juncture, the organization has a few main partners with whom it has been
working. These are mentioned below.
4.3.1 Tamilnadu Government: The core project of the organization for past few years has
been the promotion and nurturing of the SHG network. This is done under the Mahalir
Thittam project of Tamil Nadu Women Development Corporation (TNWDC). The
government gives the guidelines regarding how to proceed on the project and also
gives funds for the activities carried out under it. Government has provided
infrastructure for the project in form of office premises for most of the blocks in
which CST is functioning. But whether the organization is a partner of the
government and not the agency or channel for the implementation purpose is hard to
decide. This is because of the domineering role played by the government in the
partnership which is depicted in figure 2.
Govt Dept.,
Board or Corpn.
Schemes
Reports Finance
Regulations
Community Schemes Govt. Official

Services Trust Control (BDO, PO)
Figure 2
The organisation is facing some problems in its relationship with the government because of
the government’s interference in the regular functioning of groups. The government officials
like collectors etc. call the members of the groups at any time to attend any government
function or meeting which are held, at times at the behest of the political bigwigs.
-11-
Understanding
4.3.2 Indian Rose Foundation: This organization from the Netherlands has remained in
association with the CST for the past three years and this has been very fruitful to CST. It is
because of this association only that the organization is currently crossing a new milestone in
its history, by undertaking the micro-credit activity with an aim of forming a full fledged MFI
in due course of time. The association had its roots when a student from Twente University,
Netherlands came here for her internship. Later she joined the Indian Rose foundation and the
association with Indian Rose made CST’s network stronger. The idea of starting an MFI came
from her. The initial project proposal for the MFI was also prepared by her. To further the
idea, the intern continued to assist CST by promoting internship of students of Twente
University in later years also. Thanks to her efforts, every year, students of industrial
engineering and management have been coming here and contributing to the benefit of the
organization. When CST finally decided to start a micro-finance venture and start with the
lending of micro-credit to the women of SHG networks, initial capital was provided by the
Indian Rose foundation for a pilot project to test the idea. The pilot project was done with the
help of the interns and it was also reviewed by them. To add further on this association,
lobbying by the foundation was helpful in acceptance of CST proposal for financial help by
the Rabo Bank Foundation so as to start the micro finance venture on a full scale.
4.3.3 Rabo Bank Foundation: Although a new association, it may well continue in the near
future and strengthen into a very useful relationship for CST. The bank, based in Netherlands,
has recently sanctioned a soft-loan to be used by CST for micro credit. This association has
the clause of continuing for another ten to fifteen years if the project goes as planned and if
the needs of members are being met.
4.3.4 NGO forum at Salem: Although currently not much active, the association with the
NGO group in and around Salem had been necessary for the organization to implement some
of its projects during its initial years. Most notable among them was the Aids Prevention
Program which had more of a campaigning character and so the networking was necessary
for desirable results. This association has converted into a forum for lobbying with the
government as and when the need arises.
4.3.5 ICICI Prudential: CST has taken up a project for life insurance of ICICI Prudential
insurance for getting the members of groups insured. The organisation gets some commission
-12-
Understanding
(22% of the premium) depending on the number of policies sold to the members. The
organisation is doing a very good job as they are selling the number of policies as asked by
the insurance company from time to time. At one time, CST was the second largest insurance
promoter in India for ICICI Prudential. This partnership makes an interesting study because
of the corporate and profit orientation of the partner as opposed to the not-for-profit
orientation of CST. However, the Director of CST is convinced about the provision of micro-
insurance for the women as a means for empowerment as it provides financial security in
these days of insecurity and it also provides CST with some financial support. ICICI
Prudential would find it very difficult to penetrate into the rural areas in order to sell its
insurance product and, therefore, it co-opts with NGOs which already have a presence in the
areas. For ICICI Prudential, it is a matter of minimizing its cost and for CST it is a means of
achieving its mission of community empowerment.
4.4 Indirect Participants
4.4.1 University of Twente: Although there is no direct understanding between the Twente
University and CST, the students of management there have been coming for internship at
CST regularly without fail. CST is well projected as a good organization to work during the
internship and the credit for this must go to the university also. To elaborate on the benefits
CST has received from the interns over a period of time; in 2004 the pilot study for micro-
credit was conducted by the students themselves without much help from any side. The result
was satisfactory in the sense that it served as the foundation to proceed further. As the
organization is bracing itself to launch the first phase of its micro-credit program, student
interns are currently working on to develop a FIS for this purpose.
5. DELIVERABLES
CST is a development organization and it has a strong presence in ten blocks of two districts
with around 2400 SHGs and about 36000 members (assuming 15 members per SHG). It
means that the organization work will have direct impact on 36000 families and indirectly on
many more. Given this wide coverage of beneficiaries, the services or products of CST may
have very good impact if planned properly. At the moment, the CST is focusing primarily on
only two services: SHG network expansion and maintenance as a way to provide poor
-13-
Understanding
women with better financial intermediation and to help them hedge the uncertainties of life
through insurance promotion.
6. ACTIVITIES
The activities of the organization can be seen in two phases, namely, pre and post 1996.
Before 1996, the main activities of the organization included creating awareness about the
social issues like child labor, female infanticide, AIDS prevention, environment protection
etc. All these activities were done through the formation of social action groups (SAGs) of
women from Yercaud and Kolli hills blocks (both are tribal areas).
The year 1996 brought a big change in the activity profile of the organization as it was the
year when CST became the implementing agency of a government project “Mahalir
Thittam.” This project aims at women empowerment by forming self help groups and
encouraging them to save and linking them with banks so that they can avail of easily
available loans at lower rate of interest as compared to informal money lenders.
In the second phase i.e., after the starting of this project, the working area of the organization
increased from two blocks to ten blocks in two districts. CST was allotted these ten blocks by
the Mahalir Thittam office. As the number of groups increased, the focus of the organization
shifted entirely towards this project. All the resources of the organization had to be diverted
to this project. The activities performed by the organization under this project were the
formation of the self help groups, their nurturing, providing bank linkage and monitoring the
groups. After this project has been taken up, it has become the flagship programme, however
it did not sideline other projects. CST was, even otherwise, picking projects whenever it
could from the government. As the organisation had already started working with social
action groups prior to Mahalir Thittam, it did not have much of a problem in adapting to the
new project. However, initial months required many new staff members as the area of
operation increased suddenly. The details of the various activities performed by CST are
given below:
Under formation of groups, the field staff of CST visits the villages to mobilize people to
form groups by creating awareness about the importance of savings and the benefits which
-14-
Understanding
they can obtain like easy and cheap loans. After that the groups are linked to the banks by
opening an account. The fulfilling of formalities of opening account is helped by the
organization and the group is introduced by the block coordinator.
During the initial stages of a group, the animator and representative of the group are trained
regarding maintenance of records (7 records) of the SHG. In addition to this, there are
trainings for SHG members like EDP (Entrepreneurship Development Programme) and VTP
(Vocational Training Programme). As part of EDP training, members are given training
regarding the various basic concepts necessary for setting up a new business, generally, a
micro enterprise. VTP training is given to members to gain skills in activities like masala
powder making, tailoring, cleaning powder making, embroidery etc. The activities, for which
VTP training is to be given, are decided by the government. The Assistant Block
Coordinators act as trainers in these training programmes. They are given training by the
Mahalir Thittam office. For VTP, sometimes external trainers are arranged by CST.
Once the groups are linked to the bank, the process of loan disbursal starts by first grading of
the groups by the block coordinators along with the Block Development Officer. Grading is
done on the parameters already given by the Mahalir Thittam office which include repayment
record of the internal loans of the group, regularity of meetings, savings, attendance of the
members, maintenance of record books etc. After the grading, the groups are recommended
for loan by the block office.
Monitoring of the groups is done by the organization through regular visits of field
supervisors to the groups. There is a system of internal auditing wherein record books of the
groups are checked at the block office. Further the organization helps the groups getting their
record books audited from an external auditor annually at the head office at Salem.
The organization has to form the Panchayat level federation (PLF) of groups falling under
that Panchayat. This federation is formed with the long term objective of making the SHG
movement a people owned organisation at the block level. With the same objective and also
to review the performance of various groups and pass on any relevant information, monthly
meeting of all the groups is conducted at the block level in which the animators and the
representatives of all the groups are present. CST encourages common savings at the
-15-
Understanding
Panchayat and block level so that common costs like expenses on federation meetings,
celebration of women’s day etc., can be taken care of.
After the formation of SHGs, a number of government projects are routed through them. For
such projects, the NGO is given various roles like identification of prospective beneficiaries
etc. The organisation started life insurance program for SHG members in collaboration with
ICICI Prudential Life Insurance. The field supervisors tell people about the importance of
insurance and terms and conditions. They also collect premiums from the members and pass
it on to the insurance company through the block coordinators. Similarly the insurance
policies are sent to head office and are then passed to the members through the block
coordinators and field supervisors.
7. ENABLERS
7.1 Infrastructure
As a corollary to its financial condition, there is not much of own infrastructure for the
organization to boast of. The office spaces are rented and the furniture is also kept at its
minimum. With the disbursal of the grant for its new micro-credit initiative, the organisation
has recently acquired three new computers at its head office with a broadband internet
connection. These have become necessary for the FIS that is being developed and the MIS
that is yet to be developed.
7.2 Information
The basic information relating to groups’ savings, meetings and repayment etc is available
with field supervisors which they get from the groups during their visits. The field
supervisors record the relevant figures from the record books of the groups and pass it on to
the block coordinator. The block coordinator also gets information about the group from
BLCC meeting which is held very month at the block office. There is a review meeting every
week for BCOs which takes place at the head office in Salem. During this meeting the
information is passed on to the district coordinator. Any information which has to be passed
on to the groups from the head office is also passed to BCOs in this meeting, who in turn pass
-16-
Understanding
it to the groups through filed supervisors to animators or representatives. During this phase,
there is scope for distortion because the animators and representatives can pass on the
information in such a manner that either they or their supporters can garner the benefits. For
instance, a government scheme to provide pucca houses for the scheduled caste community
would require certain number of beneficiaries from each of the selected groups. The
animators would convey the information in such a way that people of their choice become the
beneficiaries of the scheme. Such instances have been reported by certain groups and the way
in which certain meetings occurred and the way in which the information was being passed
testified this distortion.
The information base of the organisation consists of the entire records of the group including
their savings, loan history, their skill base and the problems faced. Apart from what is on
record, the vast experience that has been gained by the organisation in social awareness
activities and SHG promotion are a veritable source of information for anyone interested in
similar activities
7.3 Skills
There are no professionals in the organisation. Education was not the criteria for the
recruitment but the ability to communicate with the villagers and ability to move around the
villages were the main criteria. The staff developed necessary skills like mobilizing people,
generating brief reports on groups and communication. The BCOs have developed
managerial skills as they are the heads of all activities at the block level. These skills are not
organisation specific. However, the fact that employees at times occupy more than one
position has made them multi-skilled. These skills have been a result of practice and informal
on-the-job training by the Director from time to time.
7.4 Core competencies
-17-
Understanding
The core competency of the organisation can be seen as its people mobilization skills at the
village level and this can be seen in promotion of around 2500 SHGs in a span of seven
years. Considering the constraints under which the organisation has been functioning, this is
no mean achievement and is a testimony to its competency. This social mobilization has
provided the organisation with necessary goodwill making it easy to implement its social
agenda, provided it generates the necessary financial support.
7.5 Financial Resources
From the financial statements of the past three years it has been found that there is an excess
of expenditure of around Rs. 8 lakhs which CST requires for carrying out the projects. To
fulfill this deficit, CST has to depend on some private donors and even loans from private
sources. But this source has been proving costly for the organization. It has also been found
that in the financial year 2003-04, the organization has improved its financial condition a lot
because last year they have earned a net surplus of around Rs.96000 while in the previous
two years it was incurring losses to the tune of around Rs 3 lakhs. As compared to the
previous year, CST’s operating expenses had increased but the grants received during last
year had increased in greater proportion. This can be the reason for the surplus generated last
year. CST has been able to reduce its operating and administrative expenses in the last two
years (2002-03, 2003-04) significantly. The primary reason for this is the discontinuation of
some projects in the recent years due to paucity of funds. At present the main project
undertaken by CST is Mahalir Thittam, so the major part of the grants is also being received
under this project only. Sometimes the organisation is also using the grant received under this
project for fulfilling the financial requirements of the other projects. The sources of funds for
CST are as follows:
7.5.1 Tamilnadu Social Welfare Board: The Tamil Nadu Social Welfare Board extends grants
for the crèche being run by CST, TNCDW for Mahalir Thittam (for group formation and
support cost and training). TNCDW (Tamilnadu Corporation for Development of Women)
was established for the empowerment of women in December 1983 by the Government of
Tamil Nadu. TNCDW extends grants for the group support costs, EDP training, A&R and
SHG training. This is the major source of funding for CST.
-18-
Understanding
7.5.2 Private donations: The organisation also receives some donations from private donors
which vary from year to year but it proves quite handy in difficult times.
7.5.3 Referral fees: Under the micro insurance program CST gets a commission, which is
22% of the premium being paid by the members. This referral fees has also emerged as a
good source of income for the organisation at the time when it is facing quite difficult times
as far as financial resources are concerned.
7.5.4 Resource fees and training fees: Sometimes the organisation receives funds from
government on account of training fees for the training given to the group members.
The only assured source of fund for the organization is from the TNCDW but the amount is
not sufficient for meeting all the expenses and the organisation resorts to borrowings from
time to time (borrowings have been a regular feature in its balance sheets).
8. INFLUENCES
8.1 Constraints and pressures
8.1.1 External Origin: For the last many years, SHG promotion funded by the state
government has been the major project of CST which resulted in lot of intervention and
pressure from the government officials. CST has been facing lot of problems in getting the
funds released from the government officials as it is entirely in their hands. This has brought
in scope for lot of corrupt practices. According to the Director, those NGOs which satisfy the
wants of these officials receive the funds fully and in time. Another problem comes due to the
importance being attached to the Self Help Groups by the politicians (vote bank politics) as
they try to claim ownership of the groups which sometimes even results in negative
propaganda against CST.
8.1.2 Internal Origin: Two kinds of constraints of internal origin have been identified for CST
which have been affecting its performance.
-19-
Understanding
8.1.2.1 Lack of resources: CST started its activities with some borrowed funds and as a matter
of its policy it has never gone for grants and foreign funds to meet its developmental
obligations. But these funds proved too meager for the organization to manage its activities.
In 1996, when it took up Mahalir Thittam programme sponsored by government, funds
started flowing in and they proved adequate for initial few years but later, they became
irregular and inadequate. Absence of any regular source of funds has always been a big
challenge before CST which resulted in shelving of many programmes which were started
keeping in view the requirements of the community. Another consequence of this paucity of
funds was the inability of the organization to recruit professionals for its activities. None of
the staff has any professional qualification like a master degree in social work or
management. Even the existing staff has not received any professional training, both on and
off the job. As a result, very ad hoc style of functioning is visible at all levels of the
organization. For example, the way in which weekly review meeting is conducted has not yet
been formalized despite it being a regular affair since many years. Paucity of funds is also the
reason why organization has not been able to acquire basic infrastructure like vehicles for the
field staff in remote areas, telecommunication facility at the block level etc.
8.1.2.2 Internal policies and rules: One of the important policies in CST is to recruit staff
from the local level and preferably women from the SHGs. It reduces the cost of recruitment
and selection for the organization, and also the kind of initiation that is required. A person not
from local level would have a longer learning curve in getting acquainted with the local
conditions, culture & traditions etc. As a result, most of the block level staff have risen to
their current position from the level of animators of SHGs. The organisation considers this to
be empowerment, which is its mission. However, this is a self-imposed constraint as this
policy has resulted in the poor quality of staff that have been reined in by the government
officials at the local level into the vortex of corruption that plagues the government. The
organization has to think of ways in which this tendency can be curbed. A second unwritten
policy is that the organisation never fires employees. They are only put on part-time basis for
certain time or they are demoted for non-performance. This has led to complacence on the
part of the staff in their duties and responsibilities. The Director believes that the employees
are competent and good by nature, but have been corrupted by the government affiliation. So
he believes that they should not be fired. Moreover, the fact that all his woman employees are
-20-
Understanding
from modest backgrounds makes them examples of empowerment which is the mission of the
organisation.
8.2 Enforcers
All the projects undertaken by the organization are not self initiated. The NGO only acts as
the facilitator and as an implementing agency for the projects designed by external agencies,
they being government departments like Tamilnadu Women Development Corporation,
Tamilnadu Social Welfare Board, Tamilnadu Adi Dravida Housing Corporation, Central
Social Welfare Board, Nabard Etc. So, it is but natural for the District Collector, Project
officer DRDA, and other bureaucrats in the above-mentioned agencies to have an
overarching control over CST. As a corollary to this, government has imposed certain
projects on CST, which it would have not taken up otherwise.
8.3 Risks and threats
SHGs in Tamilnadu have been actively promoted by the NGOs, both on their own and as
facilitators of the government Mahalir Thittam programme. These have become channels for
the development agenda of the government and the NGOs. As mentioned earlier, the
government has control over the SHGs of the Mahalir Thittam project leaving CST little
leeway in implementing its own agenda both in terms of the choice of areas and choice of
beneficiaries. For example, some of the areas in Yercaud where CST had its presence were
allocated by the government to another NGO. Moreover, there is a constant threat from other
NGOs who are not part of Mahalir Thittam as they view experienced SHGs as the right
channels for implementing their own development agenda. CST had experience of such
threats earlier in its Kolli Hills area where many NGOs have their operations in place. Due to
the above-mentioned constraints, the association between the SHGs and CST is not so strong
to check this phenomenon of takeover of groups, although on a limited scale.
The field level work is heavily concentrated in the hands of the block level coordinators
which make them indispensable for the organization due to the absence of any second in
command. This has often resulted in paralyzing the working in the block in absence of the
block coordinator. CST has recently gone for a new position called the Assistant Block
-21-
Understanding
Coordinator to address this problem. However in a couple of blocks where the terrain is still
not easily negotiable, field supervisors have become indispensable. Recently, as one of the
field supervisors in Kolli Hills – a tribal block – was away from work due to a serious
personal problem, the entire work in that block came to a grinding halt.
One of the threats that the organization faces is the problem in transference of right
information from the field level to the headquarters. There is no mechanism to check the
veracity of the information being passed about the groups and also the responsibilities of the
field supervisors to the Director. The Director has to believe what is reported by the block
coordinators who work in close association with the field supervisors. Because of this,
monitoring of the field level staff gets affected and it has the potential to create bigger
problems for the organization in the form of alienation of the groups.
8.4 Opportunities
With the SHG movement becoming very popular in this part of the country and financial
institutions competing to provide funds for SHG-based lending, organizations like CST have
a wide range of opportunities to strengthen their activities, both in terms of the geographical
spread and the number of groups promoted. This can be seen in the current rate of growth –
from 200 SHGs in 1997 to 2500 SHGs in 2005 – which can be maintained, if not improved.
The organization has demonstrated its strength in SHG-related activities by covering about
half of its nearly 40,000 SHG women under the insurance policy in collaboration with ICICI-
Prudential Ltd. Normally, it would take anywhere from a few months to even a couple of
years for organizations like ICICI to enter the villages and market their life insurance
product. Add to this, the negative emotions attached in our country with death and associated
monetary returns from life insurance; it would become more difficult to penetrate the rural
areas with such a product. CST has taken advantage of its association with the groups to
promote this product which is beneficial not only to the SHG women, but also to itself.
The current Micro-credit initiative, funded by loan from Rabo Bank, Netherlands, is the result
of such an opportunity that has been pursued since the past three to four years. The
organization’s experience with the government in SHG promotion has always put CST in a
constrained work environment. The current macroeconomic scenario and the regulatory
-22-
Understanding
environment that has become favorable for Micro Finance Institutions has provided an
opportunity for CST to shift its micro-credit activities to a different legal environment that
could relieve it from these constraints. This has been elaborated later in the section on
organisation change.
In addition to this, the experience the organization has had in the past in handling various
projects, ranging from Child Development Crèche to Community Health Action Project has
prepared it to take up community development projects on a larger scale.
Viewing the scope for replicating its activities elsewhere, the organization has set its sights on
the neighboring states of Karnataka and Andhra Pradesh. However, this is not an easy option
considering the capabilities the organisation currently has.
8.5 Competitors
As mentioned above, CST has been facing competition from other NGOs who have been
alluring SHGs formed by CST. Especially in blocks like Yercaud and Kolli Hills which are
highly inaccessible and which are characterized by immense biodiversity, the competition for
gaining entry points for NGOs has been high. Naturally, existing SHGs have become targets
for poaching by other NGOs. In this case, those NGOs with ample foreign funds have been
major competitors with the freebies they offer to entice groups indicating a not very strong
linkage between the organization and SHGs in certain areas.
9. CULTURE
9.1 Management style
The way things are carried on at CST can be said to be autocratic at the top level. This can be
attributed to the fact that there is no second rung of management which is aware of the policy
level information and the macro environment in which the organization is functioning. As a
result there is a huge gap in terms of knowledge base and the decision making capability
between the Director and the next level staff of the organization. This has naturally led to
autocratic style of functioning of the Director. Once the policies and projects to be taken up
-23-
Understanding
by the organization are decided and allocated to the blocks, the block coordinators work with
full independence with the only constraint being the targets decided by the Director. It has
been observed that the block level staff work more closely with the block level government
officials and this has led to their bureaucratic-like functioning. And the overarching control
that the block coordinators have over the choice of beneficiaries of various projects has led to
nepotistic kind of functioning of the block level staff. It has been clearly found that some
groups have been more patronized than others by the BCO and currently the organisation
does not have the means to make its activities really targeted at the poor.
9.2 Rules and Customs
The organization does not have a written manual of rules, regulations and procedures. Two
things are contributing to this: first being the lack of clear job description in the organization
and second being the non-existence of a formal monitoring mechanism to check whether the
rules are being followed either formally or informally. The Director says, “Once an employee
joins, he/she is told about the rules and regulations as and when the need arises. However, I
am not able to make them follow the rules and regulations as I do not know what they are
doing at the block level.” One more important thing is that most of the work of the
organization is on the field and involves interacting with women in the villages. How
efficiently the staff have been working would be dependent on whether they succeed in
making these meetings happen. Most of the women members of SHGs who go for some kind
of labor-based work will be available at home only after 3 pm and this makes meeting
difficult. This has led to the visits becoming a formality where-in the field-level employees
visit the animators and representatives only or at times one cluster assistant who collects the
books of all the groups in the area and come back with a report. Therefore, the rule of visiting
the groups once in a month has become a mere formality.
9.3 Social Behavior
The first thing that strikes any visitor to any of the offices is the high level of informality and
family like interactions amongst the employees. As rarely seen in an organization, the
employees – all of them women – refer each other as ‘Akka’ which means sister. The reason
that the field level staff is recruited by the officials at the block level from their acquaintances
-24-
Understanding
helps in the non-existence of superior and subordinate relationship. Same amount of
informality goes in the relationship between the groups and the staff members. One of the
primary reasons for the informality at this level is because the staff are mostly from the group
members and so are local people. One other reason is that the hierarchy in the staff is strictly
not established and responsibilities are easily transferred from person to person.
9.4 Attitude of the work force
The motivation for the staff comes more from extraneous forces and less from internal forces.
i.e., most of the staff behave like government officials while dealing with the groups and
there doesn’t seem to be any internal motivation for doing any social work. To elaborate on
this, the grading of the groups for availing the loans from financial institutions is in the hands
of the BCO and the BDO. There have been regularly reported instances of those groups,
which have greased the palms of both these officials, getting loans easily. The lack of a fool-
proof monitoring system has added to the proliferation of this phenomenon across almost all
the blocks. Naturally, this lack of internal motivation has led to staff working efficiently only
when they are pushed or supervised by the Director or other higher –ups.
One answer that most of the employees give when asked about what motivates them is the
nature of the job which they equate to social work. However, the actual functioning does not
reflect this attitude as they work like government staff doling out benefits to targeted
beneficiaries. Although not as a hierarchy, there is a satisfaction of the employees’ needs that
appear in Maslow’s theory. As mentioned elsewhere, the job gives them good monetary
benefits and also security, although not in the legal sense. The organization has rarely fired
any full-time employee till now and only part-time employees have been removed in times of
financial stress. Only their responsibilities have been scaled down when found delinquent on
duty.
10. INFERENCES FROM THE ORGANISATION UNDERSTANDING

COMPONENT
-25-
Understanding
The history of the organization provides an example of how external environment has played
a critical role in its life. Initially, the work was more of an extension of the activist role of the
founder where in sensitization of the tribals, especially children and women, about their
rights was taken up. Also, small projects like establishing a child development centre,
initiating a village development programme by forming social action groups were taken up,
although on a modest scale. The dynamism and the commitment of the founder who also
worked as a field level worker established CST as a credible organization, sincere in its
objective of community empowerment.
However, the financial position was under severe stress as the funds released under the small
projects were not enough to carry out its consultative programmes for child and women’s
rights. The organization carried on with borrowed funds from friends and well-wishers, who
were part of a group referred to as “Friends of CST”. For the first six years, the organization
was literally on a “hand-to-mouth” existence. The natural question that arose was why CST
did not go for grant funds from external agencies. The founder’s ideological belief in
Swadeshi and Gandhian thoughts made it a policy of the organization not to go for foreign
funding, and that too, grant funding.
In 1996, the Tamilnadu government initiated its Mahalir Thittam project for promoting SHGs
across the state. The organization could not visualize the control which the organization was
going to pass on to the government by agreeing for this arrangement. The organization had
the capability to work in two blocks of Yercaud and Kolli Hills only. The government had
then allotted eight more blocks which CST had accepted with apprehension as to how it could
manage this increased responsibility (the then government official was very supportive and
ensured continued support). The organization had to prepare itself for this new growth at a
very short notice and went in for recruitment on larger scale. However, the job description
was not in place and roles and responsibilities were not clearly defined leading to employees
being given new responsibilities from time to time or shifted from one responsibility to toher
very frequently. This had led to a kind of dissonance leading to a high degree of turnover.
However, the organization somehow resorted to financial jugglery and survived its financial
problems for the period 1996-2001. In 2001, with a change in government policies, the
funding for promoting SHGs reduced and again the organization was into financial problems
-26-
Understanding
that plagued it earlier. Occasionally, its SHG base fetched some projects like the Community
Health Action Project (CHEAP) and Aids Prevention Programme which helped it tide
through its financial problems. Only recently have some substantial projects (micro-insurance
of ICICI-Prudential and micro-credit initiative with the help of RaboBank) come its way with
ample funding that the organization is slowly coming out of its financial stress. Even these
initiatives were not part of a strategy by the management, but because of opportunities from
outside. For instance, the micro-credit initiative was the brain child of an international intern
from Holland. She had prepared the proposal and networked with funding agencies to finally
get it approved by a Dutch bank. The question that naturally arose was, “What if the intern
never came to CST?” One common thread that runs through all these developments is the
organisation’s lack of a clear strategy to proactively take up activities that could match its
vision and mission. It is for the same reason that it took up whatever opportunities came its
way and thereby, got constrained by the influences of the external agencies that provided it
these opportunities, and in this case, the main agency has been Tamilnadu government.
Another important learning has been how lack of a team of professionals can cripple the
organization. The founder of the organization has lofty ideals about community
empowerment which he could not transfer to the subordinate staff. He, therefore, had to
believe in ideas that were provided by people from outside the organization. Due to the poor
remuneration structure, the quality of staff also turned out to be poor. This naturally affected
the way things are done. Lack of well-defined systems for recruitment, selection, monitoring
and a clear mismatch between the objectives and policies had made the organization a
struggler even after fifteen years of its establishment. Added to this fact is the lack of clearly
written job description, roles and responsibilities and performance appraisal systems leading
to a very ad hoc way of performing on the job. When asked about the existence of a
monitoring mechanism for employees in the organization, the Director’s reply was: “When
something comes to my mind about how I can monitor the employees, I implement it. For
instance, when I found that employees at the block level were not making themselves
available in the office, the Director introduced a system by which every day the employees
should call from the block in the morning to inform their time of coming to the office.” When
asked how he would make sure whether they were calling from near the office, his reply was,
“I will make a surprise call back to the number from which the call was received to check
this.” However, what if the staff members just came to the office to give a call and then go
-27-
Understanding
back? For that the Director said, “I cannot do anything in this regard.” Despite this glaring
lack of systems, one important monitoring mechanism devised by the Director was to
randomly write letters to group members to get feedback about the visits of staff members.
This could have been a good monitoring mechanism had the members been literate. As a
result, these letters invariably are replied by the animators or representatives who, normally,
are in the good books of the block level staff. So, it is intuition and informality that
characterizes the working of the organization.
11. LEARNINGS FROM ORGANIZATIONAL THEORY PERSPECTIVE
In this section, we try to blend our learning’s from Organizational Theory as a subject and our
understanding based on experience with the organization. A small organization would ideally
not be amenable to apply concepts of Organizational Theory and therefore we came across
many inconsistencies. Even these inconsistencies have been good learnings which are
documented below:
11.1 Organisation Change
The organization is currently in the process of a change in its portfolio of its activities which
requires changes in size, structure, style etc., and how the organization is orchestrating this
change is something that makes a good study.
What triggered the change is the organisation’s experience with the government coupled with
its financial problems and a chance encounter with a Dutch intern who suggested to the
organization to take up micro-credit with external loans. Another supportive aspect for this is
the conducive environment for microfinance related activities leading to emergence of lot of
microfinance institutions in India. The suffocation that the organization experienced with the
government has set the Director to think about ways in which he could move out of the
control of the government and work with more independence towards its goal of community
empowerment. However, this requires financial support and the organization would not go for
foreign grants which, according to the Director, come with a “hidden agenda”. The
organization, during its experience with the SHGs realized that the existing avenues are not
able to meet the demand of credit of the poor in its area of operations, which is true with
-28-
Understanding
almost all regions of our country. During 2001, an intern from Netherlands was with CST and
she internalized these experiences to come out with a proposal for starting a micro-credit
venture by CST. With the help of Indian Rose Foundation for which she started working later
on, the organization had sent the proposal to many Indian and international financial
institutions. Only after persistent efforts was CST able to get to Rabo Bank which came up
with the funding and with some conditions like loans only for income-generating activities
and with a people-oriented legal structure.
After the pilot project involving 50 loans was found to be successful, Rabo Bank has agreed
to extend support for thousand loans in the first year and two thousand in the second year and
it promised to increase this quantum in the coming years. However, this change requires an
addition of staff members who can handle the micro-credit operations at the head office. A
Project Manager and one accounting professionals have been recruited by CST for this
purpose and they would be working at the head office and the Project Manager would
supervise the respective Block Coordinators who handle the disbursal and repayment
operations at the block level. Professionalisation of the staff to handle the loans just like a
financial institution does (which was not the case earlier) require additional capacity building.
New systems like computer-based Financial Information System and Management
Information System are required to monitor this project. Not even the Director, leave aside
the block-level staff, is acquainted with computers. Getting acquainted with computers and
then working like a professional institution is going to be a big challenge. When asked about
computers, one of the BCOs said that she does not like these computers as she is afraid of
using such electronic gadgets. This initial reluctance to technology is not uncommon, but the
organization would have to invest in training of staff members to overcome this obstacle.
A typical organization change process as depicted in Figure 3 is already shaping up in the

organization. This change is something drastic for the organization and has to be handled
prudently. Currently, the Director is initiating the staff into new ways of handling SHG
members and the incentives being used are salary hike, training and support. These help the
-29-
Understanding
Forces Initiating
Feedback Change
Organisation’s
experiences and
opportunities in MF
Change Agents
Director
Foreign Interns
What is to be
changed?
Organisation structure
Processes and Systems
Change Process Implementation Tactics
Unfreeze – Move -- Refreeze Edict
Change
New MFI
Figure 3
organization in unfreezing and moving to the new stage. However, whether these would be
successful or not is again to be seen as this requires a transformation from the present style of
working at the block level where there is not much responsibility, but only power to a new
style that involves lot of responsibility and thereby, accountability. The staff is slowly able to
understand the what and how of the project and the Director’s seriousness has helped in this
regard. How far the increased salary would match the expectations of the staff and how
-30-
Understanding
effective the MIS would track the performance at the block level would decide the success or
otherwise of the change process.
As far as resources for this change process are concerned, CST is receiving a grant for startup
costs, training, and organization development and acquiring additional infrastructure from
Rabo Bank and Indian Rose Foundation.
11.2 Organisation Effectiveness
The criticality of one of the players in the specific environment in which CST works, i.e., the
government, for the survival till now makes the strategic constituencies approach apt for
studying its effectiveness. CST has been satisfying the requirements of the Mahalir Thittam
programme and other earlier programmes of the government from whom it got its support for
its continuous existence. Although there are other players in the environment like the banks,
financial institutions and other NGOs, it sought to appease the government from time to time
as it could threaten its existence. Also the support of other institutions, mainly the banks, is
linked to its support from the government (Government nominates specific NGOs for
carrying out its activities in specific areas and only these are readily recognized by the banks)
making the government not just strategic, but also a critical constituency.
Moreover, the kind of structure – in terms of spatial differentiation – in which the

organization is working, has led to different perceptions of environment at different levels.
While the government policies, higher level bureaucrats and other NGOs form the
environment as far as the Director is concerned, the local level block development officers
and the bank managers of the local branches form the environment for the block level staff.
No attempt has been made to reconcile these differences in perception so that the
organization could effectively cushion itself from recurring environmental uncertainties.
As there are no ample resources for this small organization, it makes it all the more
imperative for it to be highly efficient. As CST does not have any influence on the
environment, unlike larger organizations, it should have had a strong environmental
monitoring system in built into its structural design. This requires vision and also resources,
which are scarce for an organization like CST.
-31-
Understanding
The capacity of the environment has been rich – there was enough scope for developmental
work – and growing when CST started its work. Down the line, within these fifteen years, too
many NGOs have started operations in the south in general and Tamilnadu in particular,
making the environment very scarce i.e., a kind of saturation in terms of the reach of
developmental agencies is being talked about in Tamilnadu. In the words of Anant Narayana
Sharma, a development consultant based in Tamilnadu, “Developmental agencies are slowly
moving to the northern states as they see less scope in Tamilnadu because of proliferation of
NGOs.” This scarce capacity of the environment combined with scarcity of internal resources
calls for efficiency of operations and CST is facing its problems because of this lack of
efficiency. Added to the capacity of the environment is volatility which represents the degree
of unpredictable change in the environment. Although the environment has moved from
stability and simplicity to dynamism and complexity with the entry of varied and vested
interests in the SHG movement in Tamilnadu (the political parties view these as vote banks
and other NGOs with varied agendas view these as the apt media for forwarding their own
agenda), the NGO had not prepared itself to handle this dynamism. Without a clear
environment handling mechanism in place and due to lack of other things like systems, ad
hoc functioning is not unexpected.
Viewed from a completely different perspective, the fact that the organization has survived a
good fifteen years, at times in extreme financial stress, indicates the resilience of the
organization. The environment was rich in the earlier years of the organisation’s life and it is
increasingly becoming leaner. It also means that indicators, either physical or financial, really
do not indicate the efficiency of NGOs which are for a larger social cause which is difficult to
quantify – only now the concept of social audit is picking up – and also not for profit. The
organization is considering the new microfinance initiative as a new lease of life, but is
treading into a different path where profits become important and the entire functioning must
be professionalized. How the organization is going to sail through this change and stabilize
would determine its resilience.
11.3 Strategy and structure
-32-
Understanding
Although the Miles and Snow typology of organizations may not be appropriate for non-
governmental organizations, the way in which CST perceived its environment and responded
to it makes it fall under the typology of “a reactor”. It started off as an organization with a
simple structure and this structure was suitable to the stable environment in which CST was
working fifteen years ago. The commitment of the initial years’ workforce was a major driver
for CST’s success in establishing itself as a credible community welfare organisation.
However, with changes in the environment and with government and other NGOs appearing
on the scene with their own agenda, CST should have modified itself and brought about
changes like formalization to effectively utilize its staff so that it could maintain its social
credibility among the target population. Like a typical reactor, the organization never
committed itself aggressively to a clear strategy of its own.
As the organization grew in size from 1996, there should have been a shift from direct
surveillance to formalization through specific rules and regulations. Surprisingly, the
organization, till date, does not have any job description, nor does it have any rule book.
Many attempts have been made to prepare manuals during the late ninties, but the turnover
was very high that such manuals never came through and later, finances were a problem to
go for such an exercise. Everything still is controlled by the Director and this control has not
been effective as the actual working of the different block-level staff is almost impossible to
come under unified control. As there is no steady pool of financial resources, the required
number of staff also could not be maintained leading to lack of role clarity (one person
playing multiple roles) and shuffling of responsibilities from time to time. Probably, any
NGO working in such an atmosphere in India would be facing the same problem and it would
be difficult to apply the concepts of Organisational Understanding in their literal sense in
such organizations. Typical of any small organization, there is very little horizontal, vertical
and spatial differentiation; and it is characterized by low formalization and high
centralization.
11.4 Culture
-33-
Understanding
Fifteen years is long enough for the organization to have evolved a culture of its own.
However, since its inception, the turnover rate has been so high that the employees who are
currently on roll do not have a sense of history and traditions so that a culture could have
evolved.
The two main influences on the way an organization performs are the individuals and the
organizational climate. Individuals tend to come already formed, in terms of character,
personality and temperament. Fundamental change in a person takes place only gradually, so
the only factor which can be changed is the style of the organisation. In an NGO like CST,
this style has to naturally come down from the Director, who is a committed individual and
whose simplistic and sincere life style should have reflected in the lifestyles of the staff
members. However, this is not the case because the place of work of majority of the staff is
away from the head office and also because they are more associated with the external
agencies at their work places and less with the Director. So, a clear government employee
style is visible in their way of functioning. When they visit the head office, they are very
submissive, but when they visit the groups, they are very authoritative a la middle level staff
of the government.
Charles B. Handy in his book Understanding Organizations, has classified organizations into
power, task, role and person types depending upon the kind of individuals heading the
organization and the shaping up of interactions with other employees. CST can be said to be
an example of the weakness of the power type which affected the organisation’s functioning.
Also known as the spider or club culture, it is best seen as a spider’s web with the boss of the
organisation in the centre surrounded by ever widening circles of others involved in the
organisation. The closer to the centre, the more influence one has. The organisational idea is
that the club exists to extend the persona of the boss. If he or she could do everything they
would. In CST, there were a few volunteers who shared the ideas of the Director and who
after a brief stint outside for purposes of education have come back to the organization and
they currently wield huge influence in the organization. At best such cultures are based on
trust, and communication is by a sense of telepathy. The Boss maintains freedom of
maneuver (and power) by writing little down, preferring to talk to people, sense their
reactions and infect them with his or her enthusiasms and passions.
-34-
Understanding
Ideally such organizations would have a rich personality and would be abound with almost
mythical stories and folklore of things that happened in the past. They can be exciting and
satisfying places to work if one is part of the club, and share the views and beliefs of the
Boss. Their great strength lies in the ability to respond rapidly and intuitively to crises or
opportunities because the lines of communication are short and decision making is
centralized. Recently certain problems in the Kolli Hills block were immediately taken up by
the Director and a huge damage was averted. It is a different story altogether as to whether
the organization is always capable of tackling the problems it faces, but this culture brings
problems to the fore immediately.
When an organisation is small such cultures can thrive, given that personality and speed of
response are crucial to success. However, the danger lies in the dominance of the character of
the boss. If the spider is weak, corrupt, and inept or chooses the wrong people to join the
club, then the organisation is weak, corrupt, inept and badly staffed. In the case of CST, the
boss is weak and chose the wrong people to whom he could not effectively transfer his ideas
and commitment.
12. CONCLUSION
The overbearing influence of the founder and his belief system has been very substantial and
it has been responsible for the organisation’s course since its existence. This, probably, is the
case with most of the small organisations. The need for professional assistance in the
organisation to develop proper systems for reporting, monitoring and performance appraisal
cannot be over stressed, especially in the context of the change towards establishing a
microfinance institution. More important is the need for financial stability which is necessary
for the organisation to break away from the constraining influence of the government which
is currently its main partner. This also becomes necessary for a relatively independent
existence of CST. Last but not the least is the resilience of the organisation as testified by its
survival for nearly fifteen years under stress and that too having reached around forty
thousand households, some of which are literally very remote from the mainstream.
References
-35-
Understanding
1. Robbins, Stephen P. (2003). ‘Organization Theory’ Prentice-hall of India Private Limited,
New Delhi.
2. Dowding, Howard . ‘The Universal Business Model’ Retrieved June 10, 2005, from
http://www.howarddowding.com
3. Handy, Charles B. ‘Summary of four organisation cultures’ Retrieved July 3, 2005, from
http://www.easterngp.co.uk/pages/resources/past/2002/documents/csPCM_3_Handycm1102.pdf.
4. Annual Reports of Community Services Trust from 1998 – 2004.
-36-

Ou CST Ou-Cst

Uploaded by

Document Information

Original Description:

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Ou CST Ou-Cst

Uploaded by

Copyright:

Available Formats

Organizational Understanding Component

Organisation Traineeship Segment

Organisation: Community Services Trust, Salem

Institute of Rural Management, Anand

Title: Organisation Understanding

Some of the important conclusions pertain to the importance of professional assistance,

S. No. Topic Page No.

1. CST: Community Services Trust

Time is a constraint, as a comprehensive study of an organization cannot be done within a

2.2 Vision, Mission and Core Objectives

3.1 Roles and responsibilities

Block Block Block Block

Block Field Auditors

3.3 Reporting Structure

4.3 Partners and Alliances

Community Schemes Govt. Official

4.4 Indirect Participants

7.4 Core competencies

7.5 Financial Resources

8.1 Constraints and pressures

8.3 Risks and threats

9.1 Management style

9.2 Rules and Customs

9.3 Social Behavior

9.4 Attitude of the work force

10. INFERENCES FROM THE ORGANISATION UNDERSTANDING

11. LEARNINGS FROM ORGANIZATIONAL THEORY PERSPECTIVE

11.1 Organisation Change

A typical organization change process as depicted in Figure 3 is already shaping up in the

Change Process Implementation Tactics

Unfreeze – Move -- Refreeze Edict

11.2 Organisation Effectiveness

Moreover, the kind of structure – in terms of spatial differentiation – in which the

11.3 Strategy and structure

4. Annual Reports of Community Services Trust from 1998 – 2004.

You might also like