Fundação Empreender
SC, Brazil
&
Chamber of Crafts and Small Industries
(HWK) for Munich and Upper Bavaria
Organisational Development of Business
Associations (ACIs)
or
How to open the door for SMEs
Fundação Empreender, SC, Brasil / DOrg-82e.ppt
1
04/99
Thesis 1

“Business Associations in Latin America




are corrupt
are closed to SMEs
are inefficient
“Motivate and use them
to promote SMEs is impossible”
(E. Oehring, FUNDES, in 11/90 on a leisure
night on the beach in Fortaleza/CE, Brazil)
Fundação Empreender, SC, Brasil / DOrg-82e.ppt
2
04/99
In 1987 ACIs looked for
partnership with the HWK
because ...


Large companies needed better qualified
SMEs as suppliers outsourcing
The main problem of SMEs according to
ACIs:
lack of adequate professional business
training
Fundação Empreender, SC, Brasil / DOrg-82e.ppt
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04/99
1989 : ZOPP III


Definition of a
Project to train SMEs
Instruments



courses with HWK
masters / technicians
practical training in
HWK member SMEs
etc.
Fundação Empreender, SC, Brasil / DOrg-82e.ppt
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04/99
1989 : ZOPP III


Changes in the ACIs themselves are out
of imagination and question!
Why?



SMEs are the target group they have to change
ACIs support SMEs but do not want to get
involved
ACIs do not perceive themselves as an object
of the project
Fundação Empreender, SC, Brasil / DOrg-82e.ppt
5
04/99
At the beginning of the project
in 1991 ....



The president of the ACI:
“We do not want a revolution !!!”
The executive director of the ACI:
“We do not want to change the
characteristics of the ACI”
Consequence for the project team:
The word CHANGE
is a TABOO
Fundação Empreender, SC, Brasil / DOrg-82e.ppt
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04/99
Organisational Development
- what is it?

A planned process to change





the behaviour, attitudes and capacities of the
actors in the organisation
the culture and attitudes of the organisation
the organisation and communication structures
the strategies
Objective: To improve both internal and
external performance of the organisation
Fundação Empreender, SC, Brasil / DOrg-82e.ppt
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04/99
Some basic elements of OD

Organisation members’ participation





in identifying problems
in developing solutions
in implementing changes
A moderator / consultant accompanies
the process
OD is a learning process within the
organisation
Fundação Empreender, SC, Brasil / DOrg-82e.ppt
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04/99
Prerequisites to start an OD
process

The will



to learn
to change the organisation
(enterprise / business association)
due to


internal / external problems or
new visions
Fundação Empreender, SC, Brasil / DOrg-82e.ppt
9
04/99
Prerequisite to start an OD process

A problem:
future situation
+
negative situation, the
organisation suffers
vision
desired situation
-
current situation

problem
adequate situation,
but the organisation
wants to improve
more
current situation
Fundação Empreender, SC, Brasil / DOrg-82e.ppt
A vision:
10
04/99
Thesis 2

An organisation


content with its performance
without problems / without visions
which wants to contribute to the
development of others (i.e. SME)
during the analysis of the project scope,
does not permit discussions
about itself as a target for change
“The problems belong to the others!”
Fundação Empreender, SC, Brasil / DOrg-82e.ppt
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04/99
Thesis 2

Effects:



The subject OD does not appear during the
ZOPP
Project members (counterparts - international
consultants)
- are not selected
- are not prepared to deal with OD
When conflicts and organisational problems
come up nobody is ready to treat them
Fundação Empreender, SC, Brasil / DOrg-82e.ppt
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04/99
Thesis 3


German project staff does not do what
deemed necessary
It does





what has learned
what it is good at
what is easy to do
what leads to immediate success
Therefore, it does not do
Organisational Development
Fundação Empreender, SC, Brasil / DOrg-82e.ppt
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04/99
1991: Orientation Phase

“The HWK / GTZ Project analysis”



Key question:
What is going to happen in some SMEs
after three years of training?
Answer:
Nothing!
Consequence:
Lack of sustainability
Fundação Empreender, SC, Brasil / DOrg-82e.ppt
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04/99
The logic of the “HWK / GTZ
Project”

An unsustainable project
SME level
after
Project: SME improvement
through German know how
before
Time
Fundação Empreender, SC, Brasil / DOrg-82e.ppt
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04/99
The logic of a sustainable
“ACIs and SMEs Project ”

A project with effects in the long run
after
SME level
the process keeps
going by itself
before
Project: Start a development
process
Time
Fundação Empreender, SC, Brasil / DOrg-82e.ppt
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04/99
This correspondents with new concepts
about the development of organisations

The institution as learning organisation
continual
improvement
Know how
traditional step by
step improvement
Fundação Empreender, SC, Brasil / DOrg-82e.ppt
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04/99
Consequence

The logic of the “HWK / GTZ Project”
Forget ZOPP III
after
Project: SME Improvement
before
Think it
over again!!
Fundação Empreender, SC, Brasil / DOrg-82e.ppt
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04/99
The search for a vision of a project
starts up ...

With whom discuss
and experiment ?
Project
Team
ACI
Board of Directors
Executive Director
Employees
SME
Fundação Empreender, SC, Brasil / DOrg-82e.ppt
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04/99
Rule: Integrate the Executive
Director to gain trust and
confidence!

strategy
“from middle both ways”
Project
Team
ACI
Board of Directors
Executive Director
Employees
SME
Fundação Empreender, SC, Brasil / DOrg-82e.ppt
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04/99
Analysis: The participating agents
in the know how transfer process
SME
Know how
institutions
Business Associations
(ACIs)
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04/99
SME’ Characteristics




Poor school education and professional
training: did not learn how to learn,
how to look for new know how
and how to apply it
Isolated: Other SMEs are seen as
competitors = personal enemies
Mistrusting business associations
Problems, needs and ideas are defined in
a diffuse and abstract manner
Fundação Empreender, SC, Brasil / DOrg-82e.ppt
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04/99
Know how institutions



Professional education and training
bodies (schools, universities etc.)
Consultants and tutors (firms and
freelancer)
Suppliers of raw material,
equipment and services
Fundação Empreender, SC, Brasil / DOrg-82e.ppt
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04/99
Characteristics of the know how
institutions




Are not familiar with SME’ reality
Define problems and needs of SMEs
“from Top to Bottom”
Offer products, services and know how
which they know to produce and
not which SMEs need
Do not feel the necessity to actively offer
and sell their know how
Fundação Empreender, SC, Brasil / DOrg-82e.ppt
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04/99
Characteristics of the Associations
of Industry and Commerce (ACIs)






LOBBY
Only deal with ..............
Institutions of the elite,
closed to SMEs
Poor / not professionalized
Employees only administrate,
do not initiate, create ...
Do not know the affiliated SMEs
ACI
Function as social clubs rather
than business associations
Fundação Empreender, SC, Brasil / DOrg-82e.ppt
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04/99
Cooperation between institutions
does not work
SUPPLY
SME
Know how
institutions
DEMAND
INTERMEDIATE
Fundação Empreender, SC, Brasil / DOrg-82e.ppt
Business Associations
(ACIs)
26
04/99
A new vision for the ACIs

Lobby is not the only task
of a business association

They have two tasks:


LOBBY and
SERVICES for
affiliated members
LOBBY
ACI
SERVICE
Fundação Empreender, SC, Brasil / DOrg-82e.ppt
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04/99
Logic of the Development of
Associations of Entrepreneurs
Law of great number:
the more members,
the more influence
Lobby
in front of Government and
other groups of the society
ACI
Information / Consultation
Training / Support
More means
to finance more and
better services
Higher attractiveness for
Entrepreneurs
More members pay more
membership fees
Services
More Entrepreneurs apply for
membership
Fundação Empreender, SC, Brasil / DOrg-82e.ppt
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04/99
Thesis 4


The business associations have
never decided not to offer
services to their affiliated members
They don‘t offer services, because
they are not aware
that this is a fundamental task
of a business association
Fundação Empreender, SC, Brasil / DOrg-82e.ppt
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04/99
Development stages of an association
1. Stage
2. Stage
3. Stage
Situation Entrepreneurs
More members
Demands of the
and more external environment on
contacts cause
the members
more
provoke well preadministrative and pared, qualified
organisational
and founded
workloads
positions, which
(meetings, calls,
due to lack of time
letters etc.)
and specialisation
honoraries are not
able to elaborate
A businessman
The association Employment of a
initiates
rents an office
Secretary General
discussion of
In a further step it Eventually he
common points of contracts a (part
performs services
interest and the
time-) secretary
to the members
foundation of an
(legal / business
association
administration,
consultancy)
is small and
is small and
is larger and
homogeneous
homogeneous
homogeneous /
heterogeneous
observe in their
town problems,
which have
negative effects
on their business
(traffic, market,
taxes etc.)
Activity
The
number of
members
...
Activity of 100 % Lobby
the association
100 % Lobby
Fundação Empreender, SC, Brasil / DOrg-82e.ppt
75 % Lobby
25 % Service
30
4. Stage
5. Stage
The environment A complex and
produces pressure dynamic
to change for the
environment
members (new
causes high
laws,
pressure onto the
technologies,
members to
management).
change. The
They need
association has to
professionalised
act and lobby on
services
all political and
business levels
Employment of
A large number of
qualified
qualified staff form
consultants in
an organisation
different areas
with differentiated
functions and
Introduction of a
hierarchies
complex
organisation
Creation of a
service network
is large and
is very large and
heterogeneous
heterogeneous
50 % Lobby
50 % Service
25 % Lobby
75 % Service
04/99
Development stages of an association
1. Stage
Tasks of
the Board
of
Directors
Tasks of
the employees
Initiate
Define opinions
Decide
Represent
Administrate
Execute
Inapplicable
2. Stage
Initiate
Define opinions
Decide
Represent
Administrate
Execute
Administrate
Execute
3. Stage
Initiate
Define opinions
Decide
Represent
Initiate
Define opinions
Decide
Represent
Advise
Administrate
Execute
Initiate
Define opinions
Advise
Administrate
Execute
5. Stage
Initiate
Define opinions
Decide
Represent
Represent
Initiate
Define opinions
Advise
Administrate
Execute
on 75% of the
on 50% of the
on 25% of the
engagement and
engagement and
engagement and
quality of the
quality of the
quality of the
honoraries, on
honoraries, on
honoraries, on
25% of the
50% of the
75% of the
Secretary General professional staff
professional staff
The per- on 100% of the on 90% of the
formance engagement and engagement and
quality of the
quality of the
of the as- honoraries
honoraries, on
sociation
10% of the
secretary
depends
...
politic and
politic and
After the politic and
performance
of
performance
of
performance
election of
the association
the association
changes
a new
changes
changes
considerably
board ...
completely
completely
Fundação Empreender, SC, Brasil / DOrg-82e.ppt
4. Stage
31
politic and
politic and
performance
performance
changes few on
changes few on
short but more on short and long
long term
term
04/99
Where are the ACIs?

In 1991 out of 105 ACIs in Santa Catarina



98 are on stage 1 or 2
07 are close to stage 3
None is on stage 4
Fundação Empreender, SC, Brasil / DOrg-82e.ppt
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04/99
Ideas for a partnership project

ACIs change through an Organisation
Development Process and start to:





hire counsellors
professionalize its staff
integrate SMEs as members
offer services to affiliated members
They finance themselves through
membership and service fees
Fundação Empreender, SC, Brasil / DOrg-82e.ppt
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04/99
Instruments to initiate discussions
about changes within the ACIs

Provoke reflections by definition of the
terminology:






“It is not a GTZ project!
It is not a HWK project!
It is not a German project!
It is a Brazilian project!
It is an ACI project!
So, you are the ones to say what
to do and how!”
Fundação Empreender, SC, Brasil / DOrg-82e.ppt
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04/99
Instruments to initiate discussions
about changes within the ACIs

Speeches and presentations in the ACIs
about services offered by HWK to its
affiliated members


Effect: almost zero !!!!
Visit of ACIs representatives to HWK and
its institutional counterparts to get to know
the services and support network offered
to SME

Effect: Spark the debate on change in the ACIs!
Fundação Empreender, SC, Brasil / DOrg-82e.ppt
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04/99
Thesis 5

When starting a discussion about changes
in the organisation mind this:


rational arguments are less important:
if you want “A” you must do “B”
psychological elements are more important:
- trust amongst participants
- credibility on the part of the participating
institutions
Fundação Empreender, SC, Brasil / DOrg-82e.ppt
36
04/99
Question:

Why a Latin American business
association should trust in



GTZ
HWK
a consultancy firm in technical cooperation
to a point
to change its organisation ???
Fundação Empreender, SC, Brasil / DOrg-82e.ppt
37
04/99
Steps to a vision for SMEs!

Proposal: “We
research the SMEs’
needs in the areas of
management,
business
administration,
production and
sales!”
Fundação Empreender, SC, Brasil / DOrg-82e.ppt
38
04/99
Steps to a vision for SMEs!

Answer: “We
already know the
results. They are
always the same:
lack of credits,
technology, well
trained personnel
etc. This does not
help!”
Fundação Empreender, SC, Brasil / DOrg-82e.ppt
The project team
working
39
04/99
Thesis 6


SMEs only want to discuss those
problems and needs they perceive /
identify in a subjective manner
The identification of problems and needs
is the final outcome of a
communication process of the SME
with other people,
and not the beginning
Fundação Empreender, SC, Brasil / DOrg-82e.ppt
40
04/99
The alternative: a discussion
platform for the SMEs

Creation of organisational structures
within the ACI



SME’s industry branch working group
within similar business areas (Nucleus)
organised, managed, advised by a consultant
(ACI’s employee)
which permit and maintain a continuous
learning process
Fundação Empreender, SC, Brasil / DOrg-82e.ppt
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04/99
Task of a Nucleus counsellor


Initiate and manage a communication
process amongst entrepreneurs
= Moderation
Objective:



Identify common subjects and problems
Stimulate the exchange of information and
experiences
Perform decisions and organise activities
(training, visits to suppliers, fairs, etc.)
Fundação Empreender, SC, Brasil / DOrg-82e.ppt
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04/99
Task of a Nucleus counsellor

At the “right” moment


take part in the discussion actively
bring into the discussion
- questions,
- ideas,
- experiences,
- comparisons,
- proposals
= Counselling
Fundação Empreender, SC, Brasil / DOrg-82e.ppt
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04/99
The didactic



What I hear, I forget
What I see, I understand
What I do, I learn
(Confucius)
Fundação Empreender, SC, Brasil / DOrg-82e.ppt
44
04/99
Elements of group counselling

Key strategy to start with:


Keep the discussion focused on problems
SMEs have direct influence
(internal causes - good chance of success)
Avoid problems
on which SMEs do not have the power to
decide on their own, because their are out of
their hands
(external causes - small chance of success)
Fundação Empreender, SC, Brasil / DOrg-82e.ppt
45
04/99
The “Nucleus” in an ACI:
the basic idea

Through a “bottom to top” structure
strengthen the affiliated SMEs




demand for services in the ACI
evaluation of the ACI performance
influence on the ACI development
The membership paying
affiliated SME has the right
to demand, complain and
influence
Fundação Empreender, SC, Brasil / DOrg-82e.ppt
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04/99
Working strategy for the project
team


To develop ideas and assign its
responsibilities to the ACIs employees
does not work:
- lack of confidence, skilled personnel ...
The project team itself has to:
organise, invite, lead, advise, execute ...
... to demonstrate what works and how it
functions
Fundação Empreender, SC, Brasil / DOrg-82e.ppt
47
04/99
The first results

The Nucleus in the first year:




bakeries
jointers
plant producers
The Executive Director of the ACI:
“I did not know that
the SMEs do want and need us!"
Fundação Empreender, SC, Brasil / DOrg-82e.ppt
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04/99
After six months: ZOPP IV

ACIs decide to:






change the ACIs
professionalize them
stimulate SME’s membership
create “SMEs nucleus”
offer them services
The ACIs decide to be the target of a
project of organisational change
in order to improve SME’s performance
Fundação Empreender, SC, Brasil / DOrg-82e.ppt
49
04/99
The most important outcome



Nobody talks about the “HWK / GTZ
German project” anymore
Everybody talks about the
“ACIs Project”
This means:
the responsibility is
with the ACIs !
Fundação Empreender, SC, Brasil / DOrg-82e.ppt
50
04/99
... and today ...
Fundação Empreender, SC, Brasil / DOrg-82e.ppt
40
35
30
25
20
15
10
51
07.98
01.98
01.97
01.96
01.95
01.94
0
01.93
5
01.92

37 ACIs in
Santa Catarina
participate!
63 employees
are working in
the service area
(42 posts are
newly created)
02.91

04/99
... and today ...



the ACIs change their statutes in order to
affiliate SMEs as members
integrate SMEs in the board of directors
cooperate on the level of



presidents
executive directors
consultants
in the areas of lobby and services, planning
of activities, staff training etc.
Fundação Empreender, SC, Brasil / DOrg-82e.ppt
52
04/99
... and today ...

ACI Board of Directors plan
“Objectives and Targets”:
what do we want and
 by which activities can we reach the
objectives
on the subjects of
 lobby (economy and community)
 services to large, medium a small sized
enterprises
 organisational development of the ACI

Fundação Empreender, SC, Brasil / DOrg-82e.ppt
53
04/99
... and today ... the ACIs
… with 9.000 members increased its number
between 10% and 300% by 2.500 SME,
10.000
9.000
8.000
7.000
6.000
5.000
4.000
3.000
2.000
1.000
0
02.91
01.92
01.93
Fundação Empreender, SC, Brasil / DOrg-82e.ppt
01.94
01.95
54
01.96
01.97
01.98
07.98
04/99
... and today ...
200 nucleus in 59
business areas

200
3.000 SMEs
participating
3.000
2.750
175
2.500
2.250
150
2.000
1.750
125
100
Fundação Empreender, SC, Brasil / DOrg-82e.ppt
55
07.98
01.98
01.97
01.96
02.91
07.98
01.98
01.97
01.96
01.95
01.94
01.93
250
0
01.92
0
02.91
25
750
500
01.95
50
01.94
75
01.93
1.500
1.250
1.000
01.92

04/99
... and today ...

many nucleus activities







problem / solution discussion
training courses on subjects defined by
núcleo members
evaluation of participating SMEs enterprises
visits to suppliers
collective equipment purchasing
visits to national /international business fairs
etc . etc. ....
Fundação Empreender, SC, Brasil / DOrg-82e.ppt
56
04/99
... and today ...

Nucleus’ start to
lobby via ACIs to
influence politics
of know how
institutions
Suppliers
Schools
ACI
SME
Nucleus
Fundação Empreender, SC, Brasil / DOrg-82e.ppt
57
04/99
A communication, services and
influence network starts to work ...
SUPPLY
SME
Know how
institutions
DEMAND
INTERMEDIATE
Fundação Empreender, SC, Brasil / DOrg-82e.ppt
Business Associations
(ACIs)
58
04/99
... and today ... in the enterprises

Many changes
The joiners example:





Employees increased by
Products’ quality increased by
Work planning increased by
Changes (machines, lay-out,
installations)
80 %
Introduction of new technology and
products
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- 90 %
- 80 %
- 60 %
-
- 70 %
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Who contributes what?
gtz
HWK


Experience with
services for affiliated
SMEs
Serves as working
example of a business
association which gives
- credibility,
- confidence
in the organisational
change process
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

Intercultural aspects
Methodologies
- ZOPP
- Metaplan
- Group Consultancy
- CEFE
- Action Learning
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Four years later ...

ACIs in Santa Catarina




are open for SMEs
work more efficiently
offer services to SMEs
“Apparently you have found a way to get
in move the ACIs in order to contribute to
the development of SMEs”
(E. Oehring, after a training session in SC)
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Fundação Empreender
A Foundation of Associações Comerciais e Industriais (ACIs - Chambers of Industry and Commerce) in Santa
Catarina, Brazil, to promote and support business associations
In a partnership with the the Chamber of Arts and Crafts for Munich and Upper Bavaria, Munich
Supported by SEQUA, Bonn, and Federal Ministry for Economic Cooperation and Development, Bonn
The aim of the partnership project (which started in February 1991) is, inter alia, to diffuse experiences with
organisational development in business associations, and with their opening for small firms. We diffuse
our know-how via training courses, consultancy work, and publications.
This file is part of our material to present and illustrate our activities to professional and elected officials of
business associations, personnel from technical cooperation projects, and other people with an interest in
this field. We are involved in a constant process of elaborating and improving this material, and targeting
it to the demands of specific groups (in the file name, the first number indicates the year, the second the
version number). Currently, files are available in Portuguese, Spanish, German, and English.
You may use, copy, and change this file as you like (we do not insist on a copyright).
We would, however, like to ask you for the following: please send us a copy (as a file or printout) and
additional information if you use the file or parts of it. We need this feed-back to demonstrate the effects
of our work vis-à-vis those institutions which support the work of Fundação Empreender. Thank you!
The Fundação Empreender Team
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