Institutional Pressures and Strategic Responses: The transformation of an INGO

The International Non-Governmental Organization (INGO) is one of key actors in the development sector and for the past decade some development International NGOs have transformed into a national entity in the developing country they operate. This paper explores how and why the institutional pressures push the organization to take strategic responses through the transformation of organization structure. A single case study of one of the large INGO in Indonesia transforming into a local foundation is performed. Data compilation includes semi-structured interviews, observations and document analysis. Oliver’s (1991) and Goodstein (2017) model of strategic choice provides the theoretical framework on which organization strategic responses to acquiesce, compromise, avoid, reject and manipulate and the main factors of institutional pressures are discussed. In the transformation circumstance, the organization implements several strategy models to tackle multi-faceted institutional pressures. The findings suggest that the organization transformation from the INGO to local organization, while appearing to be a major overhaul, in many aspects turned out to be a continuation of the existing international organization body. The study not only shows the importance of the strategic response taken by the organization, but particularly of ways to decentralize authority from the international parent organization to any new form of organization.