Research Highlight
Untangling the Paradoxes of Global Challenges: Exploring organisational paradoxes in the context of a development NGO
Dr. Carolin Waldner, Junior Professor of Sustainability Management at ESCP Business School’s Berlin Campus, recently co-authored a groundbreaking study on how NGOs like Viva con Agua navigate complex global challenges. The research study, co-authored by Stephanie Schrage and Andreas Rasche, explores managing paradoxical tensions, such as balancing global solutions with local adaptation and evolving organizational identity while preserving core values.
This interview delves into their findings and their relevance for business leaders integrating sustainability into their strategies. Her insights provide valuable guidance on driving meaningful and lasting transformation within organizations.
Could you explain the concept of "paradox knots" in simpler terms?
In business, organisations often face “paradoxes” — situations where they must balance contradictory elements that are interrelated and persist over time. These opposing elements might come from conflicting stakeholder demands or competing organisational goals. While each need makes sense on its own, addressing both simultaneously creates ongoing tension because they affect each other.
We have analysed this through two paradoxes faced by Viva con Agua (VCA), a German NGO that works on water, sanitation, and hygiene projects in the Global South.
- The Global-Local Paradox
VCA aims to be efficient by using standardized educational materials across all project countries (the global approach). However, they also need to adapt their materials for each local context to be effective (the local approach). This creates a constant paradoxical tension between global synergies and local adaptation - a challenge familiar to many international organisations. - The Identity Elasticity Paradox
VCA faces a second challenge around organisational identity - maintaining who they are while opening their organizational identity to local partners. The organisation is strongly rooted in Hamburg's former working-class St. Pauli district and embodies local values as a part of its identity. In expanding into Uganda and other countries, they started to embrace new perspectives and values, which sometimes challenged their St. Pauli roots.
When multiple paradoxes interact and affect each other, we call this a "paradox knot". In VCA's case, their global-local paradox directly affects their identity paradox: the interplay between global synergies and local adaptation is closely linked with stretching their identity towards the Ugandan context while maintaining their St. Pauli-based values.
How can the idea of "knotting mechanisms" be applied to corporate strategy in multinational companies?
Our study identifies the concept of "knotting mechanisms"—organisational practices that connect different tensions and influence how salient they are for organisational actors.
We examined Viva con Agua during its early development work in Uganda, where the organisation faced a significant global-local paradox: how to balance global efficiency with local adaptation. In the beginning, the organisation's strong identity, closely linked in liberal St. Pauli values, was not significantly questioned.
However, to address the main global-local paradox, the organisation developed practices to expand its identity, including building local networks and empowering local team members. This meant that they increasingly included new perspectives, ideas, and values into their practices. This "identity stretching" knotting mechanism, while helping manage the global-local paradox, led to deeper questions about organisational identity, thus creating a new challenge: the identity-elasticity paradox—how to adapt to the Ugandan context while maintaining the organisation's core values.
In response to this challenge, the organisation started adapting its practices to fit Ugandan conditions and developed new, locally-tailored approaches. We termed these practices “contextualizing activities" mechanisms, as they are triggered by the identity elasticity paradox, which increases in salience, and influences the global-local paradox—how to be globally efficient with locally adapted practices.
This case study reflects challenges faced by many multinational corporations, where multiple tensions intersect. These include not only tensions between global efficiency and local adaptation, but also conflicts between stakeholder demands—such as ensuring fair working conditions and living wages while meeting customer expectations for low prices. Again, these tensions are intertwined, as living wage discussions need a certain degree of local adaptation, but low prices are only feasible with global synergies, and the organisation's identity may define how important payment of living wages and low prices are for a company.
Considering that managers can only address paradoxes if they are aware of them and know the different contradictory poles, understanding the knotting mechanisms in the context of multiple paradoxes can significantly help managers to handle paradoxical situations.
What role does cultural adaptation play in balancing global standards with local practices?
Cultural adaptation represents one of the key challenges in navigating global-local tensions. For example, in an interview, a Ugandan member of VCA told me many NGOs implemented new latrines in rural areas of Northern Uganda to stop defecation in dry river banks and other empty spaces. However, when they came back to check on their facilities several years later, they were surprised that the latrines had hardly been used, while the surrounding countryside remained still "covered in sh**". The VCA member explained that in some tribes, cultural norms exist that do not allow a woman to use the same toilet as her father-in-law, and children struggle with the concept of using a latrine. Disregarding such cultural norms and values can make facilities built by NGOs redundant, which is why it is essential to engage in cultural adaptation, even if it means that tensions with global standards arise.
How does the interplay between paradox knots influence long-term organisational resilience?
Paradox theory suggests that organisations face competing demands that seem contradictory yet are interrelated - what we call "paradoxical tensions". Managers must recognize these contradictory “poles” and how they relate to each other. When multiple paradoxes intersect and influence each other, they form knotted paradoxes, creating even more complex management challenges.
To balance such contradictory demands and goals, managers should:
- Analyze each opposing element separately
- Identify key priorities, potential synergies, and complementary values
Since organisational environments constantly evolve, strategies for managing paradox knots must remain flexible and adaptable. Organisations that continuously assess and adjust their strategies to balancing these tensions ultimately develop greater resilience.
What lessons can corporate leaders draw from VCA’s handling of the global-local paradox?
While companies must develop their own unique approaches to managing paradoxes, VCA offers valuable insights into addressing global-local tensions through "universal languages" — educational activities that include cultural components like music, arts, and sports. These cultural components transcend language barriers and can foster inclusion.
VCA adapts these universal languages to local contexts. For example, they include pit latrines in their globally applied football-based education program and use local music and specific dance moves to teach recommended hand-washing practices. This approach successfully balances global synergies with local adaptation. Corporate leaders can learn from VCA's method of carefully analyzing seemingly contradictory strategies and developing innovative practices that integrate both approaches.
Can the concept of identity elasticity be applied outside NGOs, for instance, in startups expanding globally?
Yes, all kinds of organisations can face identity-elasticity challenges, including startups, public institutions, and multinational corporations. At its core, all organisations have their own identity, which encompasses their members' ideas of what is central, important, and unique about their organisation.
Some organisations develop stronger identities than others. For example, young start-ups, mission-driven organisations, and family-owned businesses tend to have strong organisational identities. When an organisation expands, whether through global expansion, launching a new line of products, implementing new services, or bringing in new leadership and employees, a process of reshaping the organisational identity begins.
Organisational members must redefine their beliefs about the organisation's central and distinct characteristics. Often, this results in a process where they stretch their identity to include new values and ideas, while trying to hold on to the core aspects that make the organisation what it is. This simultaneous process of stretching the identity and holding it together is referred to as the "identity-elasticity paradox", which we analyse in the context of Viva con Agua in Uganda.
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From a leadership perspective, what are the key takeaways for managing conflicting demands in dynamic environments?
- Leaders must acknowledge the paradoxes they face rather than avoid them. Pushing conflicts aside drains energy and leads to poor outcomes for both the leader and organisation.
- Leaders should analyze the opposing forces at play. Understanding these contradicting elements helps reveal opportunities where different perspectives can complement each other.
- Leaders must innovate by developing strategies that leverage the synergies between competing demands. Finally, especially in dynamic environments, leaders should remain flexible and continuously adapt their approaches as circumstances change.
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