Organizational Capacity Definition

The OECD defines institutional capacity as a broad focus of empowerment, social capital, and an enabling environment in organization including culture, values and power relations (OECD, 2000; Fukuda-Parr, 2002; GEF-UNDP, 2000). According to Agenda 21 (UNCED, 1992), capacity building ‘encompasses… human, scientific, technological, organizational, and institutional and resource capabilities’. In this understanding of the concept, the fundamental goal of capacity building is to enhance the ability to evaluate and address crucial questions related to policy choices and modes of implementation among development options. New thinking about institutional capacity focuses on the webs of relations involved in urban governance. Such webs interlink government

Gargan (1980:652) explained organizational capacity as the ability of an organization ‘to do what it wants to do’. Ingraham, Joyce et al. (2003) argue that organizational capacity is concerned with “the extent to which a government has the right resources in the right place at the right time”. There is no consensus in the literature about what constitutes organizational capacity. Organizational capacity. The concepti has been interpreted from three perspectives. (i) The resources perspective considers organizational capacity as inputs for production and attracting human, financial and technical resources (Honadle 1981; Wernerfelt 1984; Barney 1991; Fredrickson and London 2000; Ingraham, Joyce et al. 2003; Christensen and Gazley 2008). (ii) The capability perspective treats organizational capacity as the ability to absorb, mobilize resources, specify ways for capacity to be utilized and transform input for outputs (Honadle 1981;Teece Pisano et al. 1997; Ingraham, Joyce et al. 2003; Helfat, Fredrickson 2007; Harvey, Skelcher et al.2010). (iii) The competency perspective understands organizational capacity as organizational effectiveness and performance (Ingraham, Joyce et al. 2003; Bryson 2004; Sowa, Selden et al. 2004; Laurence J. O’Toole and Meire

This refers the ability to make decisions about on what to focus in urban economic development in the long term, and thus to set the strategic direction for development efforts (Sotarauta 2004: 46). A study on British urban governance has identified several indicators of strategic capacity in urban governance.(i) The process by which an individual organization learns. (ii) The creation of shared understanding and common conceptions of problems. (iii) The mobilization of common conceptions and understanding in the process of agenda setting. (iv) The capacity to engage in action that is consistent with evidence-based policy goals; and (v) the ability to engage in strategic learning by monitoring and evaluating policy outcomes (Leibovitz et al, 2001,