Organizing Logics, Nonprofit Management and Change

Rethinking Power, Persuasion and Authority

Tracey M. Coule, Carole Bain, Tracey Coule

• Publisher: Routledge
• Year: 2021
• Print ISBN: 9780367371005
• eBook ISBN: 9781000349658
• Edition: 1
• Topic: Business
• Subtopic: Business General
• Index: Business

Nonprofit organizations are conventionally positioned as generators of social and cultural forms of capital for the common good. As such they occupy a different space to other types of organizations such as corporate firms that exist primarily to generate economic capital for private owners/shareholders.

Recent years, however, have seen professionalization promoted widely by funders, policy-makers and nonprofit practitioners across the globe. At the same time, there has been an increasing cross-over of employees from private and public bodies into nonprofits. But do such shifts open up space for the wholesale importation of managerialism into and commercialization of the nonprofit sphere? Are nonprofits at risk of being reconstituted as primarily economic entities, serving the interests of a leadership elite? How are such changes in an organization's trajectory brought about? What are the consequences for trustees, staff, members and the nature of managerial work? The authors engage with critical questions such as these through a unique insider account of one professional institute experiencing unprecedented changes that challenge its very reason for being. Drawing on a three-year ethnography, they narrate organizational inhabitants' struggles in their search for purpose and analyze the myriad of changes within different aspects of organizing including structure, strategizing, pay and reward, governance and leadership.

The book will enable readers to reframe and rethink organizational change as a process involving power, persuasion and authority, and will be of value to researchers, students, academics and practitioners interested in managerial work and organizational change in non-profit organizations.

1Introduction

Nonprofit organizations are conventionally positioned as generators of social and cultural forms of capital for the common good. As such they occupy a different space from other types of organization, such as the corporate firm, which exist primarily to generate economic capital for private owners/shareholders (see Bourdieu (1986) for a full exploration of economic, social and cultural forms of capital). Recent years, however, have seen professionalization promoted widely by funders, policy-makers and nonprofit practitioners across the globe. At the same time, there has been an increasing cross-over of employees from private and public bodies into nonprofits. But do such shifts open up space for the wholesale importation of managerialism into the nonprofit sphere? Are nonprofits at risk of being reconstituted as primarily economic entities, serving the interests of a leadership elite? How are such changes in an organization’s trajectory brought about? What are the consequences for trustees, staff, members and the nature of managerial work?

Our aim in this book is to engage with critical questions such as these through a unique insider account of one professional association (referred to from here on as “the association” or “the institute”) experiencing unprecedented changes that challenge its very reason for being. Drawing on a 3-year field study, we narrate organizational inhabitants’ struggles in their search for purpose and analyse the myriad changes within different aspects of organizing. These include structure, strategizing, pay and reward, governance and leadership. Our motivation is to chronicle, with unswerving fidelity to inhabitants’ experiences, the often unspoken, unrevealed aspects of organizing and managing work in nonprofits. The shadow side of organization is usually only ever witnessed and documented by those simultaneously living and researching life in organizations over extended time periods. Yet, such accounts are powerful, and perhaps unique, in returning us to the potential for (in)humanity in organization. We hope our story of the association prompts engagement with the bigger questions (and a profoundly human view) of nonprofit organization among those who manage, govern and study nonprofits. We should not concern ourselves with what “good” is being done by nonprofits at the expense of considering the ethics of how things get done in nonprofits.

Professionalization, Competing Institutional Logics and the Emergence of Organizational Hybridity

Before telling our story of the association’s transformation, we wish to set the wider scene. To do this, we draw on key theoretical ideas from institutionalism and scholarship regarding the historical and contemporary societal role of nonprofits vis-à-vis the state and the market. This is important for understanding nonprofit professionalization and the emergence of hybrid forms of organizing (those comprising more than one cultural logic) because such scholarship goes some way in explaining the macro-level conditions within which these developments have occurred.

Voluntary action or nonprofit organizing has played a major role in many Western democracies for centuries. In the U.K. specifically, it developed from a source of locally organized social action and welfare provision that was not the stuff of “high politics” in Victorian Britain (Lewis, 1996) to an extension of state apparatus through the hyperactive mainstreaming of the ‘third sector’ into public policy under New Labour (1997–2010) (Kendall, 2010). In its earliest guises, voluntary action addressed poverty and tackled the underlying causes of inequality and disadvantage (Tilly, 2005; Rochester, 2014). It did so through what Beveridge (1948) later referred to as a top-down philanthropic impulse (e.g. charitable trusts financed by private wealth) and a bottom-up mutual aid impulse (e.g. friendly societies, social movements and the like). We suggest such social action was underpinned by a “community logic” (Marquis et al., 2011). A community logic or “institutional order” is founded upon a commitment to community values and ideology, personal investment in the collective good, cooperation, trust and reciprocity, though not devoid of ego satisfaction and reputation factors (Thornton et al., 2012; also see Mohan & Breeze, 2015 on The Logic of Charity).

The first wave of professionalization emerged in the latter half of the 19th century and early 20th century. Attempts to better co-ordinate nonprofit organizing through development of the precursors to what we now refer to as “infrastructure” or intermediary bodies date as far back as 1869, with the founding of the Charities Organisation Society (COS). This intensified further in the early 20th century with developments in the state’s responsibilities for welfare services, representing a shift in the institutional logic of the state. The liberal welfare reforms of the 1906–1911 Lloyd George administration involved state intervention in what was previously the territory of voluntarism. This in turn created an imperative for nonprofits to acquire a national presence to influence new governmental actors on the welfare stage and follow the state in adopting a bureaucratic model of organization (Penn, 2011). Grant (2011; 2014) traces further impetus to the professionalization of nonprofit organizing to its contribution to wartime social stability during World War I (1911–1914). In particular, he notes the turn from “amateur” to professional, paid social workers; the invention and expansion of modern fundraising methods; the emergence of state attempts to better co-ordinate voluntarism and, relatedly, the development of institutions that exist to promote mutually supportive links between statutory and voluntary “sectors.” These included the War Office’s appointment of a Director General of Voluntary Organizations (DGVO) in 1915 and establishment of a Council of Social Service in 1919, which superseded the COS and later became the National Council for Voluntary Organisations (NCVO) (See Coule & Bennett (2018) for a historical account of state–voluntary relations).

A second wave of professionalization ensued following changes in social attitudes in the 1970s, when citizens increasingly became unwilling to pay towards the welfare of others. This provided impetus for the 1979 U.K. Conservative government to undertake large-scale reforms to Labour’s post-World War II “welfare state” architecture, which was based on the influential Beveridge report of 1942. These reforms involved development of an “enterprise culture” involving tax cuts, privatization of government services, deregulation and public spending cuts. The associated introduction of New Public Management (NPM) in the late 1980s resulted in a system of public services organized on a “market logic,” emphasizing competition, consumer choice and efficiency (Coule & Patmore, 2013). Following the global economic crisis, the U.K. Conservative–Liberal Democrats Coalition (2010–2015) quickly began to dismantle New Labour’s “partnership” apparatus and positioned the state’s role as a (welfare) market creator and reformer. Significantly, it brought the state’s treatment of nonprofits in line with that of private corporations, cuing the expectation that they should embody the “ideal type” of public service delivery agent – that of a professional and enterprising entity (Coule & Bennett, 2016). The state not only displayed a disinterest in nonprofit advocacy/campaigning for the most vulnerable in society, but also suffered heated media attacks for gagging nonprofits through specific clauses in contracts between government and nonprofit providers, alongside the broader ranging Lobbying Act. In a review of the Civil Society Strategy of 2018, Bennett et al. (2019) point to the Tory government’s latest discursive affront including the use of the adjective “traditional” to describe those parts of the “social sector” that include “individual philanthropists, trusts and foundations” (HM Government, 2018, p.19), thus inciting us to see this as nostalgic, archaic and serving a bygone era. This is held in contrast to the alternative, cotemporary ways in which social value is produced through “social enterprises, mutuals and mission-led businesses” (p.18) and situates mission-led businesses as the driving force of social transformation and civil society Bennett 2019.

The culture of valuing corporate and entrepreneurial approaches above alternatives is not unique to the U.K. (Eikenberry, 2009): “the framework of marketization today is increasingly dominated by the core principles of global neoliberalism and its pervasive faith in the market and business-based approaches and solutions” (Dart, 2004, p. 418). With the global decline of other economic models, “neoliberal economics has become the prevailing position for much of the world” (Simpson & Cheney, 2007, p. 192). Citizens in Western democracies now live in what has been referred to as the hollow state (Milward & Provan, 2000) or the shadow state (Wolch, 1990). In other words, we live in societies with increasingly privatized governments that contract the provision of public goods to nonprofits and private corporations in place of state services (Salamon, 1995).

This globalized market-based approach to public management is well documented (Salamon, 1993; Eikenberry & Kluver, 2004; Eikenberry, 2009; Macmillan & Livingstone, 2015; Macmillan, 2017), with concerns expressed for its negative impact on democratic accountability and ideals (e.g. fairness, justice), citizenship and action for the collective public interest (Box, 1999; Box et al. 2001; deLeon & Denhardt, 2000; Denhardt & Denhardt, 2000; King & Stivers, 1998; Terry, 1998). The entrepreneurialism and satisfaction of individual client needs at the heart of the approach, alongside the adoption of private market values and practices among nonprofits themselves (Weisbrod, 1998), has led to the marketization of the nonprofit arena (Salamon, 1997). Ensuing “‘major marketization trends” such as commercial revenue generation, contract competition, the influence of new and emerging donors, social entrepreneurship, the market’s co-optation of the philanthropic impulse through consumption (e.g. cause-related marketing) and celebrity philanthropy are equally well examined (Eikenberry and Kluver, 2004 p. 132; King, 2006; Nickel & Eikenberry, 2009).

In the contemporary era then, nonprofit organizations are faced with significant institutional complexity (Greenwood et al., 2011). At a macro or societal level, there are state, market and community logics (Thornton et al., 2012; Jay, 2013; Pache & Santos, 2013; Meyer et al., 2014; Skelcher & Smith, 2015), underpinned by divergent “sets of material practices and symbolic constructions” that constitute their “organizing principles” (Friedland & Alford, 1991, pp. 248–249). Such complexity has the potential to result in what institutional scholars commonly refer to as “hybrid organizations” that are “subject to multiple regulatory regimes, embedded within multiple normative orders, and/or constituted by more than one cultural logic” (Kraatz & Block, 2008, p. 2).

Some organization theorists are pessimistic about the long-term survival prospects of hybrids, due to them being inherent arenas of contradiction (Scott & Meyer, 1991; Scott, 2001; Battilana & Dorado, 2010; Turco, 2012) that become “blocked, dysfunctional, and unable to resolve tensions between competing logics” (Skelcher & Smith, 2014, p. 440). Because a hybrid organization must concurrently negotiate the rules of the game in multiple, contradictory games (Heimer, 1999; Zilber, 2002; Glynn, 2008) it is “so many different things to so many different people that it must, of necessity, be partially at war with itself” (Kerr, 196...

Table of contents

• Cover
• Half Title
• Series Page
• Title Page
• Copyright Page
• Dedication
• Contents
• Figures
• Tables
• Foreword (by Angela M. Eikenberry)
• Preface
• Acknowledgements
• List of abbreviations
• 1 Introduction
• PART I: A Tale of Two Rhetorics: Organizational Life in the Milieu of Corporate and Community Logics
• PART II: Transforming Organizational Trajectory
• Appendix – Detailed Account of Methods
• About the Authors
• Index