Leading and Managing Non-Profit Organisations

This article discusses the concept of leading and managing non-profit organisations, with a focus on stakeholder theory and its application. It includes an annotated bibliography of relevant studies and their findings. The studies highlight the importance of strategic collaborations, social impact measurement, board strategic balance, stakeholder prioritization, cooperation between businesses and non-governmental organizations, and more. The article concludes that stakeholder theory can effectively be applied to non-profit organizations.

LEADING AND MANAGING NON-PROFIT ORGANISATIONS
LEADING AND MANAGING NON-PROFIT ORGANISATIONS
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1LEADING AND MANAGING NONPROFIT ORGANISATIONS
Introduction
Non-profit organisations are basically the organisations that are mission-driven,
private sector companies that exist for serving both the private and public interests (Defourny
& Nyssens, 2014). The influential hospitals and universities might be legally organised as
non-profit for serving the regional and local communities and also, many of the times, their
services even reach to the whole nations that are spread far across the earth. However, in
these instances, the stakeholders are basically a diversity of different entities including
military officials, subnational and national authorities, the local residents, organisations,
influential dignitaries or residents and the government. The abilities, attributes, skills and
knowledge that are required for negotiating, partnering and making collaborations with some
sets of multiple stakeholder need attention for the existing cultures, institutions as well as the
ability of understanding the needs of others for serving and providing services with respect
and care. In the modern diverse non-profit sector, it is very difficult to generalise regarding
its characteristics, organisations and the different perspective of its stakeholders. According
to Andriof and Waddock (2017), Stakeholder theory is one of the theories of organisational
business and management ethics that comprise for many constituencies that are impacted by
the business entities such as suppliers, local communities, employees and many others. This
paper shall elaborate on presenting annotated bibliography on the stakeholder theory and its
application in the non-profit organisations and their boards.
Annotated Bibliography
1. Bridoux, F., & Stoelhorst, J. W. (2014). Microfoundations for stakeholder theory:
Managing stakeholders with heterogeneous motives. Strategic management
journal, 35(1), 107-125. Available at DOI: 10.1002/SMJ.2089

2LEADING AND MANAGING NONPROFIT ORGANISATIONS
According to Bridoux & Stoelhorst (2014) collaboration in between the different business
sectors and non-profit organisations is regarded as a process of value creation that aids to the
business, society and the non-profit organisations. This is the process that has rarely been
viewed from the non-profit perspective. The study have discussed a whole new framework
for assisting the non-profit organisations in the development of strategic collaborations with
the businesses. Bridoux & Stoelhorst (2014) have further have argued that being strategically
proactive instead of reactive to what the businesses might offer, the non-profit organisations
could increase the level of their cross-sector collaborations. However, the limitation of this
study is that it has not provided any recommendation to deepen the understanding of the non-
profit organisations and this is why it has become incapable of assisting in solution
development.
2. Costa, E., & Pesci, C. (2016). Social impact measurement: why do stakeholders
matter?Sustainability Accounting, Management and Policy Journal, 7(1), 99-124.
Available at DOI: 10.1108/SAMPJ-12-2014-0092
The main aim of this paper by Costa and Pesci (2016) is discussing the idea of social
impact of the social impact measurement in the social enterprises by means of supporting
stakeholder theory as a contribution to the under theorised issue. With the same, the study
have also proposed that the stakeholder based approach is an appropriate solution for the
selection among the metrics in relation to the increasing number of social impact
measurements. The study have discussed a whole new framework for assisting the non-profit
organisations in the development of strategic collaborations with the businesses. However,
the main limitation of this study lies on the fact that it has responded to the call for defining a
theoretical framework that guides as a measurement of social impact and this seeks for
avoiding the current shortage of transparency and order.

3LEADING AND MANAGING NONPROFIT ORGANISATIONS
3. Ferkins, L., & Shilbury, D. (2015). Board strategic balance: An emerging sport
governance theory. Sport management review, 18(4), 489-500. Available at DOI:
10.1016/J.SMR.2014.12.002
Ferkins and Shilbury (2015) in this study have embarked on the development of theory
for explaining the notions of the board strategic capability and have identified the relationship
in between influencing the factors. Despite of the vital role of governing boards play in the
organisational life, the understanding and knowledge of their strategic function is very
limited. The paper has also claimed that .from an instrumental stakeholder perspective,a
company, be it profit or non-profit, could be considered as a long network of groups and
individuals who choose to operate for their mutual benefits. The limitation of this study is
that no survey has been conducted to assess the perception of different stakeholders in this
regard.
4. Hall, M., Millo, Y. & Barman, E. (2015). Who and what really counts? Stakeholder
prioritization and accounting for social value. Journal of Management
Studies, 52(7), pp.907-934. Available at DOI: 10.1111/JOMS.12146
Researches in the management of stakeholder have theorised extensively the prioritization of
the stakeholders as an impact dynamic of the value creation of firms but at the same time,
have paid very less attention to the organisational practices that are involved in the process of
taking decisions who and what really counts. The authors of this study have also examined
the changes that have underpinned the prioritisation of the managers of stakeholders and at
the same time, have also focused on how the attention of the managers to salient stakeholders
is communicated and represented in the reporting and accounting of the system of non-profit
organisations. However, the researcher has faced material conditions that have placed
significant limitations on the type and amount of resources.

4LEADING AND MANAGING NONPROFIT ORGANISATIONS
5. Harangozó, G., & Zilahy, G. (2015). Cooperation between business and non-
governmental organizations to promote sustainable development. Journal of
Cleaner Production, 89, 18-31. Available at DOI:
10.1016/J.JCLEPRO.2014.10.092
This paper by Harangozo and Zilahy (2015) has elaborated on examining the relationship
in between the businesses and the non-governmental organisations on the basis of stakeholder
theory. As per the authors of this article, the use of stakeholder perspective have allowed
them to identify the principles of non-profit companies and to divide the agent and principal
relationships in diverse categories. This result has contributed to the development of
stakeholder theory of a company and has helped the practical decision makes to know the
ways of improving relationships between non-profit organisations and business. However, the
limitation for this study is that the survey has been conducted in only one country, i.e.,
Hungry and this has constrain the international application of Stakeholder theory in non-
profit organisations.
6. Huybrechts, B., Mertens, S., & Rijpens, J. (2014). Explaining stakeholder
involvement in social enterprise governance through resources and
legitimacy. Social enterprise and the third sector: Changing European landscapes
in a comparative perspective, 157-175. Available at DOI: 10.1515/MANMENT-
2015-0023
The main aim of this paper by Huybrechts, Merten and Rijpens (2014) is to add some
theoretical depth for analysing the involvement of stakeholders in the social enterprise
governance. The authors of this paper have used two relevant theoretical approaches called
the institutional theory and stakeholder theory to do the same. The paper highlights the fact
that stakeholder approach to the non-profit organisations lays emphasis on the conflict and

5LEADING AND MANAGING NONPROFIT ORGANISATIONS
ignores the other views of the sector for different stakeholders group, the people who have
interest, stake and claim in the organisation. However, the limitations of this study is that it
has not included any real time data to assess the relevance of stakeholder theory to non-profit
organisations.
7. Magill, M., Quinzii, M., & Rochet, J. C. (2015). A theory of the stakeholder
corporation. Econometrica, 83(5), 1685-1725. Available at DOI:
10.3982/ECTA11455
As per the stakeholder view, there are many widely held view within the general
public about the large organisations, which they view as the organisations that should act in
interests of broader group of agents as compared to just the shareholders. Magil, Quinzii and
Rochet (2015) have presented a framework where the idea could be justified. All these risks
generate externalities on all these stakeholders that are not internalised by the shareholders.
As a significant result, in such a competitive equilibrium, there is an under-investment in the
prevention of all these risks. Also, the authors have highlighted the relationship in between
the stakeholder theory and the marketing strategy development in the non-profit organisations
and also the limitations of the stakeholder model. However, the main limitation of this study
is that no survey has been conducted to collect the real perspective of the stakeholders.
8. Sodhi, M. S. (2015). Conceptualizing social responsibility in operations via
stakeholder resource‐based view. Production and Operations Management, 24(9),
1375-1389. Available at DOI: 10.1111/POMS.12393
Sodhi (2015) in this paper have conceptualised the social responsibility for the operations
management research for developing social responsibility lens for viewing the different
operations. For doing so, the author have first considered the CSR, sustainability and the
bottom of the pyramid and the approaches of shared value as well as identifying the three

6LEADING AND MANAGING NONPROFIT ORGANISATIONS
challenges for developing such lens and making selection of the different levels of analysis,
tackling the high number of objectives and developing some theoretical underpinnings. As
per the author, stakeholder theory in the non-profit organisations help them in tackling with
the different opportunities for the organisational management research to do with the social
responsibility. He have also highlighted that the stakeholder theory is not just an approach
which systematically asks who have a notable investment in the success of an organisation
and the way they could be given a voice. The main limitation of this paper is that it has
focused on the non-profit organisations of only one country, Korea.
9. Wellens, L., & Jegers, M. (2014). Effective governance in nonprofit organizations: A
literature based multiple stakeholder approach. European Management
Journal, 32(2), 223-243. Available at DOI: 10.1016/J.EMJ.2013.01.007
Wellens and Jegers (2014) in this study have summarised and integrated the results of the
different studies that focused on the governance effectiveness of the non-profit organisations.
The main aim of this paper is to identify more than effective board governance and takes the
perspectives of various non-profit key stakeholders into the account. It is an approach that is
particularly more valuable as many researchers claim that the possibility of the non-profit
organisations being perceived as the effective and high increases when they manage for
alignment, diverse and good governance of the non-profit organisations. However, the
limitation of this study is that there is lack of ample of resources used in this study and this is
why data is missing from the study.
10. Willems, J., Jegers, M., & Faulk, L. (2016). Organizational effectiveness reputation
in the nonprofit sector. Public Performance & Management Review, 39(2), 454-
475. Available at DOI: 10.1080/15309576.2015.1108802

7LEADING AND MANAGING NONPROFIT ORGANISATIONS
The public organisations in the last few decades have highly dependent on the non-profit
partners for delivering the public services. With such a trend, the assessments of performance
of the non-profit organisations have become more important for allowing the government
resources (Willens, Jegers & Faulk, 2016). Notwithstanding this fact, the non-profit
organisations engage in multiple stakeholders and this further leads to the complicated sets of
the organisational goals and highly subjective assessments of the non-profit assessments. The
authors of this study have claimed that stakeholder theory can aid to organisational
performance and effectiveness and these together helps in composing the reputation of the
non-profit organisation. However, the limitation of this study is that it has reviewed the
judgements of different stakeholders across similar organisations only.
Conclusion
Hence, from the above analysis it is to conclude that application of the stakeholder
theory in the non-profit organisations serve as a significant response to the critics mentioned
above who found that the stakeholder theory is not compatible with the business. It is also
conclude that stakeholder theory can be effectively applied to the non-profit organisations
under the studies. It is to note that non-profit organisations had a very strong sense of
obligation to wide range of groups that it has identified as sharing objectives, although the
notion of stakeholder is not always used by the organisations. The non-profit organisations
have delivered a huge variety of services comprising of culture, arts, social services and
sports. However, all the above studies have made it a point to consider that non-profit
organisations should always be responsive to their stakeholders. There is also a relationship
in between the financial performance and the stakeholder relationships of the company.

8LEADING AND MANAGING NONPROFIT ORGANISATIONS
References:
Andriof, J., & Waddock, S. (2017). Unfolding stakeholder engagement. In Unfolding
stakeholder thinking (pp. 19-42). Routledge. Retrieved from:
https://www.taylorfrancis.com/books/e/9781351281881/chapters/10.4324/978135128
1881-2
Bridoux, F., & Stoelhorst, J. W. (2014). Microfoundations for stakeholder theory: Managing
stakeholders with heterogeneous motives. Strategic management journal, 35(1), 107-
125. Available at DOI: 10.1002/SMJ.2089
Costa, E., & Pesci, C. (2016). Social impact measurement: why do stakeholders matter?
Sustainability Accounting, Management and Policy Journal, 7(1), 99-124. Available
at DOI: 10.1108/SAMPJ-12-2014-0092
Defourny, J., & Nyssens, M. (2014). The EMES approach of social enterprise in a
comparative perspective. In Social enterprise and the third sector (pp. 58-81).
Routledge. Retrieved from:
https://www.taylorfrancis.com/books/e/9780203487747/chapters/10.4324/978020348
7747-11
Ferkins, L., & Shilbury, D. (2015). Board strategic balance: An emerging sport governance
theory. Sport management review, 18(4), 489-500. Available at DOI:
10.1016/J.SMR.2014.12.002
Hall, M., Millo, Y. & Barman, E. (2015). Who and what really counts? Stakeholder
prioritization and accounting for social value. Journal of Management Studies, 52(7),
pp.907-934. Available at DOI: 10.1111/JOMS.12146

9LEADING AND MANAGING NONPROFIT ORGANISATIONS
Harangozó, G., & Zilahy, G. (2015). Cooperation between business and non-governmental
organizations to promote sustainable development. Journal of Cleaner
Production, 89, 18-31. Available at DOI: 10.1016/J.JCLEPRO.2014.10.092
Huybrechts, B., Mertens, S., & Rijpens, J. (2014). Explaining stakeholder involvement in
social enterprise governance through resources and legitimacy. Social enterprise and
the third sector: Changing European landscapes in a comparative perspective, 157-
175. Available at DOI: 10.1515/MANMENT-2015-0023
Magill, M., Quinzii, M., & Rochet, J. C. (2015). A theory of the stakeholder
corporation. Econometrica, 83(5), 1685-1725. Available at DOI:
10.3982/ECTA11455
Sodhi, M. S. (2015). Conceptualizing social responsibility in operations via stakeholder
resource‐based view. Production and Operations Management, 24(9), 1375-1389.
Available at DOI: 10.1111/POMS.12393
Wellens, L., & Jegers, M. (2014). Effective governance in nonprofit organizations: A
literature based multiple stakeholder approach. European Management
Journal, 32(2), 223-243. Available at DOI: 10.1016/J.EMJ.2013.01.007
Willems, J., Jegers, M., & Faulk, L. (2016). Organizational effectiveness reputation in the
nonprofit sector. Public Performance & Management Review, 39(2), 454-475.
Available at DOI: 10.1080/15309576.2015.1108802

10LEADING AND MANAGING NONPROFIT ORGANISATIONS