Common Agency in Nonprofit Advocacy Organizations

Abstract

Keywords: advocacy , nonprofit , theoryNONPROFIT ADVOCACY ORGANIZATIONS-and the leaders who lead them-have become central players in American political and policy processes by helping to connect citizens with their elected officials and other decision makers. These groups also help to frame issues, educate voters and other interested parties on the issues before them, and mobilize members of the public to take action (Berry 1993 ;Berry and Arons 2005 ;Child and Grønbjerg 2007 ;Jenkins 2006 ;Verba, Schlozman, and Brady 1995 ). However, the inner workings of these organizations, or how leaders make decisions in these organizations, are not well understood. Previous studies on nonprofit management and decision making focused mostly on the organization ' s board of directors rather than the executive or president. Additionally, nonprofit advocacy organizations are rarely evaluated independently as a discreet subsector in the wider nonprofit community. This article addresses these gaps in the literature by developing a new theoretical framework that may be used to better understand how and why organizations-or more specifically, their leaders and executives-make decisions on organizational activities, structure, and strategy in an environment with multiple stakeholders.Through the insights offered by agency theory (Eisenhardt 1989 ;Jensen and Meckling 1976 ), I use an extension of agency theory called common agency (Bernheim and Whinston

International NGO Centralization and Leader-Perceived Effectiveness

“…To start with, although there exist innumerable stakeholders with innumerable interests that may affect goal setting and effectiveness measurement dynamics, dominant coalition theory (Cyert & March, 1963) suggests that some stakeholders are more influential than others. Among the most influential stakeholders is the leader, who plays an especially informed and central role in balancing rival interests and determining the ultimate direction (Connolly et al, 1980; Herman, 2016; Mason, 2016; Piatak et al, 2018; Willems, 2016). Leaders are also entitled to speak on behalf of their organizations, thus representing not merely their own perspectives but also the views of many other internal stakeholders (Herman, 2016; Mason, 2016; Mitchell 2013).…”

“…Among the most influential stakeholders is the leader, who plays an especially informed and central role in balancing rival interests and determining the ultimate direction (Connolly et al, 1980; Herman, 2016; Mason, 2016; Piatak et al, 2018; Willems, 2016). Leaders are also entitled to speak on behalf of their organizations, thus representing not merely their own perspectives but also the views of many other internal stakeholders (Herman, 2016; Mason, 2016; Mitchell 2013). As Mitchell (2013) argued, “whereas external stakeholders speak about organizations, leaders speak for organizations” (p. 4).…”

“…Although decentralized INGOs are hypothesized to acquire higher externally perceived effectiveness reputations, there are reasons to suspect that centralized INGOs might have higher effectiveness as perceived by their own leaders. First, stakeholder theory (Freeman, 1984) and common agency theory (Bernheim & Whinston, 1986) suggest that an organization’s goals and behavior are shaped by the interests of their stakeholders, and that the leader is often charged with balancing such rival interests (Connolly et al, 1980; Mason, 2016; Willems, 2016). Because decentralization could add more competing interests and conflicts to the governance process and diminish the leader’s decision-making authority, there is room to conjecture that a centralized structure could reduce transaction costs (Williamson, 1985) and help INGO leaders feel more confident about their organization’s effectiveness.…”

The Relationship between Provision of Membership Benefits and Fulfillment of Representational Roles in Nonprofit Advocacy Membership Organizations

“…The literature on nonprofit representation often focused on the effects of formal, descriptive, and participatory representation on substantive and symbolic representation (Bolduc ; Cnaan ; Guo and Musso ). The literature on nonprofit accountability examined various accountability mechanisms for diverse stakeholders (Candler and Dumont ; Kearns ; Mason ). However, these studies on accountability and representation did not explicitly consider possible tensions among stakeholders, especially tensions between members and broader constituents.…”

“…Advocacy membership nonprofits are supported by members in various ways, such as membership dues or participation in organizational activities (Berry and Wilcox ). At the same time, to retain resources and support from members, these organizations tend to allow themselves to be constrained by members (Mason ; Pfeffer and Salancik ; Wilson ). Constraints by members may help to focus organizational attention on members' interests (Wilson ).…”