Institutional isomorphism and nonprofit managerialism: For better or worse?

Abstract

Nonprofit organizations (NPOs) have increasingly adopted business‐like practices as a response to institutional pressures. Some researchers argue that this development leads to mission drift, whereas others find a positive effect on organizational performance. However, the institutional pressures responsible for shaping the nonprofit sector have remained hard to distinguish from each other. This study explores the consequences of mimetic, normative, and coercive pressures, and looks at how they affect managerialism, organizational performance, and mission drift. We link these concepts through a structural equation model based on survey data and find that one aspect of managerialism, strategic behavior, is a key construct in influencing the response to isomorphic pressures and can positively affect organizational performance while holding off‐mission drift. Normative isomorphism even has a direct positive effect on organizational performance. Mission drift can take place when organizations are under coercive pressure without having strategies or internal processes in place. These findings imply that organizations should invest in their strategy and the professional development of their staff to increase organizational performance and avoid mission drift.

Assessing the Impact of Nonprofit Organizations on Multi-Actor Global Governance Initiatives: The Case of the UN Global Compact

“…More recent discussions emphasize the increasingly political role and power of international NPOs to influence debates on and policy outcomes of global governance forums [3,25]. These discussions are further accompanied by an increase in professionalization in NPOs, characterized by a greater strategic orientation and the definition of concrete outcomes and desired impacts [15,26]. Unfortunately, NPOs have also been at the center of severe scandals, which have not only caused societal harm but have also been detrimental to their reputation [18,19].…”

“…Second, the study controls for the organization type (global business, association, local business association, foundation, global labor organization, local labor organization, global NGO, local NGO). Third, the study controls for regional and country-level institutional conditions to acknowledge arguments from institutional theory, which argues that formal regulation and informal norms and other contextual conditions significantly shape an organization's behavior [26,40], and thus may also affect an NPO's engagement in the UNGC. Finally, the study controls for participation duration.…”

The Tendency of Terrorist Organizations to Explosive Attacks: An Institutional Theory Perspective

“…The complete institutional theory may help answer the above questions, analyzing how multiple driving forces shape organizational similarities is its core (DiMaggio and Powell, 1983 ). The organizations' isomorphism phenomenon, which manifested in the resemble of different organizations, is caused by three types of isomorphism: mimetic isomorphism due to dealing with uncertainty, coercive isomorphism driven by legal or political pressure, and normative isomorphism due to professional experts and organizations (DiMaggio and Powell, 1983 ; Hersberger-Langloh et al, 2021 ). Early institutional theory studies have focused primarily on the isomorphism of typical organizational forms and practices (Ufere et al, 2020 ).…”

Institutional isomorphism in collaborative, cross-cultural, project-based development work: an inquiry into the knowledge sharing behaviour of volunteers

“…A closer look at the nonprofit literature reveals an increasing homogeneity that reflects isomorphic pressures impacting nonprofit organisations (Ramanath, 2009). Management practices and planning processes (Claeye ´and Jackson, 2012) are adopted by nonprofit organisations to imitate what they understand to be exemplary practice, as illustrated in the examples of inquiries into accounting standards use by nonprofit hospitals or the implementation of evaluation processes (Carman, 2011), or the recent analysis of Swiss nonprofit organisations' adoption of business-like practices in the sectors of health, social services and the environment (Hersberger-Langloh et al, 2020). Notwithstanding, a closer examination of how mimetic, normative and coercive pressures may potentially affect a managerialist enactment of knowledge sharing practices by volunteers in nonprofit organisations is to our knowledge currently missing in the literature.…”