Managing stakeholder relationships and nonprofit organization effectiveness

This research examined how nonprofit organizations manage their relationships with stakeholders and how these practices relate to perceived organization effectiveness. We conducted semistructured, open‐ended interviews with executive directors of nonprofit organizations (NPOs) to discover whom they see as their stakeholders, the types of expectations they encounter from stakeholders, and the practices they use in managing stakeholder relationships. The two nonprofits that were evaluated as most effective used a consistent, thematic rationale in dealing with stakeholder issues: one organization discussed its actions in terms of its mission and core values, the other based its actions in terms of building relationships and networks. Our study suggests that organizations that ground their external relations in issues that are recognized as good nonprofit management, and do so consistently across stakeholder groups, will tend to be rated as more effective by multiple, external evaluators.     

Clarifying the role of belief-motive explanations in multi-stakeholder realist evaluation

In realist evaluation, where researchers aim to make program theories explicit, they can encounter competing explanations as to how programs work. Managing explanatory tensions from different sources of evidence in multi-stakeholder projects can challenge external evaluators, especially when access to pertinent data, like client records, is mediated by program stakeholders. In this article, we consider two central questions: how can program stakeholder motives shape a realist evaluation project; and how might realist evaluators respond to stakeholders’ belief-motive explanations, including those about program effectiveness, based on factors such as supererogatory commitment or trying together in good faith? Drawing on our realist evaluation of a service reform initiative involving multiple agencies, we describe stakeholder motives at key phases, highlighting a need for tactics and skills that help to manage explanatory tensions. In conclusion, the relevance of stakeholders’ belief-motive explanations (‘we believe the program works’) in realist evaluation is clarified and discussed.     

A holistic approach to stakeholder management: A rhetorical foundation

The day-to-day concerns of managing stakeholders are a critical matter for public relations practitioners and scholars alike. “Stakeholder theory” subsumes the knowledge base about stakeholders, who are individuals and groups who affect or are affected by an organization's actions. This article argues that a holistic view of stakeholder management rests on rhetorical grounds and concerns answering three fundamental questions: (1) How are stakeholders created? (2) How can relationships with stakeholders be maintained? and (3) How can relationships with stakeholders be improved? Example cases are used to demonstrate how retrospective analysis reveals the effectiveness of stakeholder management approaches. Ultimately and most important, the combination of theory and case analyses are synthesized into a prospective approach to stakeholder management that organizations may use during strategic planning.     

Where you stand depends on where you sit: Participation and reactions to change

Although a considerable body of research on strategic planning, organizational decision making, and organizational change has emphasized the importance of participation by key stakeholders for the successful management of organizational change, few empirical studies have produced in‐depth understanding of the differing perspectives of stakeholder groups according to their level of involvement in decisions about major change. This case study examines the differing perspectives and perceptions of stakeholders leading into and during the merger of two nonprofit arts organizations. It refines and enriches existing empirical research on the effects of participation on the implementation of change.     

Communicating Engagement in Corporate Social Responsibility: A Meta-Level Construal of Engagement

Organizations are increasingly seeking stakeholder support through engagement to demonstrate their corporate social responsibility (CSR) credentials. These credentials are, in turn, used to support claims of legitimacy for organizational operations. This article uses a process model of antecedents, implementation, and consequences to study the connection between engagement and CSR. CSR reports show organizations perceive engagement in CSR as both communication and activities between organizations and their stakeholders; and as a second, meta-level of communication about that engagement with stakeholders beyond those directly involved, thereby broadening the scope of organizational claims to legitimacy. Understanding what engagement is and how and why it is carried out in CSR provides a framework for understanding engagement in public relations.     

Fingerprint-based background checks for personal care workers: Stakeholder views of policy criteria

Decision makers face difficult choices when tasked with identifying and implementing appropriate mechanisms for protecting the elderly and other vulnerable adults from abuse. A pilot project involving fingerprint-based criminal history background checks for personal care workers in Michigan has supplied an opportunity to examine one such mechanism. In conjunction with the pilot project, we have conducted a stakeholder analysis with the aim of informing decision makers about stakeholder perceptions of standard policy criteria like effectiveness, efficiency, and equity. We employed focus groups and a Web-based survey to collect data from stakeholders. While stakeholders generally see fingerprint-based background checks for personal care workers as potentially effective and as a net benefit, they also point to a variety of contingencies. They also recognize difficulties and constraints for government involvement. This preliminary analysis provides solid foundational information for decision makers and for more extensive benefit–cost analysis.     

Public Relations and Engagement: Theoretical Imperatives of a Multidimensional Concept

Engagement has emerged as important concept in public relations, as stakeholders challenge the discourse of organizational primacy and organizations prioritize the need for authentic stakeholder involvement. As a multidimensional concept, engagement offers a foundation for building organizational relationships, and provides a means to facilitate community–organization interaction. This special issue on engagement and public relations presents a body of work that both explicates and expands the theoretical foundations of engagement, and contributes to scholarly understanding of its contexts, processes, and outcomes.     

Defining the characteristics of a lingering crisis: Lessons from the National Zoo

This article begins to define the characteristics of a new type of organizational crisis—a “lingering crisis.” A qualitative case study involving the National Zoo indicated that a lingering crisis may involve (1) multiple events occurring over an extended timeframe; (2) intense media scrutiny; (3) escalating involvement of external organizations, including watchdog/regulatory/oversight agencies; (4) incongruent organizational messages and stakeholder perceptions; (5) external/internal charges of organizational deception; (6) insufficient organizational responses to stakeholder concerns; (7) organizational failure to address leadership responsibility for crisis.     

Putting stakeholders’ engagement in the equation: Proposing the integrated network engagement model

Research on engagement and relationships in the public relations literature tends to focus on individual stakeholders’ psychological states or traits. Researchers have not fully considered how stakeholders’ social environments impact their engagement with organizations. To advance theorizing on engagement and relationships, this study considers stakeholders’ social environments by examining the social ties they activate when engaging with an organization. Thus, we propose and examine the Integrated Network Model of Engagement to understand the stakeholder side of engagement. Through an egocentric network survey, we identify multiple sources of influence on indicators and outcomes of engagement, and assess the relationship between engagement indicators and outcomes. Results suggest that stakeholders’ network structures positively associated with indicators of relational engagement and outcomes of engagement, specifically OPR. On the other hand, the composition of stakeholders’ networks consistently had mixed associations with engagement indicators and outcomes. We argue it is critical for public relations scholars to account for these complexities and for practitioners to understand stakeholders’ social environments when attempting to engage them.     

Give the Emperor a Mirror: Toward Developing a Stakeholder Measurement of Organizational Transparency

The concept of organizational transparency has vaulted to prominence in recent years. While the virtues of transparency have been tied to trust and credibility, there have been no efforts to measure this abstract concept. Guidelines exist to help organizations be more transparent, but the real test is how stakeholders perceive an organization's transparency. This paper focuses on developing a stakeholder measurement of organizational transparency. Factor analyses, structural equation models, and reliability alphas on the measurement items indicate the instrument measures three transparency reputation traits (integrity, respect for others, openness) and four transparency efforts (participation, substantial information, accountability, and secrecy).     

Common Agency in Nonprofit Advocacy Organizations

Most theories of nonprofit organizations and nonprofit leadership recognize the multitude of stakeholders—including board members, donors and volunteers, funders, the media, and policy makers—that organizational leaders must contend with in doing their work. For nonprofits engaged in advocacy, demands from stakeholders may be even more challenging to meet. Although stakeholder theory recognizes the effect of various groups on an organization, it does not explain how leaders manage the preferences of their often‐competing stakeholders while they make choices for the organization. This study develops a common agency framework, evaluating the roles of three groups crucial to nonprofit advocacy organizations: the organization's board of directors, elected officials, and donors/members. The common agency framework is then illustrated with interviews with leaders of nonprofit advocacy organizations in California. Findings suggest that the leaders of these groups have a significant amount of discretion in guiding their organizations’ activities and operations.     

Examining Perceived Honest Performance Reporting by Public Organizations: Bureaucratic Politics and Organizational Practice

The credibility of performance information provided by governmentagencies to their stakeholders is critical to performance-basedaccountability and policy learning. However, the public administrationliterature has rarely paid attention to the determinants ofhonest performance reporting. This study draws on the multi-actorprincipal-agent model and examines how bureaucratic politics(external and internal) and organizational practice (participationand culture) affect an organization's performance reporting.Based on survey data from Taiwan, the results show that supportiveexternal environments and harmonious internal environments arelikely to enhance stakeholder participation and innovation culture,which, in turn, encourage honest performance reporting.     

Web-Based Accountability Practices in Non-profit Organizations: The Case of National Museums

Stakeholder theory posits that accountability systems depend on the strength and the number of their stakeholders. This paper aims to analyze the empirical validity of stakeholder theory, focusing on accountability systems in the museum sector. Based on Wikipedia resources, we have selected all of the “National Museums” (134 museums) in the major developed countries: Australia, Canada, France, Germany, Italy, the United Kingdom, and the US. After we control for type of activity (art or other), cost per visitor and country, the results of an OLS multivariate model show that size of the museum, which is assumed to represent the strength and number of stakeholders, and the amount of funds received, which represents the power of a particularly salient category of stakeholders (donors), are the two main determinants of the accountability level. We conclude that accountability, in the absence of shareholders, is driven by the number and the power of different stakeholders, validating the stakeholder theory.     

U.S. Fortune 500’s stakeholders engagement during the COVID-19 pandemic: Evidence for proactive approaches

In times of a national crisis such as COVID-19, it is important for organizations to show that they are good corporate citizens. At the same time, organizations should carefully select the type of messages that resonate with stakeholders so as to reduce stakeholder skepticism. This study examines how U.S. Fortune 500 companies discussed their COVID-19 pandemic CSR actions on Facebook over 15 months and how the public responded to such messages. We identified three CSR themes: internal stakeholder proactive CSR, external stakeholder proactive CSR, and external stakeholder accommodative CSR. When publics engaged, external stakeholder proactive CSR was significantly associated with better behavioral engagement outcomes, more positive emotional engagement outcomes, and less negative emotions. However, such effects are moderated by industry type. Our findings inform public relations theory and practice and suggest that in times of major crises, organizations should prioritize proactive approaches to engage external stakeholders while being mindful of specific institutional contexts.     

Nonprofit Organizational Effectiveness: Contrasts Between Especially Effective and Less Effective Organizations

How do key stakeholders of nonprofit organizations (NPOs) judge the effectiveness of their organization? Are the judgments of stakeholders similar, and how are board effectiveness and the use of practitioner-identified correct management procedures related to judgments of effectiveness? This study focuses on a subset of especially effective and less effective NPOs from a larger sample and finds that the especially effective have more effective boards (as judged by various stakeholder groups), have boards with higher social prestige, use more practitioner-identified correct management procedures, and use more change management strategies. Practical implications discussed include adopting more correct management procedures and change management strategies.     

Enabling multi-faceted measures of success for protected area management in Trinidad and Tobago

A key challenge has been to define and measure "success" in managing protected areas. A case study was conducted of efforts to evaluate the new protected area management system in Trinidad and Tobago using a participatory approach. The aim of the case study was to (1) examine whether stakeholder involvement better captures the multi-faceted nature of success and (2) identify the role and influence of various stakeholder groups in this process. An holistic and systematic framework was developed with stakeholder input that facilitated the integration of expert and lay knowledge, a broad emphasis on ecological, socio-economic, and institutional aspects, and the use of both quantitative and qualitative data allowing the evaluation to capture the multi-faceted nature and impacts of protected area management. Input from primary stakeholders, such as local communities, was critical as they have a high stake in protected area outcomes. Secondary and external stakeholders, including government agencies, non-governmental organizations, academia and the private sector, were also important in providing valuable technical assistance and serving as mediators. However, a lack of consensus over priorities, politics, and limited stakeholder capacity and data access pose significant barriers to engaging stakeholders to effectively measure the management success of protected areas.     

Board practices and board effectiveness in local nonprofit organizations

This study of sixty-four locally governed nonprofit charitable organizations used a social constructionist perspective to investigate the relationship between the extent to which nonprofit boards use prescribed board practices and stakeholder judgments of the effectiveness of those boards. A social constructionist perspective implies that different stakeholders use and evaluate different kinds of information in making judgments about board effectiveness. The results suggest that there is wide variation in the use of the prescribed board practices, that judgments of board effectiveness often differ substantially, and that chief executives' judgments of the effectiveness of their boards is moderately related to the extent of use of recommended board practices.     

Turning Social Return on Investment on Its Head

This article undertakes a critique of social return on investment (SROI), combining the existing research literature with an analysis of six case studies of supported social enterprises employing people with disabilities and other challenges that affect their access to the conventional labor market. The critique of SROI focuses on its positivist roots and its emphasis on one number, the SROI ratio. It also discusses the technical challenges in producing that number, including concerns about its reliability. The article presents the stakeholder impact statement, an approach that is rooted in interpretivism and attempts to understand the impact of enterprises through the eyes of multiple stakeholders. Unlike SROI, which is a supplement to conventional accounting statements, the stakeholder impact statement integrates financial and social impact data, thereby placing them on the same level of importance.