Avoiding the vicious cycle, engendering the virtuous circle: Understanding the interaction of human, social and organizational capitals in non-profit and voluntary organizations

Abstract

Increasing competition for scarce resources has required Non Profit and Voluntary Organizations (NPVOs) to focus on organizational competitiveness, whilst also addressing social goals. This article explores how NPVOs reconcile these demands through the adoption of innovative strategies. Drawing from three NPVO case organizations, we utilise an intellectual capital (IC) theoretical framework (comprising human, social and organizational capital components) to explain the associated outcomes of approaches adopted and further understanding of how IC components interact. The interactions between capitals has received considerable academic attention in both private and public sector contexts, but there is little attention given to these dynamics in the distinctive context of NPVOs. This article illuminates the varying dynamics between capital components in NPVOs and specifically identifies the compensatory role of social capital when deficiencies in other capitals exist, highlighting the risks of a ‘vicious cycle’ of outcomes when innovative strategies are adopted.