Abstract
We use a mixed-methods design to investigate the relationship between scope and performance within nonprofits and under varying conditions of environmental dynamism, munificence, and complexity. Prior strategy research on for-profit organizations suggests that relatively high levels of environmental dynamism and complexity attenuate the negative relationship between scope and performance, while greater munificence reinforces it. Our longitudinal quantitative study of approximately 63,000 Canadian nonprofits suggests the opposite: greater dynamism reinforces the negative relationship, and munificence bears no definitive effect, indicating that certain task environment effects on the scope–performance relationship manifest uniquely for organizations pursuing social over economic value creation. We then conducted qualitative interviews with nonprofit executives to explore in greater detail the probable mechanisms that underpin these relationships, highlighting three— nature of mission, scarcity of human capital, and competitive tension in collaboration. We offer several contributions to theory and practice regarding the relationship between nonprofit scope and performance.
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