Management in the Third Sector

Abstract

As early as Weber's Ideal Type, observers of the organizational world have noted the existence of organizations which neither conform nor subscribe to traditional assumptions about public and private entities. In recent years, the existence of these neither public nor private organizations has been increasingly apparent, perhaps because there are in fact more of them, or perhaps because those which do exist are increasingly active and therefore more visible. Such has been the evidence of these organizations that they have come to be known collectively as the sector. Traditional business or private sector perspectives upon the third sector have viewed with alarm the increasing publicness of heretofore private pursuits, and some have even labeled such movements as creeping socialism. From the public sector viewpoint, the control of public domains by private enterprise has correspondingly been decried as examples of the social irresponsibility of capitalism run rampant. Regardless of the labels assigned to this movement, one fact of our present era of industrialization seems apparent we are seeing the emergence of a wide variety of organizations and/or organizational processes which reflect the convergent and increasing (some would say inevitably) interdependent nature of our current stage of economic development. Aside from the occasional emotional response such as those noted above, these third sector organizations have been largely ignored by students of business administration and public administration alike. In this article, we attempt to identify some new directions in management theory and practice as they relate to the emergence of third sector organizations as important entities in our postindustrial society. We begin by specifying the definitional criteria of the third sector, after which we advance a model of third sector organizations, and conclude by discussing its implications for management in the coming decades.