The effect of stakeholder culture on managers’ perceptions of stakeholder attributes in Australian not‐for‐profit organizations

Abstract

AbstractWe examine the relation between stakeholder culture and managers’ perceptions of stakeholder attributes of power, legitimacy, and urgency in Australian not‐for‐profit (NFP) organizations. Examination of this relation is important because managers’ perceptions of stakeholder attributes determine how stakeholder relationships are managed, which affects (positively or negatively) the ability of NFP organizations to fulfil their social mission. Data were collected through a survey of top managers of 478 NFP organizations. Our results show that the stakeholder cultures of altruist and instrumentalist, manifesting different moral values, differentially affect NFP managers’ perceptions of the three stakeholder attributes for clients and government. Specifically, an altruist stakeholder culture affects managers’ perception of client legitimacy, while an instrumentalist culture affects managers’ perception of government power. We also investigate the mediating effects of power and legitimacy on the relation between stakeholder cultures and urgency. We find that managers’ perceptions of power and legitimacy act as crucial cues for managers to perceive stakeholder urgency. Our study contributes to the stakeholder management literature and has important implications for managers of NFP organizations in managing stakeholder relationships in the contemporary environment.