Which stakeholder matters: overall performance and contingency in nonprofit organizations

Abstract

This article seeks to further the literature on the importance of stakeholders in the overall performance of nonprofit organizations. Specifically, in the French context, the effect of each type of stakeholder has to be studied. The stakeholders of nonprofit organizations (NPOs) indeed correspond to their environment, which is uncertain, unpredictable, complex, and sometimes hostile. Using French NPO reports and disclosures about their performance, multiple regressions establish the various effects of stakeholder consideration, which are heterogeneous, variable, and more or less positive. The results confirm the theoretical framework proposed from the contingent approach and the agency, stakeholders, resource dependency, and stewardship theories. The article thus defends a contingent view of performance and the importance of taking organizational characteristics into account when making decisions. Moreover, while the normative approach of stakeholder theory is important, it must be nuanced according to the nuisance power of stakeholders (which corresponds to the instrumental approach). To do this, stakeholders must be differentiated and prioritized (especially in terms of resources). The results also highlight an optimistic view of cooperation between sectors, whereas fears of negative isomorphisms are often highlighted. In short, this research calls for a nuance in best practices, in favor of adapting them to each NPO according to the organizational context.