Artful Leadership

Nonprofit organizations sometimes experience problems with stakeholders, and the organization's manager must then decide how to respond. In this study, Mary Tschirhart addresses three questions: What types of problems do managers experience with their organizational stakeholders? How do they respond to these problems? What determines the use of different responses?

Interviews with managers of twenty-four nonprofit arts organizations yielded information on three types of problems. In problems of organizational legitimacy, the stakeholder's values or norms are in conflict with the organization's activities; for example, audience members are upset that a theater's performance includes nudity.

In stakeholder legitimacy problems, the organization's values or norms are in conflict with stakeholders' activities, as in the case of a theater concerned that a volunteer is misusing theater funds. In efficiency problems, organizational and stakeholder activities are interdependent and incompatible, without any violation of the values or norms of either party, as when a theater is competing with other theaters for a funder's limited monies.

Along with detailed discussions of these problems, the author offers practical advice on responding to complaints.