From Nonprofit Diversity to Organizational Multifunctionality: A Systems–Theoretical Proposal

• Author: Steffen Roth,Matthias Georg Will,Vladislav Valentinov
• Date: 01 August 2018
• DOI: 10.1177/0095399717728093
• Published date: 01 August 2018
• Subject Matter: Articles

https://doi.org/10.1177/0095399717728093

Administration & Society

2018, Vol. 50(7) 1015 –1036

© The Author(s) 2017

DOI: 10.1177/0095399717728093

journals.sagepub.com/home/aas

Article

From Nonprofit Diversity

to Organizational

Multifunctionality: A

Systems–Theoretical

Proposal

Matthias Georg Will1, Steffen Roth2,3, and

Vladislav Valentinov4,5

Abstract

The remarkable feature of the nonprofit sector is its astonishing diversity.

This feature gets short shrift in the traditional market or governmental failure

theories of the nonprofit sector. Drawing on Niklas Luhmann’s concept of

functional differentiation, we demonstrate that these theories are implicitly

economy- and politics-biased. In seeking to overcome these biases, we show

that nonprofits and nongovernmental organizations (NGOs) are better

understood as those varieties of organizations whose primary focus is on

function systems other than the economy and politics. We summarize this

argument in the concept of organizational multifunctionality, which turns out

to be likewise applicable to the for-profit sector.

Keywords

NPO, NGO, Niklas Luhmann, functional differentiation, diversity

1University of Halle–Wittenberg, Germany

2La Rochelle Business School, France

3Yerevan State University, Armenia

4Leibniz Institute of Agricultural Development in Central and Eastern Europe, Germany

5University of Halle–Wittenberg, Germany

Corresponding Author:

Steffen Roth, La Rochelle Business School, 102 Rue de Coureilles, 17000 La Rochelle, France,

and Yerevan State University, Faculty of Sociology, Alex Manoogian 1, 0025 Yerevan, Armenia.

Email: roths@esc-larochelle.fr

728093AASXXX10.1177/0095399717728093Administration & SocietyWill et al.

research-article2017

1016 Administration & Society 50(7)

Introduction

If there is a single characteristic that can be safely assumed to apply to the

nonprofit sector, it is diversity. Both across and within nations, nonprofit

organizations exhibit startling heterogeneity and include

religious congregations, universities, hospitals, museums, homeless shelters,

civil rights groups, labor unions, political parties, and environmental

organizations, among others. Nonprofits play a variety of social, economic, and

political roles in the society. They provide services as well as educate, advocate,

and engage people in civic and social life. (Boris & Steuerle, 2006, p. 66)

The diversity of this sector has been so impressive that it led some scholars to

question the meaningfulness of the sector as a definitional construct suitable

for consistent theory building (Ferreira, 2014; Simsa, 2001, p. 8). O’Neill

(2002) identified a stream of nonprofit scholarship, that is “question[ing]

whether the term sector is appropriately applied to the nonprofit world,

because of the permeability of its borders the diversity of its organizations in

size, purpose, and revenue sources” (p. 8). Notwithstanding these legitimate

concerns, the interdisciplinary field of the nonprofit sector studies has been

booming for decades. It is most likely that diversity has been one reason

behind this boom because it has encouraged lively experimentation with

ideas, theories, and methods. Yet, the diversity itself has turned out to be an

elusive concept. Although many individual theories of the nonprofit sector

provide brilliant insights into specific segments of its global landscape, its

diversity as such remains puzzling. As a result, “we are still far from a ‘grand

unified theory’ of the nonprofit sector” (O’Neill, 2002, p. 52).

As a research challenge, the issue of nonprofit diversity has certainly not

escaped the attention of scholars. It has been suggested that if diversity can

be at all explained, then only by the theories of the institutional embedded-

ness of the nonprofit sector (Smith & Grønbjerg, 2006). A landmark contribu-

tion in this direction is Anheier and Salamon’s (2006) “social origins” theory

intended to emphasize

the embeddedness of the nonprofit sector in the cultural, religious, political,

and economic realities of different countries. It thus views decisions about

whether to rely on the market, the nonprofit sector, or the state for the

provision of key services as not simply open to choice by individual

consumers in an open market . . . Rather, it views these choices as heavily

constrained by prior patterns of historical development and by the relative