Leadership succession and the performance of nonprofit organizations: A fuzzy‐set qualitative comparative analysis

• Date: 01 March 2019
• Author: Hui Li
• Published date: 01 March 2019
• DOI: http://doi.org/10.1002/nml.21339

RESEARCH ARTICLE

Leadership succession and the performance of

nonprofit organizations: A fuzzy-set qualitative

comparative analysis

Hui Li

Department of Politics and Public Administration,

The University of Hong Kong, Hong Kong

Correspondence

Hui Li, Department of Politics and Public

Administration, The Jockey Club Tower, The

University of Hong Kong, Pokfulam, Hong Kong.

Email: lihuipa@hku.hk

Leadership succession is critical to the performance of

nonprofit organizations. Existing research has mostly trea-

ted leadership succession as an instantaneous event, and it

has examined the independent effects of certain factors on

organizational performance. However, little research has

focused on the combinations of causally relevant factors.

This article integrated organizational life cycle, resource

dependence, and institutional theories, as well as the orga-

nizational fit literature, to explain how contextual and stra-

tegic factors combine to affect postsuccession

performance. A fuzzy-set qualitative comparative analysis

(fsQCA) was used to analyze 15 succession events in Chi-

nese environmental nongovernmental organizations

(NGOs). The study identified four pathways to good

NGO performance after succession. It also highlighted

that it is not succession per se but the succession context

(i.e. founders' control, board governance, professionaliza-

tion, and political environment) and the strategic orienta-

tions of the successor that affect postsuccession

performance in nonprofit organizations.

KEYWORDS

China, fuzzy-set qualitative comparative analysis,

leadership succession, nongovernmental organizations,

organizational performance

1|INTRODUCTION

Leadership succession—the replacement of key officials—is an event that almost all organizations

face at some stage of their life cycle. A smooth and successful transition contributes to organizational

performance and sustainability, whereas a failed attempt causes resource deficits, power resistance,

identity crises, or even organizational death (e.g. Balser & Carmin, 2009; Carroll, 1984; Haveman &

Received: 23 September 2017 Revised: 3 August 2018 Accepted: 16 August 2018

DOI: 10.1002/nml.21339

Nonprofit Management and Leadership. 2019;29:341–361. wileyonlinelibrary.com/journal/nml © 2018 Wiley Periodicals, Inc. 341

Khaire, 2004; Hernandez & Leslie, 2001). It is therefore critical for nonprofit managers to understand

the succession process and develop ways to sustain organizational performance after succession

(Froelich, McKee, & Rathge, 2011).

Numerous studies have examined the relationship between leadership succession and organiza-

tional performance in the private sector, yet the findings are equivocal (see Giambatista, Rowe, &

Riaz, 2005 for a review). Some argue that succession improves performance as it brings novel infor-

mation and facilitates organization learning. Others show that succession diminishes organizational

performance as it disrupts work routines, interrupts command, and increases employee insecurity.

Studies on leadership succession in public and nonprofit organizations are episodic and scattered at

best. Boyne and Dahya (2002), for example, focus on the effects of motives, means, and opportuni-

ties available to top managers on postsuccession performance. Hill (2005) finds that the long-term

effect of managerial change on organizational performance is positive. Balser and Carmin (2009)

illustrate the identity crisis among staff members in an environmental nonprofit when the founder

stepped down.

Overall, existing literature has mostly assumed that leadership succession is an instantaneous

event that comes and goes quickly. However, leadership succession is a complex process that

involves not only “passing the baton”from the incumbent to the successor but also how the successor

understands and strategically responds to environmental opportunities and constraints (Stewart,

2016). In addition, most studies have examined the independent effects of a specific factor

(e.g. organizational attributes, successor characteristics) on leadership succession. Very few have

looked at how the configuration of a set of factors affects postsuccession performance.

This study fills the gap in the literature by answering the following research question: How do

contextual and strategic factors combine to affect the performance of nonprofit organizations after

leadership succession? Integrating organizational life cycle, resource dependence, and institutional

theories and the organizational fit literature, I propose a preliminary theoretical framework to explain

how internal and external conditions, as well as successor strategies, combine to affect postsuccession

performance. Specifically, the internal structure is characterized by founder's control, board gover-

nance, and professionalization. The external environment focuses on the impact of the political envi-

ronment. Successor strategies examine the extent to which successor strategies are active when

responding to environmental demands.

I use fuzzy-set qualitative comparative analysis (fsQCA)—which focuses on identifying the con-

figuration of causally relevant factors that affect organizational outcomes—to analyze 15 succession

events in Chinese environmental nongovernmental organizations (NGOs) where leadership succes-

sion has recently become a critical issue. The study demonstrates that four configurations are good

for NGO performance after succession. The findings further show that political environment and

founder's control are both core contributors to postsuccession performance. Given a favorable politi-

cal environment, less control by the founder, and a more professionalized structure, NGOs with func-

tioning boards are equally likely to perform well than those with an active successor strategy.

Furthermore, given less control by the founder and an active successor strategy, good postsuccession

performance can be realized when a favorable political environment and professionalization are pre-

sent, or when both conditions are absent.

This article proceeds as follows. First, integrating insights from organizational life cycle, resource

dependence, and institutional theories and the organizational fit literature, a theoretical framework is

proposed. Second, the research setting is introduced, as well as the data collection and analysis

methods. Then, research findings and a summary of theoretical and practical implications of the study

are presented.

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