Organizational Response to Changing Demands: Predicting Behavior in Donor Networks

AuthorMary Tschirhart,Khaldoun AbouAssi
DOIhttp://doi.org/10.1111/puar.12786
Published date01 January 2018
Date01 January 2018
126 Public Administration Review • January | February 2018
Public Administration Review,
Vol. 78, Iss. 1, pp. 126–136. © 2017 by
The American Society for Public Administration.
DOI: 10.1111/puar.12786.
Mary Tschirhart is professor in the
John Glenn College of Public Affairs, The
Ohio State University. She studies the
management and governance of nonprofit
organizations and relationships among
organizations in different sectors. She
has a particular interest in membership
associations.
E-mail: tschirhart.2@osu.edu
Khaldoun AbouAssi is assistant
professor in the Department of Public
Administration and Policy, School of Public
Affairs, American University. His primary
research focuses on public and nonprofit
management, examining organizational
capacity, resources, and interorganizational
relations.
E-mail: abouassi@american.edu
Abstract : The integration of resource dependence theory and a network perspective results in a parsimonious “strategic
response model” for the organizational responses of exit, voice, loyalty, and adjustment. Four cases illustrate the
model’s application to nonprofit organizations by focusing on relations with a government aid agency that switched
funding priorities. The model helps explain why networks of recipients of funding may change over time and predicts
organizational responses to changing demands from resource providers.
Evidence for Practice
The strategic response model can be helpful in understanding past behavior and in future planning.
Organizations may be able to change the strength of their network ties and resource dependencies to reduce
their vulnerabilities to changing demands by funders.
It is useful to consider likely outcomes of the combination of funding strategies (e.g., revenue diversification)
with network strategies (e.g., strengthening relationships through frequent interactions).
Nonprofit leaders are encouraged to invest in understanding the dynamics within their donors’ networks to
give them knowledge useful for strategizing.
Donors may facilitate innovation and discourage dependence on them by regularly adding new members to
their donor networks and encouraging information sharing within and outside their network.
Khaldoun AbouAssi
American University
Mary Tschirhart
The Ohio State University
Organizational Response to Changing Demands:
Predicting Behavior in Donor Networks
M ost organizational theories (Baum
and Rowley 2002 ; Thompson 2010 )
consider organizations to be open systems
with changing resource environments. Resource
dependence theory (RDT) puts resource dependencies
at the heart of understanding organizational behavior
(Pfeffer and Salancik 1978 ). In general, RDT
suggests that organizations are resource insufficient
and respond positively to demands by external
stakeholders on which they are highly dependent
for needed resources (Oliver 1991; Pfeffer 1982 ;
Pfeffer and Salancik 1978 ). This theory is popular
for understanding the funding, performance, and
management of nonprofit organizations (NPOs) (see,
e.g., AbouAssi 2015a ; Barman 2008 ; Dunn 2008 ;
Guo and Acar 2005 ; Kim, Pandey, and Pandey 2017 ;
Mosley 2011 ; Ni and Zhan 2017 ; Stone, Hager, and
Griffin 2001 ; Thomson 2010 ). RDT’s popularity
is not surprising given that nonprofit organizations
often rely on external funders, face instability in the
flow of funding, and deal with volatile demands
(Ebrahim 2005 ).
A narrow focus on RDT could be one reason why
scholars and practitioners struggle to understand
NPOs’ creation and management of funding
portfolios. In addition, RDT provides little help in
addressing some of the overarching questions for the
nonprofit sector, in particular, the degree of agency
that nonprofit organizations have to change what
their donors demand. As Van Rooy (1998) presents
the question, are nonprofits just instruments of their
funders and a consequence of the distribution of
power in states and societies? Practically, should we
see NPOs as relatively powerless to exert pressure
on donors or to ignore their demands? What
other variables besides the nature of their resource
dependencies explain NPOs’ behavior in the face of
changing resource environments?
This article offers a “strategic response model” to
integrate RDT with a network perspective. The model
captures how the strength of network ties combined
with the degree of resource dependence can predict an
organization’s response to changing demands from a
resource provider. The model demonstrates that not all
organizations with the same level of resource dependence
tolerance and/or the same nature and structures of
relations necessarily will adopt the same behavior when
faced with changes in their environment. The behaviors
explained in the model are those outlined in AbouAssi’s
( 2013 ) typology: exit, voice, loyalty, and adjustment.
This manuscript was originally
submitted and accepted as an Public
Administration and the Disciplines
article. The feature editor, Rosemary O’Leary,
is gratefully acknowledged for their work
in soliciting and developing this content.
Effective with Volume 78, the Public
Administration and the Disciplines feature
has been discontinued.

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