Strategy, structure, and organizational effectiveness: A study of nonprofit arts organizations

This dissertation reports on exploratory research into strategy, structure, and organizational effectiveness in nonprofit organizations. The underlying thesis is that matches between strategy and structure contribute to organizational effectiveness.;Strategy refers to decisions and processes associated with comprehensive relationships between organization and environment. Structure refers to division of labor and the means adopted to coordinate labor. Organizational effectiveness is modeled as a consequence of components--constituency satisfaction, resource acquisition, internal process, and goal attainment--which contribute directly and indirectly to overall effectiveness. Strategy, structure, and effectiveness were studied in nonprofit organizations because financial and volunteer donations present nonprofits with a unique decision environment. Arts organizations were chosen as data sites because they appear to compete simultaneously in markets for ticket sales and donations.;An inductive, exploratory "grounded theory" research method combined qualitative and quantitative analyses. Data were collected from 19 nonprofit arts organizations in two Northeast states using executive interviews, observation of organization programs, and archival data. The principle results of this study are: (1) Nonprofit strategy can be classified using the character of benefits provided to the public. Arts Benefit, Community Benefit, and Private Benefit types were proposed. (2) The program margin ratio of earned income to program expenditure appears to indicate some aspects of strategic character. (3) Two dimensions of nonprofit structure are focus/diffusion of influence and whether key influencers are volunteers or employees. Combining these two dichotomies leads to Grassroots (volunteer-diffused), Coordinating (employee-diffused), Directorial (employee-focused), and Institutional (volunteer-focused) structures. Evolution between structure types is motivated by specialization, coordination, and assertion of control by volunteers. Cases where organizations cannot decide how to configure influence display some dysfunctions. (4) Effectiveness evaluation used subjective measures and within-sample ranking of financial strength to operationalize components of the effectiveness model. Both measures appeared to discriminate between most and least successful organizations in the sample. (5) Strategy decisions appear to contribute to organizational survival and/or impact. In two cases, structure has a significant impact on effectiveness, but this may be mediated by member commitment. In most of the sample, there is no consistent relationship between structural configurations and performance.