Masters Thesis

Are humans the input in nonprofit mergers: synergies created by Human Relations Theory vs. the Ideal Type of Bureaucracy

Nonprofits are a public entity guided by a shared mission to address needs that are underserved by public resources. Pressured by donors in the private sector, nonprofit organizations are compelled to utilize funding in the most efficient and effective way for service delivery. With this pressure comes the push from internal and external stakeholders to merge with other nonprofits to avoid duplication of services. Currently, there is a trend towards consolidation in the private sector but mergers in the nonprofit sector are lagging behind (Seaman, Wilsker, & Young, 2014; Benton & Austin, 2010). This paper analyzes resistance to mergers, successful merger strategies, and degrees of integration to elucidate the slow growth of mergers. Drawing on the framework of Follett’s theory of integrative unity and Human Relations Theory, resistance can form due to cultural differences that are not properly vetted early on in the merger process (Cartwright & Cooper, 1993). In contrast, Weber’s Ideal Type Theory postulates the idea that organizations are hierarchical with written rules of conduct suggesting a top-down approach in mergers (Spicer, 2015). Mergers are initially pursued to optimize efficiency but bringing the two organizations’ cultures together should precede financial and administrative discussions. Mergers in the nonprofit sector fail due to a lack of clear communications and a failure to integrate human relations into discussions centered on consolidating and improving shared missions. If this project went forward the research methods would use qualitative interviews with qualified Chief Executive Officers in the nonprofit sector. The research questions would be designed around the three themes of the research paper: resistance to mergers, successful strategies for mergers, and degrees of integration. In addition, the paper applies concepts from two theories: Human Relations Theory and Weber’s Ideal Type Bureaucracy Theory, in order to understand and interpret the theories as they relate to the themes.

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