Language and Power in Nonprofit/For-Profit Relationships:
A Grounded Theory of Inter-sectoral Collaboration





A thesis submitted by




Meryl McQueen




in partial fulfillment of the requirements of the degree of






Doctor of Philosophy
University of Technology, Sydney
2002




CERTIFICATE OF AUTHORSHIP/ORIGINALITY





I certify that the work in this thesis has not previously been submitted for a degree nor has 
it been submitted as part of requirements for a degree except as fully acknowledged within 
the text.

I also certify that the thesis has been written by me.  Any help that I have received in my 
research work and the preparation of the thesis itself has been acknowledged.  In addition, I 
certify that all information sources and literature are indicated in the thesis.


Signature of Candidate


_______________________________________


ACKNOWLEDGMENTS
First and foremost I would like to thank my supervisor, Associate Professor Jenny Onyx for 
expert guidance, generosity and mentorship over the past few years.  Her invaluable 
feedback and  challenging discussion helped shape my experience every step of the way.  
Always readily available, she worked to temper my ever-present impatience  while at the 
same time trying to teach me the crafts of research and academic writing.  It has been an 
honour and a joy serving as an apprentice with her.  My co-supervisor, Professor Mark 
Lyons, was extremely helpful.  His extraordinary knowledge of the history of the third 
sector in Australia was critical to my early thinking.  I appreciate his willingness to share 
his extensive experience with me on my journey.  I also owe both my supervisors a debt of 
gratitude for hiring me as a research assistant on several interesting projects over the years.

Many other people provided me with editorial support along the way.  In particular, I would 
like to thank Bill Johnstone for his herculean efforts in wading through the first draft.  His 
painstaking attention to detail saved me many a sleepless night, and his suggestions helped 
improve my presentation and clarify arguments.  Arzu Wasti was similarly generous and 
thorough, reading through all the chapters despite a hectic workload of her own.  Her 
assistance was instrumental in solidifying weak areas in the work.  Sincere appreciation is 
also due to fellow students who asked penetrating questions early on in the process:  
Jeanette Taylor, Joanne Young, Christine Frandsen, Veronika Peters and Melisah Feeney.

Special thanks to my partner Yusuf, for not falling over in shock and dismay when I 
changed my mind about 'never doing a Ph.D.' and for putting up with me through frenzied 
all-night writing sessions.  My parents were likewise encouraging and enthusiastic.  Finally, 
to my friends Rekha Balu, Esther Kelly, Catrina Hays, Louise Kinch and everyone else, for 
listening to me drone on interminably about my thesis on good days and bad.  Your moral 
support and love (even from far away) did not go unnoticed. 

Of course, despite all the assistance provided by Ass. Prof. Onyx and others, I alone remain 
responsible for the content of the following, including any errors or omissions
which may unwittingly remain.
TABLE OF CONTENTS

Certificate of authorship/originality	ii
Acknowledgments	iii
Table of Contents	iv
List of Figures	vii
List of Tables	viii
Abstract	ix
Introduction	1
Identifying the issues	1
Aims & objectives	3
Organisation of the thesis	5
Chapter 1:  Literature Review	8
1.1	Historical context of nonprofits and philanthropy in Australia	8
1.2	Collaboration	16
1.3	Power and philanthropy	22
Chapter 2:  Theoretical Model & Research Questions	24
2.1     Overview	24
2.2	Power, knowledge and language:  discourse and structural components	26
2.3	Social agency	36
2.4	Organisational capacity	40
2.5	Institutional context and structure	42
2.6     Constructing the theoretical heuristic	43
2.5	Exploring the model	46
Chapter 3:  Methodology	49
3.1	Introduction	49
3.2	Building the assumption base	51
3.3	Methodological implications of paradigm choice	54
3.4	Bricks and mortar: the methodological framework of relationships	63
3.5	Creating an appropriate tool for analysis: the linguistic thread	70
3.6 	Specific linguistic threads used in this study	75
3.7	Details of identifying the linguistic threads: a micro-level examination	86
Chapter 4:  Care & Share Association	90
4.1	Overview	90
4.2	Analysis	91
4.3	Weaving the threads	114
Chapter 5:  Nightlight	123
5.1	Overview	123
5.2	Analysis	124
5.3	Weaving the threads	146
Chapter 6:  Integrate Inc.	150
6.1	Overview	150
6.2	Analysis	152
6.3	Weaving the threads	178
Chapter 7:  The Welfare League	183
7.1	Overview	183
7.2	Analysis	184
7.3	Weaving the threads	205
Chapter 8:  Workwell	208
8.1	Overview	208
8.2	Analysis	209
8.3	Weaving the threads	231
Chapter 9:  Media Analysis	234
9.1	Overview	234
9.2	Methodology	236
9.3	Analysis	239
9.4	Weaving the threads	259
9.5	Implications	267
Chapter 10:  Quantitative Triangulation	271
10.1	Purpose	271
10.2	Methodology	272
10.3	Pilot study	275
10.4	Results	277
10.5	Theoretical triangulation:  support for case study findings	278
10.6	Theoretical expansion:  understanding 'surprises' in the quantitative data	285
Chapter 11:  Theory, Significance and Conclusions	288
11.1	Overview	288
11.2	Building the process theory model: through language and power from linguistic 
threads to individual and organisational effects	289
11.3	The models overlayed:  a 'typical' arrangement of major linguistic threads	308
11.4	Significance to various bodies of literature:  where does the theory fit?	313
11.5    Circuits of language:  language/(choice)/power/flow	322
11.6	Methodological contribution:  linguistic threads	327
11.7	Future directions & broader implications:  what does it mean?	332
Appendix A	338
Appendix B	342
Appendix C	343
Appendix D	349
Appendix E	349
Appendix F	349
Bibliography	353


LIST OF FIGURES
Figure 1:	Initial Theoretical Heuristic	48
Figure 2:	Power Interaction in Care & Share Association	117
Figure 3:	Care and Share Association Linguistic Threads Model	122
Figure 4:	Nightlight Linguistic Threads Model	149
Figure 5:	Intra-organisational Communication Incrementalism in Integrate Inc.	160
Figure 6:	Progress and Retreat	160
Figure 7:	Integrate Inc. Linguistic Threads Model	182
Figure 8:	The Welfare League Linguistic Threads Model	207
Figure 9:	 Workwell Core Values	211
Figure 10:  	Workwell Commitments	211
Figure 11:	Workwell Linguistic Threads Model	233
Figure 12:   Media Discourse Linguistic Threads Model 	262
Figure 13:   A Process Theory of Language and Power in Nonprofit/For-profit 
Relationships	309
Figure 14:	  Average Static State Linguistic Threads Model	310
Figure 15:	   Circuits of Language	326





LIST OF TABLES 
Table 1:	  Historical Overview of Nonprofit Development in Australia	9
Table 2:	  Description of Qualitative versus Quantitative Purpose and Analysis	65
Table 3:	  Research Questions and Linguistic Threads	81
Table 4:	  Frequency Table #1	279
Table 5	  Descriptive Statistics	281
Table 6:	  Correlational Table #1	281
Table 7:	  Correlational Table #2	282
Table 8:	  Correlational Table #3	282
Table 9:	  Correlational Table #4	282
Table 10:	  Correlational Table #5	283
Table 11:	  Correlational Table #6	284
Table 12:	  Correlational Table #7	284
Table 13:	  Correlational Table #8	285
Table 14:	  Correlational Table #9	287
Table 15:    Definitions of Linguistic Threads	292
Table 16:	  Prevalence of Linguistic Threads in Data	294
Table 17:	  Language/(Choice)/Power/Flow:  Circuits of Language	324






 



ABSTRACT
Concerns over the future of the nonprofit sector due to increasing resource pressures and an  
economic rationalist political climate in Australia have led to increasing public and private 
interest in partnerships between nonprofit organisations and the private sector.
The purpose of this research is to describe, understand, map and analyse the experiences of 
nonprofit staff in organisations that are linked to businesses in a variety of funding 
relationships.  The major questions that drove the research were:

1. 	Does the language used by nonprofit staff and in organisational documentation 
relating to relationships with for-profits reflect the status of and contribute to the 
reproduction of the power relationship between the organisations?
2.	Do nonprofit/for-profit relationships affect the organisational capacity of nonprofit 
organisations and the social agency of individuals? If so, to what extent can 
balanced power-sharing arrangements contribute to increased organisational 
capacity?
3.	Does the media aspect of the institutional context of relationships in which 
nonprofits operate affect the social agency of individuals and the capacity of 
nonprofits?

The thesis presents a grounded theory (Glaser & Strauss 1967; Strauss & Corbin 1998) of 
language and power in inter-sectoral relationships, using five case studies, a media analysis 
and a quantitative component as the data from which to draw theoretical implications.  The 
work develops an innovative methodological tool called 'linguistic threads' and uses 
Clegg's circuits of power model (1987) to culminate in static state and process theories of 
language and power in relationships between nonprofits and for-profits in the Australian 
context.




INTRODUCTION


IDENTIFYING THE ISSUES 

Concerns over the future of the nonprofit sector due to increasing resource pressures and an  
economic rationalist political climate in Australia have led to increasing public and private 
interest in partnerships between nonprofit organisations and the private sector.  Two recent 
examples of the attention to the topic of collaboration in the Australian context demonstrate 
the salience of this topic at the beginning of the 21st century.  Firstly, the Australian Prime 
Minister has set up an organisation to deal explicitly with the potential and challenge of 
these nonprofit/for-profit inter-sectoral relationships.  Named the Community Business 
Partnership, this project was set up to recognise, reward, facilitate and promote 
nonprofit/for-profit relationships.  Prime Minister John Howard said of this initiative: 

Working in partnership not only has the potential to enrich 
people's lives but can also deliver tangible results for all 
Australians. Community and business partnerships are a 
driver to accomplish better outcomes than any group acting 
alone could achieve.
(Community Business Partnership Web site, 
http://www.partnership.zip.com.au, accessed 09/07/01).

A second recent example of academic interest in private/third sector collaboration was 
evident at a conference hosted by the Australia and New Zealand Society for Third Sector 
Research (ANZTSR).  ANZTSR is the Australia/New Zealand equivalent of the ISTR, the 
International Society for Third Sector Research.  The ANZTSR conference held in 
December, 2000 focused on 'Partnership and Activism,' and papers presented ran the 
gamut from community development projects through to explorations of Australian 
philanthropy.  The current interest in both political and academic circles in the ways in 
which business and nonprofit organisations can work together makes this a critical time for 
a study that focuses on the internal experiences of nonprofit staff who are experiencing  
threats and opportunities presented by collaborating with the private sector. 

The Federal government's initiative of Community Business Partnership is primarily 
concerned with promoting the concept of nonprofits working with the private sector.  
However, the political rhetoric does not take into account possible negative consequences 
to the nonprofit organisations themselves as a result of collaborating with business.  The 
research reported here addresses that gap by centring itself on the people closest to the 
issue.  That is, the staff working in the nonprofit trying to maintain and secure financial 
support for their core community-based work.  It is important to understand these co-
operative arrangements in context and to examine what possible threats and opportunities 
these alliances might pose for the agency of staff in nonprofits, the organisational capacity 
of nonprofits and broader issues of social equity.

This research contributes to an understanding of the third sector by concentrating on some 
of the possible implications—both negative and positive—of these co-operative 
arrangements from the point of view of those staff members in the nonprofit.  Having 
ascertained that the primary informants for the study would be staff engaged in nonprofit 
community work in an urban environment in Australia, it was also critical to select the 
theoretical bases for analysis.  This process emanated partly from the researcher's own 
experience, and as such is important to include here.  As a social worker in a small 
homeless services organisation in inner-city Chicago several years ago, the researcher had 
the opportunity to be involved in fundraising and resource development for the 
organisation.  Although at the time she had no label for the cognitive dissonance she and 
her co-workers experienced, there was a distinct level of discomfort as the organisation was 
forced to move from full government funding to other financial arrangements.  One of these 
was to solicit support from the private sector, from large corporations to small local 
businesses.  

Anecdotal evidence from her organisation and subsequent immersion in the literature 
convinced the researcher that she and her colleagues were indeed caught in conflicting 
'thought worlds' (Dougherty 1992).  On the one hand, the team of social workers and 
employment placement officers were working to empower participants (never 'clients') to 
re-build their lives by taking control.  In this part of their jobs, the nonprofit staff modelled 
self-confidence, proactive behaviour and assertiveness in setting and achieving goals for 
themselves and the people with whom they worked.  On the other hand, when it came to 
financial support of the organisation (upon which its very survival depended), staff 
exhibited almost servile behaviour, fawning over potential donors and showing immense 
gratitude when assistance was proffered.

One of the most striking features of this experience to the researcher at the time was the 
linguistic difference between the way in which staff interacted with each other and with 
participants and the shift when attempting to gain financial support from the private sector.  
It appeared that some connection between the power relations of the two organisations was 
reflected and reinforced by the language used in the relationship.  This observation led to  
thoughts about whether the interplay of language and power in nonprofit/for-profit 
relationships could at least partly account for the perceptions of staff in her organisaton 
several years prior to embarking on the thesis journey.  Subsequent informal observation 
coupled with substantial grounding in existing work led to this idea being at the core of all 
the work presented here.

An examination of the language and power implications of these alliances will focus on 
how the staff is affected by power reflected by language and power inherent in language.  
The ideas of social agency (the extent to which people feel able to act positively on their 
own behalf), organisational capacity (the ability of an organisation to respond to challenges 
and develop progressively) and institutional context are three main constructs of the 
research.

AIMS & OBJECTIVES
The purpose of this research is to describe, understand, map and analyse the experiences of 
nonprofit staff in organisations that are linked to businesses in a variety of funding 
relationships.  The set of questions that drove this study were:

1. 	Does the language used by nonprofit staff and in organisational documentation 
relating to relationships with for-profits reflect the status of and contribute to the 
reproduction of the power relationship between the organisations?
1a.	What elements of vocabulary, narrative structure and syntax constitute a 
'language of inequality' between the private and third sector?
1b.  	How is this language different in genuine power-sharing relationships?
1c.	To what extent is this linguistic space shared across nonprofit organisations 
engaged in similar relationships with for-profit firms?
1d.	How is the structure of that language transmitted throughout the 
organisation?
4.	Do relationships affect the organisational capacity of nonprofit organisations and 
the social agency of individuals? If so, to what extent can balanced power-sharing 
arrangements contribute to increased organisational capacity?
5.	Does the media aspect of the institutional context of relationships in which 
nonprofits operate affect the social agency of individuals and the capacity of 
nonprofits?
3a.	To what extent are staff members in the nonprofit aware of the constraints 
on them of this aspect of institutionalism?

Both qualitative and quantitative methodologies were used.  To accomplish this, a rigorous 
methodological framework was created to support the assumptions underlying the research 
questions as outlined above (Lee, T.W. 1999).  This rigour was essential to the integrity of 
the research process itself.

At a broad level, the theory presented here was developed using a grounded theory 
approach as articulated by Glaser and Strauss (1967) and explored in further detail in 
Basics of Qualitative Research by Strauss and Corbin (Second Edition, 1998).  Strauss 
himself articulated the drivers behind the need to develop theory from data.  Some of these, 
excerpted below, are drivers behind the methodological consideration of this grounded 
theory development.  These were adapted as follows:

1.	The need to get out into the field to discover what is really going on
2.	The relevance of theory, grounded in data, to the development of a discipline and as a 
basis for social action
3.	The belief that persons are actors who take an active role in responding to problematic 
situations
4.	The realisation that persons act on the basis of meaning
5.	The understanding that meaning is defined and redefined through interaction
(p. 10)

These five tenets underpin all of the methodological considerations of the work because 
they are closely aligned with the theoretical intent of the overall project.  In other words, 
grounded theory was used in conjunction with other methodological choices (detailed in 
Chapter 3) to explore, refine and answer the research questions at hand.

ORGANISATION OF THE THESIS
As an inductive study, the thesis is organised according to a process of working from data 
to theory using previous work to contextualise, inform and direct initial exploration.  As 
such, there are three framework chapters to summarise the reasoning behind literature 
scope, theoretical heuristic and methodology.  Each case study is developed as a separate 
chapter.  The case study chapters are all presented according to a template consisting of an 
organisational overview, the analysis and a section called 'weaving the threads' that 
connects elements of the discourse into a coherent story.  These are followed by chapters on 
the media and quantitative data analysis.  The last chapter in the dissertation presents a 
comprehensive theory of language and power in nonprofit/for-profit relationships in the 
selected context.  The thesis is divided into eleven chapters.  

Chapter 1 is a summary of the literature surrounding various components of the research 
topic.  An overview of the historical context of nonprofits and philanthropy in Australia 
offers a context-specific narrative of how nonprofits have evolved in the country in which 
the study is being undertaken.  As part of the focus of the study, a number of 
characterisations of collaboration, and especially inter-sectoral collaboration, are explored.  
Another area of importance that maps how relationships with business and traditional 
philanthropy are changing for nonprofit organisations is understanding of the 'new' forms 
of support to third sector organisations.  Finally, as a bridge to the theoretical construct 
discussion that is the main thrust of Chapter 2, issues of power and philanthropy round out 
the range of literature in which this work fills some knowledge gaps.

The focus of Chapter 2 differs from Chapter 1 although it too is concerned with definitions 
of important concepts and previous work.  Chapter 2 looks more closely at constructs 
including power, language, social agency and organisational capacity.  It offers a discussion 
of the importance of institutional context in this type of study and traces out a possible 
theoretical heuristic to guide the rest of the study into language and power in nonprofit/for-
profit relationships.  This chapter also provides details of the research questions that drove 
the entire project.

In Chapter 3, the methodology of the entire project is outlined and explained.  Using an 
interpretivist/poststructuralist paradigm hybrid, the work is a combination of discourse 
analysis through the lens of an innovative analytical tool called a'linguistic thread' and 
quantitative triangulation.  Details of the construction of the hybrid, with particular 
attention to the paradigmatic assumptions underpinning the choice of methodology in 
conjunction with the meaning of the research questions, are presented as integral to the 
successful implementation of the inductive research cycle.  Specific elements of the 
methodology, including field note protocols and triangulation processes are also included in 
this chapter.  

Chapters 4 through 8 are individual case studies.  Each case study is introduced, explored 
using the linguistic threads analytical tool and compared against the others.  Importantly, 
Chapter 4 is also the pilot case study conducted at the outset of field work.  Therefore, it 
contains a close examination of the final form of research questions as well as how some 
aspects of the case fit with theoretical constructs defined in Chapter 2.  Although cases 
were studied in sequence, the final versions of analyses reflected here are in accordance 
with the iterative nature of inductive research (Lee, T.W. 1999).  Therefore, these five case 
study chapters have been analysed in relation to data discovered in each of the other case 
studies as well as against their own internal frames of reference.

Chapter 9 presents the results of a media analysis of discourse into nonprofits in print and 
television media in the local market over a three-year period, from 1998 to 2000.  It 
includes full methodological detail, results of the study and links to the case studies.  The 
initial intent for Chapter 9 was that the media analysis answers comprehensively one of the 
main research questions.  However, for reasons explored in detail in that chapter, the media 
analysis became rather a supplementary piece of the research.  Nonetheless, it was essential 
to explore this aspect of the relationships.  

The purpose of Chapter 10, the quantitative analysis, is two-fold.  The detailed presentation 
of findings above fulfilled the first goal, which was to provide triangulation for case study 
data and some confirmation of findings.  However, the second and perhaps even more 
crucial objective for the quantitative questionnaire was to expand and adjust the theory that 
was developed out of this research.  The chapter itself contains methodological 
specifications as well as rationale for this part of the overall project.  As with the case 
studies, the quantitative component had both pilot and final phases.  In addition to detailing 
what correlated with case study results, Chapter 10 contains a key section on the process of 
using this form of triangulation to expand the theoretical boundaries of the work.  

Finally, Chapter 11 culminates in a theory of language and power in nonprofit/for-profit 
relationships.  Carefully embedded in the data as it is presented and analysed in preceding 
chapters on case studies, the media and the quantitative triangulation, the work represents a 
process of grounded theoretical development (Glaser & Strauss 1967; Glaser 1993; Strauss 
& Corbin 1998).  The last section of the thesis offers potential for future research to extend 
the theoretical, methodological and pragmatic aspects of the results of the study.


CHAPTER 1:  LITERATURE REVIEW


A theory of power and language across the two levels of individual and organisational 
experience in a given institutional context will encompass a broad band of literature.   
Three areas of literature are particularly important to research questions here: the historical 
context of philanthropy and nonprofits in Australia; inter-organisational and inter-sectoral 
collaboration and power and philanthropy.  This chapter focuses more specifically on the 
context in which the relationships occur; more detailed analysis of the theoretical literature 
is in Chapter 2.   As constructs that are central to the theoretical frame of the research, 
issues of  organisational capacity, social agency, language and power are dealt with there.  
The next sections outline literature concerns.  


1.1	HISTORICAL CONTEXT OF NONPROFITS AND PHILANTHROPY IN 
AUSTRALIA

Almost 20 years ago, Lansbury and Spillane published an organisational behaviour text 
detailing the context in which Australian organisations operate.  Although some of the work 
is outdated, many of the characteristics they identified are instructive to a study of nonprofit 
organisations in the 21st century in Australia.  They argued that institutions were bound by 
bureaucratic ideals that contrasted with the idea of the 'rugged individual', and that this 
dependence on government has increased over time.  The view of government that 
complemented this reliance on public services was one of entitlement (Lansbury  & 
Spillane 1983).

The 'third sector' in Australia, which encompasses nonprofit organisations, co-operatives 
and other mutual forms of organisations, is made up of groups that fit into neither the 
'government' nor 'for-profit' arenas.  The third sector  grew out of a particular environment 
in a specific era. Broadly, the third sector in Australia has several unique features.  Unlike 
its counterparts in the United States or the United Kingdom, nonprofits in Australia tend to 
be equitably distributed in areas as diverse as sporting, social clubs, religious affiliations, 
human service organisations and arts institutions (Lyons 2001). In line with much of 
Lyons' earlier work, this most current exploration takes a historical perspective on the 
birth, adaptation and context of third sector.   

In his historical overview, Lyons (1993) divided third sector development into four separate 
periods, culminating in the 1980s.  A summary of the developments during those years is 
provided in Table 1.   The 1990s have been added to this earlier timeline to update the 
historical situation in Australia.  


 
Table 1:	Historical Overview of Nonprofit Development in Australia
	Period
Predominant institutions
Significant events

1788-1860s

Religious organisations and members 
of social elite
European settlement
Discovery of gold and 
rapid urbanisation
Population growth and 
increased wealth


1860-1914

Mutual organisations: 
Friendly societies
Trade unions
Professional associations political 
parties
Recreation clubs
Highest per capita income 
in the world

Peak of nonprofit creation 
in terms of variety of 
organisations developing 

1920s-1950s

Creation of regional counterparts to 
urban progress associations and 
recreation clubs

Transformation of clubs into gaming 
venues


30% unemployment in the 
1930s

Social devastation of WWI

Gambling generating 
revenues for clubs and 
government

1960s

Mutuals declining except for building 
societies

Parent-run organisations
Commonwealth 
government became major 
source of funding for 
health/community services 
and education 



Late 1960s-1980s

Community endeavours and small 
nonprofits in health, housing, 
community development, aged care, 
disability services
Service sector growth

Activism of minority 
groups including women

Well-educated youth 
spurned traditional 
bureaucracies and 
generated growth in 
community sector

Increasing participation of 
women in the labour force


1990s

Some sectors decline, others grow
See discussion of Lyons 
influential factors below

										


Lyons identified both stimulating and diminishing factors in the historical environment of 
Australia that affected the third sector.  Growth factors include religious belief, secular 
ideologies, economic self interest, desire for increased social interaction with people who 
shared interests and government incentives (Lyons 2001).

According to Lyons, diminishing or inhibiting factors including social changes contribute 
to the decline of some types of nonprofits in some sectors of society.  For example, groups 
may disband once they have achieved their social objectives.  More frequently, 
organisations must be flexible to the socio-economic changes around them.  Changing 
societal expectations, organisational inability to adapt, commercialisation of traditionally 
nonprofit strongholds, globalisation, the growth of the service economy and shifts in work 
patterns have all worked in concert to retard or reverse third sector growth in some areas.  
The combination of these elements has implications for inter-organisational links and 
research into relationships between nonprofits and for-profits.  Firstly, these factors point to 
inherent tension and possible contradictions between the sectors.  The most obvious 
difference between nonprofit and for-profit organisations is their fundamental mission.  
For-profit businesses exist primarily to offer increasing value to shareholders and to operate 
with profit-making as a primary organisational objective.  Nonprofit organisations, on the 
other hand, are founded to assist members of a particular community, promote a cause or 
fill a service gap not covered by private or public institutions.  This difference is far more 
than cosmetic—it points to a deep structural, value and organisational mission divide 
between the two sectors.

Acknowledging that Australian nonprofits are sometimes aggregated erroneously with 
trends affecting those in the United States or the United Kingdom, Lyons also clarified the 
legal status of nonprofits in this country.  Most germane to research focusing on innovative 
nonprofit funding is the understanding that donations in this country do not receive as 
broad deductions from tax as do donations in other countries (Lyons 2001).  This difference 
has had considerable impact on the way nonprofits are funded and on the relationship 
between business and nonprofits.  This may be a partial explanation of why businesses may 
not see immediate tangible benefits for participating in partnerships with nonprofits beyond 
the possible public relations advantage of being associated in the public perception with a 
'good cause.'  Nonprofits are in the position of having to market themselves as 
advantageous partners to business.

The myth of the expansive, all-encompassing welfare state has prospered in discussions of 
nonprofits in Australia.  Traditionally, public opinion has held that a high level of taxation 
and an 'overlarge' public sector should cover the costs of nonprofits (Lyons 2001).  Lyons 
has pointed to a number of shifts in the way nonprofits are funded in Australia.  He drew a 
scenario of increasing privatisation in the 1970s, followed by sharp falls in the next decade.  
Current trends in privatisation including employment services and demutualisation of 
member-owned organisations have seen the movement back towards commercialisation for 
nonprofit organisations.  This is another indicator of the need for research into how 
nonprofits and for-profit organisations can accommodate each other in the search for 
relationships.

One strong argument against pure competition and the tenders that are replacing traditional 
service contracts is the adversarial relationships into which nonprofits are forced with one 
another  (Lyons 1995b).  This trend is in direct opposition to the direction in which for-
profit firms are moving, which includes recognition of the value of working together in 
collaborative environment and networks.   Faced with the need to diversify from a single 
funding source and an increasingly hostile environment in which to bid for those resources, 
nonprofits may be forced into situations competing in a market style that operates quite 
differently from their traditional ways of working.

Structures, tradition and management processes of nonprofit organisations aside, another 
crucial element of the narrative of relationships is the people on the inside.  Onyx (1993) 
and Onyx  & McLean (1993) explored how the concept of career exhibits itself in career 
motivation and how the demand and supply sides of social service careers compare.  They 
concluded that for the community sector, the dominant motivation is related to strong social 
values and personal development.  This career picture appeared to hold true for senior 
management as well.  Strong personal values of service combined with 'accidental careers' 
in nonprofit and participatory managing were also outcomes of a study conducted in 1992 
(Lyons 1992).  This picture of individual reasons for participating in third sector 
employment was clearly linked to broader organisational goals, management structures and 
the definitions of nonprofit 'success.'  In other words, the motivation of nonprofit staff 
members was connected to the activities, values and objectives of the organisations.

The non-linear nature of many career paths is another example of how nonprofits are 
differentiated from traditional business ventures.  Because the present study focused on the 
perceptions of this group of people working in nonprofits, it is important to understand the 
work that has been done on why they choose third sector jobs.  These very personal reasons 
create close attachment of individuals to organisational potential and development.  Unlike 
corporate 'loyalty', which may be influenced by financial incentives, the motivation for 
staff in the nonprofit sector may be more closely related to individual affiliation with 
organisational mission and values.  This is important in a study on the relationships 
between nonprofits and for-profits because any effect on the nonprofit's mission will also 
have consequences for individuals working there, especially if one of their primary reasons 
for working in that organisation is the organisational mission.  

1.1.1	Shifting History:  Emerging forms of support to nonprofits

Enterprising nonprofits and self-funding charity activities are examples of how funding is 
changing.  The media and practitioner press have stampeded to popularise the latest jargon 
in promotion and inter-sectoral  co-operation, but theory lags behind the brash image of 
revolution.  Headlines for articles like 'The moral case for promotion' (Levine 1999), 
'Venture Capitalists Alter Face of Charity' (Brandon 1999), 'On creating a new nonprofit 
language' (Muehrcke 1998) and 'Cooperating to survive and thrive: innovative enterprises 
among nonprofit organizations' (Kohm 1998) offer quick solutions to resource shortages; 
however, the understanding of the fundamental implications of these partnerships and an 
examination of how different they really are is almost absent from even popular debate.

Academic research into these areas has proceeded more cautiously.  Three authors who 
embraced the idea of nonprofits becoming more like for-profit institutions were Porter & 
Kramer (1999) and Dees (1998).   The idea that philanthropy itself (i.e. foundations) should 
create value can clearly be extrapolated to nonprofit organisations themselves.  Dees went 
even further, arguing that 'market-based funding approaches do have an important role to 
play in the social sector' (p. 58).  While noting the possibility of over-commercialisation, 
his 'social enterprise spectrum' showed how nonprofits are continually and willingly 
subjugated by the dynamics of the relationship with for-profit business.  Dees also makes a 
brief comment about the 'bristling' nonprofits at the mention of language associated with 
business, like the word 'customer', without acknowledging the different traditions from 
which private and third sector organisations emerged.

Barrington (1998) presented an interesting case of corporate philanthropy where the non-
governmental organisation remained firmly in control of the scope, operational 
management and long-term planning of the organisation.  His assertion that this model 
ensures integrity of the third sector organisation raised issues regarding how deeply 
involved in management decisions venture philanthropists 'should' be and who should 
return decision-making power inter-sectoral  collaboration.  His assessment of the need for 
clear expectations and constant feedback provided a good model for corporate partnerships.

Although the nature of U.S. institution-specific data is not necessarily valid in the broader 
context of corporate partnerships, Austin's study of motivation and structure of top 
executive involvement in non-profits (1999) did give insight into how third sector 
organisations might integrate that type of expertise into their management structure.  It also 
pointed to potential conflict in situations where managers with experience in the for-profit 
context attempt to impose their cognitive map of how an organisation should behave on to a 
nonprofit framework.

A U.K. study (Palmer, Wise & Penny 1999) illustrated a trend in that country of increasing 
commercialisation of charities and warned against blurred sector lines.  The authors 
suggested increasing 'blurring' of the lines between third sector and for-profit endeavours, 
even when charities run their commercial activities through subsidiaries.  Although caution 
is required because of the unique aspects of the British third sector, it did imply a need for 
further research into how third sector organisations are moulding themselves to demands of 
the market economy.  In a related article on Cause-Related Marketing (CRM), Hemphill 
(1995) discussed how the motivation for the corporation in this becomes self-serving rather 
than altruistic.  This distinction is important because it pointed to the conflicting interests 
that private and third sector organisations may pursue. 

The potential impact of profits on donations is a crucial point in how nonprofits decide to 
fund their activities.  A study by Bruce Kingma (1995) advised managers to carefully 
scrutinise how potential changes in prices for services could influence donations.  In other 
words, nonprofits have to balance their financial needs with the possible negative 
consequences to donations if there is the perception that the organisation is no longer 
'nonprofit.'  This note of prudence marks a crucial difference in how non-profits and 
corporations define success and is a beacon for other potentially disastrous 
misinterpretations between private and third sector organisations attempting to work 
together toward a mutually defined goal.

In Australia, research expanding Lyons' work on a spectrum of business interactions 
ranging from philanthropy to corporate citizenship (Lyons 1998; Onyx, Lyons & Booth 
1999) has looked at social partnerships between nonprofits and business.  The engines of 
change reflect macroeconomic shifts, and the authors explored concerns related to social 
capital, including increased ties, bounded solidarity, enforceable trusts and norms and value 
creation. 'Integrative' relationships are the most grounded in equality and offer the greatest 
opportunity for mutual development.

Work on the changing ways in which nonprofit organisations are funding their activities is 
important to a broad understanding of the relationships between nonprofits and for-profits 
because a shifting funding environment requires nonprofits to be creative in their resource 
development.  This section has explored a variety of ways in which nonprofits have chosen 
to approach the issue of resource shortages, and it points to some possible concerns that 
may arise from these types of relationships.

1.2	COLLABORATION

There has been some differentiation in the past between work that focused on the 
private/nonprofit connection and work that dealt more closely with intergovernmental or 
public/nonprofit links.  However, there is a strong case to be made that public sector 
organisations are becoming increasingly business-like.  A glance at the privatisation trends 
of once public services will confirm this observation.  For example, tendering processes for 
employment services in Australia have changed the way that nonprofit providers view 
clients with different levels of need because of incentives and disincentives to work with 
certain target groups.  Therefore, for the purposes of understanding how the literature on 
inter-sectoral- collaboration contributes to a discussion on relationships between for-profit 
businesses and nonprofit organisations, both types of inter-sectoral  interaction will be 
discussed here.

Rhodes studied the use of 'policy networks' in work into the privatisation of the public 
sector.  Defining policy networks as ones in which some organisations are dependent on 
others for resources and that dominant coalitions dictate the pace of interaction, this 
research can be contextualised for private/nonprofit links (1992).  In practice, this might 
mean that the organisations with the most power (i.e. the private sector firm in the context 
of a 'partnership' with nonprofits) dominate discussion of the manner in which the link is 
formulated and implemented.  In this scenario, the nonprofit would simply become the 
dependent entity rather than an active participant in the exchange.  Although Rhodes' 
analysis of the networks of influence is persuasive, it is not clear that the nonprofit 
organisations studied in the research presented here would always be in the position of 
lesser power.  Resources are only one of many contributing factors that might influence 
which organisation was dominant in a particular collaboration.  

A number of authors focused on the complexity of collaboration.  It is variously described 
as a process (Lawrence 1998; Alexander 1995; Huxham & Vangen 1996; Phillips, 
Lawrence & Hardy 2000), a 'form of conversational activity' (Lawrence 1998), a trust-
building exercise (Huxham & Vangen 1996) and joint task orientation and sequential 
decision-making processes (Agranoff & Lindsay 1983).  Each of these characterisations has 
useful elements in the context of nonprofit/for-profit inter-sectoral collaboration.

Lawrence focused on the specifics of an ongoing negotiation, with an interesting distinction 
between the need for a common language and the need for common representations of joint 
interests.  This is especially useful in the present study, because it demonstrates the split 
between using the same language and identifying mutually agreed upon opportunities from 
the collaboration.  The definition of collaboration as a 'form of conversational activity' also 
hones in on the importance of language in the development of the relationship.  Other 
researchers have acknowledged this (Hackley 2000; Russ, Galang & Ferris 1998), but 
Lawrence explicitly points to the possibility that even when language is very different 
between the organisations, collaboration may be possible if both parties are cognizant of the 
mutually beneficial outcomes that may result.  However, Lawrence's study does not include 
power in the equation and therefore does not take into account the ways in which the 
dominant organisation might manipulate the definition of joint interests in the relationship.

Alexander (1995) provided a blueprint for inter-organisational co-ordination, or IOC.  
Building on the work of Lindblom and others who understood co-ordination as both a 
reactive and proactive response to externalities, Alexander strongly supported IOC as a 
process rather than a transaction.  Because IOC implied that notion of 'concerted action' 
towards a mutually agreed-upon goal, any relationship would rely heavily on trust for 
success.  There was further acknowledgement of inter-sectoral  tensions constructed around 
the three types of IOC systems: hierarchical (command based on authority), market 
(exchange based on price) and solidarity-association (consensus/agreement based on trust).  
According to Alexander, fundamental differences exist in the rationale behind for-profit 
and nonprofit organisational emergence and development and IOC illustrates these 
tensions.  Alexander used Giddens' structuration theory to explain IOC structures as social 
structures that are recursively organised, that enable or constrain behaviour and that 
function as 'virtual entities that persist over time.' 

Alexander's conceptualisation of collaboration shares several features with the present 
study on language and power in nonprofit/for-profit relationships.  The requirement of trust 
in the relationship provides a beacon for understanding how individuals in the nonprofit 
organisation perceive their relationships with staff on the business side and appears to 
indicate the effect that trust might have on their interactions.  Furthermore, Alexander's 
acknowledgement of implicit tensions and contradictions between nonprofits and for-
profits is useful.

One element missing in Alexander's model is the idea that social structures are discursively 
as well as recursively organised.  Although he used Giddens to explain the structures of 
inter-organisational collaboration, the present study is equally interested in the structuration 
of the relationship discourse.  This will be explicated further in Chapter 2.

One researcher whose work combines a theoretical understanding of collaboration with 
practical strategies for achieving it is Barbara Gray (1989; 1991; 1996).  In addition to 
mentioning that one contextual reason for collaboration may be 'shrinking federal revenues 
for social programs' (1989, p. 29), she notes the importance of power on page 10, '…there 
may be a disparity of power and/or resources for dealing with the problem among 
stakeholders.'  The issue here is not only that there is a power imbalance, but that it must be 
constructively addressed in order to pose a reduced threat to the success of inter-sectoral 
relationships.  Her critical features of collaboration can only be achieved in nonprofit/for-
profit relationships if the power differential is addressed.  

The language of that power game is critical to successful collaboration, and Gray 
acknowledges this by including in her list of attributes of successful partnerships that 
communication between the partners improves throughout the course of the partnership.  

Gray's features of collaboration include interdependence, solutions emerging by dealing 
constructively with differences, joint ownership of decisions and collective responsibility 
for future direction of domain.  Two of these pose particularly interesting questions for 
relationships between nonprofits and business.   The first, interdependence, is complex.    
What 'dependence' can a business be said to have on an organisation to which it donates a 
specific amount of money annually?  In the Australian context, the notion of philanthropy 
as an exercise in image management and reputation enhancement is slowly gaining 
currency (Centre for Corporate Public Affairs & Business Council of Australia 2000), but 
nonetheless the dependence of a business on that marketing versus the complete reliance of 
a nonprofit on donations to make up diminishing public funds can be argued to be in a 
different league of dependence.  This last one is critical, because it refers to how 
relationships change over time and stipulates that new relationships have to be negotiated.  

Gray's model incorporates a number of key elements for the research presented here.  The 
model contains overtones of social agency in urging parties to deal constructively with 
differences.  It also incorporates a definitive process for collaboration and insight into the 
way that power and different frames of reference can hamper emerging co-operative 
efforts.  Furthermore, her view of obstacles to collaboration contains language of 
conflicting cultures and ideological barriers to success.

Although other authors alluded to it, Agranoff & Lindsay (1983) and Phillips, Lawrence 
and Hardy (2000) were most explicit about the context in which inter-sectoral collaboration 
occurs.  In the same vein as Lyons argued for historical frameworks for understanding 
nonprofit evolution in Australia, Agranoff & Lindsay linked the legal/structural, political 
and technical contexts into an operating environment to which intergovernmental 
management (IGM) processes and actors must adapt.  Their notions of contextual elements 
as constraining factors on the relationships are highly relevant because a study of individual 
and organisational effects on nonprofits working with business occurs in a unique 
institutional context. 

Phillips et al (2000) take a slightly different approach to context, with a focus on the 
institutional fields in which organisations operate.  Arguing that institutional fields depend 
on the process of structuration, their work demonstrated how collaborations and 
institutional fields mutually sustain, re-create and re-frame one another.  The importance of 
structuration theory for the study presented here is that language is seen to both create and 
reflect organisational and individual reality in the context of inter-sectoral relationships.  
This will be further explored in the presentation of theoretical concepts in Chapter 2.

In related work on nonprofits and policy development, Najam outlined how nonprofits 
become 'policy entrepreneurs.'  His three characterisations of 'NGO-government' 
relations—confrontation, complementarity, and collaboration—connected with the stage in 
the policy stream and the role that the nonprofit will play in the partnership, are a useful 
matrix for understanding how decision-making processes can be built into how nonprofits 
perceive themselves (Najam 1996).   

In a similar vein, Hardy and Phillips (1998) presented four strategies used in inter-
organisational relationships:  collaboration, compliance, contention and contestation.    
Their work is useful in two key areas related to the present research.  Firstly, they question 
the common wisdom that collaboration is a solution to every problem between 
organisations.  In doing so, they bring to light a range of other organisational responses that 
may be more appropriate in a given situation than an attempt to pursue 'equitable' 
collaborative arrangements.  Secondly, the authors examined both structural and discursive 
aspects of control and authority, which ties contextual constraints to language and power.   
One of the ways in which Hardy and Phillips' work takes a slightly differently focus is its 
use of the word 'strategies' to identify the four possibilities listed above.  Rather than 
seeing collaboration as a strategy, the thrust of the current research uses collaboration as a 
process through which a relationship is developed, without necessarily requiring that 
certain levels of organisational integration or meshing occur.  In other words, collaboration 
as a process may be deemed more or less successful in the research presented here, but it is 
not defined as distinct from other organisational strategies in the context of inter-sectoral 
relationships.

Another useful concept is that of legitimation of management, which followed from earlier 
work by Drucker—that is, that the legitimation of management is that it works in the 
interests of those it governs (Lansbury & Spillane 1983).  This is pertinent to inter-sectoral  
collaboration because nonprofits and for-profits may bring with them the complexity of 
differing management styles, competing value paradigms or starkly contrasting leadership 
demands.  Any understanding of relationships requires recognition of these challenges.

The issues of leadership and collaboration were taken up by Huxham and Vangen (2000).  
Importantly, they point out that leadership can be difficult to formalise in collaborative 
arrangements.  Here they are talking about the possibility of one 'leader of the 
collaboration', which they acknowledge is inherently contradictory because individuals in 
the collaboration come from different organisations.  Instead, they present a series of 
'leadership media'—leadership through structure, leadership through processes and 
leadership through participants—through which collaborative agendas are developed.  

One of the interesting assumptions in the Huxham and Vangen work was that there was a 
'partnership agenda' that was affected by the processes of communication that led to a 
shifting balance of power in terms of who determined the issues of contention or 
negotiation in the partnership.  This is highly relevant to nonprofit/business relationships, 
where there may not even be an assumption of a single partnership agenda but the contrast 
of conflicting organisational imperatives on both sides.  In that case, where external 
structures may be more limited than in public collaborations and processes limited to 
communication between one or two key individuals from each organisation, the leadership 
through participants may take precedence over the other two media as individuals seek to 
assert power over the collaboration to achieve their own organisation's goals.

In addition to leadership concerns, the Huxham and Vangen (2000) paper also noted:

Given that collaborative structures play such an important 
role in shaping and implementing the direction of a 
partnership, it is significant that they [the structures] are often 
not within the control of members of a collaboration.
								(p. 1164)

Again, although their context is public/community relationships, whose structural 
constraints are sometimes within the purview of an external body, this observation 
highlights the importance of negotiated collaborative structures in private/nonprofit 
relationships. In other words, the ways in which the business and nonprofit organisations 
structure themselves to engage in partnerships is critical to successful collaboration.

Their earlier work focused (1996) on specific issues in public/community sector 
collaboration  including managing aims, compromise (especially how much time relatively 
minor issues can take to sort out), communication, democracy and equality, power and 
trust, determination, commitment and stamina.  They asserted the need to start with small 
collaborative projects to build trust and advocated incremental relationship development.   

In this research, collaboration is characterised as a process through which separate entities 
work together to achieve a set of aims.  Note that it is not defined as convergence or 
'melting' of two organisations, but the emergence of a third 'relationship' that combines 
elements from both organisations.  Each of the approaches and applications of collaboration 
above has a unique contribution to make to a meaningful discussion of relationships 
between nonprofits and for-profits in Australia.  Taken together, they combine to form an 
understanding of collaboration that includes process, context, language, power and 
consequences for the individuals and the organisations involved.



1.3	POWER AND PHILANTHROPY

This section includes work conducted around philanthropic endeavour and donor rationale 
as it pertains to power.  Several authors have done work on how philanthropy is affected 
and affects the social world.  In her book a decade ago on the culture of American 
philanthropy, Odendahl detailed how the activities, behaviours and self-described identities 
of philanthropists perpetuate the current social system.  She found that groups that serve the 
elite are those most likely to receive substantial funding.  For example, mainstream arts 
institutions figured prominently in the discussion because they attracted large donation 
subsidies for their work (Odendahl 1990).  

Hanson reiterated this argument in work on 'tribal exchanges', in which the author defined 
modern philanthropy as 'the paradox by which the affluent preserve and reinforce their 
power by their selective and symbolic abandonment of power over material wealth and 
goods' (1997, p. 17)  Hanson also cited Eminhiser, who did work on elite social structures 
and philanthropic funding as it relates to the process of gaining power.  In this view, the 
process of philanthropy is itself an exercise in power acquisition and consolidation. It also 
clearly states the role of power in relationships between donor and recipient.  However, 
Hanson and Eminhiser's work is focused primarily on individuals and does not address the 
possible organisational consequences.  Nonetheless, the framework might be expanded to  
point to the possibility that engaging in traditional 'charity-type' donation relationships 
may have adverse effects on the nonprofit organisation involved. 

The areas of historical context, collaboration, and the interaction of power and philanthropy 
are all part of the literature that pertains to an exploration and development of theory 
around language and power in nonprofit/for-profit relationships.  In conjunction with a 
detailed exploration of the theoretical heuristic that guided the empirical phase of the 
research presented here, Chapter 2 outlines the theoretical constructs that are pertinent to 
this research.  These include power, language, social agency, organisational capacity, the 
role of structure and the institutional context in which relationships between nonprofit 
organisations and for-profit businesses develop.



CHAPTER 2:  THEORETICAL MODEL & RESEARCH QUESTIONS

2.1   OVERVIEW

The research is based on a theoretical heuristic that explores:
?	whether and how relationships between for-profit and nonprofit institutions are 
characterised by power inequities; 	
?	how language shapes and is shaped by these 'partnerships'; 
?	implications of these elements for the nonprofit's organisational capacity and for 
individual social agency.

There are two steps to understanding the model.  Firstly, the theoretical bases of power and 
language, social agency, organisational capacity and institutional context are described 
below.  Secondly, an overall explanation of how these components fit together in the model 
follows from these individual concepts.

Research into power, language, social agency, organisational capacity and institutional 
context is quite rich in the organisational literature.  In addition to the work outlined in the 
previous chapter, the research reported here relies on work from these areas. Although there 
has been research conducted into each of these constructs separately and in different 
circumstances, this is the first work that integrates this set of constructs to develop a theory 
of how language and power reflect and shape nonprofit/for-profit relationships in Australia.  
Another significant addition in this work is a theoretical link between two levels of 
analysis: individual and organisational.  Language and power are incorporated as driving 
factors in the model. 

The research questions with which investigations were begun reflect the two levels of 
analysis, the media impact and a strong focus on the experiences of the staff in the 
nonprofit organisation.  The questions with which this research was initiated are:

1.	Does the language used by nonprofit staff and in organisational documentation 
relating to relationships with for-profits reflect and contribute to the reproduction of 
the power relationship between the organisations?
1a.	What elements of vocabulary, narrative structure and syntax constitute a 
'language of inequality' between the private and third sector?  
1b.	How is this language different in genuine power-sharing relationships?
1c.	To what extent is this linguistic space shared across nonprofit organisations 
engaged in similar relationships with for-profit firms?
1d.	How is the structure of that language transmitted throughout the 
organisation?

2.	Do relationships affect the organisational capacity of nonprofit organisations and 
the social agency of individuals?  If so, to what extent can balanced power-sharing 
arrangements contribute to increased organisational capacity?

3.	Does the media aspect of the institutional context of relationships in which 
nonprofits operate affect the social agency of individuals and the capacity of 
nonprofits?
3a.	To what extent are staff members in the nonprofit aware of the constraints on
	them of this aspect of institutionalism?

For this research, two complementary positions for the interplay between language and 
power were assumed.  On the one hand, power is reflected by the individual and 
organisational discourse of a nonprofit.  On the other hand power is inherent in the 
language, which describes structural constraints under which the organisation and 
individuals operate.  Both play a crucial role in describing and understanding relationships 
between nonprofit and for-profit organisations.  As will become clear in the following 
sections, these assertions are firmly grounded in existing research. 

This work is an investigation into the experiences of staff in nonprofit, community sector 
organisations that are involved in collaborations with for-profit business.  An examination 
of the language and power implications of these relationships looked at how the staff was 
affected by language that reflects inequality.  One initial idea was that power and language 
affect and are reflected by social agency, (the extent to which people feel able to act 
positively on their own behalf) and organisational capacity (i.e.  the ability of an 
organisation to respond to challenges and develop progressively). 
 
In order to gather appropriate data through the case study approach (see Chapter 3 for more 
methodological detail), assumptions were outlined about areas that contribute to a theory of 
language and power in relationships between nonprofits and for-profit organisations. 
However, they offered the opportunity to filter the data, ask for clarification during 
interviews and documentation gathering and understand how new concepts emerged from 
the fieldwork phase.  The literature, working definitions and existing connotations of 
collaboration between nonprofits and for-profits were detailed in the previous chapter.  The 
purpose of this chapter is to present a discussion of the theoretical constructs of power, 
language, social agency, organisational capacity and  institutional context. In the theoretical 
framework, power and language are inextricably linked.  


2.2	POWER, KNOWLEDGE AND LANGUAGE:  DISCOURSE AND 
STRUCTURAL COMPONENTS

Wildavsky offered a useful note on the connection between knowledge and power.  In a 
discussion of program evaluation, Wildavsky stated that knowledge is useless without the 
authority and legitimacy to implement changes from that knowledge (1979).  For example, 
nonprofit organisations may have knowledge that could inform the structure and process of 
an evaluation (i.e. what is to be measured and how), but they lack the power to carry out 
changes that they would see as contributing to the work of the program.  This notion links 
into power as an indication of the authority to make and implement decisions.  In that 
example, the power resides with the funding body overseeing the evaluation.

Power is shifted away from nonprofit organisations when 'funders' dictate the evaluative 
process. In this example, power may be exercised through a structural constraint--
nonprofits are bound by their contractual obligations to carry out evaluations according to a 
given set of criteria.  Foucault's idea that power is a driver behind the creation of reality 
also illustrated how individuals and the knowledge that they gain through power are part of 
this iterative transaction (1980).  In fact, Foucault's definition of power and knowledge as 
one are crucial to an understanding of how language embodies knowledge and how this 
knowledge is both a source of power and a reflection of it.
 
In the context of researching relationships between nonprofit and for-profit organisations, 
the particular subset of literature on power that provides the most useful framework focused 
on the role of narrative and social control.  At both individual and organisational levels, the 
links between power and language affect how nonprofits fare in relationships with private 
firms.

In order to understand the assumptions that ground this research regarding power, it is 
important to note salient points in the development of a theory of power.  Clegg (1987) 
provided one history of power theory and the role of narrative. In this history, the 
conceptualisation of power started as elitist where power was something that could only be 
revealed by objective, well-informed researchers.  In this sense, power was something 
outside the experience of individuals.  

Shifting to a pluralist standpoint, the conceptualisation of power hung in the balance 
between individuals and the environment in which they operate.  Pluralists like Bachrach & 
Baratz (1962), who put forward the 'two faces' theory of power, partially included 
individuals in the picture by allowing intentions to function as causes.  However, they 
remained stalled in causal behavioural explanations rather than agency.  These behavioural 
explanations were heavily influenced by the context in which the power was exercised.  
Clegg noted that others like Weber and Russell were also pluralist, but their work 
downplayed contextual factors. 

Lukes' three-dimensional view (1962) represented an expanded pluralist model of power.  
By criticising the 'intentions as causes' argument of Bachrach and Baratz, Lukes introduced 
the concept of hegemony into the power debate.  Where Bachrach and Baratz saw 
behaviour as the result of intentional exercise of power, Lukes saw concealment.  He 
operated on the premise that people did not know their own minds or that they might falsify 
their intentions.

From Clegg's standpoint, both concealment and revelation constituted an elitist view.  The 
idea of research into revelation argued that researchers could perceive the 'reality' of power 
relationships, which individuals might be unable to do.  The concealment argument, on the 
other hand, fits in with the idea that people were not even aware of how power shaped their 
lives or that they would deliberately not acknowledge that influence.  Both of these 
approaches assumed a concept of power that relied solely on the force of power to cause 
changes in behaviour, whether or not the individual was aware of the existence of power. 

In a break with the dichotomy between revelation and concealment, Clegg offered insights 
into links between agency and context that were concise and influential.  He reiterated that 
social agency remains an important concept in understanding how power works.  The 
sociology of translation supported the idea that theories of power should incorporate a 
theory of organisation, and that this in turn would lead to effective agency.  A good 
example of this theory in action is Spencer's anthropological work on authority, which 
stressed a point of view that combines 'creative force of human agency' and 'structural 
constraints of cultural institutions' (Spencer 1993).

Clegg's 'circuits of power' model took the opposite assumption from dominant narratives 
of power.  He grounded the argument by taking as given what people say in certain 
situations.  Unlike revelation, which required superior analytical powers on the part of 
researchers to understand the power dynamics, or concealment, which held that people did 
not know their own minds, Clegg's architecture provided a new basis from which to study 
power and individuals.  This position is critical to the research into the perceptions of 
power in nonprofit/for-profit 'collaborations', because the focus is on the need to understand 
the phenomenon from the inside out.  Without imposing revelation or assuming 
concealment or ignorance, the circuits of power model offers a framework in which 
participants in the research provide the empirical basis for analysis.  Their words, in the 
context in which they are written or spoken, are accepted at face value (Clegg 1989).
 
By combining conversational analysis (language as social reality) and ethnography 
(language reflects social reality), Clegg supported the 'language as medium and outcome' in 
the methodology itself.

Another advantage of using the 'circuits of power' model, which is based on Lockwood 
(1964), is that it incorporates three distinct types of power:

?	Episodic power—agents getting other agents to do things (resources and causal power)
?	Facilitative power—social integration, rules of practice, positive, innovative, rules 
'fixing relations of meaning and membership'
?	Dispositional power—system integration, domination, 'techniques of discipline and 
production'
(Clegg 1989, pp. 27-31)

One of the crucial aspects of this model was that it showed power as fluid, multidirectional 
and having the capacity to act in multiple ways.  Each of these types of power has 
embedded within them separate sets of assumptions.  In the first, power rests on the agents 
and resultant actions.  The pressure of power causes agents to behave in a certain manner.  
Episodic power is a person-to-person interaction.  Facilitative power has a different 
function and implementation.  It is the grease of organisational structure that enables social 
interaction.  These rules pivot around inter-subjective meaning and the 'rules' that result 
from individuals creating and conforming to organisational norms and practice.  This type 
of power has positive implications for functional organisations and collaborative efforts.  
Dispositional power extends the structural element of the facilitative power.  Where 
facilitative power rests on mutually agreed rules that become ingrained in how members of 
an organisation act, dispositional power is more extreme in its structuralist focus.  For 
example, this aspect of power is highly visible in regimented bureaucracies governed by 
rigid rules that constrain behaviour.  The metaphor implied here is mechanistic and 
impersonal, where the power rests in the position and the strategies of rigid discipline.  

Episodic, facilitative and dispositional definitions of power have a place in the study of 
relationships between third sector and private sector entities.  Episodic power is linked to 
social agency; facilitative power can be used to promote organisational capacity in the rules 
that create shared meaning; and dispositional power and the possibility of domination arise 
in an inter-sectoral collaboration where there is pre-determined inequality in power. 

The circuits of power model addresses both agency and structural elements of power and 
language in organisations.  At one level, power is agentic; that is, it flows from the 
influence of one individual over another.  At another level, the structures, limitations and 
context define how power is implemented in an organisation.  For example, the reporting or 
auditing requirements in a nonprofit organisation exercise power over that organisation by 
dictating how certain systems must be implemented to maintain the type of information 
required by that funding agency.  

Clegg called language and its relationship to power an important medium and outcome 
(1987).  In this view, language is a contributing factor to both the development of social 
reality and as an image of that social construction.  As such, language is a part of social 
structure and social action.  In the 'language as medium' argument, people use language to 
create mutual frames of reference, reproduce rules within organisations and share the social 
world.  The metaphor for this function of language is a tool, which individuals use to shape 
their joint social realities and enforce power relationships.  This view of language veers 
away from the extreme determinist view.  Language is not deterministic, but it is 
contributory--and therefore one of the important factors in power relations.  On the other 
side of the power and language connection, the words, syntax, and linguistic devices that 
people use are shaped by the power structures inherent in organisational imperatives and 
institutional context.  This perspective offers a different metaphor for language.  Language 
is at the same time a mirror and a magnifying glass, which reflects and focuses the rays of 
power in a particular context.

In research into collaboration between nonprofits and for-profits, this reciprocal 
relationship between language and power offers a clear advantage.   Language is both a 
power unto itself and an object upon which power is exercised, subject to the constraints, 
prior social constructions and norms that dictate language use in an organisational 
environment.  This definition closely connects language to the way in which staff in the 
nonprofit perceive and act upon their social agency, contribute to fulfilling organisational 
capacity and responding to the institutional context in which the organisation finds itself. 

A third element coloured the assumptions behind language: that language is material, 
tangible and objectified (McHoul & Clegg 1987).  Language exists as an object in the 
world, a view that does not contradict the anti-realists assumptions of methodologies such 
as discourse analysis and ethnography. This is not to argue that language is deterministic, 
but only to emphasise that objectification of language can co-exist with anti-realist 
positions.   

This is an important contribution in the context of inter-organisational power because it 
suggests that language can be manipulated to create tangible change in the relationships 
among individuals.  Rather than viewing language as simply an elusive construct, the 
'language is material' perspective argues that shaping and developing changes to language 
will have significant effects on the organisational structure and power inequity between 
organisations.  If language is both a contributing factor and a reflection of power inequality, 
then the ability to shift that power by modifying language use is a powerful tool in 
facilitating integrated collaboration between the third and private sectors.   Language can 
frame both external structural limitations (e.g. a contract or signed agreement that 
constrains action) and internal discourse (e.g. how staff in nonprofits see themselves in 
relation to their counterparts in the for-profit).

Other theorists have combined structural and discursive theories of power.  In an attempt to 
combine structural, functional and interpretivist theories of power, Lee drew on a case 
study of a power struggle in a school (Lee, M.L. 1999).  Using a method of successive 
analysis, Lee built a parallel individual view of power based on both 'reality' (i.e. 
understanding of  power structures) and perceptions, based largely on the internalised 
perceptions of power.  Here again, power and language have both agency and structural 
elements.  The restrictions on what action individuals could take depending on their 
position in the school hierarchy, combined with internalised maps of their own social 
agency illustrated that a comprehensive picture of narrative and structure could be 
constructed from the interplay of language and power.

Lee also made an important contribution to social agency.  Using a distinction between 
rhetoric and poetic self, she concluded that consistent manipulation of a situation to 
correlate with one's own experience in an effort to maintain a sense of 'empowerment' led 
to impotence.  In other words, people are able to be reflexive in their outward constructions 
of themselves and of situations in which they operate.  Once again, the link to social agency 
is clear.  Where structural/functional analysis fails to capture fully the internal dynamics of 
the effects of power on individuals, an understanding of those reflexive perceptions is 
crucial.  Lee's combination of individual perception with the structural constraints of the 
situation and the tangible effects of exercised power parallels the intention to understand 
the research questions at individual and organisational both the perspective of relational 
discourse and the very real limitations that structure and context can place on nonprofit 
organisations.  In terms of how staff in nonprofit organisations in 'collaboration' with for-
profits fit into this model, it is useful to understand the break between feelings of 
empowerment and the structural authority to act on those perceptions.  

A third set of theoretical links between power and language have been explored by 
Weedon.  She wrote:

Language is the place where actual and possible forms of 
social organisation and their likely social and political 
consequences are defined and contested. Yet it is also the 
place where our sense of ourselves, our subjectivity, is 
constructed ... Subjectivity is produced in a whole range of 
discursive practices - economic, social, and political - the 
meanings of which are a constant site of struggle over power.   

(1987, p.21)
Weedon contributed to the debate on language, power, social agency and organisational 
capacity on several levels.  Firstly, she identified language as a critical component of social 
interaction and organisation.  More importantly, she noted that language contributed to and 
reflected the power relationships between individuals as they construct themselves in 
relation to one another.  Using discursive practice as the springboard from which to propel 
forward an activist, materialist view of language, Weedon elaborated that language as the 
site for social change because discourse constructs, develops and modifies both the 
individual's conception of himself and the institutional constraints in which he operates.  
One of the disadvantages to this is that although Weedon positions herself as a post-
structuralist, over-emphasising the role of language might obscure the very real obstacles to 
change and the inertia of the status quo that limits opportunities for change.  

Ford and Ford embraced the structuration of language and discussed the way in which 
intentional change can occur through the use of language.  Using language as performative 
they argued not only that communication plays an important role in change but that:

Change as an organizational phenomenon necessarily occurs 
in a context of human social interactions, which constitute 
and are constituted by communication (Giddens, 1984; Poole 
& DeSanctis, 1990). These interactions produce and 
reproduce the social structures and actions people know as 
reality (Berger & Luckmann, 1966). From this perspective, 
change is a recursive process of social construction in which 
new realities are created (Ford & Backoff, 1988) sustained, 
and modified in the process of communication. Producing 
intentional change, then, is a matter of deliberately bringing 
into existence, through communication, a new reality or set of 
social structures.

(1995, p. 541)

Ford and Ford also speculate that 'a change agent's effectiveness in producing an 
intentional change can be increased through the effective application of these 
conversations' (p. 542).  This understanding of language as material, able to manipulated 
and resulting in concrete changes to the organisation through the social agency of 
individuals may have application in a theory of language and power in nonprofit/for-profit 
inter-sectoral collaboration.

Other researchers have also used the interaction of power and language in an organisational 
context (McCann & Gray 1986; Donnellon, Gray & Bougon 1986; Chamba 1996; Randel 
1997; Carmichael 1998; Farrell & Farrell 1998; Oakes, Townley & Cooper 1998; ), making 
the link between discourse and action a well-established issue in theoretical debate.

As illustrated by these examples, using an interactive model of power and language to 
complement one another captures a more complete picture of the phenomenon.  The model 
assumes that power is reflected and constituted by the language.  The next section examines 
specific examples of power in organisations.


2.2.1	Examples of power in organisations
Examples of power in organisations are prevalent in the literature, but there are a number of 
particularly pertinent examples for understanding nonprofit organisations and their 
relationships with institutions that provide resources to them.  Altheide's work on 'the 
production of fear' is useful in understanding how one cognitive model can be reproduced 
internally and externally to an organisation (1997).  In this work, Altheide records how one 
dominant discourse in the media—the 'problem frame'—was reproduced and integrated 
into broader society,  creating heightened perceptions of fear in communities that had 
previously not exuded this dynamic.  This is a good illustration of how a particular way of 
looking at a situation (e.g. how staff in a nonprofit perceive a relationship with the 
business) can alter ongoing perceptions of the situation.  

In a noted case study, Milofsky and Morrison examined the power relations among the 
Executive Director, staff, volunteers and board in a shelter for victims of domestic violence 
(1989) and found that there were strong links within the organisation itself among the 
power relations, structure and communication.  Although this study is focused on intra-staff 
relations, it does raise some important issues regarding the meaning of power in nonprofits, 
including the connection between hierarchy (structure) and power and communication 
(discourse) and power.

Two discourse analyses with distinct versions of the power game further serve to illustrate 
the complexity of internal and external cultural dislocation of power.  The first, by Gamble 
and Duncan, was an attempt to understand the implicit cultural values embedded in social 
relationships, with a definite emphasis on organisational culture as a factor in maintaining 
and enforcing those relationships (1999).  Based on Hong Kong data, this study scrutinised 
how the discourse of organisational culture reflected and promoted cultural values.

Skillington in the United Kingdom conducted the most closely related work to research into 
the power structures of 'innovative' relationships between nonprofits and business 
institutions.  The author showed how strategies and 'new' types of relationships in fact 
reinforced traditional power structures.  With the premise that discourse is social practice 
and that it recursively reproduces relationships, Skillington's work demonstrated that the 
power can be entrenched even when superficial linguistic relationships shift (1997). 

2.3	SOCIAL AGENCY
Social agency is a recurring theme, either explicitly or implicitly, in all of the work that 
takes as a model the individual in the context of social relationships.  In order to understand 
this concept, it is useful to begin with a discussion of social capital, a distinct but related 
concept.  Many of the researchers using this framework maintain a structuralist perspective.  
Bourdieu's view of capital is one of exchange in the framework of the social world.  His 
vocabulary included conversions among different forms of capital (i.e. cultural to 
economic), embedding of capital into institutions (i.e. the value of a tertiary degree) 
(Richardson 1986; Bourdieu 1983).  This objectification required that culture be a tangible 
that can be bought, sold and traded in a marketplace; this in turn subjects social capital to a 
'multiplier' effect depending on sizes and depths of social networks.  In work on 
community organisations and social capital, Bullen and Onyx found that social agency was 
the second strongest factor in measurement of social capital with their index (1998).

In its most deceptively simple form, the term 'social capital' can be defined as 'features  of 
social organization, such as trust, norms and networks, that can improve the efficiency of 
society by facilitating co-ordinated actions (Putnam 1993, p. 167).  However, upon 
examination, it is clear that the term when defined in this way is rife with assumptions 
about the nature of social interaction (that it is reproducible and measurable), underlying 
societal values (efficiency), and that social capital is a concept that can be objectified and 
wielded as a tool for greater co-ordination.  As is illustrated by the World Bank's Social 
Capital Bibliography compiled in 1998, the term remains somewhat controversial.  
Operationalisation of the concept has been offered in almost as many guises as there have 
been examples to support the existence or refute the possibility of 'social capital' 
(Serageldin & Grootaert 1997; Grootaert 1998).  For the purposes of researching 
individuals working in nonprofit organisations in Australia who are grappling with issues 
of power and legitimacy in terms of their relationships with for-profit businesses, the social 
capital literature is reviewed here through a lens of social agency.  In the section on 
organisational capacity aspects of social capital that contribute to organisational 
development are reviewed.

A basic element of social capital is trust.  This means that social capital is found in the 
spaces between people and in the relationships that they form with one another.  Another 
researcher who has made significant contributions to the theoretical basis of social capital is 
Fukuyama, who focused on personal interaction (1995).  He is included in the section on 
organisational social capital for his notions of the organisational imperatives of hierarchy 
combined with the need for trust in social settings.  Fukuyama's  term 'spontaneous 
sociability' and the organisational requirements that flow from his definition provided 
another perspective from which to view the creation of collaborations and collaborations 
between nonprofits and the private sector.  He wrote:

The most useful kind of social capital is often not the ability 
to work under the authority of a traditional community or 
group, but the capacity to form new associations and to 
cooperate within the terms of reference they establish…based 
on shared values rather than on contract…under the general 
rubric of what Durkheim labelled "organic solidarity"...by 
contrast, people who do not trust each other will end up 
cooperating only under a system of formal rules and 
regulations…this legal apparatus serves as a substitute for 
trust.
(p. 27)

Two related works detailed agency specifically in the context of networks and social 
capital.  Harrison (1999) cited work by Ganz (1995) that indicated 'unsettled times' provide 
proactive individuals with an opportunity to change organisations.  Democratic institutions 
bear this out as well.  Traditionally, prosperous times lead to complacency and inertia, 
whereas difficult economic circumstances draw individuals into the policy arena.  This idea 
that one person's outlook on a situation can lead to change is critical to a discussion of how 
staff at nonprofits understand their dual roles as providers of service and passive recipients 
of resources.  

Falk's definition of 'social brokers', predicated on a combination of personal identity and 
community position, used dimensions of social capital including identity, knowledge and 
historical context (1999).  Several issues here are directly related to the development of 
relationships between the third and private sectors.  His comment that shared values 
provide a more sound foundation to organisations can be extended to networks of 
organisations attempting to work together.  This follows that for organisations to be 
dynamic, innovative and able to adapt to an increasing pace of change, they must do more 
than co-ordinate their activities.  They must integrate their fundamental reasons for 
operating in the way they do into a third synergy, which creates a new organisational bridge 
every time two or more organisations join forces.  

In a different approach to locating and evaluating the effects of social capital on individual 
lives in Australia, Stewart-Weeks and Richardson (1998) chronicled the motivations behind 
dimensions of social capital.  The focus on characteristics of people with high social capital 
(e.g. people who have access to rich horizontal and vertical linkages of trust) is useful input 
into research that seeks to identify how the staff in nonprofit organisations perceive their 
own social agency, both internally in their organisation and externally in interactions with 
private sector partners.

Understanding the meaning of shared, established terms of reference is vital for these types 
of relationships.  In the context of nonprofit funding, the terms of reference are often 
contractual in nature; that is, that the legal system and sanctions for non-compliance and 
non-performance replace a sense of mutual obligation, which may decrease social capital 
among individuals and between organisations.

One of the tenets of operationalised organisational social capital is the idea that it can be 
systematically identified and manipulated.  Ritchey-Vance asserted as much in her tool for 
measuring what constitutes successful programs funded by the Inter-American Foundation 
(IAF).  In this work, the 'yardstick' of personal capacity (or social agency) is in fact a 
reflection of the structure of the grassroots organisation that includes democratic practice 
and flat organisational frameworks (1996). 

Some researchers asserted that the social capital in an organisation depends on how 
individuals can interact with one another in the organisation.  This supports the idea that 
flat, democratic institutions are more likely incubators for trust and reciprocity, which 
would raise an organisations internal social capital.  Using network analysis and locational 
identity, Burt has called this the 'structural ecology of social capital' (1997).   What Burt is 
referring to is the extent to which social capital of a particular individual depends on his or 
her position in the hierarchy.   This is a useful concept because it noted possible differences 
in social agency and levels of social capital related specifically to how powerful a person is 
within an organisation.

In related work, Leana and Van Buren (1999) discussed how employment practices affect 
organisational social capital and how enhancing the image of employees as assets or 
resources can have positive consequences for the firm.  This is directly linked to social 
agency, because employees who see themselves as positive contributors to an organisation 
will enhance the organisation itself. 

Garnsey and Rees (1996) conducted a discourse analysis to 'explore ways in which the 
persistence of inequalities may, without apparent intention, be encoded in language' (p. 
1042).  They concluded that cognitive schemata or maps of these dominant discourses may 
constrain an individual's ability to act and promote social enactment of the established 
hierarchy.

Social capital and social agency are different properties.  Taking into account all these 
varied definitions of social agency and how social capital operates, social agency is defined 
as the extent to which people feel able to act positively on their own behalf in a given social 
context.  Social capital is not located in individuals.  Like the definition of language and in 
conjunction with the premise behind Giddens' structuration theory (1984; 1987), there is an 
assumption that social capital is both a process and an outcome of itself.  It exists and can 
be manipulated in the relationships that people form with one another.  Social agency, on 
the other hand, is a perceptual quality that facilitates or inhibits an individual's ability to act 
in a positive manner on their own behalf.  

Another element of the possible connection of these constructs to power and language is 
that they shape an individual's perceptions of the meaning of action and the possible 
consequences of that behaviour.  If they have a well-developed sense of social agency, 
people may be more likely and more able to act creatively and constructively within the 
organisation.  Structurally, all individuals in organisations are subject to boundaries on their 
behaviour.  These boundaries may be based on position (e.g. power in the hierarchy), legal 
obligation (e.g. a professional code of practice), institutional expectation (e.g. how 
nonprofit staff 'should' act) or a number of other structural constraints.


2.4	ORGANISATIONAL CAPACITY

Although the subject is welfare, Ahmed's study of how to build people's capacity in 
organisations has close ties to nonprofits and their relationship with funding sources (1999).  
Organisational capacity was defined in Ahmed's work as the set of skills acquired by 
members of the organisation or group.  Skills might include leadership, networking, socio-
economic awareness, networking and negotiation.  This links well with the hypothesis that 
staff in nonprofits may lack the contextual and organisational awareness to recognise 
inconsistencies in their own behaviour towards potential funders, and that this skill 
deficiency may have adverse affects on the organisational capacity of the nonprofit.

Dougherty's work on how 'thought worlds' interfere with process integration applies as 
well to nonprofit enterprises as it did to innovation in large firms (1992).  Nonprofits that 
maintain distinct inner and outer thought worlds (i.e. differing perceptions of themselves as 
internally proactive and externally or contextually passive) interrupt their own development 
as holistic organisational entities.  Language plays a critical role in developing thought 
worlds and by extension on the ability of the organisation to develop.  Note that these 
'thought worlds' are more than a simple aggregate of how people feel about the 
organisation.  Organisations' perceptions of themselves are often codified in 
documentation, organisational hierarchy and procedures that illustrate how language and 
power are inherent in organisational structures.  

However, it would be naïve to assert that organisational capacity rests solely on an 
organisation's internal dynamics.  Organisational capacity is also affected by the 
requirements placed on it by external structure and discourse.  An organisation may be 
innovative, entrepreneurial and progressive.  However, if the structures under which it 
operates are restrictive, regressive and rigidly bureaucratic, the internal discourse of 
capacity will be severely limited and modified by the structural constraints.
 
More than fifteen years ago, Granovetter looked at how social relationships affect 
behaviour and institutions—a theory that emphasised networks and underscored the 
importance of linkage density for understanding how organisations expand and succeed.  
(1985).  Putnam's notion of horizontal and vertical linkages in an organisation makes a 
good point about the possibility of internal inconsistencies, saying 'the actual networks that 
characterize an organization may be inconsistent with the ideology that inspires it' (p. 173, 
1993).  This is another example that applies to some instances of nominal 'collaborations' 
between nonprofits and for-profits in a funding arrangement.  Words like 'collaboration' 
imply horizontal linkages, but in fact the power relationship between the organisations may 
maintain vertical linkages that prohibit organisational integration and the establishment of 
shared purpose.  This discrepancy can lead to decreased organisational capacity because an 
organisation is forced to consider conflicting, parallel courses of action.  Several years later, 
in a case study of a Southern United States textile community, Wilson showed how 
organisational social capital is embedded in local networks of power and domination 
(1999). 

A recent study in Australia of two communities facing rapid economic and social change 
offered salient comment on both community development and organisational capacity 
(Gibson, Cameron & Veno 1999).  Research from a pilot project situated in regional 
Victoria documented how narratives within the community shape those residents; abilities 
to adapt to change.  By exploring the 'variety of understandings' participants had of the 
socio-economic shifts and the consequences to their region, the authors created a model for 
assisting communities to nurture optimistic scenarios for their communities.  This type of 
work is closely linked to research into relationships, because it discussed the power of 
narrative and language to shape community development.   It also took into account 
structure, because both communities were responding to externalities from a macro-
economic situation over which they had little control.

In 'Community Development and the Role of Local Government', Onyx (1992) described 
the tension between 'new managerialism' and the concerns of responsiveness, resource 
allocation and efficiency. These structures, imposed upon nonprofits from the institutional 
context, might include modified procedures for resource allocation such as competitive 
tendering. Young and Steinberg (1995) included an analysis of the pressures of conflicting 
values 'efficiency v. equity.' Although the focus is local government, the assessment is 
useful because it outlines the differences in approach that have characterised economic 
rationalism and community development. Nyland's identification of the pressure to seek 
"economies of scale" also entered into such a discussion (1993).  The interplay of 
innovative resourcing and the resulting pressure on non-profit organisations exhibits similar 
strain and may affect organisational capacity, which is defined as the ability of an 
organisation to respond to challenges and develop progressively.


2.5	INSTITUTIONAL CONTEXT AND STRUCTURE 

By combining organisational discourse at the 'institutional field level' with the context in 
which organisations operate, Hardy and Phillips' (1999) research into the refugee system in 
Canada created a bridge between internal and external models of how the system is 
perceived.  The discussion centred around how discourse constrains actions, and offers an 
interesting perspective as to how the language of 'collaboration' between organisations 
defines the power dynamic of that relationship.  For example, there might be pressure 
points when the language of the nonprofit clashes with the terminology used by business to 
signal a link.  These deep points of disconnected meaning can lead to serious problems for 
an organisation that finds itself in the position of having to work under two separate frames 
of reference and have direct relevance for nonprofit/for-profit relationships.


2.6  CONSTRUCTING THE THEORETICAL HEURISTIC 

This section explores how the work of Giddens (1976; 1984; 1987), DiMaggio & Powell 
(1991), McHoul (1987), Wittgenstein (1972), Lyotard (1984) and Winch (1958) were used 
to frame research questions, guide the theoretical basis of this work and select specific 
methods in work investigating the nature of language and power in inter-sectoral 
relationships.
 
Giddens has been selected as the primary guiding theory for the research for several reasons 
related to research questions and methodology.  His structuration theory on the 
reproduction of social relations and the concept of duality of structure provides a 'revolving 
door' metaphor for social life.  As both the medium and outcome of the duplication and 
transmission of social practices, structuration theory nimbly incorporates both sides of the 
debate of cause and effect for social reality.  His view of social agency is also instructive.  
Human beings are agents limited by the social structures that they create and perpetuate.  
The rules are structural properties.  Giddens contributes to the discussion of power with his 
idea of the dialectic of control, which maintains that individuals in subordinate positions 
have some power by virtue of the role of dependence (1984).  This is an interesting turn on 
the 'superiors as all-powerful' position that some power theorists maintain and an important 
concept as one analyses language and power relationships from the perspective of those 
perceived to be dependent.  Of power and duality of structure he writes:

action logically involves power in the sense of transformative 
capacity…resources are structured properties of social 
systems, drawn upon and reproduced by knowledgeable 
agents in the course of interaction.
(1984, p. 15)

This illustrates two important points.  Firstly, it links the idea of power to action.  Secondly, 
it promotes the idea of agency without presuming omniscience.  That is, people may act in 
accordance with structural properties of systems.  This clearly relates back to the main 
research question under investigation on language and power; that is, language and power 
act on one another to create structures in which the inequitable power differentials are 
reproduced and amplified.  Once again, however, there remains the possibility of informed 
action on the part of individuals.

Although Gidden's work plays a significant part in the theoretical thrust of this thesis, it is 
nonetheless important to note some criticisms levelled against structuration.  Layder (1987) 
and Clegg (1989) both note that structure is dominated by agency in Giddens' discussions.  
However, structuration is an important starting point for the work presented here as it 
frames the grounded theory emerging from the data.

Neoinstitutionalism as conceptualised by DiMaggio & Powell (1991) is a strong 
counterpoint in the argument of systems and agency.  By moving away from a traditional 
institutionalist theory that focused on rigid sets of rules governing behaviour, 
neoinstitutionalism includes in it the contradictions of power.  Structuration is evident in 
this theory as well.  DiMaggio and Powell argue that 'institutions are not only constraints 
on human agency; they are first and foremost the products of human actions' (1991).  They 
also hold that context (in this case, the organisational context of the power relations 
between a nonprofit organisation and its private sector 'partner') is embedded in the 
structures themselves.  This would support the idea that language and power contribute to 
structural and organisational locus of control discrepancies in these types of relationships.  
Another important idea in neoinstitutionalism is isomorphism: that is, that these 
relationships pattern themselves after broader trends in the community and that 
organisational arrangements between like entities become more homogenous over time.  
The argument here is two-fold: first, it requires a link to the historical context of 
community sector organisations in societal discourse; and second, that it acknowledges 
that, in the absence of intervention or at least revelation, these patterns will reproduce 
themselves across organisations.

In a response to Clegg's discussion (1987), McHoul  bridges the gap between the anti-
realist perspective of language shaping and shaped by social reality and the idea that 
language is an object (1987).  For the research into alliances, power and language, the 
materialist position for language is the assumption taken for this work.  That is, language is 
nominalist in that it is an inter-subjective construct. However, it becomes embedded into 
structures, solidified by use and manipulated as an object in much the same manner as a 
hammer or saw.  This is one of the advantages of crossing the subjective/objective divide 
on the paradigm map.  Language as an object relates back to structuration theory:  it is both 
the medium and the outcome of power relations between nonprofit and for-profit 
organisations in relationships. 

Having established the assumption that language can be viewed as an object, it is also 
important to note its functions in the building of social reality and the perpetuation of 
power inequity.  Wittgenstein's agonistic language games model how individuals influence 
one another in a dialectical process.  Each element of conversation--question, request, 
assertion or narrative--is identified as a 'move' in the game that creates displacement, which 
in turn provokes (1972).  The boundaries of language games, defined by previously created 
structural rules of engagement move as the dialogue progresses.  However, the constraints 
provide strong incentive for actors to remain between the lines.  For example, in a situation 
where a nonprofit staff member has one set of scripts or game rules pertaining to 
organisational goals for clients (i.e. empowerment) and another set for organisational goals 
for funding, the latter set of rules might take on rigidity and perceived permanence.  

Constrained by structure, the assertions rest squarely on the function of narrative and 
language.  Lyotard's concepts of narrative knowledge and internal equilibrium provide a 
valuable platform from which to investigate language and power (1984).  Narrative 
knowledge, distributed as 'flexible networks of language,' takes as an assumption that 
individuals seek internal equilibrium as they interpret the world around them, which is 
directly linked to the research question of perceptions and social agency of nonprofit staff 
in organisations that are engaging in private sector 'collaboration.'  Using the idea of 
language games, Lyotard asserts that the social bond itself is made up of a series of 
language games.  Another useful metaphorical connection is that Lyotard sees language as 
a node through which communication is established and this is echoed in Clegg's circuits of 
power model (1987).   As a postmodernist, Lyotard offered an optimistic view of the 
possibilities of theorising within this paradigm.  He argued that the discourse itself is part 
of the construction of social reality and positioned power as a game in which players have 
the ability to assess the situation and respond accordingly.

In the context of a study on power and language in relationships and perception, Winch's 
work (1958) on internal relations fits in well with Lyotard's discussion of narrative 
knowledge and internal equilibrium.  Winch reiterates how social science differs from the 
natural sciences and supports the post-modern stance on a lack of 'grand theories' to explain 
social relations.  He constructs meaningful behaviour from a 'tracing of internal relations,' 
and holds the view that social reality is constructed through individuals interacting with one 
another.  As the last link in the cascade of theorists to support the proposition of the 
interplay of language and power in a nonprofit/for-profit relationship, Winch combines the 
importance of language as the medium and outcome of social relations, power structures as 
constructed constraints on behaviour, and historical context as the lens through which to 
observe organisational phenomena.


2.5	EXPLORING THE MODEL

Figure 1 details the model that framed this work from the beginning.  The theoretical 
heuristic that initially guided the research into nonprofit/for-profit relationships is 
comprised of language and power at individual and organisational levels in a particular 
institutional context.  Resource relationships between nonprofits and for-profits operate 
with a given institutional context.  These include political, social and economic conditions 
that circumscribe the entire phenomenon.  These resource relationships are driven by 
interaction of language and power, which can occur two ways.  Firstly, power may be 
inherent in the language (i.e. position in the hierarchy).  Secondly, power can be reflected 
by the language used.  These interactions are on two levels in relationships between 
nonprofits and for-profits:  individual and organisational.  If the power/language link 
perpetuate inequality, there may be both individual and organisational effects.  On an 
individual level, staff in the nonprofit may experience decreased social agency (ability to 
act on their own behalf) and perceptions of powerlessness; on an organisational level, this 
situation may limit an organisation's capacity to develop and thrive.  The model is 
presented on the final page of the chapter as Figure 1.

The links in the model may appear firmly established. However, although they are 
grounded in concepts from the literature, the connections between ideas were only a guide 
in the exploration of data.

The next chapter details methodological concerns in developing an appropriate study to 
investigate the issues presented in the first two chapters.


Figure 1:			Initial Theoretical Heuristic




CHAPTER 3:  METHODOLOGY

3.1	INTRODUCTION

Methodology is more than just the way to conduct research.  It is the sum of all the 
procedures, processes, constraints, analysis, working assumptions and intentions of the 
researcher in a particular context for a particular project. 

There are two competing views of the link between methodology and research. The view 
that informs much 'casual' research is that 'research is research.'    This perspective 
divorces the methods used from some of the deeper philosophical discussion of why certain 
approaches may be better suited to one type of question.  One way in which this is evident 
is the use of statistics in mass market research to measure answers to questions that might 
be better researched using case studies.  

On the other side is the idea that research is an integrated process from the start.  At its 
most basic level, research can be seen as an extension of the researcher.  It is one type of 
relationship that individuals forge with their environment.  In the context of the social 
sciences, these relationships are the study of interactions of human beings with each other 
and with the world.  Broken down further, an investigation of relationships between 
nonprofits and for-profits is the study of individuals in the peculiar structure of 
organisations.  With this view, it is impossible to separate the integrity of the research 
process from a thorough understanding of the intent, framework and consequences of 
research, whatever methodology is employed.  Devine and Heath have called this 'reflexive 
consideration' of method (1999); others describe it as the process of deliberation (Young 
1966).

3.1.1	What is science?
Western educational institutions have had a history of focusing on the physical sciences for 
the model to which all things purportedly scientific should aspire.  The legitimation of 
some types of research and the discarding of other approaches have been profoundly 
influenced by a particular worldview.  Rigid theoretical and methodological boundaries 
have obscured the deeper quest for meaning that lies in the notion of science.  For example, 
the scientific method is one model for creating, carrying out and evaluating research.  As 
can be seen from Hoover and Donovan's (1995) definitions (Appendix A), there are 
assumptions immanent to that process itself.  Words like 'reality test' and 'hypothesis' 
presuppose the kinds of research to be conducted and the results to be expected.

Any meaningful examination of methodology must transcend these limitations.  In Social 
Research Methods, Neuman quotes Randall Collins: 'Modern philosophy of science does 
not destroy social science; it does not say that science is impossible, but gives us a more 
flexible picture of what science is' (Neuman 1997, p. 61).  Mills (1959) also points to that 
question of science as an important issue of clarification for social scientists.

However, although hybrid methodologies may be used to broaden understanding of a topic 
and afford depth to theory testing, they should not be undertaken without first considering 
the implications of such decisions (Devine & Heath 1999; Goia & Pitre 1990; Poole & Van 
de Ven 1989).  

In this chapter, it is argued that research into relationships between nonprofits and for-profit 
organisations can be framed in a model that links these two approaches.  Without losing 
sight of the need for clear boundaries for some parts of the research or resorting to 
functionalist 'absolutes' of how research 'should' be conducted, a theoretical paradigm for 
this project is presented that incorporates hybrid methodologies firmly rooted in prevailing 
assumption frameworks.


3.2	BUILDING THE ASSUMPTION BASE

One basic assumption is that the philosophical and therefore theoretical framework of 
research is an integral part of the methodology itself.  A useful way to conceptualise this 
approach to methodology is that of a mirror.  The research questions precede the method, 
which means that the methodology reflects the assumptions underlying the research 
questions.  These assumptions are based on philosophical factors that identify the context 
and characteristics of human nature and social reality. With this in mind, two sets of factors 
determine how the methodology will be constructed.  In short, both the fundamental 
assumptions and the research questions that evolve from those understandings affect which 
methodological approach provides the most satisfactory fit.

The first step in a discussion of methodology with this atomic approach is to clearly define 
terms that will be used throughout the chapter.  It is a crucial part of ensuring that the 
author and the reader are well-placed to maintain the same assumptions of meaning, and 
provides an excellent example of how making assumptions explicit can add value to the 
research endeavour.  In fact, this in itself is an exercise in understanding how 
methodological assumptions function in research.  Terms as referred to throughout this 
research are defined in Appendix A. 

3.2.1	Laying the foundation: the researcher and the research questions
Trochim (1999) raised a general methodological issue concerned with the types of 
questions studied in research.  In his typology, descriptive, relational and causal questions 
require different methodological approaches, depending on the outcome expected and the 
intent of the researcher.  Studying any organisational phenomenon comprehensively may 
require two or more types of questions to be asked during the research process.  

There are two sets of complementary tasks contained in the research questions for this 
investigation into relationships between third and private sector organisations.  The first is 
to describe the experiences of individuals and organisations working in nonprofit 
organisations and their perceptions of power, individual social agency and organisational 
capacity.  The second is to assess to what extent the drivers of these changes are found in  
other nonprofits in similar circumstances and whether or not experiences are similar.  
Inherent in these questions are assumptions about the nature of an individual's interaction 
with others and with her environment and the context and creation of social reality.  After 
defining the theoretical frameworks, the research questions are examined in the context of 
paradigm selection and 'best fit.'

Research is a human endeavour.  By this observation, the concept of research itself will be 
shaped by and will shape how researchers understand themselves, their relationship to 
social reality and the status of different types of knowledge.  One useful trait shared by 
Burrell and Morgan (1979) and Neuman (1997) is the view of methodology inexorably 
connected to questions of who we are, how we interact with one another and the 
environment, and what constitutes knowledge.  However, both are likewise limited by a 
view that precludes movement across paradigm lines.

In Burrell and Morgan's view, research can be categorised on two major axes.  The first, 
subjective versus objective, incorporates the theoretical assumptions of the research. The 
second, radical change versus regulation, refers to a set of assumptions about the nature of 
society.   Broadly, this notion frames the question of whether research is based on a view of 
the world that is subjective or objective; that is, whether it is an outside-in constraint or an 
inside-out construction.  A brief overview follows of the four sets of assumptions in Burrell 
and Morgan's typology, which operate on separate sets of questions related to ontology, 
epistemology, human nature and methodology.  These are also summarised in Appendix B. 

Ontological suppositions are related to whether or not social reality is perceived to be 
subjective (i.e. through the perceptions of individuals) or through objective, external 
verified existence.  An element of action is implied if it is understood to be subjectively 
created, whereas with the objective status human beings are seen to react to the reality 
originating from outside.  Research is the pursuit of knowledge, and epistemological 
assumptions frame what will be accepted as knowledge of social relationships, how 
knowledge will be collected and how and whether it can be communicated to others or 
viewed as integral to individual consciousness.  This is the answer to questions of how 
people access and transmit knowledge.  Assumptions about human nature refer to issues of 
agency, pre-determined causal laws for action and the relationship of human beings to their 
environment.  Questions around agency are linked to whether or not there is a degree of 
intentionality in action.  In the view that espouses social agency, human beings have the 
ability to make decisions about their actions.  The deeper level assumption here points to 
whether or not there is such a thing as inherent human nature, or alternatively that it is the 
result of individual experience.

Methodological assumptions are at the heart of how to select a particular method to answer 
a given research question.  To a significant degree, methodological assumptions depend on 
ontological assumptions.  For example, if the ontological assumption is that social reality 
exists outside subjective experience, methods to understand social reality would closely 
mirror those of the natural sciences.  On the other hand, if that assumption dictates a 
subjective social reality, appropriate methods would enable investigation of how 
individuals create, interpret, perpetuate and communicate social reality.  Burrell and 
Morgan included in their discussion a practical table of assumptions underlying social 
science (1979, p. 3).  The table is adapted in Appendix B.  

The second major axis in the model is related to the continuum of assumptions about the 
nature of society.  These assumptions about the nature of society depend on whether the 
researcher understands society in terms of the goal being to maintain and regulate the status 
quo or profoundly challenge existing structures to promote radical social change.  Partially 
linked to questions of power, privilege and inequality, this axis determines issues like intent 
and strategy for methodological implications of research. 

If the social system is ordered, then it is characterised by cohesion and consensus when 
'correctly' regulated.  In this view, the social structure is seen as a logical, coherent system 
that can be subjected to fine manipulation and improvement.  The social system is 
mechanistic and the goal of social research should be to understand how better to tune this 
instrument and regulate society.   In opposition to regulation and status quo, the radical 
change assumption embodies a vision of society that is marked by structurally inequitable 
power relationships which lead to a misleading sense of social consensus.  Society is a set 
of institutions characterised by inequality and conflict.  In addition, there is the active 
component of this assumption that maintains that this hierarchy supports the interests of an 
elite group of individuals. 


3.3	METHODOLOGICAL IMPLICATIONS OF PARADIGM CHOICE

Assumptions and paradigms shape the basic units of understanding about the nature of 
human experience and society. The five paradigms and exemplary methodological 
approaches detailed below each have unique advantages and problems.  However, they are 
delineated by adherence to rules guiding the matching between philosophical assumptions 
about human nature and social reality and the appropriate methodologies for those 
assumptions.  The method is another link between the questions the researcher is attempting 
to answer and the manner in which she goes about satisfying her intellectual curiosity.

Two methodological paradigms that deal with the status quo are the interpretative (or social 
constructionist) and structural functionalist (or positivist).  Both assume a social system of 
regulation, which means that the intention of research is concerned with the status quo.  
However, the exemplary research methods that create the best 'fit' for each paradigm are 
very different.  Interpretivism is nominalist, which means that interpretivist researchers 
follow a guideline of subjective experience of social reality.  This is closely connected to its 
voluntarist and idiographic stances; that is, interpretivists hold that human beings have 
social agency and act on their own initiative, and that social phenomena are best studied by 
scrutinising one situation in a particular context.  Neuman's (1997) definition states that 
social reality is constructed through interaction, development of shared meaning and 
communication.  This view validates individual experience as not only relevant but crucial 
to the fabric of social reality in which people develop relationships with one another.  In 
this sense, contrary to positivism, interpretivism is an 'inside-out' approach to social 
science; that is, the reality is dynamic and responsive to the fluctuations of human 
interaction, perception and creation of meaning.

Interpretivist social science is much more inclusive than extreme positivism.  From the 
positivist viewpoint, there is only one 'correct' answer; in contrast, the interpretivist 
paradigm allows multiple positions to be taken into account when attempting to analyse a 
situation. By extension, 'science' is something that all of us do every day, using a 
combination of common-sense understandings of the world and general laws to create 
meaning.

Depending upon which paradigm a social scientist selects or identifies with, each frame 
offers one or two outstanding methods that are clearly aligned with the assumptions 
underlying it.  Interpretivist researchers seek methods that enable them to understand in 
depth the relationship of human beings to their environment and the part those people play 
in creating the social fabric of which they are a part.  They are not searching for an 
objective, external answer to their questions, because they view the world through a series 
of individuals' eyes.  In fact, methods that purport to offer objective or 'correct' information 
are contrary to the interpretivist position of subjectivity.  People have their own 
interpretations of reality, and interpretivists choose methods that encompass this 
worldview.  

The purpose of the research is important.  Interpretivists have as their main goal to describe 
a phenomenon, not to prescribe a solution to a problem.  They are interested in using 
methods that allow them to reflect on an individual's experience in a social context.  
Ethnography, which uses the anthropological methods of participant observation and 
unstructured interviews matches the interpretivist assumptions precisely.  By using as the 
primary data set information from the subject experiences, focusing on how individual 
decisions affect the broader social reality and searching for deep understanding of a person 
or group of people, ethnography satisfies the requirements of an interpretivist paradigm.  
Another key point is that interpretivists do not see themselves separate from the process of 
research.  Participant observation embraces this standpoint and enhances a researcher's 
ability to probe deeply into the phenomenon under study.  

Linguistic definitions differ as well.  For an interpretative social scientist, there may be as 
many versions of 'truth' as there are subjects in a study.  Each person in the research setting 
has a unique perspective on the phenomenon at hand and each of those accounts is equally 
valuable to the research task.  To build a comprehensive picture of the situation, 
interpretivists rely on a kaleidoscope of 'truths' through stories.  In contrast, the 'truth' for a 
positivist is just that: a singular, causal account that explains the phenomenon and extends 
beyond individuals into an external objectivity.  The model for a positivist, in contrast to 
the multi-lens kaleidoscope of the interpretivist, is the microscope—a  meticulous, single-
focus tool that allows the researcher to identify and quantify previously undiscovered 
answers.  The difference in the use of the term 'knowledge' can be similarly characterised.  
Knowledge for the structural functionalist (another term for positivist) is an immutable 
concrete wall, waiting to be catalogued and manipulated; knowledge for the interpretivist is 
a shifting sand dune, different from every angle, elusive and internally placed.

The importance and the credibility of the work can be analysed on the basis of the extent to 
which the researcher is able to communicate the subjects' perspectives and the degree to 
which others are able to share a cognitive model of the research setting.  Interpretivist 
social science is no less rigorous than positivism; it simply requires different sets of 
standards to be applied, such as understanding rather than replicability.  Context, shared 
meaning among members of a group and communicability of understanding are the 
benchmarks of success.  The researcher in an interpretivist paradigm is fully integrated into 
the research setting.  This means that it may be difficult and undesirable to assume any 
sense of value-neutrality.

In contrast to interpretivism, structural functionalism seeks to identify universal laws 
already present in social reality and articulate causal connections between constructs. 
Neuman explored this area further by re-iterating that positivism is the most widely 
accepted approach to research (1997).  With a strong history in the natural sciences, it 
overshadows much of what is popularly labelled 'research.'  Under this umbrella, the 
rationale for conducting research is to find and apply laws of human behaviour.  The goal is 
to create theories that explain behaviour in concrete terms.  A strong predictive component 
exists here as well—the intent is to identify replicable patterns of human interaction and 
then anticipate behaviour across contexts.  In positivist social science, these abstract laws 
are in a sense 'waiting to be discovered.'  They are widely applicable and subject to 
rigorous testing.  This is a predominantly nomothetic stand; that is, positivists look for 
generalisability in laws and research outcomes.  

The epistemological basis of positivism is that knowledge is objective and can be 
manipulated.  This extends to positivist language.  'Truth' is seen as a tangible construct 
a