From People to Theory and Back Again; Towards Excellence in Third Sector Organisations

The theory of third sector organisational performance measurement and quality has received little attention to date in a predominantly practice led research field. Adopting appropriate quality and performance practices is accepted as essential for the viability and effectiveness of the delivery of vital welfare services, but the lack of an appropriate theoretical underpinning could undermine the operationalisation of these approaches. Outlining the key theories proposed in the field, this paper aims to identify an appropriate theoretical perspective to underpin an effective and person-centred approach to excellence for the third sector. Drawing on empirical data from third sector organisations in Scotland and the existing literature, the key theoretical lenses conceptualising third sector organisational performance and quality are addressed. Recognising tensions between interpretive approaches, such as institutional theory, and positivist approaches such as contingency theory, a case is made for the application of stakeholder theory. Stakeholder theory has significant resonance for quality and performance and underpins the multi-stakeholder service delivery environment of the third sector. Improving understanding of the multiplicity of stakeholders’ competing claims will contribute to supporting the sustainability and person-centred ethos of third sector organisations. The research provides evidence that organisational excellence in the third sector will be enhanced with an applied understanding of stakeholder theory and management. The research outlines the importance of a developing a theoretical underpinning in the complex field of third sector organisational performance and enhances our understanding of how this can contribute to ensuring organisational excellence.