Leadership Challenges in Addressing the Tension Between Policy Context and Market Forces for Nonprofit Service Providers

Nonprofit service providers occupy a precarious position within the health and social care system. On one hand, they rely on publicly funded commissioners, and on the other, they are in competition with other service providers. To secure contracts for services, these providers must maintain relationships with commissioners, offering value for money while also operating a functional business model. This is a strategic and interpersonal challenge for nonprofit leaders. In this chapter, we will explore two leadership case studies, examining the challenges that must be navigated to resolve the tensions that these providers experience in this context. Nonprofit providers need to be responsive to the needs of policy partners and adapt to the priorities outlined by macro-level actors. Despite having little influence on policy themselves, they often play a significant role in its ultimate success. Within a market context, nonprofit service providers may have limited ability to take advantage of opportunities or be exposed to threats that impact their business model. In this chapter, we draw from literature on dynamic capabilities, institutional theory, policy implementation and organisational change, to discuss how senior leaders of nonprofit service providers can effectively manage the tension between policy context and market forces.