Scott: The Hidden Dynamics of Nonprofit Governance
This study proposes a novel theoretical framework using a discrete Hidden Markov Model (HMM) to explore the governance dynamics within nonprofit organizations, focusing on the dynamic transitions between principal-agent and stewardship theories. While traditional approaches have often treated these theories in isolation of one another (Caers et al., 2006; Davis et al., 1997), this paper supports the existence of dynamic transitions influenced by underlying, often unobservable factors. The conceptual model using a Markov chain provides insight into the conditions under which nonprofits navigate between alignment with principal-agent conflicts and stewardship-oriented behaviors. This theoretical paper addresses the empirical fragmentation in current research, suggesting a probabilistic approach to understanding governance transitions occurring in nonprofit organizations.
Lloyd Mayer