Neoinstitutional theory in nonprofit organizations: The power vacuum

The nonprofit community services sector is positioned between the institutional cusps of charitable and community models and business models. Stemming from a sociological and political tradition, neoinstitutional theory provides a sound platform from which to analyze organizational change in nonprofit organizations. Neoinstitutional writers acknowledge the limited theoretical development of power in the theory and its role in institutional change. This paper traces the shift `from the old to the new institutional theories and their different assumptions about power. I argue that their views are simplistic in the light of contemporary work that provides explanations of power based on ethical or postmodern discourse. This paper suggests the need to explore and extend neoinstitutional theory using more current explanations of power to critically analyze organizational change in the nonprofit sector.