Marketization in a statist-corporatist nonprofit sector: the case of Hong Kong
| Date | 01 June 2022 |
| DOI | 10.1177/0020852320925867 |
| Published date | 01 June 2022 |
| Author | Xiao Lu Wang |
| Subject Matter | Articles |
Article
Marketization in a
statist-corporatist
nonprofit sector: the case
of Hong Kong
Xiao Lu Wang
The Hong Kong Polytechnic University, Hong Kong SAR
Abstract
In this article, an actor-centered approach was used to conceptualize marketization
trends under statist-corporatist regimes and to critically examine theories on the
trends and impact of marketization. A grounded theory method was used to guide
data collection. A total of 65 critical incidents from the perspective of senior executives
were collected from 18 nonprofit organizations in Hong Kong. Their annual budgets all
exceeded US$6.5 million. Behavioral event interviews were conducted with the senior
executives to understand how they conceptualized the organizational challenges and
rationalized their decisions. The results show that commercialization was not a major
marketization trend in statist-corporatist regimes. Nonprofit organizations were found
enhancing self-governance capacities through building management competencies, artic-
ulating organizational policies and know-how, and adopting strategic management. It
was not driven by institutional isomorphism. Second, strategic human resource man-
agement was revealed as another strategy to reduce resource dependence, which
enriches the theory’s current focus on earned-income strategies. Third, service expan-
sions were observed as either directed at service gaps or driven by competition. By
specifying the rationales for service expansion in exclusively nonprofit service markets,
the study nuances the debate over the impact of marketization on nonprofit sectors.
Points for practitioners
For policymakers, it is important to be aware of the impact of market mechanisms on
the nonprofit sector, which varies across countries due to the differences in the
Corresponding author:
Xiao Lu Wang, The Hong Kong Polytechnic University, Department of Applied Social Sciences, Hung Hom,
Hong Kong SAR.
Email: norah.x.wang@polyu.edu.hk
International Review of Administrative
Sciences
!The Author(s) 2020
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DOI: 10.1177/0020852320925867
journals.sagepub.com/home/ras
2022, Vol. 88(2) 449–470
International
Review of
Administrative
Sciences
institutional framework for social service provision. For nonprofit managers, particu-
larly those working in a statist-corporatist sector, they may benefit from self-
governance strategies, revenue strategies such as active fundraising campaigns and
regular donor programs, and strategic human resource management practices. More
importantly, it is revealed that service expansions driven by competition for market
shares and resources could render nonprofits, particularly those serve multiple types of
target beneficiaries susceptible to the struggles of defining organizational identity and
core competencies.
Keywords
competition, marketization, resource dependence theory, self-governance, statist cor-
poratism, strategic human resource management
Introduction
The marketization of nonprofit sectors has been extensively discussed in relation to
neoliberal reforms and new public management (NPM) (Eikenberry and Kluver,
2004; Haque, 2007). The general understanding is that the public sector has opened
up to market mechanisms for welfare provision, and that nonprofit organizations
(NPOs) have become more businesslike (Dart, 2004; Maier et al., 2016; Phillips
and Smith, 2011; Van Slyke, 2007).
However, discussions on marketization have mainly been based on studies of
third sectors under liberal and corporatist regimes. For example, marketization in
the US, an example of a liberal regime, was characterized by NPOsadopting earned-
income strategies to offset government funding cutbacks (Salamon, 1993, 1999;
Salamon and Anheier, 1998). In corporatist regimes such as Germany, the disorga-
nization of the “organized welfare mix” has been at the centre of discussion, in that
the European understanding of societal corporatism is based on the principle of
subsidiarity, which gives NPOs prominent positions in policymaking and the imple-
mentation of social services (Bode, 2006; Henriksen et al., 2012; Schmitter, 1974).
In this article, I intend to address the research gap on marketization in statist-
corporatist regimes through providing insights into marketization trends in Hong
Kong’s nonprofit sector (Lee, 2005; Lee and Haque, 2008). Statist corporatism is
characterized by an autonomous state and a high level of participation of the
nonprofit sector in social provision (Ma, 2016; Salamon and Anheier, 1998;
Schmitter, 1974). In this article, an actor-centered approach is used to conceptu-
alize marketization trends in statist-corporatist regimes. The actor-centered
approach emphasizes understanding the rationales underlying marketization
trends from the actors’ perspectives.
In so doing, I critically examine resource dependence theory and new institu-
tional theory, which were frequently drawn on in previous studies to explain
450 International Review of Administrative Sciences 88(2)
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