Third sector organisations (TSO’s) increasingly provide alternatives to public
services, manage community ownership of local assets, and offer relational models of
production and exchange. Many TSO’s have relatively flat structures, valorise peer
relations and are seen as a democratic alternative to local state bureaucracies. This
chapter draws on two empirical case studies to argue that a psychosocial understanding
of lateral peer relations is essential if displacement anxiety and rivalry are to be avoided
and conflict used as productive feedback for organisational development. Taking the
UK as an example, and a context where the functions of local authorities have been
sufficiently curtailed, it concludes that TSO’s may still need the vertically organised
mediating functions of the local state if they are to carry out their roles effectively.
Keywords: Third sector Organisations, psychosocial perspective, conflict,
vertical leadership, democratic participation.
