Market Orientation and Organizational Performance in the Nonprofit Context: Exploring Both Concepts and the Relationship Between Them

Abstract

Market orientation and organizational performance in the nonprofit context. Exploring both concepts and the relationship between them. The purpose of this paper is to explore the relationship between the concepts market orientation and organizational performance for nonprofit organizations. To understand the nature of this link in the nonprofit context, the authors will discuss and elaborate on the applicability of both concepts to nonprofits. They will develop multidimensional notions of "societal orientation" and "nonprofit organizational performance," which fit the specific operating environment of nonprofit organizations engaged in the provision of health and social services. The authors also propose a conceptual framework that relates both notions and present the main underlying propositions. They conclude by suggesting items to empirically measure both constructs and venues for future research.

Stakeholder Performance Measurement in Nonprofit Organizations

“…Financial performance is not the primary objective of NPOs, so financial measures alone are insufficient to measure their performance (Kaplan ; Sawhill and Williamson ). Rather, NPOs mostly gain resources and legitimacy from stakeholders, so a stakeholder orientation is a more central focus (Duque‐Zuluaga and Schneider ; Hsieh ), and NPOs can measure their performance in relation to their stakeholder relationships (Balser and McClusky ) in a way that acknowledges the stakeholders’ expectations and interests (Hsieh ). Nonprofit managers thus require techniques that enable them to evaluate stakeholder satisfaction, identification, or loyalty (Morley, Vinson, and Hatry ).…”

The Conceptualization of Nonprofit Marketing Orientation: A Critical Reflection and Contributions Toward Closing the Practice–Theory Gap

“…Based on this assumption, nonprofit researchers introduced a concept labeled societal orientation. These researchers argued that societal orientation instead of market orientation should be used to grasp the specifics of the nonprofit sector (Duque-Zuluaga & Schneider, 2008;Liao et al, 2001;Sargeant, Foreman, & Liao, 2002). The societal orientation construct is defined as "the extent to which a nonprofit focuses on the needs of its key stakeholder groups, including the needs of the wider society of which it forms part" (Liao et al, 2001, p. 263).…”

“…Since the number of potential supporters increases and the organization's brand preference increases, we would expect supporter or resource acquisition to increase (Brady et al, 2011;Duque-Zuluaga & Schneider, 2008). The increase in brand strength is reflected in more positive perceptions of the organization from groups that are important to the organization.…”

“…It is reasonable to expect that nonprofit marketing orientation is related to staff retention, staff attitudes, commitment, and organizational citizenship behaviors (Chad et al, 2013b;Duque-Zuluaga & Schneider, 2008). Increasing levels of nonprofit marketing orientation implies that marketing is perceived as the general management model or framework through which decisions are made and priorities are determined.…”

From market orientation to brand orientation in the public sector

“…There have been several attempts at translating market orientation to a nonprofit setting under the concept of societal orientation (Duque & Schneider, 2008;Liao et al, 2001). In this orientation, the emphasis is shifted towards stakeholders instead of customers.…”