An Empirical Investigation of the Link between Market Orientation and Business Performance in Nonprofit Service Providers

Abstract

While researchers have explored the relationship between market orientation and finn performance in commercial organizations, such studies in non-profit organizations are scarce. This paper uses a structural equation model to show the impact of market orientation on the performance of non-profit organizations. To conduct the ’study, the authors employed the Kohli, Jaworski and Kumar (1993) market-orientation scale (MARKOR). Data for this study was collected by mail survey. One thousand market orientation surveys were sent to the executive directors of non-profit organizations across the U.S. One hundred forty-eight nonprofit agencies responded to the survey, representing 14.8% response rate. The performance criterion was based on the self-stated funding activities for the non-profit organizations collected in this sample. Results indicated that the Kohli, Jaworski and Kumar (1993) market-orientation scale provided a good measure of market orientation in non-profit organizations. The model of the relationship between market orientation and the performance of a non-profit organization supported the theory. The managerial implications are discussed for non-profit organizations.