Entrepreneurial Orientation and Innovation Type in Nonprofit Organizations

• In Event: Social Innovation In and by Non-Profits

Abstract

Entrepreneurial orientation is conceptualized as the top management’s inclination for innovativeness, risk-taking and proactiveness (Miller, 1983) and thus captures “the degree to which the firm’s posture may be characterized as entrepreneurial versus conservative” (Morris, Webb, & Franklin, 2011). A high value of entrepreneurial orientation has been shown to have a positive relationship with success of for-profit organizations (Rauch, Wiklund, Lumpkin, & Frese, 2009), especially in hostile environments (Covin & Slevin, 1989).
Nonprofit organizations have been facing increasingly complex environments, forcing them to invest in innovation (Eikenberry, 2009). Nevertheless, the relationship between entrepreneurial orientation and success is less clear in the nonprofit context. Scarce empirical evidence has shown positive links of entrepreneurial orientation on mission success (Pearce II, Fritz, & Davis, 2010), but ambiguous links in terms of financial success (Pearce II et al., 2010; Voss, Montoya-Weiss, & Voss, 2006). This ambiguity hints to some omitted influence that has not been focused on in research yet.
To shed more light on this relationship between entrepreneurial orientation and success, we propose to add the mediating variable innovation. Innovation has been proposed as an outcome variable of entrepreneurial orientation in nonprofit organizations (Kirkman, 2014), but not as a mediator in the relationship. Empirical evidence on the relationship is also missing.
However, the concept of innovation has been shown to be a complex one, allowing for different types of innovation (Rowley, Baregheh, & Sambrook, 2011). Only very few studies consider the difference of innovation type in nonprofit innovation, although various aspects such as antecedents of innovation depend on its type (Jaskyte, 2011).
Our research question therefore is:
“Is the relationship between entrepreneurial orientation and nonprofit success mediated by process, product and business model innovation?”
By answering this question we add to the literature on innovation in nonprofit organizations and the ambiguous outcomes of entrepreneurial orientation. We also add to the entrepreneurial orientation research in general by proposing a new mediating variable in the complex relationship of entrepreneurial orientation and success. Lastly we answer a call for more success factor research in nonprofit organizations that includes mission success as a dependent variable by including financial and mission success in our analysis (Helmig, Ingerfurth, & Pinz, 2014).
We will research this relationship collecting data from a panel of social service organizations in Germany. This allows us to collect data on a longitudinal basis, which has been called for in entrepreneurial orientation research (Miller, 2011).

Authors

• Michaela Platz, University of Mannheim

• Bernd Helmig, University of Mannheim