Entrepreneurial Orientation (EO) In Member-Oriented Advocacy Associations – Characteristics, Antecedents, and Performance Enhancing Effects

• In Event: Strategic management

Abstract

Since nonprofit organizations (NPOs) and associations face demanding funding conditions due to the neoliberal governance shift in the 1980s, third-sector research investigates how to ideally manage these organizations. The transfer of business enterprise management concepts resulted in the market orientation, professionalization, and managerialism of third-sector organizations (Maier et al., 2016). These changes helped to implement processes and structures that supported the organizational maintenance. Notwithstanding, to keep pace with the 21st-century dynamics, organizations must develop, act out renewal, and make their characteristics shine. To do so, EO appears to be an appropriate concept (Stock & Erpf, 2022). It is defined by the dimensions of innovativeness, proactiveness, and risk-taking and manifests in organizational management, methods, decision-making, and outputs (Covin & Slevin, 1989; Lumpkin & Dess, 1996).
Nonprofit research increasingly explores the occurrence and effects of this strategic posture. Several studies confirm that EO enhances NPO’s performance (Almeida et al., 2019; Pamacheche et al., 2016). However, knowledge generated so far analyses EO mainly in NPO-types of health, social services, and education (Chen & Hsu, 2013; Hinz & Ingerfurth, 2013), which face competition from private businesses (Irvin, 2010) and behave in a customer-oriented manner likewise to their commercial counterparts.
There is a lack of research on NPOs offering services for their own members and engaging in collective services, such as advocacy. These are relevant characteristics for a lot of NPO types, such as peak and umbrella associations, business- and professional associations, and unions. The present research fills this gap by addressing the following research question:
What are the significant characteristics, antecedents, and performance-enhancing effects of EO in member-oriented advocacy associations?
Based on the literature and an interview study with 12 CEOs of German associations, five hypotheses are derived: (1) The organizational self-perception as a pioneering platform, (2) the dominant CEO, and (3) absorptive capacity enhance EO in associations. (4) EO has positive effects on the membership, advocacy, and operational performance of associations. (5) The performance of associations is stronger enhanced by EO when the construct’s core dimensions are supplemented by the characteristic dimensions of member interaction and advocacy proactiveness.
The empirical study is based on a survey of 77 German business and professional associations. The data analysis is carried out by applying a variance-based structural equation model.
These results are conclusive in several ways. First, it is confirmed that associations exhibit a specific type of EO, which includes the dimensions of member interaction and advocacy proactiveness. Second, EO enhances membership, advocacy, and operative performance of associations. It is, therefore, a recommendable strategic posture for these types of organizations. Third, EO can be promoted by striving to be a pioneering platform for the members, by a CEO that shapes activities with the support of the board, and by organization wide exhibited absorptive capacity. These insights enable to derive practical implications and contribute to filling the general lack of strategic management research in associations (Tschirhart & Gazley, 2014).

References

References
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Authors

• Dorothea Maria Stock, University of Fribourg

• Markus Gmuer, University of Fribourg