A Stakeholder Perspective on the Market Orientation of Swiss Nonprofit Organizations

Abstract

ABSTRACT The adoption of business-like practices by nonprofit organizations (NPOs) has often been associated with focusing too much on markets, rather than mission. Yet, the concept of market orientation does not view profits as the goal, but rather as a consequence. This makes it highly relevant for NPOs. We argue that identifying, monitoring, and managing the relevant stakeholder groups through a market-orientation approach can enhance both the economic and social performance of NPOs. We do so by developing a preliminary scale of stakeholder-based market orientation based on survey data from Swiss NPOs and show that components of such a scale need to include stakeholder groups other than those found in the business literature. The effect of these components on organizational growth and mission achievement are examined using a structural equation model. The results suggest that adopting a stakeholder-based market orientation concept can have positive effects on organizational growth and mission achievement.