Market orientation, learning orientation, and the performance of nonprofit organisations (NPOs)

Nonprofit organisations (NPOs) are challenged with continuous change, which provides the impetus for adopting organisational change models. The purpose of this paper is to examine the impact of the adoption of market and learning orientations on NPO performance.

The authors draw on extant management literature to theorise the interrelationship between market orientation, learning orientation, and economic and non‐economic NPO performance. Using a survey design, the authors draw a convenience sample of 118 NPOs in Ghana to test their theoretisation.

Evidence is found that although the relationship between market orientation and NPO performance is significant (on both economic and non‐economic indicators), what best accounts for enhanced performance is learning orientation. Additionally, non‐economic performance mediates the relationship between learning orientation and economic performance.

Replicating the study with larger samples, using objective performance data, and applying more rigorous approach to data analysis, among other things, could significantly improve the generalisability of the results.

NPO managers are reminded that non‐economic performance (e.g. service or program effectiveness) represents part of the underlying mechanism through which the financial assurances of market and learning orientations can be exploited.

The paper builds on the market orientation literature by theorising and demonstrating empirically a route through which market orientation is related to the firm's financial performance.