Market orientation, innovation and performance of nonprofit organizations: Evidence from China

Most of existing literatures are concentrated on the relationship between market orientation (MO) and performance of enterprises, fewer studies are about market orientation of nonprofit organizations (NPOs), and it is almost a blank both in China and abroad with regard to studies on mediating variables between MO and performance of NPOs. In this study, by analyzing the questionnaire from 223 NPOs under the Chinese context, the impact of MO on performance is explored. Considering innovation in NPOs is also a forefront research area, organizational innovation is included as a possible mediating variable in our analytical framework. Based on systematic verification of the psychometric properties of market orientation, innovation and performance measuring instruments, empirical results obtained from Structural Equation Modeling (SEM) reveal that, NPOs market orientation has direct positive impact on their performance and innovation plays a partial mediating role between the two. While developing the MO strategy, it is also necessary for NPOs to strengthen organizational innovation capability to improve their performance more efficiently.