Market Orientation in Russian Non-Profit Organizations: Impact on the Performance

Abstract

The paper aims to reveal how market orientation influences efficiency of Russian non-profit organizations (NPO). Market orientation is defined within a behavioral theoretical framework and measured by the MARKOR scale, adapted for the Russian non-profit sector. Efficiency of NPO’s operation is measured by self-reporting indicators that are estimated by NPO’s CEOs. The indicators include beneficiaries’ satisfaction, organization’s capacity to attract resources, and organizational reputation. The study is based on an organizational all-Russian survey. Information was collected though face-to-face interviews with NPO’s CEOs using semi-formal inventory. The survey was conducted in 30 Russian regions. It was revealed that market orientation positively influences efficiency of NPO’s operation. Market orientation on donors contributes to fundraising and increases organizational reputation, whereas market orientation on beneficiaries positively influences beneficiaries’ satisfactions and also increases reputation. Moreover, it was identified that Russian NPOs are likely to be oriented rather on beneficiaries than on donors. The research has a number of limitations: only one type of NPOs was examined, viz. foundations; the results are based on self-reporting measurement, which is prone to subjective estimations; CEOs are the only representatives of an NPO, any other employees are excluded; longitudinal survey data are not available. Main directions for further research studies involve examining the relation between market orientation and efficiency of other types of NPOs, combining assessment made by CEOs and other employees, doing longitudinal studies. Practical issues of introducing market orientation into NPO’s operation should also be considered in future research. Application of the suggested framework can help to estimate a degree of market orientation of a particular NPO. The study is a step forward in theoretical and empirical conceptualization of market orientation and its influence on NPO’s efficiency in Russia.