Market Orientation, Brand Orientation, Social Entrepreneurial Orientation and Third Sector Organizational Performance: The Mediating Role of Learning Orientation

Abstract

Third Sector Organizations (TSOs) play a crucial role in providing services to the public due to the market, government or contractual failures. Their services have been largely affected due to competitive environment, more demanding nature of donors, entrance of commercial sector into social welfare programs and due to government strict policies and regulations. These factors also make acquisition of resources and generation of donations so much challenging for TSOs that scholars even suggested incorporating management practices from commercial sector. Therefore, the purpose of this research is to provide an empirical evidence that how managerialism approach can be utilized for improving performance of Third Sector Organizations. In this study, effect of Market Orientation (MORT), Brand Orientation (BRO) and Social Entrepreneurial Orientation (SEO) on Third Sector Organizations’ (TSOs’) Performance (Perf) has been examined in the presence of Learning Orientation (LOR) as a mediator. First challenge for any TSO is that how it can acquire intangible resources (MORT, BRO and SEO) which could fulfil Resource Based Theory (RBT) criteria of resource being rare, non-imitable and valuable resource. Second challenge could be that even if a TSO acquires them, how it can effectively utilize these resources for improving organization performance. Therefore, this study proposed Learning Orientation (LOR) as a strong capability under Dynamic Capability Theory, to effectively utilize these resources. A post-positivist philosophy was followed in which around 700 senior employees as respondents were approached registered from Pakistan TSOs to fill a structured questionnaire by using Multi Stage Probability Sampling technique. Out of 700 respondents, 326 employees from Peshawar, Swat, Rawalpindi, Islamabad, Karachi and Quetta which makes 47% of sample, completed survey. The results prove that direct effect of all these orientations is quite weak or insignificant on the organization performance but when the same causal effect is measured with LOR as a mediator the results improve from weak to stronger and from insignificant effect to positive significant effect. This answers to research question that no strategic resource can work as a substitute for other and a sustainable competitive advantage can only be achieved when an organization focuses on multiple orientations simultaneously and has strong organizational capability to effectively utilize these resources. This study contributes to academic literature by examining under researched area that what role strategic orientations play in the performance of TSOs under Theory of Firm and by analysing the complementary effect of different strategic orientations (MORT, BRO, and SEO) with LOR as a mediator on the performance. The BRO and LOR relationship also studied for the first time. In future, studies from customer perspective and role of technology and political orientations in the organizational performance can also be conducted. Different theoretical, practical and policy implications discussed for researchers, government/donors and third sector managers.