the impact of creativity on performance in non-profits

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Int. J. Nojiprofit Volunt. Sect. Mark. 10: 213-223 (2005) Published online in Wiley InterScience (www.interscience.wiley.com). DOI: 10.10O2/nvsm.25 The impact of creativity on performance in non-profits Hilton Barrett'*, Joseph L. Balloun^ and Art Weinstein^ 'Elizabeth City State University, North Carolina, USA ^ Southeastern University, Florida, USA This article examines how creative climate affects learning orientation and its relation- ship to organizational performance. The study also assesses creativity's link with tnarket orientation, entrepreneurial orientation, and organizational flexibility. Past research on creativity climate has explored areas such as the arts, high-tech, information technology, media, and the sciences. Thefocus of this study is to assess creativity's role in managerial decision-making in the non-profit sector. Sound use of creativity can improve planning, implementation, and control by non-profit organization executives. Copyright <• 2005 fohn Wiley & Sons, Ltd. Introduction The non-profit sector exists because it can better provide, relative to the business and public sectors, goods, and services that: (1) have a significant degree of non-rivalry, and (2) are difficult to charge an economically appro- priate price (Ben-Ner, 2002). Hence, non- profits are most appropriate to provide needed societal services when traditional market mechanisms fail (Sargeant et al., 2002). Examples of non-profits range from blood banks to educational institutions to sports organizations to soup kitchens. Worldwide, the non-profit sector generates well over one trillion dollars US, annually. It is big and it is important — a minor change in the productiv- ity and performance of the sector can result in a major change in national economies and the quality of life/well-being of the populace. 'Correspondence to: Hilton Barrett, Davis School of Business & Economics, Elizabeth City State University, Elizabeth Cit>', NC 27909, USA. E-mail: [email protected] The major portion of the non-profit sector varies greatly by nation and culture. In the United States, health and education are the major emphases; in Latin America, education; in central Europe, recreation and culture; and in Western Europe, social services and education. In the Johns Hopkins Comparative Non-profit Sector Project covering central and western Europe, Latin America, and several developed countries, Ireland and the Netherlands have over 12% of their non-agricultural employment in the non-profit sector; the US, 8.8%; the UK, 6.4%, Argentina, 4.4%, and Romania, 0.6% (Salamon et al, 1999). Purpose of tbe study Most of the previous research on creativity has emphasized the individual. Recently, there has been a growing interest in the organizational entity and how it can facilitate individual and group creativity. LInfortunately, much of the empirical research on organizational creativity has been limited to specialized areas such as information Copyright r 2005 John Wiley & Sons, Ltd. Intf. Nonprofit Volunt. Sect. Mark, November 2005

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Int. J. Nojiprofit Volunt. Sect. Mark. 10: 213-223 (2005)Published online in Wiley InterScience(www.interscience.wiley.com). DOI: 10.10O2/nvsm.25

The impact of creativity onperformance in non-profitsHilton Barrett'*, Joseph L. Balloun^ and Art Weinstein^'Elizabeth City State University, North Carolina, USA^ Southeastern University, Florida, USA

This article examines how creative climate affects learning orientation and its relation-ship to organizational performance. The study also assesses creativity's link with tnarketorientation, entrepreneurial orientation, and organizational flexibility. Past research oncreativity climate has explored areas such as the arts, high-tech, information technology,media, and the sciences. The focus of this study is to assess creativity's role in managerialdecision-making in the non-profit sector. Sound use of creativity can improve planning,implementation, and control by non-profit organization executives.

Copyright <• 2005 fohn Wiley & Sons, Ltd.

Introduction

The non-profit sector exists because it canbetter provide, relative to the business andpublic sectors, goods, and services that: (1)have a significant degree of non-rivalry, and (2)are difficult to charge an economically appro-priate price (Ben-Ner, 2002). Hence, non-profits are most appropriate to provide neededsocietal services when traditional marketmechanisms fail (Sargeant et al., 2002).

Examples of non-profits range from bloodbanks to educational institutions to sportsorganizations to soup kitchens. Worldwide,the non-profit sector generates well over onetrillion dollars US, annually. It is big and it isimportant — a minor change in the productiv-ity and performance of the sector can result in amajor change in national economies and thequality of life/well-being of the populace.

'Correspondence to: Hilton Barrett, Davis School ofBusiness & Economics, Elizabeth City State University,Elizabeth Cit>', NC 27909, USA.E-mail: [email protected]

The major portion of the non-profit sectorvaries greatly by nation and culture. In theUnited States, health and education are themajor emphases; in Latin America, education;in central Europe, recreation and culture;and in Western Europe, social services andeducation. In the Johns Hopkins ComparativeNon-profit Sector Project covering centraland western Europe, Latin America, andseveral developed countries, Ireland andthe Netherlands have over 12% of theirnon-agricultural employment in the non-profitsector; the US, 8.8%; the UK, 6.4%, Argentina,4.4%, and Romania, 0.6% (Salamon et al,1999).

Purpose of tbe study

Most of the previous research on creativity hasemphasized the individual. Recently, there hasbeen a growing interest in the organizationalentity and how it can facilitate individual andgroup creativity.

LInfortunately, much of the empiricalresearch on organizational creativity has beenlimited to specialized areas such as information

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214 Hilton Barrett et al.

technology, life sciences, the performing andvisual arts, or research and developmentactivities. Ford and Gioia (2000) call forincreased research in the managerial domain.The limited attention to creativity in non-profitorganizations was an impetus for our researchinvestigation.

This exploratory study examines the factorsfor successful organizational performance(PERF) with respect to managerial activitiessuch as market orientation (MKTOR), learningorientation (LRNOR), entrepreneurship (ENT),and organizational flexibility' (ORCiF) in thenon-profit organization (NPO) environment.Creative climate (CRC) is our focal variable foranalysis.

While a strong research tradition relatingthese factors to performace exists within thebusiness sector, the non-profit sector has onlyrecently attracted attention from researchers.Best examines entrepreneurial managementwithin New Zealand public libraries (Best,2001). Gonzalez et al (2002) examine marketorientation within non-profits and the resultingrelationships with both clients and donors.

Because of the vast changes in internal andexternal environments, management teamsneed to better determine what are today's(and tomorrow's) critical success factors (CSF)for their organizations. In addition, manage-ment needs to be able to influence thedevelopment and execution of these factorswithin their organizations.

This research project assesses the impact ofspecific management-controlled variables(CRC, MKTOR, LRNOR, ENT, and ORGF) asCSFs within NPO organizations in key sectors(health care and education). Specifically, itconsiders three research questions (RQ) asfolhjws:

RQ,: (a) Are these factors (CRC, MKTOR,LRNOR, ENT, and ORGF) correlated witheach other?

(b) Do the factors in RQ, (a) increaseorganizational performance (PERF)?

RQ2: Is the relationship between creativeclimate and performance direct or indirect?

RQ3: Is there evidence that the corerelationships of the factors defined in RQjand RQ2 differ between non- and for-profitorganizations?

Overview of the literature

A paradigm shift in decision-making

Non-profit, as well as business and publicsector organizations are facing a sea change oftechnology advancements, new regulations,globalization, obsolescence of products, andhyper-competition (D Aveni, 1994), Religiousorganizations are losing membership asyounger generations see less relevancy inworship attendance, and affiliation. Collegesand universities add distance education to theirprograms as the Internet allows students tolearn outside of the classroom. Healthcareinstitutions are facing financial crunches dueto decreasing occupancy rates — medicaladvances and insurance guidelines meanshorter hospital stays and less revenue. Lowerinterest rates lead to decreased cash flow fromendowments and fewer resources for ongoingoperations for a myriad of non-profits.

In the new economy, management teams invirtually all organizations are facing increasedchallenges due to changing competitors, valuechain members, regulators, and technologies.This is forcing a change in how managers makedecisions. In general, managers base theirdecisions on their experiences and knowledgeand adopt and adapt yesterday's solutions totoday s problems.

Managers generally prefer safe decisions. Foryears, the byline for buying computer tecbnol-og)' was 'no one ever got fired for buying IBMcomputers.' This belief helped sell a lot of IBMcomputers. What worked in the past no longeris sufficient. In the 21st century, today'sproblems and opportunities have few bench-marks for decision guidance.

Decision-making is using critical thinkingskills to optimize a decision — it is also recog-nized as a problem (or opportunity) solvingprocess. Historically, the analytical phase ofthis process has been stressed. Nutt (1984)found that in 85% of the management decisions

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Performance in non-profits 215

studied, there was no generation of alternativesand very little use of creative thinking. Becauseof the acceleration of environmental change,this is no longer sufficient; we need an earlierphase to develop potential, feasible choices forfurther analysis.

The use of creative thinking skills andcapabilities must be encouraged and stimu-lated. Realize that MBA-trained managers aregenerally more risk-adverse than entrepre-neurs (or intrapreneurs). To foster creativity,the work environment needs to support risk-taking and allow for the occasional failure

/., 1997).

Creative climate

While there are varying definitions for creativ-ity, there is general agreement that creativityhas novelty' and usefulness (Gryskiewicz,1987). From a marketing perspective, theoutcome of creativity is a differentiated pro-duct that has superior value to customer/clientgroups (target markets).

In an overview of creativity and what itentailed, Rhodes (1961) described four over-lapping themes:

• Characteristics for personal creativity (e.g.,curiosity, openness).

• Creative process (e.g., properly definingproblem or opportunity),

• Outcomes or products (e.g., focus onclients', donors', ultimate users' needs),

• Context or climate (e.g., workplace thatencourages individual, group, and organiza-tional creativity).

At the organizational level, creativity is amultidimensional constnict and involves theinteraction of individuals, groups, and theorganization itself. At times, it resembles anexperiment in chaos theory.

Isaksen (1984) developed a visual model inwhich person, process, and product of Rhodes(1961) was integrated within the context orcreative climate (see Figure 1). Within thecreative climate then are those activities,positive and negative, which influence theperson's persona! creativity, the creative pro-cess or operation, and the outcome or product.The better that managers understand howcreative climate influences decisions, the betterthey can develop and influence performancewithin organizations. Therefore, creative cli-mate can be viewed as a management-controlled factor.

Amabile (1997, 1998) in her well-knowncomponential model emphasizes that indivi-dual creativity depends on the person's

Figure 1. The 3Ps within the creative climate.

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216 Hilton Barrett et aJ.

expertise, thinking skills, and ititrinsic motiva-tion. While extrinsic motivation (or creativeclimate) is not a part of the model, sherecognizes that it can also be a positive factorthrough six managerial influenced factors inthe workplace:

1. Challenges that stimulate;2. Freedom or autonomy to manage the

creative process;3. Adequate resources such as time and

budget;4. Work-group features such as diverse per-

spectives;5. Supervisory encouragement, acceptance of

failure as learning experience and open-ness; and

6. Organizational support, broad based sup-port for creative efforts.

Other research studies have recognized ahost of attributes of a positive creative climate.These are: performance standards (Bower,1965); open information exchange (Amabile,1988); supportive of risk-taking (Stembergetal, 1997); diversity of perspectives, learningand application of creative problem-solvingtools and skills, mutual respect for individual swork, reasonable toleration of disorder, colla-borative relationships (Isaksen et al., 2000);playfulness, non-personal conflict, debate ofideas (Isaksen et al., 1999), and managementencouragement (Anderson etal., 1992).

In addition. Woodman et al. (1993) devel-oped a three-phase process, an interactionistmodel of organizational creativity. The phaseswere sequentially: individual, group, and orga-nizational creativity. The model used a total ofeleven variables. Only creative context was amajor influence in each phase.

Hence, this research builds upon the paststudies and models, which demonstrated thatindividuals" creative activities arc transformedthrough the facilitating creative climate intomeaningful organizational performance.

Research approach

The scope of the study, sampling approach,and measurement issues, are discussed in thissection.

Scope of the study

Previous research on the variables assessed inthis study has emphasized a single activity,manufacturing (Naman and Slevin, 1993;ZahraandCovin, 1995;BarrettandWeinstein, 1998).As part of an ongoing stream of work; wedeveloped a comprehensive database thatincludes not only manufacturing, but alsoservice businesses and non-profit organiza-tions. In this study, NPOs are the focus of ourinvestigation. For this study, non-profitsinclude both traditional ' 50 r organizations(e.g., private colleges or hospitals), as well asstate and local government organizations suchas universities and libraries.

The study departed from the usual method ofresearch with a single respondent i'rom anorganization. It incorporated a multipleresponse methodology to include numerousperspectives of ho^v the organization is per-ceived, or rated, on each of the five factors andits performance. Survey research using morethan one respondent per organization is rare,but important. The only notable research is inoperations management strategy that incorpo-rates two or three respondents from the sameorganization (Boyer and Verma, 2000; Boyerand Lewis, 2002). Numerous articles in thegenre have noted the need for using multiple,instead of single, respondents (Gray et al.,1998; Dawes, 2000; Tsai, 2002).

The sample

The study used a snowball sampling technique.According to Churchill (1995), the snowballsample is a judgment approach that is useful forsampling special populations. He adds, Thissample relies on the researcher's ability tolocate an initial set of respondents with desiredcharacteristics... those initially asked toparticipate would also be asked for otherswhose cooperation would be solicited. Thus,the sample 'snowballs' by getting larger asparticipants identify' still other possible respon-dents (p. 19)."

The process began by soliciting the membersof associations, contacting members of personal

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Performance in non-profits 217

networks, and targeting particular non-profitorganizations. The resulting non-probabilisticsample consisted of 267 usable individualresponses within twenty-three NPOs of twodifferent sectors (health care and education).

As to size of these organizations, nine wereconsidered 'large' employing 500 or moreindividuals and fourteen were 'medium'employing between 100-499 people. All theparticipants were from five southeasternstates — Florida, Georgia, North (Carolina,South Carolina, and Tennessee.

Measurement

A 7-point Likert scale is used for all questions.The resulting measures are the average of thequestions in each of the six construct sets.Given the broadness of the topics and multiplerespondent participation within organizations,the resulting 71-question survey gave us theneeded data, yet did not overly burdenrespondents. Further details on the measuresare as follows:

• Creative climate (CRC). Does the internalclimate facilitate the use of creativity byindividuals and teams to accomplish thegoals and objectives of the organization?Studies by a number of researchers haveshown a large number of activities thatfacilitate (collaboration among departments,sense of urgency and enthusiasm, appro-priate feedback) or impede (overly bureau-cratic, emphasis on status quo) the creativeworks (Ekvall, 1983: Bumside et al., 1998).Creative climate is measured using theeighteen positive questions of Biech s(1996) creativity climate survey. Thequestions emphasize a number of attributesdeemed contributing to creativity such asopenness; diversity; adequate resources; andmanagement respect, encouragement, andtrust.

• Market orientation (MKTOR). Jaworski andKohli (1993) stated market orientation hasthree components: generation of marketintelligence, sharing of this knowledgethroughout the organization, and a marketing

response mechanism. Narver and Slater(1990) defined MKTOR as having threetenets: customer orientation, competitiveorientation, and interfunctional coordina-tion. For non-profits, customer may also meanclient, patron, student, patient, or similarterm. Market orientation is different fornon-profits than for business (Liao et al,2000; Gonzalez et al, 2002; Sargeant et al.,2002). However, since we are comparingvarious factors of oi^anizations with perfor-mance, we need to have the same definition,the same construct for non-prohts. Therefore,we are using the 20-question market orienta-tion construct developed by Kohli et al(1995).

• Learning orientation (LRNOR). Learningorientation denotes that not only do indivi-duals in an organization have and use theability to do both adaptive (incremental) andgenerative (paradigm shift) learning; butalso, keep an open mind as to differentperspectives and have a commitment tolearning (Senge, 1990; Baker and Sinkula,1999). When correctly practised, the normbecomes collaborative learning. In theirstudies of organization rejuvenation, Stop-ford and Baden-Fuller (1994) establishedthat the development of a learning organiza-tion required flexibility and internal com-munication to achieve an effective marketorientation. Slater and Narver (1995, p. 67)stated a market orientation is inherently alearning orientation.' Learning orientation ismeasured using Yim-Teo's (2002) 10-ques-tion construct.

• Entrepreneurship (ENT). Entrepreneurialmanagement style, corporate entrepreneur-ship, and entrepreneurial orientation areterms used to define an organization (non- orfor-profit) that acts entrepreneurially (Covinand Slevin, 1989; Dess and Lumpkin, 2005).ENT is an organizational process thatencourages and practices: innovation, risk-taking, and proactiveness toward customers(clients or patrons), competition, and oppor-tunities (Miller and Friesen, 1982). Theprocess enables the organization to createvalue by identifying market opportunities

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218 Hilton Barrett et al.

and creating unique combinations ofresources to pursue these opportunities(Jacobson, 1992). Thus, there is a relation-ship between the dimensions of ENT and themarketing activities of the organization.Hence, the organization: (1) is proactive inobtaining intelligence on customers andcompetitors, (2) is innovative by reconfigur-ing its resources to formulate a strategicresponse, and (3) implements the response,which, because it is different, entails somedegree of risk and uncertainty. Entrepre-neurial orientation is measured using Covinand Slevin's (1989) nine-question constnict.Organizational flexibility^ (ORGF). Flexibilityis deflned as the degree in which anorganization is adaptable in administrativerelations and the authority vested in situa-tional expertise (a form of empowerment).The term organic is used to define suchattributes (Khandwalla, 1997). The manage-ment theorist Mary Parker FoUet, in the1920s, emphasized the need to match anorganic structure to what is now consideredan entrepreneurial management style(Graham, 1995). Organizational flexibilityis measured using a seven-question Khand-walla (1997) instrument.Performance (PERF). Because of the diffi-culty of obtaining comparability for perfor-mance, we used a qualitative-based, two-question itistrument developed byjaworskiand Kohli (1993). This scale assesses: (1)how well the organization did this yearversus last year, and (2) how well it didversus leading competitors or similar orga-nizations. These two judgmental questionsresult in a subjective rating of businessperformance. However, given the difficul-ties in obtaining correct financial informa-tion that is of similar nature and periodamong respondents, as well as the outrightrefusal by many to release such information,subjective measures are often more usefulthan objective financial information(Sandberg and Hofer, 1987; Naman andSlevin, 1993). Providing further support,the Cronbach alpha for the construct devel-oped by these two questions was 0.82.

Research findings

Data screening and reliability

The data were reviewed for normality, outliers,and non-response bias. Correlating factorscores within organizations with responselatencies within organizations tested the pos-sibility of non-response bias. The within-organization factor scores were not signifi-cantly correlated with the correspondingresponse latencies. The correlations of factorscores with response latency were close tozero. They ranged from —0.06 to 0.00 with amedian of —0.02.

As for testing reliability, all of the Cronbachalphas well exceeded Nunnally's (1978) mini-mum requirement of 0.70. Computed reliabil-ities were: CRC 0.94, MKTOR 0.92, LRNOR0.91, ENT0.90, ORGF0.82, and PERF0.82. Thereliability coefficients were significantlygreater than zero at the 0.05 level (Feldt et al,1987). Coefficient alpha can be high where thevariables in a factor measure two or moreseparate latent dimensions (Peter, 1979; Cor-tina, 1993). Therefore, analysis the itemswithin each factor was done by principalcomponents analysis. Each factor is uni-dimen-sional by Lautenschalger s tables (Lautenschla-ger, 1989).

Statistical analysis

RQi. Correlations among the CSF andperformance

As shown in Table 1, the critical successfactors — creative climate, market orientation,learning orientation, entrepreneurship, andorganizational flexibility — were highly corre-lated with each other (p < 0.01). Furthermore

Table 1. Pearson correlations from NPO executives

« = 267 CRC ENT LRNOR MKTOR ORGF PERFCRC 1 0.20* 0.65* 0.33* 0.21* 0.28*ENT 1 0.29' 0.49* 0.37* 0.40*LRNOR 1 0.46* 0.21* 0.36*MKTOR 1 0.23* 0.57*ORGF I 0.18'PERP 1

•Correlation is significant at the 0.01 level (one-tailed).

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Performance in non-profits 219

these independent variables were highly cor-related with the dependent variable, perfor-mance, as well (/? < 0.01). This was expected asboth theory and practice show the neededintegration and interdependency among thesefactors.

RQ2: The relationship between creativeclimate and performance

Eskildsen et al. (1999) using a sample ofEuropean businesses, did an empirical studyof the relationships among creative organiza-tion (similar to our CRC), learning organization(similar to our LRNOR) and business excel-lence (similar to our PERF). Each of theconstructs was different, but the concept ofrelationships was similar, as were the results.The European study showed the relationshipbetween creative organization and learningorganization was stronger than either therelationship between creative organizationand business excellence, or the relationshipbetween learning organization and businessexcellence.

This study found similar results. As Table 1showed, the relationship between creativeclimate and learning orientation (r = 0.65) isstronger than both the relationship betweencreative climate and perfonnance (r = 0.28),and the relationship between learning orienta-tion and performance (r = 0.36).

Creativity emphasizes generative learningand the learning orientation emphasizes bothadaptive and generative learning. Thus, thegreater power is that of a learning orientation(Senge, 1990; Baker and Sinkula, 1999). AsAmabile (1997, 1998) explained, a creativeclimate is a facilitator of innovative thinkingand the learning orientation of an organization.The findings show, using the technique advo-cated by Eskildsen et al. (1999), that a creativeclimate is positively related to organizationalperformance, and it acts through the learningorientation of the organization. Based on thesefindings and insights from related work (Barrettetal, 2004), progressive non-profits use thesecritical success factors in a similar manner astheir business counterparts; and, they are

equally successful in building and using acreative climate and learning orientation.

Furthermore, a combining of these resultswith those reported by Eskildsen et al (1999)for 202 European executives was performed.After appropriately weighting the data forsampling variation and measurement error,the following correlations were found: LRNORcorrelates 0.69 with PERE, CRC and PERFcorrelate 0.49, and LRNOR and CRC correlate0.70. The pooled sample size is 469 for ourstudy and theirs together. The one-tailed /-testfor the difference between the LRNOR-PERFand CRC-PERF correlations is 7.70, which issignificant at well beyond the 0.001 level. CRCcorrelates with LRNOR and is likely to be aprecursor of LRNOR. But LRNOR correlatessubstantially more with business performancethan does CRC. CRC seems to affect perfor-mance indirectly by its likely influence onLRNOR. This supports the proposition thatcreative climate is a facilitator of learningorientation.

RQ3. Differences between non- andfor-profit Organizations

Using comparative data from a study by Barrettet al (2004) that examined and compared non-and for-prolits, there was little mean differencebetween business and non-profits on thecritical success factors. None of the factorsare statistically different even at a conservative0.10 level of significance. Within both groups,NPOs and for-profit enterprises, the MKTORfactor had the highest correlation with perfor-mance (r = 0.48 and r — 0.57, respectively).

There is, however, an important differencein reported performance as shown in boldfacetype in Table 2 (data extracted from Barrettet al... 2004). Business respondents tend tohave a greater self-rated performance than

Table 2. Mean sector differences—CSF and performance

Individuals CRC ENT ORGF MKTOR LRNOR PERFBusinesses 4.73 4.04 3.98 4.60 4.35 5.18Non-profits 4.82 4.03 4.10 4,63 4.47 4.86Absolute A 0.09 0.01 0.12 0,03 0.12 0.32*

'Significant at the 0.001 level.

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220 Hilton Barrett et al.

respondents from non-profits (?— 3-42,/><0.001). The initial interpretation was thatbusinesses were ohtaining greater output fromthe same inputs of the five critical factors — i.e.,non-profits were not as effective in theirdeployment of these management activities.Or perhaps, do non-profits view performancewith a different reference frame? A number ofarticles support this perspective (Gonzalezetal, 2002; Sargeant etal, 2002).

Discussion of findings andimplications for managers

This empirical study helped to better under-stand and compare .several management-controlled factors in the non-profit sector.The study shows that CRC, as well as MKTOR,ENT, ORGF, and LRNOR are complementaryfor better organizational performance. Allfive of these critical success factors arepositively, highly correlated to organizationalperformance.

Research evidence suggests, however, thatcreative climate is facilitated through learningorientation. These findings have great rele-vance to non-profit organizational strategistsbecause each of these factors is controllable bymanagement and organization cultures can bedeveloped that stimulate the implementationof these components.

Findings advocate the need for non-profitorganizations to:

• Develop their creative climate and learningorientation with the understanding that theformer reinforces and leverages the latter

• Continually scan their environments forrelevant market information, act upon thatinformation and disseminate this knowledgethroughout the organization

• Act proactively to use this knowledge as astarting point to introduce new, novelprograms to benefit their clients, customers,and/or patrons

• Use cross-functional, empowered teams toanalyze, create and develop, and executestrategic marketing responses into increas-ingly dynamic environments.

This process provides insight, planning, andguidance on how to better manage 21stcentury organizations.

It is most encouraging to find that many non-profit organizations have embraced theuniversality of CRC, MKTOR, ENT, ORGF,and LRNOR. In this study, there is no statisticaldifference between the levels of each of thesefactors between businesses and non-profits.The fact that businesses do generate statisti-cally higher performances with similar levels ofthese variables indicates that either: (1) thebusiness sector is more skillful and productivein their use of these critical factors, or (2)performance has a higher priority than withnon-profits.

Either or both give a strong signal tonon-profit management that their executiveteams need to be more focused on perfor-mance results. Because of the often, ambiguousnature of their organizational missions, thismay be more difficult to accomplish withinnon-profits than with businesses. Furthermore,due to their inherent financials-driven mental-ity, for-profit enterprises have been heldaccountable by their stakeholders to performwell. Hence, they have utilized strategicmarketing and management principles (includ-ing creativity climate, market orientation,learning orientation, entrepreneurship, andorganizational fiexibility) for a long time toachieve business objectives.

Concluding remarks andcreativity-based research agenda

Non-profits constitute a major sector inindustrialized countries of the world. Asnewly emerging and developing countries'economies and societies evolve, non-profitswill grow in importance as a vehicle forimproving both the standard of living andquality of life for citizens. An enhancedcreative climate will increase the performanceof non-profit organizations.

NPOs have not received the necessaryattention for an activity generating over onetrillion U.S. dollars each year (and growing) tothe world economy. The research study

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Performance in non-profits 221

generated three recommendations for addi-tional research initiatives:

1. Greater reciprocal learning by both thebusiness and non-profit sectors. Obviouslynon-profits have learned how to use the fivemanagement<ontrolled factors (CRC, ENT,MKTOR, LRNOR, and ORGF) effectively.These are universal critical success factorsfor an organization regardless of profitorientation. Businesses can learn from non-profits just as non-profits have been learningfrom the larger sector. Possibilities in thislatter area may include dealing with multi-ple stakeholders, budget constraints, mana-ging public relations, and new programdevelopment.

2. Additional research is called for in thegrowing area of social entrepreneurship.This is an amalgamation of both sectors and isa harbinger of new organization forms,missions, and visions. In a broad sense, anyorganization, business or non-profit, that hasboth an entrepreneurial orientation and aprimary emphasis on its social mission ratherthan profitability is practicing social entre-preneurship.

3. New teaching directions which wouldinclude a focus on non-profit managementand creativity at the undergraduate andgraduate level. Progressive business profes-sors acknowledge the universality of man-agement and marketing principles in bothprofit and non-profit settings. Research onthe growing and important non-profit sec-tor should be encouraged to help dissemi-nate new knowledge to future leaders.Similarly, we now realize that both theanalytical (left brain dominance) and crea-tive (right brain dominance) aspects ofcritical thinking are necessary for optimaldecision-making, regardless of sector. Busi-ness education has notoriously stressed theanalytical approach at the expense of thecreative side. Creativity can be the differ-ence maker in advertising, entrepreneur-ship, and even strategic planning. Furtherresearch on brain lateralization theory (deBono, 1970) should be encouraged. Per-

haps, the next wave of truly new ideas inmanagement emerges not from informationtechnology, operations management, ormarketing, but rather from understandingthe cognitive and creative processes ofindividuals and managers.

Biographical notes

Hilton Barrett, D.B.A., is an Associate Profes-sor of Business at Elizabeth City State Univer-sity. He has nearly 30 years of experience as anentrepreneur and a corporate executive in aFortune 500 firm. He has published extensivelyin trade journals and his academic publicationsinclude Journal of Marketing Theory andPractice, Entrepreneurial Theory and Prac-tice, and International Journal of BusinessDisciplines.

Joseph L. Balloun, PhD., is the Professor ofResearch and Statistics at Nova SoutheasternUniversity. He has published extensively onsocial science research methods, statisticaltechniques, and developing information sys-tems in such journals as InformationResources Management Journal, Interna-tional Journal of Information Management,SAM Advanced Management Journal, andProject Management Journal.

Art Weinstein, PhD., is the Professor andChair of Marketing at Nova SoutheasternUniversity. He is the author of Handbook ofMarket Segmentation and Superior CustomerValue in the New Economy. He has alsopublished in Entrepreneurial Weory andPractice, Journal of Marketing Education,Journal of Small Business Management, andother leading publications.

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Amabile TM. 1988. A model of creativity andinnovation in organizations. In Research inOrganization Behavior, Staw BM, CummingsLL (eds). (Vol. 10). JAl Press: Greenwich, CT:123-167.

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