Document Type
Conference Proceeding
Conference Track
Service Marketing/ Non-Profit Marketing/ Ethics
Publication Date
2014
Abstract
Competition in the nonprofit sector has dramatically intensified in the past two decades as a result of the increased number of nonprofit organizations (NPOs), decreased and diffused governmental support, and entry of for-profit companies into markets that are traditionally the domain of nonprofits. In an attempt to enhance the understanding of the nonprofit competition, the authors adapt a general theory of competition to commercial nonprofits, those that generate external benefits by commercial activities. Applying resource-advantage (R-A) theory, a dynamic theory of competition adapted from the business literature, we discuss how these entities can leverage their various resources in order to successfully compete and achieve superior financial performance. This financial performance enables the nonprofit to better serve its mission as well as maintain its operations. In brief, there are three reasons why considering the primary objective of NPOs as attaining superior financial performance is required to understand nonprofit market: (1) Achieving superior financial performance enables firms (for-profit or nonprofit) to pursue other objectives, such as contributing to social causes. (2) Sustainability of the social value in the long run depends on attaining superior financial performance. In other words, prolonged inferior financial performance jeopardizes organization’s survival in the long run. (3) In a dynamic competitive environment, the players need benchmarks to evaluate and improve their performance. Social value is too subjective to compare the performance of various organizations. Superior financial performance enables a NPO to assess its performance relative to other organizations. Contributing to the understanding of the mission/money balance, this paper provides a foundation for future research in the area and helps to guide NPO managers as they maneuver in this increasingly competitive environment.
Copyright Statement / License for Reuse
Digital Commons@Georgia Southern License
Recommended Citation
Topaloglu, Omer and McDonald, Robert E., "Understanding the Competitive Environment of Nonprofit Organizations: A Resource-Advantage Theory Approach" (2014). Association of Marketing Theory and Practice Proceedings 2014. 30.
https://digitalcommons.georgiasouthern.edu/amtp-proceedings_2014/30
About the Authors
Dr. Omer Topaloglu (Dr.T) is an Assistant Professor of Marketing in the Lumpkin College of Business and Applied Sciences at Eastern Illinois University. He earned his Ph.D. in 2013 from Texas Tech University. He teaches Principles of Marketing, Marketing Management, and Consumer Behavior. His research areas include brand management, social media marketing, NPO competition, and services. His research appeared in Service Business: An International Journal and International Journal of Computational Intelligence Research.
Dr. Bob McDonald is the United Supermarkets Professor of Marketing. He earned his PhD from the University of Connecticut. Dr. McDonald's research interests include: strategy, organizational learning and innovation, branding, and nonprofit marketing. He has published in the Journal of the Academy of Marketing Science, Journal of World Business, the Journal of Advertising, the Journal of Macromarketing, Industrial Marketing Management, and Nonprofit and Voluntary Sector Quarterly. Dr. McDonald teaches Personal Selling and Sales Management. He has been awarded the Chancellor's Council Distinguished Teaching Award, the highest award given by Texas Tech University for teaching. He also serves as the Coordinator for the Area of Marketing.