Linking environmental uncertainty, customer orientation and organizational innovation in nonprofit organizations

Innovation is widely accepted as an important determinant of organizational competitiveness, whereas there has been relatively little relevant research conducted in nonprofit organizations. The purpose of this paper is to analyze the linkages among environmental uncertainty, customer orientation and organizational innovation in the nonprofit context. After reviewing the literature on organizational innovation and its relationship with environmental uncertainty and customer orientation, this paper analyzes those relationships using a sample of 136 nonprofit organizations. Results of structural equation modeling analysis indicate that customer orientation is positively associated with innovation and that environmental uncertainty can promote both customer orientation and organizational innovation. The results reflect that customer orientation partially mediates the relationship between environmental uncertainty and organizational innovation in nonprofit organizations. Implications of the findings and possible future research directions are discussed.