An investigation of innovation in nonprofit organizations: The role of organizational mission

Nonprofit organizations are experiencing increasing pressures to be more business-like and to focus on financial outcomes for sustainability and growth. There have been questions whether this attention on performance might come at the cost of serving an organization's mission. The research presented here indicates that a nonprofit organization's mission can facilitate innovation, which has been shown to be a key mediating step in achieving superior organizational performance. Two studies were conducted among nonprofit hospitals in the United States to investigate the role of the nonprofit organization's mission in the innovation process. The findings indicate that a clear, motivating organizational mission helps an organization to focus its attention on those innovations that will most likely support the accomplishment of that mission. Such a mission also creates a climate in which innovations are given a fair chance to succeed. As a result, firms with clear, motivating missions tend to be more innovative.