IDEAS home Printed from https://ideas.repec.org/a/eee/jbvent/v29y2014i3p392-404.html
   My bibliography  Save this article

Risky business? The survival implications of exploiting commercial opportunities by nonprofits

Author

Listed:
  • Gras, David
  • Mendoza-Abarca, Karla I.

Abstract

Prior research is equivocal as to the performance implications of exploiting market-based opportunities by nonprofit organizations. We investigate an under-addressed measure of performance in this literature: organizational survival. Drawing upon resource dependence theory, we argue that performance is largely dependent upon the extent to which nonprofits focus on market-based opportunities. Through analysis of the population of Canadian charities, we find support for a U-shaped relationship indicating that low to moderate levels of market-based income decrease the likelihood of firm exit, whereas high levels increase this likelihood.

Suggested Citation

  • Gras, David & Mendoza-Abarca, Karla I., 2014. "Risky business? The survival implications of exploiting commercial opportunities by nonprofits," Journal of Business Venturing, Elsevier, vol. 29(3), pages 392-404.
    • Handle: RePEc:eee:jbvent:v:29:y:2014:i:3:p:392-404
    DOI: 10.1016/j.jbusvent.2013.05.003
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0883902613000517
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.jbusvent.2013.05.003?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Peter Frumkin & Elizabeth K. Keating, 2011. "Diversification Reconsidered: The Risks and Rewards of Revenue Concentration," Journal of Social Entrepreneurship, Taylor & Francis Journals, vol. 2(2), pages 151-164, October.
    2. Wennberg, Karl & Wiklund, Johan & DeTienne, Dawn R. & Cardon, Melissa S., 2010. "Reconceptualizing entrepreneurial exit: Divergent exit routes and their drivers," Journal of Business Venturing, Elsevier, vol. 25(4), pages 361-375, July.
    3. Jean–Luc Arregle & Lucia Naldi & Mattias Nordqvist & Michael A. Hitt, 2012. "Internationalization of Family–Controlled Firms: A Study of the Effects of External Involvement in Governance," Entrepreneurship Theory and Practice, , vol. 36(6), pages 1115-1143, November.
    4. Wry, Tyler & Lounsbury, Michael, 2013. "Contextualizing the categorical imperative: Category linkages, technology focus, and resource acquisition in nanotechnology entrepreneurship," Journal of Business Venturing, Elsevier, vol. 28(1), pages 117-133.
    5. Dawn Harris & Constance Helfat, 1997. "Specificity of CEO human capital and compensation," Strategic Management Journal, Wiley Blackwell, vol. 18(11), pages 895-920, December.
    6. Miller, Danny, 1992. "The icarus paradox: How exceptional companies bring about their own downfall," Business Horizons, Elsevier, vol. 35(1), pages 24-35.
    7. Michael A. Hitt & R. Duane Ireland & S. Michael Camp & Donald L. Sexton, 2001. "Strategic entrepreneurship: entrepreneurial strategies for wealth creation," Strategic Management Journal, Wiley Blackwell, vol. 22(6‐7), pages 479-491, June.
    8. Shepherd, Dean A. & Douglas, Evan J. & Shanley, Mark, 2000. "New venture survival: Ignorance, external shocks, and risk reduction strategies," Journal of Business Venturing, Elsevier, vol. 15(5-6), pages 393-410.
    9. Paul Tracey & Owen Jarvis, 2007. "Toward a Theory of Social Venture Franchising," Entrepreneurship Theory and Practice, , vol. 31(5), pages 667-685, September.
    10. James Austin & Howard Stevenson & Jane Wei–Skillern, 2006. "Social and Commercial Entrepreneurship: Same, Different, or Both?," Entrepreneurship Theory and Practice, , vol. 30(1), pages 1-22, January.
    11. Cooper, Arnold C. & Gimeno-Gascon, F. Javier & Woo, Carolyn Y., 1994. "Initial human and financial capital as predictors of new venture performance," Journal of Business Venturing, Elsevier, vol. 9(5), pages 371-395, September.
    12. Mair, Johanna & Martí, Ignasi, 2006. "Social entrepreneurship research: A source of explanation, prediction, and delight," Journal of World Business, Elsevier, vol. 41(1), pages 36-44, February.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Sharma, Revti Raman & Nguyen, Thao Kim & Crick, Dave, 2018. "Exploitation Strategy and Performance of Contract Manufacturing Exporters: The Mediating Roles of Exploration Strategy and Marketing Capability," Journal of International Management, Elsevier, vol. 24(3), pages 271-283.
    2. Martínez Bobillo, Alfredo & Rodríguez Sanz, Juan Antonio & Tejerina Gaite, Fernando, 2021. "Explanatory and predictive drivers of entrepreneurial orientation and innovation capacity: Evidence from family enterprises," Cuadernos de Gestión, Universidad del País Vasco - Instituto de Economía Aplicada a la Empresa (IEAE).
    3. Elena Cefis & Cristina Bettinelli & Alex Coad & Orietta Marsili, 2022. "Understanding firm exit: a systematic literature review," Small Business Economics, Springer, vol. 59(2), pages 423-446, August.
    4. Devine, Anthony & Jabbar, Abdul & Kimmitt, Jonathan & Apostolidis, Chrysostomos, 2021. "Conceptualising a social business blockchain: The coexistence of social and economic logics," Technological Forecasting and Social Change, Elsevier, vol. 172(C).
    5. Hadad Shahrazad, 2017. "Main research areas and methods in social entrepreneurship," Proceedings of the International Conference on Business Excellence, Sciendo, vol. 11(1), pages 893-903, July.
    6. Kim Andrea & Moon Chul Woo & Kim Sang Kyun & Koh You Sang & Shin Jiseon, 2020. "An Empirical Investigation on the Psychological Antecedents of Social Entrepreneurship," Entrepreneurship Research Journal, De Gruyter, vol. 10(3), pages 1-18, July.
    7. Molecke, Greg & Pinkse, Jonatan, 2017. "Accountability for social impact: A bricolage perspective on impact measurement in social enterprises," Journal of Business Venturing, Elsevier, vol. 32(5), pages 550-568.
    8. Anna Kwiotkowska, 2022. "Organizational Capabilities and Social Entrepreneurship: A Fuzzy-set Approach," European Research Studies Journal, European Research Studies Journal, vol. 0(1), pages 272-285.
    9. Noelia Salido-Andres & Nuria Garcia-Rodriguez & Silvia Cachero-Martinez, 2022. "Connecting Social Enterprises and Sustainable Consumption: Systematic Review, Bibliometric Analysis, and Conceptual Framework," Sustainability, MDPI, vol. 14(20), pages 1-20, October.
    10. Sophie Bacq & Kimberly A. Eddleston, 2018. "A Resource-Based View of Social Entrepreneurship: How Stewardship Culture Benefits Scale of Social Impact," Journal of Business Ethics, Springer, vol. 152(3), pages 589-611, October.
    11. Ghosh Moulick, Abhisekh & Alexiou, Kostas & Dowin Kennedy, Elena & Parris, Denise Linda, 2020. "A total eclipse of the heart: compensation strategies in entrepreneurial nonprofits," Journal of Business Venturing, Elsevier, vol. 35(4).
    12. Geradts, Thijs H.J. & Alt, Elisa, 2022. "Social entrepreneurial action in established organizations: Developing the concept of social intrapreneurship," Journal of Business Research, Elsevier, vol. 151(C), pages 197-206.
    13. Lin, Yi-Hsin & Lin, Feng-Jyh & Wang, Kuo-Hsiung, 2021. "The effect of social mission on service quality and brand image," Journal of Business Research, Elsevier, vol. 132(C), pages 744-752.
    14. Vrontis, Demetris & Morea, Donato & Basile, Gianpaolo & Bonacci, Isabella & Mazzitelli, Andrea, 2021. "Consequences of technology and social innovation on traditional business model," Technological Forecasting and Social Change, Elsevier, vol. 170(C).
    15. Tsai, Juin-Ming & Hung, Shiu-Wan & Yang, Ting-Ting, 2020. "In pursuit of goodwill? The cross-level effects of social enterprise consumer behaviours," Journal of Business Research, Elsevier, vol. 109(C), pages 350-361.
    16. Goldenstein, Jan & Hunoldt, Michael & Oertel, Simon, 2019. "How optimal distinctiveness affects new ventures' failure risk: A contingency perspective," Journal of Business Venturing, Elsevier, vol. 34(3), pages 477-495.
    17. Mariarosa Scarlata & Jennifer Walske & Andrew Zacharakis, 2017. "Ingredients Matter: How the Human Capital of Philanthropic and Traditional Venture Capital Differs," Journal of Business Ethics, Springer, vol. 145(3), pages 623-635, October.
    18. Alexander Jennifer & Fernandez Kandyce, 2021. "The Impact of Neoliberalism on Civil Society and Nonprofit Advocacy," Nonprofit Policy Forum, De Gruyter, vol. 12(2), pages 367-394, July.
    19. Helen Haugh & Paul Robson & John Hagedoorn & Kate Sugar, 2022. "The nascent ecology of social enterprise," Small Business Economics, Springer, vol. 58(3), pages 1223-1242, March.
    20. De Beule, Filip & Klein, Martin & Verwaal, Ernst, 2020. "Institutional quality and inclusive strategies at the base of the pyramid," Journal of World Business, Elsevier, vol. 55(5).
    21. Draksler Tanja Zdolšek & Širec Karin, 2018. "Conceptual Research Model for Studying Students’ Entrepreneurial Competencies," Naše gospodarstvo/Our economy, Sciendo, vol. 64(4), pages 23-33, December.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Toyah L. Miller & Curtis L. Wesley II, 2010. "Assessing Mission and Resources for Social Change: An Organizational Identity Perspective on Social Venture Capitalists‘ Decision Criteria," Entrepreneurship Theory and Practice, , vol. 34(4), pages 705-733, July.
    2. Xi, Guoqian & Block, Jörn & Lasch, Frank & Robert, Frank & Thurik, Roy, 2017. "How Does Firm Survival Differ between Business Takeovers and New Venture Start-ups?," IZA Discussion Papers 11155, Institute of Labor Economics (IZA).
    3. Shubhabrata Basu & Anita Sharma, 2014. "Exploring Stewardship as an Antecedent Behavioural Trait of Social Entrepreneurs," Journal of Entrepreneurship and Innovation in Emerging Economies, Entrepreneurship Development Institute of India, vol. 23(1), pages 19-33, March.
    4. Khelil, Nabil, 2016. "The many faces of entrepreneurial failure: Insights from an empirical taxonomy," Journal of Business Venturing, Elsevier, vol. 31(1), pages 72-94.
    5. Virginia Simón-Moya & Lorenzo Revuelto-Taboada & Domingo Ribeiro-Soriano, 2012. "Are success and survival factors the same for social and business ventures?," Service Business, Springer;Pan-Pacific Business Association, vol. 6(2), pages 219-242, June.
    6. Jeffery S. McMullen & Katrina M. Brownell & Joel Adams, 2021. "What Makes an Entrepreneurship Study Entrepreneurial? Toward A Unified Theory of Entrepreneurial Agency," Entrepreneurship Theory and Practice, , vol. 45(5), pages 1197-1238, September.
    7. Singaram, Raja & Radu-Lefebvre, Miruna & Gartner, William B., 2023. "Gordian knot uncut: Understanding the problem of founder exit in social ventures," Journal of Business Venturing Insights, Elsevier, vol. 19(C).
    8. Figueiredo, Vítor & Franco, Mário, 2018. "Wine cooperatives as a form of social entrepreneurship: Empirical evidence about their impact on society," Land Use Policy, Elsevier, vol. 79(C), pages 812-821.
    9. Coad, Alex & Frankish, Julian & Roberts, Richard G. & Storey, David J., 2013. "Growth paths and survival chances: An application of Gambler's Ruin theory," Journal of Business Venturing, Elsevier, vol. 28(5), pages 615-632.
    10. Maija Renko, 2013. "Early Challenges of Nascent Social Entrepreneurs," Entrepreneurship Theory and Practice, , vol. 37(5), pages 1045-1069, September.
    11. Sahasranamam, Sreevas & Nandakumar, M.K., 2020. "Individual capital and social entrepreneurship: Role of formal institutions," Journal of Business Research, Elsevier, vol. 107(C), pages 104-117.
    12. Holger Patzelt & Dean A. Shepherd, 2024. "A fatigue model of social venturing," Small Business Economics, Springer, vol. 63(3), pages 1065-1088, October.
    13. Gupta, Parul & Chauhan, Sumedha & Paul, Justin & Jaiswal, M.P., 2020. "Social entrepreneurship research: A review and future research agenda," Journal of Business Research, Elsevier, vol. 113(C), pages 209-229.
    14. Mariarosa Scarlata & Jennifer Walske & Andrew Zacharakis, 2017. "Ingredients Matter: How the Human Capital of Philanthropic and Traditional Venture Capital Differs," Journal of Business Ethics, Springer, vol. 145(3), pages 623-635, October.
    15. Sahasranamam, Sreevas & Nandakumar, M.K. & Pereira, Vijay & Temouri, Yama, 2021. "Knowledge capital in social and commercial entrepreneurship: Investigating the role of informal institutions," Journal of International Management, Elsevier, vol. 27(1).
    16. Nijkamp, P. & Stough, R. & Sahin, M., 2009. "Impact of social and human capital on business performance of migrant entrepreneurs - a comparative dutch-us study," Serie Research Memoranda 0017, VU University Amsterdam, Faculty of Economics, Business Administration and Econometrics.
    17. Junyon Im & Sunny Sun, 2015. "Profits and outreach to the poor: The institutional logics of microfinance institutions," Asia Pacific Journal of Management, Springer, vol. 32(1), pages 95-117, March.
    18. Muhammad Farooq Islam & Ozge Can, 2024. "Integrating digital and sustainable entrepreneurship through business models: a bibliometric analysis," Journal of Global Entrepreneurship Research, Springer;UNESCO Chair in Entrepreneurship, vol. 14(1), pages 1-18, December.
    19. Lee, Soo-Hoon & Phan, Phillip H. & Ding, Hung-bin, 2016. "A theory of family employee involvement during resource paucity," Journal of Family Business Strategy, Elsevier, vol. 7(3), pages 160-166.
    20. Canestrino, Rossella & Ćwiklicki, Marek & Magliocca, Pierpaolo & Pawełek, Barbara, 2020. "Understanding social entrepreneurship: A cultural perspective in business research," Journal of Business Research, Elsevier, vol. 110(C), pages 132-143.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:jbvent:v:29:y:2014:i:3:p:392-404. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/jbusvent .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.