Examining the Relationship between the Formal Education of Chief Executives of Nonprofit Human Service Organizations, Organizational Performance and Market Orientation

While current research has demonstrated a strong link between formal education and managerial competency, many chief executives of nonprofit human service organizations may not possess the business management skills necessary to lead their organizations in terms of organizational performance and market orientation. The education of nonprofit executives in colleges and universities has been shaped by a perception that traditional business education is contrary to the objectives and principles of the modern nonprofit organization. The gap between the perceptions propagated in modern nonprofit executive education and the real world need for executives to develop traditional managerial competencies poses a specific problem. This quantitative causal comparative study examined whether the following dependent variables (organizational performance and market orientation) differ significantly among 5 groups of chief executives of differing formal education in nonprofit human service organizations offering adult training or vocational services. An online survey was used to gather data in three areas: (1) demographic and descriptive data about the chief executive and the organization, (2) organizational performance indicators, (3) the MKTOR questionnaire to measure the firm's market orientation. An a priori power analysis based on a 5 group test with an alpha of 0.05, a power of .95, and an effect size of .0725 indicated a need for 96 participants to complete the survey to conduct a MANOVA. The chief executives of all 301 Pennsylvania nonprofit human service organizations offering adult training programs or vocational services were asked to take part in the study. The proposed sample of 96 participants was not attained. The actual sample used in this study was 15 participants. G*Power software was used to calculate that the attained sample yields a power of 0.80 and an effect size of 0.80 at an alpha of 0.05, which were adequate for this study. MANOVA analysis indicated that there were no significant differences in average scores for either organizational performance or market orientation. The null hypothesis was retained. This paper followed the analysis of findings with a discussion of the implications as well as recommendations for future research.