How Managerial Practices Impact Perceived Organizational Effectiveness: A Study of Corporate Foundations

Abstract

The organizational effectiveness of nonprofit organizations (NPOs) has received considerable attention from the scientific research community and society. Nonprofit scholars call for more empirical research that tests existing theories and develops multidimensional frameworks at the organizational level, with a focus on actual management practices. Previous studies have suggested that a broad set of management practices at the program and organizational levels have positive implications for the perceived effectiveness of NPOs. This study evaluates and refines a conceptual model of the antecedents of organizational effectiveness and validates its applicability in the context of charitable foundations established by corporations. Based on survey data from their executive leaders, this study’s empirical findings suggest that perceived organizational effectiveness is less affected by a broad set of management practices and is driven by a few selected best practices that focus on specific stakeholder groups (i.e., experts). Moreover, the results show that certain organizational characteristics, such as organizational experience, can strengthen the perceived effectiveness of charitable foundations. Overall, the results of this study may help nonprofit executive leaders to better understand that a careful selection and implementation of specific practices might be more beneficial for an organization’s effectiveness than an extensive list of practices. Moreover, this study contributes on a broader theoretical level to the study of multidimensional frameworks as a suitable measure for identifying key antecedents of leader-perceived organizational effectiveness across different types of NPOs.