Leadership vision, organizational culture, and support for innovation in not‐for‐profit and for‐profit organizations

Abstract

Purpose The purpose of this paper is to investigate the relationships among leadership vision, organizational culture, and support for innovation in not‐for‐profit (NFP) and FP organizations. It hypothesizes that in NFPs, a socially responsible cultural orientation mediates the relationship between leadership vision and organizational support for innovation, whereas in FPs, a competitive cultural orientation mediates this relationship. Design/methodology/approach This is an empirical study that draws upon a large survey of 1,448 managers and senior executives who are members of the Australian Institute of Management. Findings Path analytic modelling provides partial support for the hypotheses. Although the predicted mediation effects occurred in NFPs and FPs, the strength of relationship between leadership vision and the two dimensions of organizational culture did not differ between the sectors. This was despite the observation that NFPs scored higher on a socially responsible cultural orientation than FPs, whereas FPs scored higher on a competitive cultural orientation. Practical implications Strategies for building innovative and sustainable organizations in the NFP sector are discussed on the basis of these findings. Originality/value The paper describes the first study in Australia that compares the responses of NFP and FP managers on leadership and related constructs, and provides evidence of the impact of organizational culture on leadership and innovation in these two sectors.