WHEN MEANS BECOME ENDS: INSTITUTIONAL ISOMORPHISM AMONG NONPROFITS IN CAUSE MARKETING PARTNERSHIPS

Edgar Alan Rayo ()
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Edgar Alan Rayo: University of Southeastern Philippines, Philippines

No 38, Social Responsibility, Ethics and Sustainable Business from Bucharest University of Economic Studies

Abstract: Firm-nonprofit collaboration in cause marketing aims to achieve improved organizational performance, higher level of efficiency and better reputation in the public. In cause marketing partnership, nonprofits must learn to strategize while employing their not-for-profit motive. However, if a nonprofit adapts for-profit behavior when it pursues optimal decisions for maximum payoff, the nonprofit eventually commits institutional isomorphism and goal displacement. Thus, numerous cases of unsuccessful cause marketing partnerships are brought about by nonprofits’ proclivity to modify their motive. But under what game theoretic conditions do nonprofits employ nonprofit motive but still pursue optimal decisions while in collaboration with a firm? This study’s main goal is to find out if there exists a significant relationship between nonprofit strategic decisions and nonprofit motive. The researcher conducted a field experiment among 43 supervisors and managers of nonprofit organizations and sought their strategic decisions according to various cause marketing scenarios under three game theoretic conditions. Results indicate that after three rounds of iteration, strategic decisions in the final rounds of Prisoner’s Dilemma and Snowdrift Game have a significant relationship with nonprofit motive. The findings indicate that nonprofit organizations that do not know how to pursue optimal decisions when playing strategic games are prone to institutional isomorphism and goal displacement. This explains why a nonprofit optimizes its gains from a partnership but eventually losses its organizational goals through opportunistic behavior. The study also explains why the Prisoner’s Dilemma paradox holds when a nonprofit partner chooses to remain in partnership with a for-profit that has reduced its collaboration effort. Nonprofits must therefore learn how to strategize but still adhere to their nonprofit motive to avoid opportunistic behavior that undermines their efficiency.

Keywords: cause marketing partnership; institutional isomorphism; nonprofit motive; game theory; goal displacement (search for similar items in EconPapers)
Date: 2012-10
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Published in Working Papers Series on Social Responsibility, Ethics & Sustainable Business

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http://www.csrconferences.org/RePEc/aes/icsrog/2012/2012_1_038.pdf First version, 2012, October (application/pdf)

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