Does Size Really Matter? Organizational Size and Innovations in Nonprofit Organizations

• Author: Kristina Jaskyte
• Published date: 01 December 2013
• Date: 01 December 2013
• DOI: http://doi.org/10.1002/nml.21087

Does Size Really Matter?

Organizational Size and Innovations in

Nonprofit Organizations

Kristina Jaskyte

University of Georgia

The purpose of this study was to investigate the relationship

between size and innovation in a sample of nonprofit organiza-

tions. The author employed a number of size estimates (person-

nel and financial) and assessed different types of innovations

(administrative and technological). Additionally, since the fail-

ure to take into consideration important contextual variables

has been attributed to producing misleading conclusions about

the relationship between size and innovation, the author con-

trolled for those variables (formalization, centralization, spe-

cialization, leadership, board size, and organization’s age)

when assessing this relationship. The results of hierarchical

multiple regressions showed that although the personnel size

estimates were important predictors by themselves, their sig-

nificance disappeared when contextual variables were intro-

duced. Board size and organization age were significant

predictors of administrative innovations. Board size was the

only significant predictor of technological innovations, as well

as of a total number of innovations.

Keywords: innovation, nonprofit

NONPROFIT SCHOLARS AND PRACTITIONERS have recognized that

in order to succeed in the current economic and social en-

vironment, organizations should seek to implement inno-

vative solutions in the service provision and the organizational

management areas (Jaskyte 2009). A recent increase in the number

of articles and books on the topics of innovation and creativity

demonstrates the importance and relevance of this topic to the

nonprofit sector. In their efforts to understand factors that contrib-

ute to the organization’s ability to innovate, nonprofit scholars have

Correspondence to: Kristina Jaskyte, University of Georgia, School of Social Work,

Tucker Hall SSW, Athens, GA 30602–7016. E-mail: kjaskyte@uga.edu

NONPROFIT MANAGEMENT & LEADERSHIP, vol. 24, no. 2, Winter 2013 © 2013 Wiley Periodicals, Inc 229

Published online in Wiley Online Library (wileyonlinelibrary.com) DOI: 10.1002/nml.21087

230 JASKYTE

Nonprofit Management & Leadership DOI: 10.1002/nml

assessed structural and human factors (Jaskyte and Dressler 2005;

Shin and McClomb 1998) and sought to develop models of inno-

vation specific to nonprofit organizations (Jaskyte 2009).

One of the variables that has received much attention in innova-

tion literature is organizational size. Most of that research, however,

was done in the business sector (Lee and Xia 2006). Little attention

has been paid to the influence of organizational size in studies of

nonprofit organizations (Bonfanti n.d.; Cornforth and Simpson

2002). Additionally, although numerous theoretical arguments sug-

gest a positive relationship between the two variables, the empirical

evidence is inconclusive (Lee and Xia 2006). Researchers found a

positive, a negative, or no relationship (Damanpour and Schneider

2006; Jaskyte and Kisieliene 2006; Sharma 2005). Thus far, empiri-

cal research has offered no unambiguous explanation of this rela-

tionship. The inconsistency in the results can be attributed to a

number of theoretical and methodological factors (Damanpour

1992; Lee and Xia 2006). Theoretical development of the concept of

organizational size is scarce. Another factor is operationalization

of organizational size and innovation (Camisón-Zornoza, Lapiedra-

Alcamí, Segarra-Ciprés, and Boronat-Navarro 2004). Researchers

employed varied estimates of organizational size that captured differ-

ent dimensions of it. Some studies used personnel-based estimates,

such as number of full-time and part-time employees, some used

non-personnel-based estimates, such as physical capacity (for exam-

ple, the number of hospital beds), financial resources (wealth of an

organization and net assets), measures concerning input (for exam-

ple, number of clients being served), and measures of output (level

of success of an organization over a given period of time) (Camisón-

Zornoza et al. 2004). A number of authors suggested that those esti-

mates capture different aspects of size, and therefore it is important

to consider what measures of size would be the most appropriate for

different types of organizations and under different circumstances

(Kimberly 1976). For example, a personnel measure may be most

appropriate for labor-intensive organizations, such as nonprofits.

Additionally, innovation researchers focused primarily on the

overall organizational innovativeness. Distinguishing between types

of innovations is important because they are initiated in different

parts of organizations and because they follow different processes of

adoption (Damanpour 1996). Some evidence shows that the

strength of the size–innovation adoption relationship does in fact

differ for different types of innovations (technological or product

and process) (Lee and Xia 2006).

The purpose of this study was to investigate the relationship

between size and innovation in a sample of nonprofit organizations.

In order to address some of the issues plaguing innovation and size

research, the author employed a number of size estimates (personnel

and financial) and assessed different types of innovations (adminis-

trative and technological). Additionally, because failure to take into

The purpose of

this study was to

investigate the

relationship

between size and

innovation in a

sample of

nonprofit

organizations.