South Korean nonprofits under the voucher system: Impact of organizational culture and organizational structure

Abstract

The social service industry in South Korea is undergoing significant changes as the Korean government has changed its approach to financing social services from direct funding support for service providers to voucher programs. This market-oriented policy has forced social service nonprofits to adopt the market practice and culture. As a result, nonprofits are becoming business-like entities striving for a share of the social service market. This study examines organizational factors that give competitive advantage to nonprofits in the social service market under the voucher system. Specifically, the study uses data collected from 35 nonprofit organizations in Busan, South Korea, to examine whether voucher revenues, an indicator of market share, is associated with organizational characteristics, including organizational culture and structure. The results may suggest strategies that help nonprofits to gain a greater share in the social service market.