Research Article

The Innovation Paradox of Nonprofit Organizations in Taiwan: A Model Analysis of Service-Dominant Orientation and Prosocial Behavior

Lin Hsin-Hung 1 * , Chien-Chung Wu 2, Chun-Chen Huang 2
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1 Department of Creative Product Design, College of Creative Design, Asia University, Taichung 41354, Taiwan2 Department of Business Administration, Asia University, Taichung 41354, Taiwan* Corresponding Author
Innovation on Design and Culture, 5(2), June 2026, 10-19, https://doi.org/10.35745/idc2026v05.02.0002
Submitted: 10 November 2025, Published: 30 June 2026
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ABSTRACT

Amid the trend of increasing institutionalized management among nonprofit organizations (NPOs) in Taiwan, religious groups are facing governance challenges as they transition from traditional “communities of belief” to modern “institutional legal entities.” This transformation has led to an innovation paradox: institutional compliance requirements (e.g., financial transparency) may conflict with the informal operations of religious culture (e.g., traditional rituals). This study integrates institutional theory (coercive, mimetic, and normative pressures), service-dominant orientation (SDO), and prosocial behavior theory to construct a mediation model, exploring how SDO mediates the tension between institutional requirements and cultural practices. The study administered a survey to religious nonprofit organizations (NPOs) in Taiwan, collecting 307 valid responses (valid response rate: 74.5%). AMOS was used to conduct confirmatory factor analysis (CFA) and structural equation modeling (SEM), and the Bootstrap method was applied to test the mediating effects. The results showed that:
(1) The three types of institutional pressures (β = 0.193–0.267, p < 0.05) and prosocial values (β = 0.382, p < 0.001) positively influenced SDO;
(2) SDO fully mediated the relationship between institutional pressures and prosocial behaviors (95% confidence interval did not include zero), indicating that organizations must transform external pressures into concrete actions through service interactions (such as follower participation and value co-creation);
The research sample was concentrated among middle-aged and older religious participants (ages 41–60 accounted for 65.8%), and future studies should include managerial levels and diverse age groups to enhance the validity of inferences. This study fills a theoretical gap in the mediating mechanism of the institution–culture transformation within religious NPOs. It confirms that SDO is a key variable in mediating this tension. The study suggests that relevant government agencies, when guiding NPOs, should consider both legal frameworks and cultural interactions, while organizations should strengthen mechanisms for follower participation.
Keywords: Nonprofit organizations, Institutional pressure, Service-dominant orientation, Prosocial behavior, Sustainable management

CITATION (APA)

Hsin-Hung, L., Wu, C.-C., & Huang, C.-C. (2026). The Innovation Paradox of Nonprofit Organizations in Taiwan: A Model Analysis of Service-Dominant Orientation and Prosocial Behavior. Innovation on Design and Culture, 5(2), 10-19. https://doi.org/10.35745/idc2026v05.02.0002

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