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The theories that will help understand the nonprofit sector include Lohmann (1989) theory of commons, which categorizes goods into three groups namely; public goods, private goods and common goods, entrepreneurship theory, trust-related theories, the interdependence theory and the stakeholder theory. The nonprofit organizations chosen for illustration in this paper include American Heart Association, Salvation Army and the American Red Cross.
Due to different multitudes of different organizational components in nonprofit management literature, management concepts suggested by Gomez and Zimmermann (1993) provides a practical step towards the growth of management models that are more in tune with the realities of nonprofit organizations. There are different approaches applied in this field, including the public goods theory. As put by Weibrod’s theory of public goods, public goods theory is an extension of the public choice theories, whereby a collective action is taken by affected individuals to resolve public good problems. This theory states that public goods, which would have been otherwise provided by the government are provided by nonprofit organization through a donor. Services provided by the American Heart Association is a good example of an organization that help fill the gap, if need be. In other words, nonprofit provision is substituted for government provision under conditions of demand heterogeneity for the public good in question. Hansmann (1987) points out that the critical weakness in Weisbrod’s theory is that it does not explain why nonprofit and not for profit firms come up to fill unfulfilled demand for public goods, especially when applying to quasi-public goods. Hansmann’s trust-related theory picks up this point precisely.
Trust-related theories take a different angle by pointing out information problems inbuilt in the goods and services provided and the
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However, any profit realized is ploughed back into the organization. Various boards of the non-profit sectors are governed by rules that stipulate how they ought to be run as will be discussed herein.
Appointed boards are common in organizations such as
This is because, even if the donor had been convicted of a white collar crime, it does not mean that the origin of the money that he or she is offering for the donation comes from those illegal activities. The management of nonprofit organization should not question the
is a fiduciary responsibility of the board since they need to be answerable to the stakeholders who vote for the board and ensure their job positions in the board. The job of the executive is to ensure that stakeholders get the maximum return out of their investment, and
This study is based on AFM’s dealings and the unethical practices followed by its owners which eventually resulted in its closure recently after being indicted by the Federal investigators of numerous accusations against its owners and some of its
The nature of the attack determines the way the strategies being put in place. They include the policies set at the administrative level.
The tools authenticate by the organization also vary. Whereas some suite the purpose of one organization they may
Human Resource Management comprises various managerial activities that include recruitment of staff, training, wage development, dispute handling, social security, the welfare of employees, administrations, and promotions. All these functions are used as a tool
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