Decision making in non profit organizations

Nonprofit Organizations' Capability to Make Effective Economic Decisions



Nonprofit organizations might face economic challenges just like any other business because of their distinctive nature. Whether publicly acknowledged or not, economic influence has a considerable impact on the decisions made regarding pricing, outsourcing agreements, employee compensation, and other matters (Robinson, 2012). In order to stay competitive in the present business environment, it is crucial for the managers of non-profit organizations to recognize and comprehend the economic aspects that influence these decisions. Evidently, the management of non-profit organizations must use a variety of talents to make wise financial decisions that will maximize their resources' productivity and efficiency of their resources and enable them to survive in the hostile dynamic business environment.



The Importance of Effectiveness and Efficiency



For a non-profits firm manager, the discussion and illustration of effectiveness and efficiency gains are valuable. Combining various tasks that are related, such as the sharing of MRI machine by two community-based hospitals can increase efficiency. Nevertheless, combining complementary and different resources can create new services, which brings about greater effectiveness in meeting both organizations' objectives, or improve the existing services. Apparently, like any other form of businesses, non-profit making companies have an emphasis on being productive and industrious (Kim, & Kim, 2016). Again, understanding the workers or the customers' emotions is significant; therefore, nonprofits' leaders should improve their skills on emotional intelligence.



Competition and Compensation



Apparently, in the recruitment of the employees, the community-based firms compete with for-profit organizations in an open market. In fact, there may be absence or little immediate difference working with community agencies or commercial businesses with most of the employees (Robinson, 2012). For instance, the doctors in a charitable hospital or private hospital expect the same working conditions and remunerations. Contrary, a lawyer in a community-based law center may accept a lower payment than an attorney in private practice, though, he/she might expect parity with lawyers in the government sphere. Nevertheless, nonprofits may not have a fair competition with the profit-making companies for financial reimbursement. But, it is essential for these firms to understand why highly professionals may get attracted to work where salaries and benefit packages are on average or below the standard payment to decide on the compensation plan or structure to implement. In fact, non-financial factors such as vision, mission, or core-values may attract various workgroup, which may allow a discounting of the wages offered (Kim, & Kim, 2016). Therefore, non-profit management and leadership are crucial in identifying and making decisions on various techniques that can attract and retain the staffs in a non-profit organization irrespective of small payments.



Institutional Collaboration and Trust



Community agencies still require making appropriate decisions on institutional collaboration with other companies. Collaboration raises the concept of professional developing and managing a partnering portfolio with other firms, and the need for these organizations to assess the desirability of alliance based on relative cost and benefits. Apparently, business collaboration for the sake of cooperation is seldom justified. Indeed, measuring the social benefits and value to the community is a sophisticated methodology, which lacks the degree of precision that an individual or organization may desire. Again, trust is one of the primary underlying core-value in the nonprofit industry. The significant role of the non-profit sector is building trust, and also using it to win the people's heart, and the prospective partners.



The Challenge of Technology



However, the concept of understanding and dealing with the dynamic technology, especially IT, brings about a significant challenge to the nonprofits, more so in social service focus (Robinson, 2012). During the initial development of the internet, it was hard to get a community-based agency engaged or involved with the technology. Consequently, in the long-run, technology has caught up with them and has been integrated with their systems. Ignoring technology is the worst harm that a firm can do to itself. Technology should be turned to the benefit of the organization; hence, appropriate and sound decisions should be made by the non-profits managers and leaders frequently to incorporate all the essential form of technology to the firm.



Utilizing Emotional Intelligence and Making Solid Financial Decisions



As stated by Hess & Bacigalupo, 2013, leaders or the management team within non-profit firms are required to apply their emotional intelligence skills to fulfill some roles simultaneously, such as recruitment of the employees, compensation strategies, institutional collaborations among others to bring about effective economic decisions. As asserted by Wellens & Jegers, 2016, suitable decision on economic prosperity leads to successful interactions, which will encourage the stakeholders to reinvest their emotional energies in subsequent activities. Therefore, the abilities of making solid financial decisions, and identifying the factors affecting these decisions is significant to the nonprofit leaders' success. Apparently, the nonprofit leaders must be willing to exercise their straight judgment on substantial economic decisions that will not disadvantage them from other profit making organizations in service delivery and employee compensation.



Conclusion



In conclusion, every leader or manager of a non-profit firm shares the objective of enhancing effective economic decision making and the appropriate utilization of their emotional intelligence skills, which will assist in the accomplishment of the company's goals. The leaders should critically evaluate their recruitment strategies, the compensation and benefits packages, institutional partnership, among others, to remain economically fit and healthy. Again, as asserted by Verschuere & De Corte, 2014, leaders of community agencies should have the skills to make proper use of all the resources available, not forgetting that their revenues are limited. Finally, the non-profits can use stakeholder's involvement to solve some of the challenges that they encounter, which will also increase their productivity and efficiency in all the services or products their offer.



References


Hess, J., & Bacigalupo, A. (2013). Applying Emotional Intelligence Skills to Leadership and Decision Making in Non-Profit Organizations. Administrative Sciences, 3(4), 202–220. MDPI AG. Retrieved from http://dx.doi.org/10.3390/admsci3040202


Kim, Y. H., & Kim, S. E. (2016). Challenges in Managing Nonprofit Organizations: A Research Overview. VOLUNTAS: International Journal of Voluntary and Nonprofit Organizations, 27(6), 2437-2961. doi:10.1007/s11266-016-9709-0 DO


Robinson, D. (2012). Effective Economic Decision-Making by Nonprofit Organizations. Int’l J. Not-for-Profit L., 7, 97.


Verschuere, B., & De Corte, J. (2014). The Impact of Public Resource Dependence on the Autonomy of NPOs in Their Strategic Decision Making. Nonprofit and Voluntary Sector Quarterly, 43(2), 293-313. doi:10.1177/0899764012462072


Wellens, L., & Jegers, M. (2016). From Consultation to Participation. Nonprofit Management & Leadership, 26(3), 295-312. doi:10.1002/nml.21191

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