Despite Aiming for Vastly Different Goals, the Approaches to Management Used in For-Profit and Not-For-Profit Organisations Are Largely Similar

“Despite aiming for vastly different goals, the approaches to management used in for-profit and not-for-profit organisations are largely similar.”

There are a number of management approaches used by all types of organizations in society. For-profit organizations have a specific goal of maximizing profit for all shareholders, whereas not-for-profit organizations are created to provide a service to benefit the community. In order for the two types of organizations to exist and to remain successful, both rely on similar managerial decisions and responsibilities. While these certain similarities do exist, there are a number of overpowering differences between the two. The ‘vastly different goals’ do in fact change the management styles and approaches used, as both are driven by polar opposite motives. Furthermore, the employees at the differing organizations require motivation but in very different ways. While both for-profit and not-for-profit organizations require similar responsibilities to remain successful, both are immensely different when it comes to the management approaches and methods of motivation.

Whilst there is an overwhelming amount of distinctions between the management of for-profit and not-for-profit organisations, a few similarities can be drawn between the two, specifically in regards to the responsibilities. ‘Managers share a set of beliefs, values, attitudes’ (Claudia M.M, 2016). Whether it be for-profit or not-for-profit, managers in by types of organizations determine where the business is headed and so ultimately share a set of values and beliefs. For example, two contrasting companies are the Salvation Army (not-for-profit) and McDonalds (for-profit). Both of these organizations are similar in regards to managerial decisions as they require revenue in order to exist. Whether it is to provide a service to better the community or seek a profit, both rely on revenue in order to achieve organizational success in their industries. To maximize this revenue, similar managerial responsibilities are required in both such as drafting budgets and planning. Financially they both need to be monitored and regulated to ensure the attainment of goals. The drafting of budgets doesn’t change just because of different organizational motives, as so, the approach taken to manage financial sector of both are similarly taken care of. ‘Planning, budgeting and performance measurement systems of both are necessary’ (Epstein & McFarlan, 2011). On top of financial regulation with the business, the approach taken to performance and planning is essential to both. The management of both types, seek to create not only short term goals, but also a long term vision, which is all facilitated through the implementation of planning. While the actual finer details of the goals for Salvation Army may be vastly different to those of McDonalds, the reason the management create these plans and the