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Nonprofit Management > Starting NPO > Flashcards

Starting NPO Flashcards

1
Q

Demand- Side / Failure Theories

A
  • Government Failure Theory

- Market Failure Theory

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2
Q

Government Failure Theory

A 
Demand Side (there are needs to be fulfilled)
From Slide:

NPOs fill the needs of smaller groups of citizens, react faster and know better local communities

From my class notes:
Role - government priorities must match those of the majority of voters while nonprofits can focus on minorities or less common issues
Bureaucracy and hierarchy - gov’t moves slowly, nonprofits can respond more quickly
(Welfare Programs in the USA, studies show only 30 cents per dollar spent reach the poor. Rest was consumed by administrative overhead.
¾ of private charities spend at least 70 cents per dollar - higher efficiency)
Less continuity than NPOs - short term of office of elected officials make them focus on issues of CURRENT CONCERN
Less Freedom to begin experimental programs for public funds than privately financed organizations

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3
Q

Market Failure Theory

A

Demand Side (there are needs to be fulfilled)

From slides:
NPOs guarantee transparency and lower information asymmetry on the market

From my class notes:
Nonprofits work better with services that are hard to measure because they will be more transparent
Also linked to profit side

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4
Q

Supply-side / entrepreneurial theories

A

There are people that just want to act and help/engage and resources to be used

  • Donative labor hypothesis
  • Impure altruism and “warm glow of giving”
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5
Q

Donative labor hypothesis

A

some are motivated by intangible values rather than economic incentives

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6
Q

Impure Altruism and “Warm glow of giving”

A

working for others bring psychological benefits to the donor

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7
Q

Theory of the commons

A

some nonprofits exist to provide common goods to groups of individuals who share an interest in them

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8
Q

TWO MAIN FUNCTIONS OF NONPROFIT SECTOR

A
  • To solve (social) issues - measures: goals execution, effectiveness
  • To build social capital - (networks/trust/norms) - measures: representation, participation
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9
Q

Nonprofit Organization Definition

OPNSV

A 
0ne
Piece
Not
So
Viel

Organized - chartered as formal organizations; have structure (charities, associations)
Private - not agencies of the government
Not profit distributing - excess revenues are reinvested in the organization; no dividends to individuals or investors
Self - governing - control lies with a board of directors or board of trustees; formally independent from other entities
Voluntary - board of directors and some service providers are volunteers

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10
Q

Types of Non Profit Orgs - Punnet Square

A

Member-Serving/Donative: orgs for minorities, for parents, patients with rare diseases

Member serving/Commercial: co-ops, industry associations, sports clubs

Community-serving/Donative: Humanitarian orgs, environmental orgs

Community-serving/Commercial: Theaters, universities, health centers

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11
Q

Voluntary Failure THeory

A

Philanthropic insufficiency - inability to generate resources on adequate scale and stable in time

Phi. paternalism - influence over the goals in the hands of those in control of the greatest resources

Phi. particularism - tendency to focus on particular subgroups of the population

Phi. amateurism - lack of professional knowledge how to solve given problem

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12
Q

NPO Environment

A

Org environment, micro, and macro

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13
Q

Org environment

A

includes actors and forces that affect organization’s ability to build and maintain successful relationships with beneficiaries and other stakeholders

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14
Q

Microenvironment

A

consists of the actors close to the organization that affect its ability to serve its beneficiaries

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15
Q

Macroenvironment

A

consists of the larger societal forces that affect the microenvironment

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16
Q

NPO’s Macroenvironment:

A 
PESTLE
Political 
Economic
Social/cultural
Technological
Legal
Environmental
17
Q

Microenvironment - Porter’s Five Forces Model

A

Threat of New Entry
Supplier Power
Buyer Power
Threat of Substitution

four arrows go into: COMPETITIVE RIVALRY

18
Q

Threat of New Entry

A
  • Time and cost of entry
  • Specialist knowledge
  • Economies of scale
  • Cost advantage
  • Technology protection
  • Barriers to entry
19
Q

Competitive Rivalry

A
  • Number of competitors
  • Quality differences
  • Other differences
  • Switching costs
  • Customer loyalty
  • Costs of leaving market
20
Q

Supplier Power

A
  • Number of suppliers
  • Size of suppliers
  • Uniqueness of service
  • Your ability to substitute
  • Cost of changing
21
Q

Buyer Power:

A
  • Number of customers
  • Size of each order
  • Differences between competitors
  • Price sensitivity
  • Ability to substitute
  • Cost of changing
22
Q

Threat of Substitution:

A
  • Substitute performance

- Cost of change

23
Q

Microenvironment - Stakeholder

A
  • Beneficiaries/Clients
  • Members
  • Publics
  • Local communities
  • Suppliers/partners
  • Donors
24
Q

Values - Vision - Mission

A
  • Values (who you are) - internally identified core assets or “founding stories” to inspire and motivate
  • Mission (what you do) - communicate the purpose of the NPO. Unique, clear, memorable, concise.
  • Vision (where you want to be) - big ideas, long-term goals, what the org wants to achieve in 10-30 years
25
Q

Aligning Structure to Strategy

A

Traditional Unitary structure (U-form)

Milti-divisional structure (M-form)

26
Q

Traditional Unitary structure (U-form)

A

specialized around functions, such as sales and manufacturing

27
Q

Milti-divisional structure (M-form)

A

the org is divided into several semi-autonomous units guided (strategy) and controlled (financial goals) from the center

28
Q

Multi-div structure: Pros/Cons

A

Pro:

  • Overall strategy developed in headquarters
  • Distinct brand and economies of scale advantages are kept
  • Flexibility of units on strategies and operations on the unit level
  • More responsibility given to units; units are motivated

Cons:

  • Power allocation problems - managers in units may fill they don’t participate in strategy shaping
  • Units may drift out from the company core goals
  • Higher costs of more management levels
  • Relations between units - competition instead of cooperation
29
Q

Prioritizing Stakeholders:

A
  • Resource dependency
  • Strategic significance
  • Relationship interconnectivity (alignment of interests)
  • Status/image benefits
30
Q

Stakeholders Analysis Matrix

A

Resource dependency (Influence) x Strategic significance (importance)

low influence / low importance = low priority
high influence / low importance = monitor
low influence / high importance = protect
high influence / high importance = good relations

Nonprofit Management (4 decks)

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