Management Practices: Are not for Profits Different?
Tinbergen Institute Discussion Paper 11-094/1
45 Pages Posted: 18 Jul 2011
Date Written: July 15, 2011
Recent studies have demonstrated the importance of good management for firm performance. Here, we focus on management in not-for-profits (NFPs). We present a model predicting that management quality will be lower in NFPs compared to for-profits (FPs), but that outputs may not be worse if managers are altruistic. Using a tried and tested survey of management practices, we find that NFPs score lower than FPs but also that, while the relationship between management scores and outputs holds for FPs, the same is not true for NFPs. One implication is that management practices that work for FPs may be less effective in driving performance in NFPs.
Keywords: not-for-profits, management, impure altruism
JEL Classification: H8, J24, J45, L33
Suggested Citation: Suggested Citation