Partial Completion as a Nonprofit Strategy

53 Pages Posted: 20 Oct 2020

See all articles by Can Zhang

Can Zhang

Duke University - Fuqua School of Business

Atalay Atasu

Georgia Institute of Technology - Sustainability

Karthik Ramachandran

Georgia Institute of Technology - Scheller College of Business

Date Written: September 1, 2020

Abstract

Problem definition: Faced with the challenge of serving beneficiaries with heterogeneous needs and under budget constrains, a number of nonprofit organizations (NPOs) have come up with an innovative solution: providing partially complete products or services to beneficiaries. We seek to understand what drives an NPO's choice of partial completion as a design strategy and how it interacts with the level of variety offered in the NPO's product or service portfolio. Academic/practical relevance: Although partial product or service provision is frequently observed in nonprofit operations, there is limited understanding (in academia and practice) of when and why it is an appropriate strategy -- a void that we seek to fill in this paper. Methodology: We synthesize the practices of two NPOs operating in different contexts to develop a stylized analytical model to study an NPO's product/service completion and variety choices. Results: We identify when, and to what extent partial completion is optimal for an NPO. We also characterize a budget allocation structure for an NPO between product/service variety and completion. Our analysis also sheds light on how beneficiary characteristics (e.g., heterogeneity of their needs, capability to self-complete) and NPO objectives (e.g., total-benefit maximization vs. fairness) affect the optimal levels of variety and completion. Managerial implications: We provide three key observations: 1) Partial completion is not a compromise solution to budget limitations but can be an optimal strategy for NPOs under a wide range of circumstances, including in the presence of ample resources. 2) Partial provision is more valuable when beneficiary needs are more heterogeneous, beneficiaries are more capable towards self-completion, or their self-completion capabilities are more heterogeneous. 3) While providing incomplete products may appear to burden beneficiaries, when fairness is factored into an NPO's objective, providing a less complete product can be optimal.

Keywords: Nonprofit Operations; Incomplete Products; Product Variety; Fairness

Suggested Citation

Zhang, Can and Atasu, Atalay and Ramachandran, Karthik, Partial Completion as a Nonprofit Strategy (September 1, 2020). Georgia Tech Scheller College of Business Research Paper No. 3684891, Available at SSRN: https://ssrn.com/abstract=3684891 or http://dx.doi.org/10.2139/ssrn.3684891

Can Zhang (Contact Author)

Duke University - Fuqua School of Business ( email )

100 Fuqua Dr
Durham, NC North Carolina 27708
United States

Atalay Atasu

Georgia Institute of Technology - Sustainability ( email )

800 West Peachtree St.
Atlanta, GA 30308
United States

Karthik Ramachandran

Georgia Institute of Technology - Scheller College of Business ( email )

800 West Peachtree St.
Atlanta, GA 30308
United States
(404) 894-8631 (Phone)

HOME PAGE: http://https://sites.gatech.edu/karthikr/

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
40
Abstract Views
233
PlumX Metrics