Moral Reasoning and Ethical Climate: Not-for-Profit vs. For-Profit Boards of Directors

Utilizing Rest's moral development and Victor and Cullen's ethical climate surveys, we examine differences in moral reasoning and ethical climate between board members in the for-profit and not-for-profit sectors. Six for-profit corporations and seven not-for-profit corporations, all with base operations in a major midwestern state, participated in the study. We find that profit and not-for-profit boards may not differ in moral reasoning, but do exhibit different types of ethical climates. We also find that for-profit board members may utilize higher stages of reasoning a greater percentage of the time than not-for-profit directors. In contrast, the ethical climates of the two types of organizations are significantly different. For-profit companies had climates higher in egoism than did not-for-profit companies. In addition, not-for-profit firms reflected higher benevolence factors than for-profit firms. Not-forprofit organizations also had somewhat higher, but not significantly different, mean scores on the principle factor compared to the for-profit organizations.     

The impact of emotional appeal and the media context on the effectiveness of commercials for not-for-profit and for-profit brands

This study investigates the impact of emotions, both ad- and context-evoked, on the effectiveness of commercials for not-for-profit vs. for-profit brands. Two types of emotional impact are taken into account: firstly, the emotional appeal of the commercial itself and secondly, the emotion evoked by the context in which the commercial is embedded. Effectiveness is made operational by both rational (recall, recognition) and emotional measures (likeability, understanding of the ad and reduced intention to switch the ad). The main research uses a 2 × 2 between subjects design where the context (warm vs. sad film fragment) and the type of commercial (warm vs. sad) were manipulated for not-for-profit and for-profit brands. The appropriate stimuli were identified in a preliminary study. The results indicate that, overall, sadness as an execution approach works better for commercials. This is in particular the case for the rational impact measures of the for-profit brands. For the not-for-profit brands, the emotional measures have significantly higher scores. Moreover, a context-evoking sadness proves to be the most responsive for the for-profit brands.     

Reimbursement and Investment: Prospective Payment and For-Profit Hospitals’ Market Share

This paper studies how the change from retrospective cost-based reimbursement to a prospective payment system shifted hospital investment strategies from quality-enhancing technologies to cost-saving technologies. A consequence of this change was the opportunity for for-profit hospitals to capture a larger share of the market. When all of a patient’s treatment costs are paid under a retrospective average cost-based program, not-for-profit hospitals invest only in the quality-enhancing technology. For-profit hospitals have no incentive to invest in either technology. As a result, most patients select not-for-profit hospitals and for-profit hospitals attract only those few patients who have extreme time preference. When hospitals are reimbursed prospectively, however, not-for-profit hospitals invest in both quality-improving and the cost-saving technologies, as do for-profit hospitals, although at lesser amounts. Quality and market shares are more equal under prospective payment, helping to explain the increasing market share of for-profit hospitals as prospective payment has become the norm.     

Learning,Innovation and Competitive Advantage in Not-for-Profit Aged Care Marketing: A Conceptual Model and Research Propositions

ABSTRACT

The rapid expansion and the increased commercialization of the elderly consumers market have forced not-for-profit organizations (NFPs) to adopt a competitive posture in their operations and to pursue innovative ways of delivering superior aged care to the target market. This paper attempts to model the antecedents of innovation-based competitive strategy in NFPs. Premised on the capability-based model of sustained competitive advantage and incorporating the emerging concept of social entrepreneurship, it is argued that entrepreneurial NFP organizations, in their mission to create social value to multiple stakeholders, build and nurture distinctive learning capabilities that enable them to formulate innovative strategies for superior aged care delivery. Key theoretical constructs within the model are explored and research propositions are presented.     

Public Versus Private Sector Procurement Ethics and Strategy: What Each Sector can Learn from the Other

The government purchasing market constitutes the largest business sector in the world. While marketers would benefit from a deep understanding of both sectors, how the two sectors differ in terms of ethics and strategy largely remains unknown. The purpose of this research, therefore, is to explore differences between the for-profit and not-for-profit sectors on two critical aspects of business-to-business procurement: ethics and strategy. Using survey data from a sample of 328 procurement professionals in the for-profit and not-for-profit sectors, key differences are explored. Findings suggest that buyers in the for-profit sector are more likely to behave opportunistically. Conversely, the buyers’ leaders in the not-for-profit sector behave more opportunistically and are more willing to turn a blind eye to their subordinate buyers’ opportunistic behaviors. In addition, key differences in procurement strategy are unveiled suggesting that not-for-profit procurement practices have some room for improvement. Based on the findings, theoretical and managerial implications are drawn, and a future research agenda is proposed.     

The Italian <Emphasis Type="Italic">Economia Aziendale</Emphasis> and Catholic Social Teaching: How to Apply the Common Good Principle at the Managerial Level

The ongoing global economic and financial crisis has exposed the risks of considering market and business organizations only as instruments for creating economic wealth while paying little heed to their role in ethics and values. Catholic Social Teaching (CST) could provide a useful contribution in rethinking the role of values in business organizations and markets because CST puts forward an anthropological view that involves thinking of the marketplace as a community of persons with the aim of participating in the Common Good (CG) of society. In the light of the CST tradition, and in particular Caritas in Veritate, this article investigates the thinking of some of the historical scholars of the Italian Economia Aziendale (EA), by focusing on the concept of azienda, in order to reinterpret in a more humanistic way the role of business organizations in society. By linking CST and EA, the dichotomy between for-profit and not-for-profit organizations and the stereotype of the so-called business amorality that has, for a long time, driven business managers can be transcended. The conclusions imply a forward-looking application of the ethical concepts embedded in the Italian science of EA.     

How Do Board Size and Occupational Background of Directors Influence Social Performance in For-profit and Non-profit Organizations? Evidence from California Hospitals

This study investigates how board size and occupational background of directors differentially influence social performance in for-profit and non-profit organizations. Using data from California hospitals, we develop a quantitative measure of social performance and provide the following empirical evidence. First, board size is negatively (positively) associated with social performance in for-profit (non-profit) hospitals. Second, the presence of government officials on the board is negatively (positively) related to social performance in for-profit (non-profit) hospitals. Third, representation of physicians on the board is positively associated with social performance in for-profit hospitals, whereas their presence is not significantly related to social performance in non-profit hospitals. Our findings highlight the different effects of governance mechanisms on social performance in for-profit and non-profit organizations.     

Aftermarketing with Best Customers-

In order to cultivate and serve the needs of their customers, for-profit businesses and organizations are using ''aftermarketing'' as a technique to reduce customer attrition. This article will examine this way as a technique for nonprofit organizations to serve the needs and wants of its donors. It will analyze a case study of a nonprofit organization which uses this technique as a tool for finding out what donors think. And it will discuss the importance of ''aftermarketing'' to nonprofit organizations.     

Are Conglomerates Less Environmentally Responsible? An Empirical Examination of Diversification Strategy and Subsidiary Pollution in the U.S. Chemical Industry

This paper is an attempt to address the limited amount of research in the realm of organizational ethical climate in the not-for-profit sector. The paper draws from Victor and Cullen's (1988) theoretical framework which, combines the constructs of cognitive moral development, ethical theory, and locus of analysis. However, as a point of departure from Victor and Cullen's work, the authors propose an alternative methodology to extract ethical climate dimensions based on theoretical considerations. Using the Ethical Climate Questionnaire (ECQ), an exploratory factor analysis is conducted followed by a confirmatory factor analysis using LISREL. The resulting five dimensions are labelled as: individual caring, machiavellianism, independence, social caring, and law and code. Findings provide a somewhat disparate perspective of the ethical climates in a not-for-profit context. First, there is a more discriminating perception of benevolent climate than its for-profit counterpart. Second, the dimensions are polarized between the individual and the cosmopolitan loci of analysis. These findings are then discussed with implications and direction for future research.     

No Logo? No Way. Branding in the Non-Profit Sector.

Ten thousand new organisations are joining the charity sector each year (Hankinson 2000). One of the ways in which charities are responding to this increased competition is to adopt commercial branding techniques (Tapp 1996; Ritchie, Swami et al. 1998). It has been suggested that brand orientation can help to raise awareness amongst target audiences (Hankinson 2000), build loyalty within donor and supporter groups (Ritchie, Swami et al. 1998) and facilitate donor choice (Hankinson 2000). This paper investigates what is understood by the term brand, what constitutes a brand in the charity environment and what organisational objectives a brand strategy seeks to achieve. It also explores the role played by values in developing charity brands. The research is primarily exploratory in nature, drawing on existing branding theory. The findings of the research are reviewed within the context of for-profit and not-for-profit branding literature. Recommendations for further research are also made.     

"When doing good is just the start to being good": a possible tool to improve the organizational effectiveness of non-profit health care organizations

Health care is an area where many non-profit organizations do good work, relieving governments and for-profit providers of workload. They contribute often specific knowledge and competence or provide better access to patients through their cultural and ethnic affiliations. Non-profit organizations, NPOs, are often dependent on one or more significant donors, sometimes governments, sometimes for-profit health providers and mostly private/corporate donors with an interest in specific medical areas, such as Alzheimers, or in unique communities, such as the Laotian neighborhoods in Southern California. In the media, high profile scandals involving financial irresponsibility have caused shock waves around the world. Concerns among some donors over the lack of a transparent performance measurement of non-profit entities have increased with the greater call for transparency and good governance in the corporate world. Not all the scandals have been in the commercial sector; some Not for Profit Organizations (NPOs) have been identified as having less than credible governance structures (Thomson, 2003). The watchdog organization SustainAbility reported that accountability and transparency are issues on which several NPOs are found wanting (Anon., 2003) and the New York Times reports that until recently NPOs were thought to be exempt from traditional oversight; their do-good nature and the commitment of their participants were thought to be sufficient to produce positive results (Christensen, 2004).     

The impact of Enterprise 2.0 in organizations

Many organizations have embarked on Enterprise 2.0. However, not many have successfully implemented it. Availability of inexpensive tools does not guarantee their usage by organizations and their employees. To have Enterprise 2.0 implemented widely and effectively by organizations, it is important that both managers and employees benefit from using it. It is expected that the level of congruence of management–employees perceived benefits would affect the level of adoption of Enterprise 2.0 in organizations. Testing this is the purpose of this research. Using the case study of two large global organizations, this study analyzed the use of Enterprise 2.0 by both employees and managers. The results showed that even though both employees and managers believe that Enterprise 2.0 usage does have a positive impact on communication, collaboration, community building, and employee engagement, the level of belief is different: managers’ perception of Enterprise 2.0 benefits is less than that of employees. There was a greater degree of congruence though between both the groups on the perceived benefits of Enterprise 2.0 on knowledge management and organizational outcomes. The size and the type (not-for-profit) of organization was a disadvantage in adopting such tools. The not-for-profit organization was more at loss when applying Enterprise 2.0 as its employees are less aware of the type of tools and of their benefits, and there is less managerial support.     

Market Orientation of Riding Schools: A Comparison of For Profit and Nonprofit Organizations Using Structural Equation Modeling

For profit and nonprofit service providers compete in different areas of economy. Market orientation is a widely acknowledged concept that influences the performance of both for-profit companies and nonprofit organizations. Nevertheless, the different underlying attitudes and motivations of voluntary or professional managers may influence the market orientation of an organization. An empirical study was conducted for investigating the influence of different attitudes toward market orientation. Groups of non- and for-profit managers are compared using the example of German riding schools. Overall, 244 volunteer and professional managers answered the survey. A structural path model was evaluated using the software SmartPLS 3. Results show that attitudes and motivations exert influence differently in the non- and the for-profit contexts. The economic situation was found to have an influence solely on the satisfaction reported by professional managers but not on the satisfaction reported by volunteers. Implications for future research on nonprofit market orientation can be drawn from the findings.     

Business models for people, planet (& profits): exploring the phenomena of social business, a market-based approach to social value creation

This article explores the hybrid phenomenon of social business, that is, both a form of organization and a practice that deliberately harnesses market dynamics to address deeply rooted social issues through the design and implementation of a core product or service. This new form of hybrid venture melds the social purpose traditionally associated with non-profit organizations with the economic purpose and market-based methods traditionally associated with for-profit firms. This exploratory research inductively explores the process by which social businesses are designed. The result suggests that clear intentionality around social purpose drives the design of these ventures and their associated missions and business models such that they can creatively synthesize competing paradigms (economic and social purpose) within one venture. The tight coupling of mission, method, and operationalization allows for the multi-stakeholder promise of the business model to be fulfilled.     

Hybrid business models for peace and reconciliation

Despite growing interest in business for peace, there is little insight into how the organizations involved combine societal aims with economic ones in their business models. Literature has exemplified ‘hybrid organizations’ that seek to pursue both for-profit and non-profit activities and are specifically set up with this mission, usually in stable Western countries. However, already existing, traditional organizations that aim for mixed forms of economic and social value creation have been underexposed, and that applies even more for organizational forms that address peace in difficult settings. To help fill these gaps, this article sheds light on different degrees of hybridity of a range of organizations operating in a (post-)conflict region. It shows how 53 organizations in between the non-profit/for-profit extremes pursue different combinations of social and economic goals, maintain and develop relationships with stakeholders, and interact progressively with markets and institutions. We also present a hybridization continuum and classification scheme that is applicable beyond our specific context. While different degrees of hybridity in objectives, perspectives, and relationships exist, key dimensions are frequent interactions with stakeholders, awareness of development and reconciliation issues, and personal commitment. We identify hybridity aspects relevant to management and discuss implications for business scholars and practitioners.     

Nursing: the lost commodity in managed care or marketing health care agencies and the professional nursing shortage

It is essential for Hospital organizations today to have an in depth appreciation for Marketing strategies and practices when dealing with their patients. The most effective first line of defense and action to ensure the highest level of health care service and value for consumers are nurses. This article will explore the essential sophisticated business and marketing role that nurses can play to achieve patient satisfaction.     

A Praxis Framework for Implementing Market Orientation Into Charities

There is a scarcity of research regarding the process of introducing market orientation into the not-for-profit sector. Understanding this process would greatly assist the not-for-profit sector, which is under increasing pressure to obtain funds to operate and offer appropriate services. In this article, we examine the successful introduction of market orientation into three Australian charities and identify the stages of implementation. The introduction of market orientation is analyzed from a discourse transformation perspective and a praxis framework is developed. This is amongst the first studies examining the transition to a market orientation discourse within charity organizations and the first study to develop a praxis framework to guide managers. The study also pioneers a discourse transformation perspective in market orientation research. The article thus extends our knowledge of market orientation within the not-for-profit sector and increases understanding of practitioner engagement in marketing activities.     

Public partnerships,governance and user involvement: a service user perspective

This paper explores public partnerships and governance from a service user perspective, drawing both on the author's own involvement in service user organizations and movements and on material associated with and produced by these organizations and movements. It addresses the ambivalent relationship between service user organizations and movements and the idea and practice of ‘partnerships’, and explores their preference for ideas of ‘alliance’. It charts the different approaches to and ideologies underpinning user involvement and their implications for partnership between state and service users and their organizations. It offers a set of components for improving such partnerships as well as highlighting the growing interest of service users' organizations and movements in developing and extending alliances.     

The Property Rights Theory of the Firm and Mixed Competition: A Counter-Example in the US Health Care Industry

We present a counter-example to the conventional property rights theory of the firm, which indicates that not-for-profit firms are incapable of directly competing against strictly profit-maximizing firms without the presence of barriers to entry, outside assistance, changing profit status or economies of scale and scope. We employ a modified Bertrand duopoly model of mixed competition in the health care industry to show that, even when these four conditions do not hold, not-for-profit firms may still be able to compete and possibly dominate the market. Consequently, market fundamentals, rather than market intervention, regulation or uncertainty, determine a not-for-profit provider's success or failure in the market. A necessary requirement is that the not-for-profit manager must care about non-pecuniary benefits but be willing to accept lower than normal returns. Moreover, under specific cost and demand conditions, a not-for-profit's ability to compete may actually be enhanced by increasing its production of non-pecuniary benefits.     

Measuring Satisfaction with Services when the Customer Is Not the Consumer

Typically, nonprofit and public institutions offer their customers services as opposed to manufactured, marketed, tangible products. Marketers in the not-for-profit and public sectors must be aware of the ways in which traditional, product-bound marketing tools must be changed to accommodate the unique nature of services. This paper considers how measures of customer satisfaction are inadequate to capture satisfaction with services especially in the situation typical to nonprofits where the customer (purchaser) of the service, is a different person from the consumer (user) of the service. This customer-consumer differentiation is necessary because it appears that in the case of high involvement services in which the customer is not the consumer, inflated satisfaction ratings occur when conventional measures are applied. It is argued that these ratings may be caused by a desire to avoid dissonance or by a faulty attribution process, but whatever their cause, new measures of satisfaction need to be developed to accommodate the special nature of these services.