Two organizations (one Non-profit and one for-profit) are considering different
ID: 1178167 • Letter: T
Question
Two organizations (one Non-profit and one for-profit) are considering different alternative courses of action within their organizations. Please describe the similarities and differences in financial analysis approaches for the non-profit and for-profit organization. Please provide an example of each in making your comparison. Can some of the non-profit approaches be applied to for-profit organizations? Answer below, or attach a Word Document Limit your answer to 500 words or less. Two organizations (one Non-profit and one for-profit) are considering different alternative courses of action within their organizations. Please describe the similarities and differences in financial analysis approaches for the non-profit and for-profit organization. Please provide an example of each in making your comparison. Can some of the non-profit approaches be applied to for-profit organizations? Answer below, or attach a Word Document Limit your answer to 500 words or less.Explanation / Answer
An Organizational Analysis is a process by which an organization's systems, capacity, and functionality are assessed in order to increase its efficiency, performance, and output. With the use of various models and theories, an Organizational Analysis aims to understand behavioral relationships, structure, and technology.[1]
The prolifieration of complex organizations has made most human activities collective endeavors.[1] The collectives manage the input and output in order to create private or public good. Within the field of Organizational Analysis, "management" is typically defined as the process of using resources, (personnel, materials, physical plant, equipment, information, time, and money) to achieve organizational goals.[2]
An Analysis, or sometimes called restructuring, of an Organization may become necessary when either external or internal forces have created a problem or opportunity. Some examples of pressures that may lead to the implementations of an Organizational Analysis:
- The environment shifts - Technology changes - Organizations grow - Leadership change
Organizations must have a clear and precise vision and mission. The purpose of the organization must be realistic in the interest of the short-term and serving the best interest of all stakeholders. Long-term strategy should also strive to meet the mission of the organization, particularly in the context of decision-making, and the long term interest of the company%u2019s stakeholders. Having a unified strategy helps guide the organization into a unified direction rather than branching out and not having a clear vision. Employees must clearly know their role within the organization and how it supports the short-term and long-term organizational strategy.
Comparative Advantage
This is important in the context of forming an organization strategy of certain companies or businesses. In both the nonprofit and corporate context, (those who are selling goods and services), once forces affecting competition are identified, a strategist can identify the company%u2019s strengths and weaknesses. From there, a plan of action can be taken to improve the position of the company within the industry and protect the company from any competitive forces.
Organizational Structure and Operations
In addition to a clear organizational strategy, there are five basic parts of an organization.
The first is strategic apex or the top management who have the ideas and the vision for the organization.
The second is the operating core, who hires the workers to do the basic work of the organization.
The third is intermediate management (or middle management). As the organization grows, these middle managers are necessary to become the liaisons between the workers and top management.
The fourth, technostructure, also known as analysts, design systems concerned with the formal planning and control of the work.
The fifth and last aspect is support staff who provide indirect services to the rest of the organization.
Organizational Structure Configurations
Every organization, whether for-profit or non-profit, require an operating structure to provide stability and to promote operational efficiency. While there are many organizational structures are frequently used, structure often depends on the organization type and what serves the best purpose. Provided here are two examples of commonly used organizational structures in both the for-profit and non-profit world.
The Simple Structure
The structure itself is a large unit with a few top managers and a group of operators who do most of the basic work. (This is the classic entrepreneurial structure). This structure, while seeming oversimplified, it remains widespread and necessary for start-ups and for small businesses with few employees.
Since simple structure relies on the chief operating officer/top manager to make most executive decisions, very few if any middle managers are hired and direct supervision of the employees is conducted by the top management.
An Example of a Simple Organizational Structure
The Divisionalized Form
This is described as an integrated organization joined together by a loose administrative overlay. The core of the operation lies with the middle managers. Maintaining control lies with partial direct supervision but much of it lies with the standardization of outputs. This leaves operating details with each department and maintains necessary autonomy, leaving periodic performance evaluations to the top management. According to Michael Porter, this structure has become increasingly popular over the last few years with hospitals, unions and the government.
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