Answer to Question #168662 in Management for Richmond

Question

How might planning in a not for profit organization such as the American cancer society differ from planning in a not for profit organization such as coca cola?

Answer 1

Answer:

The major difference between a nonprofit organization and a profit organization is hidden in its name as a whole that is PROFIT. In that case, the whole planning process is governed and defined on that basis. The mission and intent of a non-profit organization direct them, while the vision of a for-profit company guides them as they strive to become a better version of themselves in a competitive external market.

In profit organizations like Coca-Cola and others who planning process is tilted toward profit maximization in the long run. On the other hand in a non-profit organization planning process is more tilted toward the welfare of the society as a whole.

 

While funding is not easy to come by, for-profit companies may obtain capital from the free market in the form of sales or from investors, enabling them to continue operating as long as their product or service is in demand and the market is reasonably stable. Non-profits often have budgets that are fixed based on projected sales from the market and donations from people. To have the greatest effect, they usually have to extend their operating budgets. Non-profit organizations could create their strategic plans at reasonably regular intervals and work from there without too much intervention from external powers when it comes to the strategic planning phase.