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Non-Profit Organizations in a Bureaucratic Environment

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  • Paul A. Grout
  • Wendelin Schnedler

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Abstract

How does the environment of an organization influence whether workers voluntarily provide effort? We study the power relationship between a non-profit unit (e.g. university department, NGO, health trust), where workers care about the result of their work, and a bureaucrat, who supplies some input to the non-profit unit, but has opportunity costs in doing so (e.g. Dean of faculty, corrupt representative, government agency). We find that marginal changes in the balance of power eventually have dramatic effects on donated labor. We also identify when strengthening the non-profit unit decreases and when it increases donated labor.

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Bibliographic Info

Paper provided by Department of Economics, University of Bristol, UK in its series The Centre for Market and Public Organisation with number 08/202.

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Length: 30 pages
Date of creation: Sep 2008
Date of revision:
Handle: RePEc:bri:cmpowp:08/202

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Keywords: donated labor; intrinsic motivation; non-profit organizations; power within organizations;

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  1. David Easley & Maureen O'Hara, 1983. "The Economic Role of the Nonprofit Firm," Bell Journal of Economics, The RAND Corporation, The RAND Corporation, vol. 14(2), pages 531-538, Autumn.
  2. Roland Bénabou & Jean Tirole, 2004. "Incentives and Prosocial Behavior," Working Papers, Princeton University, Woodrow Wilson School of Public and International Affairs, Discussion Papers in Economics. 137, Princeton University, Woodrow Wilson School of Public and International Affairs, Discussion Papers in Economics..
  3. Klein, Benjamin & Crawford, Robert G & Alchian, Armen A, 1978. "Vertical Integration, Appropriable Rents, and the Competitive Contracting Process," Journal of Law and Economics, University of Chicago Press, University of Chicago Press, vol. 21(2), pages 297-326, October.
  4. Marisa Ratto & Wendelin Schnedler, 2003. "Too few cooks spoil the broth," The Centre for Market and Public Organisation, Department of Economics, University of Bristol, UK 03/090, Department of Economics, University of Bristol, UK.
  5. Armin Falk & Michael Kosfeld, . "The Hidden Costs of Control," IEW - Working Papers 250, Institute for Empirical Research in Economics - University of Zurich.
  6. Wendelin Schnedler & Radovan Vadovic, 2011. "Legitimacy of Control," Journal of Economics & Management Strategy, Wiley Blackwell, Wiley Blackwell, vol. 20(4), pages 985-1009, December.
  7. Timothy Besley & Maitreesh Ghatak, 2003. "Competition and incentives with motivated agents," LSE Research Online Documents on Economics, London School of Economics and Political Science, LSE Library 2202, London School of Economics and Political Science, LSE Library.
  8. Guido Friebel & Wendelin Schnedler, 2007. "Team Governance: Empowerment or Hierarchical Control," Working Papers 0457, University of Heidelberg, Department of Economics, revised Oct 2007.
  9. Tore Ellingsen & Magnus Johannesson, 2008. "Pride and Prejudice: The Human Side of Incentive Theory," American Economic Review, American Economic Association, American Economic Association, vol. 98(3), pages 990-1008, June.
  10. Glaeser, Edward L. & Shleifer, Andrei, 2001. "Not-for-profit entrepreneurs," Journal of Public Economics, Elsevier, Elsevier, vol. 81(1), pages 99-115, July.
  11. Sliwka, Dirk, 2003. "On the Hidden Costs of Incentive Schemes," IZA Discussion Papers 844, Institute for the Study of Labor (IZA).
  12. Grossman, Sanford J. & Hart, Oliver D., 1986. "The Costs and Benefits of Ownership: A Theory of Vertical and Lateral Integration," Scholarly Articles 3450060, Harvard University Department of Economics.
  13. Francois, Patrick, 2000. "'Public service motivation' as an argument for government provision," Journal of Public Economics, Elsevier, Elsevier, vol. 78(3), pages 275-299, November.
  14. Wendelin Schnedler, 2008. "When Is It Foolish to Reward for A While Benefiting from B?," Journal of Labor Economics, University of Chicago Press, University of Chicago Press, vol. 26(4), pages 595-619, October.
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