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Management practices: Are not for profits different?

Author

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  • Propper, Carol
  • Smith, Sarah
  • Dur, Robert
  • Delfgaauw, Josse

Abstract

Recent studies have demonstrated the importance of good management for firm performance. Here, we focus on management in not-for-profits (NFPs). We present a model predicting that management quality will be lower in NFPs compared to for-profits (FPs), but that outputs may not be worse if managers are altruistic. Using a tried and tested survey of management practices, we find that NFPs score lower than FPs but also that, while the relationship between management scores and outputs holds for FPs, the same is not true for NFPs. One implication is that management practices that work for FPs may be less effective in driving performance in NFPs.

Suggested Citation

  • Propper, Carol & Smith, Sarah & Dur, Robert & Delfgaauw, Josse, 2011. "Management practices: Are not for profits different?," CEPR Discussion Papers 8498, C.E.P.R. Discussion Papers.
    • Handle: RePEc:cpr:ceprdp:8498
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    1. Glaeser, Edward L. & Shleifer, Andrei, 2001. "Not-for-profit entrepreneurs," Journal of Public Economics, Elsevier, vol. 81(1), pages 99-115, July.
    2. Oriana Bandiera & Luigi Guiso & Andrea Prat & Raffaella Sadun, 2015. "Matching Firms, Managers, and Incentives," Journal of Labor Economics, University of Chicago Press, vol. 33(3), pages 623-681.
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    4. Glazer, Amihai, 2004. "Motivating devoted workers," International Journal of Industrial Organization, Elsevier, vol. 22(3), pages 427-440, March.
    5. Brekke, Kjell Arne & Nyborg, Karine, 2010. "Selfish bakers, caring nurses? A model of work motivation," Journal of Economic Behavior & Organization, Elsevier, vol. 75(3), pages 377-394, September.
    6. Nicholas Bloom & Carol Propper & Stephan Seiler & John Van Reenen, 2015. "The Impact of Competition on Management Quality: Evidence from Public Hospitals," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 82(2), pages 457-489.
    7. Sandra E. Black & Lisa M. Lynch, 2001. "How To Compete: The Impact Of Workplace Practices And Information Technology On Productivity," The Review of Economics and Statistics, MIT Press, vol. 83(3), pages 434-445, August.
    8. Canice Prendergast, 2007. "The Motivation and Bias of Bureaucrats," American Economic Review, American Economic Association, vol. 97(1), pages 180-196, March.
    9. Josse Delfgaauw & Robert Dur, 2008. "Incentives and Workers’ Motivation in the Public Sector," Economic Journal, Royal Economic Society, vol. 118(525), pages 171-191, January.
    10. Delfgaauw, Josse & Dur, Robert, 2010. "Managerial talent, motivation, and self-selection into public management," Journal of Public Economics, Elsevier, vol. 94(9-10), pages 654-660, October.
    11. Bloom, Nicholas & Van Reenen, John, 2011. "Human Resource Management and Productivity," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 4, chapter 19, pages 1697-1767, Elsevier.
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    Cited by:

    1. Lapo Filistrucchi & Jens Prüfer, 2019. "Faithful Strategies: How Religion Shapes Nonprofit Management," Management Science, INFORMS, vol. 65(1), pages 188-208, January.
    2. Leaver, Clare & Lemos, Renata & Scur, Daniela, 2019. "Measuring and explaining management in schools: new approaches using public data," LSE Research Online Documents on Economics 103431, London School of Economics and Political Science, LSE Library.
    3. John McCormack & Carol Propper & Sarah Smith, 2014. "Herding Cats? Management and University Performance," Economic Journal, Royal Economic Society, vol. 124(578), pages 534-564, August.
    4. Nicholas Bloom & Christos Genakos & Raffaella Sadun & John Van Reenen, 2011. "Management Practices Across Firms and Countries," CEP Discussion Papers dp1109, Centre for Economic Performance, LSE.
    5. Nava Ashraf & Oriana Bandiera & Scott Lee, 2014. "Do-gooders and go-getters: career incentives, selection, and performance in public service delivery," STICERD - Economic Organisation and Public Policy Discussion Papers Series 54, Suntory and Toyota International Centres for Economics and Related Disciplines, LSE.
    6. Catherine Buffington & Lucia Foster & Ron Jarmin & Scott Ohlmacher, 2016. "The Management and Organizational Practices Survey (MOPS): An Overview," Working Papers 16-28, Center for Economic Studies, U.S. Census Bureau.
    7. Lapo Filistrucchi & Jens Prüfer, 2013. "Nonprofits are not alike: The Role of Catholic and Protestant Affiliation," Working Papers - Economics wp2013_07.rdf, Universita' degli Studi di Firenze, Dipartimento di Scienze per l'Economia e l'Impresa.
    8. INUI Tomohiko & KAWASAKI Kazuyasu & ITO Yukiko & MIYAGAWA Tsutomu & MANO Toshiki, 2019. "Management Practices and Labor Productivity in Intensive Care Homes for the Elderly (Japanese)," Discussion Papers (Japanese) 19049, Research Institute of Economy, Trade and Industry (RIETI).
    9. Jamilu Tijjani Baraya & Bello Hamza Abdullahi & Ugochukwu Sylvester Igwenagu, 2020. "The Effect of Humidity and Temperature on the Efficiency of Solar Power Panel Output in Dutsin-Ma Local Government Area (L.G.A), Nigeria," Journal of Asian Scientific Research, Asian Economic and Social Society, vol. 10(1), pages 1-16, January.

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    More about this item

    Keywords

    Impure altruism; Management; Not-for-profits;
    All these keywords.

    JEL classification:

    • H8 - Public Economics - - Miscellaneous Issues
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J45 - Labor and Demographic Economics - - Particular Labor Markets - - - Public Sector Labor Markets
    • L33 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Comparison of Public and Private Enterprise and Nonprofit Institutions; Privatization; Contracting Out

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