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The economics of performance management in nonprofit organizations
Author(s) -
Speckbacher Gerhard
Publication year - 2003
Publication title -
nonprofit management and leadership
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.844
H-Index - 54
eISSN - 1542-7854
pISSN - 1048-6682
DOI - 10.1002/nml.15
Subject(s) - nonprofit sector , private sector , business , context (archaeology) , profit (economics) , public relations , economics , microeconomics , political science , paleontology , biology , economic growth
This article analyzes whether and how private‐sector notions of performance management apply tononprofit organizations. To this end the author shows that each concept of performance management used in theprivate sector is based on a specific economic theory of the firm and its environment. Before transferringconcepts and tools derived from a certain model of the firm and its environment to nonprofit organizations, onemust determine whether the assumptions underlying this model are also adequate for nonprofit organizations.Otherwise, one must first adjust those assumptions and analyze whether the derived concepts and tools are stillmeaningful in the new context; if not, one must determine how to modify them accordingly. The analysiselaborates on the differences between for‐profit and nonprofit organizations that are important forapplying performance management concepts. Moreover, the author discusses the practical implications for the useof balanced scorecards in nonprofits.