Question

Question 3 (15 marks) a How might planning in a not-for-profit organization such as the Cancer-Link Society differ from planning in a for-profit organization such as Adidas? b Will the 'planning' function become more or less important to managers in the future? Why?

Answer 1

Answer:

a) To determine the difference in the planning of profit and non profit organization, remember the basic difference i.e the profit earning. Some notable differences are:

1. Human resource: In for-profit companies, employees are always paid-employees while in non-profit most of the time employees are volunteers which are hard to find. These volunteers work only part time, which makes them unable to put more attention towards proper planning. Therefore, It can be said that getting people to work for the organization is more uncertain for the non profit organizations creating difficulty in making proper plans

2. Strategic plan: The basic goal of for-profit company is to earn as much as dividend for the shareholders or owners while the non-profit organizations goal is to collect enough money to keep their mission in running state. For profit companies customers are those who purchase their goods and plans are made to attract them towards their product. For non-profit organization people who donate and people who receive the benefits are the customers. Proper planning to manage this exchange is required.

3.End goal: In for profit organization employees are already motivated by the money they will be getting, but in non profit organization the board may get distracted from the mission they want to achieve. So plans for avoiding such situations have to be the part of the planning. Proper transparency, accountability are given more focus.

b) Planning is and will always be the first step of any successful management. Whether we talk about profit or non profit organization without setting the ultimate goal nothing can ever be achieved and setting the goal is a part of planning.To estimate the level of risk whether because of market change, or any other loss planning is required to manage that risk. To avoid any uncertain situation planning is required. Planning helps the organization in coordinating all its actions and targets towards the end goal. Since the businesses or organizations work in a very uncertain environment there will always be the need for more and more effective planning in present and in the future.