Question

Why do good management principles apply equally to businesses and nonprofit organizations?

Answer 1

Good management principles help in :

• Utilization of resources
• Motivation of employees
• Customer satisfaction

All organizations, whether for profit or non profit, use resources and employees.

Non profit organizations have beneficiaries as their customers who need to be satisfied to attain objectives of the organization. Business need to satisfy customers to generate profits.

Customer satisfaction can be maximized through employees and resources.

Hence, it is important for business as well as non profit organizations to use giid management principles for employee motivation and resource utilization.

The 14 Principles of management by Henry Fayol are applicable for both business and non profit organizations.

The principles are:

• Division of work
• Authority and responsibility
• Discipline
• Unity of command
• Unity of direction
• Subordination of individual interest
• Remuneration
• Degree of centralization
• Scalar Chain (Hierarchy)
• Order
• Equity
• Stability of tenure of personnel
• Initiative
• Esprit de corps

These 14 principles of management can be used to manage any organization, whether it is Business for profit , Government or non profit organization