Management control systems in nonprofit organizations will probably never be as highly developed as in profit-seeking firms.Why?
A)There are fewer discretionary fixed costs in nonprofit organizations.
B)Organizational goals are clearer in nonprofit organizations.
C)Measurement of goals is easier in nonprofit organizations.
D)The motivation and incentives of employees in nonprofit organizations differ from those of employees in profit-seeking firms.

Question

Quizplus · Accepted Answer

Nonprofit organizations typically have non-financial or intrinsic motivation for employees, whereas profit-seeking firms usually have financial or extrinsic motivation. This fundamental difference in motivation makes it more difficult to design and implement management control systems that are as effective in nonprofit organizations as in profit-seeking firms. Furthermore, some of the metrics and measures that are commonly used in profit-seeking firms, such as profit margins and return on investment, are not relevant or applicable in nonprofit organizations, which further limits the development of management control systems in these organizations.

Management Control Systems in Nonprofit Organizations Will Probably Never Be