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Unit 13: Management Control of Service Organisation

1. The mission of non-profits Notes
2. Stakeholders’ goals
3. Key success factors
4. Performance measures

5. Infrastructure
6. Management style and culture
7. Formal Control Process
8. Communication systems

9. Rewards
10. Informal control process.
1. The mission of Non-profits: Non-profits are organised so as to pursue and accomplish a
mission i.e., its purpose. Drucker emphasizes that a mission statement should contain the
following three elements:
(i) The opportunities that the organization can exploit or needs that it can meet,

(ii) The strengths of the organisation
(iii) What members of the organisation believe in?
2. Stakeholder’s goal: In a non-profit organisation, there often is no dominant stakeholder
but a multiplicity of key stakeholders e.g. a school board, a church or a childcare agency
has multiple key stakeholders.
Boards or Trustees are often major stakeholders because they are the key donors and
contributors of time and effort. The board represents a real opportunity for these institutions
so long as they focus on achieving the mission of the institution and stay out of operational
details. The purpose of the board is to guide and direct the mission of the institution by
evaluating major strategies, to select the CEO; they provide and secure funds, to provide
outside professional perspective on governance and to make CEO accountable for the
accomplishment of the mission.

In addition to the board, each non-profit has mission stakeholders to serve: to save the
lost, to heal the sick, to protect abused children, to educate children and so on. In addition,
there are often external parties who do not participate directly in the affairs of the institution
that have a vital interest in the institution, such as, the public in the work of a school
district.
Many employees and volunteers in a non-profit organisation participate because they
believe in the mission of the organisation. But they believe in different aspects of the
organisation.

Example: Physicians look upon hospitals as a place to provide service for patients and
they want beds and other services to be available for the patients, regardless of the cost.
They are not concerned about hospital finances and they resist contractual arrangements
that interfere with their practises and as a result there is often a conflict between hospital
administrators and the physicians employed at the hospital.

In formulating stakeholder’s goals, it is necessary to integrate all of the stakeholder’s
goals around the missions of the organization.

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