Monarch Management Review-Vol1-Num1-Keller

Monarch Management ReviewManagement Research UGSM-Monarch Business School - Volume 1, Number 1, October 1, 2010www.ugsm-monarch.com

The Monarch Management Review is the scholarly journal of management research and practice from UGSM-Monarch Business School.

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CSR As Mythology - Dr. Jeffrey Henderson 7

EVA: Pros And Cons - Dr. Igor Pustylnick 16

Empirical Testing of Technology Spillovers 37Among Trading Partners - Dr. Fadi Fawaz

The Subjective Field of Ethics: 55A Philosophical Panorama - Dr. Norman Madarasz

The Value Added of the Human Resource Function 80of the Enterprise- Dr. Ali Mabrouk

Comparing The Five Factors of Production In Southeast 25Wisconsin - Dr. Gary Keller

Research& Review

FeaturedArticle

The Monarch Management Review 1

From The Editor ............................................................................................................................................ 2New Researcher Contribution Program ............................................................................................ 3Abstracts ............................................................................................................................................ 4

ArticlesCSR As Mythologyby Dr. Jeffrey Henderson ................................................................................................................................. 7

EVA: Pros And Consby Dr. Igor Pustylnick ....................................................................................................................................... 16

Empirical Testing of Technology Spillovers Among Trading Partnersby Dr. Fadi Fawaz ........................................................................................................................................... 37

The Subjective Field of Ethics: A Philosophical Panoramaby Dr. Norman Madarasz ................................................................................................................................. 55

The Value Added of the Human Resource Function of the Enterpriseby Dr. Aki Mabrouk ......................................................................................................................................... 80

Featured Article - Exemplary Contribution Comparing The Five factors of Production of For-Profit Firms And Not-For-Profit Organizations in Southeast Wisconsin

by Dr. Gary Keller ............................................................................................................................................ 25

Editorial Policy ............................................................................................................................................. 103

The Monarch Management ReviewVolume 1, Number 1 - October 1, 2010

Contents

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“Senior Executives often include a slide of Maslow’s hierarchy in their presentations. They know that employees will find fulfillment only if

they’ve been given the chance to exercise their higher order capabilities --- initiative, imagination, and passion.”

! ! ! ! ! ! Management Guru - Gary Hamel


The Monarch Management ReviewVolume 1, Number 1 - October 1, 2010

Abstracts

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CSR As Mythology - Dr. Jeffrey Henderson

In “CSR As Mythology” author, Dr. Jeffrey Henderson, brings to the foreground several issues existing within the state of affairs of CSR study that force a re-evaluation of the efforts produced by academics and scholars within the domain.

Principally, the issue that academics since the early 1950s have felt the need to take a secular view of an inherently moral discourse is shown to have yielded sparse advances in the field of business in society literature up to present day. Coupled with the application of adherence to anachronistic social myths the domain of CSR study has been stripped of its soul by those very people charged with its livelihood. This fact is illustrated by Dr. Henderson to be the limiting factor behind the study of CSR and the primary reason why many investigators claim that the domain of CSR study is presently bankrupt.

Within the article, Dr. Henderson reviews the contributions of Dr. Joseph Campbell and his theories of mythos as applied to the domain of CSR studies. The premise is addressed that true social change will not take place until society replaces the anachronistic archetypical myths that reinforce the orientation of conflict based economic systems for those of a more cooperative form. Inspiration for change can be found in the timeless writings of major figures such as management Guru Peter Drucker who is shown to have taken a homo-centric view of the practice of management, as compared to the often cited writings of Milton Freidman who champions the profit-centered view that tends to deny corporate social responsibility.

EVA: Pros And Cons - Dr. Igor Pustylnick

EVA is a proprietary analysis tool trademarked by Stern Stewart. In the recent years many consulting companies attempt to use EVA for the evaluation of the company performance. This short paper discusses pros and cons of using EVA and gives the reader an idea of when and where the use of EVA makes the most sense.

Comparing The Five Factors Of Production Of For Profit Firms And Not For Profit Organizations In Southeast Wisconsin - Dr. Gary Keller

Assessing and explaining how corporate leaders utilize the factors of production at their disposal has been researched and debated traditionally by scholars but more recently the popular media. Over the centuries numerous economic and management theories have been proposed to resolve why some companies with equal access to labor, capital, land and ideas have succeeded while others collapsed. Traditionally, examinations of how managers classify and utilize the factors of production have centered on the private (i.e. for-profit) sector. However, on a global basis not-for-profit organizations (NPOs) or non-governmental organizations (NGOs) are Vo

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making an increasingly important contribution to their national economies. For example, in the United States in 2007 there were 1,569,572 tax-exempt organizations accounting for 8.11% of all wages and salaries paid with $2.6 trillion in total assets (National Center for Charitable Statistics, 2010).

This study compares and contrasts how managers in the private and public sectors located in two counties in southeast Wisconsin ranked the factors of production, defined as: financial resources, employees, management practices, materials, and technology. The data for this research project was derived from two studies designed to correlate firm/organizational management practices and economic outcomes of for-profit (Keller 2009) and not-for-profit firms (Keller, 2010) located in two counties located in the state of Wisconsin (USA) Racine and Kenosha.

Empirical Testing of Technology Spillovers Among Trading Partners - Dr. Fadi Fawaz

Previous literature suggests that trade contributes to knowledge and technology spillovers among trading partners. Using panel data and country-specific fixed effects, we show that the technology of a country is explained by existing technology of its major trading partners. We build an endogenous growth model for OECD countries for the 1960-2000 period; we draw the residuals to measure the Total Factor Productivity (TFP) of each country. Then using spatial econometrics, we regress the TFP of each country on previous TFP of its major trading partners. In addition, we run a Random Coefficient Model, to let this relationship vary randomly by country. Finally, we run the endogenous growth model again, but now it includes the Spatial lag term as an explanatory variable.

The Subjective Field of Ethics: A philosophical Panorama - Dr. Norman Madarasz

Most approaches of ethics in disciplines other than philosophy do not tend to emphasize the singular dimension in which it acquires its binding force and consequential implications. This dimension is the field of the subject. Subjectivity today is a vast concern in the social sciences. Most models of subjectivity stipulate the existence of at least a minimal concept of mind, i.e. of an interior field in which language, perception, intentionality and higher order inferences merge into synthesized experience. Often this mental synthesis projects a purpose that then translates into action. Inevitably, when one contemplates the field of the subjective conditions behind ethical conduct, one considers the philosophical models at the origin of the paradigms prevailing in the contemporary epistemological field. Our aim will be to distinguish some of the main paradigms of subjectivity generally encountered in ethics.

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Volume 1, Number 1 - October 1, 2010Abstracts

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The Value Added of the Human Resource Function of the Enterprise: Dr. Ali Mabrouk

HRM forms one of the most significant areas in determinig the success of the enterprise. A number of studies have noted the importance of HRM activities in the success or failure of a company, where business survival is directly correlated with the HRM function. People are increasingly being seen as the most critical asset of a company.

The strategic role attributed to the HRM department demands that it should be well managed in order to get the best out of the organization. Managing the human resource department demands measuring the performance of that department. HRM measurements transform human resources capabilities into measurable strategic value-add items that are then made transparent to the organization in order to improve connection with leadership across the company. In order to demonstrate the added value of HRM to the entire company, several possibilities have to be taken into consideration. In this article Dr. Mabrouk takes the reader through a review of these methodologies which include: measurement, linking, aligning of employees and the use of the HR balanced scorecard.

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Volume 1, Number 1 - October 1, 2010Abstracts

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For Profit Perspective

Since the commencement of the industrial economy and its evolution into the information age, corporate leaders have searched for a succinct set of guiding principles that can both direct and measure firm performance.

Prior to the Industrial Revolution (1750) the typical farmer or artisan in Europe was not much better off than their ancestors dating back to ancient Rome or Greece; however after the Industrial Revolution that situation changed dramatically (Hubbard, 2006). With the advent of factories and dramatic increases in productivity the scale of coordinating the operations of large enterprises became more difficult. With little historical precedent or academic resources to draw upon, corporate leaders groped for solutions

to efficiently manage their enterprises in a new competitive environment.

As the American economy continued its colossal growth in the later part of the twentieth century a variety of new management theories grew in popularity to systematize the efficiency and competitiveness of a firm. A variety of management theories developed over a 100 year period ranging from Frederick W. Taylor, The Principles of Scientific Management (1911) to W. Edwards Deming, Out of the Crisis (1986) to Robert S. Kaplan and David P. Norton, The Balanced Scorecard (1996) to many pop business culture fads in recent years. The chief goal of these efforts was to secure the secret ingredient(s) of commercial success. Furnham (2005) c a t a l o g u e d 2 4 c o n t e m p o r a r y management developments (1950 – 2000).

Comparing The Five Factors of Production in Southeast Wisconsinby Dr. Gary Keller

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Dr. Gary Keller holds the position of Professor of Management Studies at UGSM-Monarch Business School. He also holds the position of tenured Associate Professor at Cardinal Stritch University in Milwaukee, Wisconsin. Dr. Keller holds a Ph.D. from Northcentral University as well as a Master in Management Science from Cardinal Stritch and a Master in History from the University of Wisconsin. Dr. Keller teaches global business policy and strategic management. The recipient of the Teacher of the Year Award for Region 4 from ACBSP he has taught around the world and has supervised several graduate students through advanced thesis work. He is also a consultant to industry and non-profit organizations.

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http://en.wikipedia.org/wiki/Robert_S._Kaplan

http://en.wikipedia.org/wiki/Robert_S._Kaplan

http://en.wikipedia.org/w/index.php?title=David_P._Norton&action=edit&redlink=1

http://en.wikipedia.org/w/index.php?title=David_P._Norton&action=edit&redlink=1


Hubbard (2006) offered an intriguing insight into the mystery of why some enterprises consistently perform at very high levels and others do not. The key to unraveling the performance/productivi ty puzzle is assessing corporate competitiveness on a micro economic level or as Alfred Chandler Jr. and David Landes asserted “Through the microeconomic perspective, management is, at heart, a choice made by each firm.” (p. 30).

An influential study by Bloom and Van Reenen (2006) of more than 700 manufacturing companies in Great Britain, France, Germany and the United States noted that the approach taken by firm leaders was the chief management influence on corporate performance. Those companies with superior management were associated with higher productivity, return on equity and market capitalization. Bloom, Van Reenen, Dorgan and Dowdy (2007) performed a larger research project which involved more than 4,000 American, European and Asian companies. Bloom et al. (2007) investigations verified Bloom and Van R e e n e n ’ s 2 0 0 6 f i n d i n g s . T h e conclusions from the 2007 study indicated that there was no single management practice that advanced a company’s performance. Rather, it was the average score of 18 management practices grouped into “four areas: operations (three practices), monitoring (five practices), targets (five practices),

and incentives (five practices)” (p. 1361) when weighed against to a corporation’s financial achievements that gave the most precise gauge of attainment.

Not-For-Profit Perspective

The techniques that assess the e f f i c a c y o f a n e n t e r p r i s e a r e multifaceted. The for-profit sector has adopted a variety of analytical fiscal and other measurements that have proven over time to be serviceable enough to gauge a firm’s performance. However, judging the effectiveness of not-for-profit organizations (NPO) has always been difficult for several reasons.

One can ask the question that while a financial analyst may compare two medium sized steel fabricators how does one reasonably appraise two historical societies or food pantries?

Another issue that makes evaluations intricate is the NPO sector’s ability to rapidly respond to changes in society. Consider new social concerns (ex. AIDS, teen pregnancy, childhood obesity, urban ecology, homelessness

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While financial rating agencies can compare similar for-profit businesses, it is very complicated to accurately evaluate two NPOs with similar missions.


and etc.) that spawn the creation of new NPOs. As the amount of NPOs multiplied to mitigate legacy and new social problems funders have been faced with the problem of determining which NPO to support. As mentioned previously, sorting out the issue as to w h i c h N P O s h o u l d b e f u n d e d necessitated funders seeking ways to measure which NPO could deliver the best results. The existing model to assess operating performance and therefore by default a methodology to compare NPOs already existed in the for-profit sector, mainly accounting and financial standards. Grant applications began to take on the appearance of a financial institution’s loan application. As a result the leadership of innovative NPOs began the process of learning and utilizing many for-profit managerial practices. However, the question remains as to which managerial practice(s) was most applicable in the not-for-profit sector given the plethora of management theories as noted above by Furnham (2005).

During the last 40 years many of the best known management theorists transformed their management models derived from usage in the for-profit sector and modified them for usage by NPOs. Examples of this trend include McConkey (1973) Management by Objectives (MBO); Deming (1986) Out of the Crisis TQM and many of its offshoots such as ISO, Six Sigma and etc.; Drucker (1990) Managing the Non

Profit Organization; Buckmaster (1999) Benchmarking; Kaplan (2001) the Balanced Scorecard; Sanger (2008) a n d F i e l d ( 2 0 0 9 ) D a t a D r i v e Performance Measurement and Lewis (2003) a fusion of all of the evolving management theories. The application of critical success factors (CSF) have been added to the repertoire of considerations as NPOs conduct strategic p lanning. Sr idhar and Nagabhushanam (2008) neatly divided NPO success fac to rs in to two components, hard and soft. The soft critical success factors include: vision, missionary zeal, distinct culture, leadership, value delivery, shared values, succession and unique space. The hard factors were: structure, size, objectives, focus, targets, funding, professionalism and government support (p. 20).

Regrettably many for-profi t management theories did not achieve the same results in the not-for-profit sector (Rojas, 2000). Speckbacher (2003) claimed that one reason private sector concepts failed in the NPO sector was because the economic assumptions (profit and shareholder wealth) that drive for-profit firms was contradictory to the missions of NPOs. For instance, employing disabled i n d i v i d u a l s t o w o r k o n l i g h t manufacturing assignments may not result in the highest output per person hour compared to an automated solution; however, employing disabled


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persons by an NPO achieves two goals; providing meaningful work and skil ls to disabled persons while simultaneously diversifying an NPO’s revenue stream. Herman and Renz (2004) offered that “finding the right fit among (management) practices is more important than doing things the “right way” (p. 694). Herman and Renz (2008) also performed a general l i t e r a t u r e r e v i e w o f n o n p r o f i t organizational effectiveness and concluded that it was doubtful that there were universally applicable best practices for all NPO boards and management. Liu, Cheng, Mingers, Qi, and Meng (2010) claimed that the methods some NPOs currently use to generate performance indicators have limitations, especially when applied to public sector organizations.

Another problem of evaluating the affect that management practices have on organizational performance is the absence of an exact taxonomy of performance. Ritchie and Kolodinsky (2003) asserted that there was an absence of concurrence regarding how to measure the financial performance and overall evaluation of NPOs. Folan, Browne and Jagdev (2007) claimed that there is no accurate definition of per fo rmance in the contex t o f management science and as a consequence financial measurements are the most accepted predictors of managerial quality. Young (2007) stated

t h a t w h i l e p r o f i t a b i l i t y i s a n unambiguous criterion for profit making ventures, no analogous standard exists for NPOs. Considering that NPOs legal requirement is to not make a profit, the generation of consistent excess revenue may not be a positive sign given an NPO’s legal (501 (c) (3) tax exempt status.

Acco rd ing to t he In te rna l Revenue Service the definition of a not-for-profit corporation is “An organization may qualify for exemption from federal income tax if it is organized and operated exclusively for one or more of the following purposes, religious, charitable, scientific, testing for public safety, literary and educational” (IRS, 2010). There are four other qualifying organizational types; social welfare organizations; labor unions, farm bureaus and others; business leagues; and social and recreational clubs. To differentiate the many kinds of 501 (c) (3) organizations a categorization scheme was created, the National Taxonomy of Exempt Entities (NTEE). The NTEE is used by the IRS and the National Center for Charitable Statistics to categorize nonprofit organizations according to their missions (NCCS, 2010).

One of the significant indications derived from the literature review was the difficulty that economists and management theorists experience in


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explaining the role that the X factor (management practices) has on evaluating an enterprise’s economic p e r f o r m a n c e . Q u a n t i t a t i v e measurements such as financial ratios, employee count, market size, access to suppliers and other economic features are relatively easy to count.

Accounting for the affect of management has baffled academicians regarding their assessments of for-profit firms and now as NPOs adopt management practices similar to their for-profit counterparts, the issue has been passed to the NGO sector as well.

Methodology

The problem addressed in this study was to determine what, if any, differences existed between the way that for-profit corporations and NPOs ranked the f ive key factors o f production.

This research study had a well-de f i ned popu la t i on . Sou theas t Wisconsin is composed of a diverse population of 358,097 persons and more than 20,648 companies (U.S. Census Bureau, 2008) including several Fortune 500 firms (e.g., Emerson Electr ic ( Insinkerator), Modine, Snap-on Tools, a number of large privately held companies (e.g., S.C. Johnson Company, Jockey International, Chrysler) and some firms owned by foreign corporations (CHN Global, Bombardier, IRIS USA). The counties also have many community based organizations seeking to improve the lives of the residents via the provision of numerous social, educational and cultural services.

The data for this research project was derived from two studies. One research project (Keller, 2009) was conducted on for-profit corporations in late 2008 and the second (Keller, 2010) conducted on NPOs in 2010. Both research projects obtained data from a survey composed of 14 general organization information questions and 18 questions about the company’s or organization’s management practices. Question 15 in both surveys asked the CEO/Executive Director to rank (1=low, 5=high) order the following five “factors of production” (Parkin, 2005, p. 3) that were vital to their enterprise’s success: f inancial resources, employees,


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However, merely counting objects and analyzing data does not explain how corporate leaders make decisions to utilize the factors of production under their control, lead their employees or plan for the future.


management practices, materials, and technology.

On October 23, 2008 a survey instrument was sent to the CEOs of 682 qualified firms in southeast, Wisconsin. The qualified companies (682) included firms with 49 or more e m p l o y e e s d e r i v e d f r o m t h e Unemployment Compensation data bases for Racine and Kenosha Counties dated September 2, 2008. The survey instrument was used to sample 100% of the eligible population of 682 firms. The response rate to the mailing of the survey was 54 surveys or a response rate of 7.92%. This rate was considered acceptable for a blind direct mail survey with no built in system for follow-up except for a letter of reminder to the entire population of 682. On February 9, 2010 a survey instrument was sent to the Executive Directors of 100 qualified NPOs in southeast, Wisconsin. The qualified NPOs (100) included those derived from the Unemployment Compensation data bases for Racine and Kenosha Counties. The survey instrument was used to sample 100% of the eligible population of 100 organizations excluding governmental units, schools, health care agencies and colleges/universities. There were 20 valid responses (20% response rate) to the survey. An evaluation of how CEOs or Executive Directors ranked the five factors of product ion ( f inancia l resources, employees, management

practices, materials and technology) that they considered to be vital to corporate/organizational success was revealing. Depicted in Table 1 is the comparison (1=low, 5=high) of the five vital success factors.

Analysis of For-Profits’ Rankings

Most respondents to Keller’s 2008 survey of for-profit firms in southeast Wisconsin indicated that they had adequate access to capital. The importance of financial resources receiving a relatively low grade (number 1 or low) for its significance to the firm’s success may be explained by the response to Question 14 (Does the firm have access to capital?) where 93% of respondents stated they had access to cap i ta l . I n essence respondents may take for granted their ability to secure adequate amounts of cap i ta l t o opera te the i r f i rms . Respondents may take for granted that


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Management practices were selected by for-profit firms as the most vital factor to their enterprises’ success. This high ranking was revealing. Four of the five vital success factors (save for management practices) are the fundamental components that economists use to assess the performance of a firm.


their firm either has accumulated a sufficient amount of saved capital or have relatively easy access to it.

There was agreement regarding the top two secondary vital success

factors (technology and materials). One of the reasons firms graded technology and materials as the top factors may be related to the fact that key business decisions are made at a distant c o r p o r a t e h e a d q u a r t e r s w h i c h


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Table 1: Comparison of 5 Key Factors of Production

For Profit Not-For-Profit

Financial Resources 1 1

Employees 2 4

Management Practices 5 3

Materials 3 5

Technology 4 2

Note: 5 = highest importance, 1 = lowest importanceNote: 5 = highest importance, 1 = lowest importanceNote: 5 = highest importance, 1 = lowest importance

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Financial Res. Employees Mgmt. Practices Materials Technology

For Profit Not-For-Profit

Note: 5 = highest importance, 1 = lowest importance


delegates strategic decisions to local managers for implementation.

The impact of employees on firm per formance rece ived a mixed response from respondents to the study’s survey. Of the respondents ranking employees as vital to the success of their firms, 55% ranked it high (3-5) while a slightly lower number 47% considered employees as being a low success factor for their firms’ success. Clear ly, the ro le that employees play in the performance of f irms in southeast Wisconsin is somewhat split due to the difference in firm ownership.

The final vital success factor that was ranked was technology. Of the respondents ranking technology as vital to the success of their firms, 77% ranked technology high (3-4-5) while 23% considered technology low. R e s p o n d e n t s ’ r a n k i n g s o f t h e importance of materials and technology to their firms’ success was quite high indicating that most firms desire to stay abreast of tools and techniques that will keep the i r f i rms e f f i c i en t and productive.

Analysis of Not-For-Profits’ Rankings

At first glance, the not-for-profit respondents’ ranking of the five key factors of production was somewhat

surprising considering the missions of NPOs. One explanation for the curious ordering of materials being the most important factor of production may reflect the diversity of organizations in the survey sample (from an adult literacy group to a municipal zoo) and a growing trend in NPO agencies, social entrepreneurship. Many NPOs are attempting to generate earned revenue via creation of products/services that provide a new revenue stream to diversify away from dependence on contributions, funding from United Way type funding agencies and fees for services which oftentimes do not fully recover the services’ costs.

The ranking of management practices by respondents as the third most important factor of production is f asc ina t i ng g i ven the s t rong ly significant correlation of management p r a c t i c e s a n d o r g a n i z a t i o n a l performance. One explanation for this


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The obvious explanation for employees ranked as the second most important factor of production reflects the service mission of not-for-profit agencies. To achieve the desired outcomes, people not equipment are the most essential asset a not-for-profit organization can possess.


rank ing may be an inc reas ing managerial skill level and sophistication of not-for-profit corporate leadership.

Technology was ranked as the fourth most important factor of production for not-for-profits in the s u r v e y a n d r e p r e s e n t s t w o transformational developments. One notable need for technology is the revolution in information technology that requires any entity to invest in information age infrastructure (i.e. c o m p u t e r , i n t e r n e t a n d o t h e r communication devices) to conduct daily operations from communications to maintaining institutional operational records to providing client services. The second striking need for technology in a not-for-profit organization is linked to production equipment. Many NPOs have become cost-effective providers of services (ex. packaging, light assembly, maintenance services and etc. that have been outsourced by for-profit firms. Therefore the need for equipment and associated transportation assets (trucks, vans, cars, buses and etc.) has become vital to those NPOs who desire to pursue revenue via social enterprise activities.

Finally and most surprisingly, capital was ranked last. While most not-for-profits struggle to find sufficient funding to provide services, it would appear from the data collected within the study that the management of the

organizations considered the delivery of service as their primary focus rather than merely seeking funds as one of the most time consuming and resource intense activities. This phenomenon may be a result of the inclusion of talented for-profit leaders serving on the boards of directors of NPOs and the growing trend of NPO executives securing management degrees and ongoing training.

Implications

The problem addressed in this study was to determine what, if any, differences existed between the way that for-profit corporations and NPOs ranked the f ive key factors o f production that were vital to their enterprise’s performance. For-profit firms ranked the five factors by way of importance as: management practices, technology, materials, employees, and financial resources as most vital. Not-for-profit organizations provided the


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There were disparities between the rankings of the for-profit businesses and NPOs with the exception of one factor, financial resources. It could be argued that enterprises in both sectors view financial resources as an outcome rather than a driving force of corporate performance.


same ranking as: materials, employees, management practices, technology and financial resources as their most critical to their organization’s performance.

Another explanation may be attributed to the relative ease in which respondents to the survey believe they have access to capital whether it is from a financial institution, corporate parent, internal fiscal sources or government/private contributors (in the case of NPOs). A final justification for both groups agreement regarding the low ranking of financial resources may be an abundance of confidence in their products/services and therefore assurance tha t cus tomers and therefore revenue will continue to flow thereby insuring the generation and/or ability to secure sufficient financial resources.

Another important distinction between the two groups was their selection of the top factor of production. In the case of the for-profit group, management practices were selected as the most vital factor of production. One reason for this outcome may lie in the fact that privately owned firms composed the largest percentage (87%) of participants in the survey. As many privately owned businesses are held and managed by family members, the pressure to deliver results is critical due to the fact that there is little margin for failure as a corporate parent cannot absorb consistent losses, not to

mention the desire to please oneself or their family members.

The NPOs selected materials as their most vital factor of production. As noted previously, a trend in NPOs is to diversify their revenue sources. One method to achieve that goal is to turn toward social entrepreneurial ventures such as becoming a convenient local outsource service for low skilled, labor intensive activities such as: outdoor ma in tenance , packag ing , l i gh t assembly. These activities in turn create the requirement for business operations to address the ability to satisfy the need to obtain materials ranging from lawn mowers and fertilizer to material handling and transportation equipment to access to food to stock food pantries and meals for homeless people and needy individuals. Another reason for the ranking of materials as the number one factor of production among NPOs may be a shift in the nature of contemporary NPOs from being focused primarily on either services or distribution of tangible items to a more diversified mixture of both products and services.

It should be noted that both studies were conducted during one of the most di ff icul t recessions in American history. The analysis of the rankings of the factors of production by both for-profit and NPOs may have been influenced by the need to solely su rv i ve . Bo th g roups repor ted


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2. KA55H*+E+<$%+i<$+>''$'$*+N*+V5&?<$*+L*+V5(%]*+N"*+/77_*+N@A]*+qI<$<?'H'$4+;&<34B3'+<$%+;&5%@34BZB4]R+UD]+4D']+H<44'&r*+I<$<?'H'$4+I<44'&)*+I3bB$)']+M+=5H;<$]+<$%+4D'+='$4&'+Q5&+,35$5HB3+>')'<&3D"

3. KA55H*+E+<$%+i<$+>''$'$*+N*+/77_*+E5Z'H6'&*+I'<)@&B$?+<$%+'c;A<B$B$?+H<$<?'H'$4+;&<34B3')+<3&5))+dB&H)+<$%+35@$4&B')"+l@<&4'&A]+N5@&$<A+5Q+,35$5HB3)*+Z5A"+!//*+$5"+Y*+;;"+!0S!1!Y78"

4. K@3GH<)4'&*+E*+!OOO*+K'$3DH<&GB$?+<)+<+A'<&$B$?+455A+B$+Z5A@$4<&]+$5$1;&5dB4+5&?<$BJ<4B5$)"+#$+'c;A5&<45&]+)4@%]"+T@6AB3+I<$<?'H'$4+.!Y^!^^_`9*+Z5A"+!*+$5"+Y*+;;"+^701^!^"

5. V'HB$?*+U,*+!O8^*+2@4+5Q+4D'+3&B)B)R+m@<AB4]*+;&5%@34BZB4]*+<$%+35H;'4B4BZ'+;5)B4B5$"+E'(+F5&GR+=<H6&B%?'+\$BZ'&)B4]+T&'))"

6. V&@3G'&*+T*+!OO7*+I<$<?B$?+4D'+$5$1;&5dB4+5&?<$BJ<4B5$k+;&<34B3')+<$%+;&B$3B;A')"+E'(+F5&G*+EFR+X<&;'&=5AAB$)"

7. PB'A%*+=*+/77O*+T'&Q5&H<$3'+H<$<?'H'$4"+PB$<$3B<A+I<$<?'H'$4+.!Y_!O!8S9*+;;"+Y71Y!"8. P5A<$*+T*+K&5($'*+N*+M+N<?%'Z*+X*+/77_*+L';4'H6'&*+T'&Q5&H<$3'R+[4)+H'<$B$?+<$%+35$4'$4+Q5&+

45%<]a)+6@)B$'))+&')'<&3D"+=5H;@4'&)+B$+[$%@)4&]*+Z5A"+S8*+$5"+_*+;;"+^7S1^/7"9. P@&$D<H*+#*+/77S*+CD'+;)]3D5A5?]+5Q+6'D<ZB5@&+<4+(5&G"+-5$%5$R+T)]3D5A5?]+T&'))"10. X'&H<$*+>*+M+>'$J*+V*+/77Y*+V5B$?+4DB$?)+&B?D4R+,QQ'34BZ'$'))+B$+A53<A+$5$;&5dB4+5&?<$BJ<4B5$)*+<+

;<$'A+)4@%]"+T@6AB3+#%HB$B)4&<4B5$+>'ZB'(*+Z5A"+^Y*+$5"+^*+;;"+^OY1_7Y"11. X'&H<$*+>*+M+>'$J*+V*+/778*+#%Z<$3B$?+$5$;&5dB4+5&?<$BJ<4B5$<A+'QQ'34BZ'$'))+&')'<&3D+<$%+

4D'5&]R+EB$'+4D')')"+E5$;&5dB4+I<$<?'H'$4+M+-'<%'&)DB;*+Z5A"+!8*+$5"+Y*+;;"+0OO1Y!S"12. X@66<&%*+:*+/77^*+CD'+;&5%@34BZB4]+&B%%A'"+L4&<4'?]+<$%+K@)B$'))*+Z5A"+YS*+;;"+/8100"13. b<;A<$*+>*+/77!*+L4&<4'?B3+;'&Q5&H<$3'+H'<)@&'H'$4+<$%+H<$<?'H'$4+B$+$5$;&5dB4+

5&?<$BJ<4B5$)"+E5$;&5dB4+I<$<?'H'$4+M+-'<%'&)DB;*+!!.09*+0SY"14. b'AA'&*+:*+/77O*+V5+H<$<?'H'$4+;&<34B3')+<QQ'34+4D'+'35$5HB3+;'&Q5&H<$3'+5Q+dB&H)+A53<4'%+B$+

)5@4D'<)4+UB)35$)B$*+\L#j+[$4'&$<4B5$<A+>'ZB'(+5Q+K@)B$'))+>')'<&3D+T<;'&)*+Z5A"+S*+$5"+^*+;;"+_O18O"+

15. b'AA'&*+:"P"+./7!79"+#))'))B$?+4D'+I<$<?'H'$4+T&<34B3')+5Q+E541Q5&1T&5dB4+=5&;5&<4B5$)+B$+L5@4D'<)4+UB)35$)B$+<$%+CD'B&+#QQ'34)+5$+2&?<$BJ<4B5$<A+T'&Q5&H<$3'*+:A56<A+N5@&$<A+5Q+I<$<?'H'$4+<$%+K@)B$'))+>')'<&3D*+!7+.S9+O/1O8"+[LLER+7O_S1S8S0"+

16. -'(B)*+V*+/770*+CD'5&BJB$?+4D'+5&?<$BJ<4B5$+<$%+H<$<?'H'$4+5Q+$5$1?5Z'&$H'$4<A+%'Z'A5;H'$4+5&?<$BJ<4B5$)"+T@6AB3+I<$<?'H'$4+>'ZB'(*+Z5A"+S*+$5"+0*+;;"+0/S10YY"

17. -B@*+U"*+=D'$?*+s"*+IB$?'&)*+N"*+lB*+-"*+M+I'$?*+U"+./7!79"+CD'+0,+H'4D5%5A5?]+Q5&+%'Z'A5;B$?+;'&Q5&H<$3'+B$%B3<45&)+Q5&+;@6AB3+)'345&+5&?<$BJ<4B5$)"+T@6AB3+I5$']+M+I<$<?'H'$4*+07.S9*+07S10!/"+%5BR!7"!787W7OSY7O^/"/7!7"S7O!87"

18. I3=5$G']*+V+.!O_09"+#;;A]B$?+H<$<?'H'$4+6]+56h'34BZ')+45+$5$1;&5dB4+5&?<$BJ<4B5$)"+L#I+#%Z<$3'%+I<$<?'H'$4+N5@&$<A+.770^787S9*+Z5A"+08*+$5"+!*+;"+!7"

19. E<4B5$<A+='$4'&+Q5&+=D<&B4<6A'+L4<4B)4B3)*+/7!7*+l@B3G+Q<34)+<65@4+$5$;&5dB4)"+>'4&B'Z'%+I<]+!*+/7!7*+Q&5H+D44;RWW$33)"@&6<$"5&?W)4<4B)4B3)Wm@B3GQ<34)"3QH

20. E<4B5$<A+='$4'&+Q5&+=D<&B4<6A'+L4<4B)4B3)*+/7!7*+E<4B5$<A+4<c5$5H]+5Q+'c'H;4+'$4B4B')"+>'4&B'Z'%+I<]+/*+/7!7+Q&5H+D44;RWW$33)"@&6<$"5&?W3A<))BdB3<4B5$WEC,,"3QH

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employee growth was flat to declining. Therefore, a need exists to follow-up this study on an annual basis to

determine if the rankings change over time.

http://nccs.urban.org/statistics/quickfacts.cfm

http://nccs.urban.org/statistics/quickfacts.cfm



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21. T<&GB$*+I"*+/77S9"+,35$5HB3)+._4D+'%"9"+K5)45$R+T'<&)5$+,%@3<4B5$"22. >B43DB'*+U*+M+b5A5%B$)G]*+>*+/770*+E5$;&5dB4+5&?<$BJ<4B5$+dB$<$3B<A+;'&Q5&H<$3'+H'<)@&'H'$4R+#$+

'Z<A@<4B5$+5Q+$'(+<$%+'cB)4B$?+dB$<$3B<A+;'&Q5&H<$3'+H'<)@&')"+E5$;&5dB4+I<$<?'H'$4+M+-'<%'&)DB;*+Z5A"+!0*+$5"+Y*+;"+0^_"

23. >5h<)*+>*+/777*+#+&'ZB'(+5Q+H5%'A)+Q5&+H'<)@&B$?+5&?<$BJ<4B5$<A+'QQ'34BZ'$'))+<H5$?+Q5&1;&5dB4+<$%+$5$;&5dB4+H<$<?'&)"+E5$;&5dB4+I<$<?'H'$4+M+-'<%'&)DB;*+!!.!9*+O_"

24. L<$?'&*+I*+/778*+P&5H+I'<)@&'H'$4+45+H<$<?'H'$4R+K&'<GB$?+4D&5@?D+4D'+6<&&B'&)+45+)4<4'+<$%+A53<A+;'&Q5&H<$3'"+T@6AB3+#%HB$B)4&<4B5$+>'ZB'(*+Z5A"+^8*+$5"+^*+;;"+L_71L8S"

25. L&B%D<&*+b"+M+E<?<6D@)D<$<H*+I"+./7789"+E:2)+B$+[$%B<1+@$Bm@'$'))+<$%+3&B4B3<A+)@33'))+Q<345&)*+&')@A4)+5Q+<$+P:V"+iB)B5$+.7O_//^/O9*+!/./9*+!S1/!"+

26. L;'3G6<3D'&*+:*+/770*+CD'+'35$5HB3)+5Q+;'&Q5&H<$3'+H<$<?'H'$4+B$+$5$;&5dB4+5&?<$BJ<4B5$)"+E5$;&5dB4+I<$<?'H'$4+M+-'<%'&)DB;*+Z5A"+!0*+$5"+0*+;"+/^_"

27. F5@$?*+V*+/77_*+PB$<$3B$?+$5$;&5dB4)*+;@44B$?+4D'5&]+B$45+;&<34B3'"+-<$D<H*+IVR+#A4<+IB&<+T&'))"28.

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Citation: This article may be cited as:

Keller, G. “Comparing The Five Factors of Production of For Profit Firms And Not For Profit Organizations in Southeast Wisconsin”, The Monarch Management Review, UGSM-Monarch Business School, Vol. 1, Num. 1, Oct. 2010, pp. 25-36

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