Is There Really a Difference in Leadership Styles in Nonprofit and for Profit Organizations

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Is There Really A Difference in Leadership Styles in Nonprofit and For-Profit Organizations?

Submitted By:
Dietrice Watkins
Strayer University

For:
Professor Gerry Patnode

Date

June 21, 2008

Abstract

Academic researchers have not found it important to attempt to complete studies based on leadership in non-profit organizations. A main problem that arises is that people tend to confuse the terms leadership and management with each other. Also leadership researchers tend to associate leadership in non-profit organizations with general research about leadership.

These two problems result in a minimum amount of research done to support studies about leadership in non-profit organizations. This lack of study about leadership in non-profit versus for profit can tend to make people believe that there are no differences between the two. This study will attempt to differentiate between the two based on definitions, characteristics, tax laws, funding sources, organizational structure, incentives, leadership styles and human resources. This study will include semi structured interviews by the CEO of Guadenzia, a for profit organization in Baltimore City that provides counseling services for at risk youth in Northwest Baltimore and The Director of Northwest Baltimore Youth Services, Inc., a non-profit organization that also provides counseling services to at risk youth in Northwest Baltimore. This information will then be examined in regards to their similarities and differences.

Statement of Problem

Although there have been an unlimited amount of research done in reference to leadership styles in for profit organizations, there have been a lack of research done in the non-profit sector in regards to leadership. There have also been few research studies that address the differences in management process between non-profit organizations and for profit organizations. Research Questions

1. Is there really a difference in leadership styles between non-profit and for profit organizations? 2. Is the management process different in a non-profit organization than a for profit organization?

Hypothesis

1. When it comes to problem solving, non-profit organizations is less concerned with the cost of a solution than a for profit organization. 2. In non-profit organizations they tend to find the “best solution” versus the “best cost solution” in the for profit sector. 3. It takes longer to solve a problem in a non-profit organization than in a for profit organization.

Statement of Limitations

This research will not attempt to prove that one form of business is better than the other, nor will it make any recommendations on what business to be part of or start. This research will only shed light on the findings that were already researched. This research will be limited to the study of the organizational structure and funding base of Northwest Baltimore Youth Services, Inc. and Guadenzia, Inc. Other limitations will be not examining all non-profit organizations and for profit organizations, just one of each.

Definitions

Non-profit organization- According to Webster online dictionary and other online sources, a non- profit organization is a legally formed organization that is not conducted or maintained for the purpose of making a profit or whose objective is to support or engage in activities of public or private interest without any commercial or monetary profit. For-profit organization- According to Webster online dictionary and other online sources, for profit is an organization that is conducted or maintained for the purpose of making a gain in business activities for the benefit of the owners of the business. Leadership-According to Webster online dictionary and other online sources, leadership, is the capacity to lead, the act or an instance of leading, or directing a group of people to strive towards...
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