The Behavior of Organizations

Abstract

In this chapter we offer a theory that can explain the similarities and differences in the managerial priorities and tactics of charities and for-profit providers. We do not attribute much importance to legal form but rather focus on conditions in the organizations’ niches. The chapter is divided into three sections. The first reviews research that examines the different outputs and outcomes of charities and for-profits. Second, we review theories and research proffered by the sociology and management literatures to gain perspective on what might explain managerial priorities and tactics. Finally, we use recent advances in niche theory to shed light on why many charities have priorities and tactics similar to for-profits while others remain quite distinct. In the course of this exercise we hope to introduce a framework for studying organizations—both for-profits and charities—that will prove useful for students of macro-organizational behavior.