As time progresses, the world, in terms of business is rather contracting. There is growing communication, interaction, and exchange between different parts of the world. Technologies that were once thought of as a far-sighted notion are now being using like household commodities and communication mediums that were once considered luxuries available to few are now necessities needed to prosper. The world is becoming more integrated by the day and countries are becoming more and more dependent on one another in terms of trade and business. The escalating trading between countries in all parts of the world is causing an upward trend in the level of competition as firms to try to succeed in gaining a larger market share. This paper would focus on a situation faced by a not-for-profit organization that is inflicted with external competition from businesses that are aimed at making a profit.
It is now a well-known and widespread phenomenon that the world is a ‘global village’. This means that globalization has become a practical happening and the entire world is somewhat a unified society or community that needs to interact to get on. Most businesses are aimed at making a profit out of what they sell or offer. This is done by selling the goods at a price that is higher than the cost incurred to manufacture or create the product. These businesses are referred to as for-profit organizations. Contrary to these, several not-for-profit organizations aim to provide goods or services either free or at a minimal cost for those people that are in need and are constraint by the financial crisis. The non-profit goals to promote the well-being of the society and its people are often foregone by businesses during their quest for a larger market share and this factor leads to organizations taking over the market and discouraging the not-for-profit organizations from achieving their goals.
Due to the increase in hospital facilities in the town, there has been a substantial decrease in the revenues of the non-profit hospital. Not-for-profits are expected to provide sufficient facilities to the society with the resources that they have but the decrease in the revenues and a forecast of future downfall make it difficult to manage the facilities and provide the optimal services in the same amount of finances.
The facilities of the hospital are now wearing down and they need to be replaced with new equipment and facilities. However, there is less revenue to be invested back and there need to be decisions made to make the best use of the resources. The hospital has the choice of renovating the existing facilities and refurbishing the beds and other depreciated equipment to cover for the wear and tear of the facilities for being used for many years. On the other hand, there is a choice of building a completely new facility with new equipment. It is also possible to refurbish some of the old equipment and get replacements for other equipment that are either in very bad condition or are outdated due to technology changes.
It would be recommended to follow the latter approach. It is not necessary to replace all the equipment in the hospital. Hence, it is not in the best interest of the organization to build an entirely new facility that would incur unnecessary costs for the organization. A better approach would be to analyze the facilities to find out the conditions of the equipment. According to the analysis, it would be decided to replace the old facilities such as the beds for the patients that are very old. Furthermore, due to the constant changes in technologies and advancements equipment go outdated quite often. The other hospitals in the town are making more profits due to their superior technology. Hence, it is important to invest in new technologies to provide better services. The organization has an overall of $85,000,000 to invest. The costs of the construction and equipment cost around $75,000,000. the new equipment and the renovated facilities would be covered in the cost. It is very important, at this point, for the hospital to invest in the reorganization of the facility as they have become old and need to be fixed so that the hospital does not fall short in providing optimal care and comfort.
Hospitals need to be maintained and managed more often than other businesses as they provide direct care to the patients. Moreover, not-for-profit businesses are expected to provide the best public services to the people who need them and help society cope with a financial or economical crisis. There is a dire need for the hospital to keep up with the competition by staying up-to-date with the latest equipment to provide the best facilities. (Masoudi, 2006)
The hospital should improve its pricing strategy to enhance its competitive positioning. These strategies would align the overall objectives of the not-for-profit organization and would help to gain control over the business, increase the investments, improve the quality of the services provided and provide a true picture of the way the costs are allocated. Pricing is an important factor and it needs more consideration especially when it comes to not-for-profit organizations that need to reinvest all the revenues to enhance the services that they provide.
Marketing is a tool that is used by every business to create a name for it and promote its brand among consumers. It is not feasible for not-for-profit organizations to find the finances to market their facilities and this problem is amended by the conception of cause marketing. Cause marketing is the mutual effort of two types of organizations with two contradicting objectives. Cause marketing combines the motives of the non-profit organizations with the resources of a business. The motive is generally a social or charitable cause that requires large-scale marketing. Cause marketing is a distinction from the normal profit-oriented market and it is a positive step towards working for a good cause, benefiting the society and at the same time benefiting the organization. The hospital can be aided through cause marketing and get promotion in the town where other for-profit businesses operate. Cause marketing can help the hospital gain more revenue and hence provide better services. (Daw, 2006)
There are other sources that the business can use to promote itself to keep up with its growing needs of revenue and investments. Due to the advent of globalization and the commoditization of information technology, mass media is becoming easier to implement and make use of. Media, today, is one of the most influential mediums of communication. It is considered the most powerful mode of conveying messages and promoting brands and causes. Media is becoming so influential by the passage of time that it affects people’s perceptions, viewpoints, likes, dislikes, and so on. Every company needs to market its goods or services for the consumers to be aware of them. Similarly, in today’s society, it is also necessary for not-for-profit companies to make people aware of their facilities as other for-profit organizations often tend to overshadow the objectives of the non-profit entities.
It is a fact that the management of non-profit organizations is more difficult. There is also less control because these organizations are not owned by anyone in particular. There are many other disadvantages correlated with operating a not-for-profit organization. However, the advantages outweigh these drawbacks. These firms are not taxed and there is often support from the government in the forms of grants and subsidies. Moreover, it is recognized that people are more willing to offer time or money to non-profit motive organizations as they are working in the interest of the general public. (Keating,1980)
Conclusion
In the end, it is important to understand that not-for-profit organizations are those entities that have a purpose of providing public services to society and help them in managing their economic standing at availing affordable services. The profits earned are used to further the purpose of the organization. It is essential to make the best use of the finances so that the objectives can be achieved whilst using the resources efficiently.
References
The reference section starts on a new page immediately after the discussion section. The word “References” is centered and capitalized. Below are several examples of the format for different types of text references. Notice that the references have hanging indents from the second line onwards and are not numbered.
Books
- Adkins, S. (1999). Cause related marketing. Butterworth-Heinemann.
- Keating, B. (1980) Not-for-profit. T.Horton.
- Daw , J. (2006). Cause marketing for Nonprofits. Wiley-interscience.
Web Cites
Masoudi, F.A (2006). For-Profit vs. Not-for-Profit Funding of Cardiovascular Trials. Journal Watch. Web.
Score (2002). For profit versus non profit. Web.