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October 1, 2010

UGSM-MONARCH

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

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

Research & Review

Featured Article

CSR As Mythology - Dr. Jeffrey Henderson

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EVA: Pros And Cons - Dr. Igor Pustylnick

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

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

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

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

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UGSM-MONARCH October 1, 2010

The Monarch Management Review Volume 1, Number 1 - October 1, 2010 Contents

From The Editor ............................................................................................................................................ New Researcher Contribution Program ............................................................................................ Abstracts ............................................................................................................................................

2 3 4

Articles CSR As Mythology by Dr. Jeffrey Henderson .................................................................................................................................

7

EVA: Pros And Cons by Dr. Igor Pustylnick .......................................................................................................................................

16

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

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

55

The Value Added of the Human Resource Function of the Enterprise by 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 ............................................................................................................................................

Editorial Policy

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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

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The Monarch Management Review Volume 1, Number 1 - October 1, 2010 Abstracts 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.

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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

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The Monarch Management Review Volume 1, Number 1 - October 1, 2010 Abstracts 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.

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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, 2010 Abstracts 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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FEATURED ARTICLE

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

to efficiently manage their enterprises in a new competitive environment.

For Profit Perspective

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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

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) catalogued 24 contemporary management developments (1950 – 2000).

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Comparing The Five Factors of Production in Southeast Wisconsin by Dr. Gary Keller H u b b a r d ( 2 0 0 6 ) o ff e r e d a n 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/ productivity 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 Reenen’s 2006 findings. The 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 efficacy of an enterprise are 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.

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

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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Comparing The Five Factors of Production in Southeast Wisconsin by Dr. Gary Keller 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 which NPO should be funded 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) and Field (2009) Data Drive 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 planning. Sridhar and Nagabhushanam (2008) neatly divided NPO success factors into 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-profit 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 individuals to work on light manufacturing assignments may not result in the highest output per person hour compared to an automated solution; however, employing disabled

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Comparing The Five Factors of Production in Southeast Wisconsin by Dr. Gary Keller persons by an NPO achieves two goals; providing meaningful work and skills 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 literature review of nonprofit 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.

that while profitability is an 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. According to the Internal Revenue Service the definition of a notfor-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).

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 performance in the context of management science and as a One of the significant indications consequence financial measurements derived from the literature review was are the most accepted predictors of the difficulty that economists and managerial quality. Young (2007) stated management theorists experience in

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Comparing The Five Factors of Production in Southeast Wisconsin by Dr. Gary Keller explaining the role that the X factor (management practices) has on evaluating an enterprise’s economic performance. Quantitative measurements such as financial ratios, employee count, market size, access to suppliers and other economic features are relatively easy to count.

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.

Accounting for the affect of management has baffled academicians regarding their assessments of forprofit 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.

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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 five key factors of production.

This research study had a welldefined population. Southeast 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 Electric (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: financial resources, employees,

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Comparing The Five Factors of Production in Southeast Wisconsin by Dr. Gary Keller management practices, materials, and practices, materials and technology) technology. that they considered to be vital to corporate/organizational success was On October 23, 2008 a survey revealing. Depicted in Table 1 is the instrument was sent to the CEOs of comparison (1=low, 5=high) of the five 682 qualified firms in southeast, vital success factors. Wisconsin. The qualified companies (682) included firms with 49 or more Analysis of For-Profits’ Rankings employees derived from the Unemployment Compensation data Most respondents to Keller’s bases for Racine and Kenosha 2008 survey of for-profit firms in Counties dated September 2, 2008. southeast Wisconsin indicated that they The survey instrument was used to had adequate access to capital. The sample 100% of the eligible population importance of financial resources of 682 firms. The response rate to the receiving a relatively low grade mailing of the survey was 54 surveys or (number 1 or low) for its significance to a response rate of 7.92%. This rate was the firm’s success may be explained by considered acceptable for a blind direct the response to Question 14 (Does the mail survey with no built in system for firm have access to capital?) where follow-up except for a letter of reminder 93% of respondents stated they had to the entire population of 682. On a c c e s s t o c a p i t a l . I n e s s e n c e February 9, 2010 a survey instrument respondents may take for granted their was sent to the Executive Directors of ability to secure adequate amounts of 100 qualified NPOs in southeast, c a p i t a l t o o p e r a t e t h e i r f i r m s . Wisconsin. The qualified NPOs (100) Respondents may take for granted that included those derived from the Unemployment Compensation data bases for Racine and Kenosha Management practices were Counties. The survey instrument was selected by for-profit firms as the used to sample 100% of the eligible most vital factor to their population of 100 organizations enterprises’ success. This high excluding governmental units, schools, ranking was revealing. Four of the health care agencies and colleges/ five vital success factors (save for universities. There were 20 valid management practices) are the responses (20% response rate) to the fundamental components that survey. An evaluation of how CEOs or economists use to assess the Executive Directors ranked the five performance of a firm. factors of production (financial resources, employees, management

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Comparing The Five Factors of Production in Southeast Wisconsin by Dr. Gary Keller 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 importance

For Profit

Not-For-Profit

5 4 3 2 1 0

Financial Res.

Employees Mgmt. Practices

Materials

Technology

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Note: 5 = highest importance, 1 = lowest importance

their firm either has accumulated a factors (technology and materials). One sufficient amount of saved capital or of the reasons firms graded technology have relatively easy access to it. and materials as the top factors may be related to the fact that key business There was agreement regarding decisions are made at a distant the top two secondary vital success 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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Comparing The Five Factors of Production in Southeast Wisconsin by Dr. Gary Keller delegates strategic decisions to local surprising considering the missions of managers for implementation. NPOs. One explanation for the curious ordering of materials being the most The impact of employees on firm important factor of production may p e r f o r m a n c e r e c e i v e d a m i x e d reflect the diversity of organizations in response from respondents to the the survey sample (from an adult study’s survey. Of the respondents literacy group to a municipal zoo) and a ranking employees as vital to the growing trend in NPO agencies, social success of their firms, 55% ranked it entrepreneurship. Many NPOs are high (3-5) while a slightly lower number attempting to generate earned revenue 47% considered employees as being a via creation of products/services that low success factor for their firms’ provide a new revenue stream to s u c c e s s . C l e a r l y, t h e r o l e t h a t diversify away from dependence on employees play in the performance of contributions, funding from United Way firms in southeast Wisconsin is type funding agencies and fees for somewhat split due to the difference in services which oftentimes do not fully firm ownership. recover the services’ costs.

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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. Respondents’ rankings of the 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 their firms efficient and productive.

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-forprofit organization can possess.

The ranking of management practices by respondents as the third most important factor of production is fascinating given the strongly At first glance, the not-for-profit significant correlation of management respondents’ ranking of the five key 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 factors of production was somewhat performance. One explanation for this Analysis of Not-For-Profits’ Rankings

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Comparing The Five Factors of Production in Southeast Wisconsin by Dr. Gary Keller r a n k i n g m a y b e a n i n c r e a s i n g organizations considered the delivery of managerial skill level and sophistication service as their primary focus rather of not-for-profit corporate leadership. than merely seeking funds as one of the most time consuming and resource Technology was ranked as the intense activities. This phenomenon fourth most important factor of may be a result of the inclusion of production for not-for-profits in the talented for-profit leaders serving on s u r v e y a n d r e p r e s e n t s t w o the boards of directors of NPOs and the transformational developments. One growing trend of NPO executives notable need for technology is the securing management degrees and revolution in information technology ongoing training. that requires any entity to invest in information age infrastructure (i.e. Implications 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 The problem addressed in this daily operations from communications study was to determine what, if any, to maintaining institutional operational differences existed between the way records to providing client services. The that for-profit corporations and NPOs second striking need for technology in a r a n k e d t h e f i v e k e y f a c t o r s o f not-for-profit organization is linked to production that were vital to their production equipment. Many NPOs enterprise’s performance. For-profit have become cost-effective providers of firms ranked the five factors by way of services (ex. packaging, light assembly, importance as: management practices, maintenance services and etc. that technology, materials, employees, and have been outsourced by for-profit financial resources as most vital. Notfirms. Therefore the need for equipment for-profit organizations provided the and associated transportation assets (trucks, vans, cars, buses and etc.) has There were disparities between the become vital to those NPOs who desire rankings of the for-profit to pursue revenue via social enterprise businesses and NPOs with the activities. exception of one factor, financial resources. It could be argued that Finally and most surprisingly, enterprises in both sectors view capital was ranked last. While most not-for-profits struggle to find sufficient financial resources as an outcome funding to provide services, it would rather than a driving force of appear from the data collected within corporate performance. the study that the management of the

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Comparing The Five Factors of Production in Southeast Wisconsin by Dr. Gary Keller same ranking as: materials, employees, mention the desire to please oneself or management practices, technology and their family members. financial resources as their most critical to their organization’s performance. The NPOs selected materials as their most vital factor of production. As Another explanation may be noted previously, a trend in NPOs is to attributed to the relative ease in which diversify their revenue sources. One respondents to the survey believe they method to achieve that goal is to turn have access to capital whether it is toward social entrepreneurial ventures from a financial institution, corporate such as becoming a convenient local parent, internal fiscal sources or outsource service for low skilled, labor government/private contributors (in the intensive activities such as: outdoor case of NPOs). A final justification for m a i n t e n a n c e , p a c k a g i n g , l i g h t both groups agreement regarding the assembly. These activities in turn low ranking of financial resources may create the requirement for business be an abundance of confidence in their operations to address the ability to products/services and therefore satisfy the need to obtain materials a s s u r a n c e t h a t c u s t o m e r s a n d ranging from lawn mowers and fertilizer therefore revenue will continue to flow to material handling and transportation thereby insuring the generation and/or equipment to access to food to stock ability to secure sufficient financial food pantries and meals for homeless resources. people and needy individuals. Another reason for the ranking of materials as Another important distinction the number one factor of production between the two groups was their among NPOs may be a shift in the selection of the top factor of production. nature of contemporary NPOs from In the case of the for-profit group, being focused primarily on either management practices were selected services or distribution of tangible items as the most vital factor of production. to a more diversified mixture of both One reason for this outcome may lie in products and services. the fact that privately owned firms composed the largest percentage It should be noted that both (87%) of participants in the survey. As studies were conducted during one of many privately owned businesses are the most difficult recessions in held and managed by family members, American history. The analysis of the the pressure to deliver results is critical rankings of the factors of production by due to the fact that there is little margin both for-profit and NPOs may have for failure as a corporate parent cannot been influenced by the need to solely absorb consistent losses, not to s u r v i v e . B o t h g r o u p s r e p o r t e d

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Comparing The Five Factors of Production in Southeast Wisconsin by Dr. Gary Keller employee growth was flat to declining. Therefore, a need exists to follow-up this study on an annual basis to

References 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15.

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determine if the rankings change over time.

16. 17. 18. 19. 20.

KA55H*+E+<$%+i<$+>''$'$*+N"*+/77^*+I'<)@&B$?+<$%+'c;A<B$B$?+H<$<?'H'$4+;&<34B3')+<3&5))+dB&H)+ <$%+35@$4&B')"+>'4&B'Z'%+P'6&@<&]+!*+/778+Q&5H+D44;R+3';"A)'"<3"@GW4'c45$A]W;'5;A'W6A55HW ;<;'&)WKA55Hi<$>''$'$/";%Q" KA55H*+E+<$%+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$5HB3+>')'<&3D" KA55H*+E+<$%+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" 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"+!*+$5"+Y*+;;"+^701^!^" V'HB$?*+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&'))" V&@3G'&*+T*+!OO7*+I<$<?B$?+4D'+$5$1;&5dB4+5&?<$BJ<4B5$k+;&<34B3')+<$%+;&B$3B;A')"+E'(+F5&G*+EFR+ X<&;'&=5AAB$)" PB'A%*+=*+/77O*+T'&Q5&H<$3'+H<$<?'H'$4"+PB$<$3B<A+I<$<?'H'$4+.!Y_!O!8S9*+;;"+Y71Y!" P5A<$*+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*+$5"+_*+;;"+^7S1^/7" P@&$D<H*+#*+/77S*+CD'+;)]3D5A5?]+5Q+6'D<ZB5@&+<4+(5&G"+-5$%5$R+T)]3D5A5?]+T&'))" 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*+$5"+^*+;;"+^OY1_7Y" X'&H<$*+>*+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*+$5"+Y*+;;"+0OO1Y!S" X@66<&%*+:*+/77^*+CD'+;&5%@34BZB4]+&B%%A'"+L4&<4'?]+<$%+K@)B$'))*+Z5A"+YS*+;;"+/8100" b<;A<$*+>*+/77!*+L4&<4'?B3+;'&Q5&H<$3'+H'<)@&'H'$4+<$%+H<$<?'H'$4+B$+$5$;&5dB4+ 5&?<$BJ<4B5$)"+E5$;&5dB4+I<$<?'H'$4+M+-'<%'&)DB;*+!!.09*+0SY" b'AA'&*+:*+/77O*+V5+H<$<?'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*+$5"+^*+;;"+ _O18O"+ b'AA'&*+:"P"+./7!79"+#))'))B$?+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$'))+>')'<&3D*+!7+.S9+O/1O8"+[LLER+7O_S1S8S0"+ -'(B)*+V*+/770*+CD'5&BJB$?+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*+$5"+0*+;;"+0/S10YY" -B@*+U"*+=D'$?*+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'$4*+07.S9*+ 07S10!/"+%5BR!7"!787W7OSY7O^/"/7!7"S7O!87" I3=5$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*+$5"+!*+;"+!7" E<4B5$<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 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

The Monarch Management Review 35


FEATURED ARTICLE

UGSM-MONARCH October 1, 2010

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

Citation: This article may be cited as:

Volume 1, Number 1

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

The Monarch Management Review 36


UGSM-MONARCH October 1, 2010

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The Monarch Management Review 104

Monarch Management Review-Vol1-Num1-Keller  

Over the centuries management theories have been proposed to resolve why some companies with equal access to labor, capital, land and ideas...

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