Case Study: Analysis of Personal and Organizational Ethics and Values between For-Profit and Not-For-Profit Organizations



Case Study: Analysis of Personal and Organizational Ethics and Values between For-Profit and Not-For-Profit Organizations

Introduction

Since the 1980s, public administrations have been viewed increasingly as inefficient in comparison with organizations governed through market principles, which are considered as being both more conducive to the promotion of quality and more cost effective. As a consequence, the role played by private organizations (for-profit and nonprofit) has broadened. In this new environment, nonprofit organizations, which had previously been seen as fulfilling the demand for social services which the state did not provide, now clearly abandoned this supplementary role in favor of a complementary one in which nonprofit organizations and governments came to be engaged primarily in a 'contract relationship' in which the latter finance public services and the former deliver them.

An important factor that leads governments to engage in public services contract with nonprofits is the belief that they share similar ethical and value orientations that will allow governments to reduce monitoring costs. However, the notion of the existence of similarities in ethical climate has not been systematically examined. This study aimed exactly to this scope. It is an investigation of ethical climates in nonprofits and government in Japan and UK, to determine the extent to which similarities (and differences) exist in ethical climate dimensions, what drives the differences and what are the implications for the sectors in these two countries.

Discussion

The crucial role assumed by nonprofit organizations (NPOs) in the provision of public services makes it essential that their ethical orientations are understood by both government, as their major source of funding, and the community at large as taxpayers and beneficiaries. Accordingly, governmental regulation and oversight of NPOs have grown substantially during the last decade in an effort to maximize accountability to the public (Austin, 2003; Hodgson, 2004), a tightening of control which has often been considered to be to their disadvantage (Evers, 2004, Paton, 2003). Indeed, some writers suggest the major problem for NPOs is the scramble for services contracts, which also produces 'mission drift' (Young and Denize, 2008). It is also argued that governments are reluctant to enter into contractual relationships with NPOs because of the attendant high monitoring costs (Malloy and Agarwal, 2008). The pressure for accountability, from the nonprofit side, and high monitoring costs, from the government side, make any kind of partnership between these two sectors difficult to establish and to maintain (Gazley and Brudney, 2007). However, there are solutions to this problem. Brown and Troutt (2004), for example, report that when organisations share similar ethical values they are more willing to enter into less rigid and more value-based relationships whose efficacy tends to be longer lasting. In order to sustain long-term relationship both sides should be driven by philosophy and ethical values that go beyond merely providing efficient solutions to societal problems (Brown and Troutt, 2004).

For the government-nonprofit service delivery arrangement to evolve into a long-term relationship it is well-advised that governments plan ...