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Firms, nonprofits, and cooperatives: A theory of organizational choice

Herbst,Patrick
; 
Prüfer,Jens
Abstract
We formalize the difference between profit-maximizing firms, nonprofits, and cooperatives and identify optimal organizational choice in a model of quality provision. Firms provide lowest and nonprofits highest levels of quality. Efficiency, however, depends on the competitive environment, the decision making process among owners and technology. Firms are optimal when decision making costs are high. Else, firms are increasingly dominated by either nonprofits or cooperatives. Increased competition improves relative efficiency of firms and decreases relative efficiency of nonprofits.
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Date
2016-09
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Tilburg University Research Output Collection
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Keywords
theory of the firm, nonprofits, cooperatives, organizational choice, organizational change, L21 - Business Objectives of the Firm, L31 - Nonprofit Institutions; NGOs; Social Entrepreneurship, D23 - Organizational Behavior ; Transaction Costs ; Property Rights
Citation
Herbst, P & Prüfer, J 2016, 'Firms, nonprofits, and cooperatives : A theory of organizational choice', Annals of Public and Cooperative Economics, vol. 87, pp. 315-343. https://doi.org/10.1111/apce.12130
URI
https://hdl.handle.net/20.500.14602/65051
License
info:eu-repo/semantics/closedAccess
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