Issues in the Decision-Making

Process and Managerial Accounting

Practice in Non-profit Organizations
Introduction
 Managerial accounting focuses on the decisions made by
the leadership of organizations (Perica, 2021).
 The practice of managerial accounting enhances
accountability and ethical conduct in organizations.
 Trends are emerging that are changing the practice of
managerial accounting.
 The emerging trend of focus herein entails the operations
of non-profit organizations.
Defining Non-Profit
Organizations

Non-profit
organizations are
entirely different from Non-profit
all other forms of organizations do not
entities (Rüsch, invest to earn profits.
Wilkesmann &
Bastini, 2019).

Non-profit Adjustments needed

organizations depend when implementing
on the donations and managerial accounting
contributions from procedures in their
well-wishers. operations.
 Non-profit organizations assist the decision-making
process.
How Non-Profit
Organizations Non-profit organizations must work closely with all
their stakeholders to deliver such outcomes (Treinta et
Assist the al., 2020).
Decision-Making
Process They build consensus in decisions at all the levels of
their operations.

Through the building of consensus, non-profit

organizations to operate successfully.
How Non-Profit Organizations Hinder the
Decision-Making Process

They do not pay taxes

Non-profit
and their operations
organizations are not
are exempt from
governed as other
various standards
entities.
(Treinta et al., 2020).

Such realities hinder

Non-profit
the effective decision-
organizations choose
making process for
the strategies to adopt
managerial accounting
and implement.
principles.
Theoretical Models to Justify the Views

The patron-clientelism
The main theoretical model
approach requires all the
for decision-making in non-
stakeholders to serve as both
profit organization is patron-
patrons and clients (Kang,
clientelism.
2020).

The decisions of the non-

Any non-profit organization
profit organization must first
ignoring the interests of its
fit the expectations of its
patrons will fail.
stakeholders.
Theoretical Models to Justify the Views

SUCH AN APPROACH
THE OTHER MODEL THAT REQUIRES THE NON- THE COOPERATIVE MODEL
THE CONSENSUS MUST BE
SHOULD BE CONSIDERED PROFIT ORGANIZATION TO MAINLY FOCUSES ON THE
BUILT ON ALL THE
IS THE COOPERATIVE AVOID APPOINTING THE VIEWS AND
ACTIVITIES OF THE NON-
MODEL OF DECISION- CEO AND SENIOR EXPECTATIONS OF ITS
PROFIT ORGANIZATION.
MAKING. MANAGERS (DEFOURNY, STAKEHOLDERS.
NYSSENS & BROLIS, 2021).
Lessons Obtained From the Analysis

Non-profit
The nature of
organizations are
operations of non-
significantly
profit organizations
different from all
complicates
other forms of
decision-making.
organizations.

The patron- Consensus during

clientelism and the decision-
cooperative models making influences
are often adopted in the success of non-
the decision profit
processes. organizations.
Conclusion

Non-profit organizations
The issues and interests of
demand managerial
all the stakeholders must be
accounting application
considered.
procedures to be adjusted.

Failing to make effective Managerial accounting

decisions based and built on procedures and principles
consensus can derail must in the operations of
success. non-profit organizations.
 Defourny, J., Nyssens, M., & Brolis, O. (2021). Testing social enterprise
models across the world: Evidence from the “International
Comparative Social Enterprise Models (ICSEM) project”. Nonprofit
and Voluntary Sector Quarterly, 50(2), 420-440. doi:
10.1177/0899764020959470
Kang, Y. (2020). Dispersed domination through patron-clientelism: the
evolution of the local state–NGO relationship in post-disaster
sichuan. Journal of Contemporary China, 29(124), 598-613. doi:
10.1080/10670564.2019.1677367
Perica, I. (2021). The mediating role of managerial accounting in non-profit
organizations: a structural equation modelling approach. Croatian

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