NP organizations are typically built upon a mission and people at the top of the hierarchy will usually give more responsibility and flexibility to their employees because the perception is that these employees have a more hands-on understanding of what the organization is accomplishing/how the clients and beneficiaries are doing. Profit is not a top priority for these companies and ladder-climbing within the companies is not common.

Syracuse University

There are three main ownership structures at an organizational level: for profit, not for profit, and local government. All of these structures have different priorities, and therefore different ways of running their organizations. NP and LG organizations delegate more responsibility to their employees than do FP companies. Additionally, FP organizations are more focused on external motivations like profit margins, while the other structures put more emphasis on intrinsic motivation and passion for the cause. Ownership structure can affect the way a company is run, and the well-being of the employees and the clients. 

Ownership structure's influence on organizational workplace design

Ben-Ner, A., & Ren, T. (2015). Comparing Workplace Organization Design Based on Form of Ownership: Nonprofit, For-Profit, and Local Government. Nonprofit and Voluntary Sector Quarterly, 44(2), 340–359. https://doi.org/10.1177/0899764013512422

Comparing Workplace Organization Design Based on Form of Ownership: Nonprofit, For-Profit, and Local Government. 

This cycle explains the tendency for employees and their workplaces to often align in motive. People more passionate about a cause will typically gravitate toward a not for profit organization that emphasizes their mission, while someone looking to be comfortable financially will likely seek out a for profit company where promotions are available and more likely. Companies will then choose employees that align with their motive and the cycle will continue. 

The Attraction-Selection-Attraction (ASA) Cycle

Not for Profit Leadership Structure

Local Government organizations are similar to NP settings in the sense that the mission and goals are the main priority. Local officials are the leaders of these organizations, and seek knowledge through members of their team who have personal experience with members of the community and how they can be helped. The main difference between LG and NP is that the ultimate owners of LG organizations are the citizens of the community while NPs will have a more specific owner. 

Local Government Leadership Structure

In a typical for-profit firm, the leadership structure is a hierarchy where different levels have distinct roles in strategy. The Board of Directors, representing the firm's owners, is responsible for determining the long-term strategic direction. Managers are then tasked with implementing these overarching strategies by translating them into operational plans and directing the work of employees.

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