Red Cross A Nonprofit Organization
The international Red Cross is a non-profit organization which is known for its emergency based planning, controlling, and management. As the organization is not selling any product or service for profits, it has to manage budgeting comprehensively in a way to handle crisis and emergency based situations like Hurricane Sandy. (Allen, 2011)
Current events around the world have more dynamic effect on nonprofit organizations. For instance Red Cross is an international organization of disaster management. It has to reach areas where there is problem. As Alan (2011) has mentioned that today disaster managing nonprofit organizations have to be more active and dynamic. Sometimes they have to manage one disaster in Taiwan, and the other one in America. Some other projects in Africa and other non-developed geographies remain active throughout the year.
Effect of Hurricane Sandy on Red Cross
Red Cross has directly dealt with Hurricane Sandy in the year 2012. Red Cross came active by announcing 4,000 workers for the disaster of the hurricane. They worked in damaged and destroyed areas with thousands of volunteers. NY Times (2012) mentioned Red Cross as the most active nonprofit organization working for the development of the regions after the Hurricane Sandy. Red Cross not only sent disaster workers for disaster management, but they also managed to collect around $23 million for this particular hurricane.
The following report will discuss different aspects of Red Cross related to planning, programming, budgeting, performance measurement and management control.
Management of Red Cross
Red Cross has properly developed itself as an organization with effective strategy of change management in order to be effective in their disaster management works all over the world. On “what we do” of the website of www.redcross.org, it can be seen that the organization seems to follow decentralized organizational structure with their international offices and branches all over the world.
For the Hurricane Sandy program, Red Cross (2012) initiated work right after the threats of the hurricane were made public by different authorities. The organization started with the planning phase so as to deal with it successfully.
Planning is not same in profit oriented and nonprofit oriented organizations. Peters and Pierre (2012) have mentioned that strategic planning of profit oriented organization is based on higher sales, market growth, higher target market, revenues and hence net income. They said that strategic planning of nonprofit organization is based on higher benefits of the society. Red Cross has similar kind of planning in which they care for society, particularly against sudden disasters like Hurricane Sandy,
Red Cross plans in accordance with mission and vision of their organization. The mission and principle of Red Cross is to serve humanity whenever it is in trouble. Red Cross cannot take a project or a program when it is not related to their program. Red Cross cannot help brokers who are in financial trouble because of the current recession in America, as it is not according to their mission and vision.
According to the website of Red Cross, the organization plans in accordance with disaster and constant hunger and poverty. The planning is done on need bases. For example when Hurricane Sandy was predicted, Red Cross put all their efforts and American resources to work for the people he could be affected by the hurricane.
Bryson (2011) has done extensive research on public and nonprofit organizations in their planning and programming deals. He said that nonprofit organizations plan and program with their mission and vision. They cannot program against their values. Strategic planning and programming should also be in accordance with each other. Upper management and board will give directions and approval of different programs. Conduct of planning and programming with team based activities. Potential clients are involved in planning and initial programming so that contacts can be developed for fundraising and donations.
Programming in Red Cross is according to the studies of Bryson (2011). They plan and work within their defined domains. In Hurricane Sandy Program by Red Cross (2012), it can be seen that Red Cross had planned for it before the problem actually started. The potential disaster was approved by the board because it was according to their mission and vision. Programming has its value all over the world in both profit and nonprofit oriented organizations. It is a way of management in all the aspects of an organization.
Finance of Red Cross is dependent on fundraising and donations by public and private sector. Majority of nonprofit organizations working for wellbeing of humanity are based on donations for the fulfillment of financial needs. Red Cross (2012) was able to generate $23 million through celebrities for the disaster management of Hurricane Sandy.
Budgeting for nonprofit organizations involved in humanitarian and disaster management works can raise financial resources based on needs. For example when Hurricane Sandy hit America, people started to donate more than usual to Red Cross. Similarly other organizations of disaster management have more opportunity to raise financial resources. (Weerawardenaa, McDonaldb, & Mort, 2010)
Weerawardenaa, McDonaldb and Mort (2010) have further said that the nonprofit organizations which have proved to be effective and efficient in social works are more potential to generate financial resources. In current financial scenario of America, the whole country is in financial crisis because of higher inflation rate, higher unemployment and low business opportunities. Such current scenarios have restricted some of the financial resources for the nonprofit organizations.
According to Vermeer, Raghunandan and Forgione (2009) nonprofit organizations have a comprehensive share in the economy of America even today. Some corruption and scandal issues have created problem for nonprofit industry, but still it has a unique influence. For example, when it comes to natural disasters, people do contact organizations which are pro towards volunteers work. Organizations which have made their name are trusted more by people.
Performance measurement and management control
Red Cross has developed performance measurement strategy to evaluate their performance. In July 2004, they launched the chapter of “Performance Standards”. On page of Red Cross (http://www.redcross.org.au/strategy-2015.aspx), the organization has mentioned their Strategy 2015 where performance measurement and control management has been focused.
Achievement of goals has been made compulsory in Red Cross where organization has to follow them. Performance will be measured by managers so as to improve and take corrective actions. Performance will be accountable to stakeholders at the organizational level. Past and current organizational renewal projects will also be analyzed for better future programs. Training and development will be part of the programs. (RedCross, Working as One – Strategy 2015, 2013)
Ridder and McCandless (2010) have focused on human resource management of nonprofit organizations like Red Cross. The authors have agreed that none of the nonprofit organization can ignore the importance of human resource management in their programs. They need to offer proper hiring, training, developmental, compensation, and performance management program. Human resource management plays a strategic role in an organization which cannot be ignored.
Evaluation of different programs should be done when a certain phase or the whole program is finished. For example, Red Cross should have complete evaluation and reporting of Hurricane Sandy project. It will help them to know their weaknesses and strengths. The evaluation will help them to take corrective actions in future and to make themselves better.
Human resource management should be focused in areas like personnel costs, salaries, training, space, travel, development, hierarchy, structure, etc. They should be effective when assigning employees and volunteers for different programs. For example, for Hurricane Sandy program, they can only assign those volunteers who have high stamina and more will power to fight against natural disasters.
Management in nonprofit organization
Management of nonprofit organization needs same importance as in profit oriented organization. Finance, accounting, human resource management, strategic management, planning, control, training and development, performance management, evaluation, corrective actions and all other business and managerial practices have similar kind of importance and influence on nonprofit organizations in the modern times today.
Management of all kinds should be given proper space and focus in nonprofit organizations. A research showed that out of 229 nonprofit organizations based on charities (like Red Cross), it was seen that higher nonprofit organizations which worked in accordance with modern business practices, technology and business strategies were able to generate higher results. It was also seen that such organizations with successful planning and implementation of different programs were focused on strategic human resource management. (Guo, Brown, Ashcraft, Yoshioka, & Dong, 2011)
Red Cross and Hurricane Sandy
On Hurricane Sandy Program, Red Cross had published reports and online material through which they have proved their struggle against the natural disaster. With planning and organizing of Red Cross, the organization was able to provide 1400 evacuation centers for around 450,000 evacuees. More than 68 million meals were provided to the affected people. 1.4 million families were helped in basic needs of food, groceries, clothing, etc. (RedCross, Hurricane Recovery Program, 2012)
Red Cross has one positive image of showing team work and idea of being together to the society. This is a marketing tactic as well used by various profit oriented organizations to show being together approach. For example Nokia “connecting people” is a way of the company to show integration in the market and society. Similarly Red Cross has shown an image of being together with victims of Hurricane Sandy. They stood up with the people and helped them in achieving back their regular lives.
Emotional behavior is another tactic used by firms through advertising to attract target market. Red Cross used emotional behavior as well to attract donations and financial resources for managing their Hurricane Sandy program. They were so much effective in their emotional approach and marketing that around 200,000 individuals were ready to participate voluntarily for Hurricane Sandy program. Hurricane Sandy program of Red Cross was a successful as it provided around $110 million assistance to the victims. The management of Red Cross proved to be successful in this fight against the disaster. (RedCross, Hurricane Recovery Program, 2012)
Current management control in nonprofit organization
Modern and current management control in profit and nonprofit organization has shifted a lot. As Red Cross is working in situation where there can be risk and sudden management control requirements, actions has to be taken accordingly. Power (2011) has mentioned “risk management” for situations in which current organizations have to fell into sudden dynamic external environment changes.
Current management control in modern world is associated with information technology as well. To keep updated with external environment, risk management and modern aspects of business, management control of different organizations have to stay active with information technology in current world. Information technology not only helps organization to be efficient within the organization, but also in the external world, industry and the international market. (Li, Peters, Richardson, & Watson, 2012)
In the modern business world of profit and nonprofit organizations, performance management is another important aspect which is associated with risk management and information technology. Current management is not in the typical or classical way of old days in which number of production of a labor was seen or calculated.
Today organizations see their employees as individual personnel as well as team/group mates. Performance of individual is measurement today in both tangible and intangible forms. Behavior, ethics, way of communication, work itself, production, team work, and other related aspects are part of performance measurement and management. Such modern practices of management control have changed management practices completely. (Dyck & Neubert, 2008)
Current events that have shaped and changed management control and performance management practices are international business expansion, turning of world into global village, globalization, whole world into financial crisis, dependence of different industries on each other, etc. All these events are related with each other today. Today the world is interrelated more with each other. If there will a Tsunami in any part of the world, thousands of international companies and NGOs will join hands together to save humanity.
For all the programs in a nonprofit organization, like Red Cross, it starts with planning. Planning is crucial for both profit oriented and nonprofit oriented organizations. Red Cross was aware that Hurricane Sandy is coming and its aftermaths can be seriously disastrous for a lot of families. The organization started planning right from the beginning with their program initiatives and marketing strategies to generate donations and charities.
Program of Hurricane Sandy was properly defined with goals and mission. Thousands of volunteers were registered and were given training to assist the affected societies. Donations were spent on victims and corrective actions were taken during and after the program so as to be more effective in future programs.
Budgeting was done by the organization by donations. $110 were gathered and spent on different subprograms under Hurricane Sandy program. Performance measurement programs were also taken by the managerial teams so that it can be shown to the stakeholders and corrective actions can be taken in future programs.
It is important to see the managerial similarities between profit oriented and nonprofit oriented organizations. There is a lot of different in selling, revenue generation, target marketing, etc; but internally there is almost similar kind of management, decision making, planning, hiring, training and development, performance measurement, and evaluation.
A nonprofit organization has also a mission and vision statement which guides them for their ventures and programs. Red Cross has a mission to serve humanity which was in accordance with Hurricane Sandy, and hence they took active part. Managerial aspects of nonprofit organizations vary a little from other organizations but it is not alien with traditional organizations.