Final answer:
Not-for-profit and governmental organizations do need cost management to ensure fiscal responsibility and effective use of funds, although their goals are not to generate profits. These entities use cost management to provide services, fulfill their missions, and ensure accountability for the funds they handle.
Step-by-step explanation:
True, not-for-profit and governmental organizations typically need cost management. Although these entities do not seek to generate profits like for-profit organizations, they still require effective management of their resources to ensure they can provide their intended services and achieve their mission goals. Cost management is significant for non-profit organizations because they operate based on funds received from donors, grants, and other sources, and they must demonstrate fiscal responsibility to retain their funding and public trust. Governmental organizations also need to manage costs effectively as they deal with taxpayer money and are accountable to the public for their expenditures.
There are other types of organizations beyond those that exist to make a profit, such as non-profit organizations, which are created to provide services or to address specific societal issues without the primary aim of making money. These include charitable organizations, educational institutions, and many healthcare facilities that contribute significantly to the community. The government may feel the need to insert itself into the economy for various reasons, including to provide public goods and services that the private market cannot efficiently supply, to correct market failures, enforce property rights, and to redistribute income and resources to achieve a perceived social balance.