Final answer:
For-profit business managers focus on the bottom line or profitability, while non-profit managers emphasize social impact and fulfilling their organization's service-oriented mission. The key difference lies in the primary objectives of each type of organization, which dictate their managerial focus and strategies.
Step-by-step explanation:
A manager in a for-profit business focuses primarily on the bottom line, which is essentially profitability and financial success. This means that their decisions are based on what will increase revenues and reduce costs, aiming to achieve the highest possible economic profit. Economic profit is when a company’s total revenues exceed both its explicit and implicit costs, including opportunity costs. In contrast, a manager of a non-profit organization prioritizes social impact.
They make decisions based on how well they can fulfill their mission of providing charitable, educational, or religious services, rather than how much profit they can generate. These managers focus on customer satisfaction and community service, as the success of a non-profit is often measured by the extent to which it achieves its service-based objectives rather than by financial metrics.
Essentially, while for-profit managers are guided by the objective to maximize shareholder wealth, non-profit managers strive to maximize stakeholder engagement and community benefit. This difference is rooted in the fundamental purpose of these organizations, with non-profit organizations existing to meet a social need or to provide services to members, often benefiting from tax-exempt status and relying on donations and grants more than sales revenue.