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1.0 Management problem in brief
There has been a fallacy that about organizations in the sense that non-profit organizations are warm but not competent, and that on the other hand, for-profit organizations are competent and not warm. It is believed and research has shown that people perceive others on the basis how they exude warmth and competence. It has been however proven that stereotypes really do exist and that it determines the market position of the organization. It is not clear though that these stereotypes affect how consumers behave in selecting where to purchase their products.
Writings on social psychology and organizational behaviour say that people are judged on the basis of warmth and competence they show towards others. Warmth is said to be judged by the level of generosity, kindness, honesty, sincerity, trustworthy and helpfulness. Competence on the other hand is associated with confidence, effectiveness, intelligence, capability, skilfulness and competitiveness. It is also very interesting that even animals have the same perception as human in that they determine if the entity is friendly and if it has the ability to enact its intentions. Competence and warmth in this sense mean that it provides a sense of competition and status that promote reproduction and survival.
Other research shows that people are prone to trust a company or firm on the basis of its reputation. Reputation is said to be build over a long period of time. It contradicts with the fallacies though that reputation is gained when a firm or an organization is competent and warm to its customers. Research on promotion practices suggest that for-profit executives are often promoted because they have shown competence and managerial skill, whereas executives in nonprofits are promoted because they have shown commitment to the social good of the organization.
This view leads to the question of how consumers distinguish non-profit and for-profit on the basis of warmth and competence. All of it is blended together to produce better results in the organization. With best management practice being employed in the organization then all the rest will be achieved at long run. Thus, warmth and competence dimensions provide essential answers to competition and status concerns that promote reproduction and survival. From this perspective, then, it may be unlikely that such values are learned.
2.0 Research methods used
In the first experiment, two level single factor designs were used where it manipulated the types of organization using the simple manipulation of dot.org and dot.com internet domain name (Dot.com is believed to be a for-profit and dot.org for non-profit).
In the search for information, consumers may perceive organizational frame, that is, nonprofit versus for-profit, as a filter through which they may interpret information about a product or firm. The implications of these findings are of both theoretical and practical importance. First, to what degree is the distinction between for-profits and nonprofits even discernable for consumers? The existence of dot-com and dot-org domain name endings offers consumers an immediately knowable guide as to whether an organization is for-profit or nonprofit.
The second experiment on purchasing behaviour and changing perceptions of non-profits and for-profits organization was done by use of credible source endorsement to determine if it could determine consumer willingness to purchase a product from the firm.
The third experiment was done by use of the concept of money through incidental exposure to an unrelated advertisement mentioning money.
Fourth, for robustness and external validity, we measured self-reported behavior over time to determine whether the effect would influence participants' likelihood to visit a for profit
And non-profit firm's Web site.
The Fourth experiment was conducted as a pretest among people from the same population as that sampled in the main experiment. Extant research ration of the effects, participants were e-mailed a follow-up survey one month after the study asking them to complete some follow-up questions to the "World of Good Study" that they had participated in the prior month.
3.0 Data analysis methods
The results of experiment 1 shows that while nonprofits are perceived as more warm, for-profits are perceived as more competent. The results of experiments 2 and 3 suggested that these perceptions influence consumers' willingness to buy from these organizations: consumers are more willing to buy a product when they view it as being made by a for-profit than a non-profit.
Further, this effect seems to be driven by perceptions of the firm's competence. Consequently, when the perceived competence of a non-profit is boosted by a credible endorsement (experiment 2) or subtle alignment with money (experiment 3), discrepancies in willingness to buy disappear. In fact, when non-profit firms are perceived as both warm and competent, consumers become more willing to buy a product from that firm.
To be sure, there are likely exceptions we hypothesize that a firm is warm will not translate to positive behaviors toward its product offerings, whereas judgments of competency will.
4.0 Conclusions/ Findings/ Management implications
It has been seen from this that organizations that are competent sell more of their products that those that are not competent. Competence in this case is associated with for-profits organizations. Non-profits organization are said to be warm towards its clients and thus it does not sell more than the for-profit. These perceptions can however be influenced to favour each side of the coin to sell its products. The general reason for this study is to acquire knowledge on the concepts of firms' goals for profitability marking and the consumer requirements. Furthermore, one can create a perception of nonprofits as highly warm and competent engendering feelings of admiration, which lead to enhanced willingness to buy.
These effects persist and play out in actual behavior. The studies here mix concepts grounded in basic perception with perceptions of firms' goals for profitability to reveal the impact on consumer beliefs, emotions, and marketplace actions.
Stereotypes can have a big impact on the way an organization/firm operates if it is not demystified in good time. Stereotype here implies a short hand blanket judgement containing evaluative components. It is quoted that competent leaders are perceived as less warm, nice and likeable. Thus the perceptions of people are majorly predicted by warmth rather than competence. However, future work is needed to explore this premise with experimental paradigms that allow for dynamic changes in consumer perceptions over time. Research addressing these questions might also affect on the reputation enjoyed by social enterprises, often heralded as a blend between non-profits and for-profits making organizations.
6.0 Lesson learnt
Perception is major in anything that is done which deals with clients. It is important to make the right impression and a lasting reputation that sells your organization in order to make the right impression to the people you serves. Cultural judgement perceivers also tend to agree that there is a positive result when a group works together but not both working differently. It also establishes that perceptions of people vary with regard to their different tastes and preferences. The research also highlights that organisations needs to foster competence and warmth by cultivating respect first and then add the warmth to their customers. This research also makes advances by detailing the specific benefits that accompany being non-profit or for-profit organization. In the search for information, consumers may perceive organizational frame that is nonprofit versus for-profit, as a filter through which they may interpret information about a product or firm. The implications of these findings are of both theoretical and practical importance, so it can be applicable to any organization that requires the same services to increase their profitability.