Answer:
For a profit-making organization, there must be the presence of the profit motive to ginger the organization to achieve its purpose because resources are committed and used efficiently with the knowledge that enough profits will be generated for the stockholders. This means that its absence will not be motivating nor allow organizations to be efficient.
For a not-for-profit organization, there is no profit motive. The presence or absence of profits will not deter the organization from achieving its purpose, provided resources are available. Though, it may not be able to use the resources in the most efficient manner.
Explanation:
The profit motive drives profit-making organizations to come up with creative new products and services. These products and services are then sold to customers for maximum profit, which covers the costs of providing the products and services. Most importantly, with the presence of the profit motive, organizations try to provide the goods and services in the most efficient manner. Generally, most economists agree that the profit motive is the only efficient way to allocate scare economic resources.
