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Greetings Sir. Can you please help me in the following question.
Which of the following statements regarding measurement of performance in not-forprofit organisations is/are true?
(1) Output does not usually have a market value, and it is therefore more difficult to measure effectiveness.
Ans- Output does not usually have a market value, and it is therefore more difficult to measure efficiency.
Sir, we usually compare the output with the desired result or objective in order to assess the effectiveness of a N.P.O. So shouldn’t this statement me true. Looking towards an early reply.
By market value it is meaning that it has a price. For example, if a company produces TV’s then the output is TV’s and they have a market value (i.e. the selling price).
Not-for-profit organisations are not usually producing products. For example, the output of a hospital is people who have been cured, and this does not have a selling price or market value.
Although I understood your explanation, but still i didn’t understood, why the statement is false. Can you please help me out sir
It seems that maybe the book in which you found this has a typing mistake.
Partly because the statement is true, but also the statement refers to effectiveness, whereas the answer you quote refers to efficiency 🙂
Sir, the question belongs to the kit of Kaplan, and they have not provided any explanation as to why it will be more difficult to measure efficiency.
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