Chapter 3: Theories of the Nonprofit Sector and Nonprofit Organizations

Test Bank

Multiple Choice

1. Sociologists describe nonprofits as ______.

A. mediating structures

B. the voice of the people

C. the basis of a nation’s economy

D. organizations that engage in rational acts

Learning Objective: 3-1: Summarize key theories from various disciplines that explain the nonprofit sector.

Cognitive Domain: Knowledge

Answer Location: Nonprofit Theory Across the Disciplines

Difficulty Level: Easy

2. Individuals who benefit without paying are called ______.

A. consumers

B. free riders

C. externalities

D. resource leeches

Learning Objective: 3-1: Summarize key theories from various disciplines that explain the nonprofit sector.

Cognitive Domain: Knowledge

Answer Location: The Failure Theories

Difficulty Level: Easy

3. The type of market failure in which a breakdown occurs in the relationship between a buyer and a seller is called a/an ______ failure.

A. public

B. private

C. contract

D. common

Learning Objective: 3-1: Summarize key theories from various disciplines that explain the nonprofit sector.

Cognitive Domain: Knowledge

Answer Location: Market and Government Failure

Difficulty Level: Easy

4. What theory attributes the existence of nonprofit organizations to the vision of the individuals who created them?

A. failure

B. altruism

C. supply-side

D. entrepreneurship

Learning Objective: 3-1: Summarize key theories from various disciplines that explain the nonprofit sector.

Cognitive Domain: Knowledge

Answer Location: Supply-Side Theories

Difficulty Level: Easy

5. Lohmann describes a third category of goods as ______ goods.

A. free

B. common

C. charitable

D. tax-exempt

Learning Objective: 3-2: Define public, private, and common goods and the role of nonprofit organizations in providing them.

Cognitive Domain: Knowledge

Answer Location: Theory of the Commons: An Interdisciplinary Approach

Difficulty Level: Easy

6. Salamon identifies nonprofits as ______.

A. self-governing

B. citizen communities

C. private sector organizations

D. public sector organizations

Learning Objective: 3-3: Summarize key theories explaining the behavior of nonprofit organizations.

Cognitive Domain: Knowledge

Answer Location: Characteristics of Nonprofit Organizations

Difficulty Level: Easy

7. The ______ is the principal standard against which nonprofit performance should be measured.

A. charter

B. business plan

C. mission statement

D. core values statement

Learning Objective: 3-3: Summarize key theories explaining the behavior of nonprofit organizations.

Cognitive Domain: Knowledge

Answer Location: Characteristics of Nonprofit Organizations

Difficulty Level: Easy

8. Nonprofit organizations are driven by ______.

A. the need to maximize profit

B. achievement of their missions

C. the success of fund-raising campaigns

D. a need to meet the expectations of a majority

Learning Objective: 3-3: Summarize key theories explaining the behavior of nonprofit organizations.

Cognitive Domain: Knowledge

Answer Location: Characteristics of Nonprofit Organizations

Difficulty Level: Easy

9. ______ enables a nonprofit organization operating as an open system to adapt to changing circumstances.

A. Feedback

B. Bureaucracy

C. Academic research

D. Operational results

Learning Objective: 3-3: Summarize key theories explaining the behavior of nonprofit organizations.

Cognitive Domain: Knowledge

Answer Location: Nonprofits as Open Systems

Difficulty Level: Easy

10. A nonprofit organization functioning as a/an _____ system is entirely self-sufficient.

A. open

B. closed

C. hybrid

D. unilateral

Learning Objective: 3-3: Summarize key theories explaining the behavior of nonprofit organizations.

Cognitive Domain: Knowledge

Answer Location: Nonprofits as Open Systems

Difficulty Level: Easy

11. ______ theory explains the behavior of organizations in terms of their dependence on external constituencies.

A. Supply-side

B. Isomorphism

C. Market failure

D. Resource dependence

Learning Objective: 3-3: Summarize key theories explaining the behavior of nonprofit organizations.

Cognitive Domain: Knowledge

Answer Location: Resource Dependence

Difficulty Level: Easy

12. A risk of resource dependency is actions taken by the nonprofit to alter its goals to satisfy the contributor of funds. This action is also called ______:

A. goal displacement

B. population ecology

C. information asymmetry

D. performance measurement

Learning Objective: 3-3: Summarize key theories explaining the behavior of nonprofit organizations.

Cognitive Domain: Comprehension

Answer Location: Resource Dependence

Difficulty Level: Medium

13. One way to reduce dependency and thus maintain more autonomy is to ______.

A. rewrite the mission statement

B. use a single source of revenue

C. diversify the sources of revenue

D. lobby for more government assistance

Learning Objective: 3-3: Summarize key theories explaining the behavior of nonprofit organizations.

Cognitive Domain: Comprehension

Answer Location: Resource Dependence

Difficulty Level: Medium

14. The concept that organizations become more like each other when facing similar environmental influences is called ______.

A. isomorphism

B. goal displacement

C. institutional theory

D. task environment theory

Learning Objective: 3-3: Summarize key theories explaining the behavior of nonprofit organizations.

Cognitive Domain: Comprehension

Answer Location: Resource Dependence

Difficulty Level: Medium

15. ______ isomorphism refers to the tendency of organizations to copy each other.

A. Mimetic

B. Coercive

C. Mocking

D. Institutional

Learning Objective: 3-3: Summarize key theories explaining the behavior of nonprofit organizations.

Cognitive Domain: Knowledge

Answer Location: Isomorphism

Difficulty Level: Easy

16. Normative isomorphism arises when organizations are influenced by the same standards of ______.

A. achievement

B. bureaucracy

C. assimilation

D. professionalism

Learning Objective: 3-3: Summarize key theories explaining the behavior of nonprofit organizations.

Cognitive Domain: Knowledge

Answer Location: Isomorphism

Difficulty Level: Easy

17. When individuals do not have complete information to judge the quality of the goods they seek to purchase, they are experiencing ______.

A. goal displacement

B. resource dependency

C. information asymmetry

D. consumer misunderstanding

Learning Objective: 3-3: Summarize key theories explaining the behavior of nonprofit organizations.

Cognitive Domain: Comprehension

Answer Location: Market and Government Failure

Difficulty Level: Medium

18. A sociological approach for explaining the life and death of an organization is called ______.

A. necrosis

B. dissolution

C. isomorphism

D. population ecology

Learning Objective: 3-3: Summarize key theories explaining the behavior of nonprofit organizations.

Cognitive Domain: Knowledge

Answer Location: Nonprofits as Open Systems

Difficulty Level: Easy

19. _______ cultures help organizations produce excellent results.

A. Strong

B. Flexible

C. Relaxed

D. Variable

Learning Objective: 3-3: Summarize key theories explaining the behavior of nonprofit organizations.

Cognitive Domain: Knowledge

Answer Location: Organizational Culture

Difficulty Level: Easy

20. According to Edgar Schein, logos, ceremonies, and symbols belong to what category of culture?

A. basic values

B. basic assumptions

C. voluntaristic values

D. artifacts and creations

Learning Objective: 3-3: Summarize key theories explaining the behavior of nonprofit organizations.

Cognitive Domain: Knowledge

Answer Location: Organizational Culture

Difficulty Level: Easy

21. Mary is writing detailed organizational policies for a nonprofit organization. Mary is practicing ______.

A. bureaucracy

B. dependency

C. experimentation

D. closed systems theory

Learning Objective: 3-3: Summarize key theories explaining the behavior of nonprofit organizations.

Cognitive Domain: Comprehension

Answer Location: Nonprofit Theory Across the Disciplines

Difficulty Level: Medium

22. A nonprofit organization landscaped the grounds of a building it occupies. This beautification improved the property values of the residences located across the street. This is an example of a(an) _____ externality.

A. nominal

B. positive

C. augmented

D. complement

Learning Objective: 3-3: Summarize key theories explaining the behavior of nonprofit organizations.

Cognitive Domain: Comprehension

Answer Location: The Failure Theories

Difficulty Level: Medium

23. A nonprofit volunteer is buying groceries for a poor family at a commercial store. The volunteer is buying ______ goods.

A. public

B. private

C. external

D. common

Learning Objective: 3-2: Define public, private, and common goods and the role of nonprofit organizations in providing them.

Cognitive Domain: Comprehension

Answer Location: The Failure Theories

Difficulty Level: Medium

24. A nonprofit organization provides training sessions to encourage its volunteers to embrace the organization’s vision, mission, and values. The nonprofit is applying ______ theory.

A. market

B. institutional

C. open systems

D. closed systems

Learning Objective: 3-2: Define public, private, and common goods and the role of nonprofit organizations in providing them.

Cognitive Domain: Comprehension

Answer Location: Isomorphism

Difficulty Level: Medium

25. Board members of a nonprofit organization are calculating the salary offer for a new chief executive officer (CEO). The board wants to ensure that the salary paid to the new CEO is fair for the knowledge and skills needed to perform the job well. The board members are practicing ______.

A. open compensation

B. closed competition

C. nonprofit distributing

D. noncompulsory distributions

Learning Objective: 3-3: Summarize key theories explaining the behavior of nonprofit organizations.

Cognitive Domain: Comprehension

Answer Location: Characteristics of Nonprofit Organizations

Difficulty Level: Medium

26. The chief executive officer (CEO) of a nonprofit organization is preparing a data information system to monitor if organizational programs are meeting the established goal. The CEO is controlling his organization’s performance through the use of ______ measures.

A. input

B. impact

C. mimetic

D. outcome

Learning Objective: 3-3: Summarize key theories explaining the behavior of nonprofit organizations.

Cognitive Domain: Comprehension

Answer Location: Resource Dependence

Difficulty Level: Medium

27. ______ scientists study organizations from a perspective of power relationships.

A. Political

B. Historical

C. Behavioral

D. Environmental

Learning Objective: 3-1: Summarize key theories from various disciplines that explain the nonprofit sector.

Cognitive Domain: Knowledge

Answer Location: Nonprofit Theory Across the Disciplines

Difficulty Level: Easy

28. A majority of citizens in a community do not agree with a minority of citizens that the community needs a nonprofit organization to serve the needs of homeless citizens. This sentence is an example of ______.

A. an externality

B. market failure

C. government failure

D. demand heterogeneity

Learning Objective: 3-1: Summarize key theories from various disciplines that explain the nonprofit sector.

Cognitive Domain: Comprehension

Answer Location: Market and Government Failure

Difficulty Level: Medium

True/False

1. Nonprofit organizations differ from government organizations in that they have more flexibility to respond to the needs of diverse groups.

Learning Objective: 3-1: Summarize key theories from various disciplines that explain the nonprofit sector.

Cognitive Domain: Knowledge

Answer Location: Nonprofit Theory Across the Disciplines

Difficulty Level: Easy

2. The Internal Revenue Service does not allow nonprofits to undertake experimentation with regard to the development of new programs.

Learning Objective: 3-1: Summarize key theories from various disciplines that explain the nonprofit sector.

Cognitive Domain: Knowledge

Answer Location: Nonprofit Theory Across the Disciplines

Difficulty Level: Easy

3. Failure theories suggest governments should pay to meet the needs of large groups.

Learning Objective: 3-1: Summarize key theories from various disciplines that explain the nonprofit sector.

Cognitive Domain: Knowledge

Answer Location: Nonprofits as Gap Fillers

Difficulty Level: Easy

4. According to trust theory, leaders are trusted because they are believed to be driven by altruistic motivations.

Learning Objective: 3-1: Summarize key theories from various disciplines that explain the nonprofit sector.

Cognitive Domain: Knowledge

Answer Location: Nonprofits as Gap Fillers

Difficulty Level: Easy

5. Nonprofits may not receive any funding from city governments.

Learning Objective: 3-1: Summarize key theories from various disciplines that explain the nonprofit sector.

Cognitive Domain: Knowledge

Answer Location: Characteristics of Nonprofit Organizations

Difficulty Level: Easy

6. Final control of a nonprofit organization is held by the chief executive officer.

Learning Objective: 3-4: Explain factors influencing the organizational structure of organizations.

Cognitive Domain: Knowledge

Answer Location: Explaining Nonprofit Organizational Structures

Difficulty Level: Easy

7. Excess revenues gained by a nonprofit are invested in stock markets.

Learning Objective: 3-3: Summarize key theories explaining the behavior of nonprofit organizations.

Cognitive Domain: Knowledge

Answer Location: Characteristics of Nonprofit Organizations

Difficulty Level: Easy

8. The term “open systems” means organizations interact with their external environments.

Learning Objective: 3-3: Summarize key theories explaining the behavior of nonprofit organizations.

Cognitive Domain: Knowledge

Answer Location: Nonprofits as Open Systems

Difficulty Level: Easy

9. The term “resource dependency” means nonprofits rely on external constituencies for revenue.

Learning Objective: 3-3: Summarize key theories explaining the behavior of nonprofit organizations.

Cognitive Domain: Knowledge

Answer Location: Resource Dependence

Difficulty Level: Easy

10. The term “organizational culture” in a nonprofit refers to unwritten rules regarding “how things are done.”

Learning Objective: 3-3: Summarize key theories explaining the behavior of nonprofit organizations.

Cognitive Domain: Knowledge

Answer Location: Organizational Culture

Difficulty Level: Easy

Short Answer

1. Name and explain functions political scientists argue that nonprofits perform in relation to government.

Learning Objective: 3-1: Summarize key theories from various disciplines that explain the nonprofit sector.

Cognitive Domain: Comprehension

Answer Location: Nonprofit Theory Across the Disciplines

Difficulty Level: Medium

2. Select a nonprofit organization and analyze how the nonprofit acts as a gap filler.

Learning Objective: 3-1: Summarize key theories from various disciplines that explain the nonprofit sector.

Cognitive Domain: Analysis

Answer Location: Nonprofits as Gap Fillers

Difficulty Level: Hard

3. Identify and explain situations in which government failure can occur.

Learning Objective: 3-1: Summarize key theories from various disciplines that explain the nonprofit sector.

Cognitive Domain: Application

Answer Location: Market and Government Failure

Difficulty Level: Medium

4. Analyze if religious worship is a private, public, or common good.

Learning Objective: 3-2: Define public, private, and common goods and the role of nonprofit organizations in providing them.

Cognitive Domain: Analysis

Answer Location: Changing Definitions of Private, Public, and Common

Difficulty Level: Hard

5. Select and summarize three of the five common characteristics of nonprofit organizations.

Learning Objective: 3-4: Explain factors influencing the organizational structure of organizations.

Cognitive Domain: Knowledge

Answer Location: Characteristics of Nonprofit Organizations

Difficulty Level: Easy

6. Apply an example for each of Schein’s three categories of organizational culture to a nonprofit organization.

Learning Objective: 3-1: Summarize key theories from various disciplines that explain the nonprofit sector.

Cognitive Domain: Application

Answer Location: Organizational Culture

Difficulty Level: Medium

7. Sketch a simplistic model of a nonprofit organization operating as an open system. Label each part of the system.

Learning Objective: 3-1: Summarize key theories from various disciplines that explain the nonprofit sector.

Cognitive Domain: Application

Answer Location: Nonprofits as Open Systems

Difficulty Level: Medium

8. Explain the three types of isomorphism defined by Powell and DiMaggio. Provide an example of a nonprofit organization that demonstrates each type.

Learning Objective: 3-1: Summarize key theories from various disciplines that explain the nonprofit sector.

Cognitive Domain: Application

Answer Location: Isomorphism

Difficulty Level: Medium

9. Compare market failure and contract failure.

Learning Objective: 3-1: Summarize key theories from various disciplines that explain the nonprofit sector.

Cognitive Domain: Comprehension

Answer Location: Market and Government Failure

Difficulty Level: Medium

10. Explain Howard Berman’s perspective on the nonprofit sector. Provide an example.

Learning Objective: 3-1: Summarize key theories from various disciplines that explain the nonprofit sector.

Cognitive Domain: Comprehension

Answer Location: Nonprofits as Gap Fillers

Difficulty Level: Medium

11. Discuss recent research findings regarding the ability of nonprofit organizations to adapt to manage resource dependency.

Learning Objective: 3-1: Summarize key theories from various disciplines that explain the nonprofit sector.

Cognitive Domain: Comprehension

Answer Location: Resource Dependence

Difficulty Level: Medium