Most organizations, whether run for profit or otherwise, live or die on the balance between funds for operations, cost of operations and the quality of the resulting  product or service.

This applies regardless of the organizational function, e.g., government, corporate, charatible, educational, other non profit and so on.

Of course, governments are a bit of a special case in that they seem to be able to overspend without dire consequence, to a point anyway.  That is governments have a much larger tolerance for deficit spending than most other types of organization.

Getting the Balance Right

Given there are only three parameters, it might seem easy to set the organizational goals.  Simply put, maximize revenue, minimize cost and give the stakeholders what they want, i.e., the product or service provided by the organization should exceed the users expectations.

Not surprisingly, in practice, it is far more complex.  Before maximizing revenues or minimizing expenses both the sources and the integration income, cost and quality come into play.

Reducing cost could reduce quality, resulting in a lower price for the product or service and thus lower revenue.  Or higher quality could result in lower demand due to a higher cost of goods leading to lower sales due to affordabilty issues.

There are in fact a wide myriad of combinations and scenarios to consider.

Also revenues can come from a variety of sources, many which are somewhat out of the organizations control.  Things like donations, government handouts, revenue from sales of goods or services, investment income and the list goes on.

The point, developing clear and simply strategies and execution plans for managing the intricat dance between income, expense and outputs is not easy.

Ultimately though, no matter how difficult, of all the things an organization does, strategizing, planning, executing and monitoring expenses, revenues and quality is the most critical activity to ensure organizational success.