articles review of how does the strategic management process differ for ngo

8/10/2019 Articles review of How does the strategic management process differ for NGO

1/16

The Strategic Management Process in

Non Profit Organizations with Dynamic

Environments.

Group Members:Alishan Jaffer

Ajay Kumar

Abdul Majid

Zain Afridi

Research Article extracted from:

Journal of Managerial Issues

TEAM RED


2/16

Objectives

Articles sets a benchmark as to how Non Profit Organizations

need to formulate Strategies

Differentiates For Profit Organizations against Non Profit

Organizations

Importance of a completely modified model for StrategicManagement in Non Profit Organizations

Describes the theory that supports the idea of bifurcates usual

Strategic management method for Profit & Non Profit

organizations Focuses highly on Stakeholders Value Analysis

Presents a completely modified model especially designed for

Non-Profit Organizations


3/16

Theories

Strategic Management Process remains same for Profit & Non

profit organizations (Crittenden, 1986)

Current Model of Strategic Management may be applied to

Non Profit Organizations but needs Modifications (Nutt, 1984)

Strategic Management Organizations need to be classified bypurpose (Charitable, Social, Trade Association, Government &

Political) making their Stake holders & their evaluation easier

(Crittenden, 1988)

Wallender (1978), later identifies major Differences &Similarities in Profit & Non Profit Organizations; integrating

their differences & similarities for a new model.


4/16

Arguments

Brysons Model (1988) defined a new model for Strategic

Management which focused mainly on

1) Identification of outside stakeholders & their role during

the entire strategic management process.

2) Strategic Management in Non Profit Organization has amajor chunk that revolves around Values & Views of Outside

Stakeholders

3) Stake Holders Values Analysis overshadows all other aspects


5/16

Analysis of Brysons Model


6/16

Modified Strategic Management

Model


7/16

Stakeholder Value Analysis


8/16

Style

Author has used a comparative style of writing in which hedifferentiate between profit and not for profit organization ateach step on strategic management

I.e Mission of profitable organization changes if the previousmission is no more profitable

Whereas mission of not for profit organization rarely changes butit increase its scope in vision

Goals and objective of profitable organization is to earn profit

Whereas goals of not for profit organization is to serve the needsof stakeholder at maximum operational efficiency and working in

budget constraint Not Technical

Descriptive and Exploratory style

Starts an argument and then supports it with relevant example atevery step.


9/16

Method Employed & Evidence

of the strategys successfulness Measuring Performance of Organizations for the

implementation of the strategy

Identifying the Variance between an Organizations

performance earlier & after the exact implementation of the

Strategy for a period of 5 years A Survey on the organizations that implemented the strategy

and their analysis for next 5 years shows the inclination of the

Non Profit Organizations towards more Stakeholder focused

to promote inflows. (Digman, 1991)


10/16

Central Concepts

Mission Statement

Goals & Objectives

Situational Analysis

Strategy Formulation

Policies & Procedures

Strategy Evaluation & Choice


11/16

Contribution

Prepares new Strategic management model for Non-Profitorganization and describe how does the external stakeholdercan influence the process of strategic management

Mission Statement

Mission statement of profitable organization changes if oldmission is no more profitable

Mission statement of NGO does not changes but scope of themission increases. Saving polio, Decreasing child mortality

Goals and objectives

Primary Goals of profit making organization is to grow and earnmaximum profit whereas goals of not for profit organization is to workfor the needs of stakeholder in best way as well as to work in budgetconstraints

Both are conflicting either u can increase value or work in budget, it isup to the organization what option to choose


12/16

Situation Analysis

The situation analysis of profit making is to conduct PEST andSWOT analysis whereas in NGO involves assessment of futureresource levels. In the nonprofit setting funding can come frommany different sources and can vary from year to year. For

instance, donations and volunteer interest might decrease for anygiven number of reasons all beyond the direct control of topmanagement.

Strategy Formulation

The key to effective strategy formulation involves finding the

major internal resource variables that the firm can manipulate toimprove its match with the environment.

Preferences of stakeholder should be prioritized. For example ifclients does not want an abortion room in hospital you can notbuild it for any purpose


13/16

Policy and procedures Large contributors normally has major say in policy formation and procedures

even if they do not have expertise of that business

Strategy Evaluation and Choice Profitable organization may focus on the long term prospects of the business

and strategy while considering the which one should be implemented

NGOs may prefer to choose the one which has most early benefit and may beable to attract more contributors.

Implementation difficulties are compounded in nonprofit organizations. For instance, time is a

limited resource during any implementation process, but can be even morecrucial for nonprofit organizations where future sources of funding orvolunteer support may be contingent upon the success of newly developed

strategies. Thus, strategies in nonprofit organizations may need to beimplemented in ways such that initial results from the strategy are quick andfavorable, so that sufficient future resources can be secured to successfullycomplete the entire implementation process

Motivating Employees is very difficult as no monetary benefits can beattached


14/16

Strategic Control or Evaluation

For profit organization performance of new strategy can be

evaluated in the financial statement by the bottom line like profit

and loss

Where as in not for profit it is not that easy as motive oforganization is not to earn profit

Stakeholder satisfaction level can be used as proxy for measuring

the performance of the strategy but it is not that easy as

measuring satisfaction is a very much subjective.


15/16

Wider Literature

The Chronicle of Philanthropy (1993), focused on how Cash

inflows in the Non-Profit Organizations were influenced by

Brysons Model

Successful implementation attracts stakeholders for their

continuous support for the cause that Non profit Organizationpromotes (Oster, 2010)

Later studies in the genre focused on effective cash

management by Non-Profit Organization once they

successfully implement the Strategy to attract inflows

Non profit management clinic by Bradley (2004)

Competitiveness in Non profit sector is driven by the higher

value to outside stakeholders (Goetzmann, 2013)


16/16

Conclusion

Are for-profit strategic management models applicable to non

profit organizations?

While the basic principles can be applied to both for profit and

non profit organizations the overall importance and execution

of each step varies The nature of the environment also plays a role in how the

models/processes are applied to non profit organizations.

Therefore a modified model was proposed which:

Places more emphasis on the importance of stakeholders Gives more importance to the implementation phase.

Recognizes how dynamic environment can affect the strategic

management process.

articles review of how does the strategic management process differ for ngo

Documents