case 7 united way tn

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Teaching Note: Case 7 – United Way Teaching Note: Case 7 – United Way Case Objectives 1. To apply the concepts of strategic management to a non- profit organization. 2. To examine how the external and internal environment affects a non-profit business model given the current state of U.S. economic and philanthropic activity. 3. To discuss the many decisions and actions that a non- profit organization has to undertake to sustain a competitive advantage. 4. To evaluate the impact of negative publicity on a non- profit organization and the implications for strategic leadership in such a case. See the table below to determine where to use this case: Chapter Use Key Concepts Additional Readings or Exercises 1: Strategy Concept Strategic management; vision, mission, strategic objectives See NOTE, video interview with CEO Brian Gallagher 2: External Environmen t External environmental forces, Porter’s five forces model See NOTE additional information. Also see Porter’s 1996 HBR article “What is strategy?”, and Porter & Kramer’s 1999 HBR article “Philanthropy’s New Agenda: Creating Value” 3: Internal Analysis Value chain, resource- based VRIN analysis 4: Intellectu al Assets Human capital; intellectual capital 1

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Page 1: Case 7 United Way TN

Teaching Note: Case 7 – United Way

Teaching Note: Case 7 – United Way

Case Objectives

1. To apply the concepts of strategic management to a non-profit organization.2. To examine how the external and internal environment affects a non-profit

business model given the current state of U.S. economic and philanthropic activity.

3. To discuss the many decisions and actions that a non-profit organization has to undertake to sustain a competitive advantage.

4. To evaluate the impact of negative publicity on a non-profit organization and the implications for strategic leadership in such a case.

See the table below to determine where to use this case:

Chapter Use Key Concepts Additional Readings or Exercises

1: Strategy Concept

Strategic management; vision, mission, strategic objectives

See NOTE, video interview with CEO Brian Gallagher

2: External Environment

External environmental forces, Porter’s five forces model

See NOTE additional information. Also see Porter’s 1996 HBR article “What is strategy?”, and Porter & Kramer’s 1999 HBR article “Philanthropy’s New Agenda: Creating Value”

3: Internal Analysis

Value chain, resource-based VRIN analysis

4: Intellectual Assets

Human capital; intellectual capital

5: Business-Level Strategy

Generic strategies

9: Strategic Control

Behavioral control; corporate governance

See NOTE United Way ratings by watchdog groups

11: Strategic Leadership

Leadership capabilities; ethical orientation

Case Synopsis

The United Way Case illustrates the problems that have been created due to a well-established business model, in a challenging environment, facing the possibility of declining growth, and competition from new directions, all under the threat of eroding trust. This case shows how a mature brand, with a powerful and mostly honorable history, can still stumble. Since the year 2000, United Way had seemingly reached a plateau of fundraising in the U.S. Certainly there were options for growth but charitable donations still had not topped the inflation-adjusted increases of the 1998-1999

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Teaching Note: Case 7 – United Way

campaigns. In addition, veteran fund-raisers on all fronts were citing challenges such as competition for donations, difficulty recruiting and keeping volunteer staff, and a growing focus on large gifts from very wealthy individuals, which, when publicized, could reduce the motivation for smaller donors to contribute. The explosive growth of single-focus nonprofits since 9/11 meant more choices for donors who increasingly wanted a connection to a cause. Coupled with the well-publicized scandals in organizations such as the Nature Conservancy, Red Cross, and United Way of America itself, trust was eroded, legitimacy of mission was questioned, and governance issues were at the top of the to-do lists of nonprofit CEO’s.

In this environment, Brian Gallagher, United Way of America CEO since 2002, established new membership standards to enhance the level of accountability and transparency in United Way affiliates’ operations, re-branded United Way as doing “what matters” in the communities it served, and updated the “standards of excellence”. These new standards provided a description of best practices to better reflect the organization’s strategic shift. United Way was transitioning from its traditional role as strictly a fundraiser to a new mission focused on identifying and addressing the long-term needs of communities. These initiatives required that the United Way affiliates buy into the change effort, since the power of the parent organization was limited to removing the affiliate from United Way membership if it didn’t comply. It was imperative for a nonprofit organization to get the necessary support at the local level in order to achieve stated organizational goals. Would Gallagher’s strategy be successful? Was the shift in strategy sufficient to ensure the continued viability of the United Way, or was its very mission perhaps no longer relevant?

Teaching Plan

This is a comprehensive case and can be used for the full arc of strategic analysis, formulation and implementation. As such, this case is best positioned at least mid-way through the course, after students have had exposure to the concepts of strategy analysis and formulation. Especially if students have already studied a for-profit organization trying to develop a sustainable competitive advantage in its industry, turning this discussion to a non-profit may help them further refine their strategic management tool set.

As a community service exercise, after discussing the case, the instructor can encourage students to make themselves aware of the local charities supported by their community United Way. Students might be encouraged to participate in community service activities as a result of this new knowledge.

Summary of Discussion Questions

Here is a list of the suggested discussion questions. You can decide which questions to assign, and also which additional readings or exercises to include to augment each discussion. Refer back to the Case Objectives Table to identify any additional readings and/or exercises so they can be assigned in advance.

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This case can start with an icebreaker. Starting from the perspective of a customer may make it easier for students to transition to a strategic analysis. All students should be able to identify with the concept of non-profit missions and charitable giving. Choosing any of the following questions can get students thinking about their experiences with the products and the industry:

Have any of you ever given to United Way or know someone who has? Based on what you know, even before reading the case, what is your opinion of United Way and other broad-based charities such as the American Cancer Society and the Salvation Army? Have you ever used their services or do you know someone who has? Do you trust them? If asked, would you donate to them? Would you rather donate to some other charity? Why?

Discussion Questions:

1. What are the current challenges facing United Way? What are key issues in the general and non-profit charitable giving industry environments that affect United Way’s operations?

2. What are United Way’s most important internal resources and capabilities?

3. What business is United Way in and how should it compete? What are United Way’s core capabilities? What strategies have United Way’s leadership tried in the past, and how successful have they been? What additional strategies might you suggest?

4. What unique responsibilities does United Way have regarding ethical behavior and “best practice” governance and financial accountability models? How successful will United Way be in creating change at the local level? Is United Way’s mission still viable?

Discussion Questions and Responses

1. What are the current challenges facing United Way? What are key issues in the general and non-profit charitable giving industry environments that affect United Way’s operations?

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Referencing Chapter 1: Introduction and Analyzing Goals and Objectives

See Chapter 1, Exhibit 01: Strategic management consists of the analyses, decisions, and actions an organization undertakes in order to create and sustain competitive advantages:

strategy directs the organization toward overall goals and objectives; includes multiple stakeholders in decision making; incorporates both short-term and long-term perspectives; recognizes trade-offs between efficiency and effectiveness.

See Chapter 1, Exhibit 06: The primary role of the organizational leader is to articulate vision, mission and strategic objectives. Leaders must also be proactive, anticipate change and continually refine changes to their strategies. United Way may need to evaluate its initial vision of the organization’s purpose: what was the original goal that was “massively inspiring, overarching, and long-term”, that represented a destination that is driven by and evokes passion? Is the original vision still applicable given the present circumstances? United Way’s organizational mission needs to be considered: a mission encompasses both the purpose of the company as well as the basis for competition and competitive advantages. Organizations must respond to multiple constituencies if they are to survive and prosper, and the mission provides a means of communicating to diverse organizational stakeholders. Although vision statements tend to be quite enduring and seldom change, a firm’s mission can and should change when competitive conditions dramatically change or the firm is faced with new threats or opportunities.

United Way leadership must establish strategic objectives to operationalize the mission statement. That is, objectives operationalize the mission statement, and help to provide guidance on how the organization can fulfill or move toward the “higher goals” in the goal hierarchy—the mission and vision.

The basic question strategic management tries to answer is: How can we create competitive advantages in the marketplace that are not only unique and valuable but also difficult for competitors to copy or substitute?

NOTE - ADDITIONAL EXERCISES:

In writing a mission statement, it is important to understand the definition of the business: 1) who are its customers, 2) what customer need is the organization trying to fulfill, and 3) how does the business create and deliver value to customers and satisfy their needs. Visit the United Way of America’s web site to view its mission and vision at:http://www.liveunited.org/about/missvis.cfm. Watch the following video interview of CEO Brian Gallagher from December 2006 on how United Way reaches out for donations: http://www.forbes.com/video/?video=fvn/business/ab_charity121306

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Based on this, how do you feel about the mission of United Way? Would you feel willing to give, based on what you know about them?

Referencing Chapter 2: Analyzing the External Environment

To answer the question about the key issues in the general and non-profit charitable giving industry environments that affect United Way’s operation, it’s necessary to assess the segments of the external competitive environment that include competitors, customers, and suppliers, substitutes and new entrants. Porter’s five forces model allows strategists to anticipate where the industry might be most vulnerable. Here’s where the answer to the question: what business are you in? becomes most important, since identifying the wrong industry can create problems for crafting an effective strategy.

Help students apply Porter’s Five Forces of competition by drawing a diagram on the board similar to the following, and having students fill in the details:

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RivalryHigh

Threat of Substitutes

High

Buyers’ Bargaining

PowerHigh

Threat of New Entrants

High

Suppliers’ Bargaining

PowerNone

Suggested: Donors can switch to being program providers on their own; recipients can raise their own funds.

Suggested: Many rivals compete for donors. Showing how programs are different and explaining the current change in United Way mission is difficult when some competitors are also previous partners.

Suggested: Donors encounter almost no switching costs, so loyalty cannot be assumed. Recipients have less bargaining power.

Suggested: Almost no resources are needed to start up a nonprofit.

Suggested: There are no traditional suppliers in the nonprofit philanthropic industry. Both donors and recipients can be considered “customers”.

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Teaching Note: Case 7 – United Way

Regarding the general external environment, United Way must consider the political/legal, economic and global, sociocultural and demographic, and technological forces that might affect the ability of the firm to deliver its services and sustain its business. See which factors in the general environment students might pick that have a significant impact on the nonprofit philanthropic industry. Students might respond as follows:

Demographic: Certainly the demographics had changed. Mergers and acquisitions were reducing the number of corporate partners available in local areas, and, although these larger corporations had significant assets and employees available for potential donations, many such corporations were considering creating their own charitable arms, preferring to use these to promote their own social responsibility while retaining control of the causes they supported. Also, the rich individuals were getting richer, the baby boomers were getting older and staying active longer, all good for non-profits looking for large individual donors and volunteers. However, the poor were getting poorer and more in need of help.

Sociocultural: Socio-cultural issues included the traditional highly philanthropic nature of the average American citizen (first noticed by Alexis de Tocqueville in 1831, who wrote “I must say that I have seen Americans make a great and real sacrifice to the public welfare; and have noticed a hundred instances in which they hardly ever failed to lend faithful support to one another”, the top United Way donors who contributed at least $10,000 annually were honored by being inducted into the Tocqueville Society).

Technological: Technology, especially the growth of the Internet had been a significant boon to all nonprofits, especially in accomplishing administrative duties and in communicating with current and potential donors. United Way appeared to be aware of these benefits.

Political-Legal: Political-legal issues had an effect not only on United Way, but also on the nonprofit philanthropic industry as a whole. Changes in tax law, pension regulations, potential legislation of governance controls similar to Sarbanes-Oxley for nonprofits, all these were being discussed. United Way had dedicated public policy advocacy personnel to monitor and lobby for these issues, but changes here make it difficult to anticipate the future.

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NOTE - ADDITIONAL EXERCISES and OPTIONAL READINGS:

The ongoing challenge of philanthropic organizations is to maintain the pace of donations. In 2006, ABC’s 20/20 did an investigation into why people give, and who gives the most. The full story is available at http://abcnews.go.com/2020/story?id=2682730&page=1. With the U.S. economic downturn in 2008, what has happened to charitable giving trends? See this additional story from 2009 which includes an interesting graphic available in the left sidebar: http://www.nytimes.com/2009/06/10/us/10charity.html And here listen to or read about how charitable contributions dropped in 2008:http://www.npr.org/templates/story/story.php?storyId=105178804

In addition, students can be given an assignment to read the 1996 article by Michael Porter, “What is strategy?”, Harvard Business Review, 74(6): 61-78, and the 1999 article by Porter and Kramer, “Philanthropy’s New Agenda: Creating Value”, Harvard Business Review, 77(6): 121-130. Concepts from these articles will allow the students to further develop their understanding.

2. What are United Way’s most important internal resources and capabilities?

Referencing Chapter 3: Analyzing the Internal Environment To further evaluate the challenges facing United Way, the organization must assess the relationships between the elements in its value chain. Every activity should add value. Take a look at Chapter 3, Exhibit 3.1 to see the value chain activities. Here is what an assessment of this might look like for United Way:

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Value chain activity How does United Way create value for the “customer”? What challenges does United Way have in its value chain?

Primary:Inbound logistics (fundraising tactics)

It appears that relationships with long-time donors are a strength, partly given the long history of the organization.

Operations (efficient processing of donations, quality control systems)

No evidence that this has ever been a systemic weakness except where blatant misappropriation has occurred due to lack of monitoring of existing controls.

Outbound logistics (distribution to recipients)

Distribution efficiency is one of the hardest things to assess, except by exception.

Marketing and Sales (motivated representatives, innovative advertising & promotion)

Donor segments seem well identified and understood. Many affiliates seem to have dedicated and knowledgeable representatives. Advertising and promotion campaigns appear to lack innovative appeal.

Service (ability to solicit feedback & respond)

Consistent quality guaranteed by long-time relationship with most fund recipients. Donor relationships are changing and may require new skill sets and resources in order to service these appropriately.

Secondary (or support):Procurement (win-win relationships with partners and other alliances for procurement of program components)

Long-term relationships directly with partners, both corporate donors and program allies such as the Red Cross create trust and willingness to negotiate for needed goods and services, and to create joint initiatives such as relief efforts post-Katrina.

Technology development (state of the art hardware & software, innovative culture & qualified personnel)

Attention seems to be paid to IT upgrades and innovations, especially regarding the Internet as a conduit for both donations and management of affiliate operations.

Human resource management (effective recruitment, incentive & retention mechanisms)

Volunteer recruitment is essential to United Way success, as is the ability to attract skilled fundraising professionals. A long history and traditional formal recognition of these valuable workers appears successful at retaining talent.

General Administration (effective planning systems to establish goals, access to operating capital, effective top mgmt communication, relationships with diverse stakeholders)

Here is where United Way of America has faltered in the past. Lack of appropriate control systems has led to multiple misappropriations of funds, miscommunication of mission and goals and effective standards, lack of appropriate involvement of key stakeholders in top level planning. Current leadership seems aware of the need for attention, here.

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In addition, it’s important to consider the concept of the resource-based view of the firm, and the three key types of resources: tangible resources, intangible resources, and organizational capabilities. Determining whether the internal resources are valuable, rare, difficult to imitate, or difficult to substitute (VRIN) can help a firm sustain a competitive advantage. See Chapter 3, Exhibit 3.6. United Way’s profile might look like this:

Tangible Resources:

Financial: The consistently reported administrative costs at around 10-15% of total contributions makes it appear that United Way of America and its affiliates are financially responsible. However, reports of the inflation of revenues to achieve this admirable low cost continue to surface. Even with possible misstatement, it does appear as if United Way falls below the Better Business Bureau’s expense guideline of 20%, BBB’s point at which charitable giving organizations are suspected of administrative inefficiencies and possible mis-management.

Physical: No significant physical assets involved.

Technological: Partnerships with corporate donors provided United Ways with access to some significant technological resources. Major long-time donors included Microsoft, UPS, and the NFL, all of whom could have helped in many different ways.

Organizational: The federation governance model is both a strength and a weakness. A strength because the affiliates are allowed significant autonomy to develop alliances with diverse donors; a weakness because it makes change harder to institutionalize.

Intangible Resources:

Human: Highly valuable, and rare in the case of dedicated volunteers. Also, many United Way affiliate administrators had been with the organization their entire working lives, and were therefore very knowledgeable and loyal.

Innovation and creativity: Because of the history and longevity of the organization, not known for innovation. Following the same basic mission for years and years does not provide much opportunity for creativity.

Reputation: This was United Way’s most significant strength, but also a most potential weakness. Its brand was very well known. Any stumble, as in the past, would prove costly.

Organizational Capabilities:

Specific Competencies or Skills: Being a venerable brand with a solid volunteer and donor base gives United Way an advantage over possible competitors.

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Capacity to combine resources: How to combine the above competencies to revitalize and grow and differentiate whatever new initiatives that may be developed depends on United Way’s ability to continue a focus on anticipating social trends, and a willingness to take some risks, both in the U.S. and internationally.

There can be great divergence in how various groups would mark these resources as valuable, rare, inimitable and non-substitutable (VRIN). The instructor will probably be able to engage the students in debate and encourage discussion as to whether or not the individual value chain activities can lead to advantages that are sustainable. The instructor may also pose questions about how the interrelationships among such activities would be the source of sustainable competitive advantage. That would help drive home the idea of ‘unique bundles of activities/resources’ as the basis of sustainable competitive advantage much more strongly. This analysis may highlight the difficulties facing United Way. Possible responses are listed below:

Resource/Activity Is it Valuable? (V)

Is it rare?(R)

Is it difficult to imitate? (I)

Are there few substitutes? (N)

Inbound logistics Yes No No NoOperations Yes No No NoOutbound logistics Yes No No YesMarketing and sales

Yes No No No

Service Yes No No YesProcurement Yes No Yes YesTechnology development

Yes No Yes Yes

Human resource management

Yes Yes Yes Yes

General administration

No No No No

Referencing Chapter 4: Assessing Intellectual Capital

Consider the concepts of intellectual capital and human capital, both of which are intangible assets that a company such as United Way needs to have in order to compete successfully. Intellectual capital is a measure of the value of a firm’s intangible assets, its reputation, employee loyalty and commitment, customer relationships, company values, brand names, and the experience and skills of employees. Human capital involves the individual capabilities, knowledge, skills, and experience of the company’s employees and managers. United Way has numerous partners to help it carry out its mission:http://www.liveunited.org/partners/ What other resources does United Way need in order to be effective, and which might be their most important resources given their current challenge?

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Teaching Note: Case 7 – United Way

3. What business is United Way in and how should it compete? What are United Way’s core capabilities? What strategies have United Way’s leadership tried in the past, and how successful have they been? What additional strategies might you suggest?

Referencing Chapter 5: Formulating Business-Level Strategies

In order to craft a sustainable competitive strategy, United Way has to assess its ability to contend with many other philanthropic organizations. See this list from Forbes at http://www.forbes.com/2010/11/16/forbes-charity-200-personal-finance-philanthropy-200-largest-charities-charity-10-intro.html. This story provides additional information to support Exhibit 4 from the case. See if students can identify the differences between the top rated charities – how do they compete?

The question of how to compete in a given business to attain competitive advantage requires an assessment of the types of competitive strategies, including the three generic strategies that are used to overcome the five forces and achieve a competitive advantage:

Overall cost leadershipo Low-cost-position relative to a firm’s peerso Manage relationships throughout the entire value chain

Differentiationo Create products and/or services that are unique and valuedo Non-price attributes for which customers will pay a premium

Focus strategyo Narrow product lines, buyer segments, or targeted geographic marketso Attain advantages either through differentiation or cost leadership

Encourage students to develop their own ideas, using information gained from the discussion of the internal and external environment. Ask the students which strategy they think United Way should pursue, and why. Their answers may include some of the following points:

Cost Leadership: This is traditionally where United Way has excelled, using its touted low operating costs to demonstrate how it could funnel more money to support programs. However, this is also where creative accounting practices may have lead to misrepresentation and subsequent loss of trust. If United Way wants to continue to compete here, adherence to the new standards by all affiliates is essential.

Differentiation: United Way’s original reputation was built on its “community chest” model of providing funds to selected service providers rather than providing services itself. The “federation” model of governance was rather unique at the time, but may be the barrier for needed change going forward. United Way of America’s nationwide initiatives such as 2-1-1 may be sufficient to differentiate it from others at the corporate level, but the local affiliates have little ability to distance themselves from local competition.

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Focus: Unless United Way decides to diversify and innovate, and successfully create new products and services, it appears that it is limited to its niche of broad-based community support. Internationally United Way may have more opportunity to focus on a country or region’s specific needs, especially in emerging nations, where it may provide a unique and competitive choice for programmatic assistance.

Other options firms sometimes pursue include:

Combination of Differentiation and Cost Leadership, Combination of Focus and Cost Leadership, Combination of Differentiation and Focus: As stated above, United Way does not now appear to have a sufficiently unique position in the market for it to achieve obvious ongoing competitive leadership, except as a result of its history and reputation. Will its combined strategy be successful against any competitor? Probably not except with international partners.

Stuck in the Middle? What does United Way need to do to make sure it is not stuck in the middle? Its history and reputation are a strength, but also a weakness here, due to inertia and change resistance. It appears Brian Gallagher is trying to work with all stakeholders to be creative and identify innovative program ideas for the future. This might also require new or reconfigured resources, an additional challenge. Further ideas to explore might include diversification. In addition, brand extensions can be a way to grow as long as the target is very clearly defined, and the program offerings are clearly distinct from competitors’ offerings. Internationally, United Way is playing a nontraditional role in some countries – doing no fundraising, but instead acting as a coach and counselor and resource provider for infrastructure suggestions. This appears to be a core competency of United Way.

Another idea might involve increasing existing alliances and partnerships with other nonprofits and governmental agencies to pool resources, such as with the 2-1-1 initiative. In addition, since the older demographic is one that’s growing, it might make sense for United Way to develop a specific campaign to attract this group, as either donor or volunteer. The organization is already reaching out to the college age population, most recently through the Alternative Spring Break initiative – helping students spend their break doing good deeds in rebuilding the Gulf Coast region. What other alliances or partnerships might United Way want to pursue?

4. What unique responsibilities does United Way have regarding ethical behavior and “best practice” governance and financial accountability models? How successful will United Way be in creating change at the local level? Is United Way’s mission still viable?

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Referencing Chapter 9: Strategic Control & Corporate Governance

Strategic control involves the process of monitoring and correcting a firm’s strategy and performance. It focuses especially on the roles of informational and behavioral control in the formulation and implementation of strategies. See Chapter 9, Exhibit 9.2. Informational control is concerned with whether or not the organization is “doing the right things”, while behavioral control is concerned with whether or not the organization is “doing things right” in the implementation of its strategy. United Way needs to make sure enough information of the right kind is available to monitor activities – this is where things such as financial, quality control, and customer feedback is essential; and that the appropriate role models and rewards are available to keep employees motivated.

United Way has a unique challenge because of its structure of affiliates. To what degree do the role models at United Way of America seem to affect the behavior at the local affiliates?

NOTE - ADDITIONAL EXERCISES

United Way is governed via a federation of affiliates. To see how the United Way in your area is rated, search below: http://www.charitynavigator.org/index.cfm?keyword_list=united+way&Submit2=GO&bay=search.results United Way Worldwide is rated per below:http://www.charitynavigator.org/index.cfm/bay/search.summary/orgid/4629.htm The Better Business Bureau publishes standards for charitable accountability, available here: http://www.bbb.org/us/Charity-Standards/ United Way meets these standards, per below: http://charityreports.bbb.org/Public/Report.aspx?CharityID=1994

Based on the reports from these watchdog groups, how does the United Way of America appear to handle its financial responsibility?

Referencing Chapter 11: Strategic Leadership: Excellence, Ethics & Change

The concept of leadership involves the process of transforming organizations from what they are to what the leader would have them become. This involves:

Setting a direction Designing the organization Nurturing a culture dedicated to excellence and ethical behavior

Leaders need to continually scan the environment to develop knowledge of all stakeholders, and knowledge of salient environmental trends and events. Then leaders must integrate that knowledge into a vision of what the organization could become. Leaders require the capacity to solve increasingly complex problems, and must be proactive in their approach so they can develop viable strategic options.

Difficulties in implementing the leader’s vision and strategies include a lack of understanding of responsibility and accountability among managers, reward systems that

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do not motivate individuals and groups toward desired organizational goals, inadequate or inappropriate budgeting and control systems, and insufficient mechanisms to coordinate and integrate activities across the organization.

CEO Brian Gallagher has acknowledged the potential difficulties of his plan to change the way both the national United Way and its local affiliates plan for and deliver services. Read the article from 2002 in Business Week below:http://www.businessweek.com/magazine/content/02_11/b3774074.htm?chan=search

What strategies might Gallagher use to get the chapters to buy into his strategic vision?

Leaders, especially those who have responsibility for some degree of public trust, as United Way does, must also maintain at least the outward appearance of an ethical business culture. When nurturing a culture dedicated to excellence and ethical behavior, managers and top executives must accept personal responsibility for developing and strengthening ethical behavior; consistently demonstrate that such behavior is central to the vision and mission; develop and reinforce role models, corporate credos, codes of conduct, reward and evaluation systems, policies and procedures that support the ethical orientation.

Here’s a news story from 2009 about how Washington DC area charities are suspending their memberships with the local United Way and partnering with another fundraising group, America’s Charities, partly as a result of United Way’s past financial scandals:http://www.washingtonpost.com/wp-dyn/content/article/2009/04/28/AR2009042803701.html

What should non-profits do to ensure that temptation doesn’t result in inappropriate behavior from individuals in leadership positions?

Let students know that at this point, it is not clear whether Brian Gallagher’s strategy is sufficient for enlisting the local affiliates’ support. They don’t have to identify one best strategy, just use this discussion to explore the implications of how strategy is developed, and what are the pros and cons for each business decision. Whatever decisions students come to can be checked by asking “is this strategy sustainable”, and “will the need for United Way still exist ten years from now”? One interesting discussion might be regarding United Way’s international outreach. The mission and role of United Way in developing countries was more of a consultancy model, which might be more relevant than the traditional role played in the American philanthropic market. United Way did have some extensive experience creating and serving multiple constituencies. Using that experience to coach others to provide for unique community needs might be a worthwhile and successful approach worldwide, therefore continuing to keep their overall mission viable.

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