Development For Nonprofit Organizations: Importance Of Strategy, Challenges And Implementation

Importance of strategy in businesses and not-for-profit organizations

Discuss about the Development for Nonprofit Organizations.

The strategy can be defined as systematic planning procedure which is designed to attain overall objectives of business by considering internal as well as external environmental factors. Strategies are highly significant for business as it assists in efficient planning and executing business activities to achieve desired goals (Walker and Madsen, 2016). The present study is based on the description of the strategy and its importance for business and non-profit organizations. The study will include challenges faced by managerial parties in implementation and development of strategy by considering relevant examples. In addition to this, the study will also include the relevance of strategy in present competitive environment.

The strategy is path followed by the organization to achieve their goals and advantages over a long term. Strategy management is done through allocating resources in such a way that fulfil the needs of customers, mould business process with the changing environment and meet the expectations of stakeholders. In other words, it can be cited as, considering the direction in which where the organization must go in order to attain competitive advantage (Priem, Wenzel and Koch, 2017). It is the approach of assessing the scope of the market by which company will get to know the competitiveness and activities involved in those markets. The effective strategy ensures that business is performing its best in the market and determine activities and resources that are essential to meet the goals and attain advantages by considering the internal and external factors that will directly impact the business.

Strategies are used at different stages of an organization as the existence of the same is important for all operational activities the business varying on the basis of management or a business group to individuals functioning in it (Morden, 2016). Different type of strategies is enumerated as below:

Corporate strategy: This strategy concerns the total scope and aim of the firm in order to meet the expectations of stakeholders. It is a significant stage as it thoroughly influenced by business investors and guides to maintain strategic decisions within the organization (Verbeke, 2013). Corporate strategy is frequently acknowledged as a mission statement.

Business unit strategy: This strategy is concerned with the competitive advantages in a specific marketplace (Peteraf, Gamble and Thompson Jr, 2014). It assesses strategy decision making regarding customer satisfaction, competitive advantages, products, driving opportunities etc.

Operational strategy: It is concerned with the organizing of business activities in such a way to serve the business-unit level strategic direction. Thus, this strategy concerns on issues regarding individuals, resources and processes etc.

Challenges faced by managerial parties in implementation and development of strategy

With the changing business environment, from stable to the competitive environment, the strategy is considered to be a vital part of attaining objectives of business set by mission and vision of business entities. Strategy plays an important role in business success as there are several reasons why strategy must be implemented. Firstly, there must be proper planning in business, and effective strategy provides actions and directing plan, it introduces a clear, precise and sound way for the same (Chen and Jermias, 2014). The strategy is inclusive of proper direction for an organization to create a road map that how goals will be achieved with a comprehensive action plan. Creating and following progress beside yearly working plan is considered as a significant management tool. The company must concern the past experience and make planning according to them in order to prevent the mistakes happened in the past few years.

Subsequently, many types of research provided several concepts regarding strategic management in order to efficiently making use of firm’s resources to achieve their goals and objectives. Strategy refers to an integrated and complete plan intended to guarantee achievement of business objectives (Albeladi and et al., 2014). Strategy assists in organizing functions and merging them properly so as to attain competitive edge through value adding in activities to satisfy ultimate users of products provided by business entities and to attain the business goals of the mission and vision.

Strategic planning enables NPO to use their human resources as well as financial resources carefully and effectively. Furthered decisions related to expenses and costs are based considerably on judgments regarding the impact they impose on improvement in services (Omar and et.al, 2014). Nonprofit organization are mostly requested to give a strategic plan in order to enlarge charity and public welfare plans to justify funds provided by donors, alike to how business entities represent their strategies to justify capital sources of the venture (Bharadwaj and et al., 2013). The strategic plan work as a guide to NPO’s group of management while ensuring that team members are also putting their efforts to achieve the same goals along with the same precedence.

Strategies provide various benefits to business, but development and implementation of strategy in operational activities are not an easy task. For this aspect, the company has to face issues such as ineffective leadership and employee resistance (Kotler, Berger and Bickhoff, 2016). Strategic implementation starts with deciding on goals, prioritizing objectives and allocation of resources but above all it requires a leader or a manager who is familiar with systems and processes so they can develop and implement effective strategies (Madsen, 2016). They must be able to communicate effectively, motivate and encourage his team, delegate authority and monitor execution.

Strategic implementation requires a lot of planning in alignment with mission or vision, sense of urgency and effective leadership. The responsibility of leader doesn’t stop here. They need to ensure that people understand the strategy, buy into it and take decisions and actions accordingly. Further, strategies must be measured and monitored from time to time. The main strategies should be related to price, product and customer specific solutions should be according to customer needs (Eden and Ackermann, 2013). Different strategies require different styles of leadership and different organizational behaviours. The attitude of people in the organization depends on customer proposition, behaviour of leader, processes and structure, commitment. Effective leaders lead and manage strategy implementation by aligning people to the organizational goals (Booth, 2015). Ineffective leadership leads to great resistance in implementing strategies. Ineffective leaders generally do not display courage and are also not determined to push the initiative to achieving the desired outcomes.

The strategy is properly executed when there is a balancing act among the workforce and their commitment towards organizational development. However, implementation of the strategy is typical due to employee resistance.  It is the act of struggling or opposing the changes, modifications in the work place. In every business change is inevitable (Peteraf, Gamble and Thompson Jr, 2014). Leaders need to manage change with minimal disruption if it is not handled properly there is more resistance than necessary. Resistance to change is not a problem but what matters is how it is managed. The success of the venture is threatened by resistance to change. It can largely affect the productivity, quality, communication, employee commitment in a workplace.

The introduction of new strategy involves a lot of planning like managing the stages of strategy adoption, integrating work environment, managing employee unhappiness and resistance (Burke, 2017). Employees’ actions are to be observed like late assignments, absenteeism, verbal criticism, remarks, missing meetings related to change, talking to them about changes can help in spotting resistance to change.

Some employees may need help in navigating the change. The more powerful the employee resistance, in terms of job title, position etc. the more success they will have with their resistance. If the employees have insufficient support in gaining result the resistance to the strategy may intensify (Bryce, 2017). Organizations having the culture of support, trust, involved and engaged employees and positive relationships can handle implementation and development of new strategies.

The relevance of strategies is not affected in present competitive environment as strategic thinking is inclusive of the direction of external and internal business environment. The elements of the external business environment such as economic and technical are considered to be chief factors driving opportunities and threats for the business (Omar and et al., 2014). The never ending demand of the society is again a significant factor that must be kept in mind regarding defining the competitive strategy by considering strength and weakness of the business entities. Thus strategies are prepared on the basis of changing market conditions not merely as per traditional theories. In accordance with the study of Burke (2017), planning for activities will not be successful if it is not supported by appropriate strategy.

Further, businesses need a strategy for ways by which they are conducting experiments, as they need to widen their direction and scope of the experiments to ensure success. Conventionally, the main focus has been given to providing of new products and services to the customers (Booth, 2015). However, with the increasingly unstable environment business process also becomes quickly outdated and unpredictable. Thus, companies are required to revive their strategies to frequently adapt changes and make use of broad experimenting prior to their competitors.

For this aspect, an example of Ikea can be considered as the company describes the experimenting power along with business models to their wide range of products. Companies like Ikea holds current assets and liabilities to do experiment with the business models. After entering in the market of Russia, managers considerably observed that each time the company opens an outlet, the value of nearer real estate’s improved drastically (Morden, 2016). Further, Ikea made a decision to simultaneously discover two business models which were dealing with their stores and outlets and driving the pleasure in the values of real estates through the development of malls. At present, it generates more revenue by developing malls rather than from its Conventional business of retail.

Ultimately, experimenting without appropriate strategy also fundamentally generates a failure. For example, Intuit (a software company), has become very successful initially while adopting new approaches to develop business. In 2005, it initiated an advertising campaign in order to get through young filers of tax by making use of website named rockyourrefund.com (Goffin and Mitchell, 2016). The website provided discounts and schemes at Best Buy and Expedia and attained refunds of tax in the way of prepaid vouchers. The campaign resulted in major failure, as no one makes use of the website.

Above description shows that strategy in current competitive environment assist in the allocation of resource regarding the selection of the type of product and services will be the part of a portfolio of the company. An effective strategy in these decisions is used to guarantee greatest returns. Lastly, it assists in modifying operation plans as changing internal and external environmental factors which create a positive impact on company’s position (Kotler, Berger and Bickhoff, 2016). It makes entities alert and prepared for possible in market shifts and offers opportunities to take actions to implement. It is because; strategy builds a peak level self-awareness and offers a superior focus on resources and activities which will assist in making the business more successful. In addition to this, the strategy also states and serves strategic decisions in designing and tracking the organization.

Conclusion

In accordance with the present study, conclusion can be drawn that strategies are a vital part of business planning as it assists in the viable roadmap to achieve desired objectives. Further, irrespective of nature of business all organizations are required to make use of strategies to ensure their operational success. However, development and implementation of the strategy is not an easy job as managers have to face issues such as ineffective leadership, resistance by employees and work culture issues. Thus, businesses are required to implement the strategy by using appropriate tools and techniques. The study also shows that strategy is significant for entities irrespective of changing market conditions and increasing competition.

References

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