Strategic Management is a broad term that is used for the implementation of major objectives that are undertaken by the top management of the company on behalf of the owners. A non-profit organization is formed by a collection of people so that they can pursue a goal without having the intention to distribute excess revenue to the members (Zhuang, Saxton & Wu, 2014). This report highlights how strategic management influences the non-profit organizations and blends the theoretical along with normative literature to highlight some of the challenges that the management face in a non-profit organisation.
The primary focus of this literature review is on the arena of non-profit agencies that cater to the needs of the vulnerable group and are mainly operated by professionals who are external to that of the target group. The search focussed on secondary data like that of books and journals that are related to a wide variety of issues related to strategic management. It employs descriptive and comparative methods that involve the qualitative approach. The literature search produced around 20 articles that revolved around strategic management in non-profit organizations. The literature review will be based on various published along with that of unpublished materials like that of books, papers and reports in order to understand how strategic management can influence the non-profit organisations (Malatesta & Smith, 2014). It thus highlights how by the implementation of suitable strategies and procedures the non-profit organisations can be handled in a better manner thus providing benefits to the members, employers and a wider society at large. Industrial Organization economies play a significant role in defining the proper strategies that should be used for deciding about the correct strategy that would prove to be fruitful for the working of the non-profit organization.
Google Scholar was used as the search engine that provided abundant information in relevance to the topic. Strategic management in non profit organisation was the search term used that helped in gleaning important information about the topic. At first, the role played by the board and leadership in relation to a non-profit organisation was searched in Google scholar that helped in identifying how these play an important role in the arena of strategic management. The key issues in regard to strategic management in non-profit organisation that have an impact on the organisation were searched for thoroughly in order to identify the areas of problem (Crockett, 2013). The model of strategic management in the area of non-profit organisation was searched and the theory that can be used in solving the key issues was searched for in order to get effective outcome. The search methods used helped in narrowing down the topic to a few important areas that was immensely helpful in completing the assignment (Crutchfield & Peterson, 2016).
Internal management is crucial for the success of non-profit organization. Letts, Ryan and Grossman has pointed out that these kind of organizations can prosper with the help of an internal foundation that is strong (Aboramadan & Borgonovi, 2016). Effective leadership at all the levels can play a great role in making the organization work successfully. Board governance along with that of staff and volunteers play an integral role for the perfect working of the organization. An organization relies to a great extent on the networking contacts along with that of fundraising abilities for successfully handling the strategic management in an organization (Ferlie & Ongaro, 2015). Plumptre and Laskin has asserted that the financial health, fostering great relationships and developing a long-term plan are important aspects for the great working of an organization.
Advocating effectively the mission of the organization are crucial aspects related to the working of the non-profit organization. Leslie Crutchfield along with Heather McLeod in the famous book Forces for Good: the Six Practices of High-Impact Nonprofits has done a research on twelve organizations that have a high level in terms of the social impact. They found that the governance model differed from that of one organization to that of another (Crutchfield & Peterson, 2016). According to them, the role played by the board revolved around the mission of the organization and it also evolved with the changing of time. Developing the information along with that performance target about important issues like that of the ability of the organization in being able to reach target groups are fundamental to the role of the board along with that of the financial performance (Tent, 2015). The board should be able to self-evaluate in an effective manner and this is key for the success of the board. This is in relation to the individual members of the board along with that of role played by the board together.
The chairs in relation to the effective groups should take active steps to create a group that is well-integrated and built on the essence of trust. (Haar & Ernst, 2016). Plumptre has maintained that interpersonal skills along with that of group dynamics can help in improving the governance as compared to that of written procedures. Plumptre and Laskin has stated that good partnership relationship between that of staff and board can help to a large extent in strategic management of the organization. The staff should support the work done by the board and vice versa (Crockett, 2013). The CEO along with other members in relation to the staff and board should define regarding how the collaborations will occur. In the words of McLeod Grant high impact organizations are led with the help of executive director and board.
A study carried out by Crutchfield along with McLeod has stated that dearth of talent proves to be an important barrier in order to increase the impact that an organization has. The leaders of non-profit organizations are mainly recruited from that of outside the organization (see Appendix B). This is on account of the large amount of time spent in the arena of fundraising within the non-profit organization. The non-profit organizations should be able to cultivate internal leadership (Hill, Jones & Schilling, 2014). According to Thomas Woolf, a leader in non-profit organization should possess the element of vision in relation to the opportunities along with that of dangers. Community Engagement is essential that included the knowledge in relation to the whole community and ability of fostering relationships and willingness to engage is crucial for the perfect running of the non-profit organization. Creating the element of commitment among the members of the board and having good instincts are important aspects and desirable for the running of the organization (Omar, Leach & March, 2014).
Personal attributes like clarity along with self knowledge are qualities that are important for the strategic management of an organization. The CEO’s of the non-profits have to put their interests aside in order to serve the cause and organization (Chai et al., 2013). The CEO’s of the company share power with that of the other executives who have complementary skills. A strong leader, second-in-command and strong management are crucial for the organization to work perfectly (see Appendix A). A collaborative model is essential in case of a non-profit organization that can even operate within the ambit of complex environment and have a lot of internal along with external stakeholders (Bryce, 2017). Crutchfield along with that of McLeod has suggested that an effective method of model sharing is to possess an executive director who can handle external leadership and is concerned with vision along with that of relationship building (Hill, Jones & Schilling, 2014). In the words of Letts, Ryan and Grossman important role in regard to national office should be to support the local affiliates in order to become agents that can help in promoting high performance in a business. The performance standards should be defined and local affiliates should be made responsible for the standards (Nanthagopan, Williams & Page, 2016).
The national office should learn how to communicate about the important elements in relation to successful program operation. They should become an important resource in respect to continuous learning within the local level. The employees of non-profit organizations should be recruited on account of their passion for the job (Butler & Wilson, 2015). The high impact organizations should be able to support the creativity of the staff with the help of creation of a work environment that is conducive. The organizations should be able to harness talent along the right lines in order to be effective (Ferlie & Ongaro, 2015). The compensation has to be adequate so that the employees feel motivated to work in the organization. It was found with the help of research done by Crutchfield along with McLeod that the employees at the higher end of non-profit wage scale were paid a hefty sum so that they felt motivated to continue working in the organization (Omar, Leach & March, 2014).
Most of the non-profit organisations fail on account of the fact that they run too many organizations instead of laying stress on a few programs where the impact can be the greatest. It has been cited by authors that the management can put importance on the emotional aspects related to a program but it should be carried out only if the resources prove to be sufficient for the implementation of the program (see Appendix C). Bryson has stressed on the fact that the employees along with that of the management should work in a psychologically safe environment where they can put forward their conflicting viewpoints. Identification of the strategic issues can give rise to a conflict. A conflict that is constructive is desirable as it helps in the clarification of important issues (Foerstl et al., 2015). Bryson highlights that the oval mapping process that involves the creation of practical along with creative opinions in relation to each issue that is identified and then a mapping should be carried out in relation to the consequences for each option. This will help in the creation of action-to-outcome relationship that can in turn help in developing the goal of an organization in relation to each program area (Omar, Leach & March, 2014).
Thomas Woolf has offered two useful approaches in relation to strategic management. The linear model allows the organizations to carry out evaluation in a systematic manner and generating a formal document which can be shared with public. This proves to be a lengthy process and can be conducted once in three years (Chai, Liu & Ngai, 2013). The second model is integrated within that of the regular operations in relation to the organization. Components in relation to planning take place simultaneously with that of the flow of information in different directions. This approach proves to be highly effective in responding quickly to that of a changed circumstance and continuous involvement in relation to the executive and staff is essential (Aboramadan & Borgonovi, 2016).
Resource based theory at the level of business can help in exploring relationships between resources, competition and that of profitability. It includes the analysis of competitive imitation and appropriatability of returns to the innovation. This theory points forward to a framework that is dependent on resource-based approach for the formulation of strategy that integrates themes that arises from the strategic planning literature. This frame work includes a five-pronged strategy (Omar, Leach & March, 2014).
It analyzes the resources of the firm, appraise the capability of the firm, analyze the profit-earning potential, select a strategy and upgrade the resources of the firm (Chai et al., 2013). This strategy plays a great role in the effective functioning and co-ordinating of different activities in the non-profit organisation.
Committees can be formed that can work on assigned areas in order to give rise to new ideas. Oversight from that of executive along with board can help in bringing the committees together to create five year plans. Planning can be divided into that of immediate, mid-term along with long-term time frame and different emphasis can be placed in different meetings (Quélin, Kivleniece & Lazzarini, 2017). Planning committee can work in close co-ordination with the decision member of the board by providing the board with enough information.
Internal foundation is extremely important in case of a non-profit organization. Effective leadership at every level can play a significant role in the successful working of an organization. Financial health, building great bonds and developing a plan that is long-term are crucial for the perfect working of an organization (Bryce, 2017). Self-evaluation is important and should be carried out in an effective manner which is integral for the success of board. This is important for the individual members along with that of role played by the board jointly. Interpersonal skills and group dynamics can help in bringing improvements to the organization as compared to that of the written procedures. Building effective internal leadership is of supreme importance for the perfect running of a non-profit organization. A leader in non-profit organization should have vision that will help him in knowing about the opportunities and the dangers (Quélin, Kivleniece & Lazzarini, 2017). A collaborative model is important in relation to a non-profit organization so that it can operate within that of a complex environment that has a lot of internal and external stakeholders. Effective method of model sharing that has an executive director at the helm who can handle external leadership is integral for the success of this kind of an organization (Butler & Wilson, 2015).
Strategic planning can help in setting the priorities and strengthen the operations in a non-profit organization. The linear model provides opportunity to the organizations to carry out evaluation in a systematic manner and a formal document can be generated that can be shared with that of the public (Foerstl et al., 2015). The second model is integrated within that of the regular operations in relation to the organization. Employees along with that of the management can work in a psychologically safe environment where they can express their conflicting opinions. Identification of the strategic issues can set forth conflict and a constructive conflict helps in clearing important aspects. Oval mapping process can prove to be immensely effective that can help in identifying the problem areas.
Aboramadan, M., & Borgonovi, E. (2016). STRATEGIC MANAGEMENT PRACTICES AS A KEY DETERMINANT OF SUPERIOR NON-GOVERNMENTAL ORGANIZATIONS PERFORMANCE. Problems of Management in the 21st Century, 11(2).
Aboramadan, M., & Borgonovi, E. (2016). STRATEGIC MANAGEMENT PRACTICES AS A KEY DETERMINANT OF SUPERIOR NON-GOVERNMENTAL ORGANIZATIONS PERFORMANCE. Problems of Management in the 21st Century, 11(2).
Bryce, H. J. (2017). Financial and strategic management for nonprofit organizations. Walter de Gruyter GmbH & Co KG.
Butler, R., & Wilson, D. C. (2015). Managing voluntary and non-profit organizations: Strategy and structure. Routledge.
Chai, J., Liu, J. N., & Ngai, E. W. (2013). Application of decision-making techniques in supplier selection: A systematic review of literature. Expert Systems with Applications, 40(10), 3872-3885.
Crockett, J. (2013). Forces for Global Good: American Strategic Planning in the 21st Century. Political Analysis, 15(1), 2.
Crutchfield, L. R., & Peterson, K. (2016). Social Enterprise and Innovation in Emerging Markets. In Innovation in Emerging Markets (pp. 158-177). Palgrave Macmillan UK.
Ferlie, E., & Ongaro, E. (2015). Strategic management in public services organizations: Concepts, schools and contemporary issues. Routledge.
Foerstl, K., Azadegan, A., Leppelt, T., & Hartmann, E. (2015). Drivers of supplier sustainability: Moving beyond compliance to commitment. Journal of Supply Chain Management, 51(1), 67-92.
Haar, J., & Ernst, R. (Eds.). (2016). Innovation in emerging markets. Springer.
Hill, C. W., Jones, G. R., & Schilling, M. A. (2014). Strategic management: theory: an integrated approach. Cengage Learning.
Malatesta, D., & Smith, C. R. (2014). Lessons from resource dependence theory for contemporary public and nonprofit management. Public Administration Review, 74(1), 14-25.
Nanthagopan, Y., Williams, N. L., & Page, S. (2016). Understanding the nature of Project Management capacity in Sri Lankan non-governmental organisations (NGOs): A Resource Based Perspective. International Journal of Project Management, 34(8), 1608-1624.
Omar, A. T., Leach, D., & March, J. (2014). Collaboration between nonprofit and business sectors: a framework to guide strategy development for nonprofit organizations. Voluntas: International Journal of Voluntary and Nonprofit Organizations, 25(3), 657-678.
Quélin, B. V., Kivleniece, I., & Lazzarini, S. (2017). Public?Private Collaboration, Hybridity and Social Value: Towards New Theoretical Perspectives. Journal of Management Studies.
Tent, D. A. (2015). Social Entrepreneurship. Studia Universitatis Babes-Bolyai. Studia Europaea, 60(4), 97.
Zhuang, J., Saxton, G. D., & Wu, H. (2014). Publicity vs. impact in nonprofit disclosures and donor preferences: A sequential game with one nonprofit organization and N donors. Annals of Operations Research, 1-23.
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