Strategic Management in the Non Profit Sector - Essay Example

Strategic Management in the Non Profit Sector Strategic management may be defined as the function of goal orientation and goal achievement working in tandem towards creating tangible results. In the midst of this function, there are numerous sub processes that take place in the operational sphere of the organisation. The effective management of these processes in a bid to reach the organisational goals forms the foundation of strategic management. (Buckley, 1990) This function of strategic management can be replicated in the diagram below: Means   Ends Internal Vision External Vision Business Purpose Programs and Internal Management Goals Activities Objectives Source: Allison et al, 19971 This diagram presents the human face of strategic management. It creates the basic flow which all the processes in the organisation must follow. This flow starts at the means and develops momentum until it reaches the specific ends. This has special importance for a non profit or not for profit organisation due to the fact that there is a close alignment of values with management in these organisations. (Allison et al, 1997) Goal and Value Alignment In a not for profit organisation, it is imperative to align the goals with values. This defines the core operational areas of the organisation. Through the clarification of the operational areas, there is a movement towards strategic management. This movement follows the lines of the following functions: (Bowman, 1996) Resource allocation: this involves the allocation of scarce resources in a bid to maximize the chances of reaching the goals. This process also involves the mobilisation of human and other resources in a timely and appropriate fashion so as to cater to a specific value system. Clear Cut Objective Orientation: this process involves clear cut definitions of activities which will form a pyramid eventually leading to complete goal satisfaction. Every element in the pyramid, in the form of human resources, must have good working knowledge of the end results. Optimum Utilisation of resources: there must be careful synchronisation of activities and objectives so as to make best possible use of scarce resources. Inclination towards following policy drivers: Every area has its own policies which drive the actions of its not for profit organisations. These organisations cater for such policies in their planning and management process. Partnerships Partnerships are an important function in the non profit sector. The positioning of efforts in tandem with that of another organisation helps the organisation move towards effective goal achievement. This also promotes harmony in activities and the society in general. The structuring and strategic management of goals and structures within an organisation must lead to partnerships with external parties. This is due to the fact that a not for profit organisation basically deals with what is outside, rather than what is inside. Its activities revolve around the betterment of people and their environments. For this reason, it is important to work in tandem with other organisations that can provide it with something that is lacking within the organisation in question. This is a matter of strategic positioning and the strategic use and management of resources that belong to the society as a whole. Partnerships are also a good option in strategic management for new and developing organisations as it helps in the sharing of costs and resources. It also helps the new organisation in garnering the requisite amount of experience and leverage in the market. (Bowman, 1996) Competitive Advantage Competitive advantage is the response of a firm to the pressing need to organize and perform discrete activities. While these needs may not be perpetually spelt out, it is the responsibility of the planners and executers of policies to foresee such situations when catering for growth and development of the firm at various levels. (Porter, 1980) In the case of non profit organisations, it is imperative to lay special focus on the mission and its statement. This will help the organisation create an identity of its own and distinguish its role and operational areas at the very onset. A cluster that has been well formed and makes the required effort to be called well functioning is one that contributes to the advancement of an economy in terms of growth and development. In the case of not for profit organizations, this can be defined as strategic partnerships. These partnerships become the major players in strategic management in this sector once they are properly developed and implemented. This is a crucial aspect that most organizations tend to ignore. In this way, one can measure the implications of the theory and growth thereof, in a more accurate and reasonable manner. This also helps avoid monopolistic tendencies within markets in order to make sure social development is not impeded. (Porter, 1980) This brings us to the issue of equality in the strategic management of such organisations. This is a major requirement for the development of an organization. The more consistent and widespread the development, the more advanced its overall management process can be called. Unless there is mass involvement in various policies and acts, the non profit sector cannot be called developed by itself. Differences in resource effectiveness could not be explained by efficiency, labor or capital, but by amazingly ambitious goals that stretched beyond typical strategic plans, raising the question how such incredible goals could get past the credibility test and be made tangible and real to employees. This has special implications in the case of knowledge management and change management of such organizations. (Porter, 1980) The non profit organization is one that operates on the basis of knowledge and the dynamic environment within which it functions. Effective knowledge management and process management are important prerequisites when structuring an organization. This will release the necessary efforts towards strategic management and subsequent goal achievement. (Porter, 1980) References: 1. Bowman, C; Asch, D (1996). Managing Strategy. Macmillan Press, London. 2. Buckley, A (1990). The essence of Strategic Management. Prentice Hall, Europe 3. Porter, M. E (1980) Competitive Strategy, Techniques for Analysing Industries & Competitors. Free Press, new York 4. Allison, Michael & Kaye, Jude. (1997) "Why Plan?" Strategic Planning for Non profit Organizations. New York: John Wiley & Sons. Read More