Strategic Leadership for Non-Profit Organizations - Research Paper Example

Strategic Leadership for Non-Profit Organizations Introduction The concept of strategic leadership is mainly focused on the manner in which executives in an organization impact on the performance of the organization, specifically via leadership. Bobbi et al (2008) illustrates the crucial nature of strategic leadership in the organization through an assertion that the organization will always be a reflection of its top leadership. However, there is little precious research into the impact of strategic leadership in the non-profit organization, instead focusing mainly on the for-profit sector. This has meant that leaders in non-profit organizations are left to interpret empirical strategic leadership findings for their sector, or to reject these findings as being inapplicable. There is evidence pointing to the fact that strategic leadership is different for non-profit organizations, with Bobbi et al (2008) also pointing out that the nature of problems faced by non-profits are antithetical to those that for-profit organizations face. For example, for-profit organizations seek out “easy” business that almost runs itself and has minimal problems, while non-profit organizations seek out the toughest problems that need solving. This paper will set out to investigate the potential benefits and needs for strategic leadership in the non-profit organization, conducting a review of literature into the topic and applying it to the non-profit organization. Literature Review A number of theoretical articles and studies have been published concerning the influence and role of non-profit organization managers generally, of which a number focus on the feasibility of applying strategic leadership theories in for-profit organizations to non-profit organizations. Stubbs (1998) concludes that the role of the private manager significantly differs from that of the business manager, contending that these differences included different decisional, interpersonal, and informational roles. More recently, Dym & Hutson (2011) offered their take on the existing differences between the roles played by corporate and non-corporate managers and, although they fail to offer adequate information concerning their methodology for determination of the study’s rigor, they identify five areas that the non-profit strategic leader must adapt practices used by strategic leaders in for-profit organizations. These included a wider range of expectant stakeholders looking for consensus, a smaller authority scope, the challenge of using limited training and resources to build an effective organization, an added requirement to be more attentive to communications, and the requirement to innovate metrics for performance measurement (Dym & Hutson, 2011). In spite of a growing base of literature about strategic leadership, there only seems to be a number of researchers attempting to use the theory of strategic leadership and to incorporate it into the not-for-profit organization, especially through investigation of the causative links between performance of the organization and the actions of leaders. Rothschild (2012) makes an attempt to address the issue of how non-profit managers involved in human service succeeded during turbulent periods. Following in-depth and face-to-face interviews with managers for non-profit organizations, various themes regarding strategic management are offered. However, there was little reference, reliance, or citation of any of the principle articles involved in the strategic leadership field, despite using the conceptual term strategic leadership. In this way, this work can be seen as part of the increasing recognition of the need for an integration of non-profit leadership and the strategic leadership field. Something similar can be said of Bezold (2010), who set out to investigate the relationship between innovation in the human service non-profit organization and the executive style of leadership. While they find that there is a correlation between a focus on vision and the frequency of innovation, the findings do not seem connected with the broader strategic leadership field. In addition, in a research study investigating the link between non-profit organization outcomes and employee values, Pugh (2008) find that specific orientations of theory like the worth of employees are related to successful outcomes in the organization. Although the study surveys agency directors and employees separately, there is not much differentiation between the values of the executives and those of the employees. Therefore, the findings in this study are suggestive of possible support for various arguments that the non-profit organization is reflective of the values of their managers and leaders, although the study fails to offer supporting evidence to support the research question. Therefore, there is a gap in literature on the application of strategic leadership to non-profit organization management, which this paper will seek to address by examining how strategic leadership can be applied to the non-profit organization. This will be done by drawing information from existing theory on strategic leadership and earlier research focused on the non-profit organization. Discussion Strategic Leadership and Learning Capacity An effective non-profit organization manager should seek to increase the learning capacity of the organization. Candler and Dumont (2010) proposes that organizational learning is influenced by strategic leaders at three separate levels. They can increase the developmental readiness level of the individual employees via their actions and messages, as well as promote the diffusion of knowledge across and within social networks at the network level. In addition, they can also support and promote knowledge diffusion to the larger organization across networks at the systems level. Plas and Lewis (2011) find that strategic leaders who are involved in transactional and transformational behaviors of leadership affect organizational learning. Transformational behaviors in the non-profit organization encourage members of the organization adopt generative thinking, while also challenging institutionalized learning. On the other hand, transactional behaviour tends to encourage employees in the organization to extend and improve knowledge in existence. There is also evidence that organizational learning affects the culture of the organization, while also contending that strategic leaders can infuse ethical value systems and sustain an effective culture of the organization (Githens, 2009). Therefore, by extension, strategic leaders with direct impact on the culture of an organization should also influence its learning capacity. The manner in which non-profit organization leaders contribute to learning capacity in the organization is unique for this sector. In this case, Githens (2009) identifies the informational roles of non-profit leaders as being markedly different from for-profit leaders. They observe that managers in non-profit organizations are required to be more attentive to communications compared to their counterparts. In addition, they must also be involved in the building of effective organizations using limited training and resources. For this reasons, it is clear that it is essential for the non-profit manager to increase the learning capacity of the organization. Strategic Leadership and Capacity for Change The strategic leader also contributes to the outcomes of an organization through the development of the organization’s capacity for change, which should be no different for non-profit organization (Akingbola, 2006). The strategic leader must act as a catalyst for change by preparing the organization for various changes, such as funding difficulties. As with the need for the non-profit manager to increase the learning capacity of the organization, this development of a capacity for change is a critical function of the non-profit organization leader. Akingbola (2006) identifies two behaviors of managerial leaders that are greatly valued by employees in the non-profit organization, including compelling direction and clarification of roles with both behaviors aiding in their acceptance of change. Interestingly, it is found that these behaviors are also valued by organizations in the for-profit organization, specifically in a crisis (Akingbola, 2006). However, for non-profit organizations, these behaviors are valued in stability and in crisis, which suggests that non-profit organizations have a different process in building change capacity. Osula & Ng (2014), in considering the processes utilized by not-for-profit organizations in making future-based strategic decisions find that organizations undergoing change due to substantial growth are more focused on organizational structure and mission, while those in an environment of lower growth are more likely to focus on analysis of the environment and competition. In addition, communication is also central to the prediction of planned change outcomes, in which a lack of formal communication on change strategy between the senior managers and employees leads to decreased receptivity of the change process by the employees. Therefore, to develop an organizational change capacity, strategic leaders must place a premium on communicating to employees why change is necessary, as well as the implementation strategies for the change (Osula & Ng, 2014). Spending time in several departmental or functional areas is likely to result in broadening and learning managerial skill sets and perspectives, in turn enhancing their capability to deal with the uncertainty of organizational change. Hamlin et al (2011) find that the perceptions of change by top managers in the effectiveness of the organization are impacted by their functional work experience. Therefore, building organizational capacity for change in the not-for-profit organization needs broad experiences that enhance the manager’s ability as a strategic leader. In addition, without substantial support from the top management, major initiatives for change will rarely succeed; while the failure of initiatives geared toward change is mostly the result of strategic leadership that is ineffective. Myers (2004) proposes that there is need for a new and flexible theory of leadership to explain how top managers can impact on the performance of organizations, in which it should be explicit in the strategic leadership actions and decisions that could enhance the capacity of the organization to manage change. For instance, performance determinants can be influenced by behaviors of change-oriented leadership. In short, this theory must have the ability to be extended to include organizations in the non-profit sector. Based on these findings, it is clear that effective not-for-profit strategic leaders should increase the capacity for change in the organization. Strategic Leadership and Organizational Innovation Although every organization requires innovation, the mission of the non-profit organization necessitates unique innovation. Hess & Bacigalupo (2013) posits that leadership in the non-profit organization must prepare their organization to take innovation as a natural practice, maintaining that the ability of an organization to innovate should determine its potential use available resources to generate new services, take advantage of environmental resources and opportunities, and determine its potential to meet demand in the future. For the non-profit organization, an ability to innovate is critical for its survival in the long term, especially since those funding human services often require innovation. By experimenting with new concepts and ideas for delivery of service, innovation becomes crucial for performance in the organization. In fact, McMurray et al (2010) contends that innovation may be more critical for the non-profit organization because a changing society portends a greater opportunity, as well as threat, to the non-profit organization. Strategic leadership is essential to enhancing innovation for both non-profit and for-profit organizations. Those non-profit organization managers that champion technological innovation show transformational tendencies (McMurray et al, 2010). In deed, strategic transformational leadership actions result in exploratory innovation, while the transactional strategic leader will show behaviors of exploitative innovation. In non-profit organizations, Sarros et al (2011) conclude that top managers who have favorable attitudes for innovation generally influence every stage of the organization’s adoption of innovation. However, there is a moderating contextual effect on the relationship between innovation and strategic leadership. These contextual effects in the non-profit organization are suggestive of the fact that strategic leadership may possess a different relationship with ability to innovate. McMurray et al (2012), while contending that strategic leadership’s effect on innovation in the non-profit organization is yet to be defined clearly, finds that transformational leadership is not related substantially to the non-profit organization’s ability to innovate. However, the top managers are most likely to push innovation, especially if they have a clear vision about their future operations. Based on these analytical findings, it can be concluded that the effective non-profit strategic leader has a fundamental role in improved innovation in the organization. Strategic Leadership and Managerial Wisdom Strategic leaders in the non-profit organization must have the capability to exercise managerial wisdom. Li (2011) finds that social and practical wisdom shaped via informal experiences has more value to the non-profit organization than formal education, especially in impacting managerial performance. There are two crucial factors of successful leadership for the non-profit manager, including detailed knowledge of the organization’s strategic structure and its programs and his willingness and ability to learn and communicate with multi-level actors outside and inside the organization. The key predictors of the quality of evaluation plans involve non-profit managers, who ensure that employees have technical resources and training to implement and design evaluation system outcomes, involve board members and staff in planning of outcome evaluation, offer support to succeed in evaluation of outcomes, and affect organization culture positively. Non-profit organization strategic leaders should also know how to maintain and develop relationships with their boards that are productive. This requirement for managerial knowledge is specifically acute due to the considerable variation in the nature of the relationships between the board and the management in the non-profit organization (Li, 2011). Therefore, based on these findings, it is clear that an effective strategic leader in the non-profit organization must strive to improve performance by exercising managerial wisdom. Conclusion As the discussion above demonstrates, there is every reason to expect that strategic leadership in non-profit organization management contributes to the organizations performance in ways that are consistent with the theory of strategic leadership. However, from the literature reviewed, it is evident that exercising strategic leadership in the non-profit organization differs significantly from the for-profit context. Therefore, this research paper has made an attempt to extend the theory of strategic leadership in the non-profit organization, particularly in a manner that acknowledges the sector’s uniqueness. While the propositions made by are not offered as an exhaustive discussion, they should act as a vital starting point for future research into use of strategic leadership in the management of non-profit organizations. The discussion also serves to illustrate the benefits of using strategic leadership to approach management of non-profit organizations. Future research can build, on this study, to explain how strategic leadership in non-profit organization management contributes to organizational outcomes. References Akingbola, K. (September 01, 2006). Strategic choices and change in non-profit organizations. Strategic Change, 15, 6, 265-281. Bezold, C. (November 01, 2010). Lessons from using scenarios for strategic foresight. Technological Forecasting & Social Change, 77, 9, 1513-1518. 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