Corporate Strategy for Non-Profit Organisations

Topics: Strategic management, Non-profit organization, Management Pages: 13 (4651 words) Published: January 28, 2011
1.Introduction and History
The concept of strategy is as old as the history of wars itself. “The Art of War” the first comprehensive book on strategy was written about 500 BC. The roots of strategy are in competition. The word “strategic” derives from the Greek word “strategos,” which means “a general set of manoeuvres carried out to overcome an enemy during combat” (Nutt & Backoff 1992, p. 56). However, corporate strategy gained the recognition of being a separate field of study around fifty years ago (Kay 2003). The most famous work on for-profit strategy is Porter’s “Competitive Strategy”. He defines strategy as: “developing a competitive strategy is developing a broad formula for how a business is going to compete, what its goals should be, and what policies will be needed to carry out those goals” (Porter 1980, p. xvi).Five decades of practice and research have been focused on strategy for for-profit organisations. Applying strategy concepts from this for-profit perspective to the non-profit world is challenging, as key differences exist among the two sectors—for example, their different conceptions of organizational effectiveness and non-client funding sources. The paper discusses some of the issues surrounding the applicability of strategy concepts to the non-profit sector and dismisses the conception that for-profit strategy concepts cannot be applied to the non-profit sector. Some concepts can be applied with some modifications and others as is. The paper then applies some corporate strategy concepts developed for commercial enterprises to the non profit world. These concepts include Porter’s five forces model, SWOT analysis, the resources based view of strategy, and strategic alliances. Each of these applications is supported by examples from the non-profit sector in Pakistan. The examples are based on my ten year long experience with Pakistan’s non-profit sector. By presenting these examples, I want to show that the non-profit organisations are already practising parts of these strategies. However, these strategies are only partly implemented and are not as comprehensive as the ones for business firms. Therefore, there is a dire need for research that can allow non profit concerns to benefit from the strategies developed for business firms. “It is difficult to understand why the examination of the strategic management … in not-for-profit organizations has been barely initiated, given the prevalence of these organizations in modern societies”(Montanari and Bracker 1986, p. 251). With non-profit organizations contributing heavily to the world economy's provision of services, the non-profit sector plays a major role in the use of global resources and the provision of essential community services. The effective functioning of non-profit organizations is critically important to the life of billions of people being served by these organisations, especially in developing countries. Yet “not-for-profit management has often been treated as the poor stepchild in management thinking” and the emphasis has traditionally been placed on profit making organizations (Hatten 1982, p. 89). This question becomes even more important when business managers are frequently being hired for non-profit work e.g. Robert McNamara, and Eugene Black, both former business leaders remained the president of the World Bank for thirteen years each) (The World Bank 2009). Therefore, the non-profit manager should be told to confidently apply the corporate strategy concepts to the non-profit organisations to help improve their target achievement. 2.Strategy: for-profit and non-profit

The for-profit world strategy writers have developed a number of tools, concepts, and processes for strategy development and implementation. Among these are the 7S model of strategy implementation, “strategic intent” (Hamel & Prahalad, 1989), “strategic thinking” (Mintzberg, 1994a), SWOT (strengths, weaknesses, opportunities, threats) analysis, strategic...
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