Strategic management in nonprofit organizations is the process of selecting an organization’s goals, determining the strategic programs necessary to achieve specific objectives in route to the goals, and establishing the methods necessary to assure that the policies and strategic programs are implemented.
What is Strategic Management For Nonprofit Organizations?
Strategic management is the process of planning strategies for achieving an organization’s goals and objectives.
Strategic management is the application of management procedures to provide long-term direction to an organization’s overall activities.
Strategic management is the carrying out of organizational policies and procedures and is the purposeful process of achieving a predetermined and desired objective.
The Source for Strategic Management
Strategic management is the process of setting standards for the organization’s overall goals and objectives and for the policies and programs formulated in order to fulfill those objectives.
Strategic management is the planned direction of an organization’s activities.
Strategic management is the process of selecting an organization’s goals, determining the strategic programs necessary to achieve the objectives in route to the goals and establishing the methods necessary to assure that the policies and strategic programs are implemented.
Strategic management is the process of formulating a directional plan of action to achieve goals, objectives, and policies established by an organization’s board of directors.
Objectives of Strategic Management For Nonprofit Organizations
The institutional objectives of strategic management are to: mark the existence of organizational mission and assist the organization in conforming to that mission; implement long-term strategic plans; formulate strategic plans for short-to medium-term periods; identify the organization’s exact position in its market; define consumers and competitors, and make certain that employees are well trained and well informed; use cost analysis as a managerial device; and analyze the effectiveness of the organization’s procedures to achieve its goals.
Strategic management for nonprofit organizations encompasses five basic objectives, including:
- Formulate plans and goals for the organization
- Implement the organization’s plans and goals
- Review and evaluate the organization’s performance
- Analyze the organization’s effectiveness and efficiency
- Project the organization’s future position
Strategic Management Process
The Strategic Management Process is an organized, directed approach to achieve the organization’s objectives and standards. The process entails the following basic steps:
- Formulate a set of organizational objectives
- Set a target date for the achievement of the objectives
- Determine the strategies that will be used to achieve the objectives
- Develop a plan of action for achieving the goals
- Evaluate the plan
- Revise the plan as necessary
Strategic Management Techniques
Strategic management techniques are the various methods used for setting organizational goals, objectives, plans, action plans, etc. The strategic management techniques commonly used today include the following:
This model was developed by Szyperski and deals with the setting, monitoring, and evaluation of objectives for an organization.
In order to implement the objectives-performance model into the strategic management process, the following steps are taken:
- Formulate objectives in specific terms
- Specify the target date
- Develop performance measures
- Identify control mechanisms
- Draw conclusions about the effectiveness of the plan
2 x 2 Matrices
2 x 2 matrices are a planning technique used for dividing 16 goals into two groups: “highly important” goals and “important but not critical” goals. The matrix is a simple, concise, and highly effective tool for obtaining objectives that are practical and realistic.
Steps in developing 2 x 2 matrices are:
- Formulating the organization’s overall goals in objective form
- Subdividing the objectives in terms of “highly important” and “important but not critical”
- Dividing the “important” objectives into two groups: “more important” and “less important”
- Determining the “highly important and more important” goals
- Determining the “highly important and less important” goals
- Determining the “important but not critical” goals
- Determining the “not important” goals
- Determining the “most deficient goals
- Determining the “second most deficient goals
- Determining the “third most deficient goals
- Determining the “fourth most deficient goals
- Determining the “fifth most deficient goals
- Determining the “sixth most deficient goals
- Taking steps to remedy any deficiencies
- Revising the 2 x 2 matrix
The decision tree is an essential and practical tool used in strategic management.
Steps in the decision-tree process:
- Phrasing the decision in terms of alternative choices
- Identifying the specific alternatives available to the organization
- Identifying the consequences of choosing each alternative
- Determining how each consequence would contribute to the achievement of organizational objectives
- Using the decision tree to evaluate the probability of achieving the organization’s objectives
SWOT analysis is featured in many management texts and articles as a fundamental and necessary process in strategic management. Smith defines SWOT analysis as “a technique used to evaluate an organization’s standing against the opportunities and threats it faces in its environment.” The technique is based upon the words “strengths,” “weaknesses,” “opportunities,” and “threats,” which have been substituted for “W” and “P” in conventional strategic planning. SWOT analysis is aimed at identifying and examining the strengths, weaknesses, opportunities, and threats existing in an organization.
In today’s technological business world, the use of the power analysis technique is critical. The power analysis is an organizational procedure that seeks to determine the organization’s objectives and policies and to suggest the necessary direction that the organization must take in order to improve efficiency.
A power analysis can be used by an organization to focus on its business environment and to develop new strategies for the future. With a power analysis, the organization can easily assess both its competitors and its environment and, with this information, assess its strengths and weaknesses relative to those of its competitors.
A power analysis provides a dynamic analytical framework by which the organization can effectively establish objectives and strategies, in order to achieve its goals and objectives.
The process of a power analysis includes the following:
- Identify the organization’s goals and objectives
- Determine the policies and programs that must be used to achieve the goals and objectives
- Establish performance standards
- Survey the organization’s entire business environment
- Determine the organization’s strengths and weaknesses
- Determine the organization’s opportunities and threats
- Relate the information from steps 1-6 to each of the
The remuneration strategy is a relatively new strategy for nonprofit organizations.
The purpose of the remuneration strategy is to examine the remuneration structure of an organization and to devise a plan for the provision of rewards to staff members. The remuneration strategy can be used to achieve one or more of the following goals for an organization:
- Alleviate the workforce
- Provide a challenge to employees
- Provide a reward system for outstanding results
- Encourage group behavior and teamwork
- Develop organizational loyalty
- Increase employee productivity
- Reduce absenteeism and staff turnover
The remuneration strategy provides a comprehensive and reasonable approach for nonprofit organizations to use in the search for new and creative ways of motivating the staff members in the organization.
Marketing is considered to be the process through which goods and services are purchased and sold by organizations.
Strategic marketing is a technique used for the development of a long-range marketing plan for an organization. Strategic marketing takes a holistic approach to marketing planning in that it considers all aspects of the marketing situation and proposes a total organization marketing strategy for achieving the organization’s ideal image in the eyes of the public.
Some of the elements that must be included in an organization’s strategic marketing plan are as follows:
- The identification of the organization’s customers
- The identification of messages that will be conveyed to the customers
- The classification and description of strategic marketing players
- The analysis of competitive situations
- The description of the organization’s products
- The analysis of alternative marketing strategies
- The planning for marketing activities
- The scheduling of marketing activities
- The budgeting of marketing activities
STEP 2: Plan Implementation
Plan implementation involves the following three steps:
- Implementation planning and action
- Monitoring of objectives, performance, and plans
- Feedback systems
- Implementation Planning and Action.
The first step that is involved in the planning process is the development of the Step 1 and Step 2 action plans. The development of the implementation plan and the action plans for Step 1 and Step 2 are usually done at the same time.
- Monitoring of Objectives, Performance, and Plans.
The monitoring of objectives, performance, and plans is a continual process. The monitoring of objectives, performance, and plans is used to determine the actual results of the implementation action plans.
- Feedback Systems.
An essential element of management is used for identifying the effectiveness of the implementation action plans.
Step 3: Control and Monitoring of the Implementation Action Plans
The control and monitoring of the implementation action plans should be effective in order for the organization to achieve its strategic plan objectives. Effective control of implementation action plans should focus on the following:
- Achieving the organization’s strategic plan objectives
- Monitoring the implementation process
- Identifying the causes of any deviation from the implementation plan
- Providing corrective action for any deviation from the implementation plan
- Providing rewards to individuals and groups for achievement
of organizational objectives
- Providing rewards for achievement of key performance
Vital Sign Report The Vital Sign Report is the measurement of organizational performance against strategic plan achievement. The Vital Sign Report is a continuous process involving the following:
- Identify the major indicators used in measuring performance
- Collect data related to the indicators
- Produce a summary report on the indicators
The final stage in the planning process is the development of an organization’s operational plan. Steps 3 and 4 involve the development of the operational plan, which is the detailed operation of the organization’s strategy during a specific time period, usually a year. The operational plan is a long-range planning and scheduling tool that helps the organization to monitor its progress. The operational plan is a tool that helps to determine the specific sequence of actions needed to reach the organization’s objectives. The purpose of the operational plan is to:
- Monitor the implementation of the organization’s strategic plan
- Determine the progress being made toward meeting the objectives of the organization
- Identify implementation action programs that need adjustment
- Identify implementation action programs that need to be modified or developed
- Monitor the performance of implementation action programs
The operational plan is used to determine the specific implementation actions that need to be done to reach the organization’s strategic plan objectives.
A particular implementation action plan may include one or more of the following aspects:
- Organizational restructuring
- Reorganization of departments
- Redefining a job role
- Reallocating resources
- Establishing budgets
- Developing a work schedule
- Establishing performance standards
- Reorganizing an organization into strategic business units
- Creating a project team
- Developing a job description
- Developing a communication plan/organization chart
- Reviewing strategic environmental factors
- Seminar development
- Establishing a strategic planning committee
- Developing a strategic plan for the organization
- Strategic planning resource materials
- Additional supporting documentation
Operational planning is the process through which strategic plans are monitored and adjusted, as necessary.