Identifying the Factors That Influence Positioning Strategy in U.K.

Charitable Organizations That Provide Public Services: Toward an Integrating Model

Celine Chew Cardiff University Stephen P. Osborne University of Edinburgh

This article is based on empirical research that for the first time identifies and explains the key factors that influence the organizational-level positioning strategy of charities involved in the delivery of public services within the wider voluntary nonprofit sector in the United Kingdom. The multidimensional factors are integrated in a theoretical model, which the authors argue is better able to accommodate the charitable context. The model suggests that a combination of external environmental, organizational, and mediating factors influence the positioning strategy of charities. Several of these factors are unique to the charitable context. They highlight the inadequacy of the existing marketing and strategy literature on positioning to fully explain strategic positioning in charities. Together, the research findings and the model provide distinct additions to the voluntary sector management literature while also providing an alternative perspective to researching charity positioning in contemporary marketing and strategy literature. Keywords: strategic positioning; charities; positioning strategy; voluntary nonprofit organizations; public services

Charities and their equivalents globally are operating in increasingly challenging and competitive external environments (Anheier & Kendall, 2001; National Council for Voluntary Organizations [NCVO], 2004b, 2005).1 Of
Note: An earlier version of this article was presented at the European Group of Public Administration conference at Bocconi University in September 2006. We appreciate the helpful comments from participants. We also thank the four anonymous reviewers of this journal for their constructive comments. Responsibility for the article itself remains with the authors alone, as always.
Nonprofit and Voluntary Sector Quarterly, vol. XX, no. X, Month XXXX xx-xx DOI: 10.1177/0899764008315180 2008 Association for Research on Nonprofit Organizations and Voluntary Action

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particular significance is the impact both of the evolving governmental policy context on the delivery of public services and of other external environmental drivers (concerning these organizations resource attraction and allocation capabilities and their ability to manage new patterns of relationships with public and private sector organizations in their changing operating environment; Deakin, 2001). In the United Kingdom, as part of its agenda to modernize public services (Cabinet Office, 1999), the Labour Government has increasingly sought ways to provide these services in partnerships with charities and voluntary organizations (NCVO, 2005). It has, through the governmental Cross Cutting Review, committed to increase funding and to develop the capacity of these organizations in public service delivery (HM Treasury, 2002).2 For instance, nearly 39% of the total annual income of general charities came from statutory sources (i.e., grants and contract fees) in 2005 compared to 27% a decade earlier (Charities Aid Foundation [CAF], 2004; NCVO, 2006).3 However, against this backdrop, there have been concerns raised about the potential erosion of charities independence, incorporatism, and diversion of charitable purpose (Blackmore, 2004; Harris, Rochester, & Halfpenny, 2001; Pharoah, 2003). Charities also perceive increasing competition for funding and other resources from the growing number of other voluntary organizations and private sector organizations that provide similar services.4 These new entrants have, in part, resulted in the shifting and blurring of boundaries among the voluntary, public, and private sectors (NCVO, 2004b, 2006). Despite the changes in the external environment, Hibbert (1995) argued that charities often find it hard to differentiate themselves from other bodies offering similar services. Bruce (1998) suggested that market positioning by charities often results from unconscious rather than conscious action. However, Chew (2003) argued that there are at least two views of a charitys strategic positionfrom the charitys perspective and from the external audiences perspective. This lack of attention to organizational positioning in the charity sector could pose a major longer-term problem for resource attraction and in building the charitys brand identity (Bruce, 1998). The relevant target audiences persist in recognizing the cause but not the specific charity delivering the service. It is therefore striking, given this challenge, that the current voluntary and nonprofit literature lacks adequate theoretical models on positioning that can better accommodate the particular circumstances of charities and guide management research and practice in this field. This article develops such a model. It is the first attempt to identify, integrate, and explain the multidimensional factors that influence an organizational-level positioning strategy (PS) in charitable organizations in the United Kingdom. It highlights the inadequacy of the existing marketing and strategy literature on positioning to fully explain strategic positioning in charities. Our findings and model provide distinct additions to the voluntary and nonprofit sector management studies in the United Kingdom and elsewhere while providing an alternative perspective

Positioning Strategy in U.K. Charitable Organizations

to researching charity positioning in the contemporary marketing and strategy literature. The first section of this article reviews the literature on strategic positioning at the organization level in the charitable context. The second section outlines the method used in our study. An anatomy of PS in charities derived from our findings is described in the third section. The proposed model and its constituents are explained in the fourth section. We conclude with a discussion on the implications of our model for positioning theory and practice and offer some directions for future research.

STRATEGIC POSITIONING IN THE CHARITABLE CONTEXT The concept of positioning was popularized during the 1960s and 1970s in private sector marketing with pioneers such as Alpert and Gatty (1969) and Trout and Ries (1972), who emphasized the communications role of positioning to differentiate products and brands in for-profit organizations. However, it was only until the 1990s that positioning, as a management practice, was prescribed for U.K. voluntary and charitable organizations to preserve their distinctiveness in a changing operating environment (e.g., Bruce, 1998; Frumkin & Kim, 2001; Hudson, 2002; Saxton, 1996; Wray, 1994). Yet much of the existing literature on positioning for nonprofit organizations depicts this concept for them in similar ways as for for-profit organizations (e.g., Andreasen & Kotler, 2003; Kotler, 1994; Lovelock & Weinberg, 1989). Andreasen, Goodstein, and Wilson (2005) argued that sectoral differences are potential barriers to transferring business concepts in their entirety from the for-profit sector to the nonprofit sector, whereas others have argued for the adaptation of these concepts in the charitable context (Maple, 2003; McLeish, 1995). Moore (2000) suggested that private sector strategy models advocated for nonprofit organizations fail to take into account the social purpose-driven mission and different funding avenues of the latter. Moreover, the values-critical culture of charities and nonprofits creates special challenges for them when adopting business models that emphasize operational efficiency and short-term performance goals in the government-contracting market (Frumkin & Andre-Clark, 2000). In exploring strategic positioning activity by charities, it is important to distinguish between two elementstheir organizational-level positioning activity and their PS.
ORGANIZATIONAL-LEVEL POSITING ACTIVITY

Strategic positioning is defined in this article as a managerial decisionprocess to develop an organization-level PS that aims to effectively differentiate the organization from other service providers (Chew, 2005, p. 4). This article

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is therefore about positioning at the organization level from the charitys perspective, which is distinct from but provides guidance to positioning at the product or brand levels in the charitable context. Although strategic positioning at the organization level is a long-term process of developing the charitys overall distinctive advantage in the marketplace, positioning at the product or brand level involves identifying how the particular offerings are perceived by consumers relative to other competing products or brands (Hooley, Saunders, & Piercy, 1998). The aim is to identify the charitys place (its strategic position) in its environment, which depends on its mission and distinctive or core competences (Chew, 2006a). The strategic position embodies the strategic intent or overriding ambition for positioning in the organization (Johnson, Scholes, & Whittington, 2006). This is often viewed in the marketing and strategy literature for for-profit organizations as focusing on adversarial motives and to strive for a leadership position by winning over rival providers (Hamel & Prahalad, 1989). However, the strategic intent for positioning by charities is less clear because of the lack of research on this topic. This is explored for the first time in our article. In addition, the distinctiveness of service offerings provided by service organizations, such as charities, compared to physical goods suggests that an organizational-level positioning is more important for these organizations than is product or brand positioning (Devlin, Ennew, & Mirza, 1995). This is because creating differential advantage based on product features is limited, even impractical for service and mission-critical organizations. We also argue there are at least two parties views of the charitys strategic position: the organizations view and that of its external target audience or audiences. The process of strategic positioning within the organization creates its strategic position, which is communicated through a chosen PS to its various target audiences (Fill, 2002; Reddy & Campbell, 1993). The other view of the organizations position is from the perspective of the external audience or audiences. This market perspective may or may not be similar to the organizations perspective (Attia, 2003). Although both views of an organizations position are important, we argue that the charitys perspective of its strategic position is an important starting point for shaping the external audiences perspective of its distinctiveness compared to other providers. The extant literature also suggests at least two different theoretical perspectives of depicting the process of developing a PS for nonprofit organizations. For instance, from a marketing perspective, a PS is viewed as a key component of the strategic marketing planning process (e.g., Kotler & Andreasen, 1996; Lovelock & Weinberg, 1989). From a strategic management perspective, the PS of an organization is an outcome of a review of its external environmental trends and internal organizational capabilities (Hudson, 2002). However, it is less clear in the literature which of these perspectives can better explain the process in charities.

Positioning Strategy in U.K. Charitable Organizations

PS

There is a lack of consensus among scholars as to the components of a PS. The marketing and strategy literature suggests that a PS comprises interrelated components, for example, the choice of generic or core PS (Porter, 1980), the choice of target audiences, and the positioning dimensions that the organization uses to distinguish itself and to support its generic PS (Hooley, Broderick, & Moller, 1998). This latter component provides the broad framework within which the organization decides more specific positioning activities (Porter, 1980, 1985). Three alternative core PSs have been suggested for for-profit organizations: differentiation, focus, and low-cost positioning (Porter, 1980). Differentiation positioning means establishing some positively distinctive ways in which the organization and its offerings meet the needs of its target audiences and are valued by them. Focus or niche positioning is focusing on serving a particular group of target users or beneficiaries, focusing on serving a particular geographic area, or providing a type of service better than other providers. Low-cost leadership is where the organization leads the market by setting low or lower prices. There is general consensus in the marketing literature that the key target audience for positioning by for-profit organizations is often the customer who pays for the product or service (Hooley, Saunders, et al., 1998; Kotler, 1994; Webster, 1992). This simplistic notion of the customer is difficult to apply in nonprofit organizations. Bruce (1995, 1998) argued that charities have at least four customer groupsbeneficiaries or users, supporters, intermediaries, and other stakeholders. Other authors (e.g., Andreasen & Kotler, 2003; Mason, 1984) have suggested that customers of nonprofits include both external and internal target audiences who are involved in their resource allocation and resource attraction activities. Positioning dimensions are the specific instruments that support the organizations core PS and through which the charity differentiates itself from other providers (Chew, 2003, 2005). They require appropriate supporting resources to sustain the core PS over time (Hooley, Broderick, et al., 1998). Different positioning dimensions heavily draw on the assets and capabilities available to the organization in different ways. For instance, an emphasis on superior or high-quality service would require good relationship management and service delivery skills, whereas a lower-cost positioning would require good cost control and cost-efficient supply chain and distribution capabilities (Hooley, Saunders, et al., 1998). However, there is lack of empirical studies to identify the components of a PS in charities. Our article and model aim to fill this gap. The next section outlines the method that was utilized in developing our model.

6 METHOD

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Our proposed model draws on new empirical findings on the positioning activities of British general welfare and social care charities that provide public services.5 We chose this sector as the focus of our study because it contains a high proportion of charities engaged in the delivery of public services in the United Kingdom. Because of a lack of existing literature and paucity of research in positioning in charities, a three-stage method, which supports an inductive approach to developing our model, was employed. An initial conceptual framework of possible influences on a PS was founded on a review of the existing positioning literature in the first stage of our study. This early conceptualization integrated alternative insights from three broad theoretical perspectives on strategic positioning: the market-orientation perspective (Hooley, Broderick, et al., 1998; Hooley, Greenley, Fahy, & Cadogan, 2001; Hooley, Saunders, et al., 1998, Porter, 1980, 1985), the resource-based view (Wernerfelt, 1984), and the stakeholder- or resource-dependence perspective (Freeman, 1984; Pfeffer & Salancik, 1978). It allowed us to compare the empirical results emerging from Stages 2 and 3 of the study with the conceptual factors. A detailed review of these perspectives is found in Chew (2003, 2006b). The second stage of our study utilized an exploratory postal survey to empirically map the extent of strategic positioning activities in a purposive sample of 95 general welfare and social care charities. The achieved response rate was 54%. The target respondent was a key decision maker in the charity who was knowledgeable in the planning and/or implementation of its corporate strategies. An initial picture of the influencing factors in the charitable context emerged at this stage. The largely descriptive data were analyzed using frequency tables, cross-tabulations, and chi-square tests for significance. The survey identified a number of external environmental and organizational influences on a PS in charities. Several of these factors were not commonly cited in the extant literature, such as the charitys mission, the needs of two groups of target audiences (users or beneficiaries and donors or funders), the board of trustees, the influence of government, and volunteers. Details of the survey questions, findings, and analysis are explained in Chew (2006a, 2006b). The third stage of our research investigated the emergent influencing factors in greater depth using four cross-sectional case studies. These were selected based on their organizational characteristics and responses in the survey questionnaire. They were contrasting in terms of history, age (between 16 years and 180 years), size (total income between 1 million and 120 million), type of service (children services, grant making, emergency sea rescue, and drug treatment), and funding mix (voluntary income, government grants, and contract fees). The combined criteria allowed us to compare the findings across the cases while offering a degree of generalizability of the findings in the subsector in which they operated.

Positioning Strategy in U.K. Charitable Organizations

Multiple sources of evidence were gathered in the case studies. They involved 27 semistructured interviews with key organizational decision makers, four group discussions with operational or branch office staff, and review of organizational documents relating to the charities corporate or strategic plans, annual reports, and marketing communication materials. The use of multiple methods and sources of data at different stages of our research provided both methodological and data triangulation and aimed to enhance the reliability and validity of the findings (Denzin, 1978; Jick, 1979; Mingers & Brocklesby, 1995). A case study protocol was utilized to guide the data collection in each case study to provide consistency in the various data sources used, thereby enhancing reliability (Yin, 2003). An iterative process of data collection and analysis was adopted. This involved coding the data along key themes that emerged from the semistructured interviews in one case and then reanalyzing and interpreting them as further data were gathered in the other cases (Carson, Gilmore, Perry, & Gronhaug, 2001). Analytic comparison of the themes was then employed to unveil similarities and differences in the influencing factors across cases (Neuman, 2006). Relevant organizational documents were also analyzed for corroborating or contradictory evidence. Our theoretical model thus developed was grounded in the empirical results. It integrated the external environmental, internal organizational, and mediating factors into a broader explanatory framework. Table 1 shows the factors that were most frequently cited in our research that influence PS in the charitable context. Some factors were common in both the survey and case studies, whereas others were specific to one or some of the case studies only. This differentiation was crucial in our model building because it enabled us to include those factors that we could generalize across charities while recognizing the influence of other contingent factors.

ANATOMY OF PS IN CHARITIES A crucial starting point in explaining our theoretical model is to first identify the components of a PS in the charitable context. Three major interrelated components were evident on the basis of our findings: the generic or core PS, the key target audience or audiences, and the choice of positioning dimensions through which the charity seeks to distinguish itself in support of its generic PS. We found in our case studies that a strong organizational-level position created and/or supported certain core values in the charity. This position then translated into a distinctive range of services or offerings and unique relationship with other stakeholders (users or beneficiaries, donors, statutory funders, and other partner organizations). It also provided the framework for communicating the charitys strengths and competences in its fund-raising and advocacy campaigns. A PS therefore provides the vehicle through which the charitys desired strategic position is communicated to its external and internal audiences (Chew, 2006a).

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Table 1

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Key Factors Influencing Positioning Strategy in British Charitable Organizations Cited in the Postal Survey Stage (%) 16 67 Cited in the Case Studies Stage (%) 85a 59a

Key Factors Influencing Positioning Strategy Governmental influence (funder, policy maker, legitimizer) External environmental factors (other than governmental or political; e.g., shifts in social demography, economic, technology, international developments, media influence) Needs of users, beneficiaries Mission of the charity Organizational resources (including availability of funds, skills, and capabilities) Competition (other than statutory) Trustees, chief executive of the organization Organization size (number of branch offices, number of staff, total income and assets) Needs of donors (nonstatutory) Needs of volunteers

78 82 69 37 38

41a 38a 68b 60b 40b Factors particular to some cases Factors particular to one case Factor not cited in all cases

53 10

Organizational culture One of more nongovernmental funding organizations

31 8

Note: Factors in the case studies were further differentiated between those that influenced the core positioning strategy (cells with superscript a) and those that influenced the positioning dimensions of the strategy (cells with superscript b). The postal survey did not make this distinction. Governmental influence was cited in the postal survey as from its role as funder only. The case studies identified other influences from government as policy maker and legitimizer of the charities activities besides its influence as a dominant funder. External environmental factors included political dimension in the postal survey. Competition in the postal survey included other charities, voluntary organizations other than charities, and private sector organizations. Organizational size was not cited in the postal survey but was cited in three of the four case studies.

GENERIC OR CORE PS

We found that charities have indeed adopted generic or core PSs. Differentiation positioning was used by two thirds of the charities in our study, whereas only one third of them adopted focus positioning as their core PS. Our finding supports the assertion by some nonprofit authors that differentiation and focus PSs are more appropriate for charities (e.g., Bruce, 1998; Saxton, 1996). However, low-cost positioning was not employed by charities in our study. Bruce (1998) argued that this strategy is difficult to apply in the charitable sector because it requires the charity to be a dominant

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market player or to occupy a monopoly position in the sector or subsector in which it operates. The inherent resource dependency of many charities on external parties would make low-cost positioning appears less appropriate for them.
KEY TARGET AUDIENCES

Charities in our study recognized the influence of at least two key groups of external target audiences in their positioning activities compared to a singular customer in for-profit firms. Users or beneficiaries of the charities services were their primary target audience, whereas the secondary target audience included donors or funders and government funding agencies. Mason (1984) argued that charities, unlike for-profits organizations, require separate organizational structures to manage their resource attraction and allocation functions to effectively serve the different expectations of these two target audiences. Bruce (1998) goes further to suggest that charities have to develop consistent PSs that are acceptable not only to their users and donors or funders but also to their wider range of stakeholders as well. Our study thus found charities striving to communicate a singular strategic position to different groups of target audiences while maintaining focus on their mission.
POSITIONING DIMENSIONS

Positioning dimensions are the specific vehicles through which charities differentiate themselves. We found that they utilized a range of dimensions to distinguish themselves and to support their core PS and that these could change over time as the organization adapts to its external and internal environments. Some dimensions we found for charities reflected those advocated in the nonprofit literature, such as quality of services or the provision of specialist services (Kotler & Andreasen, 1996; Lovelock & Weinberg, 1989; McLeish, 1995). Other dimensions did not, such as the charitys mission, strong relationship with statutory bodies, and access to networks of branches and volunteers. These variations suggest important differentiation in subsectoral or organizational contexts and highlight the limited applicability of generic positioning typologies for the diverse charitable and voluntary nonprofit sectors.

INTEGRATING MODEL Figure 1 presents the theoretical model that integrates the multidimensional factors influencing PS in charities that have emerged from the combined evidence in the survey and case studies. It identifies three groups of factors: organizational, environmental, and mediating factors. Several of these factors are not

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commonly cited in the for-profit marketing and strategy literature. They include the charitys mission, needs of two distinct groups of stakeholders, influence of the board of trustees or chief executive, needs of volunteers, and governmental influence. The most significant factors and their influence on the components of a PS are explained below.
ORGANIZATIONAL FACTORS

Three organizational influences on PS are depicted in our model: the charitys mission, its corporate plan, and organizational resources. Mission. This is defined here as the fundamental purpose of a charity (Hudson, 2002). Our study found that a charitys mission played a crucial role in determining its positioning direction. Mission can guide or constrain the charitys strategic choices by establishing its strategic intent and by determining the scope of its operations. It provided the central direction for the charitys core PS (how to be distinctive), identified its primary target audience (users or beneficiaries), and guided the development of its positioning dimensions (resources and core competences) to differentiate the organization from other charities and providers. This directional quality is well articulated by an interviewee in one of our case studies: The charitys missionwhat the charity stands for and what it aims to dois the lynch pin to its positioning. If somebody asks what does our charity stand for and what we do? I will read to them our mission statement. (Marketing and public relations managerregional grantmaking charity) By contrast to for-profit organizations, charitable status requires a substantive and often intangible mission, which is more resistant to change without damaging its purpose and legal status for existence (Hudson, 2002; Leat, 1995a). Our findings support this assertion. In all our case studies, we found that the core PS reflected the charitys mission and remained essentially unchanged over time. However, charities have adapted to external environmental changes by embarking on changes in their organizational structure, operations, and resources to remain relevant to their causes. This relationship of operational change with fixity of basic purpose is well illustrated in a sea rescue charity: The strategic position of the charity has not changedthe purpose and core values of the organization today are the same as when it was set up 180 years ago. But how the charity provides the services has changed for us to remain relevant to changing times. (Regional managersea rescue charity)

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Governmental Influence

Other External Environmental Factors

* Shifts in Social Demographic trends * Economic uncertainty * Technological advances in service delivery

* Role as Policy Maker * Role as Funder & Provider of Public Service Contracts * Role as Legitimizer

Competitor Influence
* Presence of Competition * Intensity of Competition - funding (statutory & voluntary) - needs/demands for public services

T H E C H A R I T Y O R G A N I Z A T I O N

Charity Mission/Purpose Primary Target Audience

Mediating Factors
Critical Trigger Event
Distinctive Competences

Corporate Strategy (long-term plan)

Internal Stakeholders
* Power and Influence of Board of Trustees * Influence of Chief Executive

Direct influence

POSITIONING STRATEGY * Core Positioning * Target Audiences * Positioning Dimensions

Key Strengths

Resources
External Stakeholders
* Influence of dominant funders * Influence of volunteers

Indirect influence

Marketing and other Functional Strategies

Communicate
strategic position

to external audiences

Strategic Relationships between the charitable organization, other charities, voluntary, public and private sector organizations

Figure 1 Integrating Model of Factors Influencing Positioning Strategy in Charitable Organizations Source: Chew (2006b)

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Corporate plan. We found that a charitys PS often emerged from its organizationwide corporate planning process. It did not typically develop separately or as part of a conscious and deliberate strategic marketing planning process, as advocated for nonprofit organizations by, for example, Hooley, Saunders, et al. (1998), Lovelock and Weinberg (1989), and Kotler and Andreasen (1996). Changes to this corporate plan could affect the strategic direction of the charity, such as its scope of operations, geographic location, or primary target audiences. This would then necessitate a shift in its positioning dimensions. For instance, a change in public policy that supported local community development had provided a strategic opportunity for a regional grant-making charity to revise its corporate plan to manage a growing number of local government grant projects. There were consequently efforts by its senior management to professionalize the charitys approach to delivering community services contracted for government, such as service quality standards, providing customized training for staff, and establishing performance targets. This example illuminated the charitys desire to realign its resources and distinctive competences to support the new strategic direction that was mandated by its corporate plan. Of interest, we also found that larger charities have dedicated marketing functions, but these played mainly a communications role in the strategic positioning process. This contrasted with the marketing perspective that prescribes a PS as a key outcome of the strategic marketing planning process. Organizational resources. Together, organizational assets and capabilities provide the foundation for an organizations core competences (Prahalad & Hamel, 1990) and from which its positioning dimensions draw their strengths. Hooley, Broderick, et al. (1998; Hooley et al., 2001) suggested that marketing resources and capabilities play key roles in establishing competitive advantage of for-profit firms. We found that charities in our study were generally more dependent on external parties for resources (especially funding and volunteers) than were their for-profit counterparts. Developing internal capabilities rather than physical assets, such as a unique expertise, strong culture, and organizational leadership, was then crucial to maintaining their strategic positions over time. Organizational culture has been classified as a key resource and a strategic asset because it is difficult to imitate (Amit & Schoemaker, 1993; Reed & Defillippi, 1990), and the charities in our study, in particular smaller ones, considered it as one of their key positioning strengths. As we are a small charity and we dont have projects for everyone to support, we have developed a unique culture that emphasized using our expertise in housing accommodation, quality services to beneficiaries, and long-term relationships with our donors to support our mission. (Fund-raising managerchildrens charity)

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EXTERNAL ENVIRONMENTAL FACTORS

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On the basis of our research, we identified three external factors that have influenced the PS of charities: governmental influence, other external environmental factors, and competitor influence. Governmental influence. Governmental influence was the most significant external factor that emerged from our case studies. It affected the choice of the charitys core PS and positioning dimensions. However, the degree of this influence differed depending on the perceived role that government played in the relationship with the charitywhether as its policy maker (e.g., national policies and regulations in social care and community welfare services) and legitimizer of its activitiesand the type of service sector in which it operated. This factor has a particular resonance in the United Kingdom, where the past decade of government policy has emphasized partnership with charities and increasing their capacities in the delivery of public services (HM Treasury, 2002). Our study thus suggests a complicated set of relationships between charities and government. We found that as long as charities remained focused on their mission, they could work with central and regional governments as partners despite their policy-making role and public service contract dependency, as illustrated by the comment below from one case study participant: Governmental policies do not change our charitys overall strategic position directly, but only operational issues, for example, setting clearer policies for beach lifeguarding services at local levels, legitimizing the charitys role for this public service, and statutory requirements for search and rescue training qualifications that it provides to its crew and volunteers. (Beach lifeguarding officersea rescue charity) Other external environmental factors. These comprised environmental factors (other than governmental influence) external to the charity, which were outside the direct control of its management, such as economic conditions and technological and sociodemographic changes. Such a situation could provide opportunities for, or impede, strategic positioning (Bruce, 1998; Hudson, 2002). For instance, an aging and increasingly pluralistic population, shifts in demographics of service users and funders, and shifts in how their needs could change in the future were the most frequently cited environmental influences in our study. On the other hand, changes in the national and international economic environments (recessionary or growth trends) and technological changes that had availed cost-effective electronic and Internet capabilities for fund-raising and service delivery had affected those charities that heavily relied on voluntary income. Of importance, the influence of different environmental conditions had affected the charities positioning dimensions more significantly than their core PSs. The positioning

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dimensions were reviewed in light of shifts in the charities corporate strategy as they adapted to changes in different environmental conditions. Competitor influence. The increasing competition for both financial and other resources is increasingly evident in many charity subsectors in which a number of charities may serve the same cause, offer similar types of services (e.g., general welfare for children or accommodation services for elderly persons), or operate in the same geographical or user segments. CAF (2003) reported that 23% of the top 500 British fund-raising charities were in the general welfare and social care subsectors. Within these subsectors, for example, nearly 25% of the charities target the children and young people welfare segment alone. However, the drivers of intrasectoral competition could vary depending on the nature of services involved and historical orientation. Those charities that derived a high proportion of their income from statutory sources had to compete with other charities and for-profit firms for governmental contracts. By contrast, increasingly discerning general public and media challenged charities that depended on voluntary sources of funding, such as individual donations and corporate sponsorships. Although there are different schools of thought on the notion of nonprofit organizations adopting competitive strategies (e.g., Courtney, 2002; Herman, 1994; Saxon-Harrold, 1990), we found little evidence to suggest that PSs of charities were created or pursued for a purely competitive motive. Although it may be difficult to achieve extremes in either perfect competitive strategies or truly collaborative ones, we found that in terms of strategic positioning, there was a tendency for charities to strive toward a combination of competitive and cooperative or collaborative motives for both service delivery and fund-raising because of their inherent mission for existence and their legal obligations toward their charitable purposes. Increase in competition from other charities for nongovernment funding wont be a major influence on our mission and strategic position. If someone out there is able to offer their services better than we can, we are not going to be out of the drug treatment service. Were going to still want to provide that service because of our mission. (Head of fund-raisingdrug treatment charity)
MEDIATING FACTORS

Of significance, our findings suggest that external environmental factors were mediated by other factors, which could amplify or reduce their impact. Mediators are conceptualized here as those factors that intervene between stimuli and response (Baron & Kenny, 1986). We identified three groups of mediating factors: influential internal and external stakeholders and critical trigger events.

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Influential internal and external stakeholders. These are defined here as those groups or organizations that possess the power and legitimacy to influence the charitys behavior because of their resource-dependent relationships with it (Mitchell, Agle, & Wood, 1997) and without whose continuing participation it could not survive (Clarkson, 1995). Among the distinguishing features of a charity are the entirely nonexecutive and voluntary composition of its board of trustees and the relationship between the board and the chief executive (Leat, 1995a). Our research suggests that these organizational leaders often initiated a more formalized process of strategic positioning in the charity and decided how resources were to be acquired, developed, and allocated to support its PS. They were particularly influential when they were knowledgeable in or supportive of business and management approaches in the charitys operations. External influential stakeholders were also found to influence the choice of positioning dimensions by virtue of the resources they provide to charities. The extent of this influence would depend, in part, on the degree to which the charity was dependent on resources (in particular funding) from these stakeholders. Two groups of external stakeholders stood out in our findings: local government agencies that provided direct substantial financial resources (grants and public services contracts) and volunteers who provided essential services to charities. We found that some charities heavily depended on local councils or government funding agencies for a major proportion of their income, often in the form of contract fees for delivering public services. The degree of a funders influence would depend on the service subsector in which the charity operated and the extent to which the charity leaders engaged with them as partners or acted to maintain organizational independence and autonomy. However, the increasing trend for charities to deliver public services under government contracts does not necessarily imply that they are becoming more dependent on this source of funding or losing their independence (Blackmore, 2004). On the contrary, it could suggest that charities are becoming more accomplished in their understanding and adoption of strategic approaches to securing resources while at the same time maintaining credibility and legitimacy (Leat, 1995b, p. 161). Volunteers, other than members of the board of trustees, play a range of roles in charities, such as participation in service delivery, fund-raising, and organizational management. We found that the extent to which volunteers influenced the positioning dimensions of a charity would depend on the value that it placed on the volunteer ethos and how dependent it was on volunteers. For instance, one case study organization considered its volunteer base as more than an economic resource. It heavily relied on volunteers to operate more than 95% of its emergency sea rescue and fund-raising activities since its inception 180 years ago. A strong volunteer ethos was therefore part of its mission statement and core values. This ethos had, in part, shaped its strategic position by differentiating it from other charities and for-profit organizations that provided similar services. By contrast, a drug treatment

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charity decided to employ more paid staff with professional qualifications to deliver its drug treatment services instead of using volunteers. This decision was influenced by its corporate strategy to take advantage of the evolving government policy to increase statutory funding and programs for treatment of drug misuse. Critical trigger events. Our study revealed that unanticipated external or internal events, over which the charity had little or no control, could trigger changes in the charitys positioning activity. These events included a major change in organizational leadership, a sudden shift in governmental policy, or changes in the legal framework for the provision of public services. An example was the economic downturn in the United Kingdom in the late 1990s and early 2000s, which resulted in declining voluntary and legacy income for charities. Competition for government contracts for public services increased during this period, as more charities vied for this source of income to compensate for the loss of voluntary funds. These events negatively affected the charities resource bases, which in turn triggered a review of their core PS and positioning dimensions. Another common example in our research was a sudden leadership change in the charity, such as the arrival of a new chairman of the board of trustees or a new chief executive who brought strategic management thinking into the organizations planning approach. Such a change invariably triggered a change in the charitys positioning activitiesor even initiated the process of positioning itself.

DISCUSSION AND CONCLUSIONS This article began with an acknowledgement of the lack of adequate theoretical and conceptual models to guide positioning research and practice in the charitable context. Its central contribution is in overcoming this deficiency by proposing an empirically grounded theoretical model that for the first time integrates the factors that influence PS in the charitable context. We found that charities have begun to position themselves strategically in their external environment in distinctive ways that are not adequately reflected in or explained by existing positioning theory. Our findings suggest that research has lagged behind practice. They affirm that the existing literature and theoretical perspectives on positioning that are derived from the for-profit marketing and strategy literature have limitations when uncritically applied to the charitable sector. Our findings and model also offer alternative insights into the strategic positioning in charities by combining the empirical findings with multidimensional theoretical perspectives to explain their significance. We have revealed that the components of a charitys PS are influenced by a combination of internal organizational and external environmental factors. These influences could

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however be mediated by other factors, which, we contend, are unique to the charitable context. We discuss below three major implications arising from our study for positioning research and management practice in the charitable sector. First, our study revealed that strategic positioning in charities is a multifaceted concept and requires a multidimensional approach to researching it. The existing literature and theoretical perspectives on positioning tend to depict positioning based on their particular assumptions, and each has not been able to adequately explain the positioning activities in charities on their own. For instance, we found that a low-cost PS and particular types of positioning dimensions were not employed by charities. Their inherent resource dependency on external parties and tendency toward cooperative or collaborative relationships with their heterogeneous stakeholders would make it impractical or even impossible for them to adopt monopolistic forms of positioning (Bruce, 1998; Wilson, 1994). By contrast, they tended to adopt core PSs that emphasized avoidance of direct competition (Mintzberg, 1987) and have developed positioning dimensions that are less tangible and more enduring to support their strategic positions over time. These findings, we argue, could thus be better explained by drawing on alternative theoretical perspectives, such as stakeholder and resource dependence theories (Pfeffer & Salancik, 1978) instead of the marketing derivative alone that emphasizes mainly competitive positioning. Certain influencing factors were also found to be unique to the charitable context, such as the charitys mission, varying forms of governmental influence, and competing demands from internal and external stakeholders, as explained above. This deviation from the existing literature reflects the particular institutional and organizational contexts of charities. In particular, the preeminence of the charitys mission is a significant finding because it dictated the development of a charitys PS (choice of core positioning, key target audience, and positioning dimensions) but, at the same time, constrained its future options. Charities in our study have benefited from strong strategic positions that were anchored on their missions. However, this apparent rigidity could constrain their repositioning efforts in light of future environmental changes. Further research is required to develop more theoretical models and conceptual frameworks for charitable and nonprofit organizations that critically adapt or expand models from the existing literature while also being mindful of the need to accommodate their distinctive architectures. Second, the extant marketing and strategy literature suggests that strategic positioning in for-profit organizations is predominately undertaken for competitive motives (Hooley, Broderick, et al., 1998; Hooley, Saunders, et al., 1998; Johnson et al., 2006; Kotler, 1994). The strategic intent of these organizations is to outperform their rivals (Hamel & Prahalad, 1989). Our study, however, revealed that a combination of cooperative or collaborative and competitive motives underpinned strategic positioning by charities. These

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motives were molded by the charitys mission, which could enable or constrain their strategic choices. Two explanations are offered to support this proposition. Charitable purpose is explicitly required by charity laws in the United Kingdom to conform to specified categories and to demonstrate public benefit (Charity Commission, 2004a, 2005b). At the same time, the missions of some charities are implicit because they are part of the accepted values and ethos of people working in these organizations (Hudson, 2002). These two levels of shared values combine to make the charitys mission a potent influence on its strategic positioning activities, as suggested in our study. Third, the profound changes taking place in the U.K. public policy context could offer charities potential opportunities for growth and involvement in policy development while at the same time posing challenges. One recurring concern is about the risk of mission drift in charities that increasingly deliver public services under government contracts and their potential loss of independence to campaign for their causes (Alcock, Brannelly, & Ross, 2004; NCVO, 2004a; Osborne & McLaughlin, 2004). Mission drift for charities means loss of focus on their charitable purpose and prioritizing their activities for dominant funders instead of serving their users or beneficiaries (Blackmore, 2004; Charity Commission, 2007). This could affect their fundraising from voluntary sources and spur confusion about their charitable purpose. Yet it was encouraging that we found little evidence of mission drift or loss of independence in the charities in our study. They have developed strong strategic positions that are guided by their missions. This has enabled them to preserve their charitable values and independence while building strategic relationships with their various stakeholders, including government, in pursuance of their mission. However, we recognize that tensions persist in charities in balancing the conflicting demands of various stakeholders, such as between uses or beneficiaries and donors or funders. We also recognize that there is a further tension between remaining committed to the core organizational mission and appropriately responding to a changing external environment. Our findings suggest that charities have begun to develop organizational strategic positions that best preserve their particular missions and effectively differentiate them from other charities and nonprofit organizations. However, they need to be more proactive in shaping their strategic positions to meet both of these objectives instead of being passive recipients of a strategic position shaped for them by the transient needs and demands of government and other dominant funders. In conclusion, we offer two important caveats about our theoretical model. First, we have explored strategic positioning at the organizational level in the charitable context. This is distinct from, but provides guidance for, positioning at the operational (product and brand) level. Further exploration is needed to investigate this relationship within the charitable sector. Second, the factors influencing PS in our model have been generalized from our empirical research. Although this model was developed for the first time

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from evidence gathered from a range of charities, there could be other influencing factors operating under specific circumstances. Consequently, we recognize that our model may not include all influencing factors. Future research is needed to validate the model and its constituent elements in different organizational and sectoral contexts. This could take the form of establishing testable hypotheses based on our present study to refine the model and to more robustly test the causal connectivity among the various factors. Moreover, longitudinal research could further explore, in greater sophistication, the process of developing a PS in charities, the causal relationships among the influencing factors identified above, the effects of positioning on the charitys performance, and the effects of positioning on strategic relationships among charities, the wider voluntary and nonprofit sector, and government.

Notes
1. Charitable organizations or charities are defined in this article as voluntary and nonprofit organizations that meet the strict conditions required for charity registration as defined by the Charity Commission for England and Wales. The Charities Act 2006 stipulates that charities must be established for charitable purposes and demonstrate public benefit. 2. The Cross Cutting Review was initiated in September 2002 by the U.K. treasury, which identified a greater role in public services delivery by charities and the wider nonprofit sector (HM Treasury, 2002). The main purposes of the review were to analyze the contribution of the voluntary sector in public service delivery and to identify areas for improvement, especially funding, capacity building, and improving the range and quality of services offered by the voluntary and nonprofit sector. See Osborne and McLaughlin (2004) for a full analysis of this review. 3. General charities are defined by the National Council for Voluntary Organizations (NCVO, 2002) as registered charities but exclude those organizations that are considered as part of the government apparatus, financial institutions considered to be part of the corporate sector, and organizations that deliver only private benefit. An estimated 169,000 general charities were registered in the United Kingdom in 2006 (NCVO, 2006). 4. There were more than 189,000 registered charities in the United Kingdom at the end of 2006 (Charity Commission, 2006). An average of 7,000 new charities have been registered each year with the Charity Commission since the mid-1990s (Charity Commission, 2003, 2004a, 2004b, 2005a, 2005b, 2006). 5. This article uses the Charities Aid Foundations (2003) classification of general welfare and social care charities, which were categorized under six subsectors: other general welfare, children, benevolent funds, elderly care, service or ex-service, and religious general welfare.

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Celine Chew is lecturer in strategy and marketing at Cardiff Business School, Cardiff, United Kingdom. Her current research interests include the application of strategic management and marketing for public and nonprofit organizations, social enterprise, and hybrid organizational forms of charities. Stephen P. Osborne is professor of international public management in the Management and Economics School at University of Edinburgh, United Kingdom. He is editor-in-chief of Public Management Review and president of the International Society for Public Management.