Strategic for non profit organisation

What is Strategic Planning? Strategic planning is designed to help public and non-profit organizations (and communities) respond effcctivcly to their new situations. It is disciplined eflort to produce jiAndamenta1 decisions and actions shaping the nature and direction of an organization¶s (or other entity¶s) activities within legal bounds.¶

Not-for-Profit (NFP): An organization that provides some service or good with no intention of earning a profit. NFP includes Private nonprofit corporations (such as hospitals, institutes, private colleges, and organized charities) as well as Public governmental units/agencies (such as welfare departments, prisons and state universities) Types of Not-for-Profit Organizations

Importance of Revenue Source: NFPs are dependant on dues, assessments or donations for their revenue sources. In NFP organizations there is likely to be a very different sort of relationship between the organisations providing and the person receiving the service. Because the recipient of the service typically does not pay the entire cost of the service, outside sponsors are required. Pattern of Influence on Strategic Decision Making: Pattern of influence is derived from its source of revenues. Those who fund the NFP are likely to have significant influence on its operations

especially with multiple sponsors. Thus it is very likely that most of the NFPs have not used strategic management because its concepts. techniques and prescription does not lend themselves to situations where sponsors. Such attitude created opportunities for politics. The constraints are as follows: y y y y y Service is often intangible/hard to measure Client influence may be weak Strong employee commitments to professions Resource contributors intrude on internal management Restraints on use of rewards and punishments Impact on Strategy Formulation: y y y y Goal conflicts with rational planning: because NFPs typically lacks a single clear cut performance criterion. The concept of competitive advantage is less useful to the typical not-for-profit organizations than the related concept of Institutional advantage. Impact of Constraints on strategic management: Several characteristics peculiar to the not for profit organisation constrain its behavior and affects it strategic management. Situation (SWOT) analysis. mission statements. However the situation is changing nowadays. and corporate governance are all relevant to the strategic assessment of NFPs as they are to a profit making organizations Strategic management is difficult to apply where the output of an NFP is difficult to measure. Ambiguous objectives create opportunities for internal politics and goal displacement: the combination of vague objectives and heavy concerns with resources allows managers a considerable scope in their activities. which can be easily measured than with service which cannot. A NFP organisation is said to have institutional advantage when it performs its tasks more effectively than other comparable organizations. divergent goals and objectives are likely. An integrated planning process tends to shift from results to resources: because NFPs tend to provide services that are hard to measure planning becomes more concerned with resource inputs. Professionalization simplifies detailed planning but adds rigidity: In NFPs professional values and traditions can prevent the organizations from changing its conventional behviour patterns to fit new service mission tuned to changing social needs.Usefulness of Strategic Management and Techniques: some strategic management concepts can be equally applied to business and not for profit organizations whereas others cannot. Goals of the professionals and their representative bodies may not align with organizational goals Impact on Implementation . rather than the market place determine the value. stakeholder analysis. Portfolio analysis may be more difficult to apply to NFPs.

then one needs to list out ways and means to achieve this goal in a manner that is defined by the organization. The job of a ³dean for external affairs´ for example consists primarily of working with the school alumnae and raising funds. Job enlargement and executive development can be restrained by professionalism: in organisations that employ large number of professionals. However it is better not to make it unnecessarily lengthy. The time span required to achieve this goal should also be indicated and . Its purpose is to help subsidize the primary service programs. Therefore. The benefits far surpass the financial gains one enjoys when working for remuneration. when forming a non-profit organization. the mission statement should take pride and place in the organization. It is important that the directors of the organization share the same passion. as some may work on a voluntary basis. How to Set Goals in a Non Profit Organization: strategic planning for nonprofit organizations Non-profit organizations function for different purposes. literary. educational. The purpose can be wide and varied. Once the purpose and the benefits are defined. managers must design jobs that appeal to prevailing professional norms. as monetary benefits in such organizations are limited and may not even be any. Increased requirement for an environmental buffer role: because of the heavy dependence on outside sponsors a special need arises for people in buffer roles to relate to both inside and outside organizations. Impact on Evaluation & Control y y Rewards & penalties have little or no relation to performance: when results are vague and the judgement of success is subjective. ranging from one sentence to several paragraphs. Inputs rather than outputs are heavily controlled: because its inputs can be mneasured much more easily than outputs.y y y Decentralization is complicated: the difficulty of setting objectives for an intangible service complicates the decision making authority. It appears to be a form of concentric diversification but it is engaged in only for its money generating value Mergers:Merging with an organization with a similar mission can help to reduce administration costs. The mission statement will describe the purpose of the organization. This will enhance their capacity to serve clients or to acquire resources while enabling them to keep their identity. whether be charitable. The mission statement is usually based on the passion of the group of people forming the non-profit organization. Popular Not for Profit Strategies y y y Strategic piggybacking:Strategic piggybacking refers to he development of a new activity for the not-for-profit organization that would generate funds needed to make up the difference between revenues and expenses. The mission statement will indicate the proposed benefits to the beneficiaries. Strategic alliances:Developing cooperative ties with other NFPs. predictable and impersonal feedback cannot be established. the not for profit organisation tends to focus more on the resources going into performance than on the performance itself. scientific or humanitarian.

make today¶s decisions in light of their future consequences. if you do not have the financial or the man power resources to set up the required goals to achieve the objectives. . the organization structure should be formed and incorporated in a manner that the present board of members of the organization is protected when they are no longer involved with the organization. To achieve this purpose. Initially. Not all are able to support financially and you may be surprised at how many people will be willing to volunteer for a worthy cause. it may be possible to fund the organization through other support groups. solve major organizational problems. This is an important aspect in order to avoid legal issues with the government. find volunteers who are willing to give their time and knowledge to achieve the goals and objectives of the organization. improve performance. organizations or individuals. Mission statement can be expanded as the goals and objectives become clearer and the organization is capable of expanding beyond their initial scope. Ideally. the manpower requirement should also be taken into account. develop a coherent and defensible basis for decision making. but this may not be possible continuously and therefore goals have to be set for finding ways and means for the organization to be financially independent. By following a methodical and organized structure. If so. Equally important is to formulate a plan for the organization to be financially viable. Build teamwork and expertise. It is equally important that proper objectives and goals are set for the staff. The Benefits of Strategic Planning What arc the benefits of strategic planning? y y y y y y y y y y y y think strategically. setting goals in a non-profit organization can be a very straightforward and simple task. It might at times be prudent to work with an already established non-profit partner organization.whether this would be on a one off situation or with the idea of continuance of these objectives. deal effectively with rapidly changing circumstances. Volunteers should have enough commitment to accept the goals and challenges in the same way as a paid employee. Before proceeding to set goals. clarify future direction. find out state and country laws that govern the type of organization being planned. exercise maximum discretion in the areas under organizational control.

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