Strategic Management in the Non-Profit Organisations

Reza Shafi-zade
Islamic Azad University Of Saveh Branch, Islamic Republic of IRAN
No426, Niloofar Ave,Tehransar, Tehran, Iran
E-mail: RSG1189@Yahoo.com

ABSTRACT
Constant pressure from either policy changes, competition, or market demands has
always been faced by non-profit organisations. Nonetheless, change or in more radical
terms “transformation”, is never an easy task. Transformation management particularly in
a pluralistic society, must take into account the various political, cultural or sociological
factors. In addition, changes normally causes anxiety, stress or even trauma to both
people and organisation. Thus, the management of change is indeed, one of the most
delicate endeavour to deal with as far as the art of management is concerned. This paper
deals with the role of leadership in transforming strategy into action. The paper sets out
and discusses some approaches to the management of strategic transformation in the
context of public organisations. Specifically, the focus is on managers of non-profit
organisation and their leadership behaviour, the culture of management and how the
leaders should comprehend the issues of change. It is maintained that the leadership is
essential to strategic management process.

Keywords: Strategic management ,Non-Profit Organization, Leadership

Introduction
Over the past Ten years or so, there has been the major re-organisation,
restructuring and rationalisation of many issues in the non-profit organisations. Events
that occur everywhere in the world have significance impact to the national sectors either
directly or indirectly. Change, though traumatic for some quarters, is indispensable and
unavoidable. In most non-profit organisations, the change even if it is carried out on a
small scale normally viewed unfavourably by the civil servants who for years have been
comfortable’ in their positions. However, a review of traditional modes of management
justifies the idea of transformation organisation. This certainly demands a whole range of
tasks. As noted by Worcester (1991, p. 55), among these tasks are:
Introducing wholly new products or services, handling a major reorganisation,
effecting acquisitions and mergers, Entering a new market, radically improving
internal efficiency and profitability.
Since strategic management is still considered a new introduction in the non-profit
organisations, its practicability is an issue. For example, in the area of strategic financial
management,decentralised budgetary approaches, the notion let the managers manage'
has created a tension or conflict of interestbetween non-profit managers and politicians
(Pollitt, 1995, pp. 203-34). Rationalisation' also brings out another criticism. Ten years of
working experience does not mean one will learn something new as one may keep on
doing the same routine everyday. As argued by Peters, basic values such as
accountability and responsibility are ignored (Peters,1995, p. 314; see also an interesting
discussion on the concept of rational action by Waldo in Shafritz and Hyde, 1987, pp.
232-4). Others argue that the establishment of internal markets within the public sector
constitutes a rejection of the administrative state (Lane, 1995, p. 198). Many intangible
values such as the trade-off between efficiency or productivity versus due process and
legality (Lane,1995, p. 175) cannot be quantified (or is unwise to be quantified).
As there has been continuing interest on the part of governments around the world
in promulgating a policy for market-oriented approaches, many of the managerial and
organisational practices have been taken from the private sector. Among other popular
prescriptions adopted for improving the management of public organizations are
Planning, Programming, Budgeting System (PPBS), re-engineering, Cost-Benefit
Analysis (CBA), Management by Objectives (MBO) and Total Quality Management
(TQM). These also include planning techniques such as PERT analysis, industry analysis,
market research, and economic forecasting (Raimond,1996, p. 211).
By the end of the 1980s and in the early 1990s, strategic management became a
popular phenomenon and was applied within a broad framework. This period was marked
by the obvious acceptance of the idea and practice of the New Public Management
(NPM), which affected every conceivable pillar of public sector administration, including
areas where privatisation had happened. Perhaps the idea was best popularised in the
United States with the launch of the concept of `reinventing government’. US
Government Performance and Results Act of 1993 required the federal agencies to
submit strategic plans to Congress in complementing the state and local units’ activities.
These measures were also adopted by Ireland (Strategic Management Initiative in 1995),
Australia, Britain (see Doern, 1992), Canada and Germany; all of which have introduced
strategic management concepts into non-profit organisations - with the emphasis on
action and consideration of the broad, diverse set of interested parties, and on paying
attention to external threats and weaknesses.
Even developing countries in Asia, Africa and Latin America have followed the
footsteps of Western countries. As it is crucial to develop a strategic management plan to
support the appropriate methods of privatisation, countries such as Bulgaria, Egypt and
Malaysia have resorted to strategic options in their Master Plan for privatisation.
Malaysia in particular has developed a comprehensive programme for privatisation that
identifies the objectives and major issues the government will encounter, and has
established a two-year rolling plans and an annual action plan for transferring ownership
or management control (Rondinelli, 1996, p. 255).

Models of Strategic Management

The term `strategic management' seems to be used interchangeably in the private
sector with `business policy', `corporate strategy' and `corporate planning' (Luffman et
al., 1996, p. 6. See also Hussey, 1990, pp. 3-25, for more comprehensive discussion on
the development in strategic management). A common argument also states that there is
no clear line to demarcate strategic management from strategic planning (Goldsmith,
1997, p. 31). Therefore, it is better to determine and differentiate the scope and the level
of activity covered by the subject area in order to get a clear grasp of the contextual
application of the tools.
While strategic management means different things to different people, it
emphasises formal techniques for setting an organisation's long-term course, developing
plans in the light of internal and external circumstances, and undertaking appropriate
action to reach those goals (Goldsmith, 1997, p. 25). It owes to the combination of the
value of managerial capability which involves the interplay between the power hierarchy
and leadership style that shape healthy organizational culture for successful mediation of
strategic management. It is worth mentioning that the strategy which involves complex
processes as well as different functional areas, needs to be mobilised primarily by
efficient leadership in the organisation.
Several more specific models have emerged and are developed under the strategic
management model (see also Nutt and Backoff, 1992, pp. 166-222 for a clearer overview
of strategic management tools). Four of the most popular strategic management tools are
highlighted below:

Portfolio Matrix Analysis

Otherwise known as `portfolio analysis techniques’, this tools were applied in
several diversified international companies using different names such as Boston
Consulting Group (BCG), the General Electric Business Screen, and the Shell Directional
Policy Matrix. Basically it involves a matrix by which market share was plotted against
overall market growth (Ascher and Nare, 1990, p. 309). It is done under an assumption
that an organisation should maintain sufficient cash to meet investment needs.
As far as the non-profit organisations are concerned, the portfolio models may be of
limited value. This is explained by the fact that there are two factors that predict whether
a line of business will produce or use cash: the market growth rate (slower growing
markets are expected to demand less new investment) and its share of the market (larger
market shares are expected to generate large cash flows due to experience curve effects).
The fact that many public agencies operate in a single service sector or in non-profit or
non-financial settings made this matrix seem alien to them.
Nevertheless, can we say that the portfolio models are totally irrelevant to the
public agencies? With de-regulation, the application of new technology, competition for
limited financial sources and many other process of its kind, many of the public agencies
now may have to compete among themselves even more. Property and financial
management which certainly involve investment decisions demand serious
reconsideration of the portfolio models.

SWOT Analysis
This model is an analysis of an environment of the four major angles that surround
an organisation – strengths, weaknesses, opportunities and threats. Based on a stimulating
and more creative problem-solving method, SWOT analysis is useful at the corporate,
competitive and functional level of strategy as it addresses the current fit between the
organisation and its environment and considers the potential impact of environment
change (Thompson, 1993, p. 595). Popularised by Jack Welch of General Electric in the
1980s, SWOT has strong implications in both the public and non-profit sectors
(Goldsmith, 1997, p. 33). However, there are difficulties in applying this model in the
public organizations where a variety of programmes and initiatives operate from under
one roof as opposed to single-purposed organisations (p. 310).
The practicability and interesting fact about this model is it represents an evaluation
of how well the resources of an organisation match the needs of the environment in
which it operates and competes. It devises strategies alongside situational forces, such as
the role and the influence of stakeholders, government policy, and market trends which
may bring direct impact on the activities of the organisation. At the same time, the
evaluation of internal factors stress the importance of management values which must be
linked to the social obligations. This ultimately constitutes the intrinsic factor for the
organisation’s existence.

Stakeholder Analysis
It is said that this analysis is particularly relevant to the public sector. It requires
identification of those individuals or groups who have a stake in the success of the
organisation - from customers and suppliers to employees and shareholders – and
suggests that corporate strategies must take into account all these varied interests (Ascher
and Nare, 1990, p. 311). Strategies are expected to be more robust in the public sector
since all decisions made in a democratic manner must create a balance between the
competing views and interests of every facet of society. Different types of stakeholders
might consist of employees, local people, interests and pressure groups etc. These groups
will act and react in forceful ways such as through lobbying and petitions. Indeed, it is a
real challenge for the public managers to strike a balance towards those competing
interests.
Nonetheless, despite the various kind of demands to be addressed, there are no
obvious rules for setting satisfactory levels of performance for all groups (Goldsmith,
1997, p. 36). In addition, some issues related are like no stakeholders are identified; no
forum exists for exchanging views with stakeholders; stakeholders themselves are not
accountable in the sense that individual views may be out of step with others; and
stakeholders are not empowered (The Strategic Management of Agencies - Full Report
and Case Studies, 1995, p. 90). The fluctuation and the nature of volatile issues really put
the stakeholder analysis to the test.

Mission Setting
'Mission' means the long-term objectives of the organisation as related to the
strategic leader's vision of the nature and scope of the businesses that he feels would be
appropriate and desirable (Thompson, 1993, p. 45). It describes the broad purpose of
what the organisation is and how it will progress. Organisations that successfully and
consistently promote a common mission know their definite objectives and are clear
about their challenges ahead. In this regard, the organisation cultures plays a central role
in success or failure. Some organization cultures enhancing a sense of mission and
purpose while in others, the effort seems to become enmeshed in political manoeuvring
and the conflicting claims of wide differing goals (Harrison, 1995, p. 122). That is why a
consensus on the fundamental ideals that the organisation is trying to fulfil is very crucial
to shape resources and to relate to employee goals. This should be well communicated,
ideally to every department or unit of the organisation. Strategy, corporate mission and
objectives share strong connections and, therefore the three subjects should not be
separated from one another. Precisely, it is essential to create a flexible strategy, whereby
the organisation modifies its mission due to the changing nature of its objectives.
Even though governments through their central departments and agencies have
given a great deal of consideration to the application of strategic management in line with
changing situations, far less attention has been given to the preliminary conditions before
it can be implemented efficiently. Within this context, this paper sets aims to look into
how the leaders in the non-profit institutions can act strategically within the controlled
behaviour, cultural complexities, and their ability to mitigate the potentially adverse
factors in view of the broader and societal environment.

Key Issues and Evaluations

A number of important concepts of strategic management has been reviewed in the
preceding sections of this paper and that they apply to a very large, diverse, complex and
challenging environment. At this point, perhaps an important challenge for all managers
of non profit organizations handling the task of managing development projects and
programmes is how to really develop and tactfully manage the processes and procedures
of strategic management. It is wise to review some of these issues and develop an
evaluation of them.
A study of 16 major British companies on how corporate centres add value to
business units identified important tensions or trade-offs confronting corporate level
managers. The chief executive for instance cannot simultaneously provide strong
leadership and give autonomy to the subsequent lower units (Campbell et. al, 1990, p.
220). In other words, the leader in this context, sometimes faces a dilemma to decide the
degree of leadership which may in conflict with the empowerment exercise. There are
four other similar tensions - co-ordination and co-operation versus clear responsibilities
and accountability; analysis and planning versus entrepreneurial speed of response; long-
term strategic targets versus short-term financial targets; and flexible strategies (i.e.
strategies that can be changed quickly to meet competitor moves) versus tight controls. In
brief, the underlying primary issue is, what is the level of practicability of strategic
management applied in the non-profit organisations? Other crucial issues that confront
This managers in adopting strategic management are: Where does the private-sector
experience leave us regarding strategic management in the non-profit organisations?
(Goldsmith, 1997, p. 36); is the formal strategic planning process too logical, too abstract
and does it fail to take into account non-profit dynamics? Is it too rigid and slow-moving
to respond adequately to a rapidly changing environment? Does it work against one’s
creativity (Olsen and Eadie, 1994, p. 184). Some more basic questions are: Where do
strategies come from? How are they created? (Hamel, 1996, p. 71). What are the explicit
strategic management standards applied in the non-profit organisations? Given the
volatile nature of strategic management, it is worth looking at some issues objectively
and evaluating (rather than critiquing) them.

Rationalisation’ and Information

Over the past decade, the field of non-profit organisations has undergone a different
phase of managerialism influence. The development of managerialist ideologies were
influenced and characterised by a number of different schools of thoughts. In the area of
scientific management, Taylor is perhaps best known as a pioneer of time and motion in
the techniques of workers and tasks (Pollitt, 1990, p. 14). The impact of Taylorism,
which treats management as a separate and scientific field of study, is in fact, identical
with Woodrow Wilson’s influential paper published in 1887, `The Study of
Administration’, in which he proposed the dichotomy between `administrative’ and
`political’ questions. But, to what extent is `politics’ regarded as an improper intrusion
into `administration’? Studies prove that politics cannot be perceived as a distinct sphere
of `administration’. As managers of non-profit organisations are rational actors, they
utilise a great variation of knowledge and high level of abstraction while engaging in
strategic management. They also continuously calculate the means to maximise non-
profit goals depending on which level they are in or what kind of jobs they are doing
(Waldo, 1987, p. 232). Being `rational’, thus, actually demands managers to tactfully
single out the `unwelcome and unnecessary’ intrusion of politics.
Information on the public sectors is a function of both individual rationality and
collective wisdom (Lane, 1995, p. 10). The combination of individual information,
collective processing and storing of such information creates more aggregate levels of
information systems which have become more and more advanced. However, normally,
the problem of comprehensive and perfect information can hardly be attained in the non-
profit sector.
Rational action may involve considerable uncertainty and ambiguity. Thus,
managers make decisions by using their personal judgement and experience and by
reconciling the qualitative and quantitative information they possess. Problems of
information (i.e. information deluge), goal divergence and the psychology of the decision
maker may all lead to `non-rational’ decisions (Bowman and Asch, 1987, p.36). This was
in fact recognised by Stacey as a natural process for learning organisation where
insecurity, anxiety, conflict, and confusion must be accepted as inevitable factors in the
process of new knowledge creation (Stacey, 1993, p. 90).
Qualitative rationality may also involve a constant conflict between subjectivity and
objectivity. Thus, even the best and most proper methods of planning cannot beat the
paradox. As we live in a very challenging time of an increasing demand of the non-profit,
managers nowadays face serious constraint to lead and manage. Against this paradox, the
determined strategists emerged. They embraced rather than shunned accountability, and
they stimulated rather than dampened non-profit expectations (Moore, 1995, p. 274). By
embracing social accountability, they enhance the social support reflected by the social
overseers’ aspirations.
It is argued that the external standards of accountability have a direct affect on
internal standards as well. Establishing an initial good contact with different parties
would consequently spearhead more concrete actions such as the use of budgeting
strategy or the manipulation of functional strategy. Rationalisation requires shaping the
psychology of people first before executing with other crucial (yet controversial) actions.

Devolution/Risk Management
Some are skeptical of `letting the managers manage’, fearing that too much
managerial autonomy brings increased risk of “impropriety” and thus may limit progress
(Holmes and Shand, 1995, p. 563). Even in developed countries such as the United
Kingdom, New Zealand, Sweden and Finland, the move towards a market-driven
approach and devolution has proved to be an onerous period which demanded formidable
tests from the government. In particular, the alignment of strategic objectives, operational
goals, performance indicators and costing systems is technically difficult and progress
may be slow, even where local management is basically supportive (Pollitt and Summa,
1997, p. 11). A `public market’ differs from other types of market with respect to demand
structures, price mechanisms and the determinants of purchasing power (Pierre, 1995, p.
68).
In another respect, management deals with a very subjective and less dependant
entity of the organisation, that is the people itself. The application of strategic
management is always confronted with the typical mechanistic and bureaucratic approach
of non-profit organisations. There is always a paradox between the essential aspect of
motivation and the control aspect of management. Managerial intervention emphasises
merely disciplined or even penalising, as a tool of bureaucratic control which directly
reinforces the less tangible issues of commitments and morale in workforce (Pollitt, 1990,
p. 13). A professional system outlines established policies and procedures against abuse
of authority. However `the arbitrary exercise of power that can create a rule of fear and
a hotbed of political intrigue in the power-oriented culture is at least limited and
ameliorated’ (Harrison, 1995, p. 128). As a result, the genericism of managerialism
which is influenced by the mechanistic tools undermines the intrinsic values of non-profit
organisation, and the endeavours of the strategic approach may be only a cosmetic
approach.
Case studies conducted by Moore (see Moore, 1995) have proved that transforming
an organisation with endemic problems requires a whole new dimension of action. In the
risk-management approach, managers of non-profit organisation may resort to completely
restructuring the hierarchical line of organisation, recruiting skilled and dedicated staff
who could cope superbly with difficult challenges, and altering traditional modes of
organizational practices. Beyond making these mechanistic transformations and
tightening disciplinary and procedural procedures, managers must demonstrate that they
are reformers of the conventional methods, as reflected in the surge of enthusiasm, self-
confidence and committed leader/worker.
Decentralisation proves to be more than merely symbolic: it is a significant
departure from past experience, and it serves to test and challenge managers (Moore,
1995, p. 252). Interestingly, they set up a necessary backup capacity - in the forms of
individuals or units of operation. This was in fact the strategy proposed by Grant in which
the concern is not only with the deployment of existing sources, but also with the
development of the organisation's resource base (Grant, 1991, p. 131).
Strategic planning or management is not a substitute for effective leadership
(Bryson, 1996, p. 12). It is only a tool to guide the actions of managers of non-profit
whereby their organisation’s success or failures depends on how they manipulate or
utilise it. It is interesting to note that the strategic management may crystallise a
successful blend of centralisation and decentralisation. In this aspect, the key strategists,
facilitate control over their broad-scale visions and monitor their development, while
entrusting their subordinates with considerable authority over the operational goals. He
should restructure his new organisation within his locus of control. In this sense, even
though managerial discretion is diffused and empowered into every level of management,
the leader is still the key player.

Performance Measurement
What are the best ways of measuring the success of strategic implementation? It is
rather difficult to give a definite answer to this question as an organisation’s goals may be
too complex and subjective. The success of an organisation depends on an initial process
of defining a set of clean, mutually compatible objectives (Pollitt, 1990, p. 120). It is then
that these objectives are translated into the most cost-effective means with the available
management skills and operation.
The issue now is how far the conflicting and shifting performance criteria can be
explicitly and objectively assessed. Pollitt has identified at least three pressures that tend
to push the formulation of objectives in the direction of vagueness and ambiguity - first,
the political support; second, broadly-stated objectives; and third, vague wording of
objectives, which provides room for manoeuvre (Pollitt, 1990, pp. 121- 22). These are the
substantial elements in the new systems they have created and, in which they could
construct broadly stated objectives. Besides relying on only one particular aim, non-profit
organisation managers should give more attention to the operational part of their
organisations. In fact, the primary objectives they set should be rather flexible and give
them more room for manoeuvre. Re-organising an organisation must be done on the basis
of priority and long-term emphasis. Bryson has proposed the `chunking' method where it
involves the process of mixing new and old activities amongst them (see Bryson, 1996,
pp. 38-40 for a clearer discussion on this method). Once the new and old activities have
been evaluated, non-profit organisation managers should figure out how to fit the new
with the old. Besides, they could tactfully mark out some of the new whilst dropping the
old ones.
This effort is also known as the `chunking’ strategy, which is done through a set of
projects and programmes. Different clusters of projects and programmes made up of
specific objectives would pave way for more clearer actions. These chunks could be
added together to make useful overall progress (Bryson, 1996, p. 38). Rhetorically,
according to the demands of the interested parties as individuals, the new set of goals
could be altered, which could put a slight change of emphasis in an old policy but would
indeed have practical and financial implications.

Operational Effectiveness Versus Strategy

Although the transfer of ownership may generally decrease the financial incapacity,
the government still has the responsibility to create a number of projects and programmes
within current organisational limits. In fact, they could invariably use more money than
they have available (Thompson, 1993, p. 175). In addition, financial well-being is often
given far less attention than the ultimate aim of providing goods and services to meet the
expectations of the public. Besides, a change in policy makers or even the fluctuation of
the economy can always severely damage the financial capacity which supports the
changes. That is why, there are various reasons why financial decentralisation has failed.
In the face of competition, a company or corporation can outperform its rivals by either
delivering greater value to customers or creating comparable value at a lower cost, or
both. Nevertheless, this strategy is appropriate when there is an open market where
competition between the providers of services exists. Within economic uncertainty and
instability, political ambivalence towards private sector participation, or inadequate
organisational capacity to transform state operating enterprises, the issue of operational
effectiveness and strategic positioning may not be significant or relevant at all
(Rondinelli, 1996, p. 258). The non-profit organisation at large is left with a very limited
choice of having to accept the only service available.
Porter, in his article published in the Harvard Business Review, has pointed out that
operational effectiveness and strategy are both essential to superior performance, and,
which is the primary goal of any organisation. However, they work in very different ways
(Porter, 1996, p. 61). The case studies of Moore (1995) were interesting examples of
single dominant non-profit sector organisations with no direct competition from rival
organisations. The increase in the costs of supply may not correspond to the growth in
income. In other words, the flow of revenue into the organisation may work in contrast to
the increase in the cost of the services or products offered.
Strong leadership with a clear vision of success enhances a forceful approach in
influencing budgetary allocation. Strategists could demonstrate an admirable persuasive
action in reshaping non-profit values. They could predict changes and their consequences
and act confidently. Also, they do not completely rely on the budget or funding from the
people, but seek alternative sources. Operational effectiveness in the context of the non-
profit sector must not be simply viewed in limited operational activities, but beyond that.
It involves the interplay between the different actions of policy makers, interested parties
or even similar provider organisations.
Organisational Strategic Positioning
Once embarked on managerial approaches, government corporations may have to
compete on par with similar providers of services while having to be more cautious on
their financial performance. The organisations are now confronted with the challenge of
making a distinction between their input and output for the public. According to Mathur,
those benefits that influence customers when making buying decisions are the outputs.
By contrast, inputs are the costs, culture, resource and skills needed to produce the
`quality’ of the output or product to the customer (Mathur, 1992, p. 200). In relation to
market position, input is more in control and is what shapes output. In fact, the ability to
reconcile the difference between these outputs and inputs determines how successfully
the organisation is managed.
Strategic positioning here means the organisation locates itself in a `niche’ market.
Regarding this, Porter defined the term competitive strategy as `deliberately choosing a
different set of activities to deliver a unique mix of value’ (Porter, 1996, p. 64). Ideally,
inputs must be within the organisation’s reach and preferably beyond the reach of others,
thus creating a barrier to encroachment (Mathur, 1992, pp. 200-1). Competitive position
is secured only when the barrier is protecting or serves as a `buffer zone’ to the
organisation. In the context of the non-profit sectors, the challenge is even greater - that is
to reconcile operational cost-effectiveness whilst maintaining their strategic position.
Perhaps the latter is a less difficult task as that the organisations are the sole providers of
their services.
The competition for most non-profit organisations is actually the challenge to win
over the cash-limited budget from other public organisations that solicit the same sources
of funds. This is especially true as economic downturn consequently brings deleterious
impact to the financial capacity for most Asia countries presently. As a result, there are
often tumultuous erupting inflation and drastic devaluation that could consequently
mishap the organisation's operation. This justifies another good reason why the real
strategists may ultimately or deliberately challenge the different authorities. Certainly,
this could create a conflict of interests between various groups. However, as noted by
Holmes and Shand, once the size and boundaries of programmes have been determined,
efficiency and service delivery can be made appropriate. Indeed an improved customer
focus may reduce rather than increase costs (Holmes and Shand, 1995, p. 565).

Critical Leadership Skills for Strategy Transformation

There is often a difference between leaders and managers. Some crudely put it as a
manager is very much concerned with the present system, whereas a leader on the other
hand, is more future in orientation. Furthermore, leaders have the capacity to mobilise the
subordinates towards the vision they have created for the organisation. These include
ability to negotiate risk, legitimately assume power, and strike a balance of self-control
(Zalzenik, 1983, p. 448).
Strategic advocators preach the need for the manager to be more proactive to the
external environment without neglecting the organisational effectiveness. It should be
noted that the strategic management is simply a set of ideas, systematic procedures and
merely serve nothing more than as a tool designed in order for the mangers to think and
act strategically in performing their tasks. By acknowledging this fact, we come to the
point of what can make the tools workable and practicable.
Therefore the issue now is the force behind the tools. In this regard, it is suggested
that managers of the non-profit sector equip themselves with leader style and qualities.
Only by repositioning themselves they could pursue virtuous ends by utilising the tools
strategically.
At this juncture, it is wise to look into interconnected strategic elements that are
crucial for the leadership in managing the plural society. Leaders in the first place, need
to have a clear perception of various courses of events and refrain themselves from being
captured by single events. They must see the events as an interplay of continuity
(stability) and change. They should know how best to strike a balance in a given context
(Bryson, 1995, p. 210). Only with this understanding leaders know what is the best
approach to a conflict or process. The leadership’s understanding of the whole process
would avoid the "fire-fighting" approach to problem or conflict. The understanding and
knowledge determine leaders' capacity not only in recognising the immediate strategy,
but they are more attentive to possible changes that occur.
Leadership skills need to be mobilised strategically. This would require the ability
to create and re-create a whole new synthesis or sources - human or non-human factors.
The leader and his vision can never be separated since vision is essential and paramount
important to the change process (Carnal, 1991, p. 36). In addition, change process must
be backed up with alternative plans. Subordinates must be reconciled with the idea of
change. Resistance factors which normally colour the politics of the organisation need to
be tackled accordingly. Indeed, in the wake of conflicting interests from different quarters
of groups in the organisation, especially those who would like to maintain the status-quo,
or feel happy in their comfort zone, even retaliation or outrageous response may come as
no surprise.
The nature of non-profit organisation as a service provider demands the manager of
the organisation to act significantly differently from their counterparts in the private
sectors. The leaders of non-profit organisations must always have the conscience as an
individual who acts as a social architect. The conscience is in tandem with the
organisation's vision and mission, and provides the raison d'etre - the social justification
for its action. Eventually, there would be identifiable social and political needs that the
organisation seeks to fulfil (Bryson, 1995, pp. 26-7). Certainly, in the context of a plural
society, different races or communities need to be rationale in striking their values and
meet the social and political needs of the various parties.
If non-profit organisations are to thrive and be more professional in their
management, the element of trust must be given a new meaning while retaining its
position at the core of the organisation’s activities. Leaders must engineer the way
relationships are constructed. This is because high levels of trust reduce friction among
employees, bind people together, increase productivity, and stimulate growth. On the
contrary, low levels of trust adversely affect relationships, stifle innovation, and hamper
the decision-making process(Sonnenberg, 1994, p. 189).
In periods of dramatic growth where everybody seems to adequately happy with the
organisation's achievement, many would muddles through their ways in climbing the
professional ladder easily (i.e. mostly by promotions). By contrast, in the wake of
economic downturn, the prevailing low level of trust becomes more apparent alongside
loss of loyalty, productivity, and innovative thinking. In fact, these phenomenon are
inherited and come as no surprise as they want to be seen less vulnerable. The
“defensiveness” and “mutual suspicions” attitude eventually trash the values of
innovativeness and job discipline. Moreover, as job security is more transparent in non-
profit organisations than in profit sectors, these attitudes are considered as the basic
ailments in the organisation itself.
Nobody could deny the crucial role of trust cultivated in the organisation. But how
can the trust be instilled by the leader in an organisation? First, leaders have to know the
person and lend the trust accordingly. In expediting a government project for example,
and in setting up the working committee for it, the leader may assign different tasks to
different people based on their real skills and ability. Second, leaders must be fully aware
of the situation where the trust is fading away. For example, subordinates holding back
responsibility given to them or more keen to criticising the past actions rather than acting
more pro-actively to the issues that should be of prime concern to them. It is definitely a
clear setback to the image of the organisation when everybody start to politicise and
emotionalise the issues or programmes organised within.
Next question probably is, how does the leader secure trust from his subordinates?
There are actually many attributes of trust associated to oneself such as integrity –
honesty, non-hypocrisy, ability and sincerity. The continuos reinforcement of one or
more of this attributes (i.e. the leaders do what they preach) could enhance one’s trust.
Ultimately, and even unconsciously, the leader will get the support from his subordinates
on whatever decisions he has made. Within this context, Sonnenberg added the
“impeccable reputation” which is the factor that has strong correlation with gaining trust
from subordinates. They do not really question the decision as they have the true
conviction that the wise and trusted leader would only do things that benefit the
organisation even though some of the decisions are controversial or seem to be biased.
Upon examining various angles of strategy, there is indication that there are a lot
more issues of concern pertaining to strategic management. Indeed, strategy is not simply
a matter of declaration and the niceties of conventional action. Strategy needs more than
that. It requires a total commitment and devotion and it is not an end in itself. In their
missions, non-profit organization managers develop their frameworks with different
kinds of approaches, and reposition their organisations in a new dimension which allows
them to focus their managerial attention on the key issues described above. non-profit
organization managers in general need to be fully aware of these issues before strategy
can be utilised as a tool to tackle the managerial problems they are dealing with. Given
the rapid rate of environmental turbulence, a constant ability to adapt and respond is
determined by the capability to think and act strategically. These are the two qualities that
are of paramount importance to survival and success (Koteen, 1997, p. 69). These brief
remarks will bring us to the final conclusion of this paper.
Conclusion
As presented, the discussions exhibit different stages of strategic management and
its development since its emergence in the 1950s. It is found that the increasing value of
strategy in organisations was shaped by the contextual demand and the periodical
challenges given at a particular time. These could be social, political, cultural and/or
economical. Interestingly, in searching for these values, the approaches range freely
across the reality of today seeking betterment for tomorrow. Of course, as we have learnt
this sort of tactical move faces many hindrances.
Indeed, some may fear that a strategy commonly employed by managers move too
far away from the conventional methods of certain issues and problems being tackled.
Another concern is, it is too imaginative, has too robust features, too forceful, or too
aggressive, due to its moving away from a conventional style of confronting the issues or
problems. Consequently, this would have a deleterious impact on the quality of
democracy. Hence, the purpose of this paper is precisely to lay out the reasons why
strategy has its relevance. This is accomplished by putting forward its development of
managerial orientation and techniques over time within the prism of pluralistic society.
That is why, `good’ strategy should be differentiated from `bad’ strategy. While the
former faces the continuous challenge for progressive improvement, the latter has the
risks of failure, and therefore irrelevant and has to be discarded.
The discovery of the volatile nature of strategic management is indeed undeniable.
However, more importantly, strategists normally do not have detailed plans in advance
but instead they improvise on most of the changes they have made in response to the
complexities and on the specific circumstances they were in. This makes strategic
management interesting and yet very challenging. The following conclusions can be
drawn:

• Strategic Management Is No Panacea

Strategic management may exist as another typical management tool that has
emerged over time. However, one significant difference of strategic management
compared to other tools is that it is unlikely to be eliminated from the management
dictionary. As the techniques can be modified, non-profit organization managers may
find them possessing a relevancy for the management endeavour. non-profit organization
managers need to be fully aware of the implications of applying strategy techniques,
particularly in a plural society, where the tendency towards communication fraught and
tension relationships prevail. This is especially true when communal division appears not
only on specific issues regarding the economic, social, and cultural benefits and costs of
participating in the polity but in many facets of the society. Different frameworks of
development projects and programmes in different settings demand distinct styles of
strategic management. Nevertheless, what has changed is the emphasis. In the new
approach, strategy is seen more as something to be negotiated, not engineered. The accent
is, therefore, on finding mutual agreement in game plans (Goldsmith, 1997, p. 31).
Strategic management is a better option for transforming government-owned projects and
programmes into more effectively managed projects and for complementing market-
oriented systems. However, it is neither a panacea for all governments’ weaknesses nor
an adequate tool to ensure its effectiveness and non governmental organisation.

• Strategy Demands Redefinition of Overall Mission, Goals and Operational

Objective
Non-profit organization managers may feel sceptical of their convictions in working
inside a hostile environment. This is because they have to balance the competing interests
of different parties. It is most likely that strategy can be most effectively utilised starting
at the top executive level of the organisation. The vision should be well communicated
across each and every level of the organisation.
Commitment to total quality products and services require a very special kind of
organisational culture. It is a general believe by many strategic writers that managers
have to possess entirely different skill to move the organisation from a controlled
mechanism entity to one where it becomes a matter of personal challenge, self-regulation
and pride. Research shows that Japanese managers think differently as compared to their
Western counterparts. Japanese are typically vigorous, analytical and quantitative (see
Raimond, p. 209-10). Thus, the need to develop a new form of mission, goals, and
operational objectives has opened up the possibility and opportunity for strategic
application for many Japanese companies.
• Strategic Management Lies in the Process, Not Outcome
Non-profit organization leaders’ visions for their organisations must turn out to be
both practically useful and morally compelling. In this instance, the establishment of a
new work ethic is deemed essential. A study in the UK, New Zealand, Sweden and
Finland proved that despite evidence of continued tightening and refinement of
performance indicators, the swing to a more output-oriented culture was slow (Pollitt and
Summa, 1997, p. 11). This indicates that the role of the government at the macro level is
not enough. As noted earlier, strategic management is most effective when it is part of a
broader programme of socio-economic reforms and organisational development where
the strategists worked as the key players. Effective strategic management as noted by
Porter, thus, requires the formation of a strategic management group to provide
leadership for the process whom made up by chief executives, top-line managers and key
executive members (Porter, 1996, p. 316).
The benefits of strategic management can be maximised when the government
ensures that when a project is launched, the idea or the method of strategic options taken
is fully understood by all managerial and functional level in the project team. In addition
to this, the project team has to ensure that all procedures should be based on certain
principles and priorities, such as minimising cost, enhancing quality, promoting skills and
competency, and stimulating inter-agency co-operation. This can also be done by taking
into account the necessary and effective regulatory role of the government to avoid any
detrimental factors that would otherwise cause delay to the project or programme.

• Conscientious Efforts to Initiate and Capitalise Non-profit Value

Moore argues that the non-profit organization managers’ most important ethical
responsibility is to undertake the search for non-profit value conscientiously (Moore,
1995). In this pursuit, the manager has to strike a balance between political commentary
(response) and his operational tests or means of effectiveness. Consequently,
modification and re-modification of their views should be made as a result of this
interplay.
As noted by Porter, strategy requires constant discipline and clear communication. In this
regard, vision guides the subordinates and is communicated directly to the non-profit at
large. The consistency between functional units and the overall strategy will ensure that
the non-profit values are optimised. The new paradigm would generate a new form of
non-profit value.
• Strategy Shapes the Vocation of Non-profit Managers
As noted by Moore, the ideas and techniques of good managerial actions can be of
no substitute for good character and experience. However with luck, they might help to
enhance the limits of one’s character and experience (Moore, 1995, p. 309). In other
words, strategy cannot be perceived as an end in itself. Public managers should take a
more pro-active stance in improving themselves and their managerial skills.
Above all, even though strategic management could be applied within a certain functional
area or within a team (which may consist of a few people), it is most likely to face the
risk of failure without a vigilant, forceful and committed attitude from the non-profit
organization manager. Governments, on the other hand, are expected to retain their
obligation to maintain the development project from excessive political interference,
monitor the overall process of the project or programme and make sure that the project is
worth to its intended beneficiaries. Therefore, the role of a central government through
appropriate ministries, ultimately, comes before, during and after the projects or
programmes are convened and completed. The emergence of strategy into the lexicon of
non-profit organisations reflects both the increasing complexity and adaptability of the
organisation in responding to the demand of a volatile environment. Strategic
management, without doubt, can become a dynamic yet challenging tool to complement
the efforts towards new non-profit management, particularly in the area of managing
non-profit sector development projects and programmes. Despite many hindrances or
restraining factors that go along the way, strategy without doubt could enhance the
professionalisation of management in the government sponsored bodies.
In the final analysis it is the leadership styles and behaviour that determine the
success of the re-engineering process through the use of strategic management tools.
Strategic management concepts whether borrowed or home grown can only be good if
the critical leadership factor is present to initiate and guide changes towards better
outcomes.
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