CHAPTER 14 Strategic Issues in NotforProfit Organizations STRATEGIC

CHAPTER 14 Strategic Issues in Not-for-Profit Organizations STRATEGIC MANAGEMENT & BUSINESS POLICY 11 TH EDITION THOMAS L. WHEELEN J. DAVID HUNGER 1

Not-for-Profits NFP – –Private nonprofit corporations –Public governmental units/agencies 2

Not-for-Profits Public or collective goods – –Certain goods and services that profitmaking firms cannot or will not provide 3

Not-for-Profits Importance of Revenue Source -–Depends on dues, assessments, donations, funding 4

Not-for-Profits 5

Not-for-Profits Institutional advantage -–Performs its tasks more effectively than other comparable organizations 6

Not-for-Profits Constraints on strategic management -–Service is often intangible/hard to measure –Client influence may be weak –Strong employee commitments to professions 7

Not-for-Profits Constraints on strategic management -–Resource contributors intrude on internal management –Restraints on use of rewards and punishments 8

Not-for-Profits Complications to strategy formulation -–Goal conflicts interfere w/rational planning –Integrated planning focus shifts –Ambiguous operating objectives –Simplifies detailed planning – adds rigidity 9

Not-for-Profits Complications to evaluation & control–Rewards/penalties • No relationship to performance –Inputs rather outputs • Heavily controlled 10

Not-for-Profits Not for Profit Strategies -–Strategic piggybacking –Social entrepreneurship –Mergers –Strategic alliances 11