Strategy creation in non-profit organizations The National Development Foundation of Jamaica - Research Paper Example

? Strategy creation in non-profit organizations Introduction Business refers to a combination of activities that serve the community by producing goods and services in exchange of profits. The social growth and community development in any region is largely influenced by the growth in business enterprises and institutions. Successful business enterprises define the extent of prosperity and wealth accumulation within communities. However, running a profitable business enterprise requires efficient management capabilities and strategic plans that help the firms in attaining their goals. Entrepreneurs in their quest for profits adopt various strategic measures to promote business growth and development. These are common perceptions that are held for any kind of business activity. On the one hand it is true that businesses exist for profit creation and sustaining business development activities, but the fact that firms have moral and social obligations to the community in which they exist cannot be ignored. Quite a lot of organizations exist and operate to serve the community and its social needs. These organizations are popularly termed as non-profit organizations that seek to improve the society in which they live. The National Development Foundation of Jamaica (NDFJ) is one such organization that is committed to assist micro, small and medium enterprises in setting up and promoting their business goals through the delivery of innovative financing products. How can a non-profit organization sustain its business goals and activities and what are the strategic measures such organizations can take to survive and grow in existing economic conditions. These are some of the vital issues facing the management of organizations like NDFJ. The paper highlights the significance of strategic plans and the measures that can be taken by organizations to sustain and meet their developmental goals. Strategic plans and their role in businesses Managerial strategies are essential to running a successful business venture especially in today’s chaotic market and business scenario. Strategy refers to a plan of action set out by those who are at the organization’s helm providing direction to the managers and employees. The company directors and professionals for achieving long-term company goals and business objectives often design the strategic plans. Strategic planning therefore consists of competitive moves and approaches to increase performance and productivity within an organization. It is basically a game plan for running the business, strengthening the company’s competitive position, satisfying customers and achieving performance targets. Strategic planning answers three vital questions important in guiding the organization’s moves. It identifies the company’s current position providing answer to “Where are we now?” The second question that it strives to answer is “Where do we want to go?” This refers to the company’s marketing financial and business objectives. Identifying the objectives of the organization helps in finalizing and framing of operational plans and strategic approach that will be required to achieve the goals. The process of strategic management aims to answer the most important question “How will we get there?” This is the stage where the strategic alternatives relevant to the particular business scenario are weighed and measured against the desired outcome and the most appropriate move adopted. The strategic management process thus involves developing strategic mission and vision that is translated into measurable objectives. The organization then develops plans, referred to as strategies, to achieve the set objectives. The next stage involves the effective implementation and execution of the strategic plans. The results or outcome of the implemented strategies are evaluated at the end of the cycle. These strategies need to be revised and modified time and again in face of critical situation. Hence it is hardly possible for a company to follow set strategies across an extended period of time. Real time strategies or strategic plans that are more realistic in nature are more open to revision that can be easily modified to face unforeseen problems and challenges. At the same time these strategies can be molded to meet new opportunities. The strategies adopted in the earlier days were more focused on past events and forecasts that had greater chances of proving wrong. Moreover, the strategies used to be so interlinked that it was difficult to change a specific plan without affecting the rest. Sometimes this even required rethinking the aims and objectives. Real time strategies focus on the present chain of events and conditions and steps planned in subsequent phases with troubleshooting options available in case of any criticality. These strategies are designed and developed by people at the operational front who are actually in charge of the operations within the organization. These people have better knowledge of the work scenario and factors influencing the operations and productivity and hence are better judges of successful strategies than people in the board room who do not have much idea of real time problems and issues that are faced on the work front. In fact the current approach to strategic planning involves all people concerned in the overall productivity and performance of the organization or department. Their experiences contribute tremendously to the strategic planning process and possible alternatives that may be explored and analyzed in terms of feasibility. Non-profit organizations and their strategic implications Non-profit organizations make use of the opportunities provided to them to further their mission and goals. The models adopted by them to visualise and conceptualise their goals within a practical environment is influenced by the available resources, technical know-how and leadership ability to guide the changes they believe in. Managers must possess the leadership qualities to enable changes and practically turn their vision into reality. Effective leaders can achieve big objectives with their vision and passion overcoming barriers with their enthusiasm and energy. The leader’s responsibility is to balance a set of objectives that include accomplishment of targets, developing individuals, building a team, and accomplishing personal objectives too. He needs to decide how the resources can be effectively allocated to complete a particular job, monitoring and supervising against the work plan, attending to personal problems, praising individuals, recognizing individual abilities, building team spirit, encouraging and motivating the team to achieve desired results Innovation is yet another aspect that is vital for the success of non-profit organizations. Innovation is the product of creativity and personal motivation that leads to the development of new ideas and thought processes. Innovative entrepreneurs are in a better position to pursue their goals through creative ideas and strategies that increase motivation levels and provide satisfaction to the people involved in the process of goal achievement. There are increasing number of entrepreneurs who are interested in starting a business venture driven by social causes and purpose that embody a whole range of ideas and values to be spread within the community in which they exist. The difference between those enterprises and emerging practices lie in the level of technology, innovation, precision and strategic methods used to drive the social goals and objectives. The trend has gained momentum with increasing number of youths coming forward to make a difference in the society by means of such enterprises. The social entrepreneurship practiced today does not discount the economic value of such activities but encourages the flow of capital resources to improve the means of achieving the organizational goals and mission. The market conditions over the last decade have changed dramatically owing to liberalization of economies, globalization and rapid pace in the technology change. The globalization of markets and technology improvements have led to faster access to information, wider reach of markets, and increasing interconnectivity leading to removal of geographical boundaries. Evolving business climate includes vast transformations in the perception of organizational leadership, managerial functions, and human resource strategy. Corporate management faces more challenges in the form of changing corporate relations and increasing global influences that have set a new pattern in managing people and businesses. In face of growing dominance of large multinationals, the smaller companies are struggling to survive and sustain their business. A key aspect of strategic planning in financing SME sectors is an understanding of the target customer needs and expectations. One of the critical factors that drive marketing strategies is an in-depth understanding of the consumer behavior and market trends that are significant to the analysis of markets and help the organization to define appropriate strategies to gain competitive advantage. Positioning the brand and creating brand awareness of the intended product involves great deal of planning and execution of advertising campaigns that will assist customers in recognizing the brand and creating brand loyalty. Effective brand loyalty strategies include identification of target client group, market acquisition, and understanding client needs and alternatives available in the market. There are increasing numbers of firms working their ways towards social objectives and re-defining their business models to promote social causes. The enterprises that were dependant on grants and aids for funding from external sources are now increasingly focusing on profit making activities and channelising the profits towards social mission. Most of the multinational companies now support social objectives to contribute in some ways to the development of the society in which they operate. “More and more non-profit organizations are finding out that becoming more entrepreneurial can be very rewarding – not just in a financial sense, but also in terms of spirit and energy that can potentially be released within the organization and its staff, volunteers, patrons, and clients” (Dees et al., 2001). Conclusion The strategic objectives of a firm are usually expressed in general terms. These objectives are translated to planning goals before they are refined into operational plan. The process needs an insight into the measurable components of the goals to be achieved. The process must determine as to how realistic the goals are. Comparing the operational outcomes to goals provides an indication of the level of current performance. The organization should adopt a three-step strategic management policy that comprises of strategy formulation, strategy implementation and evaluation and control of strategy. The decision making process involved in adopting a specific business strategy requires an analysis of the associated advantages and disadvantages and its economic cost and effectiveness. The additional revenues, associated costs, and necessary investment must be estimated and possible outcomes evaluated. References 1. Dees, Gregory; Emerson, Jed; and Economy, Peter. 2001. Enterprising nonprofits: a toolkit for social entrepreneurs. Wiley Press. 2. GEM. 2009. Executive Entrepreneurship Report. 3. John L. Colley, Jacqueline L.Doyle, Robert D. Hardie (2001) Corporate Strategy. - The McGraw Hill Executive MBA series. Read More