Strategic Management for Public and Nonprofit Organizations

Strategic Management

Strategic Decision Elements
Functional and Program Strategies
Strategic Management Deﬁned
Basic Components of Strategic Management
Strategic Planning
Resource Management
Control and Evaluation
Information Management Systems
An Illustration of the Strategic Management Continuum
Objective Methods and Subjective Ability

The main elections of the organization and the nature of the obligations to each constituency; A fundamental goal of strategic management should be to provide focus and consistency to the organization's programs of action.

Organizational Decision Making

The Framework for Strategic Management

Adaptation to Change

Expressed and unexpressed demands, emanating from the wider environment and from within the organization, continue to act as concerns for organizational stability. The range of possible adjustments is governed by the relative number of responses available to the decision-making system when faced with decision-making situations.

A Decision Continuum

As displacement pressures continue to increase, adaptive decisions may no longer be sufficient, and in some cases, may even contribute to total stress on the decision system. Adaptive decisions lead to some minor revisions to expectations, while more innovative decisions may lead to new or replacement expectations.

Innovative Decisions

Once the need for an innovative decision is clear and accepted, an open assessment of the organization's goals and objectives should be made. As a result, individuals' goals and objectives often diverge and become inconsistent with the overall objectives of the organization.

Rational and Nonrational Decisions

This assessment often brings to the surface conflicting motives that are dispersed among various otherwise discontinuous roles within the structure of the organization. Since industry X announced its intention to locate in this part of the state, we decided to erect a shell building in the industrial park and offer them rent-free space.

Incremental Decisions

Forget buying land for public recreation, expanding residential street lighting, or adding a wing to the public library. Therefore, what is judged by an observer to be a non-rational or irrational action may seem completely rational to the decision maker based on their premises.

Satisﬁcing Decisions

Lindblom and his followers conclude that partisan mutual adjustment is a positive factor in the current system of decision-making. While attempts have been made to analyze decision making as a universal process, there are significant differences in the way decision responses are handled within an organization.

Demands as the Inputs of a Decision System

It must be recognized that many aspects of the wider environment have a significant impact on the organization in terms of decision requirements. A strategic manager must constantly evaluate various aspects of the adopted system and identify any elements in the wider environment that may appear to be potential disruptions to the organization.

Screening Demands to Determine Intakes

In fact, the solution to the problem is, in a sense, the clarification (or concretization) of the goals [11]. A further danger in this step, however, is that we find a plausible, albeit incomplete, definition of the problem.

Identiﬁcation of Constraints and Boundary Conditions

Short-circuiting this stage of the decision-making process can lead to more time being spent addressing the real problem later, when it becomes painfully clear that further analysis is needed. It's virtually impossible to save a decision that starts with the right premise but doesn't stop at the right conclusions.

Formulation of Alternatives

This review involves identifying the implications of certain courses of action in relation to other aspects of the organization. A series of such interim reviews leads to an understanding of the problem that is often more relevant to the decision-making situation than the original conception.

Search for the Best Solution

In other situations, the first step is the most important – the ultimate goal may be shrouded in obscurity for now. The last criterion refers to the limitation of resources and is closely related to the concept of systems readiness - the ability of the organization to implement the proposed course of action.

Modiﬁcation to Gain an Acceptable Decision

This process of modification and compromise is somewhat similar to what other decision-making models have defined as "adaptation to the power structure." The term expectations can include all factors, both internal and external, in the decision-making system.

Converting the Decision into Action

If acceptable resources are not found, internal demands will be increased and further exploration of organizational expectations will be necessary. The more neutral notion of system expectations has been used here to give recognition to the role of the internal structure of the decision-making process, and to provide a model that is adaptable to both the power structure and the pluralistic approach to decision-making.

Feedback Phase

A fundamental aspect of the decision-making process is the development of a predictive capacity in the organization to identify changing conditions that may necessitate modifications in the chosen course of action. Thus, in a complex, difficult problem situation, different stages can appear simultaneously in different aspects of the same problem.

Strategic Planning: Mission, Vision, Goals, and Objectives

Strategic Planning in the Private Sector

The consequence is that managers in the organization who need to use a strategic planning system must design it. A good understanding of the values of clients/customers is important for strategic planning in the private sector.

Strategic Planning in the Public Sector

Within the concept of incremental dynamics, the uneven development of parts shows where the weak links are in the system and where the next product breakthrough must come. Other directions of evolution included the conversion from macro to micro entities and the development of automation.

Long-Range Planning and Disjointed Incrementalism

A general agreement has emerged in the public and nonprofit sectors that the broader environment is indeed changing in dynamic and often unpredictable ways. The most significant flaw in the concept of disjointed incrementalism is that it fails to consider all the incremental alternatives between existing approaches to decision-making and the strawman extreme of synoptic planning.

From One-Shot Optimization to a Planning Process

Lindblom claimed that public goals are difficult to define and consensus can rarely be achieved. What is needed is a planning framework within which strategic decisions can be subject to constant testing, correction and refinement.

A Planning Hierarchy

Through such an approach, alternative courses of action can be identified and analyzed, and a desirable scope can be established within which choices can and should be made. The concept of strategic planning, as it has developed over the past 35 years, provides an important response to this need for a more dynamic planning process.

Strategic Planning Software

This software is a structured brainstorming tool that can be used to conduct planning analysis to generate alternative strategies and to increase participation in strategic planning. From a systems perspective, strategic planning should be part of a continuous strategic management process that includes the allocation and management of resources, as well as performance evaluation and feedback.

Basic Components of the Model

This model of strategic planning assumes that a concentration of systemic data can form the basis of theoretical constructs—provisional goals and objectives—regarding the desired future state of the organization or society. Several of the components outlined in this model are common to many strategic planning approaches.

Systems Readiness

The remainder of this chapter will focus on the first two components of the strategic planning process—determining readiness for strategic planning, crafting mission and vision statements, and delineating appropriate goals. The product of this initial phase is a planning blueprint – an outline of the components needed to demonstrate that the organization is ready for strategic planning.

Mission and Vision Statements

A vision statement should be appropriate to the organization's mission and consistent with the organization's values. The statement should emphasize the important social purposes that the organization serves and that justify its existence.

Formulating Goals and Objectives

A separate vision statement may be appropriate to provide some "stretch," to inspire its members to strive for higher levels of achievement, and to initiate the necessary changes in organizational structure and processes to achieve long-term improvements and broader contributions to society. A "process" is an activity whose direct purpose is at a low level in the means-ends hierarchy, while a "purpose" is a set of activities whose orientation value or goal is at a high level in the means-.

Three Levels of Objectives

This statement implies that personnel will be assigned to perform or coordinate various tasks in the development and implementation of these public meetings and seminars. Measures of effectiveness examine the relationship of program outcomes to program objectives—outcome standards.

Objectives Matrix

A second level of possible conflict arises from territorial considerations, that is, the prerogatives of various units within the organization or community. Finally, those goals must be identified that (1) are clearly in conflict with each other, (2) evidence of potential conflict or consensus, and (3) are mutually reinforcing.

An Iterative Process

The purpose of this analysis within the strategic planning process is to more clearly identify both potential conflicts and areas of agreement and congruence. A commentary on: “The Comprehensive Concept of Government Productivity Measurement – An Overview of Some Strategies.” Public Productivity Review.

Strategic Planning: SWOT Analysis, Strategies, Policies,

Inputs, Throughputs, Outputs, Outcomes, and Impacts

Throughputs:Processes through which the programs are operated Outputs:Immediate, observable results of the programs. The products of a SWOT analysis include a database of quality information and a list of the most important issues the organization needs to address.

Analytical Tools

A possible substitute would be the position of the organization in the wider economic environment in which it must operate. A numerical value ranging from +1 (worst) to +6 (best) is assigned to each of the selected variables representing dimensions of financial strength and economic status.

Delineating a Planning Horizon

Some horizon criteria are products of the level of technology available at any given time. From these hypotheses, the mix that best fits the mission statement of the organization or community can be identified and outlined as the thesis of what should be (that is, the desired future state of the organization or community).

Hierarchy of Strategies

Functional strategies focus on administrative and support needs and their impacts on the organization's efficiency and effectiveness (eg, adopting a program budget format, installing a ﬁnancial system based on an accrual accounting method). An organization's strategies are formed over a period of time and then reformed as conditions change.

Program Alternatives

Suppose, for example, that one of the adopted strategic objectives is to continue to provide for the overall well-being and prosperity of the city and its citizens by developing and improving the economic base of the city. Acquire and develop new areas to further expand the city's parks and recreation system in accordance with strategic plan recommendations.

Policy Matrix

Performance measures can be defined by (1) establishing current levels and types of performance in the organization in discrete categories, (2) estimating the current impact of resources on this performance, and then (3) defining the desired levels and types of performance . The development of positive statements of performance provides a basis from which change can be defined and evaluated.

The Written Plan

Actively involve the leadership of the organization to convey the importance and priority of the strategic planning process;. Organize the work of the organization by setting objectives and operational activities within the framework of the strategic plan;

Implementation Feasibility Analysis

The probability that program revisions will be required increases significantly as the time span of the decision increases. New programs designed to promote comprehensive developmental and social change require much higher rates of change and are therefore more difficult to implement.

Political, Social, and Organizational Constraints

How well does the strategy/program option fit with the existing mission of the agency or organization (organizational climate). To what extent will prevailing economic conditions be affected by the implementation of the strategy/programme?

Performance Measures

Information Requirements of Strategic Planning

An inability to provide for these needs can limit the successful application of the strategic planning process. The principal contribution of the strategic planning approach is the strengthening of the factual basis for decision through the development of information management and program evaluation systems.

Completing the Forward Pass

Unfortunately, as more attention is paid to the form of the reports and less to the content, there is an increased danger of "the medium becoming the message". These issues will be discussed in more detail in Chapter 12 on information management and decision support systems. This overview of the rudiments of strategic planning risks creating an impression that the process is simple and relatively easy to implement.

Productivity and Quality Improvement

Three Management Models

If adaptation to predictable changes is within the organization's competences, the components that form part of the organization can be trained to handle the new situations. Some interpretations of the social model assume that leaders must give up strong leadership in favor of empowering others.

Interpretations of the Social Model

Job enrichment; increasing the variety of tasks to be performed and the skills of the employee. In the quality of work life (QWL) approach, criteria for project evaluation may go beyond short-term performance and productivity measures to focus on broader measurements of the quality of life in the work environment.

Total Delivery System

The writings of Deming, Juran and Crosby have recently found favor in the United States with industrial companies such as Ford, Xerox, Motorola and Hewlett-Packard.

Four Basic Concepts of TQM

Instead, the most productive course for organizations is to participate in a peer learning system or social network. Full participation allows the learning system to work in the organization (eg through voluntary quality circles, cross-functional teams, etc.).

Hoshin Kanri

Identify the mission of the organization (including relevant goals and objectives to implement the mission). Hoshin kanri is one of the pillars of TQM and includes every part of an organization.

Hoshin Versus Strategic Planning

It is involved in selecting and defining a small number of key goals for the organization to pursue and then contributing to the achievement of those goals. Hoshin kanridi differs from other planning systems in that it makes extensive use of quality management principles and techniques. Morale/human resources Stakeholder satisfaction, employee satisfaction, number of appropriately educated employees and scope of training.

Hoshin Planning

During the implementation of the Hoshin Plan, each target must be assessed using performance measures taken from the target statement. So, from top to bottom, all participants in the Hoshin planning process must be aware of the performance measure for each level.

Quality Function Deployment

According to the Hoshin orplan-do-check-act paradigm, planning should involve all levels of management in the organization. However, the uptake of QFD in the Western world seems to have been quite slow.

Systematic Innovation

Up to five of the 40 principles of problem solving are shown in the cells of the matrix formed by the intersection of any two parameters. Each cell of the matrix can contain up to five of the 40 problem-solving principles, and they represent possible solutions to the contradiction.

Six Sigma

When an organization does not apply six sigma techniques correctly, the tendency is to think that the statistical techniques are not useful. A road map or visual description is useful for developing a sound implementation of six sigma techniques [17].

Other Variations of the TQM Theme

Projects in critical business areas should be defined as part of the implementation. There is evidence of growing interest in developing quality assurance systems in the public sector that reflect ISO 9000 standards, due to the need to control the quality of public services, reduce costs associated with poor quality and become more responsive to community needs and demands.

What Is ISO?

When a company is registered to the appropriate ISO 9000 standard, the consumer has important guarantees that the quality of the product or service purchased will be as expected. ISO is valid in English, French and Russian, the three official languages of the International Organization for Standardization.

Why Are Standards Important?

Registered companies have experienced dramatic reductions in customer complaints, significant reductions in operating costs and increased demand for their products and services.

Achieving ISO 9000 Registration

States that "the QFD system has been used by Toyota since 1977 after four years of training and preparation. After a meeting in London in 1946, delegates from 25 countries agreed to create a new international organization "whose purpose would be to facilitate the international coordination and unification of industrial standards." The International Organization for Standardization began to function officially on February 23, 1947.

Resource Management

Process Reengineering

Processes Deﬁned

Successful organizations use information technology to integrate processes across functional boundaries rather than operating through organizational silos or functional hierarchies. The simple use of the latest information technology in existing processes does not guarantee a valid solution to the problems of complex organizations.

Continuous Improvement Programs

A Total Delivery System

Process Reengineering Body of Knowledge

As-is Process: A description of the current process flow, including sub-processes and activities, that shows how products and services are created. To be” process: A description of the desired process flow, including sub-processes and activities, that shows how products and services could be created according to the new vision.

Process Reengineering in the Public Sector

Understand the organizational mandate and set mission strategic directions and goals appropriate to address specific goals and decision making across and down the organization. Exercise "hands-on" senior management ownership of process improvements through personal responsibility, involvement and decision-making.

Four Basic Components

Deﬁning Strategic Objectives

The involvement of senior management is crucial during this phase of process redesign due to the radical nature of this undertaking. This analysis involves aligning process redesign efforts with the organization's overall strategic objectives.

Customer or End-User Analysis

It is especially important to develop an understanding of the organization's "customers" so that processes can be redesigned to focus on delivering superior value to these recipients of the organization's products and services. Not all customers or end users have the same needs or desires when accessing an organization's services or products.

Identifying Core Competencies

This phase of process reengineering often begins with an examination of the organization's strengths, weaknesses, opportunities and threats (SWOT) -. A SWOT analysis can help an organization determine its distinctive competencies, which, in turn, will help determine what the organization's mission should be.

Critical Success Factors

Encourage staff members to generate creative ideas and innovative practices that improve the ability of the organization to compete with its peers. Recognize staff members who demonstrate creativity and ensure successful outcomes in support of the organization's goals.

Key Performance Indicators

In some cases, entities providing the data may feel that the presentation format needs to be modified and some negotiation may be necessary to arrive at an agreed format that meets the needs of users and meets the perceptions of source authorities. However, in some cases, it may be necessary to agree on one set of data over another to avoid misunderstanding and confusion among users of the information.

Benchmarking

Where data is not consistent from one year to another (for example, due to a change in data categories), it may be necessary to recalculate (or "roll through") the previous year's data to made them more comparable. They do not indicate what, if anything, can be transferred in the organization's particular circumstances or how to make the transfer.

Three Common Types of Benchmarking

The processes to be benchmarked should be relevant to the organization's stakeholders (eg constituents, customers and end users). It is necessary to examine the factors influencing the current performance of the organization to determine which characteristics are most important and which are least important.

Developing an Operational Vision

Process Mapping

To improve process flow, it is important to know the time required to complete each step. The process map helps to identify the points in the process that cause problems.

Process Proﬁles

An early step in process planning is to bring together those people who understand or are affected by the process. Focus groups—five to fifteen people familiar with a given process—can be organized to exchange ideas, discuss issues, and collaborate in defining activities and their relationships within processes. Reference materials should be distributed prior to group meetings to facilitate discussion and provide a common focal point for participants.

Designing Future Processes

Value-added analysis determines which activities in the process are most important to the customer or end user and to the organization's strategy. Is this activity required by the customer or end user and will they pay for it.

Tools and Techniques for Gap Analysis

In practice the percentages may not always be exactly 20:80, but there are usually 'the vital few and the trivial many'. Extrapolation – the most common form of prediction – is based on the assumption that the course of events will continue in the same direction and at an unchanging rate (or at a steadily increasing or decreasing rate, that is, as a logarithmic extrapolation) until a major intervention takes place. .

Process Redesign

Forecasting based on statistical models is often feasible and successful even when the reason or explanation for a mathematical relationship found in historical data is unknown. The adaptability of the IT platform to changing processes and new technologies should also be an important consideration.

Systems Integrity

The ability of the organization to adopt change (system readiness) must be addressed in this phase of process redesign. A new role must be created to maintain the overall integrity of the organization as a system.

Cost Analysis

Strategic Funds
Basic Concepts of Cost
Factors Inﬂuencing Future Costs
Monetary Costs and Economic Costs

Extending short-term debt in accordance with the organization's ﬁscal structure (for example, for banks to offer extended lines of credit, leasing rather than purchasing equipment, factoring accounts receivable). At this point, the proposed strategies should be evaluated in terms of the required changes in the financial structure of the organization.