Corporate Strategy for Non-Profit Organisations
1. Introduction and History
The concept of strategy is as old as the history of wars itself. “The Art of War” the first comprehensive book on strategy was written about 500 BC. The roots of strategy are in competition. The word “strategic” derives from the Greek word “strategos,” which means “a general set of manoeuvres carried out to overcome an enemy during combat” (Nutt & Backoff 1992, p. 56). However, corporate strategy gained the recognition of being a separate field of study around fifty years ago (Kay 2003). The most famous work on for-profit strategy is Porter’s “Competitive Strategy”. He defines strategy as: “developing a competitive strategy is developing a broad formula for how a business is going to compete, what its goals should be, and what policies will be needed to carry out those goals” (Porter 1980, p. xvi).Five decades of practice and research have been focused on strategy for for-profit organisations. Applying strategy concepts from this for-profit perspective to the non-profit world is challenging, as key differences exist among the two sectors—for example, their different conceptions of organizational effectiveness and non-client funding sources.
The paper discusses some of the issues surrounding the applicability of strategy concepts to the non-profit sector and dismisses the conception that for-profit strategy concepts cannot be applied to the non-profit sector. Some concepts can be applied with some modifications and others as is. The paper then applies some corporate strategy concepts developed for commercial enterprises to the non profit world. These concepts include Porter’s five forces model, SWOT analysis, the resources based view of strategy, and strategic alliances. Each of these applications is supported by examples from the non-profit sector in Pakistan. The examples are based on my ten year long experience with Pakistan’s non-profit sector. By presenting these examples, I want to show that the non-profit organisations are
The concept of strategy is as old as the history of wars itself. “The Art of War” the first comprehensive book on strategy was written about 500 BC. The roots of strategy are in competition. The word “strategic” derives from the Greek word “strategos,” which means “a general set of manoeuvres carried out to overcome an enemy during combat” (Nutt & Backoff 1992, p. 56). However, corporate strategy gained the recognition of being a separate field of study around fifty years ago (Kay 2003). The most famous work on for-profit strategy is Porter’s “Competitive Strategy”. He defines strategy as: “developing a competitive strategy is developing a broad formula for how a business is going to compete, what its goals should be, and what policies will be needed to carry out those goals” (Porter 1980, p. xvi).Five decades of practice and research have been focused on strategy for for-profit organisations. Applying strategy concepts from this for-profit perspective to the non-profit world is challenging, as key differences exist among the two sectors—for example, their different conceptions of organizational effectiveness and non-client funding sources.
The paper discusses some of the issues surrounding the applicability of strategy concepts to the non-profit sector and dismisses the conception that for-profit strategy concepts cannot be applied to the non-profit sector. Some concepts can be applied with some modifications and others as is. The paper then applies some corporate strategy concepts developed for commercial enterprises to the non profit world. These concepts include Porter’s five forces model, SWOT analysis, the resources based view of strategy, and strategic alliances. Each of these applications is supported by examples from the non-profit sector in Pakistan. The examples are based on my ten year long experience with Pakistan’s non-profit sector. By presenting these examples, I want to show that the non-profit organisations are
References: • Courtney H. 2001, 20/20 Foresight, Boston, MA, Harvard Business School Press • Hall Richard, February 1992, The Strategic Analysis of Intangible Resources, Strategic Management Journal, Vol • Porter M. E. 1980, Competitive Strategy, New York, The Free Press • Sheehan R