Strategic Management in Nonprofit and Governmental Organizations
Nonprofit organizations are basically just like for-profit companies except for two major differences: (1) nonprofits do not pay taxes and (2) nonprofits do not have shareholders to provide capital. In virtually all other ways, nonprofits are just like for-profits. Nonprofits have competitors that want to put them out of business. Nonprofits have employees, customers, creditors, suppliers, and distributors as well as financial budgets, income statements, balance sheets, cash flow statements, and so on. Nonprofit organizations embrace strategic planning just as much as for-profit firms, and perhaps even more, because equity capital is not an alternative source of financing.
The strategic-management process is being used effectively by countless nonprofit and governmental organizations, such as the Girl Scouts, Boy Scouts, the Red Cross, chambers of commerce, educational institutions, medical institutions, public utilities, libraries, government agencies, and churches. The nonprofit sector, surprisingly, is by far the largest employer in the USA. Many nonprofit and governmental organizations outperform private firms and corporations on innovativeness, motivation, productivity, and strategic management. Compared to for-profit firms, nonprofit and governmental organizations may be totally dependent on outside financing. Especially for these organizations, strategic management provides an excellent vehicle for developing and justifying requests for needed financial support.
Educational Institutions
The world of higher education is rapidly moving to massive open online courses (MOOC), with many of the courses being free to anyone with an Internet connection. The American Council on Education, an association for higher education presidents, is considering allowing free, online courses to be eligible for credit toward a degree and eligible for transfer credit. Several companies, including edX, Udacity, Coursera, and the Jack Welch Management Institute, are most associated with MOOCs, but the list is growing weekly.
Educational institutions are more frequently using strategic-management techniques and concepts. Richard Cyert, former president of Carnegie Mellon University, said, “I believe we do a far better job of strategic management than any company I know.” Population shifts nationally from the Northeast and Midwest to the Southeast and West are but one factor causing trauma for educational institutions that have not planned for changing enrollments. Ivy League schools in the Northeast are recruiting more heavily in the Southeast and West. This trend represents a significant change in the competitive climate for attracting the best high school graduates each year. Online college degrees are commonplace and represent a threat to traditional colleges and universities. “You can put the kids to bed and go to law school,” says Andrew Rosen, chief operating officer of Kaplan Education Centers, a subsidiary of the Washington Post Company. Many U.S. colleges and universities have now established campuses outside the USA. Forexample, Yale University and the National University of Singapore established a joint campus in Singapore in 2013. The institution is Singapore’s first liberal-arts college and Yale’s first campus outside the Ivy League institution in New Haven, Connecticut.
Medical Organizations
The $200 billion U.S. hospital industry is experiencing declining margins, excess capacity, bureaucratic overburdening, poorly planned and executed diversification strategies, soaring health-care costs, reduced federal support, and high administrator turnover. The seriousness of this problem is accented by a 20 percent annual decline in use by inpatients nationwide. Declining occupancy rates, deregulation, and accelerating growth of health maintenance organizations, preferred provider organizations, urgent care centers, outpatient surgery centers, diagnostic centers, specialized clinics, and group practices are other major threats facing hospitals today. Many private and state-supported medical institutions are in financial trouble as a result of traditionally taking a reactive rather than a proactive approach in dealing with their industry.
Governmental Agencies and Departments
Federal, state, county, and municipal agencies and departments, such as police departments, chambers of commerce, forestry associations, and health departments, are responsible for formulating, implementing, and evaluating strategies that use taxpayers’ dollars in the most cost-effective wayto provide services and programs. Strategic-management concepts are generally required and thuswidely used to enable governmental organizations to be more effective and efficient.
Strategists in governmental organizations operate with less strategic autonomy than their counterparts in private firms. Public enterprises generally cannot diversify into unrelated businesses or merge with other firms. Governmental strategists usually enjoy little freedom in altering the organizations’ missions or redirecting objectives. Legislators and politicians often have direct or indirect control over major decisions and resources. Strategic issues get discussed and debated in the media and legislatures. Issues become politicized, resulting in fewer strategic choice alternatives. There is now more predictability in the management of public sector enterprises. Government agencies and departments are finding that their employees get excited about the opportunity to participate in the strategic-management process and thereby have an effecton the organization’s mission, objectives, strategies, and policies. In addition, government agenciesare using a strategic-management approach to develop and substantiate formal requests foradditional funding.
Nonprofit organizations are basically just like for-profit companies except for two major differences: (1) nonprofits do not pay taxes and (2) nonprofits do not have shareholders to provide capital. In virtually all other ways, nonprofits are just like for-profits. Nonprofits have competitors that want to put them out of business. Nonprofits have employees, customers, creditors, suppliers, and distributors as well as financial budgets, income statements, balance sheets, cash flow statements, and so on. Nonprofit organizations embrace strategic planning just as much as for-profit firms, and perhaps even more, because equity capital is not an alternative source of financing.
The strategic-management process is being used effectively by countless nonprofit and governmental organizations, such as the Girl Scouts, Boy Scouts, the Red Cross, chambers of commerce, educational institutions, medical institutions, public utilities, libraries, government agencies, and churches. The nonprofit sector, surprisingly, is by far the largest employer in the USA. Many nonprofit and governmental organizations outperform private firms and corporations on innovativeness, motivation, productivity, and strategic management. Compared to for-profit firms, nonprofit and governmental organizations may be totally dependent on outside financing. Especially for these organizations, strategic management provides an excellent vehicle for developing and justifying requests for needed financial support.
Educational Institutions
The world of higher education is rapidly moving to massive open online courses (MOOC), with many of the courses being free to anyone with an Internet connection. The American Council on Education, an association for higher education presidents, is considering allowing free, online courses to be eligible for credit toward a degree and eligible for transfer credit. Several companies, including edX, Udacity, Coursera, and the Jack Welch Management Institute, are most associated with MOOCs, but the list is growing weekly.
Educational institutions are more frequently using strategic-management techniques and concepts. Richard Cyert, former president of Carnegie Mellon University, said, “I believe we do a far better job of strategic management than any company I know.” Population shifts nationally from the Northeast and Midwest to the Southeast and West are but one factor causing trauma for educational institutions that have not planned for changing enrollments. Ivy League schools in the Northeast are recruiting more heavily in the Southeast and West. This trend represents a significant change in the competitive climate for attracting the best high school graduates each year. Online college degrees are commonplace and represent a threat to traditional colleges and universities. “You can put the kids to bed and go to law school,” says Andrew Rosen, chief operating officer of Kaplan Education Centers, a subsidiary of the Washington Post Company. Many U.S. colleges and universities have now established campuses outside the USA. Forexample, Yale University and the National University of Singapore established a joint campus in Singapore in 2013. The institution is Singapore’s first liberal-arts college and Yale’s first campus outside the Ivy League institution in New Haven, Connecticut.
Medical Organizations
The $200 billion U.S. hospital industry is experiencing declining margins, excess capacity, bureaucratic overburdening, poorly planned and executed diversification strategies, soaring health-care costs, reduced federal support, and high administrator turnover. The seriousness of this problem is accented by a 20 percent annual decline in use by inpatients nationwide. Declining occupancy rates, deregulation, and accelerating growth of health maintenance organizations, preferred provider organizations, urgent care centers, outpatient surgery centers, diagnostic centers, specialized clinics, and group practices are other major threats facing hospitals today. Many private and state-supported medical institutions are in financial trouble as a result of traditionally taking a reactive rather than a proactive approach in dealing with their industry.
Governmental Agencies and Departments
Federal, state, county, and municipal agencies and departments, such as police departments, chambers of commerce, forestry associations, and health departments, are responsible for formulating, implementing, and evaluating strategies that use taxpayers’ dollars in the most cost-effective wayto provide services and programs. Strategic-management concepts are generally required and thuswidely used to enable governmental organizations to be more effective and efficient.
Strategists in governmental organizations operate with less strategic autonomy than their counterparts in private firms. Public enterprises generally cannot diversify into unrelated businesses or merge with other firms. Governmental strategists usually enjoy little freedom in altering the organizations’ missions or redirecting objectives. Legislators and politicians often have direct or indirect control over major decisions and resources. Strategic issues get discussed and debated in the media and legislatures. Issues become politicized, resulting in fewer strategic choice alternatives. There is now more predictability in the management of public sector enterprises. Government agencies and departments are finding that their employees get excited about the opportunity to participate in the strategic-management process and thereby have an effecton the organization’s mission, objectives, strategies, and policies. In addition, government agenciesare using a strategic-management approach to develop and substantiate formal requests foradditional funding.
No comments:
Post a Comment