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Strategic Planning Role in Non Profit Organizations

Authors:
  • Iqra University Karachi

Abstract

Strategic planning is crucial for every organization, as it formulates strategies for them. It not only assists in resource allocation but also helps in financial stability of organization. If strategies are appropriately formulated and implemented then it will result in organizational success otherwise it will results in organizational failure. The aim of this research is to emphasize the role of strategic planning in nonprofit organizations and highlighting the role of leaders in strategic planning. As organizations move forward because of their leader’s managerial and visionary strategic planning. Strategic leaders are very innovative in growing their organization’s assets and core values. Keywords: Strategic planning; nonprofit organizations
Journal for Studies in Management and Planning
Available at
http://edupediapublications.org/journals/index.php/JSMaP/
ISSN: 2395-0463
Volume 03 Issue 06
May 2017
Available online: http://edupediapublications.org/journals/index.php/JSMaP/ P a g e | 166
Strategic Planning Role in Non Profit Organizations
Ramaisa Aqdas Rana1, Fazeyha Zirwa Rana2, Huzaifa Ahmad Rana3
1, 2 Department of Business Administration, University of the Punjab, Gujranwala Campus,
Gujranwala, Pakistan
(ramaisarana@gmail.com)
(fazeyhazirwarana444@gmail.com)
3 Department of Management Sciences, COMSATS Institute of Information Technology, Lahore,
Pakistan
(ranahuzaifa7@gmail.com)
Abstract
Strategic planning is crucial for every organization, as it formulates strategies for them. It not only assists in
resource allocation but also helps in financial stability of organization. If strategies are appropriately
formulated and implemented then it will result in organizational success otherwise it will results in
organizational failure. The aim of this research is to emphasize the role of strategic planning in nonprofit
organizations and highlighting the role of leaders in strategic planning. As organizations move forward because
of their leader’s managerial and visionary strategic planning. Strategic leaders are very innovative in growing
their organizations assets and core values.
Keywords: Strategic planning; nonprofit organizations
1. INTRODUCTION
Strategic planning is an essential tool for any
organizational success. Planning is a tedious and
time taking procedure which also utilizes
organizations resources. It plays a vital part in
organizations management processes although it’s
a lengthy procedure and outcomes are not
necessarily positive. According to Steiner (2010)
strategic planning is a systematic approach to
accomplish prescribed aims. It is not a new concept
in fact it is widely studied concept in organizations.
Strategic planning assists in organizations financial
sustainability as well as in allocation of scarce
resources in order to achieve competitive
advantage (Mara, 2000). Strategic planning is
fundamental for formulating strategies for
organizations. One of the most crucial element in
management of any organization is planning. In
order to determine any organization, specific path it
is necessary to track its current status and know
where it wants to go and how it will follow the path
to achieve success and all this is possible only
through proper planning as it’s an action of
preparation.
Planning is a continuous, systematic and deliberate
process (Glaister & Falshaw, 1999) and strategic
planning is a future course for organization and it
usually answers one of three questions: (1) What an
organization is doing? (2) How will organization
exceed? (3) For whom organization is doing?
Strategic planning improves quantifiable target,
develops profitability, increases revenues and
minimizes expenses in for-profit organizations
while in case of nonprofit organizations strategic
planning is less accurate because results are
qualitative in contrast to quantitative (Bryson,
Crosby, & Bryson, 2009).
Importance of Research
This research is conducted to
investigate impact of strategic planning on
nonprofit organizations which is one of the most
discussed topic. As organizations can’t exceed
without proper and systematic planning. Planning
is considered as a backbone for organizations and
organizations success or failure is dependent on
strategies. If strategies are appropriately formulated
and implemented then it will result in
organizational success otherwise it will results in
organizational failure. Leaders of organizations
also play the most important role in organizations
as it is their role and responsibility to formulate and
implement strategies in organizations. The aim of
this research is to emphasize the impact and role of
strategic planning in nonprofit organizations as
well as highlight the role of leaders in strategic
planning.
Research Objectives
Research objectives for this study are as following
To analyze the impact of strategic
planning on nonprofit organizations
To evaluate importance of strategic
planning for any organizational success
To investigate the problems faced in
strategic planning
Journal for Studies in Management and Planning
Available at
http://edupediapublications.org/journals/index.php/JSMaP/
ISSN: 2395-0463
Volume 03 Issue 06
May 2017
Available online: http://edupediapublications.org/journals/index.php/JSMaP/ P a g e | 167
To analyze importance of strategic
planning
2. THEORETICAL PERSPECTIVE
Strategic planning
Planning is looking towards future and deciding
about organization’s future while according to
Bryson (2011) strategic planning is a disciplined
effort which helps in shaping organization’s
necessary actions and decisions and guides about
an organizations doing and reasons of doing it. It
acts as a roadmap. Strategic planning requires to
look upon the environment in which organization is
working and assists in focusing its attention on
critical challenges and issues. It also helps leaders
of the organizations to focus their attention on
those issues and deciding about them.
Several challenges are faced by organizations.
Every organization’s goals and purpose are
determined by good planning. There are numerous
benefits of strategic planning such as it encourages
organizations management and employees to
improve decision making processes and act
deliberately. Strategic planning forces management
to think about their organizations future and solve
problems. It also motivates organizations to
respond to external environment. Resultantly
organizations will become more effective and
efficient in communicating their values, vision and
mission (Cothran & Clouser, 2006).
Successful planning helps in increasing
organizational performance. Some organizations
plan in anticipation on regular basis, while others
fail in planning and faces serious consequences. It
is very important for organizations to involve in
strategic planning as it builds commitment among
its members which sustains and strengthens
organizations achievements. If organizations
properly follow plan, then they can enjoy
responsiveness to their environment as well as
enhance their organizational performance (Oster,
1995).
According to Ford, Ford, and D'Amelio (2008)
organizations are always expanding, evolving and
contracting as they are unable to exist in stasis.
Evolution of organization is an acceptable principle
as when there is greater change, greater is the
resistance. Change and resistance are related to one
another. If one is taking place other one
simultaneously takes the place (Aqdas, Bilal,
Abbas, & Zirwa). Resistance is linked with
strategic planning as it is focused on change.
Strategic planning provide guidelines to
employees, suppliers, customers and stakeholders
in reaction towards change and gaining efficiency
in consideration to that change in effective manner.
Organizations sometimes change their strategies in
order to cope with situations and accomplish their
goals and objectives. So organizations must be
ready to change their strategies at any point of time
and new strategies must be ready if any unexpected
change is occurred in organization as change can
occur at any time and it can demand new strategies
to handle the situation. Strategic managers must be
ready to face this type of situation and need to plan
different strategies to cope up with this type of
change.
Strategic planning process
Strategic planning improves sustainability and
improves nonprofit organizations service. It is
necessary to consider every served client as
stakeholder in nonprofit organizations and
determination of every stakeholder is essential in
strategic planning procedure as their list is very
detailed, including every staff member as well as
volunteers, civic organizers, competing
organizations and clients served etc.
Strategic planning process has four reasons of
organizations clearly stated purpose. First of all if
organization don’t have clearly stated purpose then
it will face difficulty in accomplishing their
mission as there is lack of clarity about mission
(Allison & Kaye, 2011). Furthermore unclear
mission purpose leads towards decision making
challenges which leads to organizational failures.
Secondly if purpose is defined too broadly then it
will lead towards prioritizing difficulty for
organization. Thirdly key holders and constituents
can have contradictory ideas about organizations
existence and fourthly organization can never know
time to refine its mission without clear purpose.
Strategic planning process acts as a backbone for
magnificently designed strategy. It emphases on
scanning needs of organization, implementing
ideas and developing targets (Kaufman, Oakley-
Browne, Watkins, & Leigh, 2003). Strategic
planning can be viewed as task series which lead
towards final products. It is a clear and simple
process which do not require complex legal
expertise or talent (Collins, 1998). Strategic
planning is implemented, keeping in mind
organizational resources i.e. time and money.
Non Profit organizations
Non-profit organizations are those organizations
which don’t work for making profits instead their
purpose is social cause and they work for
betterment of society. They contribute to country’s
economy. Nonprofit organization’s number is
increasing dramatically since past few decades as
well as the number of jobs in nonprofit
organizations are increasing more rapidly as
compare to profitable organizations (Bilzor, 2007).
Journal for Studies in Management and Planning
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ISSN: 2395-0463
Volume 03 Issue 06
May 2017
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Nonprofit organizations contribute both socially as
well as economically to communities’ progress.
Nonprofit organizations also enjoys tax exemption
advantages as they are established for welfare and
societal purposes regardless of earning revenues for
its shareholders (Anheier, Kaldor, & Glasius,
2005). Previous researches have shown that proper
attention is not given to nonprofit organizations
strategic planning as their employees do not take it
seriously and consider it as unimportant.
Furthermore they consider it as a time wasting
phenomenon (Helmig, Jegers, & Lapsley, 2004).
Strategic marketing planning is considered as an
important technique for nonprofit organizations as
specific strategies are formulated for those people
who are voluntarily interested to work for society’s
betterment and meeting their organizational goals.
Individuals are motivated to donate to charities and
proper strategies are formulated so that
organizational goals and objectives are achieved
(Pope, Isely, & AsamoaTutu, 2009).
Strategic planning in nonprofit
organizations
Strategic planning is a method of positioning an
organizations goals. Planning is a necessity for
profitable as well as for non-profit organizations.
Strategic actions and thoughts are very much
necessary for organization’s future success.
Strategic planning can benefit both non-profit
organizations and profitable organizations in
radically changing environments to respond and
anticipate efficiently and effectively (Bryson,
2011).
Although roots of strategic planning lies in military
arena but recently it’s primary focus is
organizations of private sector. Strategic planning
has freedom in determining direction and planning
requirement is the driving force behind profit
motive. Organizations of public sector have
predetermined powers and freedom levels and their
primary motive is to maximize output. In order to
increase outputs and improve money value
organizations are moving towards strategic
planning models and systems. Strategic planning
inclines to fuse future decision making and
planning (Kriemadis & Theakou, 2007).
Strategic marketing needs for nonprofit
organizations is a vital element for their growth.
Proper strategic planning is done in nonprofit
organizations for their survival in competitive
environment and gaining effective place in market
and meeting with urgency and demands of society
(Nolan, Goodstein, & Goodstein, 2008). Nonprofit
organizations increases their money and improve
their resources by proper strategic planning. As
strategic planning plays a very much important and
crucial role in accomplishing organizations
objectives, goals, mission and vision (Lawlor,
2010).
According to Mittenthal (2002) strategic planning
is considered as a keystone for efficient, successful
and effective organization as organizational
performance is determined by it. All vital elements
such as marketing tactics, managerial policies,
leadership etc. are included in organizations
strategic planning procedure. Nonprofit
organizations utilize internet in order to generate
resources and advertise online for effective
organizational success.
SWOT analysis (Strengths, Weakness,
Opportunities and Threats) is an effective tool to
judge proficient strategic planning, as it can
evaluate external as well as internal market factors
for organizations. It can provide a detailed analysis
of required strategies for an organization to succeed
in competitive marketplace. It also provide
information about competitors, obstacles and
strategies adopted by competing firms as well as
market target space so that organization can
formulate those required strategies which can be
used to gain success.
Leadership in nonprofit organizations
Organizations move forward because of leaders
managerial and visionary strategic planning.
Strategic leaders are very innovative in growing
their organizations assets and core values. They
focus on developing long term organizational goals
providing stability to organizations. (Kuratko &
Audretsch, 2009). Some clear distinctions between
vision of for-profit leadership and nonprofit
leadership are in ethics such as concern, honesty,
care, trust etc. can be more seen in nonprofit
leaders as compare to for-profit leaders as nonprofit
leaders are working for humanity and society.
According to Ruvio, Rosenblatt, and Hertz-
Lazarowitz (2010) wide range visionary planning
benefits organizations in nonprofit leadership while
it hinders organizational performance in for-profit
leadership. Nonprofit leader use both external and
internal stakeholder values in garnering and
nurturing organizations (Riggio & Orr, 2004).
There is a significant correlation between
effectiveness of strategic planning and leader’s
characteristics. Planning scope is more effective
and useful in long range goals which is consistent
with leaders strength characteristic (Crittenden &
Crittenden, 2000).
Successful leaders have certain traits which are
necessary for organizational success such as long
range planning, developing vision, goals
communication, information sharing, effective
planning and consensus building etc. which are
also necessary characteristics for successful
strategic planning (Garrett & Russell, 2006).
Journal for Studies in Management and Planning
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Leaders use their personal intuition to access future
organizational circumstances and situations.
Nonprofit organization leaders challenge
constituents with novel concepts and ideas in order
to bring changes. Effectively led organizations
have clear vision and plans (Lake, 2008).
Nonprofit management requires strong leadership
in strategic planning. Effective use of leadership
contributes in strategic planning. Strategic planning
and leadership are linked with each other. (Herman
& Renz, 2008). Leaders formulate strategies for
organizations and by acting upon those strategic
planning, organizations achieve success and
competitive advantage over its competitors.
Leaders play an important role for any
organizations success as they act as the backbone
for any organization. So leadership play a crucial
role in strategic planning.
3. CONCLUSION
Strategic planning is very necessary and important
for all organizations success regardless of for-profit
organizations or nonprofit organizations. It helps
organizations to reach its mission, goals and
objectives and improve its performance efficiently
and effectively. Although it is time consuming and
exhaustive procedure but it provides new ideas,
energies and improved team works as well as
organizational accountability, direction and vision.
It also provides opportunities to organizational
employees in achieving organizational goals and
objectives effectively and efficiently (Cothran &
Clouser, 2006).
Effective leaders also play their role in formulating
strategies for organizations and their successful
implementation helps organizations to succeed in
competitive environment. Strategic planning also
helps organizations to work in changing
environment and formulate strategies according to
new situations. It is not a static process in fact it is
continuous process which keeps on focusing on
environmental changes and plan strategies
according to environment (Stopford, 2001). In
short strategic planning is essential tool for
organizational success.
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... What follows are general comments about strategic plans, issues to consider, and comments on actions to be taken in the current strategic plan draft. Migliore (1995) states that the development of a strategic plan involves the following steps: ...
... According to Migliore (1995), defining purpose is probably the most important in developing a strategic plan, with the purpose statement representing the dream and vision of the organization. Analysis and assumptions is important because it is vital that the organization gauge the environment where it operates. ...
... erstanding of, as well as their commitment to, the organizational goals (Steiner, 1979; Melcher and Kerzner, 1988; Koteen, 1989). The improved communication, combined with broad participation, in turn, are believed to be helpful to building teamwork and increasing members' commitment to the organizational goals (French and Bell, 1995; Bryson, 1995; Migliore et. al., 1995). However, existing empirical studies on the subject present different findings on the impact of participation. For example, Wotring (1995) examined the perceptions of 130 participants who were involved in the year-long development of the strategic plan for the Belpre City School District, Ohio and found that both the degree to which th ...
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