1 / 36

Special Topics: Strategies for Not-For-Profits

Special Topics: Strategies for Not-For-Profits. 8. Learning Objectives. After studying this chapter, you should be able to: Define not-for-profit and public sector organizations. Describe the various types of not-for-profit organizations.

kamran
Download Presentation

Special Topics: Strategies for Not-For-Profits

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Special Topics: Strategies for Not-For-Profits 8

  2. Learning Objectives After studying this chapter, you should be able to: • Define not-for-profit and public sector organizations. • Describe the various types of not-for-profit organizations. • Describe how the strategic management process is used in these organizations. • Discuss the special strategic issues facing these organizations. • Describe the unique strategies developed by not-for-profit organizations.

  3. Not-For-Profit and Public Sector Organizations What are Not-for-Profit Organizations? • Not-for-Profit (NFP) organization is an organization whose purpose is to provide some service or good with no intention of earning a profit in order to meet the requirements of U.S. tax code section 501 c (3) as a tax exempt organization.

  4. Not-For-Profit and Public Sector Organizations What are Not-for-Profit Organizations? • Not-for-Profit means no profit, not no revenue. • Sources of revenue include: • Taxes. • Dues. • Donations. • Product sales. • Permit fees. • Grants.

  5. Figure 8.2 Revenue Source for Not-For-Profit Organizations

  6. Figure 8.3 Types of Not-For-Profit Organizations

  7. Not-For-Profit and Public Sector Organizations What are Not-for-Profit Organizations? • Public sector organization is an NFP created, funded, and regulated by the public sector or government, and includes: • Government units, offices, agencies and divisions at all levels of government. • Provide public services to society. • Police protection • Transportation needs • Care for the elderly and disabled

  8. Figure 8.4Economic Contribution of NFPs and Public Sector Organizations(2006)

  9. Not-For-Profit and Public Sector Organizations What are Not-for-Profit Organizations? • Other types of NFP organizations include • Schools. • Charities. • Religious organizations. • Health care-related organization. • Cultural and recreational facilities.

  10. Not-For-Profit and Public Sector Organizations What are Not-for-Profit Organizations? • Importance of NFP organizations to society: • Provide essential needs not provided by private sector for-profit organizations. • Maintain or enhance quality of life. • Maintain economic, social, and political system that encourages, facilitates, and protects the development and continued existence of for-profit organizations.

  11. Not-For-Profit and Public Sector Organizations What are Not-for-Profit Organizations? • Importance of NFP organizations to society: • Contributes a significant portion of the GNP. • Large employers. • Employees pay taxes and spend income on goods and services.

  12. Not-For-Profit and Public Sector Organizations The Strategic Management Process in Not-for-Profit Organizations • NFP organizations compete for resources and customers. • Need to develop competitive advantage. • Positive link between strategic management and performance in NFP organizations.

  13. Not-For-Profit and Public Sector Organizations The Strategic Management Process in Not-for-Profit Organizations • NFP organizations face dynamic environments: • Need external and internal analyses.

  14. Section Review Questions • What is a not-for-profit organization (NFP)? • Do NFPs need revenue? How about profits? Explain. • Describe the typical sources of revenues for NFPs. • What are the main types of NFPs? • What is a public sector organization, and what do they provide? • Why are NFPs important? • Explain how NFPs “compete.” • How would strategic managers in an NFP do an external analysis? An internal analysis? ?

  15. Not-For-Profit and Public Sector Organizations The Strategic Management Process in Not-for-Profit Organizations Strategy Choices • NFP organizations face similar constraints as • for-profit organizations: • Limited resources. • Competition for customers and resources. • Performance measurement.

  16. Not-For-Profit and Public Sector Organizations The Strategic Management Process in Not-for-Profit Organizations Strategy Choices • Functional strategy choices differ between NFP organizations and for-profit organizations. • Limited variety of strategic choices due to limited resources and external constraints.

  17. Not-For-Profit and Public Sector Organizations The Strategic Management Process in Not-for-Profit Organizations Strategy Choices • Competitive strategy choices are similar to for- profit organizations • Competition with other NFPs and for-profit organizations for: • Customers • Resources

  18. Not-For-Profit and Public Sector Organizations The Strategic Management Process in Not-for-Profit Organizations Strategy Choices • Corporate strategy choices are similar to for- profit organizations: • Growth • Stability • Renewal

  19. Not-For-Profit and Public Sector Organizations The Strategic Management Process in Not-for-Profit Organizations Strategy Choices • Corporate strategy choices are different than for-profit organizations. • Limited range of strategic choices: • Cost cutting • Restructuring • Re-establishing relationships

  20. Not-For-Profit and Public Sector Organizations The Strategic Management Process in Not-for-Profit Organizations Strategy Evaluation • Most difficult part of the strategic management process for NFPs: • No single performance measure • Profit • Clearly stated performance goals are difficult to develop in NFPs.

  21. Not-For-Profit and Public Sector Organizations Specific Strategic Management Issues Facing Not-for-Profit Organizations • Misconception about the usefulness of strategic management • Managing multiple stakeholders • Unique Strategies Used by NFP organizations

  22. Not-For-Profit and Public Sector Organizations Specific Strategic Management Issues Facing Not-for-Profit Organizations • Misconceptions about the usefulness of strategic management: • No profit=No strategic management? • Still need competitive advantage • Competition for resources and customers • Environmental changes

  23. Not-For-Profit and Public Sector Organizations Specific Strategic Management Issues Facing Not-for-Profit Organizations • Multiple stakeholders • Close relationship between politics and political process. • Public sector organizations are owned by the public. • Close monitoring of NFP decision making. • Second guessing • Different agenda of stakeholders.

  24. Not-For-Profit and Public Sector Organizations Specific Strategic Management Issues Facing Not-for-Profit Organizations • Unique strategies used by NFP organizations: • Cause-related marketing • Marketing alliances • Strategic piggybacking

  25. Not-For-Profit and Public Sector Organizations Specific Strategic Management Issues Facing Not-for-Profit Organizations • Cause-related marketing is a strategic process in which NFP organizations link up with a social cause that fits well with its products. • Avon Breast Cancer Crusade

  26. Not-For-Profit and Public Sector Organizations Specific Strategic Management Issues Facing Not-for-Profit Organizations • Profit marketing alliances are strategic partnerships between an NFP and one or more corporate partners in which the corporate partner(s) agree to do marketing actions that will benefit both the NFP and the corporate partner(s).

  27. Not-For-Profit and Public Sector Organizations Specific Strategic Management Issues Facing Not-for-Profit Organizations • Profit marketing alliancesare an extension of cause-related marketing, with the main difference being that the NFP organization is the one that proposes and initiates the alliance.

  28. Not-For-Profit and Public Sector Organizations Specific Strategic Management Issues Facing Not-for-Profit Organizations • Marketing alliances include: • Transaction-based promotion • Joint-issue promotion • Licensing

  29. Figure 8.5 Types of NFP Marketing Alliances

  30. Not-For-Profit and Public Sector Organizations Specific Strategic Management Issues Facing Not-for-Profit Organizations • Transaction-based promotion is an alliance in which the corporate partner donates a specific amount of cash, food, or equipment in direct proportion to sale revenues, typically to a limit.

  31. Not-For-Profit and Public Sector Organizations Specific Strategic Management Issues Facing Not-for-Profit Organizations • Joint-issue promotion is an alliance in which the partners agree to tackle a social problem through actions such as advertising products and promotional materials. • Glamour magazine and Hanes hosiery with the National Cancer Institute, American College of Obstetricians and Gynecologists, and the American Health Foundation - distribution of health materials and magazines about breast cancer in young women

  32. Not-For-Profit and Public Sector Organizations Specific Strategic Management Issues Facing Not-for-Profit Organizations • Licensing names and logos of NFPs in return for a fee or percentage of revenue • Arthritis Foundation and McNeil Consumer Products to market a line of pain relievers called :”Arthritis Foundation Pain Relievers.”

  33. Not-For-Profit and Public Sector Organizations Specific Strategic Management Issues Facing Not-for-Profit Organizations • Strategic Piggybacking is when an NFP develops a new activity to generate revenue. • Special Olympics sells clothing and other related merchandise.

  34. Section Review Questions • What kinds of strategic choices do decision makers at not-for-profit and public sector organizations face? • Describe how functional, competitive, and corporate strategies might be used in NFPs and public sector organizations. • What types of strategy evaluation and control issues do strategic decision makers at NFPs face? • How would you address the misconceptions that strategic management isn’t useful for or isn’t needed in NFP and public organizations? ?

  35. Section Review Questions • What types of challenges do NFPs face in dealing with multiple stakeholders, and how can these challenges be addressed? • Describe cause-related marketing. • How are marketing alliances different from cause-related marketing efforts? • What are the three different types of NFP marketing alliances? • What is strategic piggybacking, and what are its benefits and drawbacks? ?

  36. PowerPoint created by: Ronald Heimler • Dowling College-MBA • Georgetown University-BS Business Administration • Adjunct Professor-LIM College, NY • Adjunct Professor-Long Island University, NY • Lecturer-California Polytechnic State University, Pomona, CA • President-Walter Heimler, Inc

More Related