Strategic Management in the Non-Profit Organisations

Reza Shafi-zadeIslamic Azad University Of Saveh Branch, Islamic Republic of IRAN

No426, Niloofar Ave,Tehransar, Tehran, IranE-mail: RSG1189@Yahoo.com

ABSTRACTConstant pressure from either policy changes, competition, or market demands has

always been faced by non-profit organisations. Nonetheless, change or in more radical terms “transformation”, is never an easy task. Transformation management particularly in a pluralistic society, must take into account the various political, cultural or sociological factors. In addition, changes normally causes anxiety, stress or even trauma to both people and organisation. Thus, the management of change is indeed, one of the most delicate endeavour to deal with as far as the art of management is concerned. This paper deals with the role of leadership in transforming strategy into action. The paper sets out and discusses some approaches to the management of strategic transformation in the context of public organisations. Specifically, the focus is on managers of non-profit organisation and their leadership behaviour, the culture of management and how the leaders should comprehend the issues of change. It is maintained that the leadership is essential to strategic management process.

Keywords: Strategic management ,Non-Profit Organization, Leadership

IntroductionOver the past Ten years or so, there has been the major re-organisation,

restructuring and rationalisation of many issues in the non-profit organisations. Events that occur everywhere in the world have significance impact to the national sectors either directly or indirectly. Change, though traumatic for some quarters, is indispensable and unavoidable. In most non-profit organisations, the change even if it is carried out on a small scale normally viewed unfavourably by the civil servants who for years have been comfortable’ in their positions. However, a review of traditional modes of management justifies the idea of transformation organisation. This certainly demands a whole range of tasks. As noted by Worcester (1991, p. 55), among these tasks are:Introducing wholly new products or services, handling a major reorganisation,effecting acquisitions and mergers, Entering a new market, radically improvinginternal efficiency and profitability.

Since strategic management is still considered a new introduction in the non-profit organisations, its practicability is an issue. For example, in the area of strategic financial management,decentralised budgetary approaches, the notion let the managers manage' has created a tension or conflict of interestbetween non-profit managers and politicians (Pollitt, 1995, pp. 203-34). Rationalisation' also brings out another criticism. Ten years of working experience does not mean one will learn something new as one may keep on doing the same routine everyday. As argued by Peters, basic values such as accountability and responsibility are ignored (Peters,1995, p. 314; see also an interesting discussion on the concept of rational action by Waldo in Shafritz and Hyde, 1987, pp. 232-4). Others argue that the establishment of internal markets within the public sector constitutes a rejection of the administrative state (Lane, 1995, p. 198). Many intangible values such as the trade-off between efficiency or productivity versus due process and legality (Lane,1995, p. 175) cannot be quantified (or is unwise to be quantified).

As there has been continuing interest on the part of governments around the world in promulgating a policy for market-oriented approaches, many of the managerial and organisational practices have been taken from the private sector. Among other popular prescriptions adopted for improving the management of public organizations are Planning, Programming, Budgeting System (PPBS), re-engineering, Cost-Benefit Analysis (CBA), Management by Objectives (MBO) and Total Quality Management (TQM). These also include planning techniques such as PERT analysis, industry analysis, market research, and economic forecasting (Raimond,1996, p. 211).

By the end of the 1980s and in the early 1990s, strategic management became a popular phenomenon and was applied within a broad framework. This period was marked by the obvious acceptance of the idea and practice of the New Public Management (NPM), which affected every conceivable pillar of public sector administration, including areas where privatisation had happened. Perhaps the idea was best popularised in the United States with the launch of the concept of `reinventing government’. US Government Performance and Results Act of 1993 required the federal agencies to submit strategic plans to Congress in complementing the state and local units’ activities. These measures were also adopted by Ireland (Strategic Management Initiative in 1995), Australia, Britain (see Doern, 1992), Canada and Germany; all of which have introduced strategic management concepts into non-profit organisations - with the emphasis on

action and consideration of the broad, diverse set of interested parties, and on paying attention to external threats and weaknesses.

Even developing countries in Asia, Africa and Latin America have followed the footsteps of Western countries. As it is crucial to develop a strategic management plan to support the appropriate methods of privatisation, countries such as Bulgaria, Egypt and Malaysia have resorted to strategic options in their Master Plan for privatisation. Malaysia in particular has developed a comprehensive programme for privatisation that identifies the objectives and major issues the government will encounter, and has established a two-year rolling plans and an annual action plan for transferring ownership or management control (Rondinelli, 1996, p. 255).

Models of Strategic ManagementThe term `strategic management' seems to be used interchangeably in the private

sector with `business policy', `corporate strategy' and `corporate planning' (Luffman et al., 1996, p. 6. See also Hussey, 1990, pp. 3-25, for more comprehensive discussion on the development in strategic management). A common argument also states that there is no clear line to demarcate strategic management from strategic planning (Goldsmith, 1997, p. 31). Therefore, it is better to determine and differentiate the scope and the level of activity covered by the subject area in order to get a clear grasp of the contextual application of the tools.

While strategic management means different things to different people, it emphasises formal techniques for setting an organisation's long-term course, developing plans in the light of internal and external circumstances, and undertaking appropriate action to reach those goals (Goldsmith, 1997, p. 25). It owes to the combination of the value of managerial capability which involves the interplay between the power hierarchy and leadership style that shape healthy organizational culture for successful mediation of strategic management. It is worth mentioning that the strategy which involves complex processes as well as different functional areas, needs to be mobilised primarily by efficient leadership in the organisation.

Several more specific models have emerged and are developed under the strategic management model (see also Nutt and Backoff, 1992, pp. 166-222 for a clearer overview of strategic management tools). Four of the most popular strategic management tools are highlighted below:

Portfolio Matrix AnalysisOtherwise known as `portfolio analysis techniques’, this tools were applied in

several diversified international companies using different names such as Boston Consulting Group (BCG), the General Electric Business Screen, and the Shell Directional Policy Matrix. Basically it involves a matrix by which market share was plotted against overall market growth (Ascher and Nare, 1990, p. 309). It is done under an assumption that an organisation should maintain sufficient cash to meet investment needs.

As far as the non-profit organisations are concerned, the portfolio models may be of limited value. This is explained by the fact that there are two factors that predict whether a line of business will produce or use cash: the market growth rate (slower growing markets are expected to demand less new investment) and its share of the market (larger market shares are expected to generate large cash flows due to experience curve effects).

The fact that many public agencies operate in a single service sector or in non-profit or non-financial settings made this matrix seem alien to them.

Nevertheless, can we say that the portfolio models are totally irrelevant to the public agencies? With de-regulation, the application of new technology, competition for limited financial sources and many other process of its kind, many of the public agencies now may have to compete among themselves even more. Property and financial management which certainly involve investment decisions demand serious reconsideration of the portfolio models.

SWOT AnalysisThis model is an analysis of an environment of the four major angles that surround

an organisation – strengths, weaknesses, opportunities and threats. Based on a stimulating and more creative problem-solving method, SWOT analysis is useful at the corporate, competitive and functional level of strategy as it addresses the current fit between the organisation and its environment and considers the potential impact of environment change (Thompson, 1993, p. 595). Popularised by Jack Welch of General Electric in the 1980s, SWOT has strong implications in both the public and non-profit sectors (Goldsmith, 1997, p. 33). However, there are difficulties in applying this model in the public organizations where a variety of programmes and initiatives operate from under one roof as opposed to single-purposed organisations (p. 310).

The practicability and interesting fact about this model is it represents an evaluation of how well the resources of an organisation match the needs of the environment in which it operates and competes. It devises strategies alongside situational forces, such as the role and the influence of stakeholders, government policy, and market trends which may bring direct impact on the activities of the organisation. At the same time, the evaluation of internal factors stress the importance of management values which must be linked to the social obligations. This ultimately constitutes the intrinsic factor for the organisation’s existence.

Stakeholder AnalysisIt is said that this analysis is particularly relevant to the public sector. It requires

identification of those individuals or groups who have a stake in the success of the organisation - from customers and suppliers to employees and shareholders – and suggests that corporate strategies must take into account all these varied interests (Ascher and Nare, 1990, p. 311). Strategies are expected to be more robust in the public sector since all decisions made in a democratic manner must create a balance between the competing views and interests of every facet of society. Different types of stakeholders might consist of employees, local people, interests and pressure groups etc. These groups will act and react in forceful ways such as through lobbying and petitions. Indeed, it is a real challenge for the public managers to strike a balance towards those competing interests.

Nonetheless, despite the various kind of demands to be addressed, there are no obvious rules for setting satisfactory levels of performance for all groups (Goldsmith, 1997, p. 36). In addition, some issues related are like no stakeholders are identified; no forum exists for exchanging views with stakeholders; stakeholders themselves are not accountable in the sense that individual views may be out of step with others; and

stakeholders are not empowered (The Strategic Management of Agencies - Full Report and Case Studies, 1995, p. 90). The fluctuation and the nature of volatile issues really put the stakeholder analysis to the test.

Mission Setting'Mission' means the long-term objectives of the organisation as related to the

strategic leader's vision of the nature and scope of the businesses that he feels would be appropriate and desirable (Thompson, 1993, p. 45). It describes the broad purpose of what the organisation is and how it will progress. Organisations that successfully and consistently promote a common mission know their definite objectives and are clear about their challenges ahead. In this regard, the organisation cultures plays a central role in success or failure. Some organization cultures enhancing a sense of mission and purpose while in others, the effort seems to become enmeshed in political manoeuvring and the conflicting claims of wide differing goals (Harrison, 1995, p. 122). That is why a consensus on the fundamental ideals that the organisation is trying to fulfil is very crucial to shape resources and to relate to employee goals. This should be well communicated, ideally to every department or unit of the organisation. Strategy, corporate mission and objectives share strong connections and, therefore the three subjects should not be separated from one another. Precisely, it is essential to create a flexible strategy, whereby the organisation modifies its mission due to the changing nature of its objectives.

Even though governments through their central departments and agencies have given a great deal of consideration to the application of strategic management in line with changing situations, far less attention has been given to the preliminary conditions before it can be implemented efficiently. Within this context, this paper sets aims to look into how the leaders in the non-profit institutions can act strategically within the controlled behaviour, cultural complexities, and their ability to mitigate the potentially adverse factors in view of the broader and societal environment.

Key Issues and EvaluationsA number of important concepts of strategic management has been reviewed in the

preceding sections of this paper and that they apply to a very large, diverse, complex and challenging environment. At this point, perhaps an important challenge for all managers of non profit organizations handling the task of managing development projects and programmes is how to really develop and tactfully manage the processes and procedures of strategic management. It is wise to review some of these issues and develop an evaluation of them.

A study of 16 major British companies on how corporate centres add value to business units identified important tensions or trade-offs confronting corporate level managers. The chief executive for instance cannot simultaneously provide strong leadership and give autonomy to the subsequent lower units (Campbell et. al, 1990, p. 220). In other words, the leader in this context, sometimes faces a dilemma to decide the degree of leadership which may in conflict with the empowerment exercise. There are four other similar tensions - co-ordination and co-operation versus clear responsibilities and accountability; analysis and planning versus entrepreneurial speed of response; long-term strategic targets versus short-term financial targets; and flexible strategies (i.e. strategies that can be changed quickly to meet competitor moves) versus tight controls. In

brief, the underlying primary issue is, what is the level of practicability of strategic management applied in the non-profit organisations? Other crucial issues that confront This managers in adopting strategic management are: Where does the private-sector experience leave us regarding strategic management in the non-profit organisations? (Goldsmith, 1997, p. 36); is the formal strategic planning process too logical, too abstract and does it fail to take into account non-profit dynamics? Is it too rigid and slow-moving to respond adequately to a rapidly changing environment? Does it work against one’s creativity (Olsen and Eadie, 1994, p. 184). Some more basic questions are: Where do strategies come from? How are they created? (Hamel, 1996, p. 71). What are the explicit strategic management standards applied in the non-profit organisations? Given the volatile nature of strategic management, it is worth looking at some issues objectively and evaluating (rather than critiquing) them.

Rationalisation’ and InformationOver the past decade, the field of non-profit organisations has undergone a different

phase of managerialism influence. The development of managerialist ideologies were influenced and characterised by a number of different schools of thoughts. In the area of scientific management, Taylor is perhaps best known as a pioneer of time and motion in the techniques of workers and tasks (Pollitt, 1990, p. 14). The impact of Taylorism, which treats management as a separate and scientific field of study, is in fact, identical with Woodrow Wilson’s influential paper published in 1887, `The Study of Administration’, in which he proposed the dichotomy between `administrative’ and `political’ questions. But, to what extent is `politics’ regarded as an improper intrusion into `administration’? Studies prove that politics cannot be perceived as a distinct sphere of `administration’. As managers of non-profit organisations are rational actors, they utilise a great variation of knowledge and high level of abstraction while engaging in strategic management. They also continuously calculate the means to maximise non-profit goals depending on which level they are in or what kind of jobs they are doing (Waldo, 1987, p. 232). Being `rational’, thus, actually demands managers to tactfully single out the `unwelcome and unnecessary’ intrusion of politics.

Information on the public sectors is a function of both individual rationality and collective wisdom (Lane, 1995, p. 10). The combination of individual information, collective processing and storing of such information creates more aggregate levels of information systems which have become more and more advanced. However, normally, the problem of comprehensive and perfect information can hardly be attained in the non-profit sector.

Rational action may involve considerable uncertainty and ambiguity. Thus, managers make decisions by using their personal judgement and experience and by reconciling the qualitative and quantitative information they possess. Problems of information (i.e. information deluge), goal divergence and the psychology of the decision maker may all lead to `non-rational’ decisions (Bowman and Asch, 1987, p.36). This was in fact recognised by Stacey as a natural process for learning organisation where insecurity, anxiety, conflict, and confusion must be accepted as inevitable factors in the process of new knowledge creation (Stacey, 1993, p. 90).

Qualitative rationality may also involve a constant conflict between subjectivity and objectivity. Thus, even the best and most proper methods of planning cannot beat the

paradox. As we live in a very challenging time of an increasing demand of the non-profit, managers nowadays face serious constraint to lead and manage. Against this paradox, the determined strategists emerged. They embraced rather than shunned accountability, and they stimulated rather than dampened non-profit expectations (Moore, 1995, p. 274). By embracing social accountability, they enhance the social support reflected by the social overseers’ aspirations.

It is argued that the external standards of accountability have a direct affect on internal standards as well. Establishing an initial good contact with different parties would consequently spearhead more concrete actions such as the use of budgeting strategy or the manipulation of functional strategy. Rationalisation requires shaping the psychology of people first before executing with other crucial (yet controversial) actions.

Devolution/Risk ManagementSome are skeptical of `letting the managers manage’, fearing that too much

managerial autonomy brings increased risk of “impropriety” and thus may limit progress (Holmes and Shand, 1995, p. 563). Even in developed countries such as the United Kingdom, New Zealand, Sweden and Finland, the move towards a market-driven approach and devolution has proved to be an onerous period which demanded formidable tests from the government. In particular, the alignment of strategic objectives, operational goals, performance indicators and costing systems is technically difficult and progress may be slow, even where local management is basically supportive (Pollitt and Summa, 1997, p. 11). A `public market’ differs from other types of market with respect to demand structures, price mechanisms and the determinants of purchasing power (Pierre, 1995, p. 68).

In another respect, management deals with a very subjective and less dependant entity of the organisation, that is the people itself. The application of strategic management is always confronted with the typical mechanistic and bureaucratic approach of non-profit organisations. There is always a paradox between the essential aspect of motivation and the control aspect of management. Managerial intervention emphasises merely disciplined or even penalising, as a tool of bureaucratic control which directly reinforces the less tangible issues of commitments and morale in workforce (Pollitt, 1990, p. 13). A professional system outlines established policies and procedures against abuse of authority. However `the arbitrary exercise of power that can create a rule of fear and a hotbed of political intrigue in the power-oriented culture is at least limited and ameliorated’ (Harrison, 1995, p. 128). As a result, the genericism of managerialism which is influenced by the mechanistic tools undermines the intrinsic values of non-profit organisation, and the endeavours of the strategic approach may be only a cosmetic approach.

Case studies conducted by Moore (see Moore, 1995) have proved that transforming an organisation with endemic problems requires a whole new dimension of action. In the risk-management approach, managers of non-profit organisation may resort to completely restructuring the hierarchical line of organisation, recruiting skilled and dedicated staff who could cope superbly with difficult challenges, and altering traditional modes of organizational practices. Beyond making these mechanistic transformations and tightening disciplinary and procedural procedures, managers must demonstrate that they

are reformers of the conventional methods, as reflected in the surge of enthusiasm, self-confidence and committed leader/worker.

Decentralisation proves to be more than merely symbolic: it is a significant departure from past experience, and it serves to test and challenge managers (Moore, 1995, p. 252). Interestingly, they set up a necessary backup capacity - in the forms of individuals or units of operation. This was in fact the strategy proposed by Grant in which the concern is not only with the deployment of existing sources, but also with the development of the organisation's resource base (Grant, 1991, p. 131).

Strategic planning or management is not a substitute for effective leadership (Bryson, 1996, p. 12). It is only a tool to guide the actions of managers of non-profit whereby their organisation’s success or failures depends on how they manipulate or utilise it. It is interesting to note that the strategic management may crystallise a successful blend of centralisation and decentralisation. In this aspect, the key strategists, facilitate control over their broad-scale visions and monitor their development, while entrusting their subordinates with considerable authority over the operational goals. He should restructure his new organisation within his locus of control. In this sense, even though managerial discretion is diffused and empowered into every level of management, the leader is still the key player.

Performance MeasurementWhat are the best ways of measuring the success of strategic implementation? It is

rather difficult to give a definite answer to this question as an organisation’s goals may be too complex and subjective. The success of an organisation depends on an initial process of defining a set of clean, mutually compatible objectives (Pollitt, 1990, p. 120). It is then that these objectives are translated into the most cost-effective means with the available management skills and operation.

The issue now is how far the conflicting and shifting performance criteria can be explicitly and objectively assessed. Pollitt has identified at least three pressures that tend to push the formulation of objectives in the direction of vagueness and ambiguity - first, the political support; second, broadly-stated objectives; and third, vague wording of objectives, which provides room for manoeuvre (Pollitt, 1990, pp. 121- 22). These are the substantial elements in the new systems they have created and, in which they could construct broadly stated objectives. Besides relying on only one particular aim, non-profit organisation managers should give more attention to the operational part of their organisations. In fact, the primary objectives they set should be rather flexible and give them more room for manoeuvre. Re-organising an organisation must be done on the basis of priority and long-term emphasis. Bryson has proposed the `chunking' method where it involves the process of mixing new and old activities amongst them (see Bryson, 1996, pp. 38-40 for a clearer discussion on this method). Once the new and old activities have been evaluated, non-profit organisation managers should figure out how to fit the new with the old. Besides, they could tactfully mark out some of the new whilst dropping the old ones.

This effort is also known as the `chunking’ strategy, which is done through a set of projects and programmes. Different clusters of projects and programmes made up of specific objectives would pave way for more clearer actions. These chunks could be added together to make useful overall progress (Bryson, 1996, p. 38). Rhetorically,

according to the demands of the interested parties as individuals, the new set of goals could be altered, which could put a slight change of emphasis in an old policy but would indeed have practical and financial implications.

Operational Effectiveness Versus StrategyAlthough the transfer of ownership may generally decrease the financial incapacity,

the government still has the responsibility to create a number of projects and programmes within current organisational limits. In fact, they could invariably use more money than they have available (Thompson, 1993, p. 175). In addition, financial well-being is often given far less attention than the ultimate aim of providing goods and services to meet the expectations of the public. Besides, a change in policy makers or even the fluctuation of the economy can always severely damage the financial capacity which supports the changes. That is why, there are various reasons why financial decentralisation has failed.In the face of competition, a company or corporation can outperform its rivals by either delivering greater value to customers or creating comparable value at a lower cost, or both. Nevertheless, this strategy is appropriate when there is an open market where competition between the providers of services exists. Within economic uncertainty and instability, political ambivalence towards private sector participation, or inadequate organisational capacity to transform state operating enterprises, the issue of operational effectiveness and strategic positioning may not be significant or relevant at all (Rondinelli, 1996, p. 258). The non-profit organisation at large is left with a very limited choice of having to accept the only service available.

Porter, in his article published in the Harvard Business Review, has pointed out that operational effectiveness and strategy are both essential to superior performance, and, which is the primary goal of any organisation. However, they work in very different ways (Porter, 1996, p. 61). The case studies of Moore (1995) were interesting examples of single dominant non-profit sector organisations with no direct competition from rival organisations. The increase in the costs of supply may not correspond to the growth in income. In other words, the flow of revenue into the organisation may work in contrast to the increase in the cost of the services or products offered.

Strong leadership with a clear vision of success enhances a forceful approach in influencing budgetary allocation. Strategists could demonstrate an admirable persuasive action in reshaping non-profit values. They could predict changes and their consequences and act confidently. Also, they do not completely rely on the budget or funding from the people, but seek alternative sources. Operational effectiveness in the context of the non-profit sector must not be simply viewed in limited operational activities, but beyond that. It involves the interplay between the different actions of policy makers, interested parties or even similar provider organisations.Organisational Strategic Positioning

Once embarked on managerial approaches, government corporations may have to compete on par with similar providers of services while having to be more cautious on their financial performance. The organisations are now confronted with the challenge of making a distinction between their input and output for the public. According to Mathur, those benefits that influence customers when making buying decisions are the outputs. By contrast, inputs are the costs, culture, resource and skills needed to produce the `quality’ of the output or product to the customer (Mathur, 1992, p. 200). In relation to

market position, input is more in control and is what shapes output. In fact, the ability to reconcile the difference between these outputs and inputs determines how successfully the organisation is managed.

Strategic positioning here means the organisation locates itself in a `niche’ market. Regarding this, Porter defined the term competitive strategy as `deliberately choosing a different set of activities to deliver a unique mix of value’ (Porter, 1996, p. 64). Ideally, inputs must be within the organisation’s reach and preferably beyond the reach of others, thus creating a barrier to encroachment (Mathur, 1992, pp. 200-1). Competitive position is secured only when the barrier is protecting or serves as a `buffer zone’ to the organisation. In the context of the non-profit sectors, the challenge is even greater - that is to reconcile operational cost-effectiveness whilst maintaining their strategic position. Perhaps the latter is a less difficult task as that the organisations are the sole providers of their services.

The competition for most non-profit organisations is actually the challenge to win over the cash-limited budget from other public organisations that solicit the same sources of funds. This is especially true as economic downturn consequently brings deleterious impact to the financial capacity for most Asia countries presently. As a result, there are often tumultuous erupting inflation and drastic devaluation that could consequently mishap the organisation's operation. This justifies another good reason why the real strategists may ultimately or deliberately challenge the different authorities. Certainly, this could create a conflict of interests between various groups. However, as noted by Holmes and Shand, once the size and boundaries of programmes have been determined, efficiency and service delivery can be made appropriate. Indeed an improved customer focus may reduce rather than increase costs (Holmes and Shand, 1995, p. 565).

Critical Leadership Skills for Strategy TransformationThere is often a difference between leaders and managers. Some crudely put it as a

manager is very much concerned with the present system, whereas a leader on the other hand, is more future in orientation. Furthermore, leaders have the capacity to mobilise the subordinates towards the vision they have created for the organisation. These include ability to negotiate risk, legitimately assume power, and strike a balance of self-control (Zalzenik, 1983, p. 448).

Strategic advocators preach the need for the manager to be more proactive to the external environment without neglecting the organisational effectiveness. It should be noted that the strategic management is simply a set of ideas, systematic procedures and merely serve nothing more than as a tool designed in order for the mangers to think and act strategically in performing their tasks. By acknowledging this fact, we come to the point of what can make the tools workable and practicable.

Therefore the issue now is the force behind the tools. In this regard, it is suggested that managers of the non-profit sector equip themselves with leader style and qualities. Only by repositioning themselves they could pursue virtuous ends by utilising the tools strategically.

At this juncture, it is wise to look into interconnected strategic elements that are crucial for the leadership in managing the plural society. Leaders in the first place, need to have a clear perception of various courses of events and refrain themselves from being captured by single events. They must see the events as an interplay of continuity

(stability) and change. They should know how best to strike a balance in a given context (Bryson, 1995, p. 210). Only with this understanding leaders know what is the best approach to a conflict or process. The leadership’s understanding of the whole process would avoid the "fire-fighting" approach to problem or conflict. The understanding and knowledge determine leaders' capacity not only in recognising the immediate strategy, but they are more attentive to possible changes that occur.

Leadership skills need to be mobilised strategically. This would require the ability to create and re-create a whole new synthesis or sources - human or non-human factors. The leader and his vision can never be separated since vision is essential and paramount important to the change process (Carnal, 1991, p. 36). In addition, change process must be backed up with alternative plans. Subordinates must be reconciled with the idea of change. Resistance factors which normally colour the politics of the organisation need to be tackled accordingly. Indeed, in the wake of conflicting interests from different quarters of groups in the organisation, especially those who would like to maintain the status-quo, or feel happy in their comfort zone, even retaliation or outrageous response may come as no surprise.

The nature of non-profit organisation as a service provider demands the manager of the organisation to act significantly differently from their counterparts in the private sectors. The leaders of non-profit organisations must always have the conscience as an individual who acts as a social architect. The conscience is in tandem with the organisation's vision and mission, and provides the raison d'etre - the social justification for its action. Eventually, there would be identifiable social and political needs that the organisation seeks to fulfil (Bryson, 1995, pp. 26-7). Certainly, in the context of a plural society, different races or communities need to be rationale in striking their values and meet the social and political needs of the various parties.

If non-profit organisations are to thrive and be more professional in their management, the element of trust must be given a new meaning while retaining its position at the core of the organisation’s activities. Leaders must engineer the way relationships are constructed. This is because high levels of trust reduce friction among employees, bind people together, increase productivity, and stimulate growth. On the contrary, low levels of trust adversely affect relationships, stifle innovation, and hamper the decision-making process(Sonnenberg, 1994, p. 189).

In periods of dramatic growth where everybody seems to adequately happy with the organisation's achievement, many would muddles through their ways in climbing the professional ladder easily (i.e. mostly by promotions). By contrast, in the wake of economic downturn, the prevailing low level of trust becomes more apparent alongside loss of loyalty, productivity, and innovative thinking. In fact, these phenomenon are inherited and come as no surprise as they want to be seen less vulnerable. The “defensiveness” and “mutual suspicions” attitude eventually trash the values of innovativeness and job discipline. Moreover, as job security is more transparent in non-profit organisations than in profit sectors, these attitudes are considered as the basic ailments in the organisation itself.

Nobody could deny the crucial role of trust cultivated in the organisation. But how can the trust be instilled by the leader in an organisation? First, leaders have to know the person and lend the trust accordingly. In expediting a government project for example, and in setting up the working committee for it, the leader may assign different tasks to

different people based on their real skills and ability. Second, leaders must be fully aware of the situation where the trust is fading away. For example, subordinates holding back responsibility given to them or more keen to criticising the past actions rather than acting more pro-actively to the issues that should be of prime concern to them. It is definitely a clear setback to the image of the organisation when everybody start to politicise and emotionalise the issues or programmes organised within.

Next question probably is, how does the leader secure trust from his subordinates? There are actually many attributes of trust associated to oneself such as integrity – honesty, non-hypocrisy, ability and sincerity. The continuos reinforcement of one or more of this attributes (i.e. the leaders do what they preach) could enhance one’s trust. Ultimately, and even unconsciously, the leader will get the support from his subordinates on whatever decisions he has made. Within this context, Sonnenberg added the “impeccable reputation” which is the factor that has strong correlation with gaining trust from subordinates. They do not really question the decision as they have the true conviction that the wise and trusted leader would only do things that benefit the organisation even though some of the decisions are controversial or seem to be biased.

Upon examining various angles of strategy, there is indication that there are a lot more issues of concern pertaining to strategic management. Indeed, strategy is not simply a matter of declaration and the niceties of conventional action. Strategy needs more than that. It requires a total commitment and devotion and it is not an end in itself. In their missions, non-profit organization managers develop their frameworks with different kinds of approaches, and reposition their organisations in a new dimension which allows them to focus their managerial attention on the key issues described above. non-profit organization managers in general need to be fully aware of these issues before strategy can be utilised as a tool to tackle the managerial problems they are dealing with. Given the rapid rate of environmental turbulence, a constant ability to adapt and respond is determined by the capability to think and act strategically. These are the two qualities that are of paramount importance to survival and success (Koteen, 1997, p. 69). These brief remarks will bring us to the final conclusion of this paper.Conclusion

As presented, the discussions exhibit different stages of strategic management and its development since its emergence in the 1950s. It is found that the increasing value of strategy in organisations was shaped by the contextual demand and the periodical challenges given at a particular time. These could be social, political, cultural and/or economical. Interestingly, in searching for these values, the approaches range freely across the reality of today seeking betterment for tomorrow. Of course, as we have learnt this sort of tactical move faces many hindrances.

Indeed, some may fear that a strategy commonly employed by managers move too far away from the conventional methods of certain issues and problems being tackled. Another concern is, it is too imaginative, has too robust features, too forceful, or too aggressive, due to its moving away from a conventional style of confronting the issues or problems. Consequently, this would have a deleterious impact on the quality of democracy. Hence, the purpose of this paper is precisely to lay out the reasons why strategy has its relevance. This is accomplished by putting forward its development of managerial orientation and techniques over time within the prism of pluralistic society. That is why, `good’ strategy should be differentiated from `bad’ strategy. While the

former faces the continuous challenge for progressive improvement, the latter has the risks of failure, and therefore irrelevant and has to be discarded.

The discovery of the volatile nature of strategic management is indeed undeniable. However, more importantly, strategists normally do not have detailed plans in advance but instead they improvise on most of the changes they have made in response to the complexities and on the specific circumstances they were in. This makes strategic management interesting and yet very challenging. The following conclusions can be drawn:

• Strategic Management Is No PanaceaStrategic management may exist as another typical management tool that has

emerged over time. However, one significant difference of strategic management compared to other tools is that it is unlikely to be eliminated from the management dictionary. As the techniques can be modified, non-profit organization managers may find them possessing a relevancy for the management endeavour. non-profit organization managers need to be fully aware of the implications of applying strategy techniques, particularly in a plural society, where the tendency towards communication fraught and tension relationships prevail. This is especially true when communal division appears not only on specific issues regarding the economic, social, and cultural benefits and costs of participating in the polity but in many facets of the society. Different frameworks of development projects and programmes in different settings demand distinct styles of strategic management. Nevertheless, what has changed is the emphasis. In the new approach, strategy is seen more as something to be negotiated, not engineered. The accent is, therefore, on finding mutual agreement in game plans (Goldsmith, 1997, p. 31). Strategic management is a better option for transforming government-owned projects and programmes into more effectively managed projects and for complementing market-oriented systems. However, it is neither a panacea for all governments’ weaknesses nor an adequate tool to ensure its effectiveness and non governmental organisation.

• Strategy Demands Redefinition of Overall Mission, Goals and OperationalObjective

Non-profit organization managers may feel sceptical of their convictions in working inside a hostile environment. This is because they have to balance the competing interests of different parties. It is most likely that strategy can be most effectively utilised starting at the top executive level of the organisation. The vision should be well communicated across each and every level of the organisation.

Commitment to total quality products and services require a very special kind of organisational culture. It is a general believe by many strategic writers that managers have to possess entirely different skill to move the organisation from a controlled mechanism entity to one where it becomes a matter of personal challenge, self-regulationand pride. Research shows that Japanese managers think differently as compared to their Western counterparts. Japanese are typically vigorous, analytical and quantitative (see Raimond, p. 209-10). Thus, the need to develop a new form of mission, goals, and operational objectives has opened up the possibility and opportunity for strategic application for many Japanese companies.

• Strategic Management Lies in the Process, Not OutcomeNon-profit organization leaders’ visions for their organisations must turn out to be

both practically useful and morally compelling. In this instance, the establishment of a new work ethic is deemed essential. A study in the UK, New Zealand, Sweden and Finland proved that despite evidence of continued tightening and refinement of performance indicators, the swing to a more output-oriented culture was slow (Pollitt and Summa, 1997, p. 11). This indicates that the role of the government at the macro level is not enough. As noted earlier, strategic management is most effective when it is part of a broader programme of socio-economic reforms and organisational development where the strategists worked as the key players. Effective strategic management as noted by Porter, thus, requires the formation of a strategic management group to provide leadership for the process whom made up by chief executives, top-line managers and key executive members (Porter, 1996, p. 316).

The benefits of strategic management can be maximised when the government ensures that when a project is launched, the idea or the method of strategic options taken is fully understood by all managerial and functional level in the project team. In addition to this, the project team has to ensure that all procedures should be based on certain principles and priorities, such as minimising cost, enhancing quality, promoting skills and competency, and stimulating inter-agency co-operation. This can also be done by taking into account the necessary and effective regulatory role of the government to avoid any detrimental factors that would otherwise cause delay to the project or programme.

• Conscientious Efforts to Initiate and Capitalise Non-profit ValueMoore argues that the non-profit organization managers’ most important ethical

responsibility is to undertake the search for non-profit value conscientiously (Moore, 1995). In this pursuit, the manager has to strike a balance between political commentary (response) and his operational tests or means of effectiveness. Consequently, modification and re-modification of their views should be made as a result of this interplay.As noted by Porter, strategy requires constant discipline and clear communication. In this regard, vision guides the subordinates and is communicated directly to the non-profit at large. The consistency between functional units and the overall strategy will ensure that the non-profit values are optimised. The new paradigm would generate a new form of non-profit value.• Strategy Shapes the Vocation of Non-profit Managers

As noted by Moore, the ideas and techniques of good managerial actions can be of no substitute for good character and experience. However with luck, they might help to enhance the limits of one’s character and experience (Moore, 1995, p. 309). In other words, strategy cannot be perceived as an end in itself. Public managers should take a more pro-active stance in improving themselves and their managerial skills.Above all, even though strategic management could be applied within a certain functional area or within a team (which may consist of a few people), it is most likely to face the risk of failure without a vigilant, forceful and committed attitude from the non-profit organization manager. Governments, on the other hand, are expected to retain their obligation to maintain the development project from excessive political interference, monitor the overall process of the project or programme and make sure that the project is

worth to its intended beneficiaries. Therefore, the role of a central government through appropriate ministries, ultimately, comes before, during and after the projects or programmes are convened and completed. The emergence of strategy into the lexicon of non-profit organisations reflects both the increasing complexity and adaptability of the organisation in responding to the demand of a volatile environment. Strategic management, without doubt, can become a dynamic yet challenging tool to complement the efforts towards new non-profit management, particularly in the area of managing non-profit sector development projects and programmes. Despite many hindrances or restraining factors that go along the way, strategy without doubt could enhance the professionalisation of management in the government sponsored bodies.

In the final analysis it is the leadership styles and behaviour that determine the success of the re-engineering process through the use of strategic management tools. Strategic management concepts whether borrowed or home grown can only be good if the critical leadership factor is present to initiate and guide changes towards better outcomes.

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