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Questions and Answers
What is the significance of the voluntary non-profit sector in India?
What is the significance of the voluntary non-profit sector in India?
Providing service to meet a defined community need
Why have voluntary non-profit sectors begun adopting strategic management models?
Why have voluntary non-profit sectors begun adopting strategic management models?
Non-profit organizations aim to achieve profits like for-profit organizations.
Non-profit organizations aim to achieve profits like for-profit organizations.
False
A non-profit organization uses its surplus revenues to further achieve its _____ or _____, rather than distributing its surplus income to shareholders or equivalents as profit or dividends.
A non-profit organization uses its surplus revenues to further achieve its _____ or _____, rather than distributing its surplus income to shareholders or equivalents as profit or dividends.
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Match the following organizational statements with their descriptions:
Match the following organizational statements with their descriptions:
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What percentage of new jobs do SMEs generate annually in India?
What percentage of new jobs do SMEs generate annually in India?
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What are the key drivers of employment and economic growth according to the text?
What are the key drivers of employment and economic growth according to the text?
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Strategic management is largely regarded as an irrational process.
Strategic management is largely regarded as an irrational process.
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Strategic management is traditionally concerned with ____, size, and utilization of resources.
Strategic management is traditionally concerned with ____, size, and utilization of resources.
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What are the different ways a section 8 company can be registered?
What are the different ways a section 8 company can be registered?
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What are the stakeholders of a voluntary non-profit organization?
What are the stakeholders of a voluntary non-profit organization?
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Charismatic leaders are not significant in resolving conflict in objectives in non-profit organizations.
Charismatic leaders are not significant in resolving conflict in objectives in non-profit organizations.
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Match the following strategic management techniques with their descriptions:
Match the following strategic management techniques with their descriptions:
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What does evaluation and control information consist of?
What does evaluation and control information consist of?
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Which types of controls are specified in the content?
Which types of controls are specified in the content?
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Return on Investment (ROI) involves dividing net earnings by the amount of common stock.
Return on Investment (ROI) involves dividing net earnings by the amount of common stock.
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Nonfinancial Performance Measures used by Internet Business Ventures include Stickiness, Eyeballs, and ______.
Nonfinancial Performance Measures used by Internet Business Ventures include Stickiness, Eyeballs, and ______.
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Match the traditional financial measures with their descriptions:
Match the traditional financial measures with their descriptions:
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List the four thrust areas of strategic planning in small business as mentioned in the content.
List the four thrust areas of strategic planning in small business as mentioned in the content.
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What does the diagram in Figure 14 illustrate about the relationship between strategic planning and profitability in small businesses?
What does the diagram in Figure 14 illustrate about the relationship between strategic planning and profitability in small businesses?
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According to the content, the key elements of SME strategies are mentioned in __ table.
According to the content, the key elements of SME strategies are mentioned in __ table.
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Organic growth strategy for small businesses focuses only on financial metrics for measuring success.
Organic growth strategy for small businesses focuses only on financial metrics for measuring success.
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What are some benefits of inorganic growth strategy for small businesses?
What are some benefits of inorganic growth strategy for small businesses?
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Study Notes
Strategic Management in Non-Profit Organizations
- Non-profit organizations (NPOs) do not have commercial interests and aim to provide a service or program to meet a defined community need.
- Strategic planning is essential for NPOs to establish long-term and short-term goals, review effectiveness, and allocate resources.
- The goal of a non-profit organization is to achieve its mission and objectives, rather than to make a profit.
Definition of Non-Profit Organization
- A non-profit organization is an organization that does not aim to make a profit.
- Surplus revenues are used to further the organization's purpose or mission, rather than distributing them to shareholders.
- Non-profit organizations often have taxation implications, such as income tax exemption and charitable status.
Strategy and Planning
- Strategy is the determination of an organization's long-term goals and objectives, and the allocation of resources to achieve them.
- A strategic plan provides guidance for fulfilling a mission with maximum efficiency and impact.
- An operating plan is a coordinated set of tasks to carry out the goals of a strategic plan, with a shorter horizon of usually one fiscal year.
- A business plan is focused on generating income from a specific program or service, and includes information about products, competitive environment, and revenue assumptions.
Mission, Vision, Goals, and Objectives
- A mission statement is a brief expression of an organization's purpose, answering the question "Why do we exist?" and "What do we do?"
- A vision statement is a description of an organization's desired future state, answering the question "Where do we want to be?"
- Goals and objectives express desired outcomes and may be focused on discrete parts of an organization's programming or internal operations.
- Strategies and tactics consist of approaches or sets of activities needed to achieve goals and objectives.
Objectives and Goals of Non-Profit Organizations
- Non-profit organizations aim to provide value to the groups of people they serve, rather than accumulating wealth.
- Their objectives and goals may include providing services, advocating for a particular point of view, or furthering a social cause.
Functions of Non-Profit Organizations
- Non-profit organizations have a wide diversity of structures and purposes, and may operate as a charity, service organization, profit corporation, trust, cooperative, or informal organization.### Non-Governmental Organizations (NGOs)
- NGOs are the most common type of non-commercial organization in India, but they are not the only category.
- Memorial trusts, which honor renowned individuals through social work, may not be considered NGOs.
- In the Indian context, an NGO is considered an institution that carries human values and system values.
Formation and Structure of NGOs
- Management provisions, accountability and auditing provisions, provisions for amendment of statutes or articles of incorporation, and provisions for dissolution are essential for legal classification.
- NGOs can be formed as trusts, societies, or section 8 companies (old section 25 companies).
- Registration can be done with the Registrar of Companies (RoC) or the Registrar of Societies (RoS).
Types of Non-Profit Organizations
- Trusts: Public charitable trusts can be established for various purposes, including relief of poverty, education, and medical relief.
- Societies: Membership organizations registered for charitable purposes, governed by the Societies Registration Act 1860.
- Section 8 Companies: Companies with limited liability, formed for promoting commerce, art, science, religion, charity, or any other useful object.
Stakeholders of a Voluntary Non-Profit Organization
- Beneficiaries/service-users/clients
- Members
- Statutory funders
- Individual or corporate donors
- Staff
- Volunteers
- Board of management
- Agencies who refer clients or to whom the organization refers clients
- Regulatory bodies
Strategic Management in NGOs
- Mission, vision, values, and long-term aims are essential for strategic management.
- Strategic priorities, performance indicators, annual operational objectives, and resource requirements are necessary for effective planning.
- Monitoring and rolling operational planning arrangements and a timetable are crucial for success.
Strategic Planning Tools and Techniques
- PEST and PESTEL analysis: Analyze political, economic, social, and technological factors in the external environment.
- Ansoff's Matrix: A framework for devising strategies for future growth and creating a positional advantage.
- Mandate analysis: Examines written mandates from legislation, constitutions, trust deeds, and public policy documents.
- Stakeholder analysis: Identifies the expectations of beneficiaries, funders, volunteers, staff, and regulatory bodies.
- Identifying strategic issues: Focuses on urgent action required to meet the organization's aims.
Leadership as a Competitive Tool
- Effective leadership is essential for generating competitive advantage in NGOs.
- Enablers: Leadership, policy and strategy, people, and processes.
- Results: Customer results, people results, society results, and key performance results.
Strategic Issues in Small Business
- SMEs are key drivers of employment and economic growth.
- SMEs account for a significant proportion of economic activities in India's urban and rural areas.
- The growth of SMEs can be determined by their ability to integrate with the global economy, maintain sustainable government finances, and establish an institutional environment.
Potential of SMEs
- SMEs have addressed substantial growth in developing countries.
- Their growth can be determined by their ability to integrate with the global economy, maintain sustainable government finances, and establish an institutional environment.
Performance and Effectiveness in Small Firms
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Small businesses struggle with business constraints, especially finance, market, and human resource management.
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Constraints to business growth in SMEs include finance, market, and human resource problems.### Strategic Management in Small Businesses
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Small businesses may face growth challenges, including losing personalized touch with employees and customers, and inefficient systems and processes.
Performance Measurement in Small Businesses
- Small business performance encompasses three areas:
- Financial performance (profits, return on assets, return on investment, etc.)
- Product market performance (sales, market share, etc.)
- Shareholder return (total shareholder return, economic value added, etc.)
- Business outcomes include:
- Qualified labor
- Commitment of employees
- Job satisfaction of employees
- New product/service development capability
- Product/service quality
- Customer satisfaction
- Sales growth
- Market share growth
- Return on sales
- Return on assets
- Overall profitability
Importance of Strategic Management in Small Businesses
- Strategic management helps small businesses to:
- Arrange capital investment
- Grow faster than the increase in market size
- Face fewer failures
Organizational System in Small Businesses
- The whole organization system consists of five overlapping subsystems:
- Strategic subsystem
- Technological subsystem
- Human-cultural subsystem
- Structural subsystem
- Managerial subsystem
- Each subsystem functions interdependently and with the external environment.
Why Small Businesses Need Strategy
- Strategic management is a rational process that helps senior management identify courses of action and responses to complex and dynamic environmental forces.
Strategic Planning in Small Businesses
- Strategic planning involves:
- Determining strategies
- Blending core values with corporate structure
- Implementing survival strategies to reduce management inadequacies
- Key concerns of small business firms include:
- Growth of sales
- Cost-benefit analysis
- Healthy balance sheet and cash inflows
Strategic Management Models for Small Businesses
- Various strategic models and frameworks support small business planning and implementation.
- Examples include:
- Henderson's (1991) strategic planning model
- Van der Heijden's (1996) model for examining strategic planning paradigms
- Porter's (1991) and Ghemawat's (1991) models for competitive advantage and market profile.
Key Elements of SME Strategies
- The key elements of SME strategies include:
- Strategy and planning
- Execution and alignment
- Performance and reporting
Growth Strategies for Small Businesses
- Organic growth strategies involve:
- Investing in core competencies
- Differentiating and innovating in product or service lines
- Inorganic growth strategies involve:
- Mergers and acquisitions (M&A)
- Increasing output and business reach through acquiring new businesses.
Need for Industrial Support
- Small and medium enterprises (SMEs) require institutional support, including:
- Drafting a national strategy for SMEs
- Supplementing legislation
- Financial support
- Business advice
- Creating strategies and development programs
- Building a suitable environment for entrepreneurship and economic activities.
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Description
This quiz covers the evaluation and control process in strategic management, including performance data and activity reports, with a focus on entrepreneurial ventures and not-for-profit organizations.
