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Managing for Value: Organizational Strategy in For-Profit, Nonprofit, and Governmental Organizations
Abstract
All organizations benefit from committing themselves to a strategy that describes the value that an organization intends to produce, the means it will rely on to produce that value, and how it will sustain itself in the future. The most well-developed and commonly relied upon models for developing organizational strategies come from the private sector. Yet, these models fail to take account of two crucially important features of the strategic problem faced by nonprofit organizations and governmental bureaucracies: first, that the value that these organizations produce lies in the achievement of social purposes for which no revenue stream is readily apparent rather than in creating wealth for shareholders or satisfaction to customers, and second, that nonprofit and governmental organizations receive revenues from sources other than customer purchases of products and services. An alternative strategy model developed for use with government organizations focuses the attention of managers on three key issues: public value to be created, sources of legitimacy and support for the organization, and operational capacity to deliver the value. This alternative strategy model seems to resonate powerfully with the experience of nonprofit managers precisely because it focuses attention on social purpose and on the ways in which society as a whole might be mobilized to contribute to social purposes rather than on the financial objectives that can be achieved by selling products and services to markets.
Journal
(March 2000)
vol29
no1
pages183-208
Categories
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Financial Management
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Strategic Planning
