Discussion: Profit, Non-Profit, Government, etc... (ONLY Writing Eden)

   The private sector, non-profit sector, and the governmental sector (including the military) each have functional management strategies. Throughout these three business types, there are variations in the strategy used based on how the business is set up. There are three different approaches to establishing a strategy; each of these three strategies are utilized differently in the three different business types.

            Strategic planning, scenario planning, and strategy as planned emergence are the three approaches primarily used. Strategic planning is a long term, top down approach, where the CEO/organizational leader “ties the allocation of the annual corporate budget to the strategic plan and monitor ongoing performance accordingly” (Hitt, Ireland, & Hoskisson, 2015, p. 39). Scenario planning is the analysis of asking ‘what if’ questions that apply to different scenarios, and how these changes will affect the business (Hitt, Ireland, & Hoskisson, 2015). This type of planning asks questions about any change in law, competition, resources, or other component could affect the business. The last strategy used for a competitive advantage is strategy as planned emergence. An emergent strategy is “any unplanned strategic initiative undertaken by mid-level employees of their own volition” (Hitt, Ireland, & Hoskisson, 2015, p. 43-44). This type of strategy comes from top-down initiatives and bottom-up innovation ideas that may or may not be planned.

            Each of the three types of businesses will use each of these types of strategy to gain a competitive advantage. The first business type is the private sector. Private sector businesses use strategic planning when they have regular activities that can be easily followed from a historical perspective. The corporation will identify priorities, and then determine which “key decisions on what research should be pursued…In addition, the core competency of the organization is critical to the decision making and prioritizing process” (Raposa, 2009, p. 206). According to Hitt, Ireland, and Hoskisson (2015), this type of strategy is best used for companies that have steady, unchanging environments, which history is used to predict the future. Almost every organization and entity can be affected by unknown future factors, but out of the three entities, private industry businesses will have the opportunity for a low to high amount of change depending on the specific business.  Companies that are easily affected by trends, the environment, and legal issues will not be able to use strategic planning as easily as companies that are more of a regular necessity that do not change frequently over time. Private industry will most likely use scenario planning in addition to the strategic planning. After evaluating their strategy based on historical data, private businesses can then perform a what-if analysis, and analyze each factor that could affect their business. This could include tax laws, reporting requirements, industry trends, customer perspective of the company, new legal requirements, etc. In the private sector, the purpose of scenario strategies are important to gain a competitive advantage because they could raise common concerns that were overlooked in the short-term planning, emphasize dangers and alternatives, publicize events for the benefit of the consumer, identify policy changes, and be able to evolve more quickly (Ratcliffe, 2003).  Lastly, the private sector embraces emerging planning more than the government and non-profit sectors. Many companies now have employee surveys and ways to initiate and propose organizational changes. The text provides examples of Google and General Electric where lower level employees pushed ideas from the bottom up (Hitt, Ireland, & Hoskisson, 2015).

            The non-profit sector uses each of the three strategies similarly. In strategic planning, non-profit sectors may rely on this type of the planning the most. This is based on ideas that non-profit sectors’ missions are less likely to be swayed by financial goals, and more general well-being and benefit of others (charitable) initiatives. Non-profit businesses have strategies that are considered traditional, which is “typical of most organization's long-range planning efforts…They stress sanction and endorsement by key groups as well as a workable, if not an optimal, product” (Nutt, 1984, p. 73). Non-profit organization also use scenario planning; as part of a process based brainstorming, “[a] group process techniques [that] can be applied to enumerate strategic options…where experts are brought in to describe opportunities to organizational actors who have leverage” (Nutt, 1984, p. 62). A non-profit organization can also be subject to changes, based on many similar attributes that could change a private industry. More likely scenarios include reporting requirements and public reaction to the organization. As various events unfold over time, the public may become more or less involved. Examples in recent events include the earthquake/tsunami in Japan and the earthquake in Haiti. These events cannot be planned for, yet involve a large amount of support from non-profit organizations. There is also a lot more media attention on these organizations when unplanned events occur. The last type of strategy for non-profit sectors are emergence planning. Nutt (1984) also describes how non-profit organization uses a forced association technique to break old patterns in order to introduce new ideas. This type of strategic planning in a non-profit industry is important when the organization is unable to fulfil their mission, or do not have a strong strategy in place. This could be to changes over time, or similar organization created that has surpassed the success of the current non-profit.

            The last sector is the government and military. They use of each these strategies to gain a competitive advantage and are slightly different than the other two entities because this sector can be very political in nature.  Barbu and Ionescu (2012) believe that “Any discontinuity in the activity of such entities might result in neglecting the real needs of citizens and slowing the reform process in the public sector. Therefore, all initiatives of public organizations must have a unitary goal and integrate harmoniously within a single process” (p. 795). From a strategic planning perspective, the long-term goals and strategy of the government and military should be similar, and take longer to change because of the importance on continuity. It is also harder to have changes in some parts of the government because of the politic involved, and the process to change any current structure or initiative has to go through many approvals. As a prior analyst in the government, change was extremely rare in my office.  I worked in the budget office, and from the time we started to create new initiatives and request money, until anything was actually decided was around a two year process. The likely of the change being accepted was predicable based on leadership’s view and political importance. The government offices I am familiar with are also very top-down approach minded, with little information being sent from the bottom up. The head of the organization, and even higher to presidential initiatives are the most important.

            Scenario planning is less likely to occur in many government offices, but would be more common in the military. The most strategy for different scenarios based on my experience is when initial budgets are being proposed. The scenarios are based on likelihood of initiative acceptance.  Based on how important the team felt different factors were, dictated the effort that went into the proposal. Different budget scenarios were then based around higher priority initiatives.  The last type of planning in the government is emergence planning. This is a bottom to top approach with could be done if clients and other audiences are “included in the planning process…, which can provide useful information about the services they want, the quality or the accessibility thereof, and news about the services they need in the future” (Barbu, & Ionescu, 2012, p. 796). Many government offices also have employee engagement surveys, and take employee suggestions; however, unfortunately in my experience I am not sure how often ideas are sent from the bottom up.  In working in the government, all ideas came from management. Even though I personally proposed new ideas, which I still stand by to this day could have improved the office, none were accepted because the change would not be accepted by ‘seasoned’ employees. 

            The military would seem to have many of the same characteristics in planning, but with a heavier emphasis on scenario planning. The military has a defined top to bottom structure like in strategic planning, but must consider different scenarios as part of their regular business based on known and unknown threats. Each of the three entities must consider all three different strategy types to have a successful business. Not one strategy alone is the most effective.     

 

 

Barbu, A. M., & Ionescu, F. T. (2012). Conceptual Model of Marketing Strategic Planning Specific to Public Organization.  Annals Of The University Of Oradea, Economic Science Series, 21(2), 795-800. Business Source Complete, EBSCOhost (accessed October 31, 2014).

Hitt, M.A., Ireland, R.E., and Hoskisson, R.D. (2015) Strategic management: concepts: competitiveness and globalization. 11e. Chapter 2

Nutt, P. C. (1984). A Strategic Planning Network for Non- profit Organizations. Strategic Management Journal, 5(1), 57-75.

Raposa, K. (2009). Strategic planning and research priorities in private industry. Journal Of Dental Hygiene, 83(4), 206-207.

Ratcliffe, J. (2003). Scenario Planning: An Evaluation of Practice. Futures Research Quarterly, 19(4), 5-25.