Managing for Value: Organizational Strategy in for-Profit, Nonprofit, and Governmental Organizations

Abstract

All organizations benefit from developing a strategy. The most well-developed strategy models come from the private sector and focus on markets, customers, and competition. Yet, these models fail to take account of two crucially important features of nonprofit organizations: (a) the value produced by nonprofit organizations lies in the achievement of social purposes rather than in generating revenues; and (b) nonprofit organizations receive revenues from sources other than customer purchases. An alternative strategy model developed for governmental managers focuses the attention on three key issues: public value to be created, sources of legitimacy and support, and operational capacity to deliver the value. This alternative strategy model resonates powerfully with the experience of nonprofit managers precisely because it focuses attention on social purposes and on the ways in which society as a whole might be mobilized to achieve them.