STRATEGY FORMULATION AND IMPLEMENTATION IN NON- … · 2018. 1. 8. · STRATEGY FORMULATION AND IMPLEMENTATION IN NON-PROFIT ORGANISATIONS IN THE NELSON MANDELA MUNICIPALITY BY LAUREN

STRATEGY FORMULATION AND IMPLEMENTATION IN NON-

PROFIT ORGANISATIONS IN THE NELSON MANDELA

MUNICIPALITY

BY

LAUREN BUTLER

Paper submitted in partial fulfilment of the requirements for a Master’s Degree in

Business Administration at the Nelson Mandela Metropolitan University.

PROMOTOR: Prof. J.J. Pieterse

April, 2015

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DECLARATION

I, Lauren Butler, hereby declare that:

- This research study is my own work;

- That all sources have been reported and acknowledged; and

- This treatise has not previously, in part or full, been submitted to any

institution of higher learning in order to obtain an academic qualification.

…………………………………. …………………..

Lauren Butler Date

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ACKNOWLEDGEMENTS

Although there are no words to express my gratitude, a humble and truly heartfelt

thank you is extended to my husband, Charles. You are the reason I am able to write

this today; without you, my successes mean nothing. Your belief has shaped the

woman, wife, and mother I am today.

To my mother, who gave up so many hours to allow me the time to work on this

project. Your prayers, example and presence in my life have paved the way for me to

grow and be the best I can be. My heart is filled with gratitude by the thought of all

that you do, and are to me.

To my sisters, my family and my friends, every single word of encouragement has

given me hope, strengthened my faith, and increased my confidence that I am able

to do this. I know a thank you is simply not enough, but with it I hope you all know

that you have an immense impact in my life.

Above and beyond all others, this project was completed purely by the grace of God;

and the strength he granted me to see this journey to its end. All the honour is

granted unto him.

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ABSTRACT

Literature indicates that the sustainability of Non-Profit Organisations (NPOs) is

important as they provide pivotal services to the community. In this study, the

researcher investigates common problems associated with strategy formulation and

implementation in NPOs in the Nelson Mandela Metropole.

The researcher reports on the importance of strategy within all organisations and

outlines a strategy process that can be used as a guide to measure strategic

planning in NPOs. In pursuit of conducting qualitative research, a self-constructed

questionnaire was used to perform telephonic interviews with managers of NPOs.

The study yielded a low response rate, but based on the analysis of the data

collected, findings indicate that the main problem is not with strategy formulation or

implementation, but with the understanding of the concept of strategic planning.

During the interview process, it became evident that there is a common

misconception that the annual operations planning constitutes a strategic plan.

A major limitation to this study was the absence of a benchmark against which to

measure success. Unlike a for-profit organisation where success is measured by

profit margins, NPOs have different priorities and therefore successful strategic

planning differs from one organisation to another.

A recommendation for managers at NPOs is that they start thinking strategically

about their organisation, its planning, and methods for doing so (which is discussed

in Chapter Five).

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TABLE OF CONTENTS

DECLARATION ........................................................................................................... i

ACKNOWLEDGEMENTS ........................................................................................... ii

ABSTRACT ................................................................................................................ iii

CHAPTER ONE: INTRODUCTION TO THE STUDY ................................................. 1

1.1 INTRODUCTION .................................................................................................. 1

1.2 PROBLEM STATEMENT ..................................................................................... 2

1.3 RESEARCH OBJECTIVES .................................................................................. 5

1.3.1 Primary objective ........................................................................................... 5

1.3.2 Secondary objectives ..................................................................................... 5

1.3.3 Research design objectives ........................................................................... 6

1.4 METHODOLOGY OF THE STUDY ...................................................................... 6

1.4.1 Research paradigm ........................................................................................ 6

1.4.2 Data collection procedure .............................................................................. 7

1.5 DEFINITION OF CONCEPTS .............................................................................. 7

1.5.1 Non-profit organisation ................................................................................... 7

1.5.2 Strategy .......................................................................................................... 7

1.5.3 Strategy formulation ....................................................................................... 8

1.5.4 Strategy implementation ................................................................................ 8

1.6 OUTLINE OF THE STUDY .................................................................................. 8

1.7 SUMMARY OF THE CHAPTER ........................................................................... 9

CHAPTER TWO: LITERATURE REVIEW ............................................................... 10

2.1 INTRODUCTION ................................................................................................ 10

2.2 WHAT IS STRATEGY ........................................................................................ 10

2.3 THE IMPORTANCE OF STRATEGY ................................................................. 11

2.3.1 Benefits of strategic planning: ...................................................................... 12

2.4 A STRATEGY-MAKING and STRATEGY-EXECUTING PROCESS .................. 13

2.4.1 Phase 1: Developing a strategic vision ........................................................ 14

2.4.2 Phase 2: Setting objectives .......................................................................... 17

2.4.3 Phase 3: Crafting a strategy to achieve the objectives and vision ............... 18

2.4.4 Phase 4: Implementing and executing the strategy ..................................... 21

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2.4.5 Phase 5: Monitoring developments, evaluating performance, and making

corrective adjustments .......................................................................................... 22

2.5 SUMMARY OF THE CHAPTER ......................................................................... 24

CHAPTER THREE: RESEARCH DESIGN AND METHODOLOGY ......................... 25

3.1 INTRODUCTION ................................................................................................ 25

3.2 RESEARCH METHODOLOGY .......................................................................... 25

3.3 RESEARCH METHOD ....................................................................................... 27

3.3.1 Advantages of questionnaires ...................................................................... 27

3.3.2 Disadvantages of questionnaires ................................................................. 28

3.3.3 Question design ........................................................................................... 29

3.3.4 Guidelines for conducting interviews ............................................................ 29

3.3.5 Interview probes ........................................................................................... 29

3.4 RESEARCH POPULATION AND SAMPLE ....................................................... 30

3.5 MEASURING INSTRUMENT ............................................................................. 31

3.5.1 Questioning techniques................................................................................ 33

3.6 THE RELIABILTY AND VALIDITY OF THE STUDY .......................................... 34

3.7 COMPILING THE NARRATIVE.......................................................................... 34

3.8 SUMMARY OF CHAPTER ................................................................................. 35

CHAPTER FOUR: EMPIRICAL RESULTS .............................................................. 31

4.1 INTRODUCTION ................................................................................................ 36

4.2 BIOGRAPHICAL DETAILS RELATED TO THE SAMPLE ................................. 36

4.3 EMPIRICAL RESULTS: ..................................................................................... 41


CHAPTER FIVE: DISCUSSION, CONCLUSIONS AND RECOMMENDATIONS .... 33

5.1 INTRODUCTION ................................................................................................ 55

5.2 FINDINGS: ......................................................................................................... 55

5.3 RECOMMENDATIONS: ..................................................................................... 59

5.4 LIMITATIONS OF THE STUDY.......................................................................... 59

5.5 FUTURE RESEARCH ........................................................................................ 62


CONCLUSION ......................................................................................................... 62

LIST OF REFERENCES ............................................................................................ 1

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LIST OF FIGURES

Figure 2.1: Strategy process diagram

Figure 2.2: A Strategy-making and strategy-executing process

Figure 5.1: Improvement planning process

LIST OF CHARTS

Chart 1.1: Growth of NPOs registration over past five years

Chart 4.1: Gender

Chart 4.2: Age

Chart 4.3: Education level of Manager

Chart 4.4: Manager Tenure

Chart 4.5: Years in operation

Chart 4.6: Organisation size

Chart 4.7: Social sector

Chart 4.8: Statement 1 - The organisation has a strategic vision

Chart 4.9: Statement 2 - The organisation’s vision provides a broad overview of

where the business is going

Chart 4.10: Statement 3 - The organisation’s vision communicates management’s

goals

Chart 4.11: Statement 5 - The organisation’s vision is continuously and effectively

communicated down the hierarchy to all levels of staff

Chart 4.12: Statement 6 - The organisation has a mission statement

Chart 4.13: Statement 10 - Management has set out organisational objectives

Chart 4.14: Statement 11 - The organisational objectives convert the strategic vision

into specific performance targets

Chart 4.15: Statement 12 - Performance targets are set for each of the organisation’s

services

Chart 4.16: Statement 13 - The organisational objectives consist of financial and

strategic objectives

Chart 4.17: Statement 14 - The organisational objectives are measurable

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Chart 4.18: Statement 15 - The organisation objectives contain a deadline for

achievement

Chart 4.19: Statement 16 - The objectives contain both long-term and short-term

performance targets

Chart 4.20: Statement 17 - When trade-offs have to be made between achieving

long-term and short-term objectives, long-term objectives take precedence

LIST OF ANNEXURES

ANNEXURE A: Research questionnaire covering letter

ANNEXURE B: Measuring instruments

ANNEXURE C: Ethical clearance form

CHAPTER ONE: INTRODUCTION TO THE STUDY ___________________________________________________________________

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CHAPTER ONE: INTRODUCTION TO THE STUDY

1.1 INTRODUCTION

The National Register of Non-Profit Organisations (NPOs) (2011-2012, in South

African Department of Social Development, 2012) states that “NPO is a term used

for public organisations that range from faith and community based organisations,

charities, and a host of development and social organisations working determinedly

to serve public need”. These organisations are commonly referred to as non-

governmental organisations (NGOs), community based organisations (CBOs), and

faith based organisations (FBOs).

The South African Department of Social Development (2012), in terms of section 1 of

the NPO Act, define a non-profit organisation as:

… a trust, company or other association of persons established for a public purpose and of which its income and property are not distributable to its members or office bearers except as reasonable compensation for services rendered. NGOs and CBOs are collectively known as NPOs. In some instance, NPOs are also referred to as Civil Society Organisations (CSO).

Bryson (1988) explains that NPOs are often called on to take up the slack in the

system left by failing public organisations. For this reason, sustained operations of

NPOs are pivotal as they provide much needed services to disadvantaged groups

and communities.

The primary research question to be addressed in this study is:

a. Can problems be identified in formulating and implementing strategy in NPOs

in the Nelson Mandela Metropole?

This research will be conducted in the Nelson Mandela Metropole by outlining a

strategy forming process from literature reviewed, and using it as a guide to

investigate common problems in formulating and implementing strategy in NPOs. By

means of an interpretive study, the researcher aims to gain an understanding into

the nature of these problems so that executives could gain a greater understanding


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and awareness of the issues contributing to unsuccessful strategy formulation and

implementation.

1.2 PROBLEM STATEMENT

NPOs render needed services to the community at no charge and therefore rely

purely on sponsorship from the public and corporate funders to sustain its

operations. In addition to this, Berg (2013) states that non-profit organisations

contribute to the economy in the following ways:

NPOs operate very similarly to for-profit businesses. They are a steady

source of employment to the economy, which also requires specialised skills

and capabilities such as accountants and marketers.

NPOs use third party goods and services in their daily operations. This

generates revenue for the third party businesses.

In recent times, the economy has taken steep downturns to an extent that

companies and consumers alike are tightening their budgets and, as a result,

availability of funding for NPOs is decreasing whilst the need for these organisations

is increasing.

Based on statistics provided by the National Register of NPOs (2011-2012, in South

African Department of Social Development, 2012 ), since the inception of the NPO

Act of 1997, growth in the registration of NPOs is recorded at a rate of almost 14%;

however, during the same period, 12.1% of registered NPOs have been de-

registered. Chart 1.1 below illustrates the increase of NPO registration for the last

five years (2008 to 2013).


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Chart 1.1: Growth of NPOs registration over past five years

Source: Adapted from Department of Social Development (2013)

A major concern is that managers of non-profit organisations are principally focused

on, and driven by, the social cause, which does not always translate into good

management practices. With scare resources - no long-term strategy, poor planning,

and budgeting constraints - these NPOs are left with limited or no alternative but to

close down. The shutdown or downscaling of NPOs, same as any commercial

organisations, leads to the retrenchment of employees and essentially an inability to

serve the public’s need. According to the Department of Social Development (2013),

by the end of October 2012, 36 428 NPOs were deregistered due to non-

compliance. This is a direct reflection on the management of the NPOs and indicates

a need to investigate and suggest initiatives to assist NPOs to become compliant

and sustainable.

The problem statement for this research document is formulated as follows:

To what extent is strategy in NPOs in the Nelson Mandela Metro successfully

formulated and executed?

Research conducted by Kaplan and Norton (2008) investigated whether or not

organisations had a formal execution process in place and 54% respondents stated

yes, while 46% responded that their organisations did not have a formal strategy

execution process in place. The results of this study also discovered that

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organisations that had a formal execution process outperformed organisations

without one (Kaplan & Norton, 2008).

Porter and Kramer (2006) suggest that if proper strategy frameworks are being used

by NPOs, corporate social responsibility (CSR) can be more than just a constraint for

corporates; it can be an opportunity and source of competitive advantage. Strong,

well-functioning organisations will provide corporates with a platform to give back to

the community in a sustained and strategic method and increase the likelihood of

organisations receiving continuous funding and support.

Based on the literature reviewed, many researchers agree that strategic planning

within NGOs is problematic. However, research in this field has produced business

models and strategy frameworks that can be implemented by NPOs to improve their

operations and sustainability without investigating the underlying nature or

fundamental problems in strategic planning.

Considering the above, the purpose of this research is to investigate common

problems in strategy formulation and implementation in NGOs. By doing so, the

researcher aims to create awareness amongst executives regarding the nature of

these problems in an attempt to help prevent them from repeating errors that

compromise the continuity of the organisation.

This introduces the primary research question that will be addressed by the

research:

- What problems can be identified in formulating and implementing strategy in

NPOs in the Nelson Mandela Metropole?

This research question is divided into secondary research questions:

- What is the significance of strategy formulation and implementation in NPOs?

- How can a strategy framework be used as a benchmark for successful

strategy formulation and implementation in NPOs?

- What problems can be identified in strategy formulation and implementation in

NPOs?

- What recommendations can be made for improving strategy formulation and

implementation in NPOs in the NMM?


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According to the National Register of NPOs (2011-2012, in South African

Department of Social Development, 2012), registered organisations are grouped in

terms of the International Classification of Non-profit Organisations (ICNPO).

According to the ICNPO (in South African Department of Social Development, 2012),

there are 11 categories of NPOs, with social services being the leading sector

comprising 40% of total registered NPOs. The social services category is further

divided into subject areas referred to as themes, namely:

- Child welfare, child services, day-care

- Disaster/emergency prevention and control

- Family services

- Income support and maintenance

- Material assistance

- Refugee assistance

- Self-help and other personal social services

- Services for the elderly

- Services for the disabled

- Temporary shelters

- Youth services and youth welfare

For this study, the researcher will focus on strategy formulation and implementation

within the Nelson Mandela Bay Metropole social services sector as classified by the

ICNPO.

1.3 RESEARCH OBJECTIVES

1.3.1 Primary objective

The primary objective of the study is to identify problems that hinder the successful

formulation and implementation of strategy in NPOs.

1.3.2 Secondary objectives

In pursuit of the primary objective, the following secondary objectives have been

formulated:


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- To highlight the importance of strategy formulation and implementation in

NPOs.

- To identify a strategy framework that can be used as a benchmark for strategy

formulation and implementation in NPOs.

- To investigate the problems in strategy formulation and implementation in

NPOs based on the framework identified by means of an empirical study.

- To propose recommendations for improving strategy formulation and

implementation in NPOs.

1.3.3 Research design objectives

In order to attain the above-mentioned objectives, the following research design

objectives are pursued:

- conducting a secondary literature review on the variables being explored

- constructing a questionnaire consisting of open and closed questions for the

collection of empirical data

- distributing the questionnaire to a sample of 15 identified executives of non-

profit organisations within the Nelson Mandela Metropole

- capturing the data of the completed questionnaires

- analysing the data of the completed questionnaires

- interpreting the results and drawing conclusions

- providing recommendations to management

1.4 METHODOLOGY OF THE STUDY

1.4.1 Research paradigm

Two main research paradigms exist, namely positivism and interpretivism. For this

study, the researcher will be using a mixed modal approach to the research design,

in other words, following a mixture of both the positivistic and interpretive

approaches. The dominant paradigm will, however, be that of an interpretive

paradigm as the aim of the study is to gain an understanding of what causes the

problem, and to offer possible solutions as to how the problem could be addressed.

Thus, the nature of the problem will be investigated.


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1.4.2 Data collection procedure

1.4.2.1 Approach

The research methodology or approach for the data collected in this study is an

analytical survey by means of semi-structured interviews with managers of non-profit

organisation in the Nelson Mandela Metropole.

1.4.2.2 Data collection method

Semi-structured interviews were conducted with the identified sample during which

open and closed questions were posed to these managers.

1.4.2.3 Data analysis

Once the interviews were completed, the data was transcribed into an in-depth

narrative. A thematic analysis approach was used to interpret the collected data to

identify the common issues that recur and identify the main themes that summarise

all the views that were collected. The data from the closed questions were captured

and analysed using statistical software.

1.5 DEFINITION OF CONCEPTS

This section provides definitions of key concepts pertinent to this research. To this

end, four concepts are defined: NPO, strategy, strategy formulation, and strategy

implementation.

1.5.1 Non-profit organisation

NPOs are organisations established to serve a public need. These organisations

render needed services to the community at no charge and therefore rely purely on

sponsorship from the public and corporate funders to sustain its operations. These

income and/or property/assets are not distributable to its members or office bearers

except for compensation for services rendered as approved by the governing body.

1.5.2 Strategy

A comprehensive strategy outlines management’s plan to grow the business, stake

out a market position, attract and please customers, compete successfully, conduct

operations, and achieve targeted objectives.


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1.5.3 Strategy formulation

Formulating a company’s strategy starts with articulating the company’s strategic

vision and mission statement, and effectively communicating these down the

hierarchy to all levels of management and staff. A company’s strategy consists of an

outlined statement of values that management identify as key attributes for

personnel to display and, very importantly, setting objectives in order to convert the

strategic vision into specific performance targets that are measurable and contain a

deadline for achievement.

1.5.4 Strategy implementation

Strategy implementation is an operations-orientated activity aimed at the execution

of core business activities in a strategy supportive manner and should be launched

and managed on all organisational levels. The effective implementation of strategy

requires executives to continually evaluate if the company’s direction and strategy

are well matched to the industry and competitive conditions and if performance

targets are being met.

1.6 OUTLINE OF THE STUDY

Chapter Description

Chapter One

This chapter provides an introduction and

the outline of the study. The chapter

provides the problem statement, the

main research question and sub-

questions, research objectives, sample,

measuring instruments, and definitions of

the key concepts used in this study.

Chapter Two

This chapter focuses on the literature

study that underpins the research

problem.

Chapter Three This chapter focuses on the methodology

of the study. This includes the research


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paradigm, the sample, measuring

instruments, and data analysis

procedures.

Chapter Four

This chapter focuses on the empirical

results which will be reported and

interpreted.

Chapter Five

This chapter focuses on the empirical

results and conclusions drawn. The

chapter also includes recommendations

to managers, limitations of the study, and

highlights areas for future research.

1.7 SUMMARY OF THE CHAPTER

This chapter has provided an introduction to NPOs and the significant role they play

in society. The main research problem underpinning the study has been identified

and the sub-problems have been stated. The primary and secondary research

objectives have been formulated and the research design objectives have been

listed.

The methodology for the study was summarised and definitions of the fundamental

concepts pertaining to the study was provided. The chapter is concluded with a list of

the chapters outlining the structure of the document.

CHAPTER TWO: LITERATURE REVIEW ___________________________________________________________________

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2.1 INTRODUCTION

Bryson (1988) forewarned decades ago that strategic thought and action are

increasingly important to the continued viability and effectiveness of governments,

public agencies, and non-profit organisations. Without strategic planning it is unlikely

that these organisations will be able to successfully meet the numerous challenges

that face them.

By reviewing the literature, the researcher aims to address the first two sub-

problems:

a. To highlight the importance of strategy formulation and implementation in

NPOs.

b. To identify a strategy framework that can be used as a benchmark for strategy

formulation and implementation in NPOs.

This chapter will:

outline what strategy is;

discuss the importance of strategy; and

provide an in-depth analysis of the strategy-making and strategy-executing

process.

2.2 WHAT IS STRATEGY

Thompson, Strickland and Gamble (2005) outline a company’s strategy as

management’s game plan for:

growing the business;

staking out a market position;

attracting and pleasing customers;

competing successfully;

conducting operations; and

achieving targeted objectives.


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In order to devise this game plan, Hough, Thompson, Strickland, and Gamble (2011)

state that managers face three central questions in thinking strategically about their

company’s present circumstances and prospects: What’s the company’s present

situation? Where does the company need to go from here? How should it get there?

In a quest to answer these questions, it is essential that management conduct both

an external environmental assessment as well as an internal environmental

assessment. As described in Bryson (1988), an external environmental assessment

is performed to explore the environment outside the organisation in order to identify

the opportunities and threats the organisation faces; and an internal environmental

assessment is an assessment of the organisation itself to identify its strengths and

weaknesses.

This process is referred to as a SWOT analysis, which Bryson (1988) states is very

important because every effective strategy will build on strengths and take

advantage of opportunities while it overcomes or minimizes weaknesses and threats.

The heart and soul of any strategy are the actions and moves managers take to gain

a competitive edge over competitors. Hough, Thompson, Strickland, and Gamble

(2011) argue that if a competitive edge holds promise for being durable and

sustainable, then so much better for the strategy, revenue growth, and future

survival. Hough, Thompson, Strickland, and Gamble (2011) adds that what makes a

competitive advantage sustainable, are actions and elements in the strategy that

cause an attractive number of buyers, in the case of NPOs – sponsors, to have a

lasting preference for a company’s products or services as compared to offerings of

competitors.

2.3 THE IMPORTANCE OF STRATEGY

Thompson, Strickland and Gamble (2005) state that crafting and executing strategy

are vital managerial tasks for two reasons: Firstly, it is essential for managers to

proactively shape how the company’s business will be conducted and secondly, a

strategy focused organisation is more likely to be financially strong.


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2.3.1 Benefits of strategic planning:

Waechter (2011), among others, suggests that successful strategic planning in

NPOs can provide the following benefits:

- Bring clarity and agreement on organisation mission and vision: Agreement

on the mission is extremely important for the organisation to be effective, and

defining a shared vision is essential for identifying the desired outcome and

planning to achieve it.

- Help organisations prepare for the future: A strategic plan serves as a

roadmap to achieve the desired future for an organisation. It helps the board,

staff, and volunteers prioritise the work that needs to be done and facilitates in

making short-term decisions based on their long-term implications.

- Help organisations anticipate and manage change: By anticipating and

planning for change, organisations can prepare for it instead of merely

reacting to it in a startled way.

- Improve the decision-making processes: With a strategic plan in place, day-

to-day decision making and problem solving will be based on the

organisations short-term and long-range goals. When making choices within

the context of the strategic framework, the organisation’s direction is clearly

defined.

- Align the board and staff: A shared purpose and direction provides a platform

for high performing teams.

- Educate participants about institutional history: By understanding the

organisation’s past, better choices can be made about the organisation’s

future.

- Identify existing strengths in the organisation: Providing consistent feedback

on how well the organisations is meeting its objective according to the plan

set out serves as a source of motivation and inspiration for staff to continue. In

addition, it provides direction on which efforts best contribute to the success of

the organisation.


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2.4 A STRATEGY-MAKING and STRATEGY-EXECUTING PROCESS

Henry Mintzberg (in Gopinath & Siciliano, 2013), provides five definitions – the “Five

Ps” - of strategy:

1. Strategy as a plan. This plan documents a consciously intended course of

action and could take the form of a set of guidelines or a written report that

managers use to guide their decisions.

2. Strategy as a pattern. This is an after-the-fact view of strategy where the

organisation is looked at over a period of time and a “pattern in a stream of

actions” can be identified. Consistency in decisions suggests a direction and if

the pattern was not originally intended, then the realized strategy is called the

“emergent strategy”.

3. Strategy as a position. Managers see their firm as occupying a place within an

environment – this is its position in the market in relation to its competition.

4. Strategy as a perspective. This perspective is how the organisation sees itself

and expresses its way of doing things.

5. Strategy as a ploy. This is a short-term tactic that is intended to outwit or pre-

empt competitive strategic moves.

For this study, the researcher refers to strategy as a plan, and this section of the

report highlights the steps involved in crafting this plan.

Consequent to the above-mentioned information regarding strategy, the researcher

bases the following section on the work of Hough, Thompson, Strickland and

Gamble (2011) who describe the managerial process of crafting and executing a

company’s strategy in five interrelated and integrated phases:

1. Developing a strategic vision of where the company needs to head and what

its future product or market focus should be. This should be based on a

thorough external and internal analysis.

2. Setting objectives and using them as a benchmark for measuring the

company’s performance and progress.

3. Crafting a strategy to achieve the objectives and move the company along the

strategic course that management has charted.

4. Implementing and executing the chosen strategy efficiently and effectively.


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5. Evaluating performance and initiating corrective adjustments in the company’s

long-term direction, objectives, strategy, or execution in light of actual

experience, changing conditions, new ideas, and new opportunities.

Van Buren (2010) states that the best strategic plans have both a soft and hard

composition with the softer side including the vision, mission, values, and beliefs and

the harder side including the goals, strategic objectives, and milestones. Within the

process selected by the researcher, Phase 1 will provide greater depth into the soft

side of strategic plans, and Phase 2 will provide insight on the hard side.

2.4.1 Phase 1: Developing a strategic vision

Fundamental to crafting a strategy is to articulate the company’s strategic vision.

Hough, Thompson, Strickland and Gamble (2011) state that a strategic vision

describes the aspirations management has for the business by providing a broad

view of where the business is going and a rationale for why it makes good business

sense for the company. A strategic vision thus points an organisation in a particular

direction, outlines a strategic path, and shapes organisational identity. A clear and

well-structured vision communicates management’s goals to everyone involved and

directs the energy of the staff in one direction.

A well-crafted vision statement is distinctive and specific to the organisation and

does not include broad and generic feel-good statements. For a strategic vision to be

a valuable tool, it must include the following:

provide a clear understanding of what management wants its business to look

like;

provide management with a reference point in making decisions and

preparing the company for the future; and

it must include descriptions about how management plan to position the

company beyond where it is today.

A good vision should be beyond the company’s reach so that progress towards the

vision unites the efforts of staff.


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Hough, Thompson, Strickland and Gamble (2011) describe eight characteristics of a

well-worded strategic vision for businesses:

1. Graphic – Describes the image of the company that managers aim to create.

2. Directional – Should be forward-looking; outlines the strategic path managers

had set out to follow and the adjustments needed to prepare for the future.

3. Focused – It should be specific enough to provide managers with guidance in

making decisions and allocating resources.

4. Flexible – It should not be rigid and eternal; mangers have to be able to adjust

it as circumstances change.

5. Feasible – It should be realistic of what the company can reasonably expect

to achieve.

6. Desirable – It should indicate why this is the best path for the company to

take.

7. Easy to communicate – It should be explainable in 5-10 minutes and, ideally,

can be reduced to a simple, memorable slogan.

A strategic vision is a tool management can use to give the organisation a sense of

direction. However, like any other tool, this can be used incorrectly. As outlined by

Hough, Thompson, Strickland and Gamble (2011) below, there are common

shortcomings in company vision statements:

Vague or incomplete – Does not provide specific information on the direction

the company is headed or what preparations are being made for the future.

Not forward-looking – Does not describes management’s plan to alter the

company’s current focus.

Too broad – Provides no clear direction.

Bland or uninspiring – Does not motivate staff or inspire shareholder

confidence about the company’s future.

Not distinctive – Does not provide a distinctive company identity.

Too reliant on superlatives – Does not provide information on the company’s

strategic course beyond the pursuit of accolades such as best, most

successful, leader etc.


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In contrast to the strategic vision, the company mission statement provides a brief

overview of its present business purpose. It also may or may not include the

company’s present products and/or services, the buyers’ needs it is seeking to

satisfy, the customer groups it serves, or its business capabilities. In essence, the

company mission statement depicts “who they are, what they do, and why they are

here” whereas the strategic vision describes “where they are headed”.

As important as crafting the strategic vision, effectively communicating it down the

hierarchy to all levels of management and staff is just as vital. In order to get the

organisation to move in the intended direction, all staff need to believe that senior

management knows where it’s trying to take the company, understand what changes

lie ahead, and understand why the course that management has set out is

reasonable and beneficial.

Hough, Thompson, Strickland and Gamble (2011) state that an engaging and

convincing strategic vision has enormous motivational value. Ideally, executives

should present their vision for the company in a manner that reaches out and grabs

people. The more a vision evokes positivity, the greater its impact in rallying the staff

to move in a common direction. Thus, executives’ ability to paint a convincing and

inspiring picture of the company’s journey and destination is a crucial element of

effective strategic leadership.

Hough, Thompson, Strickland and Gamble (2011) list five benefits of a well-

conceived and effectively communicated strategic vision:

1. It crystallizes senior managers’ own views about the company’s long-term

direction.

2. It reduces the risk of rudderless decision making.

3. It is a tool to get staff support on changes that will help realise the vision.

4. It provides a beacon for lower-level managers in forming departmental

missions, setting departmental objectives, and crafting functional and

departmental strategies that are in sync with the company’s overall strategy.

5. It assists the managers in preparing for the company’s future.


17

Hough, Thompson, Strickland and Gamble (2011) state that effectively conveying

the strategic vision to staff can also be supported by capturing it in an easily

remembered slogan. The creation of a short slogan highlights the company’s

purpose and by using it consistently, it aids as a reminder of where they are headed

and why. In addition, it helps staff to overcome obstacles and maintain focus.

Lastly, Hough, Thompson, Strickland and Gamble (2011) point out that companies

should develop a statement of values to guide the pursuit of its vision and mission,

strategy, and ways of operating. Values, in this instance, are the beliefs, traits, and

ways of doing things that management has determined should guide the staff

behaviour in working towards its vision. A typical statement of values consists of

around four to eight traits.

2.4.2 Phase 2: Setting objectives

Aliyeva (2012) states that strategic thinking is a broader and innovative way of thinking

on a daily basis about overall goals of your job, team, and organisation with a more

systemic and holistic approach to your environment. It is the responsibility of

management to set objectives in order to convert the strategic vision into specific

performance targets. These performance targets are the results and outcomes that

management want to achieve. Hough, Thompson, Strickland and Gamble (2011)

describe a well-stated objective as one that is quantifiable, or measurable, and

contains a deadline for achievement. These objectives are valuable as they serve as

yardsticks for management to track the company’s performance and progress.

Van Buren (2010) describes goals and objectives as outcome statements that define

what an organisation is trying to accomplish. As with Hough, Thompson, Strickland

and Gamble (2011), Van Buren (2010) states that these need to be SMART –

specific, measurable, attainable, realistic, and timely.

In addition, Hough, Thompson, Strickland and Gamble (2011) distinguish between

financial and strategic objectives, defining financial objectives as “financial

performance targets set by management for the company to achieve”, and strategic


18

objectives as “target outcomes that indicate a company is strengthening its market

standing, competitive vitality, and future business prospects”.

It is imperative for a company to achieve acceptable financial results. Without

financial health, a company’s pursuit of its strategic vision as well as long term

survival is put a risk.

When objectives are set, managers need to outline both short- and long-term

performance targets. Hough, Thompson, Strickland and Gamble (2011) state that

quarterly and annual objectives focus attention on delivering immediate performance

improvements whereas three to five year targets prompt managers to consider what

to do now to put the company in a position to perform better later.

Hough, Thompson, Strickland and Gamble (2011) recommend that when trade-offs

have to be made between achieving long-run objectives and achieving short-run

objectives, long-run objectives should take precedence. This is of particular

importance for NGOs as these organisations are there to serve public need, so often

when issues arise that are out of their scope of service, management or staff would

compromise their efforts in working towards the long-term objectives to provide

immediate assistance to the problem at hand.

Finally, Hough, Thompson, Strickland and Gamble (2011) indicate that company

objectives need to be broken down into performance targets for each of the

organisations’ separate businesses, product lines, functional departments, and

individual work units. This provides a platform for all units to pursue performance

targets that contribute directly to the desired company-wide strategic and financial

objectives. In observing the general spread of work within a NGO,

departmentalisation is based on either the target’s markets and/or the barrier being

addressed.

2.4.3 Phase 3: Crafting a strategy to achieve the objectives and vision

Hough, Thompson, Strickland and Gamble (2011) describe the task of crafting

strategy as answering a series of “hows”: How to grow the business; how to please


19

customers; how to outcompete rivals; how to respond to changing market conditions;

how to manage each functional piece of the business and develop needed

competencies and capabilities; and how to achieve strategic, financial, and

operational objectives. It also means choosing among the various strategic

alternatives and proactively searching for opportunities to do new things or to do

existing things in a new way.

It is impossible to formulate an effective strategy without engaging in strategic

thinking. Abrahams (2005) suggests that managers explore the following approaches

to improve strategic thinking:

Being successfully different

Emulating entrepreneurs

Finding new opportunities

Being future oriented

Being collaborative

Abrahams (2005) further suggests that managers should learn to view the world with

entrepreneurial eyes. Strategic thinking not only requires managers to decide on

what will make a business unique, but also requires them to identify alternative

scenarios to generate customer value. Managers of NPOs need to become like

entrepreneurs and start questioning how business processes and daily operations

can be done better, quicker, cheaper, differently, more conveniently, faster, and

more reliable.

. Donovan (2013) describes the symptoms of a poor strategy to be as follows:

Vague business goals

Unclear operational objectives

Inadequate action plans

Irrelevant performance measurements

Effective strategic planning requires a dynamic, methodical process that keeps an

organisation constantly focused on the right issues and actions (Donovan, 2013).


20

Donovan (2013) recommends that management focus on the following four

components to improve strategy:

Strategic goals, which are brief statements of what senior management

aspires to achieve in terms of growth, services, profits, etc.

Improvement objectives, which need to be specific, measurable, achievable,

realistic, time bound, and linked to specific strategic goals.

Action plans, which transform objectives into a specific set of steps,

responsibilities, schedules to execute the agreed strategy.

Performance measures, which provide precise and accurate quantitative data

and information for reviewing, evaluating, and updating actions plans.

Figure 2.1 below summaries this process.

Figure 2.1: Strategy process diagram

Source: Adapted from Donovan (2013)

1. Strategic

goals

2. Improvement

objectives

3. Action plans

4. Performance

measures


21

Donovan (2013) adds that taking the steps discussed above requires courage,

confidence, hard work, and persistence, but the reward is executing a winning

strategy that enables the organisation to achieve its goals and ultimately its vision.

Hough, Thompson, Strickland and Gamble (2011) state that a company’s senior

executives have important strategy-making roles and hold the ultimate responsibility

for leading the strategy-making, strategy-executing process. A CEO-centred

approach to strategy development is characteristic of small owner-managed

companies, as is the case with majority NPOs. However, this does not mean that

executives should exclude other levels of staff to have input in strategy formulation. It

is the responsibility of executives to provide strategy-making direction and clearly

articulate key strategic themes that paint the white lines for lower-level strategy-

making efforts. Staff of NPOs are energised in working towards a greater cause.

Allowing them to steer their efforts, in a well guided and managed way, in directions

that they feel will render maximum benefits to the organisation and to the public,

brings great fulfilment and reward.

2.4.4 Phase 4: Implementing and executing the strategy

Managing this phase of the strategy management process is an operations-

orientated activity aimed at the execution of core business activities in a strategy

supportive manner. Hough, Thompson, Strickland and Gamble (2011) describe this

to be the most demanding part of the process which has to be launched and

managed on all organisational levels. Hough, Thompson, Strickland and Gamble

(2011) propose that converting strategic plans into actions and results tests a

manager’s ability to:

direct organisational change;

motivate people;

build and strengthen company competencies and capabilities;

create and nurture a strategy supportive work climate; and

meet or beat performance targets.


22

Hough, Thompson, Strickland and Gamble (2011) list the following principal aspects

in managing the strategy execution process:

Staffing the organisation with essential skills needed to build competencies

and competitive capabilities.

Allocating resources to activities vital to strategic success.

Drafting policies and procedures that promote effective strategy execution.

Using best practices to perform core business activities.

Installing information and operating procedures that facilitate greater

efficiencies in work tasks.

Motivating people to do their best to execute the strategy successfully.

Link rewards and incentives directly to performance.

Create a company culture and work climate that is conducive to successful

strategy execution.

Displaying the internal leadership required to drive implementation forward

and improve the execution of the strategy.

Van Buren (2010) puts forward that to make the plan operational, management need

to attach specific time lines, assign responsibilities to people, and create a budget.

This phase in the process can be considered successful if the company meets or

beats its strategic targets and achieves management’s strategic vision.

2.4.5 Phase 5: Monitoring developments, evaluating performance, and making

corrective adjustments

The fifth phase of the strategy management process entails monitoring new external

developments, evaluating the company’s progress, and making corrective

adjustments to the company’s vision, objectives, strategy, or strategy execution

methods.

Hough, Thompson, Strickland and Gamble (2011) describe this as an on-going

process where company executives continually evaluate if the company’s direction

and strategy are well matched to the industry and competitive conditions, and if

performance targets are being met. If the vision and strategy is still current, simply

fine-tuning the strategic plan and continuing with efforts to improve its execution are


23

sufficient; however, if it is not yielding results on its objectives, then executives will

need to re-evaluate or modify its strategic vision or execution methods.

Figure 2.2: A strategy-making and strategy-executing process

Source: Adapted from Hough, Thompson, Strickland, and Gamble (2011).

Van Buren (2010) states that in the end, management should ask themselves the

following questions:

Is the organisation thinking strategically?

Are strategies being created from a shared vision?

Are we learning from the past and gathering information from and about the

external environment?

Do we have measurable goals in place?

Are individuals or teams accountable to the plan?

1. Develop a strategic vision

2. Set objectives

3. Craft a strategy4. Implement the

strategy

5. Evaluate the strategy and make

adjustments


24


This section of the study reviewed literature to outline what strategy is and why it is

important for businesses to participate in strategic planning. The benefits of strategic

planning were discussed and an in-depth analysis of a strategy-making, strategy-

executing process was completed.

In this process, the essential aspects of crafting a strategic vision and mission

statement were outlined and the importance of setting objectives was stated. Factors

to consider when crafting a strategy were reviewed and the importance of

communicating, measuring, and revising the strategy was discussed.

CHAPTER THREE: RESEARCH DESIGN AND METHODOLOGY ___________________________________________________________________

25


3.1 INTRODUCTION

This study aims to identify the managerial problems that are faced by non-profit

organisations in formulating and implementing strategy. The previous chapter

reviewed literature to outline the importance of strategy formulation.

Research by Hume and Hume (2008) indicates that:

Managers within non-profit organisations are principally focused on, and

driven by, the social cause of the organisation.

This focus and drive does not always translate into good management

practices, including strategy formulation and implementation.

In consideration of these factors, and based on the literature reviewed, the

researcher identified a suitable strategy process that can be used as a guide to

understand what aspects of strategy have to be in place for NPOs to succeed.

This chapter will:

outline the planned research methodology;

describe the research method; and

provide brief insight into the construction of the measurement instrument used

to conduct this research.

3.2 RESEARCH METHODOLOGY

Collis and Hussey (2009) identifies a research paradigm is a framework that guides

how scientific research should be conducted. Based on the literature, two main

research paradigms exist, namely positivism and interpretivism. Positivism focuses

on measuring social phenomena, and interpretive studies focus on exploring the

complexity of social phenomena with a view to gaining interpretive understanding.

Based on the methodological assumption of interpretivism, in the analysis of the

findings, the researcher seeks to understand what is happening in a situation and

looking for patterns which may be repeated in other similar situations. In this study,

the researcher will take a mixed modal approach to data collection; however, the

dominant approach will be an interpretive one.


26

As identified by Collis and Hussey (2009), the main features of interpretive studies

are listed as follow:

The goal is to gain rich and detailed insights into the complexity of social

phenomena. For this reason, researchers in this paradigm can conduct their

research with small samples.

The researcher will not attempt to control any of the characteristics of the

phenomena and therefore will conduct the research in a natural setting rather

than an artificial location.

The investigation is conducted to describe different patterns that is perceived

in the data or to construct a new theory to explain the phenomenon without

being restricted by existing theories.

There is no intention of analysing data statistically and therefore no desire to

quantify qualitative research data. The aim is to produce ‘rich’ and subjective

qualitative data.

Findings generally have low reliability but high validity (this will be discussed

later in this chapter).

Findings can be generalised from one setting to an additional similar setting.

Generalisation is concerned with the application of research results to cases

or situations beyond those examined in the study.

Once the paradigm is selected, the researcher will select a methodology and

supportive method/s for collecting and analysing the research data that meets the

philosophical assumptions of the chosen paradigm.

Collis and Hussey (2009) describe a research methodology as an approach to the

process of the research, encompassing a body of research methods and a research

method as a technique for collecting and/or analysing data.

For this study, the researcher collected primary research data. Collis and Hussey

(2009) identify primary data as data generated from an original source, such as your

own experiments, questionnaire surveys, interviews, and/ or focus groups.

For this study, the researcher selected a survey as a methodology of choice to

collect the primary data. Collis and Hussey (2009) identify a survey as a


27

methodology designed to collect primary or secondary data from a sample with the

objective to analysing the data and generalising the results to the population.

Surveys are more commonly associated with positivistic studies; however, it may

also be used in interpretive studies.

As outlined by Collis and Hussey (2009), based on their purpose, surveys can be

divided into two types, descriptive surveys and analytical surveys. Collis and Hussey

(2009) describes a descriptive survey as a method that provides an accurate

representation of phenomena at a specific point in time, whereas an analytical

survey is a method conducted to determine whether there is a relationship between

pairs of variables or multiple variables. For this study, the researcher conducted an

analytical survey by means of a semi-structured telephonic interview. A

questionnaire was used so that all participants were asked the same prepared

questions, but the interviewer was also able to add additional questions in order to

obtain more detailed information about a particular answer or to explore new,

relevant issues that came about from a particular answer.

3.3 RESEARCH METHOD

Interviews are a method for collecting data in which selected participants are asked

questions to find out what they do, think, or feel. In a semi-structured interview, some

of the questions are prepared in the form of a questionnaire.

According to Wilson (2010), questionnaires are valuable tools for collecting primary

data. By incorporating different questioning techniques within the questionnaire, the

researcher is able to gather a wide range of data.

3.3.1 Advantages of questionnaires

As with all data collection methods, a number of advantages and disadvantages are

associated with questionnaires. Wilson (2010) lists the following advantages:

They allow you to obtain accurate information.

They provide a cost-effective and reliable means of gathering feedback that

can be qualitative as well as quantitative.

A survey questionnaire can provide accurate and relevant data through

thoughtful design, testing, and detailed administration.


28

In order to facilitate the collection of accurate data, Wilson (2010) states that the

researcher needs to take into account two key issues:

1. An appropriate set of questions needs to be included within the main body of

the questionnaire. These questions can be delivered using a range of

techniques that can allow both qualitative and quantitative analysis to take

place.

2. The questionnaire must be aimed at the right target audience. A poorly

selected sample can lead not only to a set of biased results, but also to a high

response rate.

Dillman (1978, in Wilson, 2010) describes three ways to best maximise the response

rate of participants in questionnaire and telephone surveys:

1. Cooperation is in some sense rewarding for them.

2. The rewards outweigh the costs to them in terms of money, time, and effort.

3. They are convinced that they can trust you to keep your side of the transition.

3.3.2 Disadvantages of questionnaires

Although the advantages outweigh the disadvantages, Wilson (2010) lists the

following noteworthy disadvantages:

Unlike personal interviews, the way questionnaires are administered often

means that they are impersonal. Researchers are not at hand to clarify any

questions that the respondents might have and this might lead to inaccurate

data or the respondent simply not answering the question.

In addition to this, if a respondent misinterprets a question, the response

cannot be included in the final analysis. In most cases, this is not the fault of

the respondent, but the consequence of a poorly designed questionnaire of

the researchers’ inability to explain the question clearly.

Finally, and perhaps the leading disadvantage of using a questionnaire, is the

difficulty associated with questionnaire design.

By using the questionnaire as a basis for a telephonic interview, these

disadvantages will not be an imminent factor in this research.


29

3.3.3 Question design

Collis and Hussey (2009) listed the following general rules for designing the

questions for a questionnaire:

Provide a context by briefly explaining the purpose of the research

Only ask questions that are needed for analysis

Keep each question as short and simple as possible

Only ask one question at a time

Avoid jargon, ambiguity, and negative questions

Avoid leading questions and value-laden questions that suggest a ‘correct’

answer

Avoid questions that could cause offence or embarrassment

3.3.4 Guidelines for conducting interviews

In addition to designing the questions appropriately, it is also essential for the

researcher to take note of how to ask the questions during an interview.

Brikci and Green (2007) list the following general guidelines for conducting an

interview:

Start with a general question to orientate interviewee to the topic

Gauge the level at which you need to express yourself - the type of language

that you should use so that the people you speak to understand you and do

not feel intimidated by complex vocabulary or patronised by a simplistic one

either

Use everyday vocabulary – do not use technical words or overcomplicated

phrases

Put more sensitive questions towards the end

Ask open questions, i.e. requiring more than ‘yes’ or ‘no’ in answer

Ask neutral questions

Use concrete rather than abstract questions

Use concrete events to help people remember

3.3.5 Interview probes

To ensure that the interviewer gains maximum information, it is essential that the

researcher probes the interviewee by asking questions that require them to elaborate


30

on their initial statement. Collins and Hussey (2009) define probes as questions you

ask in response to what the interviewee has said. These questions are asked so that

the researcher can gain a greater understanding of the issue under study. Collins

and Hussey (2009) recommend that probes can be used to gage the following

qualitative characteristics:

Gain clarity on a response

Establish relevance of the response to the topic or to other variables

Expand depth into a response

Establish significance of a topic or situation

Draw comparison

Test possible bias

3.4 RESEARCH POPULATION AND SAMPLE

The population for this study comprises all social service NPOs in the Nelson

Mandela Metropolitan area.

Brikci and Green (2007) state that it is important to select a sample in a systematic

way in order to ensure that the sample is seen as credible and indicative. Samples

for interpretive, or qualitative research, are usually purposive. This means

participants are selected because they are likely to generate useful data for the

project. To ensure that the sample is credible and covers the main groups the

researcher was interested in, the strategy for this study was to select a maximum

variation sample. This sample selection involves selecting key demographic

variables that are likely to have an impact on the participants’ view of the topic.

For this study, the researcher identified the following five (5) variables as being likely

to have an impact on the research:

1. Gender

2. Age

3. Education level

4. Size of the organisation

5. The sector the organisation services


31

In order to select this sample, the researcher identified all the registered social

service NPOs in the Nelson Mandela Metropolitan area. Telephonic interviews were

conducted with the manager of each organisation in order to gain information on the

required variables as identified by the researcher as likely to having an impact on the

research. The process of selecting a maximum variation sample was then conducted

to identify appropriate participants for the study.

A total sample of 30 social service NPO managers were selected for this study.

Consequent to the initial telephonic interviews, the managers of the organisations

(identified as the sample based on the maximum variation sample method)

participated in semi-structured telephonic interviews.

Whilst conducting these interviews during the data collection phase of this study, the

researcher found that the respondents were either very passionate about their work

and eager to participate in the study, or were reluctant to participate in such in-depth

interviews and either declined to participate, or set up interviews but later failed to

avail themselves for the agreed upon times. The low number of interviews conducted

posed a concern for the researcher, however, the findings of this study were not fully

compromised as the aim of qualitative research is to seek an understanding of other

people’s perspectives and motivations, and in so doing, focuses on words and their

meanings. For this reason it is common practise for qualitative researchers to use

small samples sizes.

3.5 MEASURING INSTRUMENT

Designing a questionnaire is not easy and Wilson (2010) lists the following few

factors to consider before commencement:

What is the purpose of your questionnaire?

How can you ensure reliability and validity?

How will the questions help you to answer your research objectives?

What length should your questionnaire be?

All of these factors will be discussed in this section, except for reliability and validity

which will be discussed in the following section.


32

Wilson (2010) deconstructed the above-mentioned factors into the following

categories:

Theme – Before constructing the questionnaire, it is essential that the

researcher has a clear understanding of the theme of the research. By using

questioning techniques, the researcher should construct clear research

questions respectively.

Layout – It is essential that questionnaires are structured in a clear and logical

manner where each section is based on a particular theme. Questionnaires

that are poorly designed jeopardises the response rate.

Length – It is difficult to establish the ideal length for a questionnaire as

researchers do not want to deter respondents with too many questions, but it

must be long enough to ensure sufficient data is generated. Suggestions are

to review previous research questionnaires in the chosen subject area or to

conduct a pilot study.

Question order – Important to questionnaire design is that the questions are in

a logical order and that all questions relating to a specific topic fall within the

same section. Respondents are more likely to finish a questionnaire if they

have already answered the majority of the questions; therefore it is advised

that sensitive questions be placed closer to the end of the questionnaire.

Coding – Codes are symbols, usually numbers, which are used to identify

particular responses or type of response in questionnaires and similar

instruments. This is used as part of the questionnaire to help process and

analyse data.

Vote of thanks – It is important that you thank your participants for their time

and cooperation. Also, asking them to comment on any aspect of your

research might provide useful information and/or lead to questions that were

not considered or overlooked.

Pilot study – Conducting a pilot study aids in increasing the levels of reliability

and validity before the commencement of the main survey.


33

3.5.1 Questioning techniques

Wilson (2010) states that the most important aspect of designing a questionnaire is

the formulation of questions through the application of questioning techniques.

Wilson (2010) describes these questioning techniques as different ways of asking a

question to extract the information you need. Important here is that these techniques

dictate the analytical techniques to analyse the findings. Wilson (2010) provides the

following detailed list of questioning techniques:

Multiple choice questions – These questions should be written so that the

selection of answers directly corresponds to the question being asked. Each

response should be mutually exclusive of the others so that there is no

overlap in the choice.

Rank order questions – These are attitude-based questions and require the

respondent to rank an attitude statement in their order of preference.

Semantic differential scale questions – These questions assess how strongly

respondents hold an attitude based on a scale that progresses from one

extreme to another.

Sensitive questions – It is often difficult to gauge the sensitivity of a question,

but it is always advised that researchers keep in mind cultural differences.

Likert scale question – This is another ‘attitude question’ in that it seeks to

determine a respondent’s attitude towards a particular subject. Generally, the

researcher posts a question and requests the respondent to tick a response

that best reflects their opinion.

Open questions – These are questions where the respondents do not have to

indicate a specific response. Respondents often see these questions as an

opportunity to respond in detail, especially if they are passionate about the

topic.

Closed questions – These questions simply request a respondent to respond

to the question by choosing from a limited number of potential answers.

The researcher will be making use of open and closed questions for the gathering of

data for this study.


34

3.6 THE RELIABILTY AND VALIDITY OF THE STUDY

Reliability and validity are two aspects of the credibility of the findings of research.

Collis and Hussey (2009) refer to reliability as the absence of differences in the

results if the research were to be repeated. Under an interpretive paradigm, reliability

is often of little importance or can be interpreted in a different way. For these studies,

emphasis is placed on establishing protocols and procedures to establish the

authenticity of the findings.

Collis and Hussey (2009) define validity as the extent to which the research findings

accurately reflect the phenomena under study. In an interpretive study such as this

one, the researcher focuses on capturing the essence of the phenomena and

extracting data that provide rich, detailed explanations. The researchers’ aim is to

gain full access to the knowledge and meaning of those involved in the phenomenon

and interpretive studies consequently yield a high validity.

Crouch and McKenzie (2006) state that in a qualitative framework, research based

on interviews seeks to penetrate social life beyond appearance and manifest

meanings. This requires the researcher to be immersed in the research fields, to

establish fruitful relationships with respondents, and through theoretical

contemplation to address the research problem in depth. Therefore a small number

of cases will facilitate the researchers close association with the respondents and

enhance the validity of in-depth inquiry in naturalistic settings.

3.7 COMPILING THE NARRATIVE

There are many ways to analyse qualitative data. These methods include either the

use a thematic, descriptive approach or more in-depth methods. For this study, the

researcher conducted a thematic analysis.

As described by Brikci and Green (2007), a thematic analysis is one that looks

across all the data to identify the common issues that recur, and identify the main

themes that summarise all the views that have been collected. Brikci and Green

(2007) identified the following four (4) key stages in a thematic analysis:

1. Read and annotate transcripts: This is the most basic stage where the

researcher makes preliminary observations on each of the interviews

conducted.


35

2. Identify themes: The next step is to look at the data in detail in order to start

identifying themes and create summaries of what the answers are about.

3. Developing a coding scheme: The initial themes can then be gathered

together to begin to develop a coding scheme. A coding scheme is a list of all

the themes and codes that the researcher then applies to the data.

4. Coding the data: The codes are then applied to the whole set of data. The

patterns and relationships found under the themes will then provide the basis

of the report.

As the researcher will be using a mixed modal approach to data collection, the data

from the closed questions will be captured in an Excel computer software

programme and analysed using the Statistica computer software programme.

3.8 SUMMARY OF CHAPTER

In this chapter the researcher identified two main research paradigms, positivism and

interpretivism, and stated that the study will use a mixed modal approach. Based on

this, the researcher selected an analytical survey as a methodology of choice and

outlined that primary research data will be collected by means of semi-structured

telephonic interviews. A questionnaire will be used as an interview sheet and its

advantages, disadvantages, correct design and guidelines on conducting an

interview was discussed. Techniques used to design the questions were outlined as

open questions and closed questions.

The population for the study was identified as comprising all social service NPOs in

the Nelson Mandela Metropolitan area, which were selected through a maximum

variation sample.

Aspects relating to reliability and validity were discussed as well as the analyses of

qualitative data.

CHAPTER FOUR: EMPIRICAL RESULTS ___________________________________________________________________

36

CHAPTER FOUR: EMPIRICAL RESULTS

___________________________________________________________________

4.1 INTRODUCTION

A sample of 30 respective organisations was selected and contacted for an

interview; however, only a total of 14 interviews were conducted, yielding a response

rate of 46.6%. The researcher experienced numerous difficulties in finding

respondents that were willing to talk about this topic and/or have the time to

participate in an interview. Among others, respondents respectfully declined to

participate, set up times for interviews but then were unavailable, or were

unavailable and did not respond to the telephone messages left.

The low response rate compromises the outcomes to a certain extent in that the

conclusion may not be as valid as the researcher hoped it to be. However, the

findings proved to be consistent among the interviews conducted and for this reason

the researcher believes the findings to be reliable.

Based on the research conducted, this chapter aims to address the fourth sub-

question:

a. Can problems in strategy formulation and implementation in NPOs be

identified?

This chapter will:

provide the biographical details of the study respondents; and

outline the empirical results.

4.2 BIOGRAPHICAL DETAILS RELATED TO THE SAMPLE

The researcher wanted to establish if the following five biographical details of the

organisation and its management would have an impact on strategy formulation and

implementation:

1. The gender of the manager

2. The age of the manager

3. The education level of the manager


37

4. The number of years the manager has been working for the organisation

5. The size of the organisation

5. The sector the organisation services

This section of the study will thus outline the biographical details as indicated by the

respondents of the study.

Chart 4.1 below illustrates the gender ratio of the interviewees. A total of five males

and nine females participated in the study.

Chart 4.1: Gender

Respondents were asked to state their age in relation to an age group, which is

illustrated in Chart 4.2. Five age groups were listed: Zero participants were younger

than 20 years; participants were between 31 and 40; five participants were between

the ages of 41 and 50; four participants were between 51 and 60; and only two

participants stated that they were older than 60.

36%

64%

Male

Female


38

Chart 4.2: Age

Respondents were asked to state their level of education. Most (43%) of the

respondents had a degree; 29% had a post graduate qualification, one of which was

a masters; and 28% only had a matric certificate.

Chart 4.3: Education level of Manager

The respondents were asked to indicate how many years they have been working for

their respective organisations. Five categories were listed and their responses were

as follows: Six managers were employed by the organisation for 0 to 4 years; four

managers were working for 5 to 9 years; three respondents stated they were with the

organisation for 10 to 14 years; zero managers were employed for 15 to 19 years;

and only one manager was with his/her organisation for more than 20 years.

0%

21%

36%

29%

14% Age

21 to 30

31 to 40

41 to 50

51 to 60

60 plus

28%

43%

29%Matric

Graduate

Post Graduate


39

Chart 4.4: Manager Tenure

Managers were asked to indicate the number of years the organisation has been in

existence. Five categories were listed and they responded as follows: Five

organisations have been in operation for 0 to 4 years; one organisation has been in

operation for 5 to 9 years; three organisations have been operating for 10 to 14

years; zero organisations have been operating for 15 to 19 years; and 5

organisations have been in operation for more than 20 years. Please see Chart 4.5

below for graphical illustration.

Chart 4.5: Years in operation

The researcher wanted to establish the size of the organisation, therefore

respondents were asked to indicate how many staff are currently working for the

respective organisations, both on a paid as well as voluntary basis. The responses

were as follows and are depicted in Chart 1.6 below: Zero organisations had a staff

43%

29%

21%

0%

7%

0 to 4

5 to 9

10 to 14

15 to 19

20+

36%

7%21%0%

36%

0 to 4

5 to 9

10 to 14

15 to 19

20+


40

count of less than 4 employees; four organisations had 5 to 9 staff members; three

organisations had 10 to 14 staff members; and one organisation had 15 to 19 staff

members.

Chart 4.6: Organisation size

The interviewees were asked to identify which sector the organisation serves. It was

found that the majority (69%) of the organisations focused on more than one sector,

indicated by the “combination” section in Chart 4.7 below. These nine organisations

service the abled bodied child and youth sector, abled bodied child, youth and family

sector, or child and youth sector including those that are disabled. One organisation

focused solely on children services and four focused solely on disability services.

Chart 4.7: Social sector

0%

29%

21%

7%

43%

0 to 4

5 to 9

10 to 14

15 to 19

20+

7%

0% 0%

29%

64%

Child

Youth

Family

Disability

Combination


41

4.3 EMPIRICAL RESULTS:

This section of the report will discuss the questionnaire that was used as a guide to

conduct the interviews and provide feedback on the interviews conducted.

Section A of the questionnaire aimed to test whether the organisations had the

fundamental strategic elements in place in order to discuss strategy implementation

and execution within their respective organisation. Statements were posed to the

managers and they were required to respond with a Yes, to indicate that this is true

for the organisation, or No to indicate that it is not true for the organisation.

These responses are descriptively and graphically illustrated in the section below.

Statement 1 required the respondents to state whether the organisation has a

strategic vision. All (100%) of the respondents answered ‘yes’, thereby stating that

the organisation has a strategic vision. This is a very positive response.

Chart 4.8: Statement 1 - The organisation has a strategic vision

However, when asked if the vision provides an overview of where the business is

going, and if the vision communicates the management’s goals, only nine

respondents stated ‘yes’, and a total of five respondents stated ‘no’, the vision does

not provide an overview of where the business is going, and ‘no’ the vision does not

communicate management’s goals.

100%

0%Yes

No


42

Chart 4.9: Statement 2 - The

organisation’s vision provides a

broad overview of where the

business is going

Chart 4.10: Statement 3 - The

organisation’s vision communicates

management’s goals

When the interviewees were asked to respond to the statements ‘The organisation’s

vision is continuously and effectively communicated down the hierarchy to all levels

of staff’, majority (86%) stated ‘yes’, and only two (14%) stated ‘no’, it does not get

communicated effectively to all levels of staff.

Chart 4.11: Statement 5 - The organisation’s vision is continuously and

effectively communicated down the hierarchy to all levels of staff

All (100%) managers stated that their organisation has a mission statement. This

statement yielded a very positive response.

64%

36%

Yes

No64%

36%

Yes

No

86%

14%

Yes

No


44

Chart 4.12: Statement 6 - The organisation has a mission statement

When the respondents were asked if they have set out organisational objectives,

three (21%) of the managers said ‘no’, they have no set out objectives; however, the

majority (79%) stated that they have.

Chart 4.13: Statement 10 - Management has set out organisational objectives

When asked if the objectives convert the vision into specific performance targets, ten

respondents stated ‘yes’, however, four respondents stated ‘no’, the objectives do

not convert the vision into specific performance targets. This means that in addition

100%

0%

Yes

No

79%

21%

Yes

No


45

to the three organisations that do not have set organisational objectives, as depicted

in Chart 4.13, an additional organisation’s objectives are not effectively set.

Chart 4.14: Statement 11 - The organisational objectives convert the strategic

vision into specific performance targets

Respondents were asked to state if performance targets are set for each of the

organisation’s services. Nine of the respondents stated that this is true for their

organisations, whereas five respondents stated that ‘no’, performance targets are not

set for each of the organisation’s objectives.

Chart 4.15: Statement 12 - Performance targets are set for each of the

organisation’s services

71%

29%

Yes

No

64%

36% Yes

No


46

When asked if the organisational objectives consist of both financial and strategic

objectives, six respondents stated ‘no’. This means that 43% of the managers did not

set both financial and strategic objectives for the organisation. See Chart 4.16 below.

Chart 4.16: Statement 13 - The organisational objectives consist of financial

and strategic objectives

Respondents were asked if the organisational objectives are measurable and nine of

the respondents stated ‘yes’ they were, but five of the respondents (36%) stated ‘no’,

their organisational objectives were not measurable.

Chart 4.17: Statement 14 - The organisational objectives are measurable

Similar to the previous statement, when the respondents were asked if their

organisational objectives have a deadline for achievement, only nine of the

57%

43% Yes

No

64%

36% Yes

No


47

respondents stated ‘yes’ they have, and five of the respondents stated ‘no’, their

objectives do not have a deadline for achievement. See Chart 4.18 below.

Chart 4.18: Statement 15 - The organisation objectives contains a deadline for

achievement

Of the 14 interviewees, only nine managers stated that their organisational

objectives contain both short- and long-term performance targets and the remaining

five managers (36%) did not set both short- and long-term performance targets for

the organisation.

Chart 4.19: Statement 16 - The objectives contain both long-term and short-

term performance targets

Respondents were asked if long-term objectives take precedence when trade-offs

have to be made between long-term and short-term objectives. Four respondents

stated ‘yes’, and ten of the respondents (79%) stated ‘no’, long run objectives do not

64%

36%Yes

No

64%

36% YesNo


48

take precedence. This is graphically depicted below and further discussed in Chapter

Five.

Chart 4.20: Statement 17 - When trade-offs have to be made between achieving

long-term and short-term objectives, long-term objectives take precedence

Section B of the questionnaire posed nine open-ended questions to managers to

gain insight into their strategic planning. This section will outline the questions posed

to the managers and a summary of their responses. After each quote, the researcher

indicated the respondent by means of R, followed by his/her interview number as

well as the organisation size by means of OS, and followed by the size category.

Does the organisation have a strategic plan?

Most respondents stated that their respective organisations have a strategic plan.

However, upon further questioning, the researcher discovered that all of these

respondents were referring to their annual year planner and or annual budget.

One respondent answered the following: “Not really, our NPO was designed and

operates on a meeting needs as they arise bases”. This respondent also answered

‘no’ to the organisation having objectives that are measurable and time bound (R8;

OS 10 to 14).

29%

71%

Yes

No


49

In contrast to this, one respondent stated ‘yes’, “I believe that a NPO have to be run

like a business, the days where NPOs stand with their hands out are something of

the past. People want a return for their money” (R 2; OS 20+).

Two respondents stated that their organisation had a strategic plan that outlined their

scope of business, their strategic areas, and their short-term and long-term goals

and objectives.

What factors were considered whilst crafting the strategy?

The overarching theme found with this question was that the managers run the

organisation purely based on the community need. None of the organisations

conducted a SWOT analysis; none of the managers stated that they look what other

organisations are doing; and none of the responses included plans for the future.

Only one respondent stated that “We do a feasibility study; we look at our services

individually to measure how feasible they are, what are the challenges, the tailwinds

and headwinds, and measure our core business services and strategy to draw up

long-term requirements” (R 2; OS 20+).

Another respondent said that in addition to community need, “we look at our own

ability to render services in the market” (R 1; OS 20+).

Who was involved in crafting the strategy?

Out of the 14 interviews conducted, none of the managers included any of the staff in

crafting the strategy at their respective organisations. All responses included “The

Board of Directors”, “The Executive Committee”, and/or “Management” or

“Leadership Team”. Based on the literature in Chapter Two, this is indicative of a

CEO-centred approach to strategy creation and is commonly found in small

businesses, or in this case, organisations.

However, a promising response to this question was the following: “It is drawn up by

the manager and head of care. The home has – two committees - board of


50

management/directors and the finance committee. I do a presentation to the board

every month and they give the final approval as well as their inputs. One of the main

things, we have about 50 residence, they have a residence committee elected by the

residence, and they give input from ground level. Also, the chairman of the residence

committee sits on the board to give feedback. They have a constitution to guide their

work – it gives them dignity and empowerment (R 2; OS 20+).

How often does the strategy get evaluated or revised? And, what factors are

considered when revising the strategy?

The majority of the managers stated that their strategic plan gets revised annually

with only one respondent stating that their organisation looks at this plan every six

months.

General factors of consideration were found to be:

turnover of staff;

turnover of residence;

availability of resources;

external and internal factors influencing the success of achieving our goals

and objectives; and

needs of the beneficiaries – has it changed or is it still the same.

The respondent that stated that their strategy gets reviewed every six months stated

that in addition to the factors above, the organisation aims to “keep our strategy

realistic and achievable whilst been stretched and keeping up with market trends”.

When asked what market trends she was referring to, she stated “the fees charged

at other homes and the offerings they have for their residence” (R 1; OS 20+).

Excluding the above, one respondent stated that his organisation conducts a

feasibility study on an annual basis – “we draw separate areas of what needs to be

done – needs list, strategise where we going to get the money from, I make a list of

care needs and break it down in each division of the home. And then I measure it


51

regularly, and write reports every month – we measure what we have done and how

we are doing in that strategy area” (R 2; OS 20+).

How do you communicate the strategy to staff? How do you measure if this is

effective?

When asked the question ‘how do you communicate you strategy to staff’, one

respondent stated “We live that. By working with the kids you realise this is the

mission. It’s a calling, a God calling, it’s a ministry. You don’t need to remind them.

They just do it. It’s part of their jobs” (R 6; OS 10 to 14).

The remaining 13 respondents stated that their strategy is communicated during

meetings and one respondent added that it is displayed on their notice boards as

well (R 9; OS 20+).

When asked the question ‘how do you measure if the communication plan is

effective’, one respondent stated: “we measure by the home itself, if the residents’

needs are being met, we look at the incredibly long waiting list – that is an indication

that we are doing something right. We have staff that has been here for 40 years,

there is a very small staff turnover and this is an indication that staff is happy. We

also have “Friends at Cheshire” – this is a group of young professionals that meet

every months to discuss how they can help; they also have a monthly braai for the

residence. We have measurable measuring tools in place” (R 2; OS 20+).

Another respondent stated that “It hasn’t been effective as this was an area

highlighted within our performance appraisal process under our management

feedback reviews” R 4; OS 20+).

What factors do you take into consideration when making decisions for/about

the organisation?

General factors that are considered by managers when they make decisions are:

Is it in line with the vision?


52

Will it benefit the beneficiaries?

Is it needed?

Does it fit in with the mission statement?

Do we have the finance?

Do we have the infrastructure?

One respondent stated that “needs can be very overwhelming” so it is important to

make decisions carefully (R 7; OS 20+).

When discussing the factors to take into consideration when making decisions

for/about the organisation, one respondent (R 2; OS 20+) stated the following:

“I believe very strongly that a service organisation needs to be run like a business,

we look at what is our business and what can we do to sell our business. We

established that we have the experience to run a school, so we started one in

Walmer Township; then we asked ourselves “what else can we do”? We currently

have several offerings; we have resident that do wheelchair repairs; we loan out

assistive devices; we have two charity shops onsite where we sell various donated

items that cannot be used in the home to generate funds. This is so that there are

accountable governance for people’s donations. Also, we found that events are

becoming more important and people are happy to pay for that, so we started

serving lunch on Sunday every month where families can come eat together for a

small costs. All these offerings we believe provide a value for money. It is important

to sell yourself and services”.

Do you consider the strategy to be effective?

Overall the respondents believed their respective strategies to be effective. Some

responses are quoted below:

“Yes, it gives a plan and direction to work towards, it give everyone boundaries” (R 9;

20+).

“Yes I do but it is important to remember it is a never ending process and one have

to stay pro-active” (R 2; OS 20+).


53

“I think it is effective, not perfect but effective. We contribute this to our strong

executive committee and strong management team” (R 2; OS 20+).

“I do believe that our strategy to date has been effective. The company as a whole

has grown substantially in 2014. Our strategy in 2015 will be to sustain this growth

whilst focusing on diversification in the disability sector. This is achieved by the

strong management staff in our academies” (R 4; OS 20+).

If given the resources, what would you do differently?

General findings from the responses to this question were:

Staff that are higher skilled

Increased staff count

Expand the organisation

Expand service offerings

One respondent stated that if not for financial restraints, she would increase staff

salaries to ensure that all packages were market related and inclusive of benefits like

medical aid because “they deserve it” (R 4; OS 20+).

The following response provide insight into why some managers are not thinking

strategically “…employ more people to get more done and have the decision makers

be able to make their decisions without the day to day stress of worrying about

funding, donations, fundraising and putting out fires to get things done ASAP” (R 8;

OS 10 to 14).

In contrast to this, another respondent stated that he would like to expand their

scope of service: “We are trying to raise money to expand the home, I like the idea of

independent living so self-responsibility is an area we looking at. We would like to

build more fully accessible units where individuals or families could stay in and

function completely independently. We would also lift the financial burden on the

families of our residents. With the little support we get from government, the families

of the residents needs to contribute towards the costs of their living in the home. And

we definitely want to continue making this a happy home” (R 2; OS 20+).


54


This chapter has graphically illustrated the biographical details of the respondents in

this study as well as the responses to the closed questions of the study. In addition

to this, the chapter listed the questions asked during the interview process and

provided, by means of summation as well as direct quotes, responses to these

questions.

CHAPTER FIVE: DISCUSSIONS, CONCLUSIONS AND RECOMMENDATIONS ___________________________________________________________________

55

CHAPTER 5: DISCUSSION, CONCLUSIONS AND RECOMMENDATIONS

___________________________________________________________________

5.1 INTRODUCTION

The previous chapter reported on the direct responses given by the managers during

the interview process of this study. Therein, it highlighted the challenges faced by the

researcher in contacting suitable respondents for the study. However, this chapter

will deduct findings from the responses received in an attempt to address the fifth

and final secondary research question:

a. Can recommendations be made for improving strategy formulation and

implementation in NPOs?

Based on the results reported on in Chapter Four, this chapter will:

outline the findings made from the interviews conducted;

propose recommendations to improve strategy in NPOs in the NMM;

outline the limitations of the study; and

provide suggestions for future research.

5.2 FINDINGS:

The findings are broken up into three different sections. The first section discusses

the biographical factors that influence strategy formulation and implementation; the

second section continues to discuss factors related to strategic planning found to be

hindering strategy execution in NPOs; and the third section presents important

findings that contribute towards successful strategy formulation and implementation.

5.2.1 Biographical factors:

This section of the chapter will discuss the findings related to strategic planning.

Service organisations are largely a female dominated industry so the gender

distribution of 64% females versus 36% males did not yield surprising results.

The response that the majority of the managers were between the ages of 41 to 50,

and that 72% of these managers had at least a degree as a formal qualification, lead

the researcher to conclude that most of the managers have a specialised skill set


56

and a fair amount of work experience behind them. This leads the researcher to

believe that the managers of the respective organisations are equipped to be in the

position that they fill, and that they have the cognitive ability to engage in strategic

planning.

There was an equal dispersion between start-up organisations operating between 0

to 4 years and long standing organisations operating over 20 years. The researcher

therefore believes that this is not an influencing factor in strategy formulation and

implementation.

An interesting finding related to the sector the organisation services was that

organisations providing services to the disabled only focused on that specific market,

whereas the majority of the other organisations service a combination of children,

youth and family services. This factor influences strategy creation in that disability

organisations can create a very specific strategy for their specific market, whereas

the other organisations have to cater to various groups of people and in so doing

complicate their strategic planning process.

The above section provided a vague insight into the respondents and their

respective organisations; however, the researcher did not find the biographical

details of the sample of respondents to have a significant impact on strategy

formulation and implementation in NPOs in the NMM.

5.2.2 Factors relating to strategic planning:

This section of the chapter will discuss the findings related to strategic planning.

These findings will be discussed according to the phase it follows in the ‘strategy–

making and strategy executing process’ discussed in Chapter Two.

Phase 1: Developing a strategic vision

The researcher found that all the organisations have a strategic vision; however,

36% of these respective visions do not provide an overview of where the business is

going; nor do they communicate managements’ goals. This leads to the conclusion

that the staff in these organisations are not all clear on what management wants the

business to look like in the future, and how they plan to grow the business.


57

More importantly, with an unclear or non-strategic vision, managers do not have a

reference point when making decisions for and/or about the organisation. This leads

to managers making decisions that are not in the best interest of the organisation

and its staff in the long run. This finding is substantiated with the response of 71% of

the managers stating that when they need to make trade-offs between long run and

short run objectives, short run objectives take precedence.

Another finding in relation to the organisations’ strategic vision is that no structured

communication plan was, or is being devised to communicate managements’ vision

and goals. For this reason there is no means to measure if the strategic vision is

being communicated effectively and if staff understand the plan. This could lead to a

misalignment between management and staff.

Phase 2: Setting objectives

What was evident during discussions with the respondents in the interview phase

was that overall, strategic planning is being confused with operations planning. With

the exception of two respondents, all the managers referred to their annual

operations plans as their strategy. The researcher found this to be the most

important finding of this study as this misconception could stymie the growth of the

organisation.

This lack of knowledge and insight regarding strategic thinking could be attributed to

the problems found with the organisational objectives. These include, but are not

limited to, the objectives not being directly related to the vision; performance targets

not being set; organisational objectives not consisting of financial and strategic

objectives; and objectives not being measurable, time-bound, or containing long- and

short-term targets.

Phase 3: Crafting a strategy to achieve the objectives and vision

The researcher found that none of the managers performed a SWOT analysis on

their organisation; therefore, the managers did not create a strategy that builds on

organisational strengths and takes advantage of opportunities, or one that aims to

overcome or minimize organisational weaknesses and threats. This is also a result of

not thinking strategically whilst planning and could be a major factor when sourcing


58

funding for operations. NPOs need to state their case as to why they should be the

organisation of choice to receive much sought after funding. If they cannot provide

substantial reasons as to why their respective organisations operate more efficiently

than the next, by default they decrease their chances of receiving sponsorship.

Another finding during this phase of the study was that none of the management

teams included staff in crafting their strategy. This is not uncommon for small

organisations like these, however, if this is the case, organisations should have an

effective communication plan in place to communicate their organisational strategy,

including their goals and objectives, which none of the respondents stated they have.

Phase 4: Implementing and executing the strategy

It was found that by not involving staff in the strategic planning process or

communicating the strategy effectively, management is restrained by having to make

all the operational decisions. This point was clearly demonstrated by the following

response from one of the managers: “…employ more people to get more done and

have the decision makers be able to make their decisions without the day to day

stress of worrying about funding, donations, fundraising and putting out fires to get

things done ASAP”.

When asked what they would do differently if given the resources, all the managers

stated that they would employ more and higher skilled staff. It is evident that these

organisations do not have the essential skills needed to aid in organisational growth.

Staffing the organisation with the appropriate skills is essential to build competencies

and competitive capabilities.

Phase 5: Monitoring developments, evaluating performance, and making corrective

adjustments

Because the majority of the respondents reported on operations planning, all the

organisations’ goals and objectives are set for short run operational performance –

this being their annual planning. If organisations want to achieve long-term

sustainability and grow or expand in the current market, they will need to evaluate

their current position and make adjustments accordingly. In the section for


59

recommendations later in this chapter, the researcher will propose a framework to

increase strategic thinking in managers of NPOs.

In conclusion, all of these factors could be attributed to the failure of management to

think and plan on a strategic level. If the strategic vision is well structured, as per the

guidelines identified by Hough, Thompson, Strickland and Gamble (2011) in Chapter

Two, and the objectives and strategic plan are set accordingly and based on the

vision, and a SWOT analysis is performed, the managers will be able to include, and

budget for, the additional costs of employing higher skilled staff and/or the expansion

of its services.

5.2.3 Strategic factors contributing to success in NPOs:

A very important finding discovered by the researcher during the interview process

was that strategic partnerships with private organisations can have a tremendous

impact on the success, the services, and the quality of services offered at NPOs.

Partnering with institutions like universities or colleges could lead to individuals with

essential skills donating their time to the organisation to broaden the organisations’

service offerings or increase the quality of its service offerings. Furthermore,

partnering with networks like The Business Woman’s Association or the Business

Network International could increase the organisations’ success in sourcing new

opportunities for funding and/or improving the standing as an organisation.

5.3 RECOMMENDATIONS:

The researcher proposes the following framework for managers to think strategically

when doing planning:

Step 1: Ask the question “Where do we want to be?”

Do not limit your thinking to what is possible with your current resources; expand

your view. A vision is a grammatical image of where you see the organisation in the

future and it should be specific and future orientated. Write down clear, measurable

goals to achieve this end state and attach specific time frames for its achievement.


60

Step 2: Ask the question “How can we get there?”

This is a crucial part in strategic planning. Here you need to challenge yourself to

think beyond the daily operations. Ask questions like:

What are the strategic things I can do to achieve my vision?

Who is fundamental in achieving the organisational goals? What can I do to

get them on board?

Who else could be beneficial to achieving the organisation’s goals? External

organisations and/or institutions?

What are the organisational strengths? How can I use it to gain an

advantage?

Step 3: Ask the question “What must I do to get there?”

This is where you start focusing on operations. Break the goals up into strategic

areas of focus. Set operational objectives and tasks for each of these areas and set

time frames to achieve them. Create task lists and assign responsibilities. Improve

your leadership and managerial skills if necessary. It is important to formally

document this operations plan.

Also important for NPO managers is to ask the following question: “What mustn’t I do

if I want to get there?” This will assist in making decisions that will benefit the

organisation and its staff in the long run.

Step 4: Continuously ask “How are we doing?”

Use structured processes and procedures to hold individuals accountable for their

responsibilities. Set periodic sessions to check whether the game plan is still

effective in achieving the organisational goal. Take note of what is working and what

is not. Check in with other organisations to see how and/or what they are doing.


61

Step 5: Ask the question “What changes need to be made?”

Once your plan is in motion, continue to monitor if it is the right course of action and,

very importantly, is your plan growing the business or simply sustaining it - strategic

planning aims to grow the organisation. Based on these assessments, loop back to

Step 2 and revise your plan accordingly. Figure 5.1 below graphically illustrates this

framework.

Figure 5.1: Improvement planning process Source: Adapted from Donovan (2013). It is of the utmost importance that when engaging in successful strategic planning, all

plans need to be documented, specific, measurable, and have a deadline for

achievement.

5.4 LIMITATIONS OF THE STUDY

Two very important limitations are discussed here:

1. There were differences in the level of understanding of strategic planning

among the managers at NPOs during the time the study was conducted. This

means that some respondents referred to their operations planning as

strategic planning which skewed the accuracy of their responses to Section A

and Section B of the questionnaire.

2. There is no benchmark against which to measure the success of an NPO.

NPOs differ in many aspects and the size of the organisation plays a big

factor in this. Bigger organisations are generally operated differently to smaller

Where do we

want to be?

What

strategies?

What action

plans do we

need?

How are we

doing?

What changes

need to be

made?

RESULTS

METRICS

GOALS PERFORMANCE

METRICS

OPERATIONAL

PLAN

STRATEGIC

PLAN


62

organisations which is evident from the findings in this study, and therefore

there will be differences in their perceptions of success. One organisation

aims to sustain operations and considers themselves successful if this is

achieved, whereas another organisation aims to expand their scope and

services and therefore consider themselves as successful if this is achieved.

Both these organisations are successful in their own right, but these are two

vastly different levels of success.

5.5 FUTURE RESEARCH

The researcher suggests that a qualitative study be conducted to evaluate the level

of understanding of strategic planning in NPO management. In so doing, the

accurateness of the fundamental elements of a strategy may be investigated (i.e. the

strategic vision, the mission statement, and the goals and objectives) in order to

evaluate if these are effectively written to guide the functioning of the organisation.


This is the fifth and final chapter of this report which discussed the findings (which

are divided into three sections) made during the interview process. The first section

of the findings related to the biographical details of the respondents and their

respective organisations; the second section discussed factors related to strategic

planning; and the third section discussed factors that improve the success of

strategy formulation and implementation in NPOs.

This chapter also made recommendations to improve strategy in NPOs in the NMM

and also outlined the limitations of the study and provided suggestions for future

research.

CONCLUSION

A strategic plan for an NPO does not have to be a complex document. Staff and

management of NPOs are passionate and eager to do the work of the organisation

and should not be restricted with strict strategic processes and procedures that are

difficult to understand and make operational. However, to remain viable, a strategic

plan needs to be in place to ensure the sustainability of the organisation. For this


63

reason, the researcher deemed it suitable to use the five phase strategy creation

execution process as found in Hough, Thompson, Strickland and Gamble (2011).

It was highlighted in this study that if strategic planning is effectively conducted by

NPOs, managers can increase the likelihood of entering into corporate social

responsibility partnerships with businesses as well as various other strategic

partnerships as was substantiated with the discussion and findings with one of the

respondents.

The low response rate of the study comprised the findings and it is therefore not as

accurate and in-depth as the researcher had hoped it to be. Nevertheless the

researcher deems the findings listed in this report to be true for the majority of NPOs

and hopes that the recommendations made will have a positive impact on the

sustainability of these organisations.

1

LIST OF REFERENCES

Abraham, S. 2005. Stretching strategic thinking. Strategy & Leadership, 33(5), 5-12.

Aliyeva, F. 2012. 50 models for strategic thinking or how to start thinking strategically

on a daily basis. [Online]

Available from: <http://www.intelligenthq.com/resources/50-models-for-

strategic-thinking-or-how-to-start-think-strategically-on-a-daily-basis>

[Accessed on 16 October 2014].

Berg, M. 2013. The importance of Non-Profit in our economy. [Online] Available

from: <http://www.borgenproject.org> [Accessed the 14 October 2014].

Brikci, N. & Green, J. 2007. A guide to using qualitative research methodology.

[Online] Available from:

http://fieldresearch.msf.org/msf/bitstream/10144/84230/1/Qualitative%20resear

ch%20methodology.pdf [Accessed the 12 June 2014].

Bryson, J.M. A Strategic Planning Process for Public and Non-Profit Organizations.

Long Range Planning, Vol. 21, No. 1. Pp 73 – 81. [Online]. Available from: <

http://docushare.usc.edu/docushare/dsweb/Get/Document-8775/> [Accesses

the 23 November 2014].

Crouch, M. & McKenzie H. 2006. The logic of small samples in interview-based

qualitative research. Social Science Information, 45(4), 483-499. [Online]

Available from:

<http://ssi.sagepub.com/content/45/4/483.short?rss=1&ssource=mfr>

[Accessed on: 3 November 2014].

Collis, J. & Hussey, R. 2009. Business Research: A practical guide for

undergraduate & postgraduate students. 3rd ed. Palgrave MacMillan.

Department of Social Development. 2013. State of South African registered non-

profit organisations 2012-2013. [Online] Available from: <http://www.gov.co.za>

[Accessed 4 September 2014].

http://www.intelligenthq.com/resources/50-models-for-strategic-thinking-or-how-to-start-think-strategically-on-a-daily-basis

http://www.intelligenthq.com/resources/50-models-for-strategic-thinking-or-how-to-start-think-strategically-on-a-daily-basis

http://fieldresearch.msf.org/msf/bitstream/10144/84230/1/Qualitative%20research%20methodology.pdf

http://fieldresearch.msf.org/msf/bitstream/10144/84230/1/Qualitative%20research%20methodology.pdf

http://docushare.usc.edu/docushare/dsweb/Get/Document-8775/

http://ssi.sagepub.com/content/45/4/483.short?rss=1&ssource=mfr

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Donovan, R.M. 2013. Connecting business strategy and operations. R. Michael

Donovan & Co., Inc.

Gopinath, C. & Siciliano, J. 2013. Strategize! Experiential exercises in strategic

management. Cengage Learning.

Hough, J., Thompson, A.A., Strickland, A.J. & Gamble, J.E., 2011. Crafting and

executing strategy. 2nd ed. New York: McGraw-Hill.

Hume, C. & Hume, M. 2008. The strategic role of knowledge management in non-

profit organisations. International Journal of Nonprofit and Voluntary Sector

Marketing. [e-journal] 13, pp.129-140. [Online] Available through: Nelson

Mandela Metropolitan University Library website <http://nmmu.ac.za/library>

Kaplan, R.S. & Norton, D.P. 2008. The execution premium: Linking strategy to

operations for competitive advantage. [e-book] Boston: Harvard Business

School Publishing. Available from: <http://books.google.co.za/books>

[Accessed 12 May 2014].

Porter, M.E. & Kramer, M.R. 2006. Strategy and Society: The link between

competitive advantage and corporate social responsibility. Harvard Business

Review.

Thompson, A.A., Strickland, A.J. & Gamble, J.E. 2005. Crafting and Executing

Strategy: The Quest for Competitive Advantage. 14th ed. New York: McGraw-

Hill.

The South African Department of Social Development, 2012.The National register of

Non-Profit Organisations (2011-2012). [Online]. Available from:

<http://www.dsd.gov.za> [Accessed 23 June 2014]

Van Buren, J.A. 2010. Strategic Planning in Non-profit Organisation – a Brief

Overview. Noonmark Non-profit Services. [Online]. Available from: <

http://www.uvm.edu/extension/community/buildingcapacity/pdfs/strategic_plan

ning_nonprofit_org.pdf> [Accessed 23 June 2014]

http://www.dsd.gov.za/

http://www.uvm.edu/extension/community/buildingcapacity/pdfs/strategic_planning_nonprofit_org.pdf

http://www.uvm.edu/extension/community/buildingcapacity/pdfs/strategic_planning_nonprofit_org.pdf

3

Waechter, S. 2011. Driving Strategic Planning: A Non-profit Executive’s Guide.

[Online]. Available from: < http://www.event360.com/blog/why-nonprofit-

strategic-planning-is-important/> [Accessed 25 June 2014].

Wilson, J. 2010. Essentials of business research: A guide to doing your research

project. London: Sage.

http://www.event360.com/blog/why-nonprofit-strategic-planning-is-important/

http://www.event360.com/blog/why-nonprofit-strategic-planning-is-important/

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LIST OF ANNEXURES

ANNEXURE A: Research Questionnaire Covering Letter

Dear Respondent

I am studying towards my MBA (Masters in Business Administration) degree at the Nelson

Mandela Metropolitan University Business School. I am conducting research on factors

influencing the successful formulation and implementation of strategy in Non-profit

Organisations (NPOs) in the Nelson Mandela Metropole. I believe that my study will make

an important contribution to the success of NPOs and the development of communities.

You are part of our selected sample of respondents whose views I seek on the above-

mentioned matter. I would therefore appreciate it if you could answer a few questions. It

should not take more than thirty minutes of your time and we want to thank you in advance

for your co-operation.

There are no correct or incorrect answers. Please answer the questions as accurately as

possible. For each statement, tick yes or no. Please tick only one answer for each

statement and answer all questions. Please note that there are also questions that

require you to write down your views on certain aspects of strategy within your organisation.

We guarantee your complete confidentiality and anonymity.

Please also note that your participation in this study is entirely voluntary and that

you have the right to withdraw from the study at any stage. Your participation in the

study therefore indicates verbal consent.

Thank you very much,

Lauren Butler

To verify the authenticity of the study, please contact Prof JJ Pieterse at 041-5043774 and

[email protected].

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ANNEXURE B: MEASURING INSTRUMENTS

SECTION A: Please respond to each statement by marking the appropriate response with

an X.

No. Statement

1 The organisation has a strategic vision

Yes No

2 The organisation’s vision provides a broad overview of where the business is going

Yes No

3 The organisation’s vision communicates management’s goals

Yes No

4 The organisation’s vision directs the energy of the staff in one direction

Yes No

5 The organisation’s vision is continuously and effectively communicated down the hierarchy to all

levels of staff

Yes No

6 The organisation has a mission statement

Yes No

7 The organisation’s mission statement outlines the organisation’s present business

Yes No

8 The organisation’s mission statement describes “who we are, what we do, and why we are here”

Yes No

9 The organisation has a statement of values to guide members’ way of work

Yes No

10 Management has set out organisational objectives

Yes No

11 The organisational objectives convert the strategic vision into specific performance targets

Yes No

12 Performance targets are set for each of the organisation’s services

Yes No

13 The organisational objectives consists of financial and strategic objectives

Yes No

14 The organisational objectives are measurable

Yes No

15 The organisation’s objectives contain a deadline for achievement

Yes No

16 The objectives contain both long-term and short-term performance targets

Yes No

17 When trade-offs have to be made between achieving long-term and short-term objectives, long-

term objectives take precedence

Yes No

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SECTION B

1 Does the organisation have a strategic plan?

Answer:

……………………………………………………………………………………………………………………………

……………………………………………………………………………………………………………………………

……………………………………………………………………………………………………………………………

……………………………………………………………………………………………………………………………

2 What factors were considered whilst crafting the organisational strategy? (Was a SWOT analysis

conducted?)

Answer:

……………………………………………………………………………………………………………………………

……………………………………………………………………………………………………………………………

……………………………………………………………………………………………………………………………

……………………………………………………………………………………………………………………………

3 Who was involved in crafting the strategy?

Answer:

……………………………………………………………………………………………………………………………

……………………………………………………………………………………………………………………………

……………………………………………………………………………………………………………………………

……………………………………………………………………………………………………………………………

4 How often does the strategy get evaluated and revised? What factors are considered when revising the

strategy?

Answer:

……………………………………………………………………………………………………………………………

……………………………………………………………………………………………………………………………

……………………………………………………………………………………………………………………………

……………………………………………………………………………………………………………………………

5 How do you communicate the strategy to staff?

Answer:

……………………………………………………………………………………………………………………………

……………………………………………………………………………………………………………………………

…………………………………………………………………………………………….………………………………

……………………………………………………………………………………………………………………………

3

6 How do you measure if this communication plan is effective?

Answer:

……………………………………………………………………………………………………………………………

……………………………………………………………………………………………………………………………

………………………………………………………………………………………………………….…………………

……………………………………………………………………………………………………………………………

7 What factors do you take into consideration when making decisions for/about the organisation?

Answer:

……………………………………………………………………………………………………………………………

……………………………………………………………………………………………………………………………

……………………………………………………………………………………………………………………………

……………………………………………………………………………………………………………………………

8 Do you consider the organisation’s strategy to be effective? If so, what contributes towards its success? If

not, what hinders its success?

Answer:

……………………………………………………………………………………………………………………………

……………………………………………………………………………………………………..………………………

……………………………………………………………………………………………………………………………

……………………………………………………………………………………………………………….….…………

……………………………………………………………………………………………………………………………

……………………………………………………………………………………………………..………………………

9 If given the resources, what would you do differently?

Answer:

……………………………………………………………………………………………………………………………

……………………………………………………………………………………………………..………………………

……………………………………………………………………………………………………………………………

……………………………………………………………………………………………………………….….…………

……………………………………………………………………………………………………………………………

……………………………………………………………………………………………………..………………………

Additional comments/questions:

……………………………………………………………………………………………………………………………

4

……………………………………………………………………………………………………..………………………

……………………………………………………………………………………………………………………………

……………………………………………………………………………………………………………….….…………

……………………………………………………………………………………………………………………………

SECTION C: BIOGRAPHICAL DATA

Please make a cross (X) or enter the relevant information in the blocks provided.

GENDER: Male Female

AGE GROUP: 20 – 29 30 – 39 40 – 49 50 – 59 60+

Please indicate your highest educational qualification:

How long have you been working for the organisation?

0-4 5 – 9 10 – 14 15 – 19 20 +

How many years has the organisation been in existence?

0-4 5 – 9 10 – 14 15 – 19 20 +

How many staff members are working for the organisation (paid and/or voluntary)?

0-4 5 – 9 10 – 14 15 – 19 20 +

What social sector does the organisation serve? (Tick every applicable block)

Children

Services

Youth Services Family Services Disability Services Combination

THANK YOU VERY MUCH FOR YOUR KIND CO-OPERATION!

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ANNEXURE C: Ethics clearance FORM E

ETHICS CLEARANCE FOR TREATISES/DISSERTATIONS/THESES

Please type or complete in black ink

FACULTY: Business

SCHOOL/DEPARTMENT: NMMU Business School

I, Prof Pieterse, J.J; the supervisor for Mrs Butler, L; 20673657, a candidate for the

degree of Masters Business Administration with a treatise/dissertation/thesis entitled:

“The identification of problems with strategy formulation and implementation in non-

profit organisation in the Nelson Mandela Metropolitan” considered the following

ethics criteria:

YES NO

1. Is there any risk of harm, embarrassment of offence, however slight or temporary, to the participant, third parties or to the communities at large?

x

2. Is the study based on a research population defined as ‘vulnerable’ in terms of age, physical characteristics and/or disease status?

x

2.1 Are subjects/participants/respondents of your study:

(a) Children under the age of 18? x

(b) NMMU staff? x

(c) NMMU students? x

(d) The elderly/persons over the age of 60? x

(e) A sample from an institution (e.g. hospital/school)? x

(f) Handicapped (e.g. mentally or physically)? x

3. Does the data that will be collected require consent of an institutional authority for this study? (An institutional authority refers to an organisation that is established by government to protect vulnerable people)

x

3.1 Are you intending to access participant data from an existing, stored repository (e.g. school, institutional or university records)?

x

2

4. Will the participant’s privacy, anonymity or confidentiality be compromised?

x

4.1 Are you administering a questionnaire/survey that:

(a) Collects sensitive/identifiable data from participants? x

(b) Does not guarantee the anonymity of the participant? x

(c) Does not guarantee the confidentiality of the participant and the data? x

(d) Will offer an incentive to respondents to participate, i.e. a lucky draw or any other prize?

x

(e) Will create doubt whether sample control measures are in place? x

(f) Will be distributed electronically via email (and requesting an email response)? Note:

If your questionnaire DOES NOT request respondents’ identification, is distributed electronically and you request respondents to return it manually (print out and deliver/mail); AND respondent anonymity can be guaranteed, your answer will be NO.

If your questionnaire DOES NOT request respondents’ identification, is distributed via an email link and works through a web response system (e.g. the university survey system); AND respondent anonymity can be guaranteed, your answer will be NO.

x

Please note that if ANY of the questions above have been answered in the affirmative (YES) the student will need to complete the full ethics clearance form (REC-H application) and submit it with the relevant documentation to the Faculty RECH (Ethics) representative.

Documents

STRATEGY FORMULATION AND IMPLEMENTATION IN NON- … · 2018. 1. 8. · STRATEGY FORMULATION AND IMPLEMENTATION IN NON-PROFIT ORGANISATIONS IN THE NELSON MANDELA MUNICIPALITY BY LAUREN