Strategic Management: A Stakeholder-Based Approach

Over the last decade many nonprofit organizations (NPOs) have felt increasing pressure to become more performance oriented (Gray et al., 1998). A number of reasons, including the increased competition for funds, financial constraints, and more demanding stakeholders, have forced NPOs to think about evaluating their existing programs and developing new strategic orientations. That is the main purpose of strategic management. It deals with clarifying the mission of an organization, with setting clear long-term objectives, and with formulating steps to achieve them (Harrison et al., 1995). It seems to be obvious that NPOs should use the tools developed for business organizations to improve and evaluate their performance, but there are a number of difficulties in simply transferring management instruments from the for-profit sector to the nonprofit sector.

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