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CHAPTER 2: THEORETICAL BACKGROUND
Introduction
This chapter presents the theoretical background to the study by discussing the history of strategic planning, the meaning of strategic planning and the differences between strategic planning in the business sector and the NGO sector; and performance in NGOs.The chapter also discusses the roles and responsibilities played by different stakeholders to the strategic planning process.
History of strategic planning
The word strategy has its origin in the military (Blackerby, 1994: 23). By the mid – 18th century, strategy was a word used by military officers to make a distinction between tactics – the conduct of battle – and all the preparations that took place before the battle. Strategy referred to the preparations (Smillie and Hailey, 2001: 92). It was believed that proper preparations ensured success on the battleground.
Transferring strategic planning to organizations
The first attempt to formalize how organizations can make preparations to deal with the future was attempted by Fayol in 1916 (Robson, 1997: 13). In the early 1920’s, Harvard Business School developed the Harvard Policy Model, one of the first strategic planning methodologies for private businesses. This model defined ‘strategy’ as a pattern of purposes and policies defining the company and its business (Blackerby, 1994: 24).It was however not until the 1950’s and 60’s when the expansion of both organization and business opportunities demanded a systematic way of looking at the future. It was around this time that the concept of strategy first appeared in organizational theory as a military metaphor (Hatch, 1997: 101). This time strategic planning focus shifted away from organizational policy and structure toward the management of risk, industry growth,and market share (Blackerby, 1994: 25). This led to the birth of long-range planning.The purpose of long-range planning was to define the organization’s objectives and allocate resources to achieve them. A key activity was to identify gaps between the ‘envisioned’ organization and the current organization. It however became immediately known that extrapolating trends into forecasts was not always accurate, and that the growth experienced in the 1950’s and 60’s could be interrupted and that new opportunities that no one had foreseen were possible. It therefore became accepted that the ‘planning gap’ was not the most crucial aspect of strategy formulation (Robson, 1997:13).
From long range planning to strategic planning
In the 1970’s strategic planning as a term replaced long-range planning with the recognition that trends have the potential for change. Strategic planning did not incorporate the assumption that adequate growth could be assured. Strategic planning was much more concerned with market competition since the more limited expansion of markets and products could not support the growth aspirations of all the industry players. Robson (1997: 13) however noted that despite the differences between long-range planning and strategic planning, they were both based on three key assumptions:
• Environmental forecasting is sufficiently accurate to predict the future.
• Strategy formulation is a rational process; objectives can be formulated and alternatives can be identified and optimized.
• The behavioral dimension can be ignored.
But, forecasting, especially long-term, is inevitably inaccurate. Important factors such as product life cycles cannot be predicted and behavioral and cultural aspects are hugely significant to the formulation and implementation of strategy.In the 1970s therefore, most people came to see strategic plans as irrelevant and most organizational critical decisions were made outside the strategic plans. This failure led to uncertainty analysis or the discovery of competitive rules and principles through industry analysis and scenario management, contingency planning. These helped the managers to understand uncertainty. The challenge was to identify which of those uncertainties will be critical to one’s particular organization. Stonehouse and Pemberton (2002: 3 -5) observed that in the 1980’s the dominant paradigm was that of competitive positioning based on the work of Porter (1980) and centering on the premise that a business positions itself within its competitive environment with the aim of generating superior performance. In the 1990’s, the resource or core competences based school of strategic management gained momentum suggesting that competitive advantage arise from an organization’s internally developed core competencies. This approach emphasizes that competitive advantage depends upon the behavior of the organization rather than its external competitive environment.
Declaration
Acknowledgements
TABLE OF CONTENTS
LIST OF TABLES
GLOSSARY
ABSTRACT
CHAPTER 1: INTRODUCTION
1.1 Introduction
1.2 A History of Development NGOs
1.3 Origins of the NGO sector in Malawi
1.4 Why strategic planning for local NGOs
1.5 Background to the country
1.6 Problem Statement
1.7 Objectives
1.8 Importance of the study
1.9 Limitations and the scope of the study
1.10 Research Process
1.10.1 Research techniques
1.10.1.1 Position of the researcher
1.10.1.2 Sampling
1.10.1.3 Public Affairs Committee (PAC)
1.10.1.4 Center for Youths and Children Affairs (CEYCA)
1.10.1.5 Malawi Human Rights Resource Center (MHRRC)
1.10.1.6 Malawi network of People Living with HIV and AIDS (MANET)
1.10.1.7 Active Youths in Social Enhancement (AYISE)
1.10.2 Literature review
1.10.3 Data collection and analysis
1.11 Data collection and analysis models
1.11.1 Levels of complexity model
1.11.2 The stages of development model
1.11.3 Triangulation
1.11.4 Clarification of terms
1.12 Chapter layout
1.13 Conclusion
CHAPTER 2: THEORETICAL BACKGROUND
2.1 Introduction
2.2 History of strategic planning
2.2.1 Transferring strategic planning to organizations
2.2.2 From long range planning to strategic planning
2.2.3 From strategic planning to organizational learning
2.3 Defining strategic planning
2.3.1 Definitions for strategic planning
2.3.2 Strategic planning and organizational learning
2.3.3 Limitations of strategic planning
2.4 Levels of strategy
2.4.1 Corporate strategy
2.4.2 Business strategy
2.4.3 Functional strategy
2.5 Strategic planning and Organization Development (OD)
2.6 Differences between NGOs and business organizations
2.7 Performance in NGOs
2.8 Challenges facing NGOs
2.9 NGO sustainability, legitimacy and relevance
2.9.1 Relevance
2.9.2 Legitimacy
2.9.3 Sustainability
2.10 Players in strategic planning
2.10.1 The role of the board in strategic planning
2.10.2 The role of management in strategic planning
2.10.3 The role of donors in strategic planning
2.10.4 The role of consultants in strategic planning
2.10.5 The role of communities in strategic planning
2.11 Conclusion
CHAPTER 3: THE PROCESS OF STRATEGIC PLANNING
3.1 Introduction
3.2 Preparing for strategic planning
3.2.1 Recognizing the need for strategic planning
3.2.2 Team to manage the strategic planning process
3.2.3 Contracting
3.2.4 Conducting an organizational assessment
3.2.5 Strategic planning in organizations going through the process for the first time and those that are going through the process for the second or more times
3.3 Formulating strategic plans
3.3.1 Creating an ideal picture of the NGO
3.3.2 Vision and mission crafting
3.3.3 Environmental scanning
3.3.4 Developing goals, strategic choices and strategies
3.3.5 Operational planning
3.4 Implementing strategic plans
3.4.1 Financial and other resources
3.4.2 Skills and competencies
3.4.3. Policies, systems and procedures
3.4.4 Structure
3.4.5. Managing stakeholders
3.4.6. Culture, values and beliefs
3.4.7. Leadership
3.5 Monitoring and evaluating strategic plans
3.5.1 The purpose of monitoring and evaluation of the strategic planning process
3.5.2 Challenges of monitoring and evaluation of the strategic planning process
3.6 Assumptions in strategic planning literature and their implications on strategic planning practice in local NGOs
3.7 Conclusion
CHAPTER 4: THE NGO INSTITUTIONAL CONTEXT
4.1 Introduction
4.2 Vision 2020, the Malawi Poverty Reduction Strategy (MPRS) and the Malawi Growth and Development Strategy (MGDS)
4.3 The Malawi Poverty Reduction Strategy (MPRS)
4.4 Review of the MPRSP
4.4.1 Pillar 1: Sustainable Pro-poor Economic Growth
4.4.2 Pillar 2: Human Capital Development
4.4.3 Pillar 3: Improving the quality of life of the most vulnerable
4.4.4 Pillar 4: Good Governance
4.5 Cross-cutting issues
4.6 The Malawi Growth and Development Strategy
4.7 International trends shaping NGOs
4.7.1 Poverty Reduction Strategies Papers (PRSPs)
4.7.1.1 Principles of PRSPs
4.7.1.2 Performance of PRSPs
4.7.1.3 Implications of PRSPs for NGOs
4.7.2 The Millennium Development Goals (MDGs)
4.7.2.1 Motivations for MDGs
4.7.2.2 Performance of MDGs
4.7.2.3 Implications of MDGs for NGOs
4.7.3 Sector Wide Approaches (SWAPs)
4.7.3.1 Motivations for SWAPS
4.7.3.2 Performance of SWAPs
4.7.3.3 Implications of SWAPs on NGOs
4.7.4 Rights Based Approach (RBA) to Development
4.7.4.1 Motivations for RBA
4.7.4.2 Performance of RBA
4.7.4.3 Implications of RBA for NGOs
4.8 Summary on the frameworks
4.9 Conclusion
CHAPTER 5: THE NGO SECTOR IN MALAWI
5.1 Introduction
5.2 The NGO landscape in Malawi
5.2.1 Human Rights NGOs
5.2.2 HIV and AIDS NGOs
5.2.3 NGO networks
5.3 Evolution of the local NGO sector in Malawi
5.4 NGOs relationship with government
5.5 NGO relationships with communities
5.6 Capacity Building Context
5.6.1 The meaning of capacity building
5.6.2 Capacity building needs for local NGOs in Malawi
5.6.2.1 The nature of capacity building needs
5.6.2.2 Capacity building competencies needed by service providers
5.6.2.3 The appropriateness of different capacity building approaches
5.6.2.4 The ownership and effectiveness of capacity building programs
5.6.3 Capacity building approaches
5.7 Conclusion
CHAPTER 6: STRATEGIC PLANNING IN THE CASE STUDIES
6.1 Introduction
6.2 Implementation of the strategic plans
6.3 The strategic plans’ contribution to the case studies’ legitimacy, relevance and sustainability
6.4 Reasons for calling for the strategic planning process
6.5 The strategic planning process
6.6 The strategic planning process and the levels of complexity model
6.7 Conclusion
CHAPTER 7: PLAYERS IN THE STRATEGIC PLANNING PROCESS
7.1 Introduction
7.2 The board
7.3 Management
7.4 Donors
7.5 Consultants
7.6 Communities
7.7 Conclusion
CHAPTER 8: SUMMARY, CONCLUSIONS AND RECOMMENDATIONS
8.1 Introduction
8.2 Summaries
8.3 Conclusions
8.4 Conclusion
