Strategic planning; benefits for a nonprofit organization: research for the institute for socio-economic development initiatives

Have, Sander ten (2012) Strategic planning; benefits for a nonprofit organization: research for the institute for socio-economic development initiatives.

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Abstract:This report is the result of my bachelor assignment. The goal of this research is to advice the institute for socio-economic development initiatives how to improve their strategic position for future sustainability. The objective of this research is to get insight in the current ISFI’s strategic position in order to identify possible strategic choices to resolve the mismatch between income generation and development initiatives. Currently the ISFI is spending most of its time on consultancy work to generate income but it lacks time and money to effectively implement its core business; executing development initiatives. Therefore, the research question is “what changes in their strategic position can the ISFI apply to balance their income generation and development initiatives?” The ISFI’s goal is to set up twice as much development initiatives compared to the current situation. Several methods are used to analyze how the ISFI’s current strategic position has to change. The execution of the current ISFI strategy and internal/external factors shaping this strategy are described by interviews with the ISFI’s CEO (Ms. Joy Cabo). These interviews are focused on the strategic position (including the internal and external environment) and strategic choices of the ISFI. Also including observations made during these interviews. Further, testing the desired state and possibilities to growth are measured by targeting eighteen of the ISFI’s clients using a questionnaire and by observations and conversations. The questionnaire consists of some general questions (e.g. years in business, education level, number of employees), questions about the use of technology, access to finance, barriers to growth and the demand for possible services supplied by the ISFI. The interviews can be used to describe the ISFI’s current strengths, weaknesses, opportunities and threats. First of all, the ISFI’s main strengths are a high level of knowledge available, its location near the university and its network with university professors as consultants, along with the company’s age, experience and reputation. However, the ISFI’s weaknesses include a lacking future strategy and have no clear goals to accomplish. Further, companies receive unneeded support due to push system. Also, the ISFI’s supporting function is financially dependent on money generated by consultancy work; they tend to spend most of the time into consultancy work. There are also opportunities for the ISFI. The results from the questionnaire show that clients are willing to pay for the ISFI’s support. Another opportunity for the ISFI is the work with students from Ateneo University; as the ISFI is located on the University campus and has good connections there. Finally, there are threats the ISFI could face. The lack of knowledge on their client´s needs is such a threat. Further, the limited funds available restrict the ISFI to extend their business and help more entrepreneurs. Finally, substitute products such as the management books and free government support are a good substitute for the entrepreneurs in need of support. These factors were analyzed in a confrontation matrix to generate three possible strategic choices. 1) Continuation, this strategic option is to continue business as it is today. As this option does not require any investments, it can be considered the most risk-free option on the short term. 2) Diversification, seeks to increase profitability through greater sales volume obtained from new products and new markets for services the ISFI offer. A possibility would be to use students from Ateneo University. Those students could help to overcome barriers to growth for MSMEs. 3) Product development develops the current ISFI service to support MSEME into a commercial service. This means that the clients have to pay a participation fee for training delivered by the ISFI. The ISFI has to decide what strategic option is the best suitable for their business. As indicated by this research, both diversification and product development could be applied. In terms of acceptability, the diversification option is the most favorable. Although the actual improvement when using students requires more investigation, the associated risks in terms of costs are lower in comparison to the product development option. The product development option requires a complete change in the organizations way of working. Thus this incorporates more risk but also a possible higher performance.
Item Type:Essay (Bachelor)
Faculty:BMS: Behavioural, Management and Social Sciences
Subject:85 business administration, organizational science
Programme:Industrial Engineering and Management BSc (56994)
Link to this item:http://purl.utwente.nl/essays/61680
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