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Relationships Between Organizational Characteristics And Strategic Planning Processes In Nonprofit Organizations.



Approximately 90 million Americans volunteer services to the nearly one million organizations which comprise the nonprofit A corporation or an association that conducts business for the benefit of the general public without shareholders and without a profit motive.

Nonprofits are also called not-for-profit corporations. Nonprofit corporations are created according to state law.
 sector. With charitable contributions charitable contribution n. in taxation, a contribution to an organization which is officially created for charitable, religious, educational, scientific, artistic, literary, or other good works.  totaling around $143 billion, the nonprofit sector contributes an estimated $250 billion to the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area.  economy and has evolved as an increasingly important influence on contemporary America (Economist, 1998; Business Week, 1995). Given the size and impact of the nonprofit sector in our society, the level of managerial research focusing upon this sector is inadequate (cf. Kearns and Scarpino, 1996).

Two decades ago, Hofer (1976) and Wortman (1979), foreseeing that major environmental shifts would impact the continued success of many nonprofit organizations Nonprofit Organization

An association that is given tax-free status. Donations to a non-profit organization are often tax deductible as well.

Notes:
Examples of non-profit organizations are charities, hospitals and schools.
, lamented la·ment·ed  
adj.
Mourned for: our late lamented president.



la·mented·ly adv.
 the lack of strategic management studies in such organizations. As predicted, the nonprofit sector has experienced a fundamental shift in environmental conditions (cf. Stubbs, 1998; Menefee, 1997; Wiesendanger, 1994; Oliver, 1991). Underlying this shift has been an increased demand for nonprofit services (e.g., homelessness, substance/domestic abuse) coupled with decreased support (e.g., less government subsidy subsidy, financial assistance granted by a government or philanthropic foundation to a person or association for the purpose of promoting an enterprise considered beneficial to the public welfare. , tax law changes, underemployment un·der·em·ployed  
adj.
1. Employed only part-time when one needs and desires full-time employment.

2. Inadequately employed, especially employed at a low-paying job that requires less skill or training than one possesses.
, donor skepticism). These evolving conditions have prompted increased attention to nonprofit management practice (e.g., American Heart Association American Heart Association (AHA),
n.pr a national voluntary health agency that has the goal of increasing public and medical awareness of cardiovascular diseases and stroke, and thereby reducing the number of associated deaths and disabilities.
, American Association of University Women ''This article or section is being rewritten at The American Association of University Women (AAUW) advances equity for women and girls through advocacy, education, and research. , The Dallas Symphony, Dropping the Cow, National Private Truck Council (Wiesendanger, 1994)) and nonprofit management research (Kearns and Scarpino, 1996; Stone and Crittenden, 1994).

The objective of this study is to examine the domain of strategic planning Strategic planning is an organization's process of defining its strategy, or direction, and making decisions on allocating its resources to pursue this strategy, including its capital and people.  processes as they exist in select nonprofit organizations and to determine any relationships that exist between organizational characteristics and strategic planning processes. As noted by Kearns and Scarpino (1996), there is an inadequate understanding of internal and external influences on the strategic planning process in nonprofit organizations. Such a delineation of influences should assist in the development of contingency theories Contingency theory refers to any of a number of management theories. Several contingency approaches were developed concurrently in the late 1960s.

They suggested that previous theories such as Weber's bureaucracy and Taylor's scientific management had failed because they
 that take into account differences in the private and nonprofit sectors (cf. Goold, 1997; Bryson, 1988; Steiner, 1969).

The remainder of this article is organized as follows. The first section discusses the strategic planning literature as it relates to the nonprofit sector. The second section describes the sample and methodology undertaken in the current research. The results of two separate factor analyses Verb 1. factor analyse - to perform a factor analysis of correlational data
factor analyze

analyse, analyze - break down into components or essential features; "analyze today's financial market"
 and the canonical correlation In statistics, canonical correlation analysis, introduced by Harold Hotelling, is a way of making sense of cross-covariance matrices. Definition
Given two column vectors and
 analysis of the relationship between organizational characteristics and strategic planning elements are discussed in the third section. We conclude with managerial implications and future nonprofit research directions.

Strategic Planning in Nonprofit Organizations

Strategic planning attempts to systematize sys·tem·a·tize  
tr.v. sys·tem·a·tized, sys·tem·a·tiz·ing, sys·tem·a·tiz·es
To formulate into or reduce to a system: "The aim of science is surely to amass and systematize knowledge" 
 the processes that enable an organization to attain its goals and objectives. There are five general steps in the strategic planning process: (1) goal/objective setting, (2) situation analysis, (3) alternative consideration and selection, (4) implementation, and (5) evaluation. Bryson (1988) suggested that the nature of organizations in the nonprofit or public sector prevents exact duplication duplication /du·pli·ca·tion/ (doo-pli-ka´shun)
1. the act or process of doubling, or the state of being doubled.

2.
 of the private sector strategic planning process. More numerous stakeholders Stakeholders

All parties that have an interest, financial or otherwise, in a firm-stockholders, creditors, bondholders, employees, customers, management, the community, and the government.
, conflicting criteria for performance assessment, public accountability, and the social service nature of nonprofit organizations tend to make replication In database management, the ability to keep distributed databases synchronized by routinely copying the entire database or subsets of the database to other servers in the network.

There are various replication methods.
 difficult between sectors (cf. Chlala et al., 1995).

While research in the nonprofit sector has increased over the past two decades, two comprehensive reviews of strategic planning in nonprofit organizations have identified noticeable gaps in the literature. Stone and Crittenden (1994) noted five major areas that warrant increased attention: (1) strategy formulation formulation /for·mu·la·tion/ (for?mu-la´shun) the act or product of formulating.

American Law Institute Formulation
, (2) strategy content, (3) strategy implementation, (4) performance, and (5) governance. Additionally, Kearns and Scarpino (1996) suggested that research attention should focus on: (1) the independent variable, (2) context and process, and (3) the dependent variable.

Regarding the strategy activities pursued (i.e., strategy content) and the need for better definition and measurement of the independent variable, Crittenden and Crittenden (1997) demonstrated that there are significant and discernible dis·cern·i·ble  
adj.
Perceptible, as by the faculty of vision or the intellect. See Synonyms at perceptible.



dis·cerni·bly adv.
 differences in the levels of planning emphasis among various groups of nonprofit organizations and that such differences are related to the use of strategic planning tools.

Exploring the dependent variable of performance, preliminary research by Crittenden et al. (1994) drew on Hatten's (1982) resource requirements The components of a system that are required by software or hardware. It refers to resources that have finite limits such as memory and disk. In a PC, it may also refer to the resources required to install a new peripheral device, namely IRQs, DMA channels, I/O addresses and memory  and environmental influences research. The authors derived and examined four measures of nonprofit performance: (1) administrator satisfaction, (2) volunteer/member satisfaction, (3) donor satisfaction, and (4) change in service/activity/product offerings.

Regarding context and process, previous studies have indicated that organizational characteristics exert influence in the use of strategic planning methods in nonprofit organizations. Webster Webster, town (1990 pop. 16,196), Worcester co., S Mass., near the Conn. line; settled c.1713, set off from Dudley and Oxford and inc. 1832. The chief manufactures are footwear, fabrics, and textiles.  and Wylie (1988) and Wolch and Rocha (1993) found that pressure from an external source (e.g., parent organization, major funding source) played a key role in the use of strategic planning. Several researchers have examined organizational variables such as size (staff and membership), age, budget/resources, degree of staff professionalism, and member participation as they relate to strategic planning process. For example, in their study of strategic planning in churches, Odom and Boxx (1988) found planning sophistication so·phis·ti·cate  
v. so·phis·ti·cat·ed, so·phis·ti·cat·ing, so·phis·ti·cates

v.tr.
1. To cause to become less natural, especially to make less naive and more worldly.

2.
 to be positively related to size (measured by attendance, dollar contributions, new membership) and growth (i.e., large and growing churches tended to be more formal planners). Webster and Wylie (1988), using an organization's budget as the size criterion, found that large organizations developed strate gic plans nearly twice as often as small and medium-sized organizations. Dart dart

see blow dart.


dart gun
see blow dart.
 et al. (1996) suggested that the age of the organization is an important classification variable in voluntary organizations. Stone (1989) reported a relationship between the use of plans and age/budget size. She found that planners were older organizations with fairly large budgets, while nonplanners were young organizations with small budgets. Wolch and Rocha (1993) reported a positive relationship between the complexity of the planning process and organizational variables such as staff size, budget, and degree of staff professionalism. However, Webster and Wylie's (1988) study suggested that membership participation detracts from the strategic planning process.

Board involvement also has been of interest in the nonprofit, strategic planning context. Unfortunately, the relationship between board involvement and strategic planning is unclear. Findings by Unterman and Davis (1982) suggest that a more active, better trained board fosters a stronger commitment to strategic planning. However, findings by Jenster and Overstreet (1990) and Siciliano Si`ci`li`a´no

n. 1. A Sicilian dance, resembling the pastorale, set to a rather slow and graceful melody in 12-8 or 6-8 measure; also, the music to the dance.
 (1997) suggest that a strong board may not be a catalyst for strategic planning.

As early as the 1950s, authors have suggested that the activities of nonprofit organizations provide a distinguishing organizational characteristic that can be associated with particular strategic planning processes. Gordon and Babchuk (1959) distinguished between two types of nonprofit organizations based on their activities: (1) instrumental and (2) expressive. Instrumental nonprofit organizations are described as organizations engaged in activities that affect persons other than group members. The group's activities are viewed as a means of accomplishing external, long-term goals Long-term goals

Financial goals expected to be accomplished in five years or longer.
. Expressive organizations are depicted de·pict  
tr.v. de·pict·ed, de·pict·ing, de·picts
1. To represent in a picture or sculpture.

2. To represent in words; describe. See Synonyms at represent.
 as involved in activities focused inward in·ward  
adj.
1. Located inside; inner.

2. Directed or moving toward the interior: an inward flow.

3.
 and represent ends in themselves. The implication is that instrumental organizations benefit more (than expressive organizations) from a formal strategic planning process due to the organization's external considerations and an emphasis on long-term goals.

It appears that strategic planning within nonprofit organizations may vary, depending upon a myriad of organizational characteristics. However, what research that has been done focuses upon the relationship between various organizational characteristics and strategic planning in general. The current research addresses the context and process issues of organizational characteristics and individual elements of strategic planning as they relate specifically to nonprofit organizations.

The following research questions are examined:

1. What organizational characteristics contribute to the distinctiveness of the nonprofit organization?

2. What are the elements of strategic planning as they relate specifically to nonprofit organizations?

3. Is there a relationship between the distinctive organizational characteristics of a nonprofit organization and elements of its strategic planning process?

Methodology

Traditionally, nonprofit management research has been limited to the single organization case study or studies involving organizations within the same national association (Stone and Crittenden, 1994). However, the still evolving knowledge concerning strategic planning behavior in nonprofit organizations suggested that a large multi-organizational study was more appropriate given the current objectives. Further, a large multi-organizational study allows for greater generalization gen·er·al·i·za·tion
n.
1. The act or an instance of generalizing.

2. A principle, a statement, or an idea having general application.
 of results, while reducing problems with sample error or sample bias.

The Survey Instrument

Guided by the traditional corporate planning model, a questionnaire was designed to gather information in several areas. Two major areas of examination were organizational characteristics and strategic planning processes. Several types of question formats were used to obtain measures regarding organizational characteristics. Dichotomous di·chot·o·mous  
adj.
1. Divided or dividing into two parts or classifications.

2. Characterized by dichotomy.



di·chot
 and partially close-ended questions were utilized to identify general organizational characteristics such as voluntary status, primary organizational function, organizational structure This article has no lead section.

To comply with Wikipedia's lead section guidelines, one should be written.
, and administrative assistance. Open-ended questions A closed-ended question is a form of question, which normally can be answered with a simple "yes/no" dichotomous question, a specific simple piece of information, or a selection from multiple choices (multiple-choice question), if one excludes such non-answer responses as dodging a  were used to gather size, organization age, and structural detail (e.g., number of directors, use of committees). Additionally, Jacoby and Babchuk (1963) developed a questionnaire to rate associations on both an instrumental and an expressive scale. This questionnaire was used as a guideline guideline Medtalk A series of recommendations by a body of experts in a particular discipline. See Cancer screening guidelines, Cardiac profile guidelines, Gatekeeper guidelines, Harvard guidelines, Transfusion guidelines.  in the development of Likert-scaled questions pertaining per·tain  
intr.v. per·tained, per·tain·ing, per·tains
1. To have reference; relate: evidence that pertains to the accident.

2.
 to instrumental and expressive dimensions.

Similarly, both dichotomous and close-ended questions were used to collect information concerning planning processes. The majority of the planning measures were derived through Likert-scaled statements. The scale was utilized to reflect the level of emphasis the organization placed on each strategic planning element.

Several steps were taken to ensure the validity and reliability of the survey instrument. An extensive literature review and synthesis of key elements found in company planning procedures formed the basis of the questionnaire. Then, several qualitative techniques were employed to refine the instrument before pre-testing. First, discussions were held with various volunteer leaders to help identify primary planning and organizational variables that appeared to exist in individual organizations and to amend any "business jargon jargon, pejorative term applied to speech or writing that is considered meaningless, unintelligible, or ugly. In one sense the term is applied to the special language of a profession, which may be unnecessarily complicated, e.g., "medical jargon. " which might be misunderstood mis·un·der·stood  
v.
Past tense and past participle of misunderstand.

adj.
1. Incorrectly understood or interpreted.

2.
 on the questionnaire. Second, two academicians familiar with the planning and organization literatures provided a content analysis of the questions to help ensure coverage. Finally, 11 volunteer leaders reviewed the revised questionnaire for readability read·a·ble  
adj.
1. Easily read; legible: a readable typeface.

2. Pleasurable or interesting to read: a readable story.
 and understandability.

The questionnaire was then submitted to a pretest pre·test  
n.
1.
a. A preliminary test administered to determine a student's baseline knowledge or preparedness for an educational experience or course of study.

b. A test taken for practice.

2.
 with a random sample of 10 organizations, after which another revision was submitted to 20 randomly selected organizations. To further assess the questionnaire's accuracy in discriminating dis·crim·i·nat·ing  
adj.
1.
a. Able to recognize or draw fine distinctions; perceptive.

b. Showing careful judgment or fine taste:
 among organizations, a simple five-question audit was administered by telephone.

In summary, these steps (i.e., literature search, unstructured interviews Unstructured Interviews are a method of interviews where questions can be changed or adapted to meet the respondent's intelligence, understanding or belief. Unlike a structured interview they do not offer a limited, pre-set range of answers for a respondent to choose, but instead , content analysis, pre-tests) provide a sound basis for the presumed validity and reliability of the survey instrument. (A copy of the survey instrument is available from the authors.)

The Sample

A directory of 11,300 nonprofit organizations was provided by a State Office of Voluntary Citizen Participation. Organizations included in the directory had been established to aid or maintain charitable activities serving the common welfare. They operated under state or federal charter and enjoyed privileges of tax exemption tax exemption, immunity from the requirement of paying taxes. Federal, state, and usually local law provide exemption from taxation for a wide variety of organizations, usually not-for-profit, such as churches, colleges, universities, health care providers, various . The directory was used to solicit a systematic random sample of nonprofit organizations. Systematic random sampling was used as it simplified the sampling procedure given the layout of the directory.

Based on pre-test response rates, a sample of 600 was selected to ensure an adequate number of responses for the valid use of the intended data reduction techniques and statistical measures. Preliminary contact was made by telephone with the top administrator of each of the selected organizations. This initial step in the data collection procedure was performed to verify the organization's mail address and to notify the administrator that the survey was being conducted under the auspices aus·pi·ces 1  
n.
Plural of auspex.


auspices
Noun, pl

under the auspices of with the support and approval of [Latin auspicium augury from birds]

Noun
 of a university.

After completion of the telephone notification to all organizations, standardized standardized

pertaining to data that have been submitted to standardization procedures.


standardized morbidity rate
see morbidity rate.

standardized mortality rate
see mortality rate.
 questionnaires were then mailed to the sample of 600. A follow-up mailing was sent two weeks after the initial mailing, resulting in a usable USable is a special idea contest to transfer US American ideas into practice in Germany. USable is initiated by the German Körber-Stiftung (foundation Körber). It is doted with 150,000 Euro and awarded every two years.  response rate of 52.8 percent. Time of response was utilized to control for nonresponse bias. Respondents In the context of marketing research, a representative sample drawn from a larger population of people from whom information is collected and used to develop or confirm marketing strategy.  were grouped according to according to
prep.
1. As stated or indicated by; on the authority of: according to historians.

2. In keeping with: according to instructions.

3.
 whether the response was after the initial questionnaire or after the follow-up mailing. Statistical testing found no significant differences between the two groups (p[less than]0.05).

The primary organizational functions, along with respective response rates, are presented in Table 1. While the response rate of most types of organizations was 50 percent or better, this rate dropped for organizations in the religious and other categories. However, the response rate of these groups (39.2% and 39.5%, respectively) was considered adequate relative to response rates in many for-profit planning studies.

Descriptive statistics descriptive statistics

see statistics.
 for the sample group are found in Table 2. Consistent with national data (Boris 1998), sample respondents are principally small, community-based entities with modest budgets and small net worth. In addition, fifty-three percent of the sampled organizations are headed by male directors and the majority of members in the typical organization are female.

Procedure for Analysis

As a first step in the analysis, frequency counts and univariate statistics were obtained for each of the variables in the questionnaire. These general statistics were useful in providing a descriptive overview of the respondents and organizational characteristics.

Exploratory factor analysis was used to separately reduce the organizational characteristics and strategic planning measures into their respective underlying factors. The primary objective was identification of the basic structuring of variables into meaningful subdimensions. The factor analysis procedure of the Statistical Analysis System (SAS (1) (SAS Institute Inc., Cary, NC, www.sas.com) A software company that specializes in data warehousing and decision support software based on the SAS System. Founded in 1976, SAS is one of the world's largest privately held software companies. See SAS System. ) was utilized with a principal components analysis and varimax rotation. The use of a principles components analysis helped ensure that a set of associated variables was a set of orthogonal At right angles. The term is used to describe electronic signals that appear at 90 degree angles to each other. It is also widely used to describe conditions that are contradictory, or opposite, rather than in parallel or in sync with each other.  linear combinations of the variables. The varimax rotation preserved the orthogonality orthogonality

In mathematics, a property synonymous with perpendicularity when applied to vectors but applicable more generally to functions. Two elements of an inner product space are orthogonal when their inner product—for vectors, the dot product (see
 of the identified factors. A factor loading of 0.45 or above was utilized in assessing the significance of factor loadings, with a Cronbach's alpha Cronbach's (alpha) has an important use as a measure of the reliability of a psychometric instrument. It was first named as alpha by Cronbach (1951), as he had intended to continue with further instruments.  calculated for each factor. For both factor analyses, the factor numbers (i.e., 1...n) indicate the relative order in which the factors were extracted. For example, factor one explains more variance than does any other factor and generally the amount of explained variance Explained variance is part of the variance of any residual that can be attributed to a specific condition (cause). The other part of variance is unexplained variance. The higher the explained variance relative to the total variance, the stronger the statistical measure used.  decreases with each successive factor.

Results

Thirteen factors were extracted from the original data on organizational characteristics. Ten factors were extracted from the original data in the factor analysis of strategic planning variables. Tables 3 and 4 show the results for the factor analyses of the organizations' characteristics and strategic planning elements, respectively. Each table presents: (1) name assigned to the factor, (2) statements that loaded significantly (0.45 or greater) on the factor, (3) factor loadings, (4) the calculated Cronbach alpha, and (5) the eigenvalue eigenvalue

In mathematical analysis, one of a set of discrete values of a parameter, k, in an equation of the form Lx = kx. Such characteristic equations are particularly useful in solving differential equations, integral equations, and systems of
.

Canonical correlation analysis was employed to examine the multiple relationships existing between the sets of organizational characteristics and strategic planning elements. The mean summate scores developed for each of the organizational and strategic planning factors were utilized as the variable input to examine the relationships existing between the two sets of variables. Ten canonical The standard or authoritative method. The term comes from "canon," which is the law or rules of the church. See canonical name and canonical synthesis.

canonical - (Historically, "according to religious law")

1. A standard way of writing a formula.
 functions were computed in the canonical analysis This article or section may be confusing or unclear for some readers.
Please [improve the article] or discuss this issue on the talk page.
 of the organizational characteristics and strategic planning elements. Table 5 presents the findings of the analysis. Four of the functions were found to be significant at the 0.05 level.

Discussion of Results

To maintain clarity, we separately discuss the findings from each of the steps of the analysis. First, we discuss the results of the factor analyses of organizational characteristics and strategic planning variables. Then, we discuss the results of the canonical correlation analysis.

Organizational Characteristics

Thirteen factors were identified as major descriptive characteristics of nonprofit organizations: (1) paid administration, (2) organizational membership, (3) gender, (4) member age, (5) organizational maturity, (6) board of directors, (7) expressive youth, (8) funding, (9) instrumental, (10) dues funded, (11) education, (12) foundation funded, and (13) bureaucratic bu·reau·crat  
n.
1. An official of a bureaucracy.

2. An official who is rigidly devoted to the details of administrative procedure.



bu
 size. Each of the factors is supported by prior theory, managerial usefulness, and statistical criteria. Included in Table 3 are the underlying constructs for each of the 13 organizational characteristics.

While the scale was developed to facilitate a better understanding of the relationship between organizational characteristics and strategic planning, the scale does provide an interesting perspective on nonprofit organizations. Though scale items such as paid administration, instrumental tendencies, education of top administrator, and foundation funded serve to validate To prove something to be sound or logical. Also to certify conformance to a standard. Contrast with "verify," which means to prove something to be correct.

For example, data entry validity checking determines whether the data make sense (numbers fall within a range, numeric data
 these characteristics as distinguishing organizational descriptors of nonprofit organizations, additional interesting relationships were suggested within the organizational characteristics scale construction:

* Organizational Membership--may indicate an important relationship between membership size and organizational structure (e.g., a greater reliance on committees and voluntary administrators with increases in the number of female members, volunteer members, and/or members).

* Gender-indicates a positive relationship between the number of active female volunteers and the likelihood of a female top administrator, and a negative relationship between each of these factors and administrative experience in profit-seeking firms. (These two relationships are not surprising given that women comprise 70-80 percent of the nonprofit workforce in the United States, while only comprising around 50 percent of the for-profit U.S. workforce (Mirvis, 1992; Preston, 1990).)

* Member Age--suggests that the age of an organization's membership may be reflected in the age of its administrator, as well as a relative incompatibility The inability of a Husband and Wife to cohabit in a marital relationship.


incompatibility n. the state of a marriage in which the spouses no longer have the mutual desire to live together and/or stay married, and is thus a ground for divorce
 between members of the two represented age groups (2 0-39 years and [greater than] 60 years).

* Organizational Maturity--suggests that older organizations (both local and parent) are prone to be more familiar to donation-minded individuals and this familiarity could, in turn, lead to greater funding.

* Board of Directors--"horizontal segmentation" by gender does appear to exist in nonprofit organizations (Onyx onyx (ŏn`ĭks), variety of cryptocrystalline quartz, differing from agate only in that the bands of which it is composed are parallel and regular.  and Maclean, 1996), as the analysis shows a relationship among larger boards, more voluntary board members, and more female board members.

* Expressive Youth--a positive relationship exists between an organization's expressive tendencies (i.e., activities and goals directed toward member satisfaction) and the proportion of younger organization members (e.g., more expressive organizations are associated with larger proportions of members under 20 years).

* Funding--a negative relationship between the proportion of funds received from sales revenue and the proportion of funding received from other undisclosed sources suggests that organizations emphasize one funding source while minimizing efforts in obtaining funds from other sources.

* Dues Funded--implies that individuals in the 40-50 year age bracket In programming, brackets (the [ and ] characters) are used to enclose numbers and subscripts. For example, in the C statement int menustart [4] = ; the [4] indicates the number of elements in the array, and the contents are enclosed in curly braces.  are either more inclined to support organizations they belong to through dues or are more inclined to join organizations that are primarily funded through dues.

* Bureaucratic Size--indicates that large administrative staffs are associated with large organizational net worth and that the inverse (mathematics) inverse - Given a function, f : D -> C, a function g : C -> D is called a left inverse for f if for all d in D, g (f d) = d and a right inverse if, for all c in C, f (g c) = c and an inverse if both conditions hold.  (i.e., small staffs--small net worth) is true as well.

Strategic Planning Elements

The factor analysis identified 10 key elements of strategic planning in nonprofit organizations: (1) scope of planning, (2) formality formality, in chemistry: see chemical equilibrium; concentration.  of planning, (3) administrative style, (4) membership involvement, (5) external environment, (6) implementation responsiveness, (7) strategic planning routinism, (8) constraint Constraint

A restriction on the natural degrees of freedom of a system. If n and m are the numbers of the natural and actual degrees of freedom, the difference n - m is the number of constraints.
 identification, (9) subjective planning, and (10) resource misallocation. Table 4 shows the underlying constructs for each of these 10 planning elements.

While the basic tenets of the corporate strategic planning model remain for the nonprofit sector, additional elements do emerge in this research: administrative style, membership involvement, strategic planning routinism, subjective planning, and resource misallocation. These additional elements take on increased importance and are key considerations in the strategic planning process in the nonprofit setting.

Frequency counts of the 10 strategic planning elements showed that all of the sample organizations indicated some level of strategic planning, however informal. In addition, 46 percent of the respondents indicated that the organization had formal, written plans. This compares to 80-94 percent of for-profit firms engaged in strategic planning. The most common time span covered by the written plan in the nonprofit arena was four to six years, compared to a five-year planning horizon Planning horizon

The length of time a model or investor or plan projects into the future.
 in the for-profit sector. These findings suggest that formal planning in the nonprofit sector is not as widespread as in the profit-seeking sector.

Perhaps one of the most interesting relationships identified in the factor analysis of strategic planning elements is found in the scale entitled en·ti·tle  
tr.v. en·ti·tled, en·ti·tling, en·ti·tles
1. To give a name or title to.

2. To furnish with a right or claim to something:
 subjective planning. The number of planners an organization utilized was found to be related to the utilization of mathematical models
Note: The term model has a different meaning in model theory, a branch of mathematical logic. An artifact which is used to illustrate a mathematical idea is also called a mathematical model and this usage is the reverse of the sense explained below.
 and/or the computer in the strategic planning process. That is, organizations with large planning groups did not tend to utilize quantitative techniques. Organizations with small planning groups were generally found to use mathematical models and/or the computer. Apparently, nonprofit administrators perceive a trade-off between the use of quantitative techniques and the number of planners needed. Thus, the expansion of planning capabilities by adding personnel rather than using quantitative techniques may be a nonprofit phenomena due to the relative ease of adding volunteer personnel to the planning group.

The Relationship of Organizational Characteristics to Strategic Planning Elements

Table 6 presents the key relationships identified in the analysis of organizational characteristics and strategic planning elements. The first canonical function associated with the set of organizational characteristics has a correlation with its corresponding function from the set of strategic planning elements of 0.656 and is significant at the 0.0001 level. This first canonical function is characterized char·ac·ter·ize  
tr.v. character·ized, character·iz·ing, character·iz·es
1. To describe the qualities or peculiarities of: characterized the warden as ruthless.

2.
 by high positive correlations Noun 1. positive correlation - a correlation in which large values of one variable are associated with large values of the other and small with small; the correlation coefficient is between 0 and +1
direct correlation
 with the Instrumental, Board of Directors, Paid Administration, and Organizational Membership scales. The corresponding canonical function for the set of strategic planning elements correlates positively with the Formality of Planning and Implementation Responsiveness scales.

This finding indicates that the attention an organization gives to detailed planning is closely related to the organization's instrumental nature and its emphasis on traditional organizational structure. It appears that externally oriented o·ri·ent  
n.
1. Orient The countries of Asia, especially of eastern Asia.

2.
a. The luster characteristic of a pearl of high quality.

b. A pearl having exceptional luster.

3.
 nonprofit organizations that utilize a board of directors, paid administrators, volunteer members, and committees will likely involve its stakeholders (e.g., administrators, volunteers, clients) in preparing a written plan for a given period of time that can be evaluated. This written plan will also include a detailed analysis of both direct and indirect competition.

The second canonical variate has a correlation of 0.574 and is significant at the 0.0001 level. The Instrumental and Expressive Youth scales each correlate negatively with this function, while the only positive correlation of high magnitude, within the organizational characteristic measures, is the Paid Administration scale. The function associated with the strategic planning elements is characterized by high negative correlations Noun 1. negative correlation - a correlation in which large values of one variable are associated with small values of the other; the correlation coefficient is between 0 and -1
indirect correlation
 with Scope of Planning, Membership Involvement, and Administrative Style.

This finding reinforces the premise that an organization may exhibit both instrumental and expressive tendencies at the same time (cf. Gordon and Babchuk, 1959). Organizations exhibiting such functional tendencies are also inclined to be involved in objective setting, forecasting, and evaluation. Organizations with these characteristics also appear to emphasize administrative informality, information flow throughout the organization, and membership involvement in decision making while typically avoiding the use of paid administrators. Apparently, organizations with both instrumental and expressive tendencies utilize unique combinations of strategic planning elements so as to satisfy its various constituencies' individual goals and objectives.

The third canonical variate has a correlation of 0.48, significant at the 0.0001 level. This function is characterized by older organizations (and parent organizations) that obtain a large percentage of their funding from individual donations. These characteristics relate positively to the formality of the organization's strategic planning process. This relationship suggests that older organizations are more likely to have a written strategic plan than organizations that have not been around as long. It appears that the longer the planning process has existed within the organization and the longer the time span covered by the plan, the more formalized for·mal·ize  
tr.v. for·mal·ized, for·mal·iz·ing, for·mal·iz·es
1. To give a definite form or shape to.

2.
a. To make formal.

b.
 the process tends to become. This may signify sig·ni·fy  
v. sig·ni·fied, sig·ni·fy·ing, sig·ni·fies

v.tr.
1. To denote; mean.

2. To make known, as with a sign or word: signify one's intent.
 the permeation per·me·a·tion
n.
The process of spreading through or penetrating, as in the extension of a malignant neoplasm by continuous proliferation of the cells along the blood or lymph vessels.
 of a planning philosophy throughout the organization.

The fourth canonical variate, with a canonical correlation of 0.372, is significant at the 0.0078 level. This function is primarily characterized by the Expressive Youth and Gender scales in the organizational characteristic set and the Subjective Planning and Resource Misallocation scales in the planning set. This would indicate that organizations scoring high on this function have a youthful membership, express goals internally, have a large proportion of female volunteer members, and are likely to have a female top administrator with little or no managerial experience in the profit sector. Such organizations are inclined to have a large number of planners rather than a quantified planning process and tend to misallocate mis·al·lo·cate  
tr.v. mis·al·lo·cat·ed, mis·al·lo·cat·ing, mis·al·lo·cates
To allocate (resources or capital, for example) wrongly or inappropriately.
 resources.

Interestingly, this finding corroborates the thinking that some nonprofit organizations lack management expertise and thus misuse resources. As well, the young, female membership and inexperienced in·ex·pe·ri·ence  
n.
1. Lack of experience.

2. Lack of the knowledge gained from experience.



in
, female leadership combined with the expressive nature of the group suggests that there are nonprofit organizations that exist, in all likelihood, for the social aspects of the membership. As such, most of the membership would be involved in any planning that might be conducted, and such planning would be rather primitive in nature.

Managerial Implications

All sampled nonprofit organizations did indicate some level of strategic planning, which suggests that leaders of nonprofit organizations recognize the importance of the planning process for the long-term survival of this sector of the economy. This is particularly true for those organizations that could be labeled as instrumental in nature. For example, organizations involved in issues such as homelessness, abuse, or long-term illnesses are more likely to utilize elements of strategic planning than expressive organizations engaged in fulfillment ful·fill also ful·fil  
tr.v. ful·filled, ful·fill·ing, ful·fills also ful·fils
1. To bring into actuality; effect: fulfilled their promises.

2.
 of individual member needs such as mountain climbing mountain climbing, the practice of climbing to elevated points for sport, pleasure, or research. Also called mountaineering, it is practiced throughout the world. Types


There are three types of mountain climbing.
 or book clubs.

However, specific tools of strategic planning (e.g., quantitative aspects, computer support) may not be embraced readily, as nonprofit administrators may supplant sup·plant  
tr.v. sup·plant·ed, sup·plant·ing, sup·plants
1. To usurp the place of, especially through intrigue or underhanded tactics.

2.
 such tool usage with larger volunteer planning groups. In addition, the tendency to use larger volunteer planning groups may be an attempt to build consensus among a broader array of organizational stakeholders. Also, the administrator may feel that having a larger contingent of planners will prevent the organization from having to incur the related financial costs of utilizing various methods of computer modeling.

Gender differences at the administrative level suggest that female administrators are less likely to bring corporate planning techniques to the nonprofit sector due to their lack of corporate administrative experience. As seen in the factor analysis of organizational characteristics, the likelihood of a female top administrator is inversely in·verse  
adj.
1. Reversed in order, nature, or effect.

2. Mathematics Of or relating to an inverse or an inverse function.

3. Archaic Turned upside down; inverted.

n.
1.
 related to for-profit administrative experience. This finding would suggest that nonprofit organizations have to make a much more concerted effort to attract female administrators from the corporate community in order to draw upon the for-profit experience in strategic planning and management. Unfortunately, such an effort could contradict con·tra·dict  
v. con·tra·dict·ed, con·tra·dict·ing, con·tra·dicts

v.tr.
1. To assert or express the opposite of (a statement).

2. To deny the statement of. See Synonyms at deny.
 the traditional thinking that nonprofit leadership roles stem from dedication to a particular "cause," as an intense effort to hire female executives from the corporate community would not necessarily imply cause-related allegiance allegiance, in political terms, the tie that binds an individual to another individual or institution. The term usually refers to a person's legal obligation of obedience to a government in return for the protection of that government, although it may have reference . Additionally, financial constraints CONSTRAINTS - A language for solving constraints using value inference.

["CONSTRAINTS: A Language for Expressing Almost-Hierarchical Descriptions", G.J. Sussman et al, Artif Intell 14(1):1-39 (Aug 1980)].
 in the nonprofit organization could be a deterrent de·ter·rent  
adj.
Tending to deter: deterrent weapons.

n.
1. Something that deters: a deterrent to theft.

2.
 unless the female administrator was willing to forego financial gain for the good of the "cause."

Interestingly, age of the organization's membership plays a key role in several of the managerial implications:

* For an organization to attract membership within a select group, it may be necessary to select administrators from the same age group.

* Younger members may be interested, mainly, in belonging to organizations that have goals and activities directed toward the satisfaction of members rather than toward external goals. As such, benefits and activities available to members (rather than external goals) should be promoted in order to attract a younger membership. In turn, this indicates that organizations that want to focus on external goals should emphasize the recruitment of an older member population.

* Rather than active participation in organizational activities, individuals in the 40-59 years of age bracket tend to prefer paying dues for the benefits of organizational membership. If the nonprofit organization requires active (physical) participation of members to fulfill ful·fill also ful·fil  
tr.v. ful·filled, ful·fill·ing, ful·fills also ful·fils
1. To bring into actuality; effect: fulfilled their promises.

2.
 its objectives, a younger than 40 or older than 59 age group needs to be a large part of its membership.

The current research suggests that nonprofit organizations tend to focus upon one funding source rather than drawing its funding from several areas. As such, nonprofit organizations are placing themselves at risk in the event that their principle source of funds is unable or unwilling to continue providing the level of funding necessary to maintain the organization's operations. Interestingly, there is a relationship, as well, between the size of the organization's administrative staff and organizational net worth. That is, large administrative staffs are associated with large organizational net worth and vice-versa. As no causal relationship is suggested by factor analysis, this finding may suggest that as organizational net worth is increased, the staff is also increased in order to more effectively manage the larger net worth or that a larger staff actually aids in the development of increased net worth.

Planning in the nonprofit organization is related to the age of the organization. The longer the planning process has existed within the organization and the longer the time span covered by the plan, the more formalized the planning process tends to become. Interestingly, the factor analysis also revealed that nonprofit organizations are more likely than profit-seeking firms to emphasize informality and the short run in their planning processes. This signifies the permeation of a planning philosophy as the organization grows and gains knowledge through its experiences. These findings have major implications regarding the need for stability in the organization's membership and administrative positions. Incentives and rewards to endure allegiance to the nonprofit organization will allow the organization to grow and fully utilize the knowledge gained through its experiences.

Finally, regularly scheduled meetings are important to the nonprofit organization's planning process. The factor analysis suggest that the planning process becomes more routinized with each meeting of the planning group. However, the number of times the planners meet may be dependent upon the number of regularly scheduled meetings for all members.

Research Agenda

A number of analytical techniques An analytical technique is a method that is used to determine the concentration of a chemical compound or chemical element. There are a wide variety of techniques used for analysis, from simple weighing (gravimetric) to titrations (titrimetric)to very advanced techniques using  were utilized in the current research to reduce the data and to analyze relationships within and between the sets of organizational characteristics and strategic planning elements. These findings provide a basis for further research in the nonprofit sector. However, the present study has not been of a definitive nature. Caution must be used in extrapolating the finding to the universe of all nonprofit organizations, as the sample was restricted to organizations in a single state. Future research might focus on expanding the sample numerically, geographically, and/or into different cultural settings.

The following sets of propositions are identified for future examination:

Propositions Concerning Organizational Interrelationships Within the Nonprofit Sector

[P.sub.1]: Voluntary, nonprofit female administrators tend to seek administrative positions exclusively within the nonprofit sector.

[P.sub.2]: Females are more likely than males to utilize committees.

[P.sub.3]: Persons under the age of 20 are interested in belonging to organizations that have goals and activities directed toward the satisfaction of members rather than toward external goals.

[P.sub.4]: Findings in the corporate sector are generalizable gen·er·al·ize  
v. gen·er·al·ized, gen·er·al·iz·ing, gen·er·al·iz·es

v.tr.
1.
a. To reduce to a general form, class, or law.

b. To render indefinite or unspecific.

2.
 to those nonprofit organizations exhibiting instrumental tendencies.

[P.sub.5]: An organization's net worth is associated with the number of officers/administrators/staff the organization has. Specifically, a large net worth is associated with a large number of officers/administrators/staff and a small net worth is associated with a small number of officers/administrators/staff.

Propositions Concerning Interrelationships Among Strategic Planning Elements Within the Nonprofit Sector

[P.sub.6]: Objectives setting, forecasting, and evaluation are interwoven in·ter·weave  
v. in·ter·wove , in·ter·wo·ven , inter·weav·ing, inter·weaves

v.tr.
1. To weave together.

2. To blend together; intermix.

v.intr.
 variables with an equal emphasis on each usually occurring.

[P.sub.7]: An association exists among variables concerned with: the existence of a formal, written plan; the time span covered by the plan; how long the organization has had a planning process; and the existence of a formal, evaluation method.

[P.sub.8]: Administrators perceive a tradeoff between their use of quantitative techniques and the necessary number of planners. Specifically, organizations that use mathematical models and/or the computer in the planning process are likely to have fewer planners than those organizations that do not use quantitative techniques.

Proposition Concerning Interrelationships Among Organizational Characteristics and Strategic Planning Elements Within the Nonprofit Sector

[P.sub.9]: Member age, source of funding (revenue, dues, or foundation), administrator education, and bureaucracy, while distinguishable organizational characteristics, are not related to the nonprofit organization's strategic planning process.

This study sought to gain a better understanding of the internal influences affecting the strategic planning processes in nonprofit organizations. The findings show that there are characteristics specific to the nonprofit organization that affect the organization's strategic planning process. As with most research studies, however, some questions were answered and new questions were uncovered. The above propositions represent some areas uncovered in the study that should prove interesting and meaningful as researchers seek to expand the body of knowledge relative to nonprofit management.

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Author:Crittenden, William F.; Crittenden, Victoria L.
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