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Private Sector Strategies for Social Sector Success: The Guide to Strategy and Planning for Public and Nonprofit Organizations / Edition 1

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Today, perhaps more than ever before, public and nonprofit organizations are using strategic management methods to ensure their survival in a volatile and competitive environment. In addition to being committed to mission and values, they are paying greater attention to customers, portfolio analysis, profit margins, and return on investment. Until recently, business concepts were not part of the public and nonprofit vocabulary. Now, they have become standard practices for many public agencies and nonprofit organizations.

This practical guide offers a realistic approach to strategic management, while borrowing from the most helpful and relevant business ideas, allows the public or nonprofit organization to achieve success without compromising its unique mission or constituency. Executives, managers, and policymakers will find key principles for everyday application, including how to:

  • Identify trends that will most affect programs and services
  • Assess the organization's core strengths and competencies
  • Select strategies that advance the mission while building operational success
  • Explore opportunities for collaborations with other organizations
  • Encourage a culture of strategic thought and action
Throughout this innovative guide, there are numerous illustrations and examples of how to apply the most appropriate technique to a particular need or goal. At last, public and nonprofit organizations have a real-world guide to finding lasting success.

"Kevin Kearns provides a well-structured overview of fundamental strategic options that leaders need to consider in shaping the destiny of their organizations and of individual programs and services. He offers busy nonprofit executives a practical, readable, and useful framework for strategic thinking."—Margaret Tyndall, chief executive officer, YWCA of Greater Pittsburgh

"Kearns has demystified strategic planning in the private sector and made its best attributes useful to public and nonprofit organizations. Private Sector Strategies for Social Sector Success will help public and nonprofit officials better serve citizens and clients in the increasingly competitive marketplace."—William Dodge, executive director, National Association of Regional Councils, and author of Regional Excellence

"This is a first-rate book, a truly useful guide. Kearns presents a comprehensive, highly readable, and practical approach to thinking and acting strategically about critical issues facing public and nonprofit organizations."—Thomas J. Pavlak, associate director, Carl Vinson Institute of Government, University of Georgia

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Editorial Reviews

From the Publisher
"Kevin Kearns provides a well-structured overview of fundamental strategic options that leaders need to consider in shaping the destiny of their organizations and of individual programs and services. He offers busy nonprofit executives a practical, readable, and useful framework for strategic thinking." (Margaret Tyndall, chief executive officer, YWCA of Greater Pittsburgh)

"Kearns has demystified strategic planning in the private sector and made its best attributes useful to public and nonprofit organizations. Private Sector Strategies for Social Sector Success will help public and nonprofit officials better serve citizens and clients in the increasingly competitive marketplace." (William Dodge, executive director, National Association of Regional Councils, and author of Regional Excellence)

"This is a first-rate book, a truly useful guide. Kearns presents a comprehensive, highly readable, and practical approach to thinking and acting strategically about critical issues facing public and nonprofit organizations." (Thomas J. Pavlak, associate director, Carl Vinson Institute of Government, University of Georgia)

"The National Alliance for Nonprofit Management has presented the 2001 Terry McAdam Book Award for the best book about nonprofit organizations published in 2000-01 to Kevin Kearns for Private Sector Strategies for Social Sector Success." (Chronicle of Philanthropy, May 2, 2002)

Sub-subtitled "The pros and cons of diversification, vertical integration, concentration, and collaboration," this text is designed to help professionals in government and nonprofit organizations to: identify trends that will affect programs and services, assess the organization's core strengths, select strategies that advance the mission while building operational success, explore opportunities for collaborations with other organizations, and encourage a culture of strategic thought and action. Kearns's (public administration, U. of Pittsburgh) approach to strategic management borrows concepts from business tempered by an understanding of the distinctive missions, contexts, and constituencies of public and nonprofit organizations. Annotation c. Book News, Inc., Portland, OR (
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Product Details

  • ISBN-13: 9780787941895
  • Publisher: Wiley
  • Publication date: 5/30/2000
  • Series: NonProfit and Public Management Series
  • Edition number: 1
  • Pages: 384
  • Sales rank: 747,414
  • Product dimensions: 6.00 (w) x 9.00 (h) x 1.00 (d)

Meet the Author

KEVIN P. KEARNS is associate professor and director of the Master of Public Administration program at the Graduate School of Public and International Affairs (GSPIA), University of Pittsburgh. He is also the author of Managing for Accountability: Preserving the Public Trust in Public and Nonprofit Organizations (Jossey-Bass, 1996).

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Read an Excerpt


If you work in a government or nonprofit organization, you may be using a vocabulary today that was once heard only in the executive suites of private corporations. Perhaps you are looking for market niches that capitalize on your organization's comparative advantages. Maybe you are worried about competitive threats in the marketplace and how to provide your customers with value-added products and services. You may be using management techniques like portfolio analysis or break-even analysis and tracking financial indicators like profit margins and liquidity ratios. Perhaps your organization is designing a sophisticated marketing and promotional campaign or contemplating creative ways to measure and report its return on investment to key constituencies.

Until recently these business concepts were not part of the management lexicon in public and nonprofit organizations. Today they are standard practice in some municipalities, some federal and state government agencies, and many nonprofit organizations.

Yet government and nonprofit organizations are not businesses and cannot be managed as such. Unlike your counterparts in the business world, you cannot think of clients and taxpayers merely as customers or consumers of goods and services. Unfettered commercialism in public and nonprofit organizations can disenfranchise marginal members of our communities who rely on government and charitable organizations to meet their needs (Hasenfeld, 1996). Not all of your clients are customers who are exercising free choice in the purchase and consumption of public services. Some of them simply have no choice or are incapable of exercising or unwilling to exercise whatever choices they do have. They depend on you to keep their best interests at the forefront of all that you do. In addition, the competitive paradigm that is one of the drivers of the business world is not totally applicable in the public sector. Instead, you look for opportunities to collaborate with other organizations (even with your competitors) in finding lasting solutions to public problems. A purely competitive mind-set in public sector organizations can waste precious public resources and blind these institutions to their true missions. Finally, you cannot worry only about financial indicators and ratios because these measures represent only part of your organization's total performance. Critical decisions regarding people in need cannot be made on the basis of your organization's balance sheet or cash flow statements (Rosenman, 1998).

What the public sector needs therefore is an approach to strategic management that borrows concepts from the business sector when those concepts are relevant and helpful but that is tempered by an understanding of the distinctive missions, contexts, and constituencies of public and nonprofit organizations.

Purpose and Audience

Private Sector Strategies for Social Sector Success is a practical guide for busy decision makers in the public and nonprofit sectors who need to chart a course for their organizations. It is targeted primarily to professionals in government and nonprofit organizations of all types. The objective is to help you improve the ways you accomplish the following tasks:

  • Understand the environment in which your organization exists. Strategic management demands that you identify and interpret the important trends that affect your organization and your portfolio of programs and services. Businesses use environmental scanning (also known as industry analysis) to help them identify and interpret important trends. With the caveats and the modifications to concepts and terminology that I discuss, government and nonprofit organizations too can use some of the principles of industry analysis.
  • Understand your organization's distinctive competencies and your comparative advantages. Any organization will fail when it strays too far from its core competencies into programs or markets in which it has little experience. Most of the techniques presented in this book require a candid assessment of your organization's strengths and comparative advantages. Your organization's portfolio of programs and services should embody its strengths. To cling to weak programs and services, especially when other organizations can better serve the same needs, is a waste of scarce community resources.
  • Identify and select organizational strategies that advance the mission and goals of your organization and are consistent with your strategic environment. At the broadest level of organizational strategy, all organizations have essentially three choices-growth, retrenchment, and stability-and each choice also has several subcategories (Wheelen and Hunger, 1992). Business firms use this paradigm to plot their overall vision and direction (see also Andrews, 1980; Chaffee, 1985). With some caveats, this paradigm has value for public and nonprofit organizations as well, and therefore I discuss these three strategies extensively.
  • Explore opportunities for collaboration with other organizations. Public and nonprofit organizations have been urged to explore collaborative relationships to reduce redundancy and enhance effectiveness. Collaboration can be a method for pursuing many types of business strategies under the general categories of growth, retrenchment, or stability while making the best use of finite public resources.
  • Encourage a culture of strategic thinking and strategic action throughout the organization. There are many executives who are brilliant strategists but totally incompetent planners. Some of the most celebrated executives and even prominent management scholars actually seem to have contempt for strategic planning. This book is designed to stimulate strategic thinking rather than to promote a particular approach to strategic planning.

Here are some of the important issues this book can help you address in your organization:

  • Why is growth such a seductive strategy?
  • How can you evaluate growth strategies objectively?
  • When does retrenchment make sense as an organizational strategy?
  • If you decide to cut back, how can you do so without endangering the core mission and purpose of the organization?
  • How do you turn around a troubled organization?
  • Under what conditions should you seriously consider liquidation?
  • Should your organization try to compete against other public and nonprofit organizations? If so, what are your comparative advantages?
  • When does it make sense to collaborate with other organizations rather than compete against them?
  • What factors should you consider when you try to implement your strategy?
  • What role does politics play in the formulation and implementation of organizational strategy?

Not only executives, policymakers, and top-level managers in government agencies and nonprofit organizations will benefit from the ideas and applications discussed here. This book is also appropriate for students in schools of public management and social work. It will be useful as a primary or supplemental text in courses on strategic management or strategic planning at the graduate level and in some instances the advanced undergraduate level. And it will be particularly useful in academic programs designed to meet the specific needs of midcareer students who have some professional experience.

Some Assumptions

The approach I take in this book assumes that the environment of public and nonprofit management is often collaborative but also sometimes intensely competitive. It is a good bet that your organization is competing directly or indirectly with similar organizations for finite resources. Municipal and state governments compete for tax -- paying residents and businesses. Universities compete for students. Hospitals compete for patients and for doctors. Opera companies compete for singers and patrons. Social service agencies compete for government contracts and grants. To the extent that your organization "wins" a certain amount of resources in this game, another organization probably "loses." Perhaps this is not the type of cutthroat, winner -- take -- all competition that we see so often in the business world. But the supply of resources cannot accommodate all needs, and therefore some organizations are more successful than others in garnering resources, attracting clients, serving community needs, and gaining legitimacy in the political environment.

Consequently, this book assumes that some of the concepts and methods of strategic management developed for use in the private sector can be adapted for use in the public sector. This is a controversial assumption because over the past few years there has been backlash, primarily among scholars, against the business -- oriented philosophy espoused by David Osborne and Ted Gaebler in their best -- selling book, Reinventing Government (1992). Critics of the reinvention movement remind us, quite appropriately, that government agencies and nonprofit organizations are not businesses and should not be operated as such. Moreover, we see examples every day that prove private businesses are hardly paragons of effective management. We do not need to look very far in the business world for shocking examples of mismanagement, strategic blunders, and ethical lapses that rival even the most famous management gaffs in the public and nonprofit sectors.

Still, even though they are not a panacea, some of the concepts and tools developed for use in the private sector have transferable value for government and nonprofit organizations.


I borrow from the business management literature in the presentation of techniques like market environmental scanning, portfolio analysis, and strategy design, and the reader will notice frequent references to the work of business scholars like Michael Porter, Henry Mintzberg, David Hambrick, James Thompson, Thomas Wheelen, David Hunger, and many others.

Only in the last fifteen years have we seen attempts, primarily in scholarly journals, to apply the concept of competitive strategy to public and nonprofit organizations (MacMillan, 1983; Young, 1988; Osborne and Gaebler, 1992; Kearns, 1992a; Stone and Crittenden, 1994; Roller, 1996). This book tries to synthesize and expand these various approaches, illustrating their application to the strategic choices facing public and nonprofit organizations.

It should be said at the outset that some readers may find the business terminology I use occasionally to be controversial or even inappropriate in its application to public and nonprofit organizations. Can we really conceptualize social programs and services as portfolios? Do strategies like divestment and liquidation make any sense in government, where agencies rarely go out of business? This book is evidence that I believe these concepts do have value in public service organizations. But I also recognize that these concepts must be qualified, carefully illustrated, and often modified to be meaningful and helpful for public sector managers.

Overview of the Contents

Chapter One of Private Sector Strategies for Social Sector Success lays a foundation for the remaining chapters by describing some of the forces affecting the ways government and nonprofit executives do their jobs. In what respects is your organization behaving more like a business? What lessons can you learn from business about effective management in public and nonprofit organizations? Conversely, what are the limits on what you can learn from business? What types of skills will be needed by public and nonprofit executives as we enter the twenty -- first century?

Chapter Two provides a brief overview of three approaches to strategy formulation. Sometimes strategy is derived rationally, through analytical techniques designed to assess the fit between an organization and its strategic environment. At other times strategy seems simply to evolve, through political bargaining and power plays, through informal experimentation, or through the gestaltlike insights of a visionary leader. Moreover, strategies do not always require dramatic shifts in direction intended to optimize performance. Sometimes strategies are nothing more than efforts to survive, even temporarily, to fight another day. They can even be incremental efforts to meet suboptimal objectives. I believe that strategy development can be usefully informed by the techniques presented here, but strict adherence to these strategic management methodologies should not supplant your own insights, imagination, and creativity.

Chapter Three presents concepts and techniques for conducting an environmental scan. The environmental scan provides crucial information on important environmental trends affecting your organization and others like it. What business are you in? In what markets do you compete? What are the distinctive features of these markets? Are these markets growing, shrinking, or remaining stable? Do you have competitors? A systematic review of these and other questions can help you identify opportunities and challenges in your strategic environment.

Chapter Four presents the concept of product and service portfolios and explores how portfolio management can help your programs and services work together to achieve the organization's goals. Portfolio analysis used in conjunction with environmental scanning is a powerful tool for deciding whether you want to grow, retrench, or simply stabilize your organization.

Chapter Five presents the various types of growth strategies and explains the pros and cons of each. Growth strategies are always appealing because they signify vitality and success. But they have pitfalls as well that need to be avoided.

Chapter Six looks at retrenchment as an organizational strategy. Retrenchment is never easy because most of us have been conditioned to think of retrenchment as a sign of failure or even impending demise. But when used wisely, retrenchment strategies can help your organization live to fight another day.

Chapter Seven explores strategies designed to stabilize your organization in a turbulent environment when neither growth nor retrenchment is appropriate. Much of Chapter Seven focuses on how to turn around a troubled organization.

Chapter Eight discusses collaborative strategies, which are appropriate when you want to partner with another organization to achieve common objectives. Collaboration is a valued ideal, especially for public and nonprofit organizations, but it is not easy to develop and sustain meaningful collaborative programs with other organizations. There are important issues to consider as you select and implement opportunities for collaboration.

Chapter Nine addresses important issues of strategy implementation. As you think about implementation, you will likely need to consider whether your organizational structure will facilitate or hinder your strategic objectives. You will also need to consider the impact of your strategy on staffing, information, and control systems. Lastly, you must consider how you will evaluate and, if necessary, modify your strategy.

Finally, the Conclusion examines the politics of strategy development and implementation. Political considerations are presented throughout the book; however, this section highlights some specific concerns and political management strategies.

Throughout I offer illustrations and examples from public and nonprofit organizations that are applying the concepts discussed. Also, I conclude each chapter with a series of questions that you might ponder on your own or discuss with your colleagues as one way of getting started on applying some of the ideas in your organization.

March 2000
Kevin P. Kearns
Pittsburgh, Pennsylvania0787943479.txt |


Two days shy of his twelfth birthday, my oldest son asked me if he could see the movie The Silence of the Lambs. Having recently seen it, I said no without hesitation. Cannibalism, murder, and mutilation seemed to be the stuff of nightmares, and I saw no reason to expose him to such ferocious brutality. Our ensuing discussion was predictable. I said that The Silence of the Lambs (or The Terminator, or Die Hard, or Nightmare on Elm Street) was not appropriate for his age. He said, "It's just a movie, Mom. It can't hurt my development." Being the son of a clinical psychologist, he has learned, in self-defense, to speak his mother's language.

I was struck by his insistence that he was the only one of all his friends who had not seen the movie. As a psychotherapist and the mother of three boys, I am not easily fooled into believing the anthem of adolescence, "I'm the only one." He assured me that he was telling the truth, and I was certain that he was exaggerating.

"Go ahead and call," he suggested. So I did, believing that other parents would share my point of view. After all, we live in a middle-class, well-educated community with parents who are genuinely and regularly involved in their children's activities. I was certain that other parents would agree that a movie like The Silence of the Lambs was an experience to shield children from.

One by one I called his friends' mothers, all women I had known for years and who were, without exception, good moms. Yes, their sons had seen the movie, some with parental permission, some without. Some of the parents and all of the kids felt "it was just entertainment." A few of the more outspoken boys even questioned why I found it difficult to "distinguish reality from fantasy." Although all of the kids felt that the movie was "very scary," none said that they had any nightmares related to it.

So here I was, a forty-five-year-old Ph.D., mother of three, significantly disturbed and shocked by a movie that eleven- and twelve-year-olds had taken in stride. My training and experience as a psychologist told me that these children should have been traumatized by the psychotic, graphic sadism of Dr. Hannibal Lecter.

Developmentally, young adolescents are concerned with issues of physical growth, awakening sexuality, the replacement of parental values with peer values, and an emerging sense of identity. At its best, The Silence of the Lambs simply does not deal with the emotional issues relevant to young adolescents. At its worst, it presents a sadistic, perverted central character in an intriguing and even playful way. In addition, I would expect this movie to raise anxiety about sexuality and physical vulnerability. Yet these children were remarkably unmoved. Why weren't they upset by this movie? Why weren't they horrified?

Almost every week, I am approached by a concerned parent who asks me, "How much TV is safe for my child? When does it become harmful?" I am frequently asked my opinion about the suitability of one movie or another. Parents appear to be simultaneously concerned with and indifferent to the amount of media violence seen by their children. On the one hand, we read articles, attend lectures, and consult with experts on how media violence affects our children; on the other hand, these same children are exposed to levels of media violence inconsistent with everything that is known about healthy child development.

I have written this book both as a psychologist and as a mother. A great deal is known about the harmful effects of media violence on children, but much of the research is technical and inaccessible to the average parent. Without this information, parents are likely to continue to underestimate the harmful effects of media violence.

As a psychologist, I hope to sharpen parents' awareness of the unique ways in which children at different stages of development experience the media. I will present what social scientists have long known about media violence: that it encourages aggression, desensitization, and pessimism in our children. But since all passion inevitably flows from personal commitment, I have written this book because I do not want my three sons growing up in a society that routinely glorifies violence and denies social responsibility.

This book is divided into three parts. The first part looks at the role of the media, and particularly media violence, in the lives of our children. Both television programs and movies are used to provide examples. Although the majority of research has been conducted on television, it seems likely that many of the findings are equally applicable to movies, which feature far more brutal and graphic depictions of violence than broadcast television. The first part traces the development of television in this country and examines more than forty years of research on the subject of media violence and children. I try to untangle the thicket of research, focusing on those findings that parents will find most significant and useful in understanding how their children are affected by media violence.

The second part of the book examines how children at specific stages of development think, act, and feel. Parents will be helped to see the world through the eyes of their children. The effects of the media will be considered in detail for children at different ages. Examples and suggestions will help parents decide which films and programs are appropriate and which are inappropriate. Although I have tried to keep my television and film examples reasonably contemporary, sometimes an older, better known movie or show is cited because of its familiarity to the public.

At the end of each chapter in Part Two is a checklist to help parents focus on the major issues affecting children at each stage of development. These checklists are included for easy reference, particularly when parents are on the fence about the appropriateness of a movie or television show for their child. Two or three no's suggest finding something else to watch. The checklists are divided into sections on attachment, aggression, cognitive development, and moral development so that parents can pay particular attention to those categories that may be troubling for their child. For example, if you are concerned about your child's being too aggressive, even a single no in the aggression category should alert you that this particular movie or television program is a poor choice for your child.

A Television Hall of Fame (and a Hall of Shame for preschoolers) following these checklists is offered as a jumping-off point for ideas about programs and movies that I consider either outstanding or particularly terrible. There is no Hall of Shame for kids past preschool because by middle childhood most of what kids watch is not children's television programming. So whereas NYPD Blue is inappropriate for an eight-year-old, the show is outstanding for an adult audience. Feel free to add your own picks and pans. Don't discount movies that are unfamiliar; there are many gems that deserve to be seen.

Some shows and movies have almost universal appeal and may be found in more than one age category. Don't be surprised if the movies contain some violence or deal with disturbing material. As this book should make clear, the point of parental supervision is not to shield children from all the disquieting aspects of life but rather to allow children to be exposed to difficult things in ways that enhance their ability to deal effectively with life's problems. A number of the movies, particularly in the older age groups, are R-rated. Some deal with upsetting or controversial content, so you might want to check them out yourself first.

For the most part, however, I tried to recommend interesting, thoughtful, and optimistic movies. At times, a good laugh is recommendation enough. There are a number of books on the market that give a brief synopsis of thousands of movies. Roger Ebert's Video Companion is particularly thoughtful and well written.

Finally, the third part of the book focuses on how parents, as well as government, schools, and the media, can best approach the problems created by a system at odds with itself. Is it possible both to "serve the public interest, convenience, and necessity" and to "recognize the special needs of children" while still turning a profit? How can we, in our varying capacities as parents, educators, politicians, entertainers, and most important of all, citizens preserve a healthy cultural environment for our children? A list of resources at the end of the book provides parents with phone numbers and addresses of the major networks and government agencies involved with media regulation. This directory also helps parents and other concerned citizens locate organizations active in the area of media reform and media literacy.

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Table of Contents


1. Embracing New Challenges and Opportunities: Strategic Management in Government and Nonprofit Organizations.

2. Understanding Three Models of Strategy Formulation.

3. Using Environmental Scanning to Track TrAnds and Prospects.

4. Analyzing Your Organization's Portfolio.


5. Growth Strategies.

6. Retrenchment Strategies.

7. Stability Strategies.

8. Collaborative Strategies.


9. Implementing Strategic Decisions.

Conclusion: Balancing Politics and Strategy.

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