Is Strategic Management Equally Relevant for Public and Third Sectors?

This essay explores the relevance of strategic management across public, third, and private sectors. It begins by defining strategic management and its importance in achieving organizational goals, including competitive advantages. The essay then delves into the application of tools like SWOT analysis and the Ansoff matrix in the private sector, highlighting their role in revenue generation and market share expansion. It contrasts this with the public sector, where strategic planning is vital for improving service delivery and addressing societal expectations, with examples like UK government initiatives. The discussion also addresses criticisms and challenges of strategic management, such as the time-consuming nature of the process and issues of transparency in non-profit organizations. The essay concludes that while strategic management is beneficial for public and non-profit organizations, it requires significant time and resources, advocating for the use of tools like the Balanced Scorecard to enhance efficiency and align day-to-day activities with broader strategic goals.

Is strategic management just as relevant
to the public and third sectors as the
private sector?

Table of Contents
INTRODUCTION...........................................................................................................................1
BODY..............................................................................................................................................1
CONCLUSION ...............................................................................................................................2
REFERENCES................................................................................................................................3

INTRODUCTION
Strategic management help an organization in forwarding towards their goals by earning
some competitive advantages on other players of the company (Kwon, Berry and Jang, 2014). It
is basically a form of planning which is done for predictable and unpredictable events.
BODY
A large number of companies are conducting SWOT and using Anstroff matrix so they
can understand their current position. It also help them in analysing the strategies that is made by
their competitors. Private sector companies are using various tools of strategic management
because their main aim is to earn more and more revenue & expand their business by grabbing
significant amount of market share. Public sector companies were failing to perform according to
the expectation of the society so they have make necessary changes in their organization in order
to remove their shortcomings and improve their performance (Hladchenko, 2015). Government
in UK made 5 year plans because they know that if they will not make a strategy then they
cannot provide better services and products to the public.
Some people often argue that strategic planning is done for hurting other players of the
industry, it main aim is to maximise market share of a company by grabbing that share from any
other firm (Fred, 2011). These people should also see the positive side of strategic management,
government of UK has made strategic plans because they know that it will help them in
achieving long term goals. Strategic management provide great assistance to the government in
minimise the wastage of public funds. It assures optimum utilisation of the available resources.
Besides these advantages, one should also look at some of the major shortcoming of strategic
management. It is a complicated process and it involve lot of time (Baumgartner, 2016).
Non profit organization always face the issues relating to transparency. The only source
of income for them is the funds which they get through charity (Arnaboldi, Lapsley and
Steccolini, 2015). By using different tools of strategic planning they can assure better utilisation
of the limited funds. If the stakeholders and society think that non gaining organization is using
their funds in an effective way then the organization can easily get more helping hands. Many
managers in private sector organizations do not support this kind of planning because they think
that instead of investing resources in making effective plans they should focus in execution of
normal and easy to implement plans (Stead and Stead, 2013). Small and medium sizes company
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cannot affords to spend huge time and money on strategic management. The perception of
people may vary but they cannot ignore the importance of strategic planning. Balance scorecard
is a strategic system which focus on communicating the aims which an organization in trying to
attain (Head and Alford, 2015). It concentrate on performing day to day activities with a clear
strategy. These kind of system can improve the current level of efficiency of public and third
sector. Their is no specific approach of strategic management that can organization can adopt for
attaining better results. It depend on their vision and long term goals (Wahl and Prause, 2013).
CONCLUSION
At the end, it can be concluded that strategic management is beneficial for public and non
gaining organizations but these sectors should invest significant amount of time in making
effective plans.
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REFERENCES
Articles and Journals
Arnaboldi, M., Lapsley, I. and Steccolini, I., 2015. Performance management in the public
sector: The ultimate challenge. Financial Accountability & Management. 31(1). pp.1-
22.
Engert, S., Rauter, R. and Baumgartner, R.J., 2016. Exploring the integration of corporate
sustainability into strategic management: a literature review. Journal of cleaner
production. 112. pp.2833-2850.
Fred, D. R. 2011. Strategic Management Concepts and Cases, 13thed., Prentice Hall.
Head, B.W. and Alford, J., 2015. Wicked problems: Implications for public policy and
management. Administration & Society. 47(6). pp.711-739.
Hladchenko, M., 2015. Balanced Scorecard–a strategic management system of the higher
education institution. International Journal of Educational Management. 29(2). pp.167-
176.
Kwon, M., Berry, F.S. and Jang, H.S., 2014. To Use or Not to Use Strategic Planning: Factors
City Leaders Consider to Make This Choice. In Developments in Strategic and Public
Management (pp. 163-178). Palgrave Macmillan UK.
Stead, J.G. and Stead, W.E., 2013. The coevolution of sustainable strategic management in the
global marketplace. Organization & Environment. 26(2). pp.162-183.
Wahl, M. and Prause, G., 2013. Toward understanding resources, competencies, and capabilities:
business model generation approach. Entrepreneurship and Sustainability Issues. 1(2).
pp.67-80.
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