Teaching Note: Case 7 – United Way
Teaching Note: Case 7 – United Way
Case Objectives
1. To apply the the concepts concepts of strategi strategicc management management to a non-profi non-profitt organizatio organization. n. 2. To eamine eamine ho! the the eternal eternal and internal internal en"ironme en"ironment nt affects affects a non-prof non-profit it #$siness model gi"en the c$rrent state of U.%. economic and philanthropic acti"ity. &. To disc$ss disc$ss the many many decisions decisions and actions actions that that a non-profi non-profitt organizatio organization n has to $nderta'e to s$stain a competiti"e ad"antage. (. To e"al$ate e"al$ate the impact impact of negati"e negati"e p$#licity p$#licity on on a non-profit non-profit organiza organization tion and the the implications for strategic leadership in s$ch a case. %ee the ta#le #elo! to determine !here to $se this case: Chapter Use
Key Concepts
1: %trategy Concept 2: ,ternal ,n"ironment
%trategic management) "ision* mission* strategic o#+ecti"es ,ternal en"ironmental forces* 0orters fi"e forces model
&: =nternal nalysis (: =ntellect$al ssets >: $siness?e"el %trategy 3: %trategic Control 11: %trategic ?eadership
Additional Readings or Exercises %ee NOE! video inter"ie! !ith C, rian /allagher %ee NOE additional information. lso see 0orters 1334 56 article What is strategy89* and 0orter ;ramers 1333 56 article 0hilanthropys Ne! genda: Creating
/eneric strategies eha"ioral control) corporate go"ernance ?eadership capa#ilities) ethical orientation
%ee NOE United Way ratings #y !atchdog gro$ps
Case "ynopsis
The United Way Case ill$strates the pro#lems that ha"e #een created d$e to a !ellesta#lished #$siness model* in a challenging en"ironment* facing the possi#ility of declining gro!th* and competition from ne! directions* d irections* all $nder the threat of eroding tr$st. This case sho!s ho! a mat$re #rand* !ith a po!erf$l and mostly honora#le history* can still st$m#le. %ince the year 2@@@* United Way had seemingly reached a platea$ of f$ndraising in the U.%. Certainly there !ere options for gro!th #$t charita#le donations still had not topped the inflation-ad+$sted increases of the 133A-1333
1
Teaching Note: Case 7 – United Way
campaigns. =n addition* "eteran f$nd-raisers on all fronts !ere citing challenges s$ch as competition for donations* diffic$lty recr$iting and 'eeping "ol$nteer staff* and a gro!ing foc$s on large gifts from "ery !ealthy indi"id$als* !hich* !hen p$#licized* co$ld red$ce the moti"ation for smaller donors to contri#$te. The eplosi"e gro!th of single-foc$s nonprofits since 3B11 meant more choices for donors !ho increasingly !anted a connection to a ca$se. Co$pled !ith the !ell-p$#licized scandals in organizations s$ch as the Nat$re Conser"ancy* 6ed Cross* and United Way of merica itself* tr$st !as eroded* legitimacy of mission !as $estioned* and go"ernance iss$es !ere at the top of the to-do lists of nonprofit C,s. =n this en"ironment* rian /allagher* United Way of merica C, since 2@@2* esta#lished ne! mem#ership standards to enhance the le"el of acco$nta#ility and transparency in United Way affiliates operations* re-#randed United Way as doing !hat matters9 in the comm$nities it ser"ed* and $pdated the standards of ecellence9. These ne! standards pro"ided a description of #est practices to #etter reflect the organizations strategic shift. United Way !as transitioning from its traditional role as strictly a f$ndraiser to a ne! mission foc$sed on identifying and addressing the long-term needs of comm$nities. These initiati"es re$ired that the United Way affiliates #$y into the change effort* since the po!er of the parent organization !as limited to remo"ing the affiliate from United Way mem#ership if it didnt comply. =t !as imperati"e for a nonprofit organization to get the necessary s$pport at the local le"el in order to achie"e stated organizational goals. Wo$ld /allaghers strategy #e s$ccessf$l8 Was the shift in strategy s$fficient to ens$re the contin$ed "ia#ility of the United Way* or !as its "ery mission perhaps no longer rele"ant8 eaching #lan
This is a comprehensi"e case and can #e $sed for the f$ll arc of strategic analysis* form$lation and implementation. s s$ch* this case is #est positioned at least mid-!ay thro$gh the co$rse* after st$dents ha"e had epos$re to the concepts of strategy analysis and form$lation. ,specially if st$dents ha"e already st$died a for-profit organization trying to de"elop a s$staina#le competiti"e ad"antage in its ind$stry* t$rning this disc$ssion to a non-profit may help them f$rther refine their strategic management tool set. s a comm$nity ser"ice eercise* after disc$ssing the case* the instr$ctor can enco$rage st$dents to ma'e themsel"es a!are of the local charities s$pported #y their comm$nity United Way. %t$dents might #e enco$raged to participate in comm$nity ser"ice acti"ities as a res$lt of this ne! 'no!ledge. "$%%ary o& 'isc$ssion ($estions
5ere is a list of the s$ggested disc$ssion $estions. Do$ can decide !hich $estions to assign* and also !hich additional readings or eercises to incl$de to a$gment each disc$ssion. 6efer #ac' to the Case #+ecti"es Ta#le to identify any additional readings andBor eercises so they can #e assigned in ad"ance.
2
Teaching Note: Case 7 – United Way
This case can start !ith an icebreaker. %tarting from the perspecti"e of a c$stomer may ma'e it easier for st$dents to transition to a strategic analysis. ll st$dents sho$ld #e a#le to identify !ith the concept of non-profit missions and charita#le gi"ing. Choosing any of the follo!ing $estions can get st$dents thin'ing a#o$t their eperiences !ith the prod$cts and the ind$stry: Have any of you ever given to United Way or know someone who has? Based on what you know, even before reading the case, what is your opinion of United Way and other broad-based charities such as the American ancer !ociety and the !a"vation Army? Have you ever used their services or do you know someone who has? #o you trust them? $f asked, wou"d you donate to them? Wou"d you rather donate to some other charity? Why? 'isc$ssion ($estions)
1. What are the c$rrent challenges facing United Way8 What are 'ey iss$es in the general and non-profit charita#le gi"ing ind$stry en"ironments that affect United Ways operations8 2. What are United Ways most important internal reso$rces and capa#ilities8 &. What #$siness is United Way in and ho! sho$ld it compete8 What are United Ways core capa#ilities8 What strategies ha"e United Ways leadership tried in the past* and ho! s$ccessf$l ha"e they #een8 What additional strategies might yo$ s$ggest8 (. What $ni$e responsi#ilities does United Way ha"e regarding ethical #eha"ior and #est practice9 go"ernance and financial acco$nta#ility models8 5o! s$ccessf$l !ill United Way #e in creating change at the local le"el8 =s United Ways mission still "ia#le8 'isc$ssion ($estions and Responses 1. What are the current challenges facing United Way? What are key issues in the general and non-profit charitable giving industry environments that affect United Ways operations?
&
Teaching Note: Case 7 – United Way
Re&erencing Chapter *) +ntrod$ction and Analy,ing -oals and Objectives
%ee Chapter 1* ,hi#it @1: !trategic management consists of the ana"yses, decisions, and actions an organi%ation undertakes in order to create and sustain competitive advantages& strategy directs the organization to!ard o"erall goals and o#+ecti"es) incl$des m$ltiple sta'eholders in decision ma'ing) incorporates #oth short-term and long-term perspecti"es) recognizes trade-offs #et!een efficiency and effecti"eness. • • • •
%ee Chapter 1* ,hi#it @4: 'he primary ro"e of the organi%ationa" "eader is to articu"ate vision, mission and strategic ob(ectives. ?eaders m$st also #e proacti"e* anticipate change and contin$ally refine changes to their strategies. United Way may need to e"al$ate its initial vision of the organizations p$rpose: !hat !as the original goal that !as )massive"y inspiring, overarching, and "ong-term*, that represented a destination that is driven by and evokes passion? =s the original "ision still applica#le gi"en the present circ$mstances8 United Ways organizational mission needs to #e considered: a mission encompasses #oth the purpose of the company as we"" as the basis for competition and competitive advantages. rganizations m$st respond to m$ltiple constit$encies if they are to s$r"i"e and prosper* and the mission pro"ides a means of comm$nicating to di"erse organizational sta'eholders. ltho$gh " ision statements tend to #e $ite end$ring and seldom change* a firms mission can and sho$ld change !hen competiti"e conditions dramatically change or the firm is faced !ith ne! threats or opport$nities. United Way leadership m$st esta#lish strategic ob(ectives to operationalize the mission statement. That is* o#+ecti"es operationa"i%e the mission statement * and help to provide guidance on how the organi%ation can fu"fi"" or move toward the )higher goa"s* in the goa" hierarchy Ethe mission and "ision. The #asic $estion strategic management tries to ans!er is: How can we create competitive advantages in the marketp"ace that are not on"y uni+ue and va"uab"e but a"so difficu"t for competitors to copy or substitute? NOE . A''++ONA/ E0ERC+"E")
=n !riting a mission statement* it is important to $nderstand the definition of the #$siness: 1F !ho are its c$stomers* 2F !hat c$stomer need is the organization trying to f$lfill* and &F ho! does the #$siness create and deli"er "al$e to c$stomers and satisfy their needs.
(
Teaching Note: Case 7 – United Way
ased on this* ho! do yo$ feel a#o$t the mission of United Way8 Wo$ld yo$ feel !illing to gi"e* #ased on !hat yo$ 'no! a#o$t them8 Re&erencing Chapter 1) Analy,ing the External Environ%ent
To ans!er the $estion a#o$t the key issues in the genera" and non-profit charitab"e giving industry environments that affect United Ways operation ! its necessary to assess the segments of the eternal competiti"e en"ironment that incl$de competitors* c$stomers* and s$ppliers* s$#stit$tes and ne! entrants. 0orters fi"e forces model allo!s strategists to anticipate !here the ind$stry might #e most "$lnera#le. 5eres !here the ans!er to the $estion: !hat #$siness are yo$ in8 #ecomes most important* since identifying the !rong ind$stry can create pro#lems for crafting an effecti"e strategy. 5elp st$dents apply 0orters "ive "orces of competition #y dra!ing a diagram on the #oard similar to the follo!ing* and ha"ing st$dents fill in the details:
!uggested& Jany ri"als compete for donors. %ho!ing ho! programs are different and eplaining the c$rrent change in United Way mission is diffic$lt !hen some competitors are also pre"io$s partners.
Threat of %$#stit$tes 5igh
6i"alry 5igh
%$ppliers argaining 0o!er
$yers argaining 0o!er 5igh
None !uggested& There are no traditional s$ppliers in the nonprofit philanthropic ind$stry. oth donors and recipients can #e considered c$stomers9.
!uggested& Gonors can s!itch to #eing program pro"iders on their o!n) recipients can raise their o!n f$nds.
!uggested& Gonors enco$nter almost no s!itching costs* so loyalty cannot #e ass$med. 6ecipients ha"e less #argaining po!er.
Threat of Ne! ,ntrants 5igh
>
!uggested& lmost no reso$rces are needed to start $p a nonprofit.
Teaching Note: Case 7 – United Way
6egarding the genera" eterna" environment * United Way m$st consider the politicalBlegal* economic and glo#al* socioc$lt$ral and demographic* and technological forces that might affect the a#ility of the firm to deli"er its ser"ices and s$stain its #$siness. %ee !hich factors in the general environment st$dents might pic' that ha"e a significant impact on the nonprofit philanthropic ind$stry. %t$dents might respond a s follo!s: #emographic& Certainly the demographics had changed. Jergers and ac$isitions !ere red$cing the n$m#er of corporate partners a"aila#le in local areas* and* altho$gh these larger corporations had significant assets and employees a"aila#le for potential donations* many s$ch corporations !ere considering creating their o!n charita#le arms* preferring to $se these to promote their o!n social responsi#ility !hile retaining control of the ca$ses they s$pported. lso* the rich indi"id$als !ere getting richer* the #a#y #oomers !ere getting older and staying acti"e longer* all good for non-profits loo'ing for large indi"id$al donors and "ol$nteers. 5o!e"er* the poor !ere getting poorer and more in need of help. !ociocu"tura"& %ocio-c$lt$ral iss$es incl$ded the traditional highly philanthropic nat$re of the a"erage merican citizen Kfirst noticed #y leis de Toc$e"ille in 1A&1* !ho !rote = m$st say that = ha"e seen mericans ma'e a great and real sacrifice to the p$#lic !elfare) and ha"e noticed a h$ndred instances in !hich they hardly e"er failed to lend faithf$l s$pport to one another9* the top United Way donors !ho contri#$ted at least L1@*@@@ ann$ally !ere honored #y #eing ind$cted into the Toc$e"ille %ocietyF. 'echno"ogica"& Technology* especially the gro!th of the =nternet had #een a significant #oon to all nonprofits* especially in accomplishing administrati"e d$ties and in comm$nicating !ith c$rrent and potential donors. United Way appeared to #e a!are of these #enefits. o"itica"-/ega"& 0olitical-legal iss$es had an effect not only on United Way* #$t also on the nonprofit philanthropic ind$stry as a !hole. Changes in ta la!* pension reg$lations* potential legislation of go"ernance controls similar to %ar#anes-ley for nonprofits* all these !ere #eing disc$ssed. United Way had dedicated p$#lic policy ad"ocacy personnel to monitor and lo##y for these iss$es* #$t changes here ma'e it diffic$lt to anticipate the f$t$re.
4
Teaching Note: Case 7 – United Way
NOE . A''++ONA/ E0ERC+"E" and O#+ONA/ REA'+N-")
The ongoing challenge of philanthropic organizations is to maintain the pace of donations. =n 2@@4* Cs 2@B2@ did an in"estigation into !hy people gi"e* and !ho gi"es the most. The f$ll story is a"aila#le at http:BBa#cne!s.go.comB2@2@Bstory8 idH24A27&@pageH1. With the U.%. economic do!nt$rn in 2@@A* !hat has happened to charita#le gi"ing trends8 %ee this additional story from 2@@3 !hich incl$des an interesting graphic a"aila#le in the left side#ar: http:BB!!!.nytimes.comB2@@3B@4B1@[email protected] nd here listen to or read a#o$t ho! charita#le contri#$tions dropped in 2@@A: http:BB!!!.npr.orgBtemplatesBstoryBstory.php8story=dH1@>17AA@(
=n addition* st$dents can #e gi"en an assignment to read the 1334 article #y Jichael 0orter* What is strategy89* Harvard Business 0eview, 12K4F: 41-7A* and the 1333 article #y 0orter and ;ramer* 0hilanthropys Ne! genda: Creating
#. What are United Ways most important internal resources and capabilities?
Re&erencing Chapter 2) Analy,ing the +nternal Environ%ent
To f$rther e"al$ate the challenges facing United Way* the organization m$st assess the relationships #et!een the elements in its va"ue chain. ,"ery acti"ity sho$ld add "al$e. Ta'e a loo' at Chapter &* ,hi#it &.1 to see the "al$e chain acti"ities. 5ere is !hat an assessment of this might loo' li'e for United Way:
7
Teaching Note: Case 7 – United Way
3al$e chain activity #ri%ary) =n#o$nd logistics Kf$ndraising tacticsF perations Kefficient processing of donations* $ality control systemsF $t#o$nd logistics Kdistri#$tion to recipientsF Jar'eting and %ales Kmoti"ated representati"es* inno"ati"e ad"ertising promotionF %er"ice Ka#ility to solicit feed#ac' respondF
"econdary 9or s$pport:) 0roc$rement K!in-!in relationships !ith partners and other alliances for proc$rement of program componentsF Technology de"elopment Kstate of the art hard!are soft!are* inno"ati"e c$lt$re $alified personnelF 5$man reso$rce management Keffecti"e recr$itment* incenti"e retention mechanismsF /eneral dministration Keffecti"e planning systems to esta#lish goals* access to operating capital* effecti"e top mgmt comm$nication* relationships !ith di"erse sta'eholdersF
4o5 does United Way create val$e &or the 6c$sto%er8 What challenges does United Way have in its val$e chain8
=t appears that relationships !ith long-time donors are a strength* partly gi"en the long history of the organization. No e"idence that this has e"er #een a systemic !ea'ness ecept !here #latant misappropriation has occ$rred d$e to lac' of monitoring of eisting controls. Gistri#$tion efficiency is one of the hardest things to assess* ecept #y eception. Gonor segments seem !ell identified and $nderstood. Jany affiliates seem to ha"e dedicated and 'no!ledgea#le representati"es. d"ertising and promotion campaigns appear to lac' inno"ati"e appeal. Consistent $ality g$aranteed #y long-time relationship !ith most f$nd recipients. Gonor relationships are changing and may re$ire ne! s'ill sets and reso$rces in order to ser"ice these appropriately. ?ong-term relationships directly !ith partners* #oth corporate donors and program allies s$ch as the 6ed Cross create tr$st and !illingness to negotiate for needed goods and ser"ices* and to create +oint initiati"es s$ch as relief efforts post;atrina. ttention seems to #e paid to =T $pgrades and inno"ations* especially regarding the =nternet as a cond$it for #oth donations and management of affiliate operations.
A
Teaching Note: Case 7 – United Way
=n addition* its important to consider the concept of the resource-based view of the firm* and the three 'ey types of reso$rces: tangi#le reso$rces* intangi#le reso$rces* and organizational capa#ilities. Getermining !hether the internal reso$rces are "al$a#le* rare* diffic$lt to imitate* or diffic$lt to s$#stit$te K30$4 F can help a firm s$stain a competiti"e ad"antage. %ee Chapter &* ,hi#it &.4. United Ways profile might loo' li'e this: angible Reso$rces)
5inancia"& The consistently reported administrati"e costs at aro$nd 1@-1>M of total contri#$tions ma'es it appear that United Way of merica and its affiliates are financially responsi#le. 5o!e"er* reports of the inflation of re"en$es to achie"e this admira#le lo! cost contin$e to s$rface. ,"en !ith possi#le misstatement* it does appear as if United Way falls #elo! the etter $siness $rea$s epense g$ideline of 2@M* s point at !hich charita#le gi"ing organizations are s$spected of administrati"e inefficiencies and possi#le mis-management. hysica"& No significant physical assets in"ol"ed. 'echno"ogica"& 0artnerships !ith corporate donors pro"ided United Ways !ith access to some significant technological reso$rces. Ja+or long-time donors incl$ded Jicrosoft* U0%* and the N?* all of !hom co$ld ha"e helped in many different !ays. 6rgani%ationa"& The federation go"ernance model is #oth a strength and a !ea'ness. strength #eca$se the affiliates are allo!ed significant a$tonomy to de"elop alliances !ith di"erse donors) a !ea'ness #eca$se it ma'es change harder to instit$tionalize. +ntangible Reso$rces)
Human& 5ighly "al$a#le* and rare in the case of dedicated "ol$nteers. lso* many United Way affiliate administrators had #een !ith the organization their entire !or'ing li"es* and !ere therefore "ery 'no!ledgea#le and loyal. $nnovation and creativity& eca$se of the history and longe"ity of the organization* not 'no!n for inno"ation. ollo!ing the same #asic mission for years and years does not pro"ide m$ch opport$nity for creati"ity. 0eputation& This !as United Ways most significant strength* #$t also a most potential !ea'ness. =ts #rand !as "ery !ell 'no!n. ny st$m#le* as in the past* !o$ld pro"e costly. Organi,ational Capabilities)
!pecific ompetencies or !ki""s& eing a "enera#le #rand !ith a solid "ol$nteer and donor #ase gi"es United Way an ad"antage o"er possi#le competitors.
3
Teaching Note: Case 7 – United Way
apacity to combine resources& 5o! to com#ine the a#o"e competencies to re"italize and gro! and differentiate !hate"er ne! initiati"es that may #e de"eloped depends on United Ways a#ility to contin$e a foc$s on anticipating social trends* and a !illingness to ta'e some ris's* #oth in the U.%. and internationally.
There can #e great di"ergence in ho! "ario$s gro$ps !o$ld mar' these reso$rces as va"uab"e, rare, inimitab"e and non-substitutab"e 730$48. The instr$ctor !ill pro#a#ly #e a#le to engage the st$dents in de#ate and enco$rage disc$ssion as to !hether or not the indi"id$al "al$e chain acti"ities can lead to ad"antages that are s$staina#le. The instr$ctor may also pose $estions a#o$t ho! the interrelationships among s$ch acti"ities !o$ld #e the so$rce of s$staina#le competiti"e ad"antage. That !o$ld help dri"e home the idea of O$ni$e #$ndles of acti"itiesBreso$rces as the #asis of s$staina#le competiti"e ad"antage m$ch more strongly. This analysis may highlight the diffic$lties facing United Way. 0ossi#le responses are listed #elo!: Reso$rce;Activity +s it 3al$able8 93: =n#o$nd logistics Des perations Des $t#o$nd logistics Des Jar'eting and Des sales %er"ice Des 0roc$rement Des Technology Des de"elopment 5$man reso$rce Des management /eneral No administration
+s it rare8 9R: No No No No
+s it di&&ic$lt to i%itate8 9+: No No No No
Are there &e5 s$bstit$tes8 9N: No No Des No
No No No
No Des Des
Des Des Des
Des
Des
Des
No
No
No
Re&erencing Chapter <) Assessing +ntellect$al Capital
Consider the concepts of inte""ectua" capita" and human capita" * #oth of !hich are intangi#le assets that a company s$ch as United Way needs to ha"e in order to compete s$ccessf$lly. =ntellect$al capital is a meas$re of the "al$e of a firms intangi#le assets* its rep$tation* employee loyalty and commitment* c$stomer relationships* company "al$es* #rand names* and the eperience and s'ills of employees. 5$man capital in"ol"es the indi"id$al capa#ilities* 'no!ledge* s'ills* and eperience of the companys employees and managers. United Way has n$mero$s partners to help it carry o$t its mission: http:BB!!!.li"e$nited.orgBpartnersB What other reso$rces does United Way need in order to #e effecti"e* and !hich might #e their most important reso$rces gi"en their c$rrent challenge8
1@
Teaching Note: Case 7 – United Way
$. What business is United Way in and ho% should it compete? What are United Ways core capabilities? What strategies have United Ways leadership tried in the past! and ho% successful have they been? What additional strategies might you suggest?
Re&erencing Chapter =) >or%$lating ?$siness./evel "trategies
=n order to craft a s$staina#le competiti"e strategy* United Way has to assess its a#ility to contend !ith many other philanthropic organizations. %ee this list from or#es at http:BB!!!.for#es.comB2@1@B11B14Bfor#es-charity-2@@-personal-finance-philanthropy2@@[email protected]. This story pro"ides additional information to s$pport ,hi#it ( from the case. %ee if st$dents can identify the differences #et!een the top rated charities – ho! do they compete8 The $estion of ho! to compete in a gi"en #$siness to attain competiti"e ad"antage re$ires an assessment of the types of competitive strategies* incl$ding the three generic strategies that are $sed to o"ercome the fi"e forces and achie"e a competiti"e ad"antage: "erall cost leadership ?o!-cost-position relati"e to a firms peers o Janage relationships thro$gho$t the entire "al$e chain o Gifferentiation Create prod$cts andBor ser"ices that are $ni$e and "al$ed o o Non-price attri#$tes for !hich c$stomers !ill pay a premi$m oc$s strategy o Narro! prod$ct lines* #$yer segments* or targeted geographic mar'ets ttain ad"antages either thro$gh differentiation or cost leadership o •
•
•
,nco$rage st$dents to de"elop their o!n ideas* $sing information gained from the disc$ssion of the internal and eternal en"ironment. s' the st$dents !hich strategy they thin' United Way sho$ld p$rs$e* and !hy. Their ans!ers may incl$de some of the follo!ing points: ost /eadership& This is traditionally !here United Way has ecelled* $sing its to$ted lo! operating costs to demonstrate ho! it co$ld f$nnel more money to s$pport programs. 5o!e"er* this is also !here creati"e acco$nting practices may ha"e lead to misrepresentation and s$#se$ent loss of tr$st. =f United Way !ants to contin$e to compete here* adherence to the ne! standards #y all affiliates is essential. #ifferentiation& United Ways original rep$tation !as #$ilt on its comm$nity chest9 model of pro"iding f$nds to selected ser"ice pro"iders rather than pro"iding ser"ices itself. The federation9 model of go"ernance !as rather $ni$e at the time* #$t may #e the #arrier for needed change going for!ard. United Way of mericas nation!ide initiati"es s$ch as 2-1-1 may #e s$fficient to differentiate it from others at the co rporate le"el* #$t the local affiliates ha"e little a#ility to distance themsel"es from local competition.
11
Teaching Note: Case 7 – United Way
5ocus& Unless United Way decides to di"ersify and inno"ate* and s$ccessf$lly create ne! prod$cts and ser"ices* it appears that it is limited to its niche of #road-#ased comm$nity s$pport. =nternationally United Way may ha"e more opport$nity to foc$s on a co$ntry or regions specific needs* especially in emerging nations* !here it may pro"ide a $ni$e and competiti"e choice for programmatic assistance.
ther options firms sometimes p$rs$e incl$de: ombination of #ifferentiation and ost /eadership, ombination of 5ocus and ost /eadership, ombination of #ifferentiation and 5ocus& s stated a#o"e* United Way does not no! appear to ha"e a s$fficiently $ni$e position in the mar'et for it to achie"e o#"io$s ongoing competiti"e leadership* ecept as a res$lt of its history and rep$tation. Will its com#ined strategy #e s$ccessf$l against any competitor8 0ro#a#ly not ecept !ith international partners. !tuck in the 9idd"e? What does United Way need to do to ma'e s$re it is not st$c' in the middle8 =ts history and rep$tation are a strength* #$t also a !ea'ness here* d$e to inertia and change resistance. =t appears rian /allagher is trying to !or' !ith all sta'eholders to #e creati"e and identify inno"ati"e program ideas for the f$t$re. This might also re$ire ne! or reconfig$red reso$rces* an additional challenge.
$rther ideas to eplore might incl$de di"ersification. =n addition* #rand etensions can #e a !ay to gro! as long as the target is "ery clearly defined* and the program offerings are clearly distinct from competitors offerings. =nternationally* United Way is playing a nontraditional role in some co$ntries – doing no f$ndraising* #$t instead acting as a coach and co$nselor and reso$rce pro"ider for infrastr$ct$re s$ggestions. This appears to #e a core competency of United Way. nother idea might in"ol"e increasing eisting alliances and partnerships !ith other nonprofits and go"ernmental agencies to pool reso$rces* s$ch as !ith the 2-1-1 initiati"e. =n addition* since the older demographic is one thats gro!ing* it might ma'e sense for United Way to de"elop a specific campaign to attract this gro$p* as either donor or "ol$nteer. The organization is already reaching o$t to the college age pop$lation* most recently thro$gh the lternati"e %pring rea' initiati"e – h elping st$dents spend their #rea' doing good deeds in re#$ilding the /$lf Coast region. What other alliances or partnerships might United Way !ant to p$rs$e8 &. What uni'ue responsibilities does United Way have regarding ethical behavior and (best practice) governance and financial accountability models? *o% successful %ill United Way be in creating change at the local level? +s United Ways mission still viable?
12
Teaching Note: Case 7 – United Way
Re&erencing Chapter @) "trategic Control Corporate -overnance
!trategic contro" in"ol"es the process of monitoring and correcting a firms strategy and performance. =t foc$ses especially on the roles of informational and #eha"ioral control in the form$lation and implementation of strategies. %ee Chapter 3* ,hi#it 3.2. $nformationa" contro" is concerned !ith !hether or not the organization is doing the right things9* !hile behaviora" contro" is concerned !ith !hether or not the organization is doing things right9 in the implementation of its strategy. United Way needs to ma'e s$re eno$gh information of the right 'ind is a"aila#le to monitor acti"ities – this is !here things s$ch as financial* $ality control* and c$stomer feed#ac' is essential) and that the appropriate role models and re!ards are a"aila#le to 'eep employees moti"ated.
United Way has a $ni$e challenge #eca$se of its str$ct$re of affiliates. To !hat deg ree do the role models at United Way of merica seem to affect the #eha"ior at the local affiliates8 NOE . A''++ONA/ E0ERC+"E"
United Way is go"erned "ia a federation of affiliates. To see ho! the United Way in yo$r area is rated* search #elo!: http:BB!!!.charityna"igator.orgBinde.cfm8 'ey!ordIlistH$nitedP!ay%$#mit2H/#ayHsearch.res$lts United Way World!ide is rated per #elo!: http:BB!!!.charityna"igator.orgBinde.cfmB#ayBsearch.s$mmaryBorgidB(423.htm The etter $siness $rea$ p$#lishes standards for charita#le acco$nta#ility* a"aila#le here: http:BB!!!.###.orgB$sBCharity-%tandardsB United Way meets these standards* per #elo!: http:BBcharityreports.###.orgB0$#licB6eport.asp8Charity=GH133( ased on the reports from these !atchdog gro$ps* ho! does the United Way of merica appear to handle its financial responsi#ility8 Re&erencing Chapter **) "trategic /eadership) Excellence! Ethics Change
The concept of "eadership in"ol"es the process of transforming organizations from !hat they are to !hat the leader !o$ld ha"e them #ecome. This in"ol"es: %etting a direction Gesigning the organization N$rt$ring a c$lt$re dedicated to ecellence and ethical #eha"ior ?eaders need to contin$ally scan the en"ironment to de"elop 'no!ledge of all sta'eholders* and 'no!ledge of salient en"ironmental trends and e"ents. Then leaders m$st integrate that 'no!ledge into a "ision of !hat the organization co$ld #ecome. ?eaders re$ire the capacity to sol"e increasingly comple pro#lems* and m$st #e proacti"e in their approach so they can de"elop "ia#le strategic options. • • •
Giffic$lties in implementing the leaders "ision and strategies incl$de a lac' of $nderstanding of responsi#ility and acco$nta#ility among managers* re!ard systems that
1&
Teaching Note: Case 7 – United Way
do not moti"ate indi"id$als and gro$ps to!ard desired organizational goals* inade$ate or inappropriate #$dgeting and control systems* and ins$fficient mechanisms to coordinate and integrate acti"ities across the organization. C, rian /allagher has ac'no!ledged the potential diffic$lties of his plan to change the !ay #oth the national United Way and its local affiliates plan for and deli"er ser"ices. 6ead the article from 2@@2 in $siness Wee' #elo!: http:BB!!!.#$siness!ee'.comBmagazineBcontentB@2I11B#&77(@7(.htm8chanHsearch What strategies might /allagher $se to get the chapters to #$y into his strategic "ision8 ?eaders* especially those !ho ha"e responsi#ility for some degree of p$#lic tr$st* as United Way does* m$st also maintain at least the o$t!ard appearance of an ethical #$siness c$lt$re. When n$rt$ring a c$lt$re dedicated to ecellence and ethical #eha"ior* managers and top eec$ti"es m$st accept personal responsi#ility for de"eloping and strengthening ethical #eha"ior) consistently demonstrate that s$ch #eha"ior is ce ntral to the "ision and mission) de"elop and reinforce role models* corporate credos* codes of cond$ct* re!ard and e"al$ation systems* policies and proced$res that s$pport the ethica" orientation. 5eres a ne!s story from 2@@3 a#o$t ho! Washington GC area charities are s$spending their mem#erships !ith the local United Way and partnering !ith another f$ndraising gro$p* mericas Charities* partly as a res$lt of United Ways past financial scandals: http:BB!!!.!ashingtonpost.comB!pdynBcontentBarticleB2@@3B@(B2AB62@@3@(2A@[email protected] What sho$ld non-profits do to ens$re that temptation doesnt res$lt in inappropriate #eha"ior from indi"id$als in leadership positions8 ?et st$dents 'no! that at this point* it is not clear !hether rian /allaghers strategy is s$fficient for enlisting the local affiliates s$pport. They dont ha"e to identify one #est strategy* +$st $se this disc$ssion to eplore the implications of ho! strategy is de"eloped* and !hat are the pros and cons for each #$siness decision. Whate"er decisions st$dents come to can #e chec'ed #y as'ing is this strategy s$staina#le9* and !ill the need for United Way still eist ten years from no!98 ne interesting disc$ssion might #e regarding United Ways international o$treach. The mission and role of United Way in de"eloping co$ntries !as more of a cons$ltancy model* !hich might #e more rele"ant than the traditional role played in the merican philanthropic mar'et. United Way did ha"e some etensi"e eperience creating and ser"ing m$ltiple constit$encies. Using that eperience to coach others to pro"ide for $ni$e comm$nity needs might #e a !orth!hile and s$ccessf$l approach !orld!ide* therefore contin$ing to 'eep their o"erall mission "ia#le.
1(
