Strategic Management and Change in High Dependency Environments : The Case of a Philanthropy

Abstract

The charities or philanthropies are generally the result of private initiative. They design and provide an apparently easily substitutable service for which there is ample competition. They collect funds from charitable donors to finance community-based projects. The continuity of the relationship to the resource providers, and to the community groups, both of which could be seen as “customers”, is temporary, and hard to stabilize. It requires trust, yet the rarity of the encounter itself and the lack of closeness destroys trust. Surviving in such an environment is a constant challenge. How do these organizations manage to adapt to change and survive is the topic of this text. Based on a detailed study of the operations and strategic decision-making of Centraide in Greater Montreal, the author suggests that dependency on the environment is not a crippling curse, but rather can be a stimulus to adaptation. The example of two major changes over a 10 year period shows that strategic management in high dependency situations requires a continual attention to the organization's relationship with the forces in its environment, thus making change a permanent feature of management and forcing a continuous management of the process by which change takes place. Where managers put the emphasis on the content of change, challenges arise that may be fatal to the managers involved, and detrimental to the organization's ability to compete. This is indeed the basic proposition of the author : for philanthropies, dependency is a strategy that may prove more effective in managing complex situations than autonomy, provided that more attention is given to strategic decisions process rather than to their content. The first part of the text is a discussion of the relevant strategic management literature, proposes a conceptual framework which structures the text. The second part describes the strategic decision-making process in Centraide, and its character, by relating two major change attempts. The first change was undertaken in 1990 and led to a major crisis, while the second was formally started in 1997, with some surprising success. This will lead to a discussion of the strategic management and change of highly dependent organizations, and to a few concluding comments and implications for research and practice.