Is Strategic Management Relevant to the Three Sectors

"Strategic management is very relevant to all the three sectors - public, private and third sector. The objective of strategic management is to enable any organization to meet its vision. While private sector usually has a vision associated with increasing shareholder value, public and third sector may have a vision associated with increasing the social capital, providing public service etc. Monetary gains or decisions driven by monetary considerations take a backseat for public and third sectors since the vision is different from increasing shareholder value.

Strategic planning approaches developed in the private sector can help public sector organisations deal with the recent dramatic changes in their environments. For Example strategic planning is a disciplined effort to produce fundamental decisions shaping the nature and direction of governmental activities within constitutional bonds it can help governments become more effective. The public sector strategic planning process provides a useful framework for review of the private sector approaches to strategic planning in the public sector.

A relevant example is that of any country’s defense organisation. The importance of strategic management cannot be emphasised more anywhere than for this sector. Effective strategies have lead to loose wars often from supposedly weaker opponents. The defense sector almost always belongs to the public sector worldwide and strategic management here is of utmost importance.

A relevant example from the third sector in India would be the Bill and Melinda Gates foundation’s work to help improve the Sustainable Development Goals. Revenue generation is not the objective of this organisation run as professionally as any matured private enterprise would. However, the strategic management of its goals and resources instil the professionalism that is inherent in this organisation. It in fact is all the more important for public sector and third world sectors as without it, sustainability of such an organisation will eventually get affected.