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RESEARCH
Strategic
management
practices
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Abstract
Purpose The purpose of this paper is to examine how managers in Nepalese business organizations
and non-profit non-government organizations understand and practice strategic management and to
what extent such understanding and practices differ from those in western countries.
Design/methodology/approach In-depth case studies of eight business organizations and nongovernment organizations (NGOs) were prepared based on multiple data collection such as interviews
and review of reports and the cases were analyzed to identify several themes for discussion of
similarities and differences in the views and practices of strategic management.
Findings Managers in Nepal have developed some shared understanding of key aspects of strategic
management and practice some important aspects of strategic management; much remains to be done
in order for them to develop a clear strategic focus so that they could develop their abilities to compete
with global players and to create competitive advantages.
Research limitations/implications This study suggested several avenues for future research for
more systematic and data-driven studies on the roles of international exposure on managers,
international partners, national culture and other macro environmental conditions on strategic
management practices in Nepal and South Asia.
Practical implications The research findings are useful for managers of business organizations
and non-government organizations to develop their strategies for superior performance in South Asian
countries characterized by volatile business environment and resource constraints.
Social implications NGOs which work for social development need to improve their strategic
management practices with more rigorous and resilient strategic implementation in Nepal.
Originality/value This research is unique in the context of Nepal and will be useful in similar contexts.
The findings contribute to understanding the strategic management practices in a unique culture.
Keywords Strategic management, Nepal, Business organization, Non-government organization
Paper type Research paper
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could be achieved (Hoskisson et al., 1999): the industrial organization (IO) view which
stresses industry and competitor analysis as a primary basis for strategic positioning
and competitive advantage (e.g. Porter, 1996) and the resource-based view (RBV) that
emphasizes having and utilizing unique and valuable resources (Barney, 1991).
While the concepts and process of strategic management are generally understood and
practiced in the western world, their prevalence in organizations of developing countries,
particularly in South Asia, is rather unknown. As countries in South Asia have uncertain
business environments and distinct cultures (Khilji, 2012; Haley and Tan, 1999), it will be
interesting to explore the extent to which the understanding and practices of management
in South Asia are similar to those in the western world. As researchers have recently
suggested, an examination of business practices in South Asia provides a fresh
perspective and research in this context adds relevance and rigor to international business
theory (Khilji, 2012). With a focus on one particular aspect of management strategic
management and one country in South Asia Nepal this study intends to contribute to
our understanding of management practices in South Asia. The basics of strategic
management are the importance of internal and external analysis, articulation of longterm goals and priorities, and implementation of strategies which are applied generally in
business organizations and not-for-profit NGOs, but only limited research exists in such
management practices in Nepal (Pant, 2006). Therefore, we sought to explore the practices
in both types of organizations and compare and contrast them with a focus on strategic
management. We adopt an in-depth case study approach because little prior basis exists to
develop quantitative measures for large-scale survey studies. The following two research
questions guided this study:
(1)
(2)
To what extent are the managers views and practices of strategic management
in business organizations and NGOs similar to and different from each other?
This paper is structured as follows: first, we discuss the key underpinning of strategic
management as discussed in the literature, which provides a basis for understanding
the approach to our study and methods we employ. We also briefly review the literature
on management and strategic management practices in Asian countries. We then
discuss our case study method followed by our approach to data collection. Next, we
discuss our findings that are derived from the case studies as they relate to the two
research questions. Finally, we discuss our findings and implications of our research
for future research and management practice.
Relevant literature and core conceptual underpinnings
Fundamentals of strategic management
Strategy is understood as a pattern of decisions, commitments, and actions undertaken
by an organization to improve its competitiveness and achieve superior performance
(Hambrick and Fredrickson, 2001; Kim and Mauborgne, 2002). Competitive advantage
arises with a unique strategy, i.e. doing different things than the competitors do (Porter,
1996). Operational effectiveness (doing the same things better) is not strategy because
it does not provide relative advantage over others, as the best practices are quickly
imitated. Strategic management is often seen as a process of performing an analysis
of the environment, identification and development of unique strategies, and
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Both the externally driven or IO and the internally driven RBV perspectives on
strategic management suggest that firms must adapt strategies according to changes
in the environment. The current strategic management texts (e.g. Rothaermel, 2013)
accordingly emphasize analysis of the industry and competitor environment (external
analysis) and analysis of the firms resources and capabilities (internal analysis) as
the starting points for strategy formulation. It is not sufficient to formulate unique
strategies, it is also critical to implement those strategies with proficiency. Issues of
developing appropriate organization structure that matches with strategy, developing
leadership skills and talents of managers and other employees, developing human
resources (Rothwell and Kazanas, 1989), empowering people to learn and better
understand the changing environments (Gnyawali and Stewart, 2003), and maintaining
an appropriate organizational culture are important aspects of strategy implementation
(Hrebiniak, 2005). In other words, the various aspects of the organization have to be
matched with the strategies so that the strategies can be put in practice and pursued
effectively and efficiently.
While the core points discussed above are the cornerstones of current strategic
management teaching and practice in the western world (e.g. Rothaermel, 2013), it is
unclear how those core aspects are viewed and practiced by managers in a developing
country, Nepal. Before getting into the discussion of our research context, we briefly
outline below strategic management issues in not-for-profit settings and the South
Asian context.
Strategic management in not-for-profit organizations
We expect that the fundamentals of strategic management discussed above analysis
of external environment and internal resources and capabilities, development of unique
strategies, and implementation of those strategies would be relevant in the context of
not-for-profit organizations. Although not-for-profit organizations do not have profit
motive, the goals of survival and long-term growth are similar to those in business
organizations. They engage in an analysis of stakeholders (any individual or entity
that impacts or is impacted by what the organization does) needs and expectations and
set their goals and priorities accordingly. They face strong competition from various
agencies and have to address diverse needs of multiple stakeholders, so not-for-profit
organizations are likely to benefit from the application of strategic management
concepts. However, Bryson (1988) suggests that since the not-for-profit organizations
are different in their goals and mission, exact duplication of the private sector strategic
planning process would not be appropriate in such organizations. While presence of
numerous stakeholders, conflicting criteria for performance assessment, public
accountability, and the social service nature of non-profit organizations tend to make
such replication difficult (Chlala et al., 1995). In addition, pressure from external
sources (e.g. parent organization, major funding sources) would make adoption of
strategic management practices more critical (Webster and Wulie, 1988; Wolch and
Rocha, 1993). Nevertheless, Hatten (1982, p. 89) succinctly argued 20 years ago that
Not-for-profit managers can indeed benefit from the application of the strategic
management concepts originally developed for profit making corporations. Drucker
(1985, p. 177) argued that nonprofits need to be entrepreneurial and innovative fully
as much as any business does.
Although focus and priorities of non-profit organizations strategic management are
different from for-profit organizations, they resemble many common aspects while
achieving their goals and mission of serving their target stakeholders or beneficiaries.
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business relationship are rather underdeveloped and are within limited purview of
selected senior managers and influential family members as owners (Pant, 2010).
As noted earlier, almost no research-based insights exist about strategic management
practices in Nepal.
In summary, the review of the literature suggests that important insights could be
gained by examining whether and to what extent the core concepts of strategic
management as understood and practiced in the western world are practiced in the
developing country of Nepal. Further, literature suggests that not-for-profit
organizations are likely to adopt and benefit from strategic management practices
as they face increased pressure from competition and stakeholders just like business
organizations do. The unique context of South Asia and lack of research in management
practices in Nepal clearly suggest the need to understand strategic management
practices in Nepal. Accordingly, we sought to examine managers view and practice
strategic management across business organizations and not-for-profit organizations and
compare them with those of the western countries.
Methods
We used the case study method primarily because there is no systematic prior
research in Nepalese strategic management practices for us to use as a basis for
the development of survey instruments. Specifically, we set out to conduct in-depth
examination of multiple companies and compare results across the case (Yin, 1994) to
develop broader insights. The research setting was eight organizations four business
organizations, and four NGOs (Table I) based on theoretical sampling (Flick, 2006).
The primary theoretical consideration for their inclusion in our list of cases was that
these organizations had reported some practices of strategic management in the past
so that we could assess these practices, compare these practices across the cases, and
compare them with the practices in the western countries. The business organizations
we selected represent banking, airlines, and food industries which are among the
important and growing industries in Nepal. Among the NGOs selected for this study,
one is involved in commercial activities to serve its philanthropic objectives and the
rest are donor funded. These NGOs compete with similar NGOs and for-profit business
organizations in delivering their products and services. Further, because many NGOs
from developed countries exist in Nepal, it is likely that the NGOs operating in Nepal
would have adopted some western management practices.
Sl. No.
Table I.
Description of
participating
organizations
Organizations
Business organizations
1
Lalitpur Finance
2
Himalayan Snacks
3
Bank of Kathmandu
4
Buddha Air
Non-governmental organizations
5
Mahaguthi
6
Room to Read Nepal
7
Adventist Development and Relief Agency
(ADRA) Nepal
8
Plan Nepal
Products/services
Data sources
The primary source of data was semi-structured interviews with executives. We
started off with a few open-ended questions in order to generate responses from the
managers: what does strategic management mean to you? To what extent are
the senior managers involved in strategic management? How much emphasis do you
put on various aspects of strategy formulation and implementation? To what extent are
planned strategies implemented? What are key opportunities and obstacles in adopting
strategic management in the organization? These questions helped us to collect
retrospective and real-time data which ensures external and internal validity of the
data (Bingham and Eisenhardt, 2011). At least three senior managers of each
organization were interviewed, and each interview lasted for about 30 minutes. Following
Flick (2006), we took detailed notes during the interviews; if things were not clear from
the interview responses, we did follow-up e-mails and telephone calls to further probe the
respondents. We also reviewed the organizations web sites and published reports to
generate additional insights relevant to strategic management practices. Use of multiple
cases and multiple sources of information on each case helped us to verify and
triangulate the data to increase validity of our findings (Flick, 2006).
Data analysis and results
We began by compiling the interview data and by synthesizing the results from the
various sources for each organization, leading to mini cases on strategic management
practices of the organizations studied. Because of rich and detailed interview
responses, we first sought to distill relevant information by identifying themes that
emerged from the data on various aspects of strategic management. The process of
identifying the themes was iterative: the theoretical definitions and concepts from the
literature helped to interpret the interview responses, and the interview responses
helped to provide greater clarity on the nature of the themes and the detailed contents
inside each theme.
Results on strategic management practices in Nepal
In this section, we discuss results related to the first research question: the managers
understanding of the strategic management concepts and extent to which they are
practiced in Nepal. We present these results in two parts. The first part summarizes the
overall themes generated from all the interviews. The second part of our discussion
takes these overall themes and provides detailed insights related to these themes
generated from the business organizations and NGOs.
As reported in Table II, 14 themes were generated from the analysis of the
interviews. One of the two authors developed the themes based on the case
stories and then the second author independently verified the themes. The two
coders agreed in most of the themes and categorization of the interview statements
by the themes. Some minor variations in the classification were handled through
discussions. As the first two columns in Table II indicate, we related each theme
to a particular core strategic management concept discussed above in the
literature review.
In order to further ensure that the themes were meaningful and categorization was
appropriate, we presented the themes to 15 second-year MBA students and asked them
to evaluate the themes and classification of the interview results. The MBA students
evaluation showed that the themes were meaningful to them and the categorization
of the interview statements by the themes was appropriate. The last two columns of
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Core strategic
management concepts
Strategy formulation
Strategy formulation
Strategy formulation
Strategic positioning
Strategy formulation
Strategy formulation
Strategy formulation
Strategy formulation
Strategy formulation
Proactive process
Reactive process
Strategy implementation
Challenges
Table II.
Themes generated from
interviews and inter-coder Benefits
agreement
Inter-coder agreement
Business
Non-government
organizations (%)
organizations (%)
81.7
83.3
88.3
75.0
66.7
73.3
83.3
73.3
90
68.3
88.9
88.3
64.4
100
78.3
86.7
85.0
91.1
80.0
80
80
-
86.7
83.3
Table II present their degree of agreement. As noted in the table, the majority of the
themes have high inter-coder reliability.
Insights on strategic management in business organizations
Using the themes reported in Table II, we illustrate how interview findings from
business organizations relate to those themes. Table III presents such results, and a
detailed discussion of each theme follows.
Goal setting and planning. Managers view strategic management as a tool for
setting goals and plan. An executive stated strategy as a game plan to strengthen
companys competitive position, satisfy customers and achieve performance targets.
The game plan provides a direction toward goals and ensures correctness of the path
for superior performance. As another executive noted, It provides direction and
path to travel, helps to make sure the path the company is following is the correct one
and [y] mobilizes resources to achieve the goals.
Goals and strategies. The strategy was about delivering products and services in
different ways than competitors to fulfill market gaps. One manager stated that their
strategy serves the customers which have not been served by others by lowering
minimum balance for depositors, or we strongly emphasize customer services, the
product is reliable, it offers the best prices in the industry, and it has a strong emphasis
on safety in the airline market. In addition, management considered that development
of unique organizational set-up, hiring competent staffs, and improving technology are
critical for strategy. A manager of an airline company stated that We send pilots
periodically to training programs, and our employees understand that Buddha Air
stands for quality and superior service and they work hard to accomplish these goals,
and it is different in that it fleets Beech 1400D and Beech 1400Cs aircrafts which are
particularly well suited for the geographic conditions of Nepal. A bank manager said
Themes
Obstacles in strategy
implementation
Benefits from strategic
management
that we have geographic focus in the far western development region and branches in
all development regions [y] the only private bank to have such a focus. These
companies assessed and identified market gaps for developing strategies. We rescued
clientele not served by other banks i.e. clients with small saving deposits and we
constantly watch the competition and find out unfulfilled market niches. Overall the
managers understanding of strategy confirmed its definition as a pattern of actions to
improve their competitiveness and superior performance through differentiation
(Hambrick and Fredrickson, 2001). However, managers views and practices of
strategy seem to be focussed more on external conditions than internal resources. For
example, the concept of non-imitable resources (Barney, 1991) was not mentioned by
any of the managers.
Managers involvements. Top managements were involved in strategy formulation,
implementation, and evaluation. They were actively involved in strategic management,
for example, the strategies are developed by top management in consultations with all
departments and the senior managers use a strategic management perspective to
formulate strategies, prepare plans and carry out continuous monitoring and
evaluation in a participative manner. Managers of another company noted that
everything is done in a top down manner by the Managing Director as it is a family
business. However, managers involvement was noted by a manager: in order to
develop strategies the entire staff of the company meets regularly. Another manager
suggested the involvement of department heads and the focus of strategy on customer
and market: The department heads review both customer complaints and
compliments, and the marketing department plays a crucial role in coming up
with ideas to differentiate products and establish marketing strategies with the active
support of various departments.
Proactive and reactive strategic management. The companies used mainly reactive
strategies with a particular emphasis on reacting to changes in the environment. An
executive mentioned that we carry out extensive business analysis every year. The
managing director evaluates long term plans, and modifies these plans on the basis of
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Table III.
Key findings from
business organizations
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Themes
Managers involvements
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Table IV.
Key findings from NGOs
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All the staff are informed and educated on the guiding principles called Blueprint
of Room to Read. The strategic planning was a long process which took about
15 months to complete. Workshops and committees were involved for generating
information during the strategy development process. A number of workshops at the
community and partner levels are conducted to validate the baseline survey and
evaluation findings and the representatives of different departments and producer
groups participate and share their knowledge and experiences in these workshops.
External facilitators were used for strategy development. Independent consulting
groups conduct baseline surveys about family situations including literacy, health, and
children as well as program evaluations. An executive supporting this fact mentioned
that the head office is proactive in utilizing its unique advantages and allocating its
resources to create new markets for growth and advancement in all the countries where
it works and the organization pays continuous attention to the donors commitment
in terms of funding and the security situation in the country while implementing the
programs. The following statement also supported the need of integrating donors
interest with strategies for programs: this organization pays continuous attention to
the external environment mainly for competing for donors funds at the international
level. The process of strategy formulation by headquarters resembles corporate
strategy of for-profit companies (Pearce and Robinson, 2005) in order to create superior
value by making country offices perform better under a headquarters umbrella.
The headquarters pay attention to the donor agencies interests, needs of the
beneficiaries, and competitors programs while developing strategies.
Strategy implementation and obstacles. The strategic implementations were weak in
the NGOs as it is difficult to motivate people to follow the strategies in a culture
where everything is expected to be initiated from the top due to insufficient skill
and knowledge to implement the strategic management plans. Similar was the view
of another executive, old and senior human resources are too inflexible towards
dynamism and changes. Some of the obstacles were related to inadequate resource
allocation such as, inadequate funding is another major constraint. These statements
indicated poor strategic alignment with human resources and organizational culture.
Other types of obstacles were related with external environment as explained by the
following statements such as unpredictable forces such as continuous strikes and
present conflict situation in the country.
Some obstacles for applications of strategic management in NGOs were related to
the process of strategic management itself. The executives mentioned about insufficient
environmental assessment during strategic planning and strategic plans are
implemented rigorously but monitoring has been difficult.
Perceived benefits from strategic management. Executives of NGOs perceived
benefits of strategic management in terms of improvements in their image, networking,
and product development, greater focus on the specific needs of beneficiaries, relationship
with stakeholders, and growth of services. An executive of Mahaguthi mentioned about
the benefits similar to private organizations, such organizational arrangements have
helped Mahaguthi to improve its image, networks, sales, marketing, and new product
development and our business has grown over the years. The managers of other
organizations believed that they had achieved superior results especially by creating
value to the donors and beneficiaries in a short period of time. The value creation helped
them expand their activities in new countries. This organization has received the social
entrepreneur organization award from the Fast Company magazine and the Hero of Asia
award from the Time Magazine. Another executive mentioned that application of
strategic management in the past contributed to the expansion of its programs into new
geographical areas, increased funding from new donors, increased government
cooperation in implementing programs, and increased capacity of local NGOs. It was
also helpful in achieving overall welfare such as applications of strategic management
have helped the organization to make its country programs focused on the specific needs
of its beneficiaries, to effectively negotiate and come up with beneficial agreements with
partner organizations in various communities, government and other development
organizations which ultimately enhanced donors supports, and employees motivation
and commitment. Finally, the strategies have helped in value creation in the society, in
terms of improvements in quality health services and increased sustainability of health
service delivery systems.
In summary, the results show that a few aspects of strategic management are
practiced in Nepal, and these practices exist in both business organizations and NGOs.
Managers believe that strategic management is important as it pushes them to be
more systematic in analyzing the environment, developing goals and strategies,
and implementing those strategies. Further, they believe that adoption of strategic
management practices help them in realizing better outcomes. The managers also see
tremendous obstacles in strategic management. While general concepts of goals, plans,
and priorities are understood and practiced reasonably well in Nepal, it is evident that
managers do not think systematically about competitor analysis, development of
unique strategic positioning, having and utilizing unique and valuable resources,
and creating competitive advantages.
Comparison of strategic management practices of business organizations and NGOs
This section focusses on a comparative analysis of strategic management practices
of business organizations and NGOs (research question 2). Table V provides a
comparative summary, and details results are discussed below.
Our comparative analysis of business organizations and NGOs shows several
differences. Business organizations consider strategic management as a tool for
gaining competitive advantages and customer satisfaction, but NGOs consider it
merely as a tool to attract more funds and to expand their programs. Compared to
business organizations, NGOs pursue a more formal and traditional strategic
planning process. Because NGOs have international linkages, they typically involve
external experts in the strategic planning process and collect a substantial amount of
information through surveys, workshops, and meetings. The strategic plan helps
them in increasing funding support from donors, expanding programs, increasing
cooperation with stakeholders, informing staff, and satisfying donors and beneficiaries.
These differences in process and focus of strategic management between business
organizations and NGOs indicated that the exact duplication of the for-profit sector
strategic planning process is not possible as suggested by Chlala et al. (1995).
It is obvious that the western style of strategic management has a strong influence on
NGO strategic management, apparently because they are guided by their headquarters
in the west.
Although senior executives of business organizations and NGOs understood
strategic management as strategy formulations, implementation, and monitoring,
the strategic goals were different. While business organizations seem to view
differentiation as being an important aspect of their strategy, NGOs strategies were
focussed on operational effectiveness in terms of producing greater social benefits
by improved service modalities. Our findings also show that NGOs are weaker in
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Managers involvements
Proactive and reactive
strategies
Strategic implementation
Table V.
Differences in strategic
management practices
between business
organizations and NGOs
Obstacles in strategic
implementation
Benefits from strategic
management
Differentiation by serving un
served customers needs for
improved competitiveness and
profitability
Extensive involvement and
empowerments of all managers
Short-term orientation and
continuous adaptations of
strategies to meet uncertainties
Resilient implementation with
maintaining sound relationships
with regulatory bodies and
adjustments in organizational
resources
Fewer obstacles due to resilient
strategic management
Improvements in market position
and profitability
NGOs
Considered as an approach for
formulating coherent strategic
plans
Efficiency focused for improved
sustainability and social impact
Prepared by head quarters and
country mangers to implement
strategies
Long-term orientations and
inflexible to address uncertainties
Less resilient implementation and
difficulties to adapt with the
changes
More obstacles due to faulty and
inflexible strategic management
Improvement in funding and image
strategy implementation as they face constant threats from the external environment,
particularly political instability and conflicts prevailing in the country. NGOs are less
reactive and more proactive. NGOs also face internal obstacles, such as lack of
confidence of the staff in making and pursuing strategic plans.
In terms of obstacles and benefits, business organizations seemed to have fewer
obstacles in strategic management because they monitor the external environment
more regularly and tap into emergent opportunities. The NGOs seemed to have more
obstacles in spite of utilizing external analysis in the strategic planning process. Business
organizations perceived the benefits of strategic management in terms of market share,
competitive advantages, brand image, and profitability. NGOs perceptions of the benefits
were largely improvement in their beneficiaries social and economic conditions, funding
supports and networking with government and partner organizations. Business
organizations were more resilient to become competitive in the given political and
bureaucratic environment and resource constraints. NGOs appeared to have traditional
strategic management practices characterized by top-down approach, and are rather
inflexible and less resilient in strategy implementation. It appeared that NGOs may need
to be more resilient to achieve their mission and goals than business organizations in the
uncertain and volatile environment (Drucker, 1985) in Nepal.
Discussion and implications
Our in-depth case studies show that while managers in Nepalese organizations do
view strategic management as being critical in their organizations success, there
are variations in the specific aspects of strategic management in for-profit business
organizations vs not-for-profit NGOs. We also find that strategic management
practices in Nepal differ from those stated in the literature in the western context.
Discussion of findings
In the case of business organizations, managers view strategic management as preparing
long-term plans (vision, mission, and goals) and distributing/communicating them to
various departments and units within the organization. They place more emphasis on
preparing annual strategic plans in a participatory approach and monitoring them.
Strategic plans are prepared to gain competitive advantages and customer satisfaction.
However, managers seem rather unclear about how to be unique and truly differentiate
their products and services. Our findings thus indicate that Nepalese business managers
have not specifically thought of ways in which they could create and maintain
competitive advantages through pursuit of inimitable differentiation strategies.
Our findings also indicate that strategic management in Nepal is often focussed on
responding to changes in the environment and competition, and thus is rather reactive
and short-term focussed. The reasons may lie in the volatile environment in Nepal,
which makes it very difficult for managers to do a long-term forecast and plan for the
future. Frequent changes in government regulations and internal resource constraints
seem to be key obstacles in developing long-term plans and implementation of such
plans. Lack of reliable, timely, and comprehensive business information in Nepal also
impedes managers from doing adequate and accurate situational analysis following
the IO approach. Haley and Tan (1996) indicated the existence of different strategic
management styles in Asian firms. Most of the companies studied do not really
emphasize internal resources and capabilities as being key to strategic management,
suggesting the absence of internal analysis based on the RBV approach. The above
mentioned examples also revealed that the strategic plans are not followed by aligning
them with the structure, system, and culture of the organization.
While we found that the adoption of the core ideas of strategic management was not
complete among the companies studied, these firms are running successfully in Nepal.
This stands in contrast to the western view that the absence of strategic management
represents a weak management style, are prone to failure. Further research is needed
in order to develop a better and deeper understanding on these aspects. This study
reveals the prevalence of an Asian strategic management style characterized by trust,
loyalty, networking and relationship based, speedy, ad hoc, and reactive strategic
decision making (Ghosh and Chan, 1994; Haley and Tan, 1999). This study further
demonstrates the relationship between formalizations of the strategic planning process
and the size, age, and complexity of the environment of these organizations, because
there is wide variation among the business organizations in terms of their understanding
and adoption of strategic management. Buddha Air, for example, does not engage
employees in the process of strategic management as most of the companys decisions are
made by the MD and the lower level managers are asked to implement these decisions.
On the other hand, the rest of the respondent companies are more participatory in their
management approach.
The not-for-profit organizations or NGOs in Nepal seem to be influenced by the
strategic management practices of the western world, primarily through their
headquarters and international linkages. It appeared that they followed the IO
approach and performed an analysis of the environment. Yet, their strategic management
practice seems to be confined to setting long-term goals and direction, continuous
execution of the plan, and periodic monitoring and evaluation. Most of the sample
organizations get the strategic plans finalized by their parent organizations in western
countries without capitalizing diverse knowledge of Nepali culture. This could be a reason
why development interventions fail (Somlai, 1992). In addition, the resulted social impact
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was not spelt out as benefits. They prepare strategic plans and evaluate them every two
to five years. There was little understanding of and emphasis on the notion of uniqueness
and differentiation for gaining competitive advantages. Therefore, these organizations do
not seem to follow the RBV approach. They placed more emphasis on differentiating from
their past practices by improving the methods of services delivery for greater impacts.
Therefore, their focus is on improving operational effectiveness rather than being
different, which is a key to strategy (Porter, 1996). They have a more formalized strategic
planning process. However, they have a varied degree of staff involvement in the strategic
planning process in the country-level NGO. The headquarters strategic focus on fund
raising may make the organization pursue a differentiation strategy, but it was not clearly
evident in our study. We believe this is an important avenue that needs to be explored in
the future research.
Overall, it appears that strategic management in Nepali organizations is different
from those of the west. For-profit business organizations in Nepal are rather reactive
and ad hoc as characterized by earlier research in the South Asian context (Pant, 2010;
Haley and Tan, 1999). The rapidly changing environment and increased competition
demand that managers and strategic decision makers be more analytical and foresighted
rather than intuitive and reactive (Henderson, 1989). Yet, that does not appear to be
happing in Nepal. The political and economic uncertainty in Nepal makes it difficult
for organizations to forecast trends and make long-term plans. While NGOs are more
proactive and appear to be more long-term in setting their goals, they also do not seem to
be devoting their attention to developing unique resources and pursuing differentiation
strategies. Thus, strategic management practices in Nepal are very different from those in
the western contexts.
Directions for future research
This study examined strategic management practices in Nepalese organizations and
compared those with the core literature on strategic management as emphasized in
the western countries. Because this is an early attempt to understand strategic
management practices, we adopted an exploratory approach to research and conducted
in-depth case studies based on interviews of managers. The method was appropriate
given the lack of research on the topic, but has limitations in terms of generalizability.
We believe that our study provides valuable insights on strategic management
practices in Nepal and suggests several avenues for future research. We illustrate a few
interesting research avenues here. First, our review of the literature and development
of the strategic management themes based on the case studies has uncovered strategic
management concepts that are viewed as important by managers and are practiced in
Nepalese organizations. This filtering of relevant information has thus created a strong
foundation for future researchers for them to build on our themes and create survey
instruments for large-scale empirical studies to understand the degree to which these
practices exist in various types of organizations in Nepal. Second, our comparative
examination of the business organizations and NGOs, including the comparative
tables, would help to create target-group specific instruments and compare results
across different types of organizations. Studies with large samples and use of multiitem survey instruments would provide a strong basis for quantitative data analysis.
Third, it is likely that the adoption of strategic management practices in a particular
organization is influenced by the exposure of its managers to the western management
practices. Therefore, it will be interesting to develop measures of such exposure and
examine their effects on the adoption of strategic management practices. Indicators
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Corresponding author
Binod Krishna Shrestha can be contacted at: binod@kusom.edu.np
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