Exploring Strategic Positioning in the UK Charitable Sector: Emerging Evidence from Charitable Organizations that Provide Public Services

AuthorCeline Chew,Stephen P. Osborne
DOIhttp://doi.org/10.1111/j.1467-8551.2007.00554.x
Publication Date01 Mar 2009
Exploring Strategic Positioning in the UK
Charitable Sector: Emerging Evidence
from Charitable Organizations that
Provide Public Services
Celine Chew and Stephen P. Osborne
1
Cardiff Business School, Cardiff University, Cardiff CF10 3EU, UK, and
1
Management and Economics School,
University of Edinburgh, 7 Bristo Square, Edinburgh EH8 9AL, UK
Corresponding author email: cel_chew@hotmail.com
The UK voluntary sector operates in an arguably enabling policy context. Yet, other
external environmental influences have posed major challenges for charitable
organizations within the wider voluntary sector. This paper aims to rectify the current
lack of empirical research on how charitable organizations have responded in terms of
their strategic positioning to the changing external operating environment and policy
context. It both explores the positioning strategies adopted by two contrasting British
charities that deliver public services in different ways, and investigates the factors that
have influenced their choice of positioning strategies. The cases studied extend our
knowledge of strategic positioning in organizations other than commercial (for-profit)
ones. The findings provide new evidence that charities have begun to strategically
position themselves in response to both internal organizational factors and external
environmental influences. Emerging lessons from the experiences of the case study
organizations provide guidance to charity managers in planning and implementing
strategic positioning in their organizations. The findings also underscore the need to
develop theoretical and conceptual management models specific to non-profit
organizations, such as charities.
Introduction
The Labour Government’s efforts to reform the
public services in the UK since the late 1990s
have arguably encouraged more charitable orga-
nizations (COs) to be involved in public services
delivery funded by government (NCVO, 2004a,
2006a, 2006b). The Association of Chief Execu-
tives of Voluntary Organizations in the UK
reported in 2005 that many COs were ready to
deliver large-scale public services with more
charities willing to take on this role in the future
(SocietyGuardian, 2005). Other external environ-
mental drivers in the socio-economic, techno-
logical and competitive landscape have also
continued to put pressure on COs to manage
their operations, effectively satisfying both their
short-term survival needs and their longer-term
strategic positioning (SP) (Chew, 2005, 2006).
This paper reopens a noted paucity of empirical
research on how COs have strategically posi-
tioned themselves in a changing external operat-
ing environment and policy context. We explore
the process of SP and components of the
positioning strategies (PSs) adopted by two
British COs that deliver public services in
The authors are grateful for the comments of Linda
McGuire (Monash University) and Kate McLaughlin
(Birmingham University) on an earlier draft of this
paper. We also thank the two anonymous reviewers for
their helpful comments and suggestions.
British Journal of Management, Vol. 20, 90–105 (2009)
DOI: 10.1111/j.1467-8551.2007.00554.x
r2007 British Academy of Management. Published by Blackwell Publishing Ltd, 9600 Garsington Road, Oxford
OX4 2DQ, UK and 350 Main Street, Malden, MA, 02148, USA.
different ways, and investigate the factors that
influenced the choice of their PSs. We build on
earlier works by the lead author, who has
reviewed the possible reasons for the relevance
of SP in charities (Chew, 2003, 2005) and
identified the factors that could influence the
PSs of charities in a postal survey of British
General Welfare and Social Care (GWSC)
1
COs
within the wider voluntary sector (Chew, 2006).
The emerging findings presented in this paper
offer new empirical evidence that COs are
undertaking SP activities in ways that differ in
several aspects to those prescribed in the con-
temporary strategy/marketing literature.
The next section of the paper provides an
overview of the changing policy context and
external environment in which British COs
operate. The following section introduces the
concept of SP and highlights the lack of empirical
research to guide the application of SP in the
non-profit and charitable contexts. The fourth
section presents the methodology and the two
case study organizations and identifies the
research questions that guide the case study
investigation upon which this paper is based.
The key findings are presented in the next section,
and the major implications and lessons learned
from the SP experiences in the case studies are
then discussed. The paper concludes with sugges-
tions for future research into SP in non-profit and
non-market organizational contexts.
Evolving policy context and external
environmental influences
Since ‘New Labour’ was elected into government
in 1997, the operating environment within which
COs operate can be characterized as an arguably
enabling policy context that further promoted
voluntary action and raised the profile of the
voluntary sector in public policy development
and service delivery (Alcock, 2003; NCVO,
2004a, 2004b). The effects of this new agenda
for change have been demonstrably felt by COs
at two levels (Blackmore, 2004):
increased funding from government (central
and local authorities) for the delivery of public
services;
increased consultation on policy issues about
public services and their delivery that affected
government directly.
The HM Treasury’s ‘Cross Cutting Review’
(HM Treasury, 2002) signalled the government’s
increased commitment to fund and develop the
capacity of COs in the delivery of public services.
Consequently, 38% of the total annual income of
general charities came from ‘statutory sources’
(i.e. grants and contract income from govern-
ment) in 2003–2004 compared to 27% a decade
earlier (NCVO, 2006b). Moreover, 42% of the
top 500 British charities’ new income in 2002
came from statutory grants (Charities Aid
Foundation, 2003).
In addition, a national ‘Compact’ was estab-
lished by government in 1998 that sought to
provide a framework for strengthening the
formal working relationship between the public
and voluntary sectors in shaping public policy
and the delivery of public services under govern-
ment contracts (Home Office, 1998). The issue of
independence of voluntary non-profit organiza-
tions (VNPOs) in general and COs specifically
was at the heart of concerns which arose from the
changing climate of increasing funding for
delivering public services under government
contracts (Blackmore, 2004). The ‘positional
advantage’ of COs includes their specialist/expert
knowledge of a service or geography, innovative
capacity, access to the wider community, in
particular to groups of people who are particu-
larly difficult to reach by government or its
agencies, and the ability to work closely with
users, beneficiaries and their families because of
their independence from government (HM Treas-
ury, 2002). Of significance, therefore, is the
commitment of government, enshrined in the
‘Compact’, to recognize and preserve COs’
independence of government, irrespective of their
funding relationship with the public sector. This
commitment was further reinforced by the
enactment of a new Charities Act 2006 to
encourage the campaigning and advocacy roles
of COs in pursuance of their charitable purposes.
1
This study uses the Charities Aid Foundation’s (2003)
classification of six general welfare and social care sub-
sectors: Other General Welfare, Children, Benevolent
Funds, Elderly Care, Service, Ex-Service and Religious
General Welfare. The sub-sectors are chosen for the
focus of this study because of the high proportion of
COs in this sector involved in the delivery of public
services in the UK.
Strategic Positioning in the UK Charitable Sector 91
r2007 British Academy of Management.

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