Towards a strategy framework for voluntary membership professional associations in Australia: a case study of the Chartered Institute of Logistics and transport in Australia

Prideaux, Murray C. (2005) Towards a strategy framework for voluntary membership professional associations in Australia: a case study of the Chartered Institute of Logistics and transport in Australia. PhD thesis, James Cook University.

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The practical problem focused on in this research is that professional associations are not attracting or retaining members even when resorting to strategic planning. Where strategic planning has been applied it has been largely based on for-profit models which are founded on providing benefits to customer and shareholder stakeholders and in developing sustainable competitive advantage. But third sector organisations are more interested in maximising benefits to members where the benefits are not of a financial nature. So it is timely to consider an approach more appropriate to the aims of third sector organisations. The third sector consists of private organisations formed and sustained by members acting voluntarily without personal profit, are democratically controlled, provide benefits to others, and material benefits to members are proportionate to their contribution to the organisation. There are over 600 000 third sector organisations in Australia, employing in excess of 410 000 equivalent full-time employees (Philanthropy and the Third Sector in Asia and the Pacific, 2005). Research to investigate strategy in third sector organisations can be set up in two main ways. One, seek the opinions of office holders in such organisations. But clearly they have few answers to those problems. Or two, look in-depth at one professional association to ascertain the priorities of the membership. The latter seems more likely to give promising results. The organisation chosen for this research was the Chartered Institute of Logistics and Transport in Australia (CILTA). The research was carried out employing focus groups, in-depth interviews, and document searches that enabled eight Australian case studies to be developed, which were then compared and contrasted with a very successful case in Singapore (CILTS). The aim of the research is to understand the nature of strategy formulation and implementation in voluntary professional membership associations (VMPAs), which led to inductive research. The case studies were generated and guided principally by the ideas of Yin (2003), to conduct ‘with-in’ and ‘between case’ analysis. Important themes emerging from the within-case analysis are summarised in Table 1:

Table 1 Summary of Important Themes Emerging from Within - Case Analysis

Theme • Vision and mission statements have little meaning or practical value for the operation of Sections • Leadership establishes the influence position of the local Section and the Institution nationally • Strategy is essential for the Institute • Strategic flexibility is necessary for Sections to respond to local conditions while implementing National strategy directives • Co-operative strategy orientation, not competitive advantage • Value is a key driver and outcome of the strategy process • Existence is the primary issue driving strategy • Satisfying member needs is the key outcome of strategy efforts • Members need to identify with the Section and the Institute • Organisational structure drives strategy • Maintaining and developing industry and government credibility are essential • The Institute must be relevant to members • Position determines role • Multiple roles can be adopted. However, roles(s) chosen shape the strategy process • Strategy formulation is restricted to issues within the sphere of influence • A ‘business model’ is necessary to expand organisational capability • Strategy needs to be concentrated and focused • Key strategy barriers are: - poor communication between Sections and between National Office and Sections - poor implementation of developed strategy - voluntary membership - ineffective management committees resulting from resource constraints and high turn-over of committee members due to election cycle - lack of commitment and/or interest by committee members - a view held by younger and newer members that older and retired members (‘old farts club’) are acting as gatekeepers and are resistant to change - no manageable approach to strategy development - attempting to manage multiple strategies • Appropriate terminology is necessary to reflect the voluntary nature of the organisation so that members can understand and identify with • Organisational values are meaningful to support strategy, but do not drive strategy formulation. • Relationship building is an essential strategy outcome • Concentration of strategy effort is necessary to focus effort to a limited number of strategic areas. • The systemic problem that even though almost all participants believed that the Institute is not competing with other associations, membership is optional, (a discretionary purchase), in contrast to other PAs where membership is required.

Twenty-five elements related to strategy context, strategy barriers, and issues influencing strategy development and implementation emerged from the between-case analysis conducted in Chapter 5. These elements are summarised in Table 2.

Table 2 Context, Barriers and Issues Identified in the Between - Case Analysis

Theme Strategy Context 1. Value for membership. 2. A strategic approach is required. 3. Competitive strategies are inappropriate. 4. Relationship building is a crucial outcome of the strategy process. 5. Vision and mission statements provide little practical guidance. 6. Strategic flexibility is required. 7. Developing member’s knowledge and skill base. 8. Business model approach in Singapore. Barriers to Strategy 1. Structure of the organisation. 2. Broad whole-of-industry charter. 3. Ineffective communications. 4. Resource constraints. 5. Voluntary membership. 6. Lack of industry leaders as members of the CILTA. 7. Lack of focus. 8. Ineffective leadership of the Institute. 9. Members drawn from all levels of employment. Issues influencing strategy 1. Why do we exist? 2. Understanding needs of members and industry. 3. What position and role(s) to be adopted. 4. Relationship building. 5. Relevance and identity. 6. Credibility and reputation. 7. Leadership and influence of the Institute. 8. Concentrating strategy efforts to focus on a limited range of integrated strategies.

Two strategy models developed from this research are presented in Chapter 5. The first is the Strategy Drivers model which identifies the conceptual issues driving strategy consideration in the case organisations. The effect of the Strategy Drivers model is to develop a simple framework of prioritised issues and associated questions requiring continual review as part of an ongoing strategy process. The framework recognises that the fundamental for-profit question ‘what business are we in’ is inappropriate for the CILTA, operating within an existing legal and taxation system, which constrains operations to the Institute’s constitution. For-profit organisations are able to significantly change the nature of their business to reflect their competitive environment, if they so choose. The CILTA and VMPAs are not permitted to change the nature of their ‘business’ without fundamentally altering their standing as a ‘non profit’ organisation. The Strategy Drivers model recognises the necessity for a simple approach to strategy that differentiates the organisation from other industry institutes. By positioning the Institute in the industry to determine the role to be played (finding 20), relationships can be developed and maintained with other organisations (finding 4), rather than adopting a competitive stance (finding 3). The outcome is an integrated strategy that focuses limited resources (finding 12), to avoid ‘multiple’ ineffective strategies (finding 15). The model recognises the voluntary nature of the CILTA, and other VMPAs, by providing a framework for ongoing strategic thinking and discussion by committee members, with limited experience and knowledge of the strategy process (finding 13). The second strategy model is the Future Shaping model which describes a holistic strategy process, the level below the issues driving strategy formulation. The Future Shaping model identifies specific questions to be addressed in the strategy process and provides a framework to facilitate implementation of chosen strategy. The model synthesises the findings of the between-case analysis to develop a simple, flexible approach (Context finding 6) to strategy development in the CILTA. The importance of an integrated strategy outcome from the strategy process is central to this model, as identified in the research (Barriers finding 7 and Issues finding 25). The Future Shaping model contributes a new dimension to third sector strategy development. Strategy development, based on this model, is focused towards relationship building, in an environment based on co-operation, and free from competitive posturing (finding 3). The model demonstrates that members are a key input, and beneficiary, of the strategy process. The strength of the value outcomes of the strategy process is a significant contributor to membership decline or growth. The model demonstrates that the strategy process is primarily influenced by those issues identified to be in the Institutes sphere of influence, as determined by the identity, reputation, and role(s) adopted. Strategy development commences with the organisation answering the fundamental issues driving the process, ‘why do we exist?’, ‘to whom will we provide value?’, and ‘what value will we provide?’ The research demonstrates that strategy formulation in the CILTA is restricted by the lack of a simple, clear and flexible model of strategy development (findings 2, 6, 12, and 13). The Future Shaping model addresses that deficiency. Based on the research conducted for this thesis, the following implementation recommendations are offered. Recommendation One Institutes and associations conduct member forums, first at the Section level, to determine member needs by addressing the issues of (1) Existence (why do we exist?), and (2) Value (what value do we provide; to whom do we provide value?). Second, national executive committees develop directional statements resulting from the member forums. Recommendation Two The issues of Relevance and Credibility, Position, Leadership, and Concentration, are considered by national executives following the determination of recommendation one outcomes. Recommendation Three National executives of cooperating institutes and associations address the strategy issues of Position, Leadership, and Concentration in a cooperative strategy formulation process, to determine association and institute synergy across the relevant industry grouping. Recommendation Four National executive’s feedback to Sections the Position and Role(s) adopted as an outcome of the industry relationship loop, as determined in recommendation three. Recommendation Five National executives develop an integrated strategy to implement the outcomes of recommendations one to four. Recommendation Six Sections adopt the Strategic Drivers framework, to consider the strategic issues at the local level, and within the context of the national strategy outcomes. Recommendation Seven At least twenty percent of each national and section executive meeting be devoted to strategic dialogue of the strategy issues identified in the Strategy Drivers framework. Recommendation Eight An Industry Advisory Body (IAB) be established at national and section levels to provide strategic advice to management committees. The contribution that this research makes to the third sector literature is that the thrust of any strategy model should be on the benefits to members, as opposed to a model that uses competitive strategy to provide benefits to stakeholders, as is the case in for-profit organisations. The practical value of the models is that professional associations will be able to reorient their focus to manage on behalf of their members, and have a method of ascertaining what is important to fulfil members’ needs, and to enhance and grow the association. There is a growing literature on third sector organisations. However, many of the problems faced by such organisations, particularly VMPAs, have not been identified. The major benefits of the research are that the strategy models, if followed, will lead to an ability to deliver what is required by the membership, and in doing so, grow the organisation and increase its influence in the industry sector.

Item ID: 2094
Item Type: Thesis (PhD)
Keywords: strategic plans, businesses, management, voluntary membership, volunteer associations, professional associations, Charted Institute of Logistics and Transport in Australia, Charted Institute of Logistics and Transport in Singapore, third sector, non-profit organizations, CILTA, CILTS, strategy formulation, strategy implementation, business strategies, business plans, strategy models
Date Deposited: 26 Feb 2009 01:16
FoR Codes: 15 COMMERCE, MANAGEMENT, TOURISM AND SERVICES > 1503 Business and Management > 150312 Organisational Planning and Management @ 0%
15 COMMERCE, MANAGEMENT, TOURISM AND SERVICES > 1503 Business and Management > 150313 Quality Management @ 0%
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