Managing the performance of social service-providing nonprofit organizations: NPOs) has become more and more complex in the past few decades as executives have had to cope with increasing competition, demands from a diversified set of stakeholders, rapidly changing technologies, and mounting scrutiny from funders and consumers. To help reduce the complexity of strategic management, organizations have been encouraged to adopt formal strategy formation processes, such as highly-structured strategic planning models. However, there are no demonstrated best practices or conclusive evidence of the utility of formal strategy formation within the nonprofit sector. The stakes of mismanagement are high for the organizations and the at-risk individuals and communities they serve. Poor strategic management could result in inefficient use of resources and/or ineffective service delivery and possibly organizational or even sector destabilization. The study employed a mixed-methods comparative multi-case study design that leveraged a unique cluster of three most-similar children\u27s mental health services NPOs in the Saint Louis area. Over 20 key informant interviews were conducted, as were several organizational observations. This data was combined with over a decade of strategy-related documents and financial records to describe the organizations\u27 strategic positions and external environment, as well their strategy formation and implementation processes relative to their internal organizational contexts. Additionally, the study set out to explore whether and how the organizations\u27 strategy formation processes influence their strategic content and how strategy implementation may mediate the relationship between strategy formation and organizational performance. The findings show that while seemingly very different on the surface, the organizations\u27 strategy formation processes are actually very similar and typically fail to yield true strategic or competitive insight. The rich descriptions also demonstrate how nimble and sophisticated modern nonprofit organizations have to be when implementing new initiatives to meet changing market demands. The most-similar case sampling method allowed for a powerful cross-case analysis capable of exploring causal mechanisms often ignored in this area of research. The study\u27s findings call into question the conventional wisdom around the necessity of formalized strategic planning and highlight the role leadership and administrative capabilities have in achieving sustainable organizational performance. Furthermore, it presents a revised conceptual model of strategic management that demonstrates why much of the documented link between formalized strategy formation processes and superior organizational performance may be spurious, both being caused by certain internal organizational characteristics and differences in strategy implementation. Implications for organizations, accrediting bodies and funders, as well as researchers are also discussed
