There has during a rapid growth of third sector organizations (TSOs) in the third world during the 1990s. Such growth has occurred during a period of severe cutbacks in state investment as well as rapid globalization of trade. Social activists have often organized TSOs in these countries as an alternative to private and public organizations. However the question of how leaders and managers of these TSOs sustain their activities remains important. Their dilemma of help is the focus of this study. / Through a study of strategy formation in three third sector organizations in the third world, this study focuses on how TSOs can be sustainable yet effective change agents. It develops a typology of TSOs with particular attention to type of third sector activity (operating, support, community), type of organizational form (Grassroots initiatives, Grassroots Organizations, Grassroots Federations, Development Support Organizations and International Development Support Organizations) and dominant strategy approach (domain, distinctiveness, and design). This study argues that attention to these three aspects needs to be complemented by exploring the processes through which strategies form in these organizations. / Accordingly the strategy process in three TSOs in South India was examined, in particular the origin of the strategy, tactics of consensus, and interests of participants. Examining the strategy process in TSOs revealed that strategies originated in intent or event, promoters' consensus-tactics were conceived or improvised and participant's interests were fixed or shifting. / These findings on strategy process show varied origins, interests and consensus tactics in TSOs. They also seem to be associated with particular capacities in these organizations to perform their chosen activities, as well as with changes in mission. The study concludes with a discussion of the significance of these findings and a call for bridging the literatures on good management and effective social change, for further researching capacity building in TSOs, and encouraging initiatives for cross sector learning.

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