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Instructions

Based on the synthesis of your readings, prepare a timeline of the evolution of strategic management, and then explain how it became popular in the public sector. Your timeline can be submitted as an infographic, chart, or another creative format of your choice. Be sure to address the following:

Explain why you consider these changes as most important in how they influenced public administration.

Include the political and societal backgrounds, and then explain why the change was necessary.

Assess new challenges in managing resources that evolved in recent years.

Defend these challenges and the steps taken to overcome obstacles.

Once you have identified the significant issues that are most meaningful, support your position by recommending opportunities to advance public policy by using strategic management in both the domestic and international realms.

Length: Timeline chart, not including title or reference pages.

References: Include a minimum of 5 scholarly resources.

Your assignment should demonstrate thoughtful consideration of the ideas and concepts presented in the course by providing new thoughts and insights relating directly to this topic. Your response should reflect scholarly writing and current APA standards. Be sure to adhere to Northcentral University’s Academic Integrity Policy.

References

Indian Health Service. (2017). Understanding the Government Performance and Results Act (GPRA)/GPRA Modernization Act (GPRAMA). U.S. Department…

Johnsen, Å. (2015). Strategic management thinking and practice in the public sector: A strategic planning for all seasons? Financial Accountability

Mazouz, B., & Rousseau, A. (2016). Strategic management in public administrations: A results-based approach to strategic public management

Rosenberg Hansen, J., & Ferlie, E. (2016). Applying strategic management theories in public sector organizations: Developing a typology

Week 1 – Assignment: Assess the Importance of Strategy in Public Management

Instructions

Based on the synthesis of your readings, prepare a timeline of the evolution of strategic management, and then explain how it became popular in the public sector. Your timeline can be submitted as an infographic, chart, or another creative format of your choice. Be sure to address the following:

Explain why you consider these changes as most important in how they influenced public administration.

Include the political and societal backgrounds, and then explain why the change was necessary.

Assess new challenges in managing resources that evolved in recent years.

Defend these challenges and the steps taken to overcome obstacles.

Once you have identified the significant issues that are most meaningful, support your position by recommending opportunities to advance public policy by using strategic management in both the domestic and international realms.

Length: Timeline chart, not including title or reference pages.

References: Include a minimum of 5 scholarly resources.

Your assignment should demonstrate thoughtful consideration of the ideas and concepts presented in the course by providing new thoughts and insights relating directly to this topic. Your response should reflect scholarly writing and current APA standards. Be sure to adhere to Northcentral University’s Academic Integrity Policy.

References

Indian Health Service. (2017). Understanding the Government Performance and Results Act (GPRA)/GPRA Modernization Act (GPRAMA). U.S. Department…

Johnsen, Å. (2015). Strategic management thinking and practice in the public sector: A strategic planning for all seasons? Financial Accountability

Mazouz, B., & Rousseau, A. (2016). Strategic management in public administrations: A results-based approach to strategic public management

Rosenberg Hansen, J., & Ferlie, E. (2016). Applying strategic management theories in public sector organizations: Developing a typology

1/4/22, 7:55 PM PUB-7021 v1: Strategic Management in the Public Sector (3279240621) – PUB-7021 v1: Strategic Management in the Public Secto…

https://ncuone.ncu.edu/d2l/le/content/168029/printsyllabus/PrintSyllabus 1/4

Week 1

PUB-7021 v1: Strategic Management in the Public Sector (…

Main Concepts and Theories

Strategic management has been traditionally applied in the private sector. Its application

in the private sector is considered easier due to the perceived ease of making and

implementing decisions compared to the public sector, which involves the overall public

good. However, there is a growing movement towards strategic management in the public

sector. Clear signs of this movement emerged with the passage of the Government

Performance and Results Act of 1993 and the Government Performance and Results

Modernization Act of 2010 (General Services Administration, 2018). Since 1993, state

and local governments and other non-U.S. governmental entities have been adopting

strategic management as a tool for decision-making. The objective of the Act was to

address concerns about accountability and performance. This act linked government

results in the budgetary decision-making process.

Increasingly, the pressure is being placed upon local governments to implement private

sector elements such as measurable and outcome-based results. Of course, it is

appropriate for organizations to develop values, goals, and priorities. These elements lend

themselves to strategic management. All executive branch agencies in the U.S. are

required to submit to the Office of Management and Budget (OMB) a 5-year strategic

plan, which must be updated every three years. For example, the Indian Health Service on

GPRA utilizes a strategic management approach (Indian Health Service, 2017). This

approach incorporates the input of its stakeholders in setting goals and budget allocation

decisions. Also, the Florida Department of Health implemented the strategic management

approach for refining the mission, vision, and goals of the department. Now, the program

outcomes of the department are more aligned with its goals and objectives. The United

States is not the only country to begin incorporating strategic management into

governmental functions. The Tanzanian government launched a strategic management

approach for all public organizations in 1986 (World Food Programme, 2018). The

country’s five-year plan prioritizes industrialization and human development as a target

for middle-income country status.

Be sure to review this week’s resources carefully. You are expected to apply the

information from these resources when you prepare your assignments.

1/4/22, 7:55 PM PUB-7021 v1: Strategic Management in the Public Sector (3279240621) – PUB-7021 v1: Strategic Management in the Public Secto…

https://ncuone.ncu.edu/d2l/le/content/168029/printsyllabus/PrintSyllabus 2/4

Books and Resources for this Week

Indian Health Service. (2017).

Understanding the Government

Performance and Results Act

(GPRA)/GPRA Modernization Act

(GPRAMA). U.S. Department…
Link

Johnsen, Å. (2015). Strategic

management thinking and practice in

the public sector: A strategic planning

for all seasons? Financial

Accountability…
Link

References:

General Services Administration & the Office of Management and Budget. (2018).

Performance.gov

Indian Health Service. (2017). Understanding the Government Performance and Results

Act (GPRA)/GPRA Modernization Act (GPRAMA). U.S. Department of Health and Human

Services.

World Food Programme. (2018). Tanzania Country Strategic Plan (2017-2021).

Heads-Up to the Signature Assignment

Your culminating Signature Assignment (due in Week 8) will be a reflection of all that you

have learned within the course, and it may require that you complete some work ahead of

time. To ensure you are prepared and have adequate time to complete this assignment,

please review the instructions by looking ahead to Week 8. You can contact your

professor if you have questions.

80 % 4 of 5 topics complete

1/4/22, 7:55 PM PUB-7021 v1: Strategic Management in the Public Sector (3279240621) – PUB-7021 v1: Strategic Management in the Public Secto…

https://ncuone.ncu.edu/d2l/le/content/168029/printsyllabus/PrintSyllabus 3/4

Mazouz, B., & Rousseau, A. (2016).

Strategic management in public

administrations: A results-based

approach to strategic public

management…
Link

Rosenberg Hansen, J., & Ferlie, E.

(2016). Applying strategic management

theories in public sector organizations:

Developing a typology. Public…
Link

Week 1 – Assignment: Assess the Importance of

Strategy in Public Management
Assignment

Due January 9 at 11:59 PM

Based on the synthesis of your readings, prepare a timeline of the evolution of strategic

management, and then explain how it became popular in the public sector. Your timeline

can be submitted as an infographic, chart, or another creative format of your choice. Be

sure to address the following:

Explain why you consider these changes as most important in how they influenced

public administration.

Include the political and societal backgrounds, and then explain why the change

was necessary.

Assess new challenges in managing resources that evolved in recent years.

Defend these challenges and the steps taken to overcome obstacles.

Once you have identified the significant issues that are most meaningful, support your

position by recommending opportunities to advance public policy by using strategic

management in both the domestic and international realms.

Length: Timeline chart, not including title or reference pages.

References: Include a minimum of 5 scholarly resources.

1/4/22, 7:55 PM PUB-7021 v1: Strategic Management in the Public Sector (3279240621) – PUB-7021 v1: Strategic Management in the Public Secto…

https://ncuone.ncu.edu/d2l/le/content/168029/printsyllabus/PrintSyllabus 4/4

Your assignment should demonstrate thoughtful consideration of the ideas and concepts

presented in the course by providing new thoughts and insights relating directly to this

topic. Your response should reflect scholarly writing and current APA standards. Be sure

to adhere to Northcentral University’s Academic Integrity Policy.

Upload your document, and then click the Submit to Dropbox button.

International Review of

Administrative Sciences

2016, Vol. 82(3) 411–417

! The Author(s) 2016

Reprints and permissions:

sagepub.co.uk/journalsPermissions.nav

DOI: 10.1177/0020852316655522

ras.sagepub.com

International
Review of
Administrative
SciencesArticle

Strategic management in public
administrations: a results-based
approach to strategic public
management

Bachir Mazouz
ENAP-University of Quebec, Canada

Anne Rousseau
Université catholique de Louvain, Belgium

With the collaboration of
Pierre-André Hudon
ENAP-University of Quebec, Canada

Abstract

As a field of knowledge, strategy has been taught and practised for over half a century.

However, there is still a distinct lack of consensus surrounding the effectiveness

of strategy in public administrations. This thematic issue of the International Review of

Administrative Sciences is devoted to advanced research which claims that in the age of

results-based management, public leaders must opt for a process-based approach to

strategy. In doing so, the emphasis is put on the complexity of strategic processes that

make it possible to support and maintain the institutions that serve the common good

and the general interest and that deliver public services using the results of public action.

From a process-based point of view, the strategy of public administration then assumes

that analysts and public leaders need to be more aware of the specificities of state

institutions. In particular, a thorough knowledge of the ways in which public officials

interact with the fundamental values, structures, regulatory frameworks and administrative

tools of public administrations is necessary.

Keywords

strategic management, public management, results-based management, governance,

administrative reforms

Corresponding author:

Bachir Mazouz, Ecole national d’administration publique, University of Quebec, Quebec, QC G1K 9H7,

Canada.

Email: [email protected]

Introduction

Long devised and implemented to deal with the ‘industrial dynamic’ marked by
‘competitive behaviour’ (Porter, 1982), strategy is now considered a field that makes
it possible for the leaders of public and private organisations to ‘take options on the
future’ (Williamson, 1999). However, despite increasingly sophisticated training
programmes and highly advanced academic research on strategic contents, pro-
cesses, options and actions, the effectiveness of public strategy is still a source of
major controversies. At best, the strategic thinking and tools do not seem to have
been sufficiently adapted to the context of public organisations (McHugh, 1997). At
worst, the strategic exercise seems to be incompatible with the non-competitive
environment in which public administrations traditionally operate.

Despite the scepticism of researchers and practitioners, many public adminis-
trations of Organisation for Economic Co-operation and Development (OECD)
countries are now subject to legislation and regulations that have turned results-
based management and strategic planning into tools that make it possible to intel-
ligently combine the purposes, objectives, means and resources required to steer
states’ administrations towards tangible results (Mazouz, 2014).

Given both the specificities (Nutt and Backoff, 1993) and the difficulties of
measuring results in the public sector (Parenteau, 1979, 1992), as well as the lack
of enthusiasm generated by the first two generations of administrative reforms
(Poister and Streib, 2005; Tilli, 2007), practitioners and theorists of public action
and government organisations have, until now, largely focused on the development
and implementation of choices that uphold the values, purposes, objectives and
structures of public action (Bryson et al., 2010; Denis et al., 2008; Drumaux and
Goethals, 2007; Hutchinson, 2001; Johanson, 2009; Kinder, 2012; Levine, 1985;
Mintzberg and Jorgensen, 1987; Paquin, 1992; Ring and Perry, 1985).

From a so-called ‘synoptic’ approach, advocating the rationality of decision-
making principles, to an ‘incremental’ approach, which considers the development
of strategies as ‘the culmination of a process triggering changes through continuous
adaptation’, many researchers have devoted their efforts to ‘high quality [research]
documenting the conditions for the adaptation of strategic tools to the realities of
government departments and agencies’ (Bernier et al., 2013, 895–908).
Undoubtedly, this renewed interest in strategic processes (Allison, 1983; Andrews
et al., 2009; Backoff and Nutt, 1992; Boyne, 2002; Bruijn, 2007; Bryson and
Roering, 1987; Rainey et al., 1976; Ring and Perry, 1985) can be explained
partly by the growing institutionalisation of formal approaches and frameworks
of objective-based management (Charih, 2000; Levine, 1985) and, more recently, of
results-based management (Emery, 2005; Mazouz, 2014). This is the case, for
instance, of the GPRA in the US, of the LAP in Quebec and the Loi organique
sur les lois de finances (LOLF) in France.

From the process-based perspective proposed by Pettigrew (1977, 1997), aca-
demic research spawned by controversies concerning the second generation of
administrative reforms and hinged around a systemic perspective of the concept
of results (Poister, 2005; Poister and Streib, 2005) seems to concentrate more on

412 International Review of Administrative Sciences 82(3)

‘ways of thinking’ and ‘ways of doing’ to explain the sustainability of public organ-
isations. For the proponents of this strategic perspective, the dynamics of services
supply/delivery structures to citizens is determined by the ways in which the
statutory mission–organisational objectives–means–resources–outputs value chain
is configured (Denis et al., 2007; Hutchinson, 2001; Johanson, 2009; McHugh,
1997).

Thus, seen in terms of processes, the strategic exercise is supposed to help public
managers to counteract the binding effects of the normative, legal and administra-
tive mechanisms that regulate the activities of public organisations. Various types
of strategic exercises are explored and concretely illustrated in the articles presented
in this special issue: they were selected to enable both public management practi-
tioners and specialists to reflect upon the challenges and issues related to strategic
management in the public sector.

Through an analysis of the territorial innovation systems of three French
regions, the article by F. Pallez and D. Fixari shows how public action coordin-
ation takes place in the medium and long term. Various ways of establishing
strategic convergence are explored: the merger of structures, the specialisation of
entities and the formalisation of coordination activities. Ultimately, in complex
administrative systems that are increasingly results-oriented, strategy must be
developed and implemented by focusing on coordination processes based on a
logic of progressive evolution, guided by the intentions of multiple stakeholders.

The article by C. Favoreu, D. Carassus and C. Maurel concerns the possible
theoretical approaches to public policy formulation processes and, in particular, the
rational, political and collaborative logics behind the strategy. Presented simultan-
eously as the result of (1) a teleological process focused on decision-making and the
quest for results, (2) a power game designed to favour certain issues over others in
the public sphere and (3) a broader and more complex democratic phenomenon,
strategy consists of the outcome of subtle interactions between numerous
stakeholders. The case study of the French fire and rescue services (SDIS) clearly
illustrates how strategy formulation processes involve actors with their own
rationality and interests and how the coordination mechanisms are inherent to an
incremental development of strategy.

The analysis by M. Audette-Chapdelaine looks at the strategic process as a
sense-making exercise (drawing on K. Weick’s theory). By analysing the water
management policy of the City of Montreal, the author shows how the political–
administrative interface becomes a transmission mechanism for sense-making.
Common meanings are derived from the interaction between the political demands
(often unclear in the case at hand) and the professionalism of the technical experts
in the civil service. Strategy is therefore presented as the result of the ongoing and
contextualised reinterpretation, by the stakeholders, of their collective understanding
of public sector objectives.

Finally, the analysis proposed by G. Divay focuses on the integrated territorial
approach as a tool of strategic coherence. Studying various regional consultations
having taken place in Quebec and targeting poverty and social exclusion

Mazouz et al. 413

alleviation, the analysis raises several questions about how the consultation strate-
gies make it possible to generate coherent policies and strategies. The author empha-
sises that, as a strategic process, multi-stakeholder territorial consultation requires
thought patterns that are often seen as incompatible with ‘linear’ rational planning.
The article stresses that regional consultations can generate coherence in policy-
making, but also that they require a long-term investment by managers and an
investor mentality focusing on the process rather than on the purpose.

Like in most Western bureaucracies, the legal and functional requirements
imposed on public administrations transform the strategic processes into an exer-
cise of collective learning: while the tabling of a strategic plan is dictated by statu-
tory considerations with no apparent added value, it does not hold true for strategy
development and management. Indeed, the level of effort required by this statutory
demand may generate significant learning related to the reaching of strategic goals
and the acquisition of new skills (Maltais and Mazouz, 2004). In other words, it
raises the question of whether public policies result from the application of a
regulatory vision (sum of the powers exercised and defined by law) and/or from
an organisational and territorial vision (requiring a more sophisticated knowledge
of internal and external realities, prior to any strategic exercise). In both cases,
these learnings do not take place outside the strategic exercise itself (McHugh,
1997; Mintzberg and Jorgensen, 1987; Nutt and Backoff, 1993) and allow state
officials and employees to give meaning to their mandates (Fabbri and Gallais,
2010).

Understanding the complexity of public governance systems means that states
and their governments must abandon the widely held notion that the strategy of
public organisations must be limited to considering the administrative apparatus as
a ‘simple’ black box that implements public policies, or, on the other side of a
simplistic continuum, to considering the political level as a ‘simple’ environmental
constraint to be integrated into a strategic approach. A conceptual clarification is
urgently needed by the different public stakeholders at a time when the renewed
methods of governance are putting them very much in the spotlight. From the
moment we seek to integrate the complexity of public action, we must deal with
three distinct rationalities: political, administrative and managerial. In doing so, we
must develop an understanding of the specificities of public policy that incorpor-
ates the management of inputs (resources required), outputs (services provided)
and outcomes (public policy indicators). However, in this area, there is a wide-
spread tendency towards simplification.

A truly strategic management of the public sector in the medium and long term
goes beyond the mere administrative exercise. In other words, it is not enough to
comply with policy directives that aim at producing and publishing administrative
documents conveying public intentions and means. In the public sphere, the stra-
tegic exercise is determined by three powers: the power of choice, the power of law
and the power of ways and means (Mazouz, 2014). ‘The strategic latitude’, to use
the expression put forward by Yves Emery (in Mazouz, 2014), is defined by the
ability of public managers to integrate these three powers: the power of choice

414 International Review of Administrative Sciences 82(3)

wielded by politicians must assist public managers in deciding on the ways and
means to be used within the current laws and regulations (Facal and Mazouz,
2013). This is a novel conceptualisation of the new roles and responsibilities of
public officials with regards to public performance indicators (Mazouz et al., 2015a
and 2015b).

Evoking objectives-based (or results-based) management prompts public leaders
to think as much about strategy definition and the formulation of the strategies as
about strategic procedures and tools. In doing so, the use of the strategy must be
seen as a tool that forces a reflection regarding which new managerial skills are
needed, as well as ways to better involve stakeholders in organisational change
(Rossignol et al., 2014). Public organisations, now seen as ‘performance centres’,
are thus forced to redefine their organisational model and examine how organisa-
tional change will be implemented.

This special issue of the International Review of Administrative Sciences helps to
understand how strategic processes are influenced by public policy steering/moni-
toring/evaluation tools and managerial rationality. In the minds of the creators of
official management frameworks (such as the French LOLF, the Quebec LAP,
etc.), strategy is often interpreted by civil servants as being strictly limited to
‘objectives–programmes–evaluations of the results’. For some people, this consti-
tutes a qualitative leap, especially in a situation where budgets are regularly
renewed and spent but rarely evaluated. Strategy must be defined with respect to
the way public leaders understand issues and work towards the common good and
the bettering of public services.

Acknowledgements

Major points of the case developed for the needs of our introductory text have been drawn

from the Call for contributions to the International Symposium ‘Regards croisés sur la
transformation de la gestion et des organisations publiques’, held on 21–22 November
2013 at the Luxembourg Institute of Science and Technology.

Funding

This research was financially supported by the CRP Tudor, a public research center cur-

rently Luxembourg Institute of science and technology.

References

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Boyne GA (2002) Public and private management: What’s the difference? Journal of
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résultats. St-Foy: Presses de l’université du Québec.

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ing improvement projects in Luxembourgish public organizations. In: EURAM, Vergata
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117–126.

Bachir Mazouz is a Full Professor at the Ecole national d’administration publique,
University of Quebec, Canada. He is chief editor of the journal Management inter-
national (Mi) and was the recipient of the Gutenberg Chair in 2009 at the École
Nationale d’Administration (ENA) in Strasbourg, France.

Anne Rousseau is a Professor at the Université catholique de Louvain, Belgium. She
also heads a research team into socio-technical innovation processes at the
Luxembourg Institute of Science and Technology.

Pierre-André Hudon is a post-doctoral researcher at the Ecole national d’adminis-
tration publique, University of Quebec, Canada. He is a lecturer and contributes to
the research on Public-Private Partnership (PPP).

Mazouz et al. 417

Financial Accountability & Management, 31(3), August 2015, 0267-4424

Strategic Management Thinking and
Practice in the Public Sector: A

Strategic Planning for All Seasons?

ÅGE JOHNSEN∗

Abstract: This paper explores how strategic management thinking manifests
itself in strategic management practice in the public sector. Mintzberg’s framework
of ten strategic management schools of thought is chosen for mapping strategic
management thinking. The paper analyses a convenience sample of 35 strategic
management processes, observation of an agency’s strategy reformulation process
and interviews of managers in the public sector in Norway for informing the
discussion. Strategic planning is heavily criticised in some of the business strategy
literature. The analysis indicates that strategic management in the public sector
extensively uses strategic planning, bundled with certain other schools of thought,
despite tendencies to downplay formal, mechanistic planning in contemporary
strategic management theory.

Keywords: central government, local government, public management, schools of
thought, strategy theory

INTRODUCTION

The purpose of this paper is to explore how strategic management thinking
manifests itself in strategic management practice in public sector organisations.

∗The author is Professor of Public Policy, Oslo and Akershus University College of Applied
Sciences, Oslo, Norway. He wishes to thank all the 101 executive master students who
participated and wrote course assignments in the ‘Strategic management for the public
sector’ courses at Oslo University College 2008–2011. Thanks also to the top management
team of the Norwegian Mapping Authority for granting access to their strategy process. The
author acknowledges comments received when earlier versions of this paper were presented
for the 7th Transatlantic Dialogue (7TAD), ‘Strategic Management of Public Organizations’,
Rutgers University, Newark, 23–25 June, 2011; the 33rd Annual Conference of the European
Group of Public Administration (EGPA), Bucharest, 7–9 September, 2011; and the New Public
Sector seminar ‘Strategic Thinking in Public Services’, The University of Edinburgh Business
School, 8–9 November, 2012. Finally, thanks to two anonymous reviewers for their constructive
comments.

Address for correspondence: Åge Johnsen, Department of Public Management, Faculty
of Social Sciences, Oslo and Akershus University College of Applied Sciences, PO Box 4,
St Olavs plass, NO-0130 Oslo, Norway.
e-mail: [email protected]

C© 2015 John Wiley & Sons Ltd
243

244 JOHNSEN

Strategic management has since its academic conception in the 1960s become
a diverse field spanning business, non-profit as well as public sector strategy.
Policy formulation, planning and budgeting have for a long time been important
activities in the public sector. However, by the early 1980s public sector
organisations also started to use strategic management concepts and techniques.
Today, strategic management is common in the public sector in many countries
and across different tiers of government.

The adoption of strategic management in the public sector was partly a
response to environmental turbulence in the 1970s, which made some of the tra-
ditional planning obsolete, and partly a reaction to disappointment with certain
management models such as the planning, programming and budgeting system
(PPBS) which put heavy demands on information processing and management
capacity (Eadie, 1983). The growing use of strategic management in the public
sector was moreover partly a component of many public management reforms
that emphasised decentralisation and sought to replace traditional bureaucratic
governmental institutions with smaller and more autonomous organisations
(Brudney et al., 1999; and Pollitt and Bouckaert, 2004). On this background one
could expect that planning plays a less prominent role in public management
than before, or that planning is only one among many strategy and management
tools in use in the public sector today. However, this assertion has so far not
been empirically documented. On the contrary, an analysis of US state agencies’
experiences from the early 1990s indicates that strategic planning in government
was a successful innovation that contributed positively towards improving the
agencies’ performance (Berry and Wechsler, 1995).

Strategic management in the public sector is a relatively young academic
discipline. Since the mid-1980s there has been an expanding academic literature
on strategic management in the public sector (Behn, 1980; Ring and Perry, 1985;
Jackson, 1993; Nutt and Backoff, 1993 and 1995; Goldsmith, 1997; Poister and
Streib, 1999; Boyne and Walker, 2004; Bryson et al., 2007; and Johanson, 2009).
After an initial emphasis on conceptual studies adapting strategy theories and
techniques to the public sector context there has in the 2000s been a growing
number of empirical studies. Many of these studies have analysed the situation
in the USA (for example, Stevens and McGowan, 1983; Hendrick, 2003; and
Poister and Streib, 2005) or the UK (for example, Greenwood, 1987; Andrews
et al., 2005; Andrews et al., 2006; and Andrews et al., 2009a and 2009b). Despite
this positive development we still know little empirically about how public sector
organisations use strategic thinking in practice. It is therefore interesting to
study how strategic management practice in the public sector reflects strategic
management thinking after five and three decades of extensive critique of formal
planning in public policy and business strategy respectively. The contribution
of this paper is the positioning of public management practices in relation to
theories of strategy.

Bryson et al. (2010) called for more studies on how strategic planning
affects organisational learning. Poister et al. (2010) argued for more large-scale

C© 2015 John Wiley & Sons Ltd

STRATEGIC MANAGEMENT THINKING AND PRACTICE 245

studies of how strategic planning affects performance and outcome. Boyne and
Walker (2010) stated in their review that we need more knowledge on how to
measure performance, how ‘publicness’ affects strategy and performance, how
different strategic stances relate to different dimensions of performance, and
how different national and public sector contexts affect strategic management.
Absent from the above listing of the need for future research is more
knowledge on how different theories and thinking underpin public sector
strategic management. This paper aims at starting to fill some of this gap in the
literature. The research problem is: How do strategic management schools of
thought manifest themselves in strategic management practice in public sector
organisations?

The remainder of the paper is outlined as follows. The next section reviews
schools of thought in strategic management and the third section develops
hypotheses regarding their use in the public sector. The fourth section
documents the methods and data employed and the fifth section presents the
results. The last section discusses the results and concludes the analysis.

STRATEGIC MANAGEMENT THEORY AND PUBLIC MANAGEMENT

Strategic management is commonly conceptualised as the alignment of internal
capabilities with external demands, and this alignment may take the form
of plans, patterns, positions, perspectives, and plots (Mintzberg et al., 2009).
Rumelt (2011) defines strategy as a ‘cohesive response to an important
challenge’. As such a good strategy has a kernel of a logical structure consisting
of a diagnosis, a guiding policy, and coherent action, he argues. Strategy in the
private sector often presupposes rivalry and competition in markets. Strategy in
the public sector may on the other hand, according to Boyne and Walker (2010,
p. 185), more appropriately be conceptualised as ‘a means by which organizations
can improve their performance and provide better services’. Leaving aside
the issue whether the public sector and its organisations have more or less
leeway for improvement than the private sector (Boyne, 2002; Mulgan, 2009;
Nutt and Backoff, 1993; and Ring and Perry, 1985), the issue of improvement
may be common to all organisations. Strategic management is important for
organisational improvement because it can affect organisational adaptability,
performance and legitimacy. Many factors are important for organisations’
ability to adapt to changing circumstances, improve services, create value
and sustain support. These factors include environment, regulation, funding,
technology, organisational structure, and strategy (Andrews et al., 2005; and
Andrews et al., 2008). Many factors represent constraints that the public sector
organisations have to adapt to, but strategy and structure are different in that
these factors to some extent are under management’s discretion. Therefore, if
management can affect strategy (and structure) and these factors are important
for organisational performance then management thinking about strategy may
be important to study in order to better understand organisational performance.

C© 2015 John Wiley & Sons Ltd

246 JOHNSEN

Strategic thinking can conceptualise different definitions of strategy and
how strategy affects performance. Different strands of strategy thinking, what
Mintzberg et al. (2009) denote strategic management schools of thought,
emphasise different definitions of strategy. Some schools of thought that
emphasise strategy as a plan, such as the planning school, are criticised and
are seemingly passé in some of the strategic and public management literature.
Mintzberg (1994), one of the best known critical voices of strategic management
as planning in the 1980s and 1990s, argued that strategic planning puts
too much emphasis on hard data and programming, separates analysis from
synthesis, reduces commitment, and is often outdated and badly suited for local
circumstances and changing environments. Some of this controversy may stem
from different conceptions of what planning and strategic planning is. Strategic
planning seems nevertheless to be extensively used in strategic management
in the public sector (Boston and Pallot, 1997; Barzelay and Jacobsen, 2009;
Poister and Streib, 2005; and Proeller, 2007), and continue to be recommended.
See for example Bryson’s (2011) book Strategic Planning for Public and Nonprofit
Organizations.

Management in the private and public sectors may be different (Allison, 1979;
and Boyne, 2002), but strategic management and strategic planning have been
found to be important in the public sector (Boyne and Gould-Williams, 2003;
Meier et al., 2007; and Ugboro et al., 2011). Moreover, strategic management
tools, such as the balanced scorecard (Kaplan and Norton, 1996) and strategy
mapping (Kaplan and Norton, 2000), may be especially important in public
management because such tools can operationalise public value for different
stakeholders (Talbot, 2011). All organisations have stakeholders, but to the
degree that public sector organisations are more prone to political processes
than other organisations, using tools such as stakeholder analysis for analysing
actors, interests and power relations (Bryson, 2004) as well as using missions
for motivating employees (Wright and Pandey, 2011) and collaborators may
also be relatively important. Thus, strategic management in the public sector is
important.

Strategic management practice is a complex phenomenon. According to
Bryson et al. (2010, p. 497) practices in:

strategic planning or management should be understood as partially routinized
strategic thinking, acting, and learning behaviors that involve typically complex
assemblies of human and nonhuman actors held together by ordering and sense-
making principles that are maintained and changed over time through the way they
are performed.

This implies that strategic management practice encompass different types
of actors – for example, top managers, planners, accountants and external
consultants just to name a few – who engage in processes that, for example,
involve various routines, making of plans and utilisation of specific tools.
Different actors have different education and training, and some schools of

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STRATEGIC MANAGEMENT THINKING AND PRACTICE 247

thought would evidently fit some group of actors better than other schools of
thought.

The literature on strategic management in the public sector has so far not
produced any overarching framework of theories in use. However, there are
several typologies on public sector strategies. Greenwood (1987) developed the
Miles and Snow framework for local government and studied how strategic styles
varied in English and Welsh local government. Wechsler and Backoff (1988)
used case studies of general purpose government agencies and identified four
distinctive public sector strategies: developmental, transformational, protective,
and political strategies. Nutt and Backoff (1995) developed a contingency
framework where strategic leaders respond to environments and act produc-
ing five positive (directors, bureaucrats, accommodators, compromisers, and
mutualists) and three negative (dominators, drifters, and posturers) public
sector strategies. Following the classical theme of strategy and structure,
one of the most employed frameworks in much of the empirical research on
strategic management in government so far, is the Miles and Snow typology of
prospector, defender, analyser and reactor. Boyne and Walker (2004) reviewed
this literature, identified shortcomings and developed a new framework with
three stances for classifying public service organisations’ strategy content, which
acknowledged the specific constraints that public sector organisations face.

The Boyne and Walker (2004) framework builds on Michael Porter’s generic
strategies, the Miles and Snow model, and constraints that stem from publicness.
The publicness concept is based on Bozeman’s (1987) assertion that ‘all
organisations are public’ and means the degree to which political authority
affects an organisation. An organisation’s publicness depends on the level of
collective ownership, level of government funding, and level of how market
or political forces constrain management’s behaviour. The Boyne and Walker
framework consists of a strategy content matrix that has two dimensions:
Strategic stance that maps an organisation as a prospector, defender or reactor;
and strategic action that categorises changes in markets, services, revenues,
and external and internal organisation. This framework is ‘the first analysis of
the strategy of public organisations that not only is exclusively concerned
with content but also distinguishes between strategic stance and strategic
actions’ (Boyne and Walker, 2004, pp. 239–40). Because strategic action implies
that strategy content refers to how organisations actually behave and not
merely intend to or state that they behave, Boyne and Walker asserted that
measurements of strategy content must be based on other data than mission
statements and paper plans, for example, actual changes in markets, services,
revenues, and external and internal structures. The ‘Cardiff-group’ has been
prolific in analysing how strategy affects performance with several studies from
the UK, for example, Andrews et al. (2008, 2009a and 2009b), and from the USA
(Meier et al., 2007). However, other frameworks on how to understand public
sectors’ strategic actions also exist. For example, Johanson (2009) identified

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248 JOHNSEN

three modes of strategic management in public agencies: strategic design,
internal strategic scanning, and strategic governance.

All these typologies on how government organisations act clearly encompass
underlying theories on strategic thinking, but they are difficult to use as
frameworks for mapping strategic thinking because these underlying theories
are mostly implicitly stated and different theories and ways of thinking can
materialise in the same processes, stances and actions. Moreover, the typologies
do not map strategic thinking or schools of thought in public sector strategic
management as such.

There are at least two well-known, possible frameworks for categorising and
analysing strategic management thinking more or less systematically. The first
is documented in Whittington’s (2001) book What is Strategy – and Does It Matter?.
The second is Mintzberg’s typology of ten strategic management schools of
thought (Mintzberg, 1990), revised and updated in the book Strategy Safari
(Mintzberg et al., 2009). These frameworks map general strategic management
thinking, but the books give few examples from the public sector and provide no
systematic analysis of strategy in government. Other frameworks documented
in well-known public sector strategic management books, such as Creating Public
Value (Moore, 1995) and The Art of Public Strategy (Mulgan, 2009), give many
examples of strategy in government but provides no systematic analysis of
the utilisation of the different schools of thought or no coherent mapping of
the usage of strategy tools in the public sector. For the purpose of this study,
the Mintzberg framework is chosen to explore strategic management thinking
in public sector organisations because this framework purports to give a general
and systematic overview of strategic thinking.

Table 1 outlines the Minzberg et al. (2009) framework. The Mintzberg
framework is divided into three normative schools (the design, planning and
positioning school), six descriptive schools (the entrepreneurial, cognitive, learn-
ing, power, culture, and environmental school) and one mixed (configuration)
school. The basic trust of the Mintzberg framework is contingency theory;
different schools of thought define strategy differently and are supposed to
be more useful for addressing some issues in some environments than in
others. For example: The design school is useful for formulating a strategy
and especially when there is a major reformulation and the organisation is
facing stable environments. The planning school is useful for implementing a
strategy, in particular in big organisations operating in stable environments
and in organisational cultures that value loyalty to top-management’s decisions.
The positioning school is useful for big companies operating in mature and
competitive markets. The entrepreneurial school suits start-ups or turnaround
in small organisations. These four schools of thought are supposed to be related
to individual central strategic actors; the chief executive, planners, analysts (in
particular consultants) and entrepreneurial leaders, respectively.

The descriptive schools conceptualise strategy processes and decisions as
subject to influence from many stakeholders. Also these schools of thought are

C© 2015 John Wiley & Sons Ltd

STRATEGIC MANAGEMENT THINKING AND PRACTICE 249

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C© 2015 John Wiley & Sons Ltd

250 JOHNSEN

‘contingency theories’. For example: The learning school is hypothesised to be
especially relevant in professional organisations, in complex environments, in
organisations lacking a powerful centre, and in new situations. The learning
school is especially viable for understanding emergent strategies when the
environment is in flux. The power school is assumed to be useful for explaining
strategy formation in big, decentralised organisations and in blocked decision
points. The macro version of the power school, corresponding to the resource
dependence perspective, is allegedly most useful for big organisations for
influencing the environment. The micro version is useful for understanding
strategies as subject to institutional politics and actors’ interests. The central
strategic actors in the descriptive schools vary from ‘minds’ to collectivities such
as whole organisations and even ‘the environment’.

Mintzberg’s typology is contingency theory: Given the environmental factors
and organisational traits there would likely be one school of thought that best
describes a good fit between an organisation’s strategic issue at hand and its
decision making process. Mintzberg et al. (2009) summarise this way of thinking
in the configuration school. As organisations establish, grow, mature, face crises,
reorganise and so on, the stakeholders will typically have different interests
and agendas and employ different theories in use and tools, depending on the
strategic issue at hand. Alternative interpretations are also possible. Actors
may have different cognitive styles, organisations may have been imprinted
by popular theories in use and tools at critical stages in the organisations’
development, and there may be some stability in the environments, which are
matched with proper internal structures. Actors and organisations may therefore
specialise in utilising certain mix of theories in use and related tools that are
assumed to be versatile for a whole range of different strategic issues and
contingencies. Changing from one school of thought to another when strategic
issues change may also be costly. Hence, actors and organisations may mix two
or more schools of thought and corresponding tools in a strategic management
package of choice. Strategic management may in that case be evident by bundles
of schools of thought and related tools that persist over time and between
strategic issues more than by a pattern consistent with the configuration school
where managers deliberately choose strategic stances, actions, processes and
tools depending on the strategic issue and situation in question.

The schools differ in their origins and theoretical foundations. Some
normative schools have distinct intellectual ‘founding fathers’ – for example,
Philip Selznick and Kenneth Andrews for the design school, Igor Ansoff for
the planning school and Michael Porter for the positioning school – while
other schools correspond more to academic developments – as well as trends
and fashions – in theory and research which partly developed as a response to
perceived problems in the normative schools. For example, cognitive psychology,
organisational learning, the resource dependence perspective, culture theory,
and new institutionalism emerged in the 1960s, 1970s and 1980s with some
research also on strategy, which Mintzberg pedagogically has regrouped into the

C© 2015 John Wiley & Sons Ltd

STRATEGIC MANAGEMENT THINKING AND PRACTICE 251

descriptive schools. On the assumption that the normative schools, especially
the design and planning schools, are older in the academic literature than
the other schools of thought as well as that they by definition purport to
improve management by being normative one could hypothesise that these
schools dominate practice. However, this hypothesis could be premature relative
to what the literature on strategic management in the public sector informs
us. Collier et al. (2001), for example, discusses research that indicates that
strategy development to a large extent appears to be the same in the public
and private sectors, but that public managers are more likely to report that
strategy development is more constrained by external forces than private sector
managers. This indicates a need for analysing how the public sector context may
affect strategic thinking and practice.

STRATEGIC MANAGEMENT THINKING IN PUBLIC SECTOR PRACTICE

So far the discussion has pointed to the possible application of all the ten schools
of thought in strategic management in general. We now turn to exploring the
most likely manifestation of the schools of thought on strategic management in
public sector organisations. Ring and Perry (1985) developed five propositions
and identified four contextual factors that give rise to distinctive constraints
and behavioural consequences for strategic management in the public sector.
The research problem for this paper is to explore how strategic management is
manifest in public sector organisations’ practices. Ring and Perry’s (1985) five
identified expected behavioural consequences are therefore used for making
hypotheses regarding which schools of thought in strategic management affect
public sector strategic management most.

The first behavioural consequence of the public sector context is incremental
decision making. ‘To the extent that incremental decision and/or emergent
strategies enable public organisations to be more responsive to the needs
or demands of their constituents, they are likely to be more effective’ than
rigidly planned processes, according to Ring and Perry (1985, p. 282). This
assertion indicates that the learning school could be especially viable for public
sector strategic management. The second behavioural consequence is maintaining
flexibility. ‘If the strategy process tends to be emergent and more open to
exogenous influences, flexibility and adaptability appears to be required of
public managers’ (Ring and Perry, 1985, p. 283). This bill fits the environmental
school. The environmental school encompass many actions that public sector
organisations could use to adapt to, accommodate or decouple from external
demands. The third behavioural consequence is bridging competing worlds. ‘(T)he
political executive must bridge competing demands within the structure of
government, in addition to bridging competing cultures outside the formal
structure. Coping with all these competing demands is likely to require managers
who display the attributes of marginality’ such as ‘the ability to integrate
competing viewpoints in decisions’, ‘a self-other orientation’, ‘maintenance of

C© 2015 John Wiley & Sons Ltd

252 JOHNSEN

low levels of dogmatism’ and ‘openmindedness’ (Ring and Perry, 1985, p.
283). The power school typically is about being open-minded towards the de
facto stakeholders and being able to analyse as well as form coalitions and
should therefore be a natural candidate school of thought for informing public
managers’ strategy practice with respect to bridging competing worlds. The
fourth behavioural consequence is wielding influence not authority. Ring and Perry
(1985) discussed the managers’ need for handling both external and internal
relations, but here we can emphasise the internal relations because above the
environmental and power schools addressed the external focus. Ring and Perry
stated that:

the formal protections of these [merit based personnel] systems, coupled with the
existence of employee unions, is likely to place a premium on the use of influence
rather than authority in managing policy within the organisation. It also may require
an ability to maintain high morale within the agency, managing internal dissent by
influence rather than authority (Ring and Perry, 1985, p. 284).

Though influence typically is wielded in the power school, the cultural
school may be useful for public managers, especially in many professional
organisations. Public managers need to understand how to analyse and develop
shared organisational values and how organisational cultures may dissolve
planned strategies as well as facilitate emerging strategies and maintain high
professional integrity when there are conflicting expectations both within and
outside the organisation in question. The fifth behavioural consequence is
minimizing discontinuity. Ring and Perry (1985, p. 284) asserted:

Coalitions are unstable, political executive tenure is brief, agendas change constantly.
Successful public sector managers act to minimize discontinuity and bridge the gaps
that it leaves in its wake.

If instability and change are the premises for public sector strategy …

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Public Management Review

ISSN: 1471-9037 (Print) 1471-9045 (Online) Journal homepage: https://www.tandfonline.com/loi/rpxm20

Applying Strategic Management Theories in Public
Sector Organizations: Developing a typology

Jesper Rosenberg Hansen & Ewan Ferlie

To cite this article: Jesper Rosenberg Hansen & Ewan Ferlie (2016) Applying Strategic
Management Theories in Public Sector Organizations: Developing a typology, Public Management
Review, 18:1, 1-19, DOI: 10.1080/14719037.2014.957339

To link to this article: https://doi.org/10.1080/14719037.2014.957339

Published online: 17 Sep 2014.

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APPLYING
STRATEGIC
MANAGEMENT
THEORIES IN
PUBLIC SECTOR
ORGANIZATIONS
Developing a typology

Jesper Rosenberg Hansen
and Ewan Ferlie

Jesper Rosenberg Hansen
Department of Economics and Business
University of Aarhus
Aarhus
Denmark

Department of Political Science and Government
University of Aarhus
Aarhus
Denmark
E-mail: [email protected]

Ewan Ferlie
Department of Management
King’s College London
London
UK
E-mail: [email protected]

Abstract

This article discusses the utility of two dif-
ferent strategic management theories in dif-
ferent types of public organizations including
contemporary New Public Management-
based public organizations, namely Porter’s
strategic positioning model and the
resource-based view of strategy. We argue
that possibilities for applying these theories
vary depending on the type of public organi-
zations involved, and are less appropriate in
traditional settings but more relevant in
autonomized and market-like service-delivery
organizations. We further propose that their
increased applicability depends on three spe-
cific conditions: the degree of administrative
autonomy, performance-based budgeting
and market-like competition. We give empiri-
cal examples drawn from public services in
the UK and Denmark. We call for more
exploration of these (and other) strategic
management approaches within contempor-
ary public services organisations but also
more exploration of the limitations of these
frameworks.

Key words
Strategic management, NPM, typology

Public Management Review, 2016

Vol. 18, No. 1, 1–19, http://dx.doi.org/10.1080/14719037.2014.957339

© 2014 Taylor & Francis

INTRODUCTION AND BACKGROUND

The public sector in many countries has recently undergone many changes through
sustained reform initiatives. While countries vary in their reform trajectory (Pollitt and
Bouckhart 2011), New Public Management (NPM) reforms have been a significant
influence in various jurisdictions since the 1980s (Hood 1991, 1995). The NPM wave
introduced new economic perspectives (e.g. quasi-markets, transaction cost economics
and agency theory) and generic management theory (e.g. firm-like corporate govern-
ance) within public organizations (Hood 1991). Changes to more business-like organi-
zational forms are now well explored in a substantial literature on NPM reforming
(Hood 1991; Ferlie et al. 1996; see Dunleavy et al. 2005 for a critical treatment)
though there are major variations of the NPM impact across countries and between
sector areas within countries (Pollitt and Bouckaert 2011).
The established public management literature (Perry and Rainey 1988; Rainey and Chun

2005; Boyne 2002) also explores the nature of strategic management in public organizations
and private companies (Nutt and Backoff 1993; Moore 2000; Rainey 2009), but typically
assumes significant differences (Allison, [1980] 2004; Bozeman 1987) due to more complex
and ambiguous goals in the public sector, and because the decision-making process is there
more open and political, given multiple stakeholders (Rainey 2009). However, this
established literature does not consider the effects of NPM reforms in making public
services organizations less distinctive from the private sector firm (see Dunleavy and
Hood 1994). It is only recently that strategic management has received attention within
the public administration literature (Ferlie 2003; Johanson 2009) and the field is still
developing. Even so, strategic management is argued by some authors to be increasingly
important for shaping the performance of public organizations (Andrews et al. 2012).
Key macro-level shifts within the NPM include (i) Autonomized Agencies: NPM

reforms break up large vertically integrated public bureaucracies into smaller and
more ‘manageable’ service-delivery-orientated subunits such as UK executive agencies
(Pollitt et al. 2004). The goal is to create autonomous public organizations (Pollitt
et al. 2004) with well-defined, high volume and narrow tasks. Such agencies are
‘accorded greater operational decentralization’ with more ‘strategic space’ in which
to operate. (ii) Quasi-Markets and Quasi-Firms: The old line management hierarchy
fragments into distinct groupings of commissioners and providers which link through
a contract. On the provider side, quasi-markets produce ‘quasi-firms’ (Ferlie 2003)
which try to secure competitive advantage and win contracts. They may become less
producer-dominated and more customer-focused. (iii) Sectoral Blurring and Public–Private
Hybrids. NPM reforms increase sectoral blurring and create public–private hybrids.
Consortia (e.g. large infrastructure projects) bring together public agencies and private
firms. Executive agencies may undergo progressive privatization, with the role of
private shareholders increasing over time. Organizations nominally remaining in the
public sector may increase income generated through the market and become less

2 Public Management Review

reliant on public funding. (iv) Strengthened Corporate Core: NPM organizations seek to
develop more steering from the corporate core. Typical shifts include assertive senior
management, importing personnel from the private sector; a smaller and more strategic
board with empowered non-executives, often with a business background; and aligning
managerial and professional domains through a linking group of public services profes-
sionals with part-time managerial roles as ‘hybrids’ (Ferlie et al. 1996).
Our main goal here is to consider whether and why certain models of strategic

management can be used in different types of public organizations. So we will first of all
consider the conditions under which generic strategic management models become more
applicable to specific types of public organizations, notably those that are NPM-oriented.
Our main argument is that where there are three NPM-correlated conditions: a high degree
of (i) administrative autonomy, (ii) performance-based budgets and (iii) market-like con-
ditions then receptivity to conventional models of strategic management increases.
Second, we will examine two influential strategic management theories found in

business organizations (Spanos and Lioukas 2001). One is Porter’s strategic positioning
(Porter; 1980, 1985, 1996) model which focuses on choice of strategy and position in
the market, so as to exploit market imperfections. The other is the resource-based view
(RBV) of strategy (Barney 1991, 1995; Peteraf and Barney 2003) which focuses on
developing and exploiting the organization’s resources. While these theories are widely
used in private companies, the literature on strategic management in public organiza-
tions does not (yet) pay much attention. More public-management-based literature
focuses on other aspects of strategic management, for example, on strategic processes
(Bryson 2004) or on Miles and Snow’s classic typology (e.g. Andrews et al. 2009;
Meier et al. 2007) – though Porter (Vining 2011) and RBV (Walshe, Harvey and Jas,
2010; Piening forthcoming) have received more attention recently. We suggest there
are further possibilities for applying these theories in public services organizations which
rate highly on our three core dimensions.
Some examples are given from public organizations in the core health and education

sectors in two countries with experience of major NPM reforms in large parts of their
public sector: the UK (Hood 1991, 1995; Ferlie et al. 1996) and Denmark (Hansen
2011). We recognize that other jurisdictions may be on non-NPM-based tracks of
public services reform (Pollitt and Bouckaert 2011) and will consider these broader
issues in the concluding discussion. The concluding discussion also outlines suggestions
for future research in what we consider as a growing field.

UNDERSTANDING DIFFERENTIAL RECEPTIVITY BETWEEN TYPES OF PUBLIC
ORGANIZATIONS TO GENERIC STRATEGIC MANAGEMENT MODELS

We argue that the possibilities for using strategic management models in public
organizations depend on their core features. In this section, we generate a continuum

Hansen & Ferlie: Strategic management in NPM-based organizations 3

to help understand such differences and suggest a classification scheme which argues
that three dimensions: the degree of administrative autonomy, performance-based
budgeting and market-like competition all influence such possibilities.

Degree of administrative autonomy

The first dimension is the organization’s degree of administrative autonomy. A tradi-
tional distinction often drawn is between economic and administrative autonomy. In the
former, the organization has economic freedom, often in a competitive situation
(Chubb and Moe 1988). Here, we focus on administrative autonomy which sets the
boundaries for strategic action. In the private sector strategic management literature,
autonomy is not seen as a big issue – probably because it is expected that companies
have autonomy to act. However, public organizations can be restricted by their
mandate (Bryson 2004). Politicians decide the organization’s degree of autonomy,
traditionally highlighted as a constraint on strategy in public management (Ring and
Perry 1985). Yet in many countries, politicians have recently expanded the scope of
autonomy for public organizations to reach their goals (Pollitt and Bouckaert 2011;
Vining 2011) and autonomy maximization may also be a managerial objective. One
core NPM policy is to construct semi-autonomous executive agencies (Pollitt et al.
2004) assuming they perform better in the operational domain than more traditional,
highly restricted public organizations (we develop this point below).

Degree of performance-based budgets

Two widely used typologies of public organizations are Wilson (1989) and Dunleavy
(1991). Wilson distinguishes between types of public organizations using two criteria:
how observable is output and outcome. Dunleavy (1991) distinguishes between public
organizations based on their budgeting. These two typologies focus on two fundamental
aspects of public agency budgeting: Wilson focuses on output and outcome, which is a
performance-oriented framework, and categorizes public organizations according to
how their performance can be observed. Dunleavy focuses on the public organization’s
budget as the basis for what the organization can achieve. This article’s classification
schema combines these two variables and focuses on the degree of performance-based
budgets.
While performance measurement has been used for different purposes, the focus

here is on performance measurement techniques which make performance-based
budgets (Jordan and Hackbart 1999) possible. The policy choice is whether public
services organizations have fixed budgets with no relation to performance, or at the
other extreme, budgets based solely on performance (activity-based budgets) or

4 Public Management Review

something in between. This dimension relates to the distinction between input- and
output-based budgets where the trend with NPM is towards more output-based
budgets (Rubin and Kelly 2005). Problems can occur with performance-based budget-
ing given a tendency to focus on aspects that are measured while forgetting those not
measured. Furthermore, many public tasks remain difficult to measure (Wilson 1989).
Therefore, the argument is not that we need a decrease or increase in performance-
based budgets, but rather that this continuum influences the possibilities for applying
strategic management. The performance-based budget form increases the importance of
strategic management because organizations’ survival to a larger extent now depends on
their performance. This is not to say that organizations with fixed budgets will not use
some strategic management techniques to help allocate resources, but rather that the
scope and scale of such analysis is likely to increase along with performance-based
budgets.

Degree of market-like competition

Perry and Rainey’s influential typology (1988) includes three criteria: ownership
(public/private), funding (public/private) and social control (polyarchy/market). This
typology is clear, but its primary focus is on the transitional area between public
organizations and private companies. Much recent work on public management has
studied organizations which are a cross between public and private sectors (Jørgensen
1999). As organizations still legally in the public sector are allowed to increase their
private and public income flows, they may too become more like hybrids and operate in
more market-like conditions.
The last dimension in our continuum is therefore the degree of market-like competi-

tion. The question is whether control is primarily political or performed via market-like
conditions either after privatization, increased private income flows or through ‘strong’
quasi-markets. This continuum suggests differential market-like conditions, for
instance, the degree of competition facing a public organization. One indicator of
market-like competition is how much it threatens organizational survival. Given high
competition, a failing public organization may experience market failure and even be
forced to close. We develop this point further below.

The overall classification schema

The first dimension explores how much freedom an organization has in achieving its
mission; the second plots the extent to which the organization receives funding for
achieving the mission and whether it varies with performance; and the third dimension
concerns whether an organization competes with others in achieving its mission. Based

Hansen & Ferlie: Strategic management in NPM-based organizations 5

on this classification schema (see Figure 1), there are two extreme types of public
organizations where all three dimensions are either low or high. The first category
contains the classical bureaus with highly restricted tasks of authority (like issuing
passports or building licenses). Traditionally these traditional bureaus have fixed
budgets regardless of performance and competition. On the other side of the spectrum
lie private-like and NPM-inspired agencies (like some public schools, where the
children have a free choice of school and which are funded according to the number
of students) with greater scope of action and fewer restrictions; they have performance-
based budgets, work in equal competition with private companies, and close if they
cannot compete. In Figure 1, we have for simplicity shown how we on one hand still
have traditional public organizations and on the other have the NPM organizations.
However, we argue that due to various NPM changes apparent in different areas (but
not all), we may have a variety of different types of public organizations that are at
different places at these three different dimensions.
It is therefore important to emphasize that these different dimensions should not be

treated as either high or low degree (binary dichotomy), but that there are different
levels in what are continua. Empirically, we will also find that different organizations
can be placed on different levels in these continua. Our theoretical argument is that
overall, the opportunity for strategic management models is highest: (i) when there is
greater freedom to act, because if everything is regulated there is less room for strategic
management; (ii) when there is much performance-based budgeting, strategic manage-
ment approaches are more applicable, because their budget (and potential survival) are
more dependent on performance; and (iii) when there are market-like conditions,
because this threatens the survival of the organizations and increases the need for
strategy. We expect that these conditions for strategic management are likely where
there are strong NPM reforms.
We now go on to explore the possible utility of two major models of strategic

management for public agencies which display strong evidence of these three core
features.

Figure 1: Differences between public organizations

6 Public Management Review

STRATEGIC MANAGEMENT MODEL 1: PORTER AND STRATEGIC POSITIONING

The strategic positioning model explores how to choose a clear strategy and position in an
industry to exploit market imperfections (Porter 1980, 1985, 1996). Given Porter is a
prolific writer, this article concentrates on his core concepts of strategic positioning, generic
strategies, the five forces model (Porter 1980) and value chain analysis (Porter 1985).
Porter’s main ideas come from the discipline of industrial organization (Bain 1959) –

a subfield of neoclassic economics using concepts of economics of scale and scope. So
the unit of analysis is the whole group of organizations (the industry). Porter’s work on
strategic positioning asks: how can the organization best position itself in the industry to
achieve competitive advantage? The key idea is that the organization, compared to
competitors, constructs an advantage from which it can make a sustained profit. A
question for Porter is how the organization can use market imperfections to appropriate
the total value created. The way to achieve competitive advantage is through a clear
strategy where only a small number of generic strategies are viable. The low cost
strategy focuses on achieving cost advantage. The differentiation strategy focuses on
offering different products or services that customers are willing to pay for (Porter
1980) in return for high quality. An organization should choose one clear strategy;
otherwise it will be ‘stuck in the middle’ (Porter 1980).
The well-known five forces model (Porter 1980) analyses the attractiveness of

industries through five different forces. First the attractiveness depends on the bargain-
ing power of suppliers and bargaining power of buyers. The more power each have, the
less attractive the industry. The threat of new entrants, the threat of substitutes and the
industry competitors and their degree of rivalry also lessen industry attractiveness.
Based on this analysis, the firm should choose which industry to be in and what position
(generic strategy) to hold. However, it can use the model to make its own industry
more attractive, by creating entry barriers for new entrants.
The strategic positioning model explores the effect of a given strategy across the

organization. This is captured in the value chain model (Porter 1985) which focuses on
all activities (primary and support) required to bring the product or service to end
customers and users. The implication is that the chosen strategy should be applied
throughout the chain.
So important concepts behind the strategic positioning model are as follows: the

theory has an outside-in focus on strategy by which the strategy is shaped by the
external environment (especially the industry). Moreover, the strategy is concerned
with making choices (or trade offs) within the industry (Porter 1996). It also empha-
sizes ‘fit’ (Porter 1996) – the idea that the strategy adopted should fit the organizational
and the market context.
Can a Porterian strategic positioning approach be applied in NPM rich public

organizations? Strategic positioning has received little attention in the strategic manage-
ment literature in public organizations (but for an exception, see Vining 2011). Few

Hansen & Ferlie: Strategic management in NPM-based organizations 7

papers discuss strategic positioning (Boyne and Walker 2004) and there are few
empirical studies. Why might this be the case? Bryson and Roering (1987) suggest it
is difficult for public organizations to know what industries they are in and which forces
are influential. Furthermore, a strategic positioning perspective focuses on competition,
while traditional public organizations focus on collaboration (Bryson and Roering
1987).
We explore these arguments further here. The overall goal of using a strategic

positioning approach is to gain an advantage over competitors and to maximize profit.
In traditional public organizations, a problem is the appropriation of value by using
market imperfections instead of creating value or ensuring overall efficiency is seen as
inappropriate. Public organizations also traditionally have multiple stakeholders to serve
within a specific mandate and not a focus on profit for shareholders (Bryson 2004).
Second, a strategic positioning perspective holds assumptions that do not match a

traditional public organization, because it focuses on the choices of customers or what
markets to serve and which generic strategy to apply. For public organizations, this
freedom of choice is often not possible, given their mandate to fulfil. Public organiza-
tions are often not free to choose their markets or customers (e.g. prisons). They are
tied to a specific ‘market’ and their customers are the citizens. The concept of generic
strategies is difficult to apply in traditional public organizations as they cannot choose
customers willing to pay extra. While Porter’s focus on the external environment can
be an important aspect of strategic management in public organizations, we suggest the
overall focus should be on value creation for all relevant stakeholders.
Some parts of Porter’s theory can be applied in traditional public organizations –

especially the value chain concept (Bryson 2004) which seeks to ensure alignment
between the various value creating activities. And the concept of environmental fit is
equally important in public organizations and private companies.
However, our overall analysis suggests that there are also difficulties in applying a

strategic positioning perspective in traditional public organizations. Major reservations
come from its focus on competition and appropriating of value. However, as formerly
argued, there are now major differences between different types of public
organizations.
The possibilities for application of Porter’s model are best when all three NPM style

dimensions are high: autonomy, market-like conditions and performance-based budget-
ing. Autonomy levels should be high because one fundamental contention is that the
organizations can choose (Porter 1996) their strategy or even their industry. Market-
like conditions should be high because the goal is to achieve a competitive advantage
(Porter 1980). This indicates that the strategic positioning model assumes market-like
conditions, even of an imperfect nature. Finally, the goal of strategic positioning is to
perform better than competitors (to earn more profit) and this assumes that the
budgetary funding should be performance-based. In the following section, we give
two empirical examples.

8 Public Management Review

Empirical examples of strategic positioning

Upper secondary schools from Denmark
Danish upper secondary schools are an example of public organizations where strategic
positioning concepts might be applied as they have moved in an NPM direction
following the Danish Structural Reform (Danish Ministry of the Interior and Health
2004). First, upper secondary schools have more autonomy because they are now self-
governing with their own boards. They are responsible for more tasks: they decide
which study directions to offer the students, and in the long run also decide their
capacity for students. Furthermore, their budgets have changed from fixed budgets to
taximeter financing. So now they budget according to the number of students who pass
an exam. This means they have to compete against other schools. Previously upper
secondary schools were assured a certain number of students because they were
allocated to them by a public committee.
Although the upper secondary schools still are publicly owned, funded and limited by

their mandate, a strategic positioning model can be applied, because each school now
has a choice of how to position itself in the ‘industry’ of upper secondary schools: for
example, they can differentiate themselves by offering particular study directions, or
even merge with business colleges or other upper secondary schools. Furthermore, they
compete with other upper secondary schools, not to appropriate profit, but for the
number of students which influences their budget. So even though the schools are not
profit-oriented, they focus on appropriation of students. Several factors could prevent a
school from applying a strategic positioning model: different institutional factors (Scott
2007) including path dependency. Here, the school leaders (the principals) have, for
years, primarily focused on pedagogical leadership and associated professional norms
which still constrain the application of strategic management theories in the public
sector, but importantly the schools can potentially apply strategic positioning thinking
because their market situation has changed. A longitudinal case study has though
showed that these schools are focusing more on competitive issues including issues
like the schools profile and attracting students after the Structural Reform (Hansen and
Jacobsen 2013). Yet, the investigated schools still keep their high level of cooperation
between schools though this may potentially be challenged in the future when the
number of students is expected to go down due to smaller year groups coming through
(Hansen and Jacobsen 2013). Moreover, a broad survey of these schools shows
increased use of strategic management tools, including competitively oriented tools
(like analysis of competitors and marketing plans), after the reform (Hansen 2011).

Strategy in the developing quasi-market in English higher education
The policy of the UK coalition government (elected in 2010) has accelerated the drift
away from a planned system to a quasi-market in English higher education (to a greater
extent than in the Thatcher era of the 1980s and 1990s). Themes of competitive

Hansen & Ferlie: Strategic management in NPM-based organizations 9

advantage have already been addressed sporadically in the UK higher education
literature (Lynch and Baines 2004, adopt an RBV perspective), but interest is now
likely to intensify. More private firms and not-for-profit organizations have been given
degree awarding powers and encouraged to enter the higher education market,
particularly in vocationally orientated subjects such as Law or Business Studies (although
we presently lack a case of market exit by a failed public provider).
Undergraduate fee levels have been increased substantially (leading to more con-

sumer pressure) to a maximum of £9000 a year and old caps on numbers of well-
performing students allocated to institutions by the central planning body have been
removed to create stronger market forces. Institutions also have the freedom to charge
less than the maximum allowed if they choose to (that is, focus on cost leadership),
although few have yet done so (perhaps mindful of consequent reputational damage).
Overseas and postgraduate student markets have been growing and are largely deregu-
lated (e.g. MBAs). Universities face explicit performance pressures both in the market-
place for students’ fee income and in research (where public funding follows an explicit
assessment of departmental performance).
Universities therefore face strategic positioning decisions within the developing

Higher Education marketplace. Do they move to a cost leadership position, and
undercut their competitors, with the danger of being seen as a low quality brand?
Or do they differentiate themselves on quality grounds and charge premium fees? Will
the middle ranking institutions (‘the squeezed middle’) be seriously affected as they do
not have a coherent overall strategy as Porter would predict)?
These are still early days and the full effects of new market level forces are still to

work through, but may be expected to force …

GPRA/GPRAMA

Understanding the Government Performance and Results Act (GPRA)/

GPRA Modernization Act (GPRAMA)

Introduction to GPRA/GPRAMA for Providers and Clinic Staff

What is GPRA/GPRAMA?

The Government Performance and Results Act (GPRA) is a federal law. It requires Federal
agencies to demonstrate that they are using their funds effectively toward meeting their missions.
The law requires federal agencies to have a 5-year Strategic Plan and to submit Annual
Performance Plans and Reports with their budget requests. The GPRA Modernization Act
(GPRAMA) strengthened GPRA by requiring federal agencies to use performance data to drive
decision making.

The Annual Performance Plan describes what the agency intends to accomplish with its annual
budget. All federal agencies have specific annual performance measures with specific annual
targets. For the Indian Health Service (IHS), these annual targets are set by the Office of
Management and Budget (OMB) in consultation with the representatives from IHS and the
Department of Health and Human Services (HHS). GPRA is a critical part of the annual budget
request for IHS. IHS reports over 90 budget measures, including more than 20 clinical GPRA
measures, and six GPRAMA measures. The IHS monitors its performance by quarter and reports
final budget measure results in the annual IHS budget request, the Congressional Justification
(CJ).

The GPRA “year” runs from July 1st- June 30th. Facilities run cumulative quarterly reports for the
second quarter (ending Dec. 31st), third
quarter (ending March 31st), and at the end
of the year (ending June 30th) and send them
to their Area offices. Area GPRA
Coordinators run Area Aggregate reports
and send them to the National GPRA
Support Team (NGST) at the California
Area Office (CAO). The NGST aggregates
all data received to generate national
aggregate data showing how the agency
performed over the GPRA year, including
whether the annual targets are met. Only national aggregate data is reported to Congress; no
individual clinic or Area-level data is reported.

Introduction to GPRA/GPRAMA for Medical Staff

 
 

 

GPRA/GPRAMA

What is a GPRA Clinical Budget Measure?
A GPRA clinical budget measure is a specific
indicator of performance on patient care. Current
GPRA Clinical Budget Measures include:

◘ Diabetes
Blood Sugar Control*

Blood Pressure Control

Statin Therapy

Nephropathy Assessment

Retinopathy Assessment

◘ Dental
Access

Topical Fluorides

Sealants

◘ Immunizations
Childhood*
Influenza– Adult and Childhood
Adult Pneumococcal

◘ Cancer Screening
Mammography Screening

Pap Screening

Colorectal Cancer Screening

◘ Behavioral Health
Depression Screening 18+*
Depression Screening age 12-17
Antidepressant Medication Management
Universal Alcohol Screening
SBIRT
Domestic Violence Screening
Tobacco Cessation

◘ Prevention
CVD Statin Therapy*
HIV Screening
Breastfeeding Rates
Childhood Weight Control
Controlling High Blood Pressure

(*GPRAMA Measures)

There are also a number of non-clinical measures that
measure facility accreditation, Public Health nursing,
suicide surveillance, environmental and sanitation
services, and health provider scholarship placements.

All Providers are GPRA leads

 GPRA/GPRAMA = good patient care

 GPRA is a shared responsibility; use a team
approach

 Provide clear roles for all team members to help
meet each GPRA/GPRAMA measure targets

 Inspire members of your team and encourage
innovation

CRS

The Clinical Reporting System (CRS), a software
application in the Resource Patient Management
System (RPMS), is the tool for reporting of all
GPRA clinical measures at IHS.

 Federal (IHS) facilities are required to use CRS
for GPRA reporting

 Tribal and Urban facilities are not required to use
CRS but are strongly encouraged to use it

 CRS provides verified and validated data with an
audit trail; this is critical for Congressional
reporting

 CRS data is reported in aggregate, and does not
contain any patient identifiers.

 Beginning in FY 2018 GPRA reporting will be
done via the National Data Warehouse, however
CRS will continue to be the primary tool for
monitoring patient health status

 There will be some changes to GPRA reporting as
of FY 2018 (including a slightly different
reporting year and measure denominator changes)
but most aspects of GPRA reporting at the site
level will remain the same

Introduction to GPRA/GPRAMA for Medical Staff

GPRA/GPRAMA

RPMS and EHR support GPRA/GPRAMA!

The Resource and Patient Management System (RPMS) manages both clinical and administrative
information at healthcare facilities. RPMS has over 50 software applications. The Electronic
Health Record (EHR) provides a graphical user interface (GUI) for RPMS.

Components of RPMS/EHR include:

 Bar Code Medication Administration (BCMA)
 Clinical Reporting System (CRS)
 Electronic Dental Record (EDR)
 iCare
 Laboratory Services
 RPMS Behavioral Health System
 VistA Imaging (VI)

You can learn more about RPMS at www.ihs.gov/rpms and the Electronic Health Record
at www.ihs.gov/ehr

“What do Meaningful Use and GPRA have in Common?”

The HITECH Act (part of the American Recovery and Reinvestment Act of 2009) seeks to improve
patient care through the adoption of HIT and meaningful use (MU) of certified electronic health
records (EHRs). In order to demonstrate meaningful use, eligible providers and hospitals must report
clinical performance measures that are similar, but not identical, to GPRA measures. The HITECH Act
Stage 1 rules established requirements for the electronic capture of clinical data, including providing
patients with electronic copies of health information. The Stage 2 final rule expanded upon the Stage 1
criteria with a focus on ensuring that the meaningful use of EHRs supported the aims and priorities of
the National Quality Strategy.

CMS EHR Financial Incentives

For more information on EHR incentive programs: www.cms.gov/EHRIncentivePrograms/

Introduction to GPRA/GPRAMA for Medical Staff



GPRA/GPRAMA

How to generate good GPRA/GPRAMA data and improve performance:

Providers:
 Ensure you and/or others are asking patients the questions that need to be asked (e.g. “do you smoke”) and

getting height, weight, and blood pressure measurements. Ensure that the information is being documented on
the encounter form in the appropriate place. Consider how you can streamline this process; some of this
information can be gathered during intake, for example.

 Make sure that patient refusals, patient education, and health factors are being documented correctly
 Ask patients about tests/immunizations/procedures they have received outside of your clinic, including

contract services, and document them on their health record. Many of these still “count” for GPRA as long as
they were performed within the required time frame.

 Use EHR clinical reminders and iCare to identify patients and community members overdue for preventive
care; monitor state immunization registries to identify children overdue for vaccinations

 Review current GPRA logic for all performance measures to ensure that you are collecting the right data and
documenting it correctly. CRS is usually updated twice a year. The CRS manual and GPRA performance
measures list are available at the CRS website at: http://www.ihs.gov/crs/

 Review your site’s GPRA results frequently. CRS reports can be run anytime, and the highest-performing
sites run them frequently, sometimes every week. Consider having a weekly meeting to review results and
make sure patients are getting called in if they are due for a test or screening.

 If you are a specialist, pay close attention to the measures applicable to your practice. For example, if you are
a dentist, review the GPRA dental measures. If you are the Diabetes Coordinator, review the diabetes
measures. Review throughout the GPRA year.

All staff:
 Make GPRA a clinic-wide priority and review GPRA results frequently. If rates do not look correct:

 In CRS, you can run a patient list for any measure to see which patients have met the measure.
 If patients are not showing up as having met the measure, you can double check the patient chart to

see if an incorrect code was used.

Produced and Distributed by

Indian Health Service/

California Area Office

650 Capitol Mall

Suite 7-100

Sacramento, CA 95814

(916) 930-3927

FAX (916) 930-3952

For additional information on GPRA/GPRAMA, please contact

National GPRA Support Team (NGST)

[email protected]