Strategic Management Thinking and Practice in the Public Sector: A Strategic Planning for All Seasons?

• Published date: 01 August 2015
• Author: Åge Johnsen
• Date: 01 August 2015
• DOI: http://doi.org/10.1111/faam.12056

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

Strategic Management Thinking and

Practice in the Public Sector: A

Strategic Planning for All Seasons?

˚

AGE 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: ˚

Age 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: aage.johnsen@hioa.no

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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

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