Contemporary strategic decision making in the public sector

he aim of this essay is to critically appraise the following assertion. Contemporary strategic decision making in the public sector, like much of the New Public Management doctrine, should be regarded as 'old wine in new bottles' with limited utility to the public manager. For the purpose of this essay, it is important to highlight the core values of the New Public Management doctrine to illustrate its effect on public sector management.

In order to fulfil the aim of this essay a review of strategic management shall be conducted, incorporating sections on strategic planning, strategic analysis, strategic option and choice, implementation and performance measurement. This essay shall provide a conclusion incorporating a brief summary and whether or not this essay is an agreement with the above assertion. This essay will now begin by looking at the New Public Management. The aim of this section is to explain the importance New Public management.

It is rather hard to define New Public management, Osborne and Gaebler, we would say it 'a revolt against values of traditional bureaucracy and a belief that the public sector can be transformed by the power of leadership, the introduction of market mechanisms, a focus on results and decentralising power1'. This is a common view by shared by various academics such as Chris Pollitt, author of Managerialism and Public Services. One of the main professionals in the field of New Public management is Chris Hood, Hood believes that there seven main tenets of the New Public management doctrine: 1.

Unbundling of public sector into corporate units by product service 2. More contract based competitive provision with internal markets and term contracts 3. Stress on private sector styles of managerial practise 4. More emphasis on visible hands on top managers 5. More Stress on discipline and frugality in resources use 6. Explicit formal measurable standards and measure of performance and success 7. Greater emphasis on output controls. Hoods seven tenets are in contrast very similar Osborne and Gaebler's definition of New Public management, for instance number one of Hoods Tenets can be matched up to 'desterilising power'.

Table 1 illustrates this point Hoods Tenets Osborne and Gaebler 1 'desterilising power' 2 'market mechanisms' 3 'Revolt against values of Traditional bureaucracy' 4 'power of leadership' 5 'power of leadership' 6 'a focus on results' 7 'a focus on results' By providing views on New Public Management form authors such as Hood and Osborne and Gaebler, hopefully this section has highlighted the importance of New Public management. This essay will now look at strategic management; the main aim of this section is to define strategic management.

Due to widespread and profound re-structuring within the UK mainly the rise of the 'NPM'a there has been a growing similarity between the public and private sectors with respect to the senior managerial tasks undertaken. Given this development strategic management techniques are becoming increasingly valid within the public sector. NPM has led to a greater focus on operational and strategic tasks rather than policy, constitutional or judicial tasks. Administrators have become 'managers' with associated performance issues.

Strategic managers identify long-range targets, scan their operating environments, evaluate their organization's structures and resources, match these to the challenges they face, identify stakeholders and build alliances, prioritize and plan actions, and make adjustments to fulfill performance objectives over time. Brinkerhoff (1991 and 1994) characterizes strategic management as "looking out, looking in, and looking ahead2". Looking out means exploring beyond the boundaries of your organization to set feasible objectives, identify key stakeholders, and build constituencies for change.

Looking in implies critically assessing and strengthening your systems and structures for managing personnel, finances, and other essential resources. Finally, looking ahead entails melding your strategy with structures and resources to reach your policy goals, while monitoring your progress and adjusting your approach as needed. Balancing strategic management's outward-, inward-, and forward-looking functions helps you develop a vision and a strategy for where and how to move health sector reform forward.

Balancing these different perspectives is the essence of managing strategically (Brinkerhoff 1991). Table 2 taken from www. csuchico. edu shows that there are five key tasks of strategic management. These are the integral elements that, when applied together, distinguish strategic management from less comprehensive Approaches, such as operational management or long-term planning. S. Scribner states, "Strategic management is an iterative, continuous process that involves important interactions and feedback among the five key facets3".

Fakey states that strategic management is "… how to lay the foundation for tomorrow's success while competing to win in today's marketplace"4. Strategy is defined by Fakey as "choices" and the sum of its choices is "… what an organization does in the marketplace". The gist of these definitions is anticipating and envisioning the future and using that knowledge to position the organization to be successful in the changing environment. Strategic Management according to Bowman and Asch " is the process of making and implementing strategic decisions…

Is about the process of strategic change. [It is] the match an organization makes between its own resources and the threats and opportunities created by the external environment in which it operates. So strategy can be seen as a key link between what the organization wants to achieve-its objectives-and the policies adopted to guide its activities5". Conditions facing public services differ from those to the private sector, which have an impact on the strategic management model used within the public sector.

Ranson And Stewart state " public organisations do not face market choices…. do not respond to market signals… usually have no choice about location6". According to Elcock " there are a number of approaches to strategic management ranging from the highly rational, logical and structured approach… to the ad hoc, opportunistic or reactive approach7. ". Small organisations operating in a fast changing, unpredictable environment would adopt the reactive, ad hoc approach.

An important concept of Strategic Management is strategic planning, Strategic planning is defined as "…a disciplined effort to produce fundamental decisions and actions that shape and guide what an organization is, what it does, and why it does it8". Strategic planning is about the process of strategic thinking, not the publication of a document. It is a process to assist in creating the future based on a structured process that incorporates data. It is idea driven, not driver numbers. This essay will analyse two strategic planning models, Bryson and Nutt and Backoff followed by a standard model for strategic planning in the public sector.

Bryson's model (figure 2) identifies ten distinct elements, which can be seen in the model bellow. According to Bryson (1988) an effective strategic planning model must meet several criteria. "It must be technically workable, politically acceptable to key stakeholders, and must mesh with the organization's philosophy and core values. It must also be ethical, moral and legal9". Bryson's model represents a generic process to strategic thought and action, and it is adaptable to a variety of organizations – both small and large.

Public sector strategic management theory has wisely emphasized the need to take political contexts into account. This is done by "meta-planning," the design of planning processes that incorporate the viewpoints of multiple stakeholders. In Figure 3 W. Earle Klay provides a "standard" model of strategic management for public agencies. Kay states "It is a simplified abridgment of more complex models proposed for public organizations by such scholars as John Bryson (1988), Nutt and Backoff (1984)10"

This section of the essay has hopefully provided a general understanding of strategic planning by using models from academics such as Bryson, Nutt and Backoff. This essay will now discuss strategic analysis, highlighting a selection of the techniques available. Strategic analysis is the process by which an organisation can take a view of key influences that have an impact on its present and future well being. According to Lawton " A number of techniques are available to managers11". The use of a technique such as STEP analysis helps the manager make sense of a complex environment.