Get under the skin of it
8. Public Sector Strategic Management
8.5 Environment of Public Sector Strategy
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As one local government strategist put it ‘if it takes us six months to decide who we will buy our printer paper off – how can you expect us to change the culture of the organisation in nine weeks?’ this was shortly after the local council had announced a budget deficit of some three million pounds.
Ring and Perry (1985) outline examples of factors particular to public sector strategy development.
The context factors in part replace what private sector organisations might see as their environment. The system the public sector organisation sits in is not the competitive industry structure of Michael Porter’s industrial economics but a political and ideological one. The fixed structural constraints of the organisation are the reference points within which strategy processes are carried out. The structure follows strategy maxim is problematic here in that organisational restructuring though clearly possible is much more complex and resource greedy, this combined with organisational and political inertia causes enormous difficulty for public sector change agents.
Procedural constraints differ in that they are not imposed as such but are a natural consequence of context, purpose and structural constraints. Policy ambiguity will arise from the pluralistic nature and diverse interests of the public sector as well as political stealth. In taxation for instance where covert rather than overt taxation occurs and the related rhetoric reality gap – claiming popularist policies whilst in reality doing something quite different. The naturally pluralistic nature of the public sector combined with the artificial time constraints of government and internal formal procedures will make coalitions both necessary and transient. An urgently required coalition today might be rendered unnecessary tomorrow (or even detrimental to the new desired coalitions) if policy changes are introduced.
The organisation structure is unilaterally divided in two but more than this the diverseness of the constituency creates vagueness over organisational objectives. This pluralism makes it difficult to achieve isolated individual objectives but at the same time scope to claim partial successes in the aggregated outcomes, however maintaining flexibility could be interpreted as reluctance to commit. Given the plurality of the public sector there exists a need or opportunity to form political and economic coalitions that again will compromise the achievement of individual objectives. The difficulty in managing coalitions in the public sector is likened to herding cats complicated by the ambiguity of the purpose of a pluralistic organisation and the wielding of influence rather than authority.
Ring and Perry (1985) cite George Romney’s exacerbated satire on public sector management that “Being Governor of Michigan … is like being quarterback of a team chosen by your
opponents.”15 The issue of being in control of your staff (choosing them) and your resources that might be taken for granted in the private sector is not so clear-cut in the public sector – it doesn’t matter who you vote for the government always gets in.
In the private sector the purpose of the organisation may be clearer, in that profit, growth and market share tend to emerge as key goals (in theory if not in actuality) in the public sector the acquisition of power may act as a form of equivalent objective.
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Ring and Perry (1985) put forward five propositions that they see as particular to public sector strategy, the propositions are:
x Policy directives tend to be more ill-defined for public than for private organisations x The relative openness of decision making creates greater constraints for public sector
executives and managers that their private sector counterparts
x Public sector policymakers are generally subject to more direct and sustained influence from a greater number of interest groups than are executives or managers in the private sector
x Public sector management must cope with time constraints that are more artificial that those that confront private sector management
x Policy legitimating coalitions are less stable in the public sector and are more prone to disintegrate during policy implementation (Ring and Perry, 1985)
The degree of openness in the public sector creates a culture of scrutiny that can often make strategy development impossible. Dealing with a statement/question from a TV interviewer a famous British philosopher outlines the problem:
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Presenter: ‘In your earlier work you suggested that the … However in your latest book you seem to be suggesting quite the opposite. How do you account for this?’
Philosopher: ‘When I find I’ve made a mistake I usually change my mind. What do you normally do?’
Even in the way the presenter’s question is asked there is an inherent glee in spotting a fatal flaw due to a change of mind – an inconsistency. The question is not a question at all but a demand for consistency and an apology for this most heinous crime of changing your mind. This then is a problem for a public sector strategist – you can change your mind in the privacy of the General Motors boardroom but not in the Houses of Parliament. The sin of inconsistency will be punished not as a natural consequence of development but as a sign of poor judgement. The openness further complicates strategy development in that strategies are telegraphed such that strategies are easier to undermine or counter. This scrutiny might hint again at the social drivers of strategy.
In the private sector there is a desire to get the whole organisation ‘on board’ with the strategy to ensure its implementation and success such that the strategy message has to be clear. In the public sector the message is often deliberately unclear.
Whilst the importance of the shareholder perspective over the stakeholder perspective is a concern in the private and public sectors, there is a greater degree of choice for the private sector manager that the public sector manager simply doesn’t have. Within the public sector there are a myriad of competing groups that given the degree of openness in the sector are able to prosecute their objectives even if ostensibly their power is limited. We see this in opposition parties in government and special interest groups, anti-war groups and the common agricultural policy of the European Community is an example of a stakeholder group subverting the wishes of many governments.
The time scales of the private sector’s strategic development and implementation are often dictated by the imperatives of the market, usually keeping up with it or staying ahead of it and occasionally just behind it. The private sector accepts or at least respects the inevitability of the market. The public sector operates within the time constraints of the tenure of the strategy formulators and the duration of the political processes themselves. The public sector in this sense is attempting to operate in its own time by slowing the pace of the environment to fit with its own processes. This attempt to control the market rather than be controlled by it in a time of
globalisation and increasing complexity of the economic environment is a further factor in the privatisation of the public sector. This has brought about a sort of public-private sector or a private-public sector.
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The education systems and infrastructure systems of telecommunications, transport and amenities are released into the market economy diminishing the public sector. At the same time the
increasing control of regulatory bodies permeating all of these ex-public bodies and some of the private ones, ironically increases the size of the public sector – steering the donkey rather than pulling the cart. This can be seen with the introduction of Compulsory Performance Assessment (CPA) in 2002.
There is the further dimension of the global public sector developing the original interest in public sector organisations; that of securing and stabilising key processes and resources for the public good. This can be seen with US involvement in Middle Eastern politics to stabilise and protect world oil production.