C Acodemy of Monagemenl Review, 1985, Vof, 10. No. 2. 276-2M. '' ' * _' '- .£<• ' .

Strategic Management in Publicand Private Organizations: Implicationsof Distinctive Contexts and Constraints^

/ • \ PETER SMITH RINGUniversity of Minnesota

JAMES L. PERRYUniversity of California, Irvine

Public and private sector strategic managers operate in different con-texts tbat generate distinctive constraints on their behaviors andchoices. Key constraints on pubJic sector managers are identified infive propositions. Implications for the evaluation of pubJic sectormanagement and for the behavior of public managers are drawn. It isargued that application of private sector models to the public sector isproblematic; that general models of strategic management are needed.

Wortman (1979), in a lengthy review, suggeststhat strategic management research is virtuallynonexistent in public and other not-for-profitorganizational contexts. He argues that the appli-cation of the principles of strategic managementdeveloped from private sector studies could helpthese public sector organizations because "fewof [them] can be acknowledged as being credita-bly managed in either the short or long-term"(1979, p. 353). However, in reaching this con-clusion, Wortman tends to ignore the contextwithin which strategic management occurs, theconstraints associated with particular contexts,and the limited ranges of managerial behaviorthat may be available in a given context. Con-sequently, he fails to acknowledge that these con-texts and constraints may imply that evaluatorsand the criteria of evaluation of public manage-ment differ markedly from those of private sectormanagement.

The context of strategic management can bedefined as the societal role of the organization,and environmental, technological, and human

'An earlier version of this paper was presented at the AnnualMeeting of the Academy of Management, Western Division,Monterey, California, 1981. The authors would like to thankCraig Calhraith, Jone Pearce, Judy Rosener, and Bernard Siscofor their helpful comments on earlier drafts of this paper.

resource factors. This paper argues that withchanges in context, a unique set of managerialconstraints arises (Stevens & McGowan, 1983).Following Thompson's (1967) lead, constraintsare defined as fixed conditions (structural orprocedural) that tend to exist for some period oftime to which an organization and its manage-ment must adapt. Context also influences thenature of managerial behavior: the actions of amanager in arriving at a decision regarding howto deal with a given context (Simon, 1957). Mana-gerial behavior is evaluated by a group of "rele-vant others" — the stakeholders of the organiza-tion. Using this general frame of reference as abasis for discussion, an attempt is made to dem-onstrate that aspects of strategic management inthe public sector are likely to differ from those inthe private sector. Dealing with these relativelyunique needs may require managerial behaviordifferent from that usually prescribed for privatesector managers.

The Context of Strategic Managementin the Public Sector

Basic distinctions do exist between the publicand private sectors, and they are critical to under-standing differences in strategic managementprocesses. Perhaps the most fundamental of these

276

differences stems from organic law: constitutions.In an effort to maintain a separation of power,constitutional draftsmen sharply divided policyfonnulators from policy implementors. Thus, leg-islatures initiate, but generally do not implement,policy. Conversely, executive branch agenciesoften can pursue only legislatively authorizedobjectives.

It is difficult to conceive of situations in whichtop management teams in private sector organiza-tions are prohibited by corporate charter fromengaging in strategy implementation, or in whichonly "outside" directors can make major strate-gic decisions. To the contrary, a direct linkbetween strategy formulation and implementa-tion and the active involvement of all relevantparties throughout the process is deemed to beessential to effective private sector policy making.

Another constraint unique to public sector stra-tegic management arises out of Civil Servicereform. One of the objectives of reform was theinsulation of government from excesses associ-ated with the spoils system. The vehicle employedwas a merit-based personnel system. Public em-ployees no longer would be entirely dependenton the good graces of political bosses for employ-ment, rewards, or advancement. The absence ofthis form of dependency relationship currentlyis most apparent in relations between high levelfederal political appointees and career SeniorExecutive Service members. In private sectororganizations, however, dependencies of this sortare the rule rather than the exception.

Third, public organizations are much moreopen to the external environment. Constituentsof the public sector, unlike their private sectorcounterparts, have direct, constitutionally or legis-latively based avenues of access to strategy mak-ers through, for example, sunshine provisionsrequiring open public meetings on most legisla-tive matters. They demand, and invariably re-ceive, the attention of their elected representa-tives. Failure to pay attention to these constitu-ents invites grave risks for elected public sectorofficials, through processes such as the recall,referenda, or the initiative. Private sector chiefexecutives or boards of directors, on the otherhand, may ignore most constituents' demandsfor direct input to the policy formulation andimplementation processes. Moreover, they gener-

ally can do so with relatively little risk to theircareers or to their organizations' legitimacy andcredibility.

In addition to these structural distinctions,Whorton and Worthley (1981) identify signifi-cant organization culture differences between thetwo sectors. They make special note of the para-dox of public administration: that is, a constrain-ing negative force that they term "bureaucracy"frequently is at odds with a positive force, thehigh ideals associated with public service. Theyidentify a variey of circumstances in which publicmanagers must cope with competing value sys-tems, in addition to the demands normally associ-ated with managerial life. In a similar vein, manybehaviors that are viewed as acceptable strategicmanagement in the private sector assume alto-gether different symbolic meaning in the pub-lic sector. For example, an outstanding performerawarded a bonus in a public organization oftenis perceived, instead, as a "crony." Finally, thepublic sector has established a number of formalprocesses, for example, ombudsmen and ethicscommittees, to monitor the conduct of publicofficials, parallels of which are rarely found inthe private sector.

This brief outline of some of the factors (Figure1) influencing strategic management in the pub-lic sector is not new, nor does it exhaust thedistinctions. The purpose of identifying them isto provide a basis for five propositions outliningconstraints related to strategic management inthe public sector that are relatively unique to itand that generally are not accounted for in dis-cussions of strategic management processes.

Differences in Strategic ManagementBetween Public and Private Sectors

Policy Ambiguity / , *

The general management functions of govern-ment are, as previously noted, constitutionallyspread out (and separated) among and acrossfederal, state, and local executive branches, morethan one legislative body, and a variety of judici-aries. The purpose, Allison (1983) argues, is notto promote efficiency, but to prevent the arbitraryexercise of power. This separation of functionalresponsibility frequently contributes to vagueness

277

Illustrative FactorsFigure 1

Involved in Influencing Strategic Management in the Public Sector

CONTEXT FACTORS , „ . . , , CONSTRAINTS ,, . ^ ,, BEHAVIORAL CUNSKQUhNCt:

Structural Procedural

(Examples)

Organic law(constitutions)

Political reform

Openness toexternalenvironment

Public expectations

_-.- -.,

• i»;j; h (Examples) ; - ; • \.

Separation of Policy ambiguitylevels ofgovernment , ' ' ,

Separation of Diverse interestbranches of groupsgovernment . Artificial time

constraintsUnstable coalitions

Centralized merit Less dependencybased personnel between career andsystems political officials

' Artificial timeconstraints

Sunshine laws Artificial timeconstraints

Referenda, recall Responsiveness toinitiative constituentsprocesses

Ombudsmen High ideals reflectedSpecial prosecutors in performanceEthics committees measures

(Examples)

Incremental decision

making

Maintaining flexibility

Bridging competingworlds

Wielding influencenot authority

Minimizingdiscontinuity

and/or ambiguity in policy and objectives whichmust be strategically managed.

Warwick (1975) argues that unlike the privatefirm, which more typically has entrepreneurialroots, public organizations are always created bysome higher, controlling body. Ths body is com-posed of multiple and competing interests. Oncecreated, the organization is largely dependent onthat body for the definition of its objectives andthe provision of its resources. One consequence,as Nutt (1979) points out, is that the individualswho comprise the higher controlling group fre-quently operate from agendas that are designedto benefit their own constituents, but not neces-sarily those of others in the controlling group.The competition among group members leads tonegotiated compromises that are purposely vague.

The vagueness permits group members to go backto their constituents and declare "victory," point-ing to provisions of the legislation that appear tofavor the claims of their constituents.

Baumer (1978) provides yet another explana-tion for the public sector's lack of policy clarity:the need to create coalitions with multiple andoften competing objectives in order to gain pas-sage of legislation. The drive for enactment fre-quently obscures the issue of whether the multi-ple goals are compatible with one another. Thus,in the case of efforts to deregulate natural gasprices, significant specific exemptions from over-all deregulation may be accorded a single stateand its industries in order to obtain the supportof a key member of the Senate.

Clear, unambiguous articulation of strategy by

278

public agencies can produce at least two counter-productive consequences. First, clearly articu-lated strategy may serve as a rallying device formobilizing political opposition. Second, a clearpolicy directive may, as Mintzberg concludedfrom his analysis of strategy formulation duringthe Vietnam War period of 1965 to 1968, permitthe "bureaucracy to run like an elephant" (1978,p. 947). Thus, clear and precise policy statementsmay lead public executives to believe there isless need for judgments of nuance, less need toexercise caution and discretion. Tbis tendencymay be of concern to all decision makers, but itcan be particularly troublesome for public execu-tives, given the autonomy of employees in CivilService systems and tbe sensitive societal mis-sion of most public organizations. Ambiguity instrategy, characteristic of many public organiza-tions, therefore, may be an asset.

In contrast, private sector organizations gener-ally operate within tbe framework of a limitednumber of relatively stable goals sucb as growth,profitability, or market share. And as Peters andWaterman (1982) note, the top managements ofmore effective organizations appear to focus tbeirattention on a limited set of clearly definedobjectives.

As a consequence of fundamental structuraldifferences between tbe sectors, and as a resultof attempts to resolve competing demands fromthe multiple constituencies of public sector or-ganizations, the following proposition describesan important distinction between public and pri-vate sector strategic management processes:

Proposition 1: Policy directives tend to be moreill-defined for public than for private organiza-tions.

The Openness of Government

Tbe role tbe media play is cited frequently asone of tbe major differences in tbe work lives ofpublic and private managers (Bernstein, 1958;Bower, 1977; Heclo, 1977; Rainey, Backoff, &Levine, 1976; and Rourke, 1976). Tbe empiricalevidence leading to tbe conclusion tbat govern-ment policymaking is a more open process re-ceives additional substantiation from executiveswbo bave managed in both sectors.

Michael Blumentbal (1979), former Secretaryof the Treasury and President of Bendix, notes

tbat in public policy debates, any previous posi-tion may be thrown back in one's face. And bebemoans tbe fact tbat be could not cbange bismind in Wasbington at anywbere near tbe samerate as be could in business without running tberisk of publicly being called inconsistent.

Otber former bigb government officials havecbaracterized tbeir experiences as "fisbbowls"(Malek, 1972; Rumsfeld, 1979). They found presscoverage so intense tbat, in comparison to tbeirexperiences in tbe business world, policy bad atendency to be exposed to public scrutiny mucbsooner, to be dissected mucb more tboroughly,and not infrequently to be killed before it everreally got off tbe drawing boards. Blumentbal(1979) argues tbat individuals, as well as groups,have learned bow to play tbe Wasbington pressin order to bait policy initiatives tbat an execu-tive migbt be contemplating. Examples aboundof tbe constraints imposed on government man-agers as a consequence of tbe bigb degree ofopenness. Former Interior Secretary Watt's at-tempts to enter into coal leases on federal landswere cballenged in tbe courts well before anyformal agreements could be completed. In general,tbe Interior Department's ability to pursue tbeadministration's objectives regarding federallands policy was significantly constrained byintense media scrutiny of Watt's every publicstatement.

Clearly, botb researcb and reminiscence indi-cate tbat tbe media and otber institutions impedetborougb discussion of issues and lead policymakers to be concerned witb how policy willlook as well as bow it will work. Thus, it appearsto be tbe case tbat;

Proposition 2. The relative openness of decisionmaking creates greater constraints for public sec-tor executives and managers than for their pri-vate sector counterparts.

^̂Attentive Publics

Tbe relative openness of public sector organi-zations is not defined exclusively by tbe atten-tion of tbe media. Public sector executives andtop managers must pay mucb more attention to adiverse public, in general, tban private sectormanagers. Rainey et al. (1976) bigbligbt tbe ricbvariety of competing interests, inside and out-side tbe organization, experienced by public sec-

279

tor organizations. Warwick (19751 observed theexistence of a wide variety of "controllers,""higher authorities," and "monitors" in the exter-nal environment, all of whom constrained theactions of State Department officials. Cleveland,pointing to the then-existing lack of policy onenergy as an example, observed: "When the peo-ple haven't decided that they want a policy yet,there isn't any policy, no matter what Washing-ton does" (1979, p. 20). Allison (1983) identifiesthis diversity of external attention getters as amajor difference between the two sectors. Blu-menthal (1979), taking a slightly different tack,argues that his efforts to develop policy withinthe Treasury were constrained by the belief heldby many of his own subordinates, especiallycareer civil servants, that they had the right to bein on the decision making process. In contrast, atBendix he could absolutely limit participation ashe saw fit.

It thus seems clear that the strategic manage-ment process in the public sector must takeaccount of a wide range of stakeholder interests.In addition, these stakeholders are likely to eval-uate the results of the strategic management pro-cess quite differently, often reaching conclusionsthat are difficult to reconcile. Deregulation of thefinancial services industry provides an excellentexample of the constraints that competing stake-holder interests pose for public policymakers.Congressional testimony suggests that Treasuryand Federal Reserve Bank officials see the issuesof deregulation in quite different terms, as do anumber of members of Congress. Further, theobjectives of large commercial banks differ fromthose of smaller ones, and both large and smallerbanks evaluate policy formation from a differentperspective than do thrifts, savings and loans,credit unions. Sears, American Express, or otherfinancial intermediaries. It is equally clear thatthe general public's primary concerns regardingbanking deregulation are not necessarily identi-cal with those of any of the other stakeholdersjust identified. Under such circumstances, it isnot difficult to reach the conclusion that:

Proposition 3: Public sector policymakers are gen-eraJJy subject to more direct and sustained influ-ence from a greater number of interest groups thanare executives or managers in the private sector.

The Time Problem ' f , •;

Although time constraints in each sector maybe equally severe, the sources and nature of theseconstraints are fundamentally different. Timebecomes a major constraining factor in publicstrategic management processes in two impor-tant ways. The first is associated with the tenureof public officials; that is, their length of staywith an agency (Heclo. 1977; Malek, 1972). Thesecond involves time constraints that are legisla-tively imposed, court imposed, or created by theexigencies of elective political office. See, forexample, Allison (1983) and Bower (1977). Timeappears to be a less critical distinguishing factorin the "gestation" period of a policy issue, how-ever. Thus, time constraints for public organiza-tions tend to be generated by legislatures, fund-ing exigencies, or the employment length of pub-lic officials. On the other hand, time constraintsin the private sector tend to be defined by thetype and rate of market (broadly defined) changes.Moreover, the time constraints that private sec-tor managers face appear to arise out of the natu-ral interaction of market forces, but those con-fronting public sector managers more frequentlyappear to be related to a lack of coordinationamong subsystems and thus tend to be more arti-ficially imposed upon those managers.

An excellent example of the constraints thattime can create for public sector strategic man-agement processes can be found in the case ofthe first major overhaul of the federal personnelsystem in nearly 100 years: The Civil ServiceReform Act of 1978. As one of the major "prom-ises" of candidate Carter, the newly electedadministration was under pressure to producequickly a piece of legislation on which Congresscould act. There also was pressure to get thereforms implemented. Thus, the legislation man-dated implementation of key components of theAct within very specific time frames and, gen-erally, without regard to the interactive nature ofsome of the reforms. As it happened, before someof the reforms were fully implemented the Carteradministration had been rejected by the voters,and a new set of political executives were left tocomplete the implementation process.

In sum, it appears that public managers facetime constraints in dealing with the strategic man-

280

agement of policy implementation quite unlikethose that their private sector counterparts con-front. Cleveland describes it thusly: "We are tack-ling 20-year problems v̂ rith five-year plans staffedwith tvkfo-year personnel funded by one-yearappropriations" (1979, p. 25). Consequently:

Proposition 4: Public sector management mustcope with time constraints that are more artificialthan those that confront private sector manage-ment.

Shaky CoalitionsThe four propositions developed thus far are

not independent of each other. Quite clearly theconstraints imposed by openness and multiplepublics, coupled with contingencies of time,when compounded by policy vagueness and/orambiguity, can and frequently do create signifi-cant problems in the implementation of policy(Pressman & Wildavsky, 1979). Viewed in thislight, it is hardly surprising that policy forma-tion in the public sector frequently is a processof coalition building involving diverse, and oft-times competing interests.

A different sort of public sector constraint asso-ciated with strategy implementation is identifiedby Nakamura (1980). He describes three kinds oflegislative coalitions: (a) those that dissolve intoconstituent parts upon passage of legislation;(b) those that partially dissolve; and (c) those thatpersist. The distinction to be made here betweenpublic and private sector management is that pub-lic sector executives, unlike those in the privatesector, frequently must create internal coalitionsto get policy passed, but these coalitions mayand often do break up during implementation.This condition is exacerbated by the great vari-ety of public sector stakeholder groups with directaccess to the policymaking process and directinterests in outcomes.

Rourke (1976) provides insight into a uniqueaspect of the problem: splits between politicaland career executives within an agency or anadministration. He cites three examples resultingin bureaucratic defiance during the Nixon admin-istration: the war in Vietnam, cutbacks in domes-tic welfare programs, and a weakening of civilrights enforcements. He also notes the intrusionof unions into the realm of public policy andexecutive decision making, a situation that addsto the instability of majority coalitions required

to obtain passage of complex legislation in a plu-ralistic society.

These factors can lead to control problems inthe implementation of policy. Michael Blumen-thal (1979) observed that in business he coulddecide what the policy should be, delegate tothose who would develop it, take it to the board,get it approved, and then control the process ofimplementation. He found that this simply wasnot the case in Washington. George Romney putthe matter more bluntly: "Being Governor ofMichigan . . . is like being quarterback of a teamchosen by your opponents" (Meyers, 1964, p.134).

Illustrative of these kinds of control problemsand the constraints they create is the case of with-holding on savings accounts. Although the Reaganadministration was able to put together a coali-tion of Republicans and Democrats large enoughto gain passage of the law, it was repealed priorto the date on which it was scheduled to go intoeffect. Similarly, the same administraton has haddifficulty in developing a solid front on economicpolicy and in gaining consensus from the Coun-cil on Economic Advisors and Secretary of theTreasury. The problem is not peculiar to a partic-ular administration. Presidents Carter and Fordexperienced similar difficulties on energy andinflation issues. Thus, there appears to be consid-erable evidence to justify the conclusion that:

Proposition 5; Policy legitimation coalitions areless stable in the public sector and are more proneto disintegrate during policy implementation.

Implications

These propositions carry a number of impor-tant implications. One is that strategic manage-ment in the public sector may be extremelydifficult. Under such circumstances, if public sec-tor performance is judged against a normativemodel of strategic management developed in theprivate sector, it is likely to be found inadequate.However, judged against standards grounded inthe public sector, different conclusions might bedrawn. Expectations about the a priori probabili-ties of the success of programs, the criteria ofperformance, and actual assessments of accom-plishment are all likely to change if alternativenormative models are used. For instance. Press-man and Wildavsky (1979) concluded from their

281

analysis of a federal economic development pro-gram in Oakland that the complexity of policyimplementation usually keeps new public pro-grams from getting off the ground. A priori proba-bilities of success for public programs thereforeshould be quite low. With respect to performancecriteria, Aharoni (1981) has argued that researchon state-owned enterprises (SOEs), a particulartype of public organization, has focused on howthese enterprises should behave rather than onhow they do behave. Zif (1981) found that increas-ing political and external orientation of SOEs wasassociated with their pursuit of goals quite differ-ent from private enterprises, for example, salesrather than profit goals and low prices relative tocosts. Thus performance criteria for public or-ganizations, the ultimate basis for judgmentsabout management's performance, also appear todiffer qualitatively from those of the privatesector. Goodsell (1983) goes one step further afterreviewing survey data on public social serviceclients, arguing that client satisfaction surveysreflect a level of high performance by publicbureaucracies, contrary to popular opinion.

These observations about evaluation of publicsector strategic management are not intended asan apology for real inadequacies, but instead toillustrate the subjectivity and probable biases ofconventional wisdom premised on private sectornorms (Wortman, 1979). Despite these arguments,however, it should be reiterated that the Ameri-can political culture will continue to set highand frequently unattainable standards for perfor-mance in the public sector. It is unlikely, there-fore, that the general public will change theirexpectations for public institutions. On the otherhand, scholars need to distinguish between per-formance expectations derived from political cul-ture and ideology and those based on technicalfeasibility.

Another implication of the propositions is thatthe distinctive constraints imposed by the publiccontext require a significantly different set ofbehavioral responses from public strategic mana-gers. The existence of incremental politics (Lind-blom, 1979) suggests that rational, comprehen-sive policy models—for example, planning modes(Mintzberg, 1978)—will rarely be appropriate inthe public sector. In contrast, disjointed incre-mentalism or other calculated means for the sim-

plification of complex problems may be extremelyuseful approaches to problem solving. Mintzberg(1978) suggests that the conventional wisdom ofstrategy formulation that emphasizes the need tostate goals precisely, assess strengths and weak-nesses, and make strategy explicit may mis-lead organizations, such as those in the publicsector, that face a confusing reality.

There is additional evidence (Allison, 1971;Cyert & March, 1963; March & Simon, 1958;Murray, 1978; Pettigrew, 1973; Quinn, 1980) thatprocesses other than those associated with ratio-nal models are employed quite frequently in largeorganizations, but the issue of whether such mod-els ought to be employed remains an open ques-tion. The constraints to strategic managementassociated with the propositions set out aboveappear to be more easily managed by incremen-tal processes than by those that are rigidly planned.To the extent that incremental and/or emergentstrategies enable public organizations to be moreresponsive to the needs or demands of theirconstituents, they are likely to be more effective.Whether use of these processes makes publicorganizations less efficient in utilizing scarceresources appears to be a more debatable question.

The strategic management issues confrontingpublic organizations can be characterized usingMintzberg's (1978) typology of deliberate (in-tended strategies that are realized), unrealized(intended strategies that are not realized), andemergent (realized strategies that were neverintended) strategies. Given previous argumentsregarding policy ambiguity, open and intenseinfluence processes, and coalition instability,public organizations can be characterized as lowon deliberate strategy and high on emergent andunrealized strategy. If this characterization iscorrect, any manager who is unable, for instance,to relinquish intended strategies in order to pur-sue emergent strategies is likely to fail. A fewthreads of empirical evidence suggest that thismay be the case. For instance, in a study of pub-lic and private managers' use of time. Porter andVan Maanen (1970) found that the most effectivepublic managers, in contrast to their privatecounterparts, avoided rigid time allocations butinstead adapted to external demands. A recentempirical study (Wechsler, Backoff, & Kump,1983) of strategy in six agencies of state govern-

282

ment in Ohio concluded that patterns of strategydepended more frequently on ecological factorsthan on managerial intention. Although alterna-tive inferences might be drawn from this evidence,it suggests that attention to emergent rather thanintended strategies may be a key feature of suc-cessful strategic management in the public sector.Certainly the evidence supports the conclusionthat, in probabilistic terms, strategy in the publicsector tends towards the emergent rather thanthe deliberate.

Cumulatively, the five propositions representa set of demands that affect the behavior of thosewho manage the strategy process in the publicsector. In responding to these demands, success-ful public managers resort to processes and em-ploy skills that frequently differ from those asso-ciated with strategic management in the privatesector, although Quinn (1980) prescribes similarbehavior for private sector managers. The pro-cesses and skills that public sector managers tendto rely on in coping with the demands associatedwith the five propositions can be grouped underthe following types of behavior, especially athigher levels of the organization.

Maintaining FlexibilityIf the strategy process tends to be emergent

and more open to exogenous influences, flexibil-ity and adaptability appear to be required of pub-lic managers. This might require, for example,the loose coupling of personal staffs with inter-nal and external elements of the organization.

In all likelihood, the need for adaptive behav-ior also means that successful public managers,particularly those at the very highest levels ofgovernment, avoid becoming deeply immersedin the details of policy. Instead, they are morelikely to be skilled at managing the policy agenda,moving items on and off as events largely exter-nal to the organization dictate. Because they arelikely to be subject to intense media scrutiny, italso is probable that they will learn to avoid mak-ing public statements that prematurely committhemselves, or their agencies, to a given set ofobjectives. Successful adaptive behavior alsoappears to be associated with the ability to actquickly, to interpret the law "creatively," and toreduce the necessity for multiple clearances inimplementing policy (Pressman & Wildavsky,

1979). Finally, it seems likely that the successfulmanager will avoid using preprogrammed re-sponses, standard operating procedures, and thelike as control mechanisms.

Bridging Competing Worlds ; . ,,

Public managers frequently function in two (ormore) different cultural contexts. The prevailingethos of democratic institutions mandates set-ting a tone of high moral character for the strate-gic management process (Weinberg, 1977). At thesame time, large segments of the public demandefficiency. They want the tasks of governmentaccomplished without waste. Others, however,expect equity in its outcomes (Bower, 1983). Gov-ernment must treat all its constituents fairly.

The internal organization that the politicalexecutive manages frequently is a foreign andhostile one, especially in the first few monthsafter appointment or election to the office. At thesame time the executive must learn to cope withother elements of the triangular relationships thatfrequently characterize public sector policy pro-cesses: competing constituent groups and legisla-tive officials. Thus, the political executive mustbridge competing demands within the structureof government, in addition to bridging compet-ing cultures outside the formal structure.

Coping with all these competing demands islikely to require managers who display the attri-butes of marginality (Cotton, 1977). Skills associ-ated with a marginal orientation include the abil-ity to integrate competing viewpoints in decisions(Liddell, 1973), a self-other orientation and main-tenance of low levels of dogmatism (Ziller, Stark,& Pruden, 1969), and openmindedness (Pruden& Stark, 1971). The attributes of marginality per-mit a manager to adapt to situations that requirethe manager to change hats, look to a new con-stituency, and explain the "facts" in new circum-stances.

Wielding Influence, Not Authority

That many of the key actors in the strategic man-agement process are external to a focal organiza-tion implies that the skillful exercise of influ-ence is likely to be more critical than the wieldingof authority. The manager must cope with con-frontation, without being confrontational. As

283

Sabatier and Mazmanian (1979) point out, suc-cessful policy implementation may require goodpolitical skills, the development and maintenanceof good v f̂orking relationships with others, andespecially the capacity to convince those opposedto, or adversely affected by, policy that they arebeing treated fairly. Achieving these objectives islikely to require frequent meetings with, andobtaining policy inputs from, those not under amanager's direct control.

The need to communicate effectively and quicklywith large numbers of constituent groups, manyof which may be shaky coalitions, or to mar-shall their support for policy, creates special prob-lems for managers who have no authority overthese groups. In such circumstances the use ofsymbols, rather than facts, more probably willprovide the means of effective management ofexternal relations, especially those with the media(Edelman, 1964). ,

Finally, though elected and appointed officialshave constitutionally based authority to run thegovernment, the creation of merit based person-nel systems resulted in the effective separationof the work force from the political executive'sdirect and immediate control. Thus, the formalprotections of these systems, coupled with theexistence of employee unions, is likely to place apremium on the use of influence rather thanauthority in managing policy within the organiza-tion. It also may require an ability to maintainhigh morale within the agency, managing inter-nal dissent by influence rather than authority.

Minimizing DiscontinuityIn many respects, strategic management in the

public sector entails the management of discon-tinuity. Coalitions are unstable, political execu-tive tenure is brief, agendas change constantly.Successful public sector managers act to mini-mize discontinuity and bridge the gaps that itleaves in its wake. At the highest levels, thisprobably means that the manager, upon electionor appointment, lands running. Light's (1981)investigation of the transition process suggeststhe absolute necessity of staff selection and pol-icy development prior to assuming office, Wein-berg (1977) describes a variety of "situationalresources" or skills that she found minimizedthe effects of discontinuity: knowledge of the

jurisdiction and political climate, the ability todefine the management task clearly, the level oftechnical expertise brought to office, and the abil-ity to establish and exercise authority cJearJy.The need to bridge discontinuity also implies,for public managers, skills that range from theidentification and allocation of resources to thecreation, proper care, and feeding of coalitions.Bridging the gaps of discontinuity also maydemand the capacity to mobilize latent constitu-encies (Sabatier & Mazmanian, 1979),

These behaviors indicate the types of responsesmanagers are likely to use in directing strategywhile meeting the demands posed by the fivepropositions. These behaviors normally will beused in conjunction with calculated strategiesfor the simplification of complex problems. More-over, as implied in the propositions, normativemodels grounded in the public sector are neces-sary for judging the adequacy of strategic manage-ment in public organizations.

Conclusion

Although the propositions presented are in-tended to reflect some of the unique aspects ofstrategic management in public organizations,they also may have application for strategic man-agement in some private sector contexts. Forexample. Snow and Hrebiniak (1980) were sur-prised to find a significant amount of self-reportedreactor behavior, implied as pathological by Milesand Snow (1978), among organizations in regu-lated industries. Such behavior, however, maybe appropriate in dealing with the constraintsassociated with a regulatory context. Similarly,Miles' (1982) analysis of the tobacco industryindicates that the differing contexts of domaincreation, domain defense, and domain offensegive rise to distinctive sets of constraints, each ofwhich appears to call for its own approach tostrategic management.

In addition to the potential for practical ap-plication, the propositions and the implicationsdrawn from them give rise to several fundamen-tal research questions. First, building on Bracker's(1980) work, if the field of strategic managementis to continue to evolve beyond the mere study ofcorporate level strategy or business level policy,it clearly requires the development of models

284

with more general applicability. This paper pres-ents a reasonable argument that existing modelsdo not capture the legitimate strategic manage-ment processes required by the differing contextsof the public sector.

Second, more research on strategic managementprocesses must be undertaken within a frame-work that recognizes the existence of separatesets of rules governing organizational conductwithin the two sectors. The literature clearlyestablishes that there are accepted standards thatapply, quite appropriately, only to market con-duct and those that apply only to political eco-nomies, democratic or otherwise (Lindblom,1977).

Third, implications regarding the four types ofmanagerial behavior just discussed have been

drawn without regard for the possibility that eachmay require a different managerial focus, contin-gent upon what it is that is being managed—forexample, constituent expectation or human re-sources. Research exploring this issue within pub-lic organizations and across the two sectorsappears warranted.

In short, a strong case has been made that anumber of research issues related to strategicmanagement processes might profitably be ex-plored prior to concluding that private sectormodels have general application to public sectororganizations. It is hoped that questions raisedby this paper will stimulate additional criticalthought and research on strategic managementprocesses in both the public and private sectors.

References

Aharoni. Y. Performance evaluation of state-owned enter-prises: A process perspective. Management Science. 1981,27. 1340-1347.

Allison. G. T., )r. The essence of decision. Boston: Little,Brown. 1971.

Allison, G. T.. Jr. Public and private management: Are theyfundamentally alike in all unimportant respects? In ). L.Perry & K. L. Kraemer (Eds.). Public management: Publicand private perspectives. Palo Alto. CA: Mayfield. 1983,72-92.

Baumer, D. G. Implementing public service employment. InJ. V. May & A. B. Wildavsky (Eds.), The policy cycle. BeverlyHills, GA: Sage, 1978, 169-197.

Bernstein, M. The job of the federal executive. Washington.D.G.: Brookings Institute, 1958.

Blumenthal, M. Gandid reflections of a businessman in Wash-ington. Fortune, January 29, 1979, pp. 36-49.

Bower. J. L. Effective public management. Harvard BusinessReview, 1977, 55(2), 131-140.

Bower, J. Managing for efficiency, managing for equity. Har-vard Business Review, 1983, 61(4). 83-90.

Bracker, ). The historical development of the strategic man-agement concept. Academy o/Management Review, 1980,5, 219-224.

Gleveland, H. Public management research: The theory ofpractice and vice versa. Paper presented at the Public Man-agement Research Gonference, Brookings Institution, Wash-ington, D.G., 1979.

Gotton. G. Marginality—A neglected dimension in work de-sign. Academy of Management Review, 1977, 2, 133-138.

Gyert, R. M., & March, ). G. A behavioral theory of the firm.Englewood Gliffs, NJ: Prentice-Hall, 1963.

Edelman, M. J. The symbolic uses of politics. Urbana. IL:

University of Illinois Press, 1964.

Goodsell, G. The case/or bureaucracy. Ghatam. NJ : Ghatam

Press. 1983.

Heclo, H. A government of strangers: Executive politics inWashington. Washington. D.G.: Brookings Institution, 1977.

Liddell, W. W. Marginality and integrative decisions. Acad-emy o/Management /ournaJ, 1973, 16. 154-156.

Light, P. G. The president's agenda, notes on the timing ofdomestic choice. Presidential Studies Ouarterly. 1981,11(1), 67-82.

Lindblom, G. Politics and markets. New York: Basic Books,1977.

Lindblom, G. Still muddling, not yet through. Public Ad-ministration Review, 1979, 39, 517-526.

Malek, F. V. Mr. executive goes to Washington. Harvard Busi-ness Review, 1972, 50(5), 63, 68.

March. J. G., & Simon, H. A. Organizations. New York: Wiley.1958.

Meyers, H. B. Businessman in a political jungle. Fortune,April 1964, 133-135, 187-195.

Miles, R. Coffin nails and corporate strategy. Englewood Gliffs,NJ: Prentice-Hall, 1982.

Miles, R. E., & Snow, G. G. Organization strategy, structure,and process. New York: McGraw-Hill, 1978.

Mintzberg, H. Patterns in strategy formulation. ManagementScience, 1978. 24, 934-948.

Murray, E. A., Jr. Strategic choice as a negotiated outcome.Management Science. 1978, 24. 960-971.

Nakamura, R. T. Further thoughts on defining policy duringimplementation. Paper presented at the Association for

285

Public Policy Analysis and Management. 1980 Annual con-ference. Boston. 1980.

Nutt, P. C. Calling out and calling off the dogs: Managerialdiagnosis in public service organizations. Academy of Man-agement Review. 1979, 4, 203-214.

Peters. T. J. & Waterman. R. H. In search of excellence. NewYork: Harper & Row, 1982.

Pettigrew, A. The politics of organizational decision making.London: Tavistock, 1973.

Porter. L. W., & Van Maanen, J. Task accomplishment andmanagement of time. In B. Bass (Ed), Managing /or accom-plishment. Lexington. MA: Lexington Books, 1970.180-192.

Pressman, J., & Wildavsky, A. Implementation. 2nd. ed.Berkeley, CA: University of California Press, 1979.

Pruden. H. O. & Stark. B. ). Marginality associated with in-terorganizational linking processes, productivity and satis-faction. Academy of Management Journal. 1971, 14, 145-148.

Quinn, J. G. Strategies for change. Homewood. IL: Irwin. 1980.

Rainey, H. C Backoff. R. W.. & Levine, C. H. Comparing publicand private organizations. Public Administration Review,1976. 36. 233-244.

Rourke, F. E. Bureaucracy, politics and public policy. 2nd ed.Boston: Little. Brown, 1976.

Rumsfeld, D. A politician turned executive. Fortune, Sep-tember 10, 1979, 88-94.

Sabatier, P., » Mazmanian, D. The conditions of effectiveimplementation: A guide to accomplishing policy objec-tives. Policy Analysis, 1979, 5, 481-504.

Simon, H. A. Administrative behavior. 2nd. ed. New York:Free Press. 1957.

Snow. C. C. & Hrebiniak, L. G. Strategy, distinctive compe-tence, and organizational performance. AdministrativeScience Quarterly, 1980, 25, 317-336.

Stevens, J. M., & McGowan, J. R. Managerial strategies inmunicipal government organizations. Academy of Man-agement Journal, 1983, 26, 527-534.

Thompson, J. D. Oi^anizations in action. New York: McGraw-Hill, 1967.

Warwick, D. P. A theory of public bureaucracy. Cambridge,MA: Harvard University Press, 1975.

Wechsler. B., Backoff, R. W., & Kump, W. I. Strategic man-agement: The nexus of politics and administration. Paperpresented at the Annual Meeting of the Amercian PoliticalScience Association, Chicago, 1983.

Weinberg, M. W. Managing the state. Cambridge, MA: MTTPress. 1977.

Whorton, J. W.. & Worthley, J. H. A perspective on the chal-lenge of public management: Environmental paradox andorganizational culture. Academy of Management Review,1981,6, 357-361.

Wortman, M. S., Jr. Strategic management: Not-for-profit or-ganizations. In D. E. Schendel & C. W. Hofer (Eds.), Strategicmanagement: A new view of business policy and planning.Boston: Little, Brown, 1979, 353-381.

Zif, J. Managerial strategic behavior in state-owned enter-prises—Business and political orientations. ManagementScience, 1981, 27, 1326-1339.

Ziller, R. C, Stark, B. J., & Pruden, H. O. Marginality andintegration management positions. Academy of Manage-ment Journal, 1969, 12, 487-493.

Peter Smith Ring is Associate Professor of Manage-ment in the School of Management, University ofMinnesota, Minneapolis.

James L. Perry is Professor of Administration in theGraduate School of Management, University of Cali-fornia, Irvine.

286