The Challenge of Strategic Management in Local Government

Abstract

INTRODUCTION Strategic management of public organizations has been one of the hottest topics of the past decade both in academia and in public management practice (Bozeman, 1983; Bryson, 1989; Denhardt, 1983; Eadie and Steinbacher, 1985; Olsen and Eadie, 1982; Ring and Perry, 1985; Wechsler and Backoff, 1986). For the most part, the burgeoning strategic management literature has not been sufficiently attentive to the challenge of applying strategic management at specific levels of government. (For exceptions see, Bryson and Roering, 1988; Gargan, 1989; Halachmi, 1986; Swanstrom, 1986; Wechsler, 1989.) There are good reasons however, to expect considerable variation across sectors, between levels of government, and among agencies (Allison, 1983; Bozeman, 1987; Fottler, 1982; Rainey et al., 1976; Ring and Perry, 1985). If we are to be successful in transferring concepts developed in the private sector to public management, then it would be useful to examine the nature of expected variations and explore their implications for organizations and managers. Although there is considerable merit in studying large populations of organizations along comparative dimensions, the authors have chosen an alternative, but equally useful, approach in which a more narrowly circumscribed organization type is examined intensively. In this article, the authors focus on the agencies of general purpose local governments. While this label captures a diverse set of agencies (including public works, police and fire, social services, etc.) with distinct policy and management agendas, the institutional and political context of local government is the driving strategic factor for entire populations of organizations. In the following sections, the authors explore the challenge of strategic management in agencies of local government and highlight the importance of the institutional and operating environment. Specifically, they focus on external political dependency as a crucial factor affecting strategic management in local government agencies. They also give consideration to the range of strategies available to agencies for managing their political dependencies. AGENCIES OF LOCAL GOVERNMENT There is a wide variety of organizational types in the public sector, including executive branch agencies, legislative bodies, courts, independent commissions, and various public authorities. Executive branch agencies of local government, which are among the most numerous of organizational forms, are the principal units of analysis in this article. The authors hypothesize that the strategic behavior of agencies of general purpose local government will be quite different from that of other public organizations, private sector firms, and not-for-profit agencies. They believe that these differences stem from the institutional setting and context of local governments and the constraints and dependencies which are imposed on the agencies as a consequence. By examining this setting, they can obtain significant insights into the strategic behavior of this large class of public sector organizations. SETTING AND CONTEXT A variety of factors influence the strategic behavior of local government agencies and establish the challenging conditions of strategic management in local government. In the presentation below, these factors are grouped into the following categories: (1) origins and legal bases of government and its agencies; (2) goals and services of the agencies; (3) governmental control processes; and (4) financing and resource allocation mechanisms. Origins and Legal Bases. The general purpose local government is ultimately a creation of its citizens; citizens and the polity can be said to own the government and its sub-units. General purpose governments are established through the legal standing derived from a constitutional compact at the federal or state level. At the local level, governments derive their standing from state constitutions. …

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