The Ecology of Strategic Management in Small Local Governments

Abstract

INTRODUCTION Strategic management, a concept developed almost exclusively in the private sector, is gathering broader acceptance in the public and nonprofit arenas. This has occurred despite the claims of early critics who discounted the possibility of success on the part of efforts to make this transition. While the fit is far from being a perfect one, nevertheless elements associated with the various processes of strategic management are proving useful and effective in improving approaches to management in the public sector. It may be assumed that where strategic management efforts have found their greatest successes have been in those public organizations whose structure, management information systems, staffing and recruiting procedures, and other basic organizational elements most closely resemble their counterparts in the private sector. Despite the best wishes of many to the contrary, such public organizations remain in the minority. It is perhaps this reason that the nay sayers continue to outnumber those who feel that a full scale implementation of strategic management in the public sector is both advisable and possible. If we choose implementation, where may we expect our greatest successes or where may we anticipate failure? Logic would indicate that larger, well financed organizations would have the greatest chance to succeed. If this were true, then might we assume that successful implementation would be increasingly more difficult as we approached the other end of the spectrum occupied by the small, financially strapped organizations? This article will examine some approaches to the conduct of strategic management and will attempt to describe the environment at the level of small (largely rural) local governments which awaits implementation efforts. In addition, a discussion of the impediments to strategic management efforts at the local level is included. If, in fact, it is deemed that wholesale implementation of strategic management is desired at this level, then the article will offer a preliminary prescription approaching this task. CLUES FROM THE LITERATURE It is of little surprise that the bulk of strategic management research is to be found in the private sector. The for profit environment does much to focus attention on the necessity making strategic decisions and developing the processes that would ensure the replication of successful decisions. Clear measures of success such as increased net returns or increased stockholder dividends virtually demand that strategies be developed toward those ends. The goals of governmental units, however, are rarely as clear, nor does failure to reach them have the drastic implications that would apply to a similar lack of success in the private sector. This is not so much a limitation as a caution flag in the literature review effort. Given the somewhat narrow focus of this work, the task is one of extracting those private sector ideas that have potential applicability in the public sector but then going a step further in determining which of these could be applied in the environment of the small, often rural local government. The content versus process dichotomy that is evident in various pieces of strategic management research (Fahey and Christensen, 1986; Huff and Reger, 1987) offers some immediate relief this problem. This allows us to bracket further reference the notion of content as it focuses on linking specific decisions to performance outcomes (Huff and Reger, 1987) in favor of a concentration on the process side of the dichotomy. Process research, according to Huff and Reger (1987) may be defined as research focused on the actions that lead to and support strategy. Research in this area includes prescriptive and descriptive work on such things as planning methods, decision-making, and the impacts of individual and group characteristics and organization structure on the formation and implementation of strategic decisions (Ibid. …

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