Exploring the Change in Strategy Formulation and Performance Measurement Practices Under Turbulence

Abstract

This article adds to the growing literature exploring the impact of cutbacks and environmental turbulence on organizational operations by studying the changes in strategy formulation and performance measurement practices in the public sector in the wake of the Great Recession. Survey data were collected from public transit agencies in small and medium-sized cities at the beginning of the recession in 2009 and again in 2013. The analyses found that transit agencies dealt with the fallout from the economic crisis by increasing their use of logical incrementalism approaches to strategy formulation through negotiating with organizational stakeholders and responding to newly emerging information through continuing changes in strategy. Agencies also placed greater emphasis on performance measurement practices. While the use of formal strategic planning itself remained constant under turbulence, the blended approach of formal strategic planning and logical incrementalism showed significant increase. Theoretical and practical implications of the findings are discussed in the conclusion.

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