Strategic Management in the Public Sector: How Tools Enable and Constrain Strategy Making

Figures & data

TABLE 1 Studies at the STA: An Overview

	Purpose	Research questions	Method	Data	Results/Conclusions
Preliminary study (2013)	To provide a preliminary understanding of how strategy work is carried out and how this work enables and/or constrains the strategy of developing the STA into a “modern” agency.	What opportunities and obstacles can be identified in the process of formulation, implementation, and monitoring of the strategic plan?	A qualitative approach, including a document study of formal management and control.	13 interviews with:	Implementing and monitoring the strategic plan through the scorecards was not successful.
				Top managers: 4
				Middle managers: 3
				First-line managers: 3
				Employees working with strategic issues: 3
		How does MBO as a philosophy work in relation to the entrepreneurial characteristics of becoming a modern agency?	The document study was complemented with interviews to get an initial idea of how the formal management and control worked with the strategy in practice.	106 steering documents	The strategic plan created tensions with the STA’s management control as several of the tools used constrained strategy work.
				The STA website	The MBO philosophy collide with the agency’s strategy work; e.g., to become a modern agency through entrepreneurial processes.
				The strategic plan
Project 1 (2014)	To understand challenges arising during the translation of strategy from an overall level to the operational level.	How does SM interact with operational control?	A qualitative approach where implementation of the strategic plan was studied within two of the STA’s main divisions from top management to operational level.	30 interviews with:	The strategic plan disappears among all of the formalized management control tools. As a result, the strategy was not used everywhere.
				Top managers: 2
				Middle managers: 4S
		How do managers and employees apply the strategy in practice?			The goals in the strategic plan were unclear, too many and conflicting.
				First-line managers: 8
				Employees: 16
		How is the strategic work monitored?	Workshops arranged at STA:	A workshop on strategy (25)	The scorecard was not a successful tool for implementing and monitoring the strategic plan.
				A workshop on evaluation and monitoring (23)
			Workshop 1: People working with strategy at different hierarchical levels were invited to discuss the strategy work.	126 steering documents	The scorecard requires measurable goals. The agency had difficulties in creating these goals in relation to the strategic plan. The goals tended to become operational rather than strategic.
			Workshop 2: People working with management control and strategy at different hierarchical levels were invited to discuss how strategy work is evaluated and monitored.	100 balanced scorecards
				37 PowerPoint presentations
Project 2 (2015–2016)	To contribute to the understanding of the relationship between management control and the work of strategy in the public sector.	What possible tensions exist between STA management control and SM?	A qualitative approach with interviews specifically targeting management control aspects as a complement to previous studies on strategy.	16 interviews with:	Three main tensions emerged between the STA’s strategic work and management control: (1) part/whole; (2) long term/short term; (3) reactivity/proactivity.
				Middle managers: 4
				First-line managers: 4
				Employees: 8
			Workshop 3: People working with management control and strategy at different hierarchical levels were invited to discuss tensions between different management tools.	A workshop on possible tensions between management control and SM at the STA (20).	A second dimension of management control is needed. In line with this, a conceptual model for characterizing management control and its relation to strategy was suggested.

TABLE 2 How Tools Enable and Constrain Strategy Making

Tools	Purpose	Findings
Management by Objectives (MBO)	A framework that the government decided that all agencies should use.	The strategic plan put forth a holistic view while MBO in practice tends to focus on parts of the operations which brings on tensions that constrain the strategy work.
Transportation Policy Objectives	There are two main policy objectives set by the government. The strategic plan should meet up with these.	The policy objectives govern STA and its work rather than the strategic plan. The long-term objectives are hard to interpret into short-term daily operations, as they are conflicting, unclear, and complex.
Delivery Qualities	Imposed by the government to deal with transparency issues in regards to management control. STA must account for them in the annual report.	The delivery qualities often sideline the strategic plan and have also developed into a strategic tool for external communication. It is a tool that focuses on one part of the operation; i.e.,, the railway. This in combination with its focus on internal efficiency has constrained strategy work in several ways; e.g., being proactive and becoming a modern agency.
Instructions and Appropriation Letter	Are set by the government and should serve as input into the strategic planning process.	The instruction enables long-term strategic planning, while at the same time imposes annual assignments that tend to conflict with the strategic plan. The short-term perspectives of the appropriation letter (including annual budget and objectives) constrain strategy work.
The Transportation Plan	Is approved by the government. Should provide STA with action plans and input into the strategic planning process.	Enables strategy work by a long-term and holistic perspective, while at the same time puts forth detailed action plans of operation efficiency that, however, tend to take precedence over the strategic plan.
The 2016 Traveling Goals	TIs set by STA to serve as a link between the long-term strategic plan and daily operations.	Emerged to cover the gap between the strategic plan and operations. The relationship between them is not clear. Only a few use the tool in their strategic work.
The Operational Plan	Is approved by the board to operationalize the MBO and the strategic plan.	Enables strategy in several ways by addressing the goals in the strategic plan, but constrains it in being difficult to interpret; e.g., from long-term objectives to daily operations.
Budget	An overall framework is set by the government. Detailed resource allocation is done by STA.	The budget is one of the most constraining tools regarding long-term strategy work, as it has a one-year time frame. It tends to privilege internal efficiency rather than external efficiency.
Balanced Scorecard	The strategic plan should be implemented in operations through the scorecard.	The scorecard constrains strategy work as it generates short-term thinking and a focus on (critical) parts of operations.