BACKGROUND

• Historically evolved from the military aspects

• Origin of “strategy”: “strategos” = army leader • Initially focused on the private sectors

• Extended to the public sectors

INTRODUCTION TO STRATEGIC

MANAGEMENT

• Defining “Strategic Management” • Strategic Management is an ART and SCIENCE

• “STRATEGIC” + “MANAGEMENT” • “strategy” + “manage

Business Strategy vs. Military Strategy

• Both strategies will always try to use the organisation’s strengths to take

advantage or capitalise on opportunities, exploiting the

competitors’weaknesses, and overcome or avoid threats

• A military strategy assumes on conflict • A business strategy assumes on competition

• However, the main purpose of both strategies is to gain competitive

Advantage

FOUNDATION OF STRATEGIC MANAGEMENT

• Context • Organisation

• Element • Organisational Direction

• Process

FOUNDATION OF STRATEGIC MANAGEMENT

(cont’d) • Strategy: • A comprehensive plan that states how a corporation will achieve its mission
and

objectives (Wheelen et al., 2018) • Large-scale, future-oriented plans for interacting with the
competitive

environment to achieve company objectives (Pearce & Robinson, 2015) • The means by which
long-term objectives will be achieved (David & David, 2017) • An integrated and coordinated set
of commitments and actions designed to

exploit core competencies and gain a competitive advantage (Hitt et al., 2017) • The goal-
directed actions a firm intends to take in its quest to gain and sustain

competitive advantage (Rothaermel, 2013)

DEFINING STRATEGIC MANAGEMENT

• "...broad formula for how a business is going to compete, what its goals should be,

and what policies will be needed to carry out those goals" and the "...combination of

the ends (goals) for which the firm is striving and the means (policies) by which it is

seeking to get there." He continued that: "The essence of formulating competitive

strategy is relating a company to its environment.“

(Porter, 1980) • “set of decisions and actions that result in the formulation and implementation of

plans designed to achieve a company’s objectives”

(Pearce & Robinson, 2015)

DEFINING STRATEGIC MANAGEMENT (cont’d) • “.. the full set of commitments, decisions
and actions required for a firm to

systematically achieve strategic competitiveness and earn above-average returns’”

(Hitt et al., 2017) • “set of managerial decision and action that determines the long-run
performance of

a corporation”

(Wheelen et al., 2018) • “analyses, decisions, and actions an organisation undertakes in order to
create and

sustain competitive advantage”

(Dess et al., 2019)

ORGANISATIONAL DIRECTION

• Types of Organisational Direction: • Vision

• Mission

• Objectives

• Goals

• Target • Slogan / Motto / Tagline

• Philosophy

• Charter • etc.
Vision Statement • “What do we want to become?” (David & David, 2017) • A statement about
what an organisation ultimately wants to accomplish; it

captures the company’s (organisation’s) aspiration (Rothaermel, 2013) • What an organisation

would like to achieve (Jones & Hill, 2010) • Organisational goal(s) that evoke(s) powerful and
compelling mental images

(Dess et al., 2019)

Vision Statement (cont’d) • A view on what management thinks an organisation should become
(Wheelen et

al., 2018) • A picture of what the firm (organisation) wants to be and, in broad terms, what

it wants to ultimately achieve (Hitt et al. 2017) • “Where we are going” (Gamble et al., 2019)

Mission Statement • A declaration of an organisation’s “reason for being.” (David & David,
2017) • Description of what an organisation actually does (Rothaermel, 2013) • What the
company (organisation) does (Jones & Hill, 2010) • A set of organisational goals that identifies
the purpose of the organisation, its

basis of competition, and competitive advantage (Dess et al., 2019)

Mission Statement (cont’d) • The purpose or reason for the organisation’s existence (Wheelen et
al., 2018) • Specifies the business in which the firm (organisation) intends to compete and

the customers it intends to serve (Hitt et al. 2017) • A company’s (organisation’s) purpose in
language specific enough to give the

company’s (organisation’s) its own identity (Gamble et al., 2019)

ORGANISATIONAL DIRECTION

Activity:

1. Choose an organisation

2. Identify its organisational direction

3. Discuss the relevance of organisational direction with its performance/

outcomes/results

THE DEVELOPMENT OF STRATEGIC

MANAGEMENT

Corporate &

Business Strategy

Strategic

Planning

Strategic

Management

THE DEVELOPMENT OF STRATEGIC

MANAGEMENT (cont’d)

Before World War II • Before the World War II, most of the planning process, documentation
and

activities were in the form of budgeting

• Cost of sales and purchases, as well as other components related to the main

data were recorded and used to forecast the budgets for trade activities in the

future

THE DEVELOPMENT OF STRATEGIC

MANAGEMENT (cont’d)

Early 1950s

• The external environment after 1950s was too dynamic, complex and had many

radical technological changes. The advancement in technology has made it feasible

to produce high-quality products in a shorter time

• These advancements have prompted businessmen and entrepreneurs to expand

their businesses and potential markets. This triggered the emerging era of long-term

planning in the 1950s and developing into the 1960s

THE DEVELOPMENT OF STRATEGIC

MANAGEMENT (cont’d)

Early 1960s

• The business environment had entered yet another new era because the

developments in technology continued to advance and industries started to use

better equipment that could work even faster. • This resulted in high-production capabilities with
high efficiency and the ability to
produce high-quality products. High-production capabilities had prompted producers

to find new markets.

THE DEVELOPMENT OF STRATEGIC

MANAGEMENT (cont’d)

Early 1970s

• In the early 1970s, it was suggested that strategic planning was better than longterm planning.
The concept of strategic planning combined internal analysis, i.e. the

organisation’s abilities with the external factors (opportunities and threats)

THE DEVELOPMENT OF STRATEGIC

MANAGEMENT (cont’d)

Early 1980s

• In the early 1980s, the concept of strategic management had been introduced as

an addition to the previous concept. The new addition consists of two

components:

1. The first is the management of strategic issues in which its foundation could be

traced back to strategic planning

2. The second component is a compliment to the main executive or the specific

executive, which acts as a buffer/back-up against uncertainty and is also known as

‘surprise management’.
THE DEVELOPMENT OF STRATEGIC

MANAGEMENT (cont’d)

1. Strategic Planning Practices in the United States

• Findings – Organisations faced difficulties in implementing strategic planning – There is an

increase in the practice of strategic planning – The strategic planning process seemed to be
ineffective in the company’s

Operation

THE DEVELOPMENT OF STRATEGIC

MANAGEMENT (cont’d)

2. Strategic Planning Practices in the United Kingdom

• Findings

– There was an increase in the practice of formal planning

– There was a tendency to form informal planning system

– There was a tendency to decentralise planning practices

THE DEVELOPMENT OF STRATEGIC

MANAGEMENT (cont’d)

3. Strategic Planning Practices in Malaysia

• Fourth Malaysian Plan (1980–1984) and Fifth Malaysian Plan (1985–

1990): Developed their own terminology of ‘long-term objectives’ and

‘strategies’ even though strategic planning was not fully developed

• Until 2003: The practice of strategic planning has increased tremendously in

both private and government sectors

STRATEGIC MANAGEMENT PROCESS

Consists THREE main stages: • Strategy Formulation

• Strategy Implementation

• Evaluation and Control

STRATEGIC MANAGEMENT PROCESS (cont’d)

STRATEGY

FORMULATION

STRATEGY

IMPLEMENTATION

EVALUATION

&

CONTROL

FEEDBACK / CORRECTIVE ACTION

STRATEGIC MANAGEMENT PROCESS (cont’d)

Strategy Formulation
• It involves designing and developing strategies to achieve organisational direction

• Strategy formulation entails identifying the organisation’s external opportunities and

threats, determining its internal strengths and weaknesses and establishing

objectives to achieve its organisational direction (mission and vision)

STRATEGIC MANAGEMENT PROCESS (cont’d)

Strategy Implementation

• Strategy implementation means executing the strategies or where strategies are

translated into action

• It includes allocating resources to execute the formulated strategies, preparing

budgets, and developing and utilising information systems and employees

STRATEGIC MANAGEMENT PROCESS (cont’d)

Evaluation and Control • The final stage in strategic management process

• Success vs. Failure

• To determine the success of implemented strategies

• Involves: • Reviewing the external and internal factors which formed the basis of the current

strategies

• Measuring the performance against objectives

• Taking corrective action (as needed)

STRATEGIC MANAGEMENT:
MODELS

GMGA3073

STRATEGIC PUBLIC MANAGEMENT

8 model

NEW PUBLIC MANAGEMENT

(NPM)

GMGA3073

STRATEGIC PUBLIC MANAGEMENT

Introduction

• Modern public sector management: • Managerialism

• New Public Management • Market-Based Public Administration

• Post-Bureaucratic Paradigm

• Entrepreneurial Government

HISTORY OF NPM

• It is viewed as a modern approach of management in public sector arose in the UK in

1970s as the reaction towards the insufficiencies of traditional public administration

approach

• Critics towards unsatisfied public sector performance

• Public sector organisations were seen unproductive, inefficient, always suffer losses, low

quality, poor innovation and creativity

• These conditions triggered the movement to reform public sector management • Then, NEW
PUBLIC MANAGEMENT emerged

HISTORY OF NPM (cont’d) • The notion of New Public Management (NPM) was firstly
introduced by

Christopher Hood in 1991

• NPM emphasises decentralisation, devolution, and modernised provision on

public services

GOALS OF NPM

• Improve efficiency and effectiveness in public sector organisation

• Improve responsiveness to stakeholders

• Improve quality of public services

• Improve accountability and performance

ESSENCE OF NPM

• Public sector management assumed that private sector management

practices are better than management practices in public sector • So, in order to improve its
performance, public sector should adopt practices
and management techniques applied in business sector, such as: • Adoption of market
mechanism

• Compulsory competitive tendering contract • Privatisation of public corporations

CHARACTERISTICS OF NPM

• Characteristics of NPM by Hood (1991): • Professionalism in the public sector • The existence
of performance standards and performance measure

• The emphasis on control of output and outcome

• Split of organisation unit • Competition in the public sector • Adoption of private sector
management style into the public sector • Discipline and economic used of resources

CHARACTERISTICS OF NPM (cont’d) • Characteristics of NPM by Mathiasen (1999): • A

closer focus on results in terms of efficiency, effectiveness, and quality of

service

• The replacement of highly centralised, hierarchical structures by decentralised

management environment where decisions on resource allocation and service

delivery are made closer to the point of delivery

• The flexibility to explore alternatives to direct public provision and regulation that

might yield more cost-effective policy outcomes

CHARACTERISTICS OF NPM (cont’d) • Characteristics of NPM by Mathiasen (1999)

(cont’d): • A greater focus on efficiency in the services provided directly by the public

sector, involving the establishment of productivity targets and the creation of

competitive environments within and among public sector organisations

• The strengthening of strategic capacities at the centre to guide the evolution

of the state and allow it to respond to external changes and diverse interests

automatically, flexibly, and at least cost

ADOPTION OF BUSINESS SECTOR

MANAGEMENT STYLE

Private Sector Management Model

Need to be efficient and competitive

• Cost efficiency & effectiveness

• Competitive

• Flexible

• Adaptive

• Responsive

• Customer-focused

Reinventing Government

David Osborne & Ted Geabler (1992) – Catalytic Government:

steering rather than rowing

– Community-Owned Government:

empowering rather than serving

– Competitive Government:

injecting competition into service

delivery – Mission-Driven Government:

transforming rule-driven organisations – Results-Oriented Government:

funding outcomes, not inputs

– Customer-Driven Government:

meeting the needs of the customer,

not the bureaucracy – Enterprising Government:

earning rather than spending

– Decentralised Government:

from hierarchy to participation and

teamwork – Market-Oriented Government:

leveraging change through the market

STRATEGIC MANAGEMENT

IN THE PUBLIC SECTOR

GMGA3073

STRATEGIC PUBLIC MANAGEMENT

Concepts and Theories in Public Management

The challenges today: – Growing complexity of social problems – Growing demand of citizens –
Acceleration of social changes

• Solution in the 80s: “New Public Management” – Private sector principles and tools •
Enrichment in the 90s: Perspective of

“Governance” – Shaping and optimising the interdependencies

between actors in the society which cooperatively

attempt to produce public value

• Present – Public administrators/managers partnership with

politicians to define what values should be created

and its methods/means

Characteristics of the Public Sector in

Strategic Management • The authorising environment and the interdependent actors can be
considered as

the actual market for the public organisations: • Environmental factors – Influence of the
political level – Legal mandates

• Transactional factors – Coerciveness – Scope of impact – Public scrutiny, accountability –

Collective ownership – Management must include societal values such as fairness, openness,
inclusiveness,

Honesty

Characteristics of the Public Sector in

Strategic Management (cont’d) • Organisational factors – Goal setting process: conflicted –
Measuring performance: complexity and difficulty

Characteristics of the Public Sector in

Strategic Management (cont’d) • Impact on the models available to strategic management : •

Strategy as positioning or scope: • The more public an organisation is, the more it will have to
position itself within the authorising

environment as its “market” in terms of producing outcome and adjusting its scope

• Strategy as setting long-term direction: • Due to the turbulent nature of the authorising
environment, a core unit of the state will have

more difficulty in setting long-term direction than a more peripheral one which delivers concrete

products and services

Characteristics of the Public Sector in

Strategic Management (cont’d) • Strategic fit: • Can be seen by maximising public value while at
the same time attracting a

maximum of permission and resources. This might lead to trade-offs between

what is perceived valuable and acceptable to the political environment. • Strategy as stretching
competencies: • Not only the public manager must use internal capabilities but rather rally

support from co-producers and external actors, which means the

organisations strategy must be attractive enough to the outside actors

The Strategic Triangle • A new approach to strategic management in the public sector: • The
Strategic Triangle (adapted from Moore, 1995) • Three (3) main management dimensions: •
Political Management • Cooperation Management • Operations Management

The Strategic Triangle (cont’d)

POLITICAL MANAGEMENT

Political support as “… an axiomatic

principle of public sector

management.”

COOPERATION MANAGEMENT

Collaboration, co-production and

networking between social actors

OPERATIONS MANAGEMENT

Maximising efficiency

and effectiveness

(Managing upward)

(Managing outward) (Managing downward)

The Strategic Triangle (cont’d) • The management dimensions “political” and “cooperation”
were dominant during planning

• The dimensions

“cooperation” and “operations” were dominant during implementation and adaptation

• Looking into the long-term

future, political factors dominate the strategy discourse

• Cooperation and operations dominate the mid-term and

short-term time horizon

Value

Overarching vision and strategic themes

achieved by:

Incremental

expansion of

value provided

Interdependency of

management

activities

Long-term Time Horizon

The Strategic Triangle (cont’d) • The strategic triangle could serve as a consulting, teaching or
research tool in

the public sector • Benefits – incremental flexibility – reduction of complexity – creates focus –
easily communicated and understood

• Drawbacks – focus can shift over time – complexity and breadth of operations is
“underrepresented
CONCLUSION

• Building robust alliances internally and externally is the key to strategic success in

the public sector • Ownership of strategy by all level are adamant

EXTERNAL

ENVIRONMENTAL ANALYSIS

GMGA3073

STRATEGIC PUBLIC MANAGEMENT

External Environment • The external environment represents factors which are beyond the
control of

an organisation. • Divided into TWO (2) categories:

1. General Environment

2. Industry Environment

External Environment • General Environment: • Little ability to predict them

• Even less ability to control them

• Can vary across industries

• Industry Environment: • factors in the task or industry environment that are particularly
relevant to an

organisation’s strategy
External Environment

POLITICAL ECONOMIC

SOCIO-CULTURAL TECHNOLOGICAL

The General and Industry Environment • The general environment, also known as the macro-
environment, includes

the environmental factors that have an impact to the organisation. • PEST Factors

• P : Political factors

• E : Economic factors

• S : Socio-cultural factors

• T : Technological factors

The General and Industry Environment (cont'd) • The industry or micro-environment refers to
the factors that directly affect

the organisation and its competitive responses. • These factors have its ability to affect the
organisation’s profitability and

shape the competition in an industry

External Environmental Analysis

• This analysis provides information to the managers regarding the key trends

and changes in the external environment, such as followed: • Population shifts

• Changing demographics (e.g. aging population) • Information technology

• New government regulations

External Environmental Analysis (cont'd) • External environmental analysis reveals: •

Opportunities: External environment factors which can help the organisation

improve its performance and achieve its strategic objectives

• Threats: External environment factors which can hinder an organisation ’ s

performance and prevent the organisation from achieving its strategic objectives

External Environmental Analysis (cont'd) • Based on the external environmental analysis,

managers formulate

strategies that: • Take advantage of opportunities

• Avoid/reduce impact of threats

• Sources of information for external environmental analysis include customer

surveys, market surveys, periodicals, journals, reports, books, newspapers,

conferences and the Internet.

Factors in the General Environment

1. Political and Legal Factors

• Looks on how the government could influence the organisations

• Examples: • Employment law

• Environmental regulations • Competitive regulations

• Government leadership
• Tax policies

• Quotas on goods produced

• Consumer protection law

Factors in the General Environment (cont'd)

2. Economic Factors: • Unemployment rates

• Inflation rates

• Consumer and investor confidence • Inventory levels • Currency exchange rates • Gross
Domestic Product (GDP)

Factors in the General Environment (cont'd)

3. Socio-cultural Factors

• Concerned with society’s attitudes, cultural values and demographic

changes • Include factors such as: • Demographic factors (e.g. population size and distribution,
age distribution,

education level) • Attitudes towards materialism, capitalism, free enterprise

Factors in the General Environment (cont'd)

4. Technological Factors

• Include factors such as: • Rate of technology transfer • Energy use and cost • New products and
services of competitors

• Changes in Internet • Changes in mobile technology

• Technological breakthroughs will create new industries or new products

and services, which makes existing products and services redundant.

Factors in the Industry Environment • A set of factors that directly affects an organisation

• Also known as micro-environment • These factors are analysed to assess how the forces of the
organisation’s

immediate environment affect the attractiveness or profitability potential of

the organisation. • Michael Porter’s Model of Five Forces (1980) is one of the most widely used

and the best-known conceptual framework to assess industry environment

Porter’s Model of Five Forces

BARGAINING

POWER OF

SUPPLIERS

BARGAINING

POWER OF

CONSUMERS

THREATS OF

SUBSTITUTE

PRODUCTS

THREATS OF NEW
ENTRANTS

Factors in the Industry Environment (cont'd)

1. Threat of New Entrants

• New entrants to an industry can raise the level of competition • The threat of new entrants
depend on the barriers to entry • Barriers of entry can be affected by economies of scale, product

differentiation, capital requirements, switching costs and government

regulations.

Factors in the Industry Environment (cont'd)

2. Bargaining Power of Suppliers

• A supplier group is powerful when: • the suppliers’ goods are critical to the buyers’
marketplace success. • the inputs required by the buyers are unique, making it costly to switch

suppliers. • the buyers’ inputs do not represent a significant portion of the supplier’s

business. • the buyers’ inputs are only available from a small group of suppliers. • the suppliers
can sell directly to the firm’s customers, bypassing the need for the

firm.

Factors in the Industry Environment (cont'd)

3. Bargaining Power of Buyers

• Customers (or buyer groups) have the most power when: • they are large and purchase most of
the industry’s output. • the industry has many small suppliers supplying the product and the
buyers are large. • the products represent a relatively large expense for customers and sales of the
product

being purchased account for a significant portion of the seller’s annual revenues. • they have
access to sufficient information and are able to evaluate the competitive

offerings. • the customers could switch to another product without incurring significant switching

cost because the suppliers’ products are not unique or undifferentiated. • the customers could
possibly make the product themselves.

Factors in the Industry Environment (cont'd)

4. Substitute Products

• Substitute products will be a threat when: • the product is undifferentiated and customers can
easily switch away from one

supplier to another supplier with little or insignificant switching costs. • the customers or buyer
groups are price sensitive and customers have little

brand loyalty. • there is no real benefit offered by the products in the industry and consumers

can do without the product offered by the industry

Factors in the Industry Environment (cont'd)

5. Rivalry Among Competitors

• Rivalry among competitors is the strongest of the five competitive forces

and can vary widely among industries. • If rivalry among the competitors is intense, companies
in the industry

may need to enhance their product offerings to keep customers and firms
may earn less profit

Factors in the Industry Environment (cont'd) • Rivalry among competitors will be most intense
when: • the industry has two or three dominant firms which are battling to be the dominant

firms in the industry. • there are numerous competitors in the industry. • the competitors are
relatively equal in size and power. • the firms are competing in a slow or shrinking industry. •
there are high fixed costs of production. • the products are undifferentiated and are viewed by
customers as commodities. • there are high costs for exiting the business.

INTERNAL

ENVIRONMENTAL ANALYSIS

GMGA3073

STRATEGIC PUBLIC MANAGEMENT

INTRODUCTION

• Internal analysis is the analysis of information obtained within the

organisation. • It identifies and evaluates the organisation’s strengths and weaknesses

• Two (2) areas: • Resources

• Culture

• Among the functional areas in the organisation are: • Management • Marketing

• Finance

• Operations
RESOURCES

• Assets, Skills, Competencies, Knowledge

• Tangible vs. Intangible

Types of Tangible Resources

• Tangible resources are assets that are relatively easy to identify

• Physical assets: plant & facilities, location, machinery & equipment • Financial assets: cash &
cash equivalents, borrowing capacity, capacity to raise

equity

• Technological resources: trade secrets, patents, copyrights, trademarks, innovative

production processes

• Organisational resources: effective planning processes, evaluation & control

Systems

Types of Intangible Resources

• Intangible resources are difficult for competitors to account for or imitate

• They are embedded in unique routines & practices

• Human resources: trust, experience & capabilities of employees; managerial skills &

effectiveness of work teams, firm specific practices & procedures

• Innovation resources: technical & scientific expertise & ideas; innovation capabilities
• Reputation resources: brand names, reputation for fairness with suppliers; reputation

for reliability & product quality with customers

FUNCTIONAL ISSUES

• Management • Marketing

• Financial • Operations

• Human Resource (HRM) • Information Technology

Management • The functions of management consist of four (4) basic activities: • Planning: •
Involves activities such as setting goals, establishing objectives, devising strategies to achieve

goals and objectives, developing policies and plans, and forecasting

• Organising: • Determines jobs or tasks to be done, delegating authority, establishing a chain of

command and

coordinating jobs or tasks • Leading: • influencing subordinates to get the jobs done, developing
effective channels and managing conflict • Controlling: • Setting standards to ensure the actual
results are consistent with planned results, measuring actual

performance, comparing actual to planned standard and taking corrective action

Marketing

• Marketing

• refers to the exchange of products or services from the producer to the users

• begins with determining what users want and need or what services could be provided
to create satisfaction

• Components (4Ps): • Product • Price

• Place

• Promotion

Marketing (cont’d)

Marketing Mix

• A unique blend of product, distribution, promotion and pricing strategies designed to

produce mutually satisfying exchanges with a target market • The right mix of the marketing 4Ps
(Product, Price, Place and Promotion) determines the

company’s position compared to its competitors

Marketing (cont’d) – Product Life Cycle

Product Life Cycle

• Introductory stage: When a product is newly introduced into the

market, it is in phase I. A high-failure rate, little competition,

frequent product modification and limited distribution typify the

introductory stage of product life cycle. • Growth stage: As time goes by, sales increase to a
maximum

(phase II). In this stage, sales typically grow at an increasing rate.

Many competitors seem to enter the market, and it is observed

that profit rise rapidly in this stage.

Marketing (cont’d) – Product Life Cycle

Maturity stage: A period when sales increase at a decreasing

rate indicates the beginning of phase III. Usually, this is the

longest stage of the product life cycle. At this stage, the niches

marketers emerge which target narrow, well-defined,

underserved segments of a market. • Decline stage: Phase IV shows a long-run drop in sales. The

rate of decline is governed by how rapidly consumer tastes and

preferences change or is being replaced by substitute products.

Financial • Deals on financial matters; find, use, and control funds

• Involves financial analysis

• Three (3) main financial issues: • investment decision

• financing decision

• dividend decision

Financial (cont’d) • Financial Ratios:

i. Liquidity ratio

• measures the firm’s ability to meet its maturing short-term obligations

• Examples: Current ratio, Quick ratio

ii. Leverage ratio

• measures the extent to which the firm has been financed by debt • Examples: Debt-to-asset
ratio, Long-term debt-to-equity ratio

iii. Activity ratio: • measures how effectively the firm uses its resources

• Examples: Inventory turnover, Fixed assets turnover

Financial (cont’d) • Financial Ratios:

iv. Profitability ratio

• measures the management’s overall effectiveness as shown by the returns generated on sales
and

investment • Examples: Gross profit margin, Return on total assets

v. Growth ratio

• measures the firm’s ability to maintain its economic position in the growth of the economy and

industry

• Examples: Sales, Net income

Financial (cont’d) • How has each ratio changed over time?

• How does each ratio compare to industry norms?

• How does each ratio compare with key competitors?

Operations
• Relating to the process of manufacturing products / providing service

• process of transforming input/resources (e.g. steel, oil, etc.) into products/

outputs that are of higher value to the users

• Emphasises on efficiency and effectiveness

Human Resource Management • Issues: • Flatter organisational structures

• Turbulent environments

• Increased employee autonomy

• Higher knowledge requirements

• Increased globalisation

• Increased employee decision making

Information Systems/Technology

• Information systems/technology contributions to performance: • Automation of back office

processes

• Automation of individual tasks

• Enhancement of key business functions

• Development of a competitive advantage

• Supply Chain Management • networks for sourcing raw materials, manufacturing products or
creating services,

storing, and distributing goods, and delivering them to customers and consumers
CULTURE

Culture

• the collection of beliefs, expectations and values learned and shared by a

corporation’s members and transmitted from one generation of employees to another

Functions of Culture

• Conveys a sense of identity for employees

• Generates employee commitment

• Adds to the stability of the organisation as a social system

• Serves as a frame of reference for employees to understand

organisational activities and as a guide for behavior

Cultural Products

Examples:

Product Description

Ceremonial Several rites connected together

Myths A narrative of imagined events, usually not supported by facts

Symbol Any object, act, event, quality, or relation used to convey meaning

Language The manner in which members of a group communicate

Values Life-directing attitudes that serve as behavioural guidelines

Belief An understanding of a particular phenomenon

Heroes/Heroines Individuals greatly respected

STRATEGIC MANAGEMENT:

APPROACHES

Resource-Based View (RBV) • Perspective that firms’ (organisations’) competitive advantages

are based on

their resources that are valuable, rare, costly to imitate, and costly to

substitute • An approach that suggests internal resources are more important compared

with the external factors in achieving and sustaining competitive advantage • Sees resources as
key to superior firm (organisation) performance

Resource-Based View (RBV) (cont’d) • Resources • an organisation’s assets and are thus the
basic building blocks of the organisation

• tangible, intangible

• VRIO Framework: • Valuable: Does it provide customer value and competitive advantage?

• Rareness: Do no other competitors possess it?

• Imitability: Is it costly for others to imitate?

• Organisation: Is the firm organised to exploit the resource?

Resource-Based View (RBV) (cont’d) • Core Competencies: • Capabilities that serve as a source
of competitive advantage for a firm (organisation)
over its rival • A firm’s (organisation’s) strategic resources that reflect the collective learning in
the

organisation • A value chain activity that a firm (organisation) performs especially well • Unique
strengths embedded deep within a firm (organisation)

Resource-Based View (RBV) (cont’d) • Competitive Advantage: • Strategy that creates superior
value for customers and that competitors are unable to

duplicate or find it too costly to imitate • Anything a firm (organisation) does especially well •
Superior performance relative to the other competitors in the same industry/field

Business Model • Company’s (Organisation’s) method in making money in the current business

environment • Compose of FIVE (5) elements: • Who it serves

• What it provides

• How it makes money

• How it differentiates and sustains competitive advantage

• How it provide its product/service

Value-Chain Analysis

• Linked set of value-creating activities • Used in assessing the activities of an organisation and
its industry

• One of the method to identify main strengths in an organisation

• Involves Primary and Support activities

Value-Chain Analysis (cont’d) • Primary Activities: • Main activities involved in producing
products / providing services

• Example: • Customer Satisfactions

• Operations

• Distribution

• Enforcement

Value-Chain Analysis (cont’d) • Support Activities: • Activities completes by the organisation to

support the main activities in in producing

products / providing services

• Example: • Human Resource

• Information Technology (IT) • Finance

Value-Chain Analysis (cont’d)

STRATEGIC PLANNING

FINANCIAL MANAGEMENT

BRAND MANAGEMENT

ICT DEVELOPMENT

ACCOUNTING & MANAGEMENT CONTROL VALUE PRIMARY ACTIVITIES SUPPORT

ACTIVITIES

SERVICE

CONCEPT &
DESIGN

PHYSICAL

RESOURCES

PROCUMENT

HR SELECTION

&

MANAGEMENT

SERVICE

CREATION &

DELIVERY

CUSTOMER

CARE &

RECOVERY

STRATEGY FORMULATION:

METHODS/TOOLS

GMGA3073

STRATEGIC PUBLIC MANAGEMENT

SWOT Analysis

• The basic method in formulating strategies

• Listing of SWOT factors (Strengths, Weaknesses, Opportunities, Threats) • Criticism of SWOT
analysis: • It is simply the opinions of those filling out the boxes. • Virtually everything that is a
strength is also a weakness. • Virtually everything that is an opportunity is also a threat. • Adding
layers of effort does not improve the validity of the list. • It uses a single point in time approach.
• There is no tie to the view from the customer. • There is no validated evaluation approach.

TOWS MATRIX

STRENGTHS (S)

List of strengths

WEAKNESSES (W)

List of weaknesses

OPPORTUNITIES (O)

List of opportunities

SO Strategies

Generate strategies that use

strengths to capture/ take

advantage of opportunities

WO Strategies

Generate strategies that take

advantage of opportunities to

overcome weaknesses

THREATS (T)
List of threats

ST Strategies

Generate strategies that

use/capitalise strengths to

avoid/overcome threats

WT Strategies

Generate strategies that

minimise weaknesses and

avoid threats

SPACE Matrix

• Four-quadrant framework indicates whether aggressive, conservative,

defensive, or competitive strategies are most appropriate for a given

organisation

• Two internal dimensions (financial position [FP] and competitive position [CP]) • Two external
dimensions (stability position [SP] and industry position [IP]) • Most important determinants of
an organisation’s overall strategic position

SFAS Matrix

• Summarises an organisation’s strategic factors by combining the external

factors from the EFAS Table with the internal factors from the IFAS Table
STRATEGY

IMPLEMENTATION

GMGA3073

STRATEGIC PUBLIC MANAGEMENT

Introduction

• Strategy formulation is primarily an intellectual process

• Strategy implementation is primarily an operational process

• Strategy formulation requires good intuitive and analytical skills

• Strategy implementation requires special motivation and leadership skills

• The sum total of all activities and choices required for the execution of a

strategic plan

• To materialise all strategies formulated during the strategy formulation stage

Questions on Strategy Implementation

• Who are the people to carry out the strategic plan?

• What must be done to align company operations in the new intended

direction?

• How is everyone going to work together to do what is needed?

Components
• Programme

• a collection/set of activities by the organisation to accomplish a plan

• Budget • Involves estimation of resources usage to accomplish a plan

• Means in allocating organisation’s resources

• Procedures

• detail the various activities that must be carried out to complete an organisation’s

programmes

• standard operating procedures

Structure Follows Strategy

• Structure Follows Strategy

• changes in strategy lead to changes in organisational structure

1. New strategy is created

2. New administrative problems emerge

3. Performance declines

4. New appropriate structure is created

5. Performance rises

Basic Issues in Strategy Implementation

• Management • Marketing

• Finance
• Human Resource Management • Operations

• Information Communication and Technology (ICT)

General Public Management Issues in Strategy

Implementation

• Leadership

• Accountability

• Transparency

• Responsibility

• Efficiency

• Information Communication and Technology (ICT) • Globalisation & Liberalisation

Specific Public Management Issues in Strategy

Implementation

• Strengthening the country’s competitiveness

• Managing equity-based economic growth

• Generating human potential to strengthen public sector performance

• Leading public service transformation

• Professionalism in the public service

EVALUATION AND CONTROL

GMGA3073

STRATEGIC PUBLIC MANAGEMENT

INTRODUCTION

• The final stage in strategic management process

• Success vs. Failure

• To determine the success of implemented strategies

• Involves: • Reviewing the external and internal factors which formed the basis of the current

strategies

• Measuring the performance against objectives

• Taking corrective action (as needed)

Key Questions to Address in Evaluating

Strategies

1. Are our internal strengths still

strengths?

2. Have we added other internal

strengths? If so, what are they?

3. Are our internal weaknesses still

weaknesses?

4. Do we now have other internal

weaknesses? If so, what are

they?

5. Are our external opportunities

still opportunities?

6. Are there now other external

opportunities? If so, what are

they?

7. Are our external threats still

threats?

8. Are there now other external

threats? If so, what are they

Evaluation Framework

Determine what

to measure

Measure

performance

Establish

standards

Take corrective

action
Continue/

Proceed with

strategies

YES

NO

Measuring Performance

• Performance

• end result of an activity

• One of the obstacles to effective control is the difficulty in developing

appropriate measures of important activities and outputs

Corrective Actions

Possible Corrective Actions

1 Alter the organisation’s structure

2 Replace one or more key individuals

3 Divest a division

4 Alter the organisation’s organisational direction (e.g. vision and mission)

5 Devise new policies

6 Install new performance incentives

7 Add or terminate employees or managers

8 Allocate resources differently

9 Outsource functions

Using Benchmarking To Evaluate Performance

• Benchmarking

• the continual process of measuring products, services and practices

against the toughest competitors or those companies recognised as

industry leaders

Benchmarking: Procedures

1. Identify area or process to be examined

2. Find behavioural and output measures

3. Select accessible set of competitors of best practices

4. Calculate differences among organisation’s performance measurements

and competitors; determine why differences exist

5. Develop tactical programmes for closing performance gaps

6. Implement the programmes and compare the results

STRATEGIC MANAGEMENT

APPROACHES IN
THE PUBLIC SECTOR

PUBLIC-PRIVATE PARTNERSHIP

• The private sector constructs and completes government projects with its own

financial resources. • In return, the government will reimburse the company in the form of land
swap

or instalment payments via lease

• Example: • PLUS Expressway • East Coast Railway Link (ECRL) project

INCORPORATION

• Change the status of a government agency to a wholly-owned government

company under the Companies Act 1965

• Involves the transfer of functions or activities of the public sector to a company

fully owned by the government • Example: • MoF Inc

• Prasarana Malaysia Bhd

• Khazanah Malaysia Bhd

PRIVATISATION

• Transfer of public sector activities or functions to the private sector. • The government will
provide funding for the private sector to implement and

complete the projects. • Example: • Lembaga Letrik Negara (LLN) (National Electricity Board)
to Tenaga Nasional Berhad
(TNB) • Jabatan Telekom (JT) to Telekom Malaysia Berhad (now as TM)

INNOVATION

• Creation, development and implementation of a new product, process or

service, with the aim of improving efficiency, effectiveness or competitive

advantage

• A new method, idea, product, etc. • Example: • Road Transport Department (JPJ)- driving
licence and road tax renewal • National Registration Department (JPN)- myKad, myKid and
myPR application, birth

registration

• Department of Immigration- passport ,border pass and work permit application

STRATEGIES TO STRENGTHEN

PUBLIC SERVICE CAPABILITIES

INTRODUCTION

• There are several issues discussed on the capabilities of public service in

Malaysia. • Few strategies may be suggested in improving the Malaysian public service

capabilities

• All issues in the strategy implementation need to be look into further attention

to ensure the materialisation of the suggested strategies in improving the

public service capabilities

STRATEGY

• Strategy 1: Determining Dynamic Direction

• Strategy 2: Developing a Solid Organisation

• Strategy 3: Managing the Best Human Resource

• Strategy 4: Developing Competitive Human Resource

• Strategy 5: Encouraging Excellent Performance

• Strategy 6: Appreciating Excellent Service

Strategy 1: Determining Dynamic Direction

• Environmental changes will require a dynamic direction to fit with the context

and/or situation

• Dynamic direction relates to the organisational direction

• Vision

• Mission

• Objectives

• Goals

• Charters

• etc.

Strategy 2: Developing a Solid Organisation

• A solid organisation should withstand any environmental factors, particularly

the external threats

• Based on the dynamic direction

• The importance of organisational culture

Strategy 3: Managing the Best Human

Resource • Focuses in retaining the best human capital in the organisation

• Several human resource aspects to be consider in retaining the best human

resource: • Human Resource Planning

• Recruitment • Training & Development • Performance Appraisal/ Management • Benefits,

Rewards & Recognition

Strategy 4: Developing Competitive Human

Resource

• Identifying/ Recognising strategic direction

• Ensuring organisation’s capacity

• Training and development • Talent management • Managing workforce with quality

• Developing workforce competencies

Strategy 5: Encouraging Excellent

Performance
• Performance, and rewards management • Formation of a high-performance work culture

Strategy 6: Appreciating Excellent Service

• Recognition

• Awards, Promotion, Incentives, Benefits

• Acknowledgement • In the organisation

• Among the peers

HIGH PERFORMANCE

CULTURE LEADERSHIP

INTRODUCTION

• The Public Service Department (Jabatan Perkhidmatan Awam/ JPA) is the

major source of skills and intellectual capital used by the Malaysian

Government to achieve its objectives and goals. • Each agency is now responsible for managing
its own development activities to ensure

that its staff have the necessary capabilities to achieve the government's goals

efficiently and effectively. • This framework does not seek to cover every detail of the
management of

development. • Agencies will need to consider the best way to apply the principles outlined in
the

framework to best match their particular context and environment.

OVERVIEW OF MALAYSIAN PUBLIC SERVICE

• Public administration in the 21st century is undergoing dramatic

change, especially in advanced economies, but also in many parts of

the developing world. • Globalisation and the pluralisation of service provision are the driving
forces

behind these changes. • Policy problems faced by the Government are increasingly complex,

wicked and global, rather than simple, linear, and national in focus. • And yet, the prevailing
paradigms through which public sector reform

were designed and implemented are relatively static and do not fully

encompass the significance or implications of these wider changes.

MODELS OF PUBLIC SECTOR REFORM

1 How can we put the government on an orderly

efficient footing?

“Weberian” public administration and

capacity-building Post-Independence

2 How can we get the government closer to the

grassroots? Decentralisation 1970s to the present

3 How can we make the government more

affordable? Pay and employment reform 1980s to 1990s

4 How can we make the government perform

better and deliver on our key objectives? New Public Management 1990s to the present

5 How can we make the government more

honest? Integrity and anti-corruption reforms 1990s to the present

6 How can we make the government more

responsive to the citizens? Bottom-Top Reform Late 1990s to the present

TRADITIONAL ROLES OF PUBLIC SERVICE

• A separation between politics and elected politicians on the one hand and

administration and appointed administrators on the other; • Administration is continuous,

predictable and rule-governed; • Administrators are appointed based on qualifications, and are
trained

professionals; • There is a functional division of labour, and a hierarchy of tasks and people; •
Resources belong to the organisation, not to the individuals who work in it; • Public servants
serve public rather than private interest.

CONTEMPORARY ROLES OF PUBLIC

SERVICE

• The New Public Management refers to a series of novel approaches to

public administration and management in the 1980s. • The NPM model arose in reaction to the
limitations of the old public

administration in adjusting to the demands of a competitive market economy

CONTEMPORARY ROLES OF PUBLIC

SERVICE (cont’d) • The key elements of New Public Management: • An attention to lessons
from private-sector management; • The growth both of hands-on “management”, in its own
rights and not as an offshoot of

professionalism, and of “arm’s-length” organisations where policy implementation is

organisationally distanced from the policymakers (as opposed to the “inter-personal”

distancing of the policy/administration split); • A focus upon entrepreneurial leadership within

public service organisations; • An emphasis on input and output control and evaluation and on
performance

management and audit; • The disaggregation of public services to their most basic units and a
focus on their

cost management; and

• The growth of use of markets, competition and contracts for resource allocation and

service delivery within public services

ISSUES AND CHALLENGES IN THE PUBLIC

SECTOR

• Key challenges facing the public sector leaders: • Increasing pace of change

• Technological development • Changing perceptions • Increasing expectations

• Citizen empowerment • Changing workforce • Changing environment

ISSUES AND CHALLENGES IN THE PUBLIC

SECTOR (cont’d) • Delivering effective and efficient public services in a fiscally constrained
environment: • Since the global recession, reduced public revenue and increased levels of
national

debt have become part of our broader environment. • Some issues and challenges in the public
sector: • Consolidating nations competitiveness

• Managing the economic growth based on equity

• Generating human potential for excellence performance

• Public service reform

• Professionalism in public service

• Stakeholder and client expectation

HIGH-PERFORMANCE CULTURE LEADER

• With several reforms were made in the Malaysian public service, performance

has been highlighted as the main emphasis in delivering its services

• Among the moves that can be consider for a high-performance culture are: • Consolidating
nation’s competitiveness

• Managing the economic growth based on equity • Generating human potential for excellence in
performance

• Public service reform (as required) • Stakeholder and client expectation

Consolidating Nation’s Competitiveness

• A nation’s competitiveness depends on the capacity of its industry to innovate and

upgrade. • In a world of increasingly global competition, nations have become more, not less,
important. • Competitive advantage is created and sustained through a highly localised process. •
Differences in national values, culture, economic structures, institutions, and history

all contribute to competitive success. • There are striking differences in the patterns of
competitiveness in every country; no

nation can or will be competitive in every or even most industries. • Ultimately, nations succeed
in particular industries because their home environment

is the most forward-looking, dynamic, and challenging

Managing the Economic Growth based on

Equity • Since the financial and economic crises that started in 2008, growth has been

at the centre of the public policy agenda worldwide. • Need to study the links between economic
growth and equity market returns

to evaluate whether structural changes to global growth composition have

implications for longer-term strategic allocations. • Growth prospects are better in emerging
markets than in developed countries

for some decades to come due to favourable demographics and healthier public finances. •
Empirical evidence in developed and emerging markets does not support the

notion of a structural relationship between economic growth and equity

returns. • Two main reasons are: (a) some countries are better than others at converting GDP

growth into profit growth, and (b) better growth prospects are often reflected in market prices.

Generating Human Potential for Excellence in

Performance
• Work teams are the backbone of contemporary work life. • A team is a group of people who
work together to accomplish something

beyond their individual self-interests; however, not all groups are teams. • A “high-performance
work team” refers to a group of goal-focused individuals

with specialised expertise and complementary skills who collaborate, innovate

and produce consistently superior results. • The group relentlessly pursues performance
excellence through shared goals,

shared leadership, collaboration, open communication, clear role expectations

and group operating rules, early conflict resolution, and a strong sense of

accountability and trust among its members.

Generating Human Potential for Excellence in

Performance (cont’d) • To function effectively, a high-performance team also needs: • A deep

sense of purpose and commitment to the team’s members and to the mission. • Relatively more
ambitious performance goals than average teams. • Mutual accountability and a clear
understanding of members’ responsibilities to the

team and individual obligations. • A diverse range of expertise that complements other team
members. • Interdependence and trust between members.

Public Service Reform • Public service reform is a key part of the strategic response to the
present

economic situation. • Sustained and effective reform is critical if the state is to continue to
deliver

essential services to the public in an environment of significantly reduced

expenditure and staff numbers. • The government decided that a renewed wave of reforms should
be

developed, building on the progress made to date and re-focusing the

government’s ambition for reform.

Public Service Reform (cont’d) • The reform program maintains the necessary emphasis on
increasing

efficiency. • Alongside, there will be a much stronger focus on the delivery of the best

possible outcomes for our people, for our economy and for our society. • There will be a real and
measurable change in the way the public service

designs and delivers its services. • The plan will be delivered through a focus on service users, on
efficiency and

openness, underpinned by a strong emphasis on leadership, capability and

delivery

Professionalism in Public Service

• Without appropriate top management, an organisation would not achieve its

optimum performance. • With sub-standard managers at the top, the performance of an

organisation

becomes poor, and operations tend to get blocked – the bottleneck. • The bottleneck is also
present in organisations with lack of systematic mechanisms for

delegation and accountability. • Although the performance of top managers is crucial, it is as

well equally
important to have corresponding quality in the performance at all management

levels

Professionalism in Public Service (cont’d) • Beyond the issue of the incidence of professionals in
public service…who

controlled them? And to whom they were accountable?

• For better or worse—or better and worse—much of our government is now in

the hands of professionals (including scientists). • The choice of these professionals, the
determination of their skills, and the

content of their work are now principally determined, not by general

governmental agencies, but by their own professional elites, professional

organisations, and the institutions and faculties of higher education.

Professionalism in Public Service (cont’d) • How does the concept of public service
professionalism apply across sectors?

• Because public service is not the exclusive domain of government employees, public

service professionals may exist in all three sectors. • Given this perspective, what defines a
public service as professional?

• Should the norms and ethics for public service professionalism differ across sectors?

Do they differ in reality?

Stakeholder and Client Expectation • Tips for managing stakeholder and client expectations: •
Identify who the stakeholders are. • Identify the stakeholder’s preferred method of
communication. • Keep stakeholders engaged throughout the process with timely updates. •
Accurately map expectations. • Classify the level of communication for each stakeholder. •
Identify which stakeholders will be advocates and which will be road blockers. • Engage the
stakeholders in decision making. • The manner in which the project is accomplished is vitally
important, not just on delivering the required specifications.

Stakeholder and Client Expectation (cont’d) • The public services will not be a success if the
important stakeholders and

clients are unhappy with the results. • One of the definitions of public service success focuses on
achieving client

satisfaction. • The policy makers need to understand and meet the expectations of the one

of the most important stakeholders and the clients.

FUTURE OF STRATEGIC

MANAGEMENT IN THE PUBLIC

SECTOR

Future Emphasis in the Public Sector • Government Aspiration

• Realising Vision 2020

• New Economic Model • Contemporary issues and challenges

Government Aspiration

• The Government of Malaysia’s aspiration were mainly based on these

sectors: • Education

• Security

• Health

Realising Vision 2020

• Since the country gained independence in 1957, it has successfully diversified

its economy from one that was initially agriculture and commodity-based, to

one that now plays host to robust manufacturing and service sectors, which

have propelled the country to become a leading exporter of electrical

appliances, parts, and components

• Developing nations frequently experience a lack of jobs, food, clean drinking

water, education, healthcare, and housing

• To be a high-income (developed) nation, the country would need to undertake

some major reforms including the creation of well-paid employment and

having more women joining the workforce

Realising Vision 2020 (cont’d) • Areas of emphasis to be a developed nation (advancement): •

Education

• enhancing the quality of schooling to improve learning outcomes

• Health and nutrition

• nutritional interventions to reduce childhood stunting

• Social protection • adequate social welfare protection for household investments in human
capital formation

New Economic Model • Problems with the current economic model: • Doing business in
Malaysia is still too difficult • Our exports are still strong but not generating enough added value

• Low-skill jobs equals low wages • Productivity is growing, but far too slowly • Efforts to
innovate and create have been insufficient • We are not developing talent and what we do have is
leaving • The gap between rich and poor is widening

• Malaysia is stuck in a middle-income trap

New Economic Model (cont’d) • Aims of New Economic Model –

• A sustainable, inclusive, high-income economy

• Breaking through to high income status

• Generating benefits for all Malaysians • An economically and environmentally enduring

solution

• Core enablers for the NEM • Unwavering leadership and political will • Getting the citizens to
drive change together • A “big push” of synchronised policy measures and initiatives

• Constantly measuring our performance and make adjustment from time to time

New Economic Model (cont’d) • A close look at the Strategic Reform Initiatives:

1. Re-energising the private sector to drive growth

2. Developing a quality workforce and reducing dependency on foreign labour

3. Creating a competitive domestic economy

4. Strengthening the public sector

5. Transparent and market-friendly affirmative action

6. Building the knowledge base and infrastructure

7. Enhancing the sources of growth

8. Ensuring sustainability of growth

Contemporary Issues and Challenges • Public service modernisation

• Social equity (welfare, rights, etc.) • Social trends (e.g., work-life balance, gender equality, etc.)
• Fiscal health

• Personal security

• IR 4.0

• Artificial intelligence (AI) • Corporate governance

• Transparency & integrity