GMGA3073 Meeting 1 Handout

GMGA3073 / STRATEGIC PUBLIC MANAGEMENT
PJJ-UUM
Meeting 1
MEETING - I
GMGA3073
STRATEGIC PUBLIC MANAGEMENT
INTRODUCTION TO
STRATEGIC MANAGEMENT
GMGA3073
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Meeting 1
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”
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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
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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)
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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
typical
• Mission
• Objectives
• Goals
• Target
• Slogan / Motto / Tagline
• Philosophy
• Charter
• etc.
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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)
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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)
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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)
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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)
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ORGANISATIONAL DIRECTION
Activity:
1. Choose an organisation
2. Identify its organisational direction
3. Discuss the relevance of organisational direction with its performance/
outcomes/results
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THE DEVELOPMENT OF STRATEGIC

MANAGEMENT
Military
Strategy
Corporate &
Business Strategy
Strategic
Planning
Strategic
Management
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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
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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
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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.
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Early 1970s
• In the early 1970s, it was suggested that strategic planning was better than long-
term planning. The concept of strategic planning combined internal analysis, i.e. the
organisation’s abilities with the external factors (opportunities and threats)
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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’.
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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
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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
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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
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STRATEGIC MANAGEMENT PROCESS

Consists THREE main stages:
• Strategy Formulation
• Strategy Implementation
• Evaluation and Control
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STRATEGIC MANAGEMENT PROCESS (cont’d)
EVALUATION
STRATEGY STRATEGY
&
FORMULATION IMPLEMENTATION
CONTROL
FEEDBACK / CORRECTIVE ACTION
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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)
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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
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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)
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STRATEGIC MANAGEMENT:
MODELS
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Wheelen, Hunger, Hoffman & Bamford (2018)
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David & David (2017)*

BUSINESS ETHICS, ENVIRONMENT SUSTAINABILITY & SOCIAL RESPONSIBILITY
EXTERNAL
ASSESSMENT
STRATEGY STRATEGY
VISION IMPLEMENTING
ANALYSIS & EVALUATION &
MISSION STRATEGIES
CHOICE GOVERNANCE
INTERNAL
ASSESSMENT
Note:
GLOBAL & INTERNATIONAL ISSUES *- simplified diagram
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Gamble, Thompson, & Peteraf (2019)
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Rothaermel (2013)
ANALYSIS FORMULATION
Develop Strategic
Identify Multiple Future
Plans to Address
Scenarios
Future Scenarios
IMPLEMENTATION
Execute Dominant
Strategic Plan
Creating Strategic
Options
Through Developing
Implementation of
Alternative Plan(s)
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Hitt, Ireland & Hoskisson (2017)*

EXTERNAL
ENVIRONMENT
VISION
ANALYSIS
MISSION
INTERNAL
ENVIRONMENT
STRATEGY FORMULATION:
• Competitive Rivalry & Dynamics STRATEGY IMPLEMENTATION:
STRATEGY
• Corporate-Level Strategy • Corporate Governance

• Business-Level Strategy • Organisational Structure & Controls
• Merger & Acquisition Strategy • Strategic Leadership
• International Strategy • Strategic Entrepreneurship
• Cooperative Strategy
PERFORMANCE
STRATEGIC
COMPETITIVENESS Note:
*- modified orientation diagram
Copyright: Dzulhilmi Ahmad Fawzi 2021
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Dess, McNamara, Eisner & Lee (2019)*

STRATEGY ANALYSIS
Note:
*- simplified diagram
ANALYSING GOALS &
OBJECTIVES
STRATEGY IMPLEMENTATION
ANALYSING THE ANALYSING THE STRATEGIC CONTROL

EXTERNAL INTERNAL & CORPORATE
ENVIRONMENT ENVIRONMENT GOVERNANCE
STRATEGIC
ASSESSING CREATING EFFECTIVE
LEADERSHIP,
INTELLECTUAL ORGANISATIONAL
EXCELLENCE, ETHICS
CAPITAL DESIGNS
STRATEGY FORMULATION & CHANGE
FOSTERING
FORMULATING
CORPORATE
STRATEGIES
ENTREPRENEURSHIP
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Jones & Hill (2010)*

STRATEGY FORMULATION STRATEGY IMPLEMENTATION
External
Designing
Analysis:
Organisation
Opportunities &
Structure
Threats
Designing
Existing Mision, Vision, SWOT Governance &
Strategies Organisation
Business Model Values & Goals Strategic Choice Ethics
Culture
Internal Analysis: Designing

Strengths & Organisation
Weaknesses Controls
Note:
*- simplified diagram
FEEDBACK
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Poister & Streib (1999)

Legislative Agenda Programme Planning & Evaluation
Customer/Constituent Interfaces Programme & Project Management
Labour Relations Service Delivery System
Organisational Culture Intergovernmental Relations

Vision
Mission
Budgeting & Financial Management Values Public Relations
Human Resource Development Administrative Processes
Performance Management Organisational Structure
Internal Communications Performance Measurement
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NEW PUBLIC MANAGEMENT

(NPM)
GMGA3073
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Introduction
• Modern public sector management:
• Managerialism
• New Public Management
• Market-Based Public Administration
• Post-Bureaucratic Paradigm
• Entrepreneurial Government
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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
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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
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GOALS OF NPM
• Improve efficiency and effectiveness in public sector organisation
• Improve responsiveness to stakeholders
• Improve quality of public services
• Improve accountability and performance
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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
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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
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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
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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
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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
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Reinventing Government
David Osborne & Ted Geabler (1992)
– Catalytic Government: – Customer-Driven Government:
steering rather than rowing meeting the needs of the customer,
not the bureaucracy
– Community-Owned Government:
empowering rather than serving – Enterprising Government:
– Competitive Government: earning rather than spending
injecting competition into service – Decentralised Government:
delivery from hierarchy to participation and
– Mission-Driven Government: teamwork
transforming rule-driven organisations – Market-Oriented Government:
– Results-Oriented Government: leveraging change through the market
funding outcomes, not inputs
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STRATEGIC MANAGEMENT
IN THE PUBLIC SECTOR
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Concepts and Theories in Public Management

Formulating
policies
• The challenges today:
– Growing complexity of social problems
– Growing demand of citizens Setting
objectives Evaluation of
– Acceleration of social changes POLITICAL RATIONALE
outcomes
• Solution in the 80s: “New Public Management”

– Private sector principles and tools
Quantifiying “Translation“
• Enrichment in the 90s: Perspective of objectives
Documentation of
outcomes
“Governance”
– Shaping and optimising the interdependencies
between actors in the society which cooperatively
Implementation MANAGEMENT RATIONALE Attainment of
attempt to produce public value objectives
of objectives
• Present
– Public administrators/managers partnership with
politicians to define what values should be created Operations
and its methods/means
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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
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Strategic Management (cont’d)
• Organisational factors
– Goal setting process: conflicted
– Measuring performance: complexity and difficulty
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• 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
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• 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
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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
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The Strategic Triangle (cont’d)

POLITICAL MANAGEMENT
Political support as “… an axiomatic
principle of public sector
management.”
Key person: Head of Department

Responsible for all three dimensions of
strategic management
(Managing upward)
COOPERATION MANAGEMENT OPERATIONS MANAGEMENT
Collaboration, co-production and Maximising efficiency
networking between social actors and effectiveness
Key person: Middle Managers Key person: Staff

Main responsibility on cooperation and Main responsibility on operations
operations management
(Managing outward) (Managing downward)
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• The management dimensions Overarching vision and strategic themes
“political” and “cooperation” achieved by:
were dominant during Long-term Time Horizon
planning
Political Management
• The dimensions Incremental
expansion of
“cooperation” and value provided
“operations” were dominant Interdependency of
during implementation and management
activities
adaptation
• Looking into the long-term
future, political factors Value
dominate the strategy

discourse
Operations
• Cooperation and operations Cooperation
Management Management
dominate the mid-term and
short-term time horizon Mid-term to Short-term Time Horizon
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• 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”
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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
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Sources/References
David, F. R. & David, F.R. (2017). Strategic Management: A Competitive Advantage Approach, Concepts and Cases (16th
ed.). New York: Pearson.
Dess, G.G., McNamara, G., Eisner, A.B. & Lee, Seung-Hyun (2019). Strategic Management: Text and Cases (9th ed.).
New York: McGraw-Hill.
Gamble, John, Thompson, Arthur A., & Peteraf, Margaret A. (2019). Essentials of Strategic Management: The Quest for
Competitive Advantage. (6th ed.). New York: McGraw-Hill.
Hitt, M.A., Ireland, R.D., & Hoskisson, R.E. (2017). Strategic Management: Competitiveness & Globalization: Concepts and
Cases (12th ed.). Singapore: Cengage Learning.
Hood, Christopher (1991), “A public management for all seasons?”. Public Administration, 69: 3-19.
Jones, Gareth R. & Hill, Charles, W. L. (2010). Theory of Strategic Management (9th ed.). Singapore: Cengage Learning.
61
Sources/References (cont’d)
Mathiasen, David G. (1999). “The new public management and its critics”. International Public Management Journal, 2(1):
90-111.
Moore, Mark (1995). Creating public value: Strategic management in the public sector. Boston: Harvard University.
Osborne, D. and Gaebler, T. (1992). Reinventing Government. New York, NY: Penguin Press.
Poister, T.H. & Streib, G.D. (1999). “Strategic management in the public sector: concepts, models, and processes”. Public
Productivity & Management Review, 22(3): 308-325.
Porter, M. E. (1980). Competitive Strategy: Techniques for Analyzing Industries and Competitors. New York: Free Press
Rothaermel, Frank T. (2013). Strategic Management: Concepts. New York: McGraw-Hill.
Thompson, Arthur A., Peteraf, Margaret A., Gamble, John E., & Strickland, A.J. (2016). Crafting and Executing Strategy:
Concepts and Cases. (20th ed.). New York: McGraw-Hill.
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Sources/References (cont’d)
Wheelen, T., Hunger, J., Hoffman, A. & Bamford, C. (2018). Strategic Management and Business Policy: Globalization,
Innovation and Sustainability. (15th ed.). New York: Pearson.
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GMGA3073 / STRATEGIC PUBLIC MANAGEMENT

Business Strategy vs. Military Strategy

FOUNDATION OF STRATEGIC MANAGEMENT

FOUNDATION OF STRATEGIC MANAGEMENT

DEFINING STRATEGIC MANAGEMENT

DEFINING STRATEGIC MANAGEMENT (cont’d)

Vision Statement (cont’d)

Mission Statement (cont’d)

THE DEVELOPMENT OF STRATEGIC

THE DEVELOPMENT OF STRATEGIC

THE DEVELOPMENT OF STRATEGIC

THE DEVELOPMENT OF STRATEGIC

THE DEVELOPMENT OF STRATEGIC

THE DEVELOPMENT OF STRATEGIC

THE DEVELOPMENT OF STRATEGIC

THE DEVELOPMENT OF STRATEGIC

THE DEVELOPMENT OF STRATEGIC

STRATEGIC MANAGEMENT PROCESS

STRATEGIC MANAGEMENT PROCESS (cont’d)

FEEDBACK / CORRECTIVE ACTION

STRATEGIC MANAGEMENT PROCESS (cont’d)

STRATEGIC MANAGEMENT PROCESS (cont’d)

STRATEGIC MANAGEMENT PROCESS (cont’d)

Wheelen, Hunger, Hoffman & Bamford (2018)

David & David (2017)*

Gamble, Thompson, & Peteraf (2019)

Hitt, Ireland & Hoskisson (2017)*

• Corporate-Level Strategy • Corporate Governance

Copyright: Dzulhilmi Ahmad Fawzi 2021

Dess, McNamara, Eisner & Lee (2019)*

ANALYSING THE ANALYSING THE STRATEGIC CONTROL

Jones & Hill (2010)*

Internal Analysis: Designing

Poister & Streib (1999)

Customer/Constituent Interfaces Programme & Project Management

Labour Relations Service Delivery System

Organisational Culture Intergovernmental Relations

Human Resource Development Administrative Processes

Performance Management Organisational Structure

Internal Communications Performance Measurement

NEW PUBLIC MANAGEMENT

HISTORY OF NPM (cont’d)

CHARACTERISTICS OF NPM (cont’d)

CHARACTERISTICS OF NPM (cont’d)

ADOPTION OF BUSINESS SECTOR

Need to be efficient and competitive

• Cost efficiency & effectiveness

Concepts and Theories in Public Management

• Solution in the 80s: “New Public Management”

Characteristics of the Public Sector in

Characteristics of the Public Sector in

Characteristics of the Public Sector in

Characteristics of the Public Sector in

The Strategic Triangle

The Strategic Triangle (cont’d)

Key person: Head of Department

Key person: Middle Managers Key person: Staff

(Managing outward) (Managing downward)