ABSTRACT
Public services organizations operate in many, and remarkably diverse, ‘houses’. Shaped by the still nowadays very visible frontiers of the ‘old’ nation states or by less visible borders drawn by history, geography, demography, affluence, culture, language, and religion, diverse ‘contexts’ host and provide the frame in which public organizations act. The cultural, societal, politico-institutional and administrative ‘context’ in which public services organizations operate is a remarkably significant feature – indeed, certain authors argue that context, far from being an ‘inert’ backdrop against which to situate action, animates action, making things ‘thinkable [.], possible, relevant, desirable and necessary’ (Clarke, 2013, p. 24). Yet very little is said in the literature about how context affects strategy in public services organizations; indeed, many texts on strategic management in the public sector appear to be very thin in their treatment of context, if not outright ‘context-free’, as if managing strategically one public organization in one political, administrative, cultural, geographic, historical context (e.g. a school in the London area in the 1980s) were the same as managing it in another one (e.g. a school in the Rio de Janeiro area in the 2010s). Sometimes and specifically, it is argued that there is long-term global convergence on NPM reforms as a master narrative. The convergence argument comes in less and more sophisticated versions. The less
sophisticated (and in our view highly unconvincing) argument suggests that NPM reforms are the ‘one best way’ and that all countries will naturally converge on them. The more sophisticated and academic argument, however, comes from an institutionalist perspective. It examines patterns in the diffusion of management knowledge internationally and suggests that there are powerful ‘knowledge carriers’ at work, who may be effective in exporting NPM reforms globally. The observation is made that private sector-based general management knowledge –
which often underpins NPM reforms – has grown explosively over the last thirty years (Thrift, 2005), and it is now diffusing strongly internationally out from its base in the USA to other countries and also from private firms into public services and not-for-profit settings. This ‘cultural circuit of capitalism’ (Engwall, 2010; Jung and Keiser, 2010; Thrift, 2005) produces a linked constellation of: MBAs, major business school faculty, management gurus, consulting firms, business media, journals and presses, inspirational conferences and ‘blockbusting’ texts. Engwall (2010, p. 372) writes of the symbiosis of business school academic writing and consulting. Thrift (2005, p. 85) suggests this circuit has ‘autopoietic’ status, given powerful interlocking institutions, self-referential insulation and an ability to acquire ever more resources. Theoretically, Sahlin-Andersson and
Engwall (2002a, 2002b) explore how general management knowledge expands both geographically and inter-sectorally into the public sector (so NPM reforms may be spread by global diffusion agents such as the Organisation for Economic Co-operation and Development, management consulting firms or authors in leading Business Schools). NPM reforms may indeed be imposed by global donors as conditions associated with structural adjustment packages in countries in the developing world seen as likely to lead to transparency and good governance. The ‘comparative argument’ in public management counters that such a convergence
conception (even in its more sophisticated formulation) is badly flawed. The comparative argument, to make a long story short, is that ‘context does matter’ in the functioning, performance, continuity and change of public services organizations (Pollitt, 2013; Pollitt and Bouckaert, 2011). As we have remarked before, the process school of strategy also accords an important role to context in shaping strategic process and outcomes. So does context matter also when the object of analysis is the strategy process? Our argument is that it does, and that the issue of how best to characterize and understand ‘context’ in strategically managing public organizations is extraordinarily important and requires careful examination. There is an obvious, yet not trivial, objection to this argument: it is that ‘context’ is simply
another word to mean ‘the environment’ in strategy analysis – in fact the most radical critique to the comparative argument can be summed up in the following question: does the notion of ‘context’ make at all sense when grappling with the issue of how best to understand strategic management, or is it the case that conceptually strategic management treats the same phenomenon through the very notion of environment (making it superfluous, perhaps even tautological, to introduce the notion of context)? According to such critique, what matters is the ‘immediate environment’ (policy sector, key stakeholders, authorizing environment, key funders, level of affluence of the territory, demography of the users of public services, and the like), which is the influencing factor on strategy (in different ways according to the school of thought employed as reference); the ‘broader context’ – the critique goes on – is simply the backdrop from which the specific environmental circumstances that matter for the specific strategy process are drawn. Whilst we promptly recognize that the terms ‘context’ and ‘environment’ may in many
respects be interchangeable, our argument is that to the extent that the terminological issue is settled by referring to ‘environment’ as the more ‘immediate’ context (here-and-now) and context is adopted to refer to ‘the broader’ context (‘context denotes an object of undetermined extension’, as aptly noticed by Rugge, 2013), then context so defined does matter. It matters because any understanding of organizational behaviour (or any other effect that a social scientific research work aims to understand, for that matter) can never get rid of ‘the broader fabric’ (the word ‘context’ derives from the Latin contextere, ‘to weave together’) in which action takes place – indeed, at least under certain epistemological assumptions, context enables action, and human agency always takes place ‘contextualized’, weaved in a broader fabric. More specifically, context affects what we label ‘the strategic space’ of a public services
organization, constituted by:
(i) the autonomy that a public services organization enjoys (a precondition for strategy to form, the alternative being the absence of any strategy for the organization, perhaps partly filled by mere tactical behaviours, individual maximizing behaviours, or bureaucratic politics taking place);
(ii) the political-societal expectations towards a public services organization (what is expected of a public service organization strategy, as a key legitimating dimension); and
(iii) the obligations and accountability bases under which a public services organization operates (what public managers as ‘strategists’ are accountable for, to whom and how).
