ABSTRACT
The book is divided into four key sections, each of which is subdivided into separate chapters. Each chapter builds upon the last, and the nature of public sector strategy unfolds logically and consistently. Theory and practice are interspersed so that students can become familiar with how concepts are applied in the “real world” and gain an understanding that strategy in the public sector is not some abstract theory that is never used; rather, it has significant practical applications.
232 Section 1 introduces the public sector. It sets the scene for the book and provides the context for the rest of the book. It contains a single chapter that gives a sense of the enormity and complexity of the sector. We show that the “public sector” is hard to define and its precise role, scale, and function varies considerably across the globe. The public sector is, therefore, made up of a range of organisations with a wide remit of functions; but despite the diverse nature of these bodies, public sector organisations have a number of common characteristics and operate according to general rules and procedures. Fundamental to this is the notion of value creation. This is the underlying principle behind public sector strategy, and we return to this theme repeatedly throughout this book.
Section 2 provides much of the theoretical underpinning for the book and outlines key theoretical frameworks which are fundamental to students and managers’ understanding of strategy.
Chapter 2 explores the history of public sector management, and we show that there has been an increasing trend towards the introduction of private sector management techniques. We explore three lenses through which public sector strategy can be viewed – traditional public administration, new public management, and network governance – and we show that the move towards managerialism has impacted widely across the sector.
The second chapter is a large one. This chapter is where the reader will find Porter’s five forces model. This chapter is where the reader will find VRIO and the value chain. This chapter is, therefore, what many readers will expect to see in a strategy textbook – and with good reason. These are tried and tested models and theories with an extensive pedigree, and they have been developed by some of the biggest names in the field. Although they were developed with the private sector in mind, they contain much that is relevant for the public sector. It is, therefore, important that they are given the attention they deserve. However, because of the unique nature of the public sector and its focus on value creation, it is necessary to modify and adapt some of these approaches. Building on the concept of “shared value” and shareholder and stakeholder perspectives on value, we discuss how value creation within the public sector requires a clear understanding of how value is perceived and captured for different stakeholders. Finally, drawing on earlier discussions and building on key theories of value creation within the field of strategy, we review and discuss the important public value frameworks that take into account the public and the business requirements that many government organisations experience.
Section 3 offers something different and is something that most strategy textbooks completely overlook. In this section, we explore how strategy is developed and how managers create and refine strategy for their organisations.
The first two chapters begin to consider how people are not as logical and independent as they might think they are. The first chapter demonstrates that, whatever we like to think of our own impartiality and ability to avoid being influenced, we are all affected by intrinsic and extrinsic factors. These can skew our thought processes and can impair the quality of the strategic decisions we make. This chapter should, therefore, have proved to be helpful in allowing readers to become more aware of what they do and why they do it. The second chapter builds on this by exploring how neo-institutional theory underpins much of strategic thinking and strategy development in the public sector, and in this chapter we lay bare how unconscious assumptions can arise, and we explore how these can impact the strategic decisions that management makes.
233The next two chapters use psychology theory to get inside the minds of strategists to understand how people make strategic decisions in the real world. In the first of these, we get to the root of what a “strategic decision” actually is, and we offer a theoretical framework for understanding these types of decision. Normative decision-making uses logical and rational approaches to undertake a series of steps to consider and evaluate the various options that present themselves and, in doing so, produces a final decision that is underpinned by robust analysis. However, behavioural decision-making uses experience and gut instinct to cut through the mass of data that managers are often confronted with, and the resulting decisions are fast but may be skewed by bias or other factors. We demonstrate that, even though we think we are using a normative approach (five forces, value chain, VRIO, etc), in practice strategy is often based on a series of non-rational steps. The final chapter in this section builds upon the first three chapters. It again takes a psychology-based approach to examine the use of cognitive heuristics when developing strategy. Cognitive heuristics are shortcuts, or rules of thumb, that are inherent within us all, and they can be used to make decisions. We show, with worked examples, that although public sector managers think they are being logical, in fact, the strategic decisions they make are guided as much by instinct and intuition as they are by facts and figures.
Section 4 is again something that most strategy textbooks completely overlook. In this section, we explore the practice of strategy. We build upon the earlier parts of the book – especially Section 2 – and we apply the theoretical underpinnings in a range of natural situations.
In the first chapter, we argue that some traditional theories are somewhat mechanistic: if you plug in some facts and figures into a model, then a good solution will emerge. Strategy As practice challenges this idea. Strategy is a social practice which pays attention to how strategy practitioners act and interact. We introduce the idea of causal cognitive mapping to break down strategists’ thinking and lay bare the thought processes behind these. We argue that strategy as practice moves strategy away from being the preserve of the senior manager and incorporates the wider range of actors and influencers.
The second chapter builds on these ideas to explore a practical example. We use our own empirical research to explore an application of the causal cognitive mapping process detailed in the previous chapter. This leads into a discussion of how a strategy workshop can be developed. This will be particularly useful for prospective managers and those who train them. Borne from our own experiences, we suggest ways in which a workshop, or a series of workshops, might be run. We explore ways in which facilitators can gather ideas and harness thoughts and then work with the participants to refine and develop these further into a plan of action.
The next chapter is a practical guide for running a strategy workshop. Again, drawn from our own experiences, we offer a worked example of the previous chapter’s ideas. The process shown in this chapter is a simple and straightforward method for eliciting strategy that can work at any level within the organisation, from an organisational team or department through to higher corporate levels.
The final chapter in this section builds upon the previous one. In that chapter, we show how workshops might be conducted, but in this chapter we provide worked examples to show what can be achieved in these workshops. This chapter examines three public sector strategy case studies and draws insights and guidance on the type of barriers, thinking, and approaches encountered when exploring strategy. The chapter explores three separate 234organisations: a profession within the UK National Health Service, a department within local government, and a new form of school.
