Week 3 – Assignment: Critique the Application of the Process

Hide Folder InformationInstructions

This week, you will prepare a presentation with a PowerPoint file. You will create your audio presentation by using an audio/video capturing tool located in NCUOne. To access the capture tool, follow the tutorial found in your Books and Resources for this Week.

Frame the presentation in terms of public organizations and an audience of public administration students. Explain the five stages of the strategic management process (goal-setting, analysis, strategy formation, strategy implementation, and strategy monitoring). Be sure to also include the following:

  • Analyze each stage and the importance of each in the strategic management process.
  • Identify and explain the behaviors that are usually associated with each stage. Provide examples to support your findings.
  • Critique the application of each stage, including any challenges your audience may encounter once in the field.
  • Recommend opportunities to strengthen and develop operations using the process.

Incorporate appropriate animations, transitions, and graphics as well as speaker notes for each slide. The speaker notes may be comprised of brief paragraphs or bulleted lists and should cite material appropriately.

Support your presentation with at least five scholarly resources. In addition to these specified resources, other appropriate scholarly resources may be included.

Length: 12-15 slides (with a separate reference slide)

Notes Length: 200-350 words for each slide

Be sure to include citations for quotations and paraphrases with references in APA format and style where appropriate. Save the file as PPT with the correct course code information.

Week 3 – Assignment: Critique the Application of the Process

Hide Folder Information

Instructions

This week, you will prepare a presentation with a PowerPoint file. You will create your audio presentation by using an audio/video capturing tool located in NCUOne. To access the capture tool, follow the tutorial found in your Books and Resources for this Week.

Frame the presentation in terms of public organizations and an audience of public administration students. Explain the five stages of the strategic management process (goal-setting, analysis, strategy formation, strategy implementation, and strategy monitoring). Be sure to also include the following:

Analyze each stage and the importance of each in the strategic management process.

Identify and explain the behaviors that are usually associated with each stage. Provide examples to support your findings.

Critique the application of each stage, including any challenges your audience may encounter once in the field.

Recommend opportunities to strengthen and develop operations using the process.

Incorporate appropriate animations, transitions, and graphics as well as speaker notes for each slide. The speaker notes may be comprised of brief paragraphs or bulleted lists and should cite material appropriately.

Support your presentation with at least five scholarly resources. In addition to these specified resources, other appropriate scholarly resources may be included.

Length: 12-15 slides (with a separate reference slide)

Notes Length: 200-350 words for each slide

Be sure to include citations for quotations and paraphrases with references in APA format and style where appropriate. Save the file as PPT with the correct course code

Bredmar, K. (2015). What about municipal strategic management and performance measurement. Journal of Public Administration, Finance & Law

Creating videos in Kaltura CaptureSpace

Elbanna, S., Andrews, R., & Pollanen, R. (2016). Strategic planning and implementation success in public service organizations: Evidence from

Mazouz, B., & Rousseau, A. (2016). Strategic management in public administrations: A results-based approach to strategic public management

Pollanen, R., Abdel-Maksoud, A., Elbanna, S., & Mahama, H. (2017). Relationships between strategic performance measures, strategic decision-making

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https://ncuone.ncu.edu/d2l/le/content/168029/printsyllabus/PrintSyllabus 1/3

Week 3

PUB-7021 v1: Strategic Management in the Public Sector (…

Strategic Management Process (Part 1)

The five stages of the strategic management process are goal-setting, analysis, strategy

formation, strategy implementation, and strategy monitoring.

Launch in a separate window

Be sure to review this week’s resources carefully. You are expected to apply
the information from these resources when you prepare your assignments.

References:

Internal Revenue Service. (2018). IRS strategic plan. Internal Revenue Service.

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Books and Resources for this Week

Bredmar, K. (2015). What about

municipal strategic management and

performance measurement. Journal of

Public Administration, Finance & Law…
Link

Creating videos in Kaltura

CaptureSpace
Link

Elbanna, S., Andrews, R., & Pollanen, R.

(2016). Strategic planning and

implementation success in public

service organizations: Evidence from…
Link

Mazouz, B., & Rousseau, A. (2016).

Strategic management in public

administrations: A results-based

approach to strategic public

management…
Link

Pollanen, R., Abdel-Maksoud, A.,

Elbanna, S., & Mahama, H. (2017).

Relationships between strategic

performance measures, strategic

decision-making…
Link

83.33 % 5 of 6 topics complete

1/18/22, 11:40 AM PUB-7021 v1: Strategic Management in the Public Sector (3279240621) – PUB-7021 v1: Strategic Management in the Public Se…

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Week 3 – Assignment: Critique the Application of the

Process
Assignment

Due January 23 at 11:59 PM

This week, you will prepare a presentation with a PowerPoint file. You will create your

audio presentation by using an audio/video capturing tool located in NCUOne. To access

the capture tool, follow the tutorial found in your Books and Resources for this Week.

Frame the presentation in terms of public organizations and an audience of public

administration students. Explain the five stages of the strategic management process

(goal-setting, analysis, strategy formation, strategy implementation, and strategy

monitoring). Be sure to also include the following:

Analyze each stage and the importance of each in the strategic management

process.

Identify and explain the behaviors that are usually associated with each stage.

Provide examples to support your findings.

Critique the application of each stage, including any challenges your audience may

encounter once in the field.

Recommend opportunities to strengthen and develop operations using the process.

Incorporate appropriate animations, transitions, and graphics as well as speaker notes for

each slide. The speaker notes may be comprised of brief paragraphs or bulleted lists and

should cite material appropriately.

Support your presentation with at least five scholarly resources. In addition to these

specified resources, other appropriate scholarly resources may be included.

Length: 12-15 slides (with a separate reference slide)

Notes Length: 200-350 words for each slide

Be sure to include citations for quotations and paraphrases with references in APA format

and style where appropriate. Save the file as PPT with the correct course code

information.

Upload your document, and then click the Submit to Dropbox button.

International Review of

Administrative Sciences

2016, Vol. 82(3) 411–417

! The Author(s) 2016

Reprints and permissions:

sagepub.co.uk/journalsPermissions.nav

DOI: 10.1177/0020852316655522

ras.sagepub.com

International
Review of
Administrative
SciencesArticle

Strategic management in public
administrations: a results-based
approach to strategic public
management

Bachir Mazouz
ENAP-University of Quebec, Canada

Anne Rousseau
Université catholique de Louvain, Belgium

With the collaboration of
Pierre-André Hudon
ENAP-University of Quebec, Canada

Abstract

As a field of knowledge, strategy has been taught and practised for over half a century.

However, there is still a distinct lack of consensus surrounding the effectiveness

of strategy in public administrations. This thematic issue of the International Review of

Administrative Sciences is devoted to advanced research which claims that in the age of

results-based management, public leaders must opt for a process-based approach to

strategy. In doing so, the emphasis is put on the complexity of strategic processes that

make it possible to support and maintain the institutions that serve the common good

and the general interest and that deliver public services using the results of public action.

From a process-based point of view, the strategy of public administration then assumes

that analysts and public leaders need to be more aware of the specificities of state

institutions. In particular, a thorough knowledge of the ways in which public officials

interact with the fundamental values, structures, regulatory frameworks and administrative

tools of public administrations is necessary.

Keywords

strategic management, public management, results-based management, governance,

administrative reforms

Corresponding author:

Bachir Mazouz, Ecole national d’administration publique, University of Quebec, Quebec, QC G1K 9H7,

Canada.

Email: [email protected]

Introduction

Long devised and implemented to deal with the ‘industrial dynamic’ marked by
‘competitive behaviour’ (Porter, 1982), strategy is now considered a field that makes
it possible for the leaders of public and private organisations to ‘take options on the
future’ (Williamson, 1999). However, despite increasingly sophisticated training
programmes and highly advanced academic research on strategic contents, pro-
cesses, options and actions, the effectiveness of public strategy is still a source of
major controversies. At best, the strategic thinking and tools do not seem to have
been sufficiently adapted to the context of public organisations (McHugh, 1997). At
worst, the strategic exercise seems to be incompatible with the non-competitive
environment in which public administrations traditionally operate.

Despite the scepticism of researchers and practitioners, many public adminis-
trations of Organisation for Economic Co-operation and Development (OECD)
countries are now subject to legislation and regulations that have turned results-
based management and strategic planning into tools that make it possible to intel-
ligently combine the purposes, objectives, means and resources required to steer
states’ administrations towards tangible results (Mazouz, 2014).

Given both the specificities (Nutt and Backoff, 1993) and the difficulties of
measuring results in the public sector (Parenteau, 1979, 1992), as well as the lack
of enthusiasm generated by the first two generations of administrative reforms
(Poister and Streib, 2005; Tilli, 2007), practitioners and theorists of public action
and government organisations have, until now, largely focused on the development
and implementation of choices that uphold the values, purposes, objectives and
structures of public action (Bryson et al., 2010; Denis et al., 2008; Drumaux and
Goethals, 2007; Hutchinson, 2001; Johanson, 2009; Kinder, 2012; Levine, 1985;
Mintzberg and Jorgensen, 1987; Paquin, 1992; Ring and Perry, 1985).

From a so-called ‘synoptic’ approach, advocating the rationality of decision-
making principles, to an ‘incremental’ approach, which considers the development
of strategies as ‘the culmination of a process triggering changes through continuous
adaptation’, many researchers have devoted their efforts to ‘high quality [research]
documenting the conditions for the adaptation of strategic tools to the realities of
government departments and agencies’ (Bernier et al., 2013, 895–908).
Undoubtedly, this renewed interest in strategic processes (Allison, 1983; Andrews
et al., 2009; Backoff and Nutt, 1992; Boyne, 2002; Bruijn, 2007; Bryson and
Roering, 1987; Rainey et al., 1976; Ring and Perry, 1985) can be explained
partly by the growing institutionalisation of formal approaches and frameworks
of objective-based management (Charih, 2000; Levine, 1985) and, more recently, of
results-based management (Emery, 2005; Mazouz, 2014). This is the case, for
instance, of the GPRA in the US, of the LAP in Quebec and the Loi organique
sur les lois de finances (LOLF) in France.

From the process-based perspective proposed by Pettigrew (1977, 1997), aca-
demic research spawned by controversies concerning the second generation of
administrative reforms and hinged around a systemic perspective of the concept
of results (Poister, 2005; Poister and Streib, 2005) seems to concentrate more on

412 International Review of Administrative Sciences 82(3)

‘ways of thinking’ and ‘ways of doing’ to explain the sustainability of public organ-
isations. For the proponents of this strategic perspective, the dynamics of services
supply/delivery structures to citizens is determined by the ways in which the
statutory mission–organisational objectives–means–resources–outputs value chain
is configured (Denis et al., 2007; Hutchinson, 2001; Johanson, 2009; McHugh,
1997).

Thus, seen in terms of processes, the strategic exercise is supposed to help public
managers to counteract the binding effects of the normative, legal and administra-
tive mechanisms that regulate the activities of public organisations. Various types
of strategic exercises are explored and concretely illustrated in the articles presented
in this special issue: they were selected to enable both public management practi-
tioners and specialists to reflect upon the challenges and issues related to strategic
management in the public sector.

Through an analysis of the territorial innovation systems of three French
regions, the article by F. Pallez and D. Fixari shows how public action coordin-
ation takes place in the medium and long term. Various ways of establishing
strategic convergence are explored: the merger of structures, the specialisation of
entities and the formalisation of coordination activities. Ultimately, in complex
administrative systems that are increasingly results-oriented, strategy must be
developed and implemented by focusing on coordination processes based on a
logic of progressive evolution, guided by the intentions of multiple stakeholders.

The article by C. Favoreu, D. Carassus and C. Maurel concerns the possible
theoretical approaches to public policy formulation processes and, in particular, the
rational, political and collaborative logics behind the strategy. Presented simultan-
eously as the result of (1) a teleological process focused on decision-making and the
quest for results, (2) a power game designed to favour certain issues over others in
the public sphere and (3) a broader and more complex democratic phenomenon,
strategy consists of the outcome of subtle interactions between numerous
stakeholders. The case study of the French fire and rescue services (SDIS) clearly
illustrates how strategy formulation processes involve actors with their own
rationality and interests and how the coordination mechanisms are inherent to an
incremental development of strategy.

The analysis by M. Audette-Chapdelaine looks at the strategic process as a
sense-making exercise (drawing on K. Weick’s theory). By analysing the water
management policy of the City of Montreal, the author shows how the political–
administrative interface becomes a transmission mechanism for sense-making.
Common meanings are derived from the interaction between the political demands
(often unclear in the case at hand) and the professionalism of the technical experts
in the civil service. Strategy is therefore presented as the result of the ongoing and
contextualised reinterpretation, by the stakeholders, of their collective understanding
of public sector objectives.

Finally, the analysis proposed by G. Divay focuses on the integrated territorial
approach as a tool of strategic coherence. Studying various regional consultations
having taken place in Quebec and targeting poverty and social exclusion

Mazouz et al. 413

alleviation, the analysis raises several questions about how the consultation strate-
gies make it possible to generate coherent policies and strategies. The author empha-
sises that, as a strategic process, multi-stakeholder territorial consultation requires
thought patterns that are often seen as incompatible with ‘linear’ rational planning.
The article stresses that regional consultations can generate coherence in policy-
making, but also that they require a long-term investment by managers and an
investor mentality focusing on the process rather than on the purpose.

Like in most Western bureaucracies, the legal and functional requirements
imposed on public administrations transform the strategic processes into an exer-
cise of collective learning: while the tabling of a strategic plan is dictated by statu-
tory considerations with no apparent added value, it does not hold true for strategy
development and management. Indeed, the level of effort required by this statutory
demand may generate significant learning related to the reaching of strategic goals
and the acquisition of new skills (Maltais and Mazouz, 2004). In other words, it
raises the question of whether public policies result from the application of a
regulatory vision (sum of the powers exercised and defined by law) and/or from
an organisational and territorial vision (requiring a more sophisticated knowledge
of internal and external realities, prior to any strategic exercise). In both cases,
these learnings do not take place outside the strategic exercise itself (McHugh,
1997; Mintzberg and Jorgensen, 1987; Nutt and Backoff, 1993) and allow state
officials and employees to give meaning to their mandates (Fabbri and Gallais,
2010).

Understanding the complexity of public governance systems means that states
and their governments must abandon the widely held notion that the strategy of
public organisations must be limited to considering the administrative apparatus as
a ‘simple’ black box that implements public policies, or, on the other side of a
simplistic continuum, to considering the political level as a ‘simple’ environmental
constraint to be integrated into a strategic approach. A conceptual clarification is
urgently needed by the different public stakeholders at a time when the renewed
methods of governance are putting them very much in the spotlight. From the
moment we seek to integrate the complexity of public action, we must deal with
three distinct rationalities: political, administrative and managerial. In doing so, we
must develop an understanding of the specificities of public policy that incorpor-
ates the management of inputs (resources required), outputs (services provided)
and outcomes (public policy indicators). However, in this area, there is a wide-
spread tendency towards simplification.

A truly strategic management of the public sector in the medium and long term
goes beyond the mere administrative exercise. In other words, it is not enough to
comply with policy directives that aim at producing and publishing administrative
documents conveying public intentions and means. In the public sphere, the stra-
tegic exercise is determined by three powers: the power of choice, the power of law
and the power of ways and means (Mazouz, 2014). ‘The strategic latitude’, to use
the expression put forward by Yves Emery (in Mazouz, 2014), is defined by the
ability of public managers to integrate these three powers: the power of choice

414 International Review of Administrative Sciences 82(3)

wielded by politicians must assist public managers in deciding on the ways and
means to be used within the current laws and regulations (Facal and Mazouz,
2013). This is a novel conceptualisation of the new roles and responsibilities of
public officials with regards to public performance indicators (Mazouz et al., 2015a
and 2015b).

Evoking objectives-based (or results-based) management prompts public leaders
to think as much about strategy definition and the formulation of the strategies as
about strategic procedures and tools. In doing so, the use of the strategy must be
seen as a tool that forces a reflection regarding which new managerial skills are
needed, as well as ways to better involve stakeholders in organisational change
(Rossignol et al., 2014). Public organisations, now seen as ‘performance centres’,
are thus forced to redefine their organisational model and examine how organisa-
tional change will be implemented.

This special issue of the International Review of Administrative Sciences helps to
understand how strategic processes are influenced by public policy steering/moni-
toring/evaluation tools and managerial rationality. In the minds of the creators of
official management frameworks (such as the French LOLF, the Quebec LAP,
etc.), strategy is often interpreted by civil servants as being strictly limited to
‘objectives–programmes–evaluations of the results’. For some people, this consti-
tutes a qualitative leap, especially in a situation where budgets are regularly
renewed and spent but rarely evaluated. Strategy must be defined with respect to
the way public leaders understand issues and work towards the common good and
the bettering of public services.

Acknowledgements

Major points of the case developed for the needs of our introductory text have been drawn

from the Call for contributions to the International Symposium ‘Regards croisés sur la
transformation de la gestion et des organisations publiques’, held on 21–22 November
2013 at the Luxembourg Institute of Science and Technology.

Funding

This research was financially supported by the CRP Tudor, a public research center cur-

rently Luxembourg Institute of science and technology.

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Bachir Mazouz is a Full Professor at the Ecole national d’administration publique,
University of Quebec, Canada. He is chief editor of the journal Management inter-
national (Mi) and was the recipient of the Gutenberg Chair in 2009 at the École
Nationale d’Administration (ENA) in Strasbourg, France.

Anne Rousseau is a Professor at the Université catholique de Louvain, Belgium. She
also heads a research team into socio-technical innovation processes at the
Luxembourg Institute of Science and Technology.

Pierre-André Hudon is a post-doctoral researcher at the Ecole national d’adminis-
tration publique, University of Quebec, Canada. He is a lecturer and contributes to
the research on Public-Private Partnership (PPP).

Mazouz et al. 417

STRATEGIC
PLANNING AND
IMPLEMENTATION
SUCCESS IN PUBLIC
SERVICE
ORGANIZATIONS
Evidence from Canada

Said Elbanna , Rhys Andrews
and Raili Pollanen

Said Elbanna
Strategic Management, College of Businessand Economics
Qatar University
Doha
Qatar
E-mail: [email protected]

Rhys Andrews
Public Management, Cardiff Business School
Cardiff University
Cardiff
UK
E-mail: [email protected]

Raili Pollanen
Accounting, Sprott School of Business
Carleton University
Ottawa
Canada
E-mail: [email protected]

Abstract

In this article, we examine the role that for-
mal strategic planning plays in determining
the success of strategy implementation in a
set of more than 150 public service organi-
zations from Canada. We also analyse the
mediating effects of managerial involvement
in strategic planning and the moderating
effects of stakeholder uncertainty on the
planning-implementation relationship. A
structured online questionnaire was used to
collect the data. Our findings suggest that
formal strategic planning has a strong posi-
tive relationship with implementation, which,
though mediated by managerial involvement,
becomes even more salient in the face of
stakeholder uncertainty. Several implications
of these findings are discussed.

Key words
Strategic planning, strategy implementation,
implementation success, managerial involve-
ment, public service organizations: Canada

Public Management Review, 2016

Vol. 18, No. 7, 1017–1042, http://dx.doi.org/10.1080/14719037.2015.1051576

© 2015 Taylor & Francis

INTRODUCTION

Strategy implementation is ‘the realization of strategy and what the firm does’
(Håkonsson et al. 2012, 182). The successful implementation of strategic decisions is
widely thought to be critical to the achievement of organizational aims and objectives
(Elbanna, Thanos, and Colak 2014; Schweiger and Sandberg 1991). This applies as
much to public sector organizations as to those in the private sector. Only when the
plans of the top management team are executed properly and in full, it is possible to
attribute organizational outcomes to the decisions made by management and to feel
some confidence that public organizations are the masters of their own destiny (Elbanna
and Child 2007); at least within the limits posed by the democratically mandated
‘authorizing environment’, in which they operate (Moore 1995). Nevertheless, in spite
of the widespread recognition of the critical role that strategy implementation success
plays in determining organizational achievements amongst public management theorists
(Bryson 2010; Poister 2010), there remain few studies that actually examine the
antecedents of successful strategy implementation in public service organizations (for
reviews of the state-of-the-art, see Bryson, Berry, and Yang 2010; Poister, Pitts, and
Edwards 2010). In fact, the literature on strategy implementation generally remains
fragmented and dispersed throughout the general and specialized management litera-
tures, with little systematic investigation of any of the major themes relating to the
implementation success (Bossidy and Charan 2011; Elbanna, Thanos, and Colak 2014;
Noble 1999). In this article, we seek to cast light on a critical issue running through
scholarly debates about strategic management in the public sector and the implementa-
tion of key decisions: the role that formal strategic planning can play in determining
strategy implementation success.
Strategic planning is a set of concepts, procedures and tools that organizations use

when determining their overall strategic direction and the resources required to achieve
strategic objectives (Bryson 2011). Although aspects of strategic planning are common
to all types of organizations, the application of planning processes needs to be carefully
tailored to the public sector environment when applied by public service organizations
(Bryson 2011). In particular, public managers have to build-in the perspectives and the
needs of those stakeholders with whom they must cooperate and collaborate in order to
achieve organizational goals (Bryson, Crosby, and Bryson 2009). Not only is the formal
strategic planning undertaken by public service organizations an important indicator of
top management’s commitment to developing and implementing coherent and com-
prehensive organizational strategies (Boyne 2010), it is also a key means for promoting
inclusive public management in a democratic society (Bryson, Crosby, and Bryson
2009). The more time and effort that is devoted to analyzing the internal and external
environments, developing and evaluating strategic options, the more managers may feel
confident that the outcome of the process will be a positive one (Camillus 1975;
Capon, Farley, and Hulbert 1987). As such, the basic assumption underpinning the

1018 Public Management Review

practice of strategic planning is that it is rational to invest resources in formulating good
plans because this will vastly improve the prospects of implementation success
(Mintzberg 2000).
In spite of the popularity of the idea that planning matters for implementation, there

have been a few empirical studies of the connection between planning and implementa-
tion in public service organizations using primary and secondary data on those organiza-
tions (Bryson, Berry, and Yang 2010; Poister, Pitts, and Edwards 2010). Moreover,
little attention has been devoted to the boundary conditions of the relationship between
formal strategic planning and strategy implementation success. In particular, the active
participation of managers in strategic planning is typically regarded as an essential
process for making strategic decisions work (Elbanna, Thanos, and Colak 2014; Floyd
and Wooldridge 1994), and as such managerial involvement in planning is likely to
mediate the connection between strategy formulation and implementation success
(Collier, Fishwick, and Floyd 2004; Floyd and Wooldridge 1997).
At the same time, formal strategic planning could potentially enable public service

organizations to better manage the support from stakeholders that is needed to achieve
strategic objectives (Pfeffer and Salancik 1978). This is especially important in the
public sector since the context in which public organizations operate has a massive
influence on organizational behaviour and outcomes (see O’Toole and Meier 2015). In
particular, the ways in which public organizations respond to stakeholders has become
increasingly important as those organizations have to do more to collaborate and
cooperate with the diverse actors who have a stake in the process of strategy
implementation (and formulation) (Osborne 2006).
Does formal strategic planning improve the implementation of strategic plans in

public service organizations? Might the connection between planning and implementing
strategies be attributable to the active involvement of managers? Does strategic plan-
ning have an even bigger implementation pay-off under conditions of stakeholder
uncertainty? To answer these questions, we examine the relationship between strategic
planning and strategy implementation success, the mediating role of managerial invol-
vement and the moderating role of stakeholder uncertainty using data drawn from a
survey of senior public sector managers in Canada.
During the past two decades, strategic planning in Canadian governments has gained

importance in response to increasing public demands for accountability and transpar-
ency. For example, since the late 1990s, the federal government has required govern-
ment departments and agencies to produce annual reports on plans and priorities (RPP)
(Pollitt and Bouckaert 2004). The RPPs, which detail departmental priorities by
strategic outcome, programme, and expected results for a 3-year period, play an
important role in the federal government’s planning and resource management pro-
cesses, as well as provide a basis for ministerial accountability to Parliament by allowing
comparisons of the actual results published in annual performance reports against the
plans (Treasury Board Secretariat Canada 2014). To further improve the efficiency and

Elbanna et al.: Strategic planning and implementation success 1019

effectiveness of such administrative functions, the Priorities and Planning Sub-
Committee on Government Administration was created in 2012 (Office of Prime
Minister of Canada 2012). At the provincial level, although implementation can vary
significantly, all ten Canadian provinces also have priority-setting/strategic planning,
budgeting and performance reporting functions as key elements of their performance
management and accountability frameworks (Canadian Institute of Chartered
Accountants 2004). Hence, the increasing importance of strategic planning practices
across Canadian governments makes the Canadian public sector a highly relevant and
contemporary context to examine the strategy planning-implementation relationship.
This article begins by exploring theoretical perspectives on formal strategic planning

and strategy implementation success, developing hypotheses about the mediating effect
of managerial involvement and stakeholder uncertainty on the planning-implementation
relationship. The data and methods employed in the study are described and the results
of the statistical analyses are reported. This article is concluded by exploring the
theoretical and practical implications of the findings.

BACKGROUND AND HYPOTHESES

Strategy implementation is defined in the literature as ‘the communication, interpreta-
tion, adoption, and enactment of strategic plans’ (Noble 1999, 120). As such, there is
clearly a direct connection between the strategic planning process and the subsequent
implementation of the decisions emerging from that process. Nevertheless, that con-
nection cannot be taken for granted nor can it be regarded as something easily
cultivated or maintained in organizations that are attempting to change strategic
direction (Johnson 2000). Critically, whatever the challenges associated with the
development of effective planning processes, the implementation of strategic decisions
is regarded as considerably more difficult than their formulation, and is an area where
many organizations fail (Nutt 1999; Hrebiniak 2006). For organizational leaders, it is
therefore important to consider in what ways the link between strategy formulation and
implementation can be strengthened to ensure that strategic decisions are fully and
properly embedded within the activities of organizational members.

The role of formal strategic planning

A key feature of the conventional approach to strategic planning is that the formulation
and implementation of plans are sequential activities. Strategy is first deliberately
formulated and only then it is put into place. Nevertheless, while this may suggest
that strategic management is a sequential activity, each of the different stages of the
planning process are not typically separate in practice, and organizations invariably

1020 Public Management Review

evince emergent as well as deliberate or planned strategies concurrently. Control has
therefore been identified as central to the implementation process (Noble 1999), and is
something that can be achieved centrally through techniques such as action plans and
monitoring. According to the advocates of strategic planning in the public sector,
effective implementation through formal methods, such as business or project plans that
identify tasks with targets, is more likely when activities are clearly defined (Boyne
2010). All of which is to say that one way in which public service organizations can seek
to bridge the gap between formulation and implementation is to ensure that they
establish strong formal planning procedures.
A number of studies of private firms have found that formal strategic planning is

critical to successful implementation. For example, the use of action plans can help
implementers to translate strategy into a more short term and focused plan (e.g.
Hrebiniak and Joyce 1984; Pinto and Prescott 1990). In the public sector, several
studies associate formal strategic planning with improved organizational perfor-
mance more generally (e.g. Andersen 2008; Boyne and Gould-Williams 2003).
Nevertheless, there are some authors who suggest that excessive attention to the
planning process may make decision-making inflexible and thereby lead inexorably
to implementation failure as managers are unable to make incremental adaptations
to a plan that is seemingly set in stone (Hambrick and Cannella 1989; Mintzberg
2000). Instead, these author(s) emphasize the need for fluid and open processes of
planning and implementation to ensure that organizations can learn more effectively
and respond to changes in the environment when implementing strategic plans
(Montgomery 2008).
Although there is some evidence to suggest that less formal planning processes

can generate effective strategic decisions (see Parsa 1999), Miller’s study (1997) of
eleven decisions from private and public organizations finds that strategic planning
has a stronger positive influence on the success of implementation than a more ad
hoc approach in which decisions are made on an incremental basis as situations
arise; in other words, more formal procedures for dealing with eventualities in
advance lead to more successful implementation. In terms of organizational out-
comes in the public sector, Poister, Pasha, and Edwards (2013) find that conducting
strategic planning efforts within a larger framework of logical incremental decision-
making . . . has a positive effect on some dimensions of performance, at least within
the context of the public transit service industry. Nevertheless, other studies of the
effects of strategy process on public service performance suggest that an incremental
approach to decision-making is more likely to be unsuccessful (Andrews et al.
2009, 2011). Thus, on the balance of prior theory and the limited available
evidence, our first hypothesis is:

H1. There will be a positive relationship between formal strategic planning and strategy
implementation success.

Elbanna et al.: Strategic planning and implementation success 1021

The mediating role of managerial involvement

The likelihood of implementation success may well be increased by the adoption of
formal planning, but it is still conceivable that those organizations that place undue
emphasis on strategic planning run the risk of ‘paralysis by analysis’ (Lenz and Lyles
1985). An obsessive concern with the details of the strategic plan may lead top
management to overlook the need for context-sensitive implementation within the
organization, especially the buy-in of those internal stakeholders responsible for imple-
menting decisions – typically middle managers. To address this potential pitfall,
strategic management theorists draw attention to the role that managerial involvement
in the strategy formulation process can play in improving the quality of strategy
implementation (Floyd and Wooldridge 1994).
The effect of formal strategic planning may be enhanced if all managers are active

participants in the process of developing strategies.1 In theory, managerial participation in
strategy formulation demonstrates the commitment of top management to the plans that
are being developed (Camillus 1975), and increases the prospects that there is a genuine
sense of ownership and commitment to strategic plans amongst those responsible for
implementing them (Rajagopalan and Rasheed 1995). At the same time, implementation
quality may be improved because managerial involvement facilitates the continual adapta-
tion of strategic plans as they are being implemented ensuring that they are ‘fit for
purpose’. Several studies of private sector organizations suggest that strategic planning
can be enhanced by encouraging managerial participation in the process. Elbanna, Thanos,
and Colak (2014), Nutt (1999) and Wooldridge and Floyd (1990), in particular, find that
such participation results in improved implementation. And, there is good prima facie
reason for thinking that such participation will also matter in the public sector, where
middle managers, especially, play an increasingly important role in strategy implementa-
tion (Gatenby et al., forthcoming; Ridder, Bruns, and Spier 2006).
Importantly, it is actually conceivable that the benefits of strategic planning for

strategy implementation are attributable to the managerial involvement that thorough-
going planning processes presuppose. That is, it is not simply the presence of formal
planning that matters for implementation success, but the managerial involvement that
accompanies effective strategy formulation. Our second hypothesis is therefore:

H2. Managerial involvement will mediate the relationship between formal strategic planning
and strategy implementation success.

The moderating role of stakeholder uncertainty

Resource dependence theory suggests that organizations must continually seek to acquire
control over resources held by other actors and organizations within their environment in
order to minimize their dependence on those entities (Pfeffer and Salancik 1978). By

1022 Public Management Review

minimizing their resource dependence, organizations can attain greater control over their
own destiny and so build an ever stronger power base making them immune from external
threats. Only by securing as high a degree of autonomy as possible from the vicissitudes of
its stakeholders can any organization effectively execute its plans (Pfeffer 1987). For public
organizations, the pursuit of organizational autonomy is particularly challenging given the
large number of economic and political external forces to which they are subject (Vining
2011), and the diversity of stakeholders to whom they are accountable (Rainey 2009). To
lessen dependence and gain more autonomy, public organizations may adopt multiple
short-term tactics ranging from internal restructuring to the cooptation of external board
members (Pfeffer and Salancik 1978). In the long run though, they are likely to need to
demonstrate a capacity for fulfilling their strategic mission (Goodsell 2011) and a reputa-
tion for high levels of reliability and effectiveness (Carpenter 2001) if they are to shape, as
well as be shaped by, the demands of powerful stakeholders, especially elected officials
whose requirements may sometimes be less predictable than those of other actors (Furlong
1998). Hence, it seems likely that public service organizations will need to develop a
systematic approach to integrating stakeholder management within their strategic planning
processes and that the impact of this may vary depending on the degree of uncertainty
around stakeholder support.
Since there is a need to proactively manage environmental dependencies, the

strength of formal strategic planning may well matter more for strategy implementation
success when there is a higher degree of uncertainty around sources of stakeholder
support. Rigorous analysis of stakeholder needs and demands may therefore be espe-
cially important when those needs and demands are difficult to predict. Although
supporters of less formal strategy formulation processes suggest that a flexible approach
is needed in the face of environmental uncertainty (Mintzberg 1979), it is quite
conceivable that more rather than less planning will be helpful for public service
organizations dealing with uncertain circumstances. As Armstrong (1982) puts it, ‘if
it is clear what will happen and when, the need for planning seems small’ (202). Rather
than attempting to respond to stakeholder uncertainty by making decisions on an ad hoc
basis, increasing formal strategic planning processes may represent a better means for
exerting managerial control over a challenging, operating environment (see Eisenhardt
1989). In fact, prior research suggests that perceived environmental uncertainty is often
associated with the increased scanning of the organizational environment that is one of
the key components of strategic planning (Daft, Sormunen, and Parks 1988; Ebrahimi
2000). As a result, our third hypothesis is:

H3. Stakeholder uncertainty will strengthen the relationship between formal strategic planning
and strategy implementation success.

The model informing our investigation is depicted in Figure 1. It posits that formal
strategic planning has a direct influence on strategy implementation success, and that
this relationship is mediated by managerial involvement and moderated by stakeholder

Elbanna et al.: Strategic planning and implementation success 1023

uncertainty. The variables included in the model have been of interest to many
researchers which increases the scope for comparing the findings of our study with
those of previous investigations. The study model also incorporates four control
variables, which are associated with three types of contexts, namely, resource slack,
organization size (organization), environmental favourability (environment) and strate-
gic planning expertise (managerial capabilities).

METHOD

Data collection and sample

The context of our study is the Canadian public sector. Canada has a three-tier
government structure, consisting of federal, provincial and municipal levels. The
three levels account for approximately 35, 45 and 20 per cent of the total governmental
expenditures, respectively, and all government expenditures are approximately 40 per
cent of the gross domestic product of Canada (Rosen et al. 2008). At the federal level,
the Government of Canada consists of departments and more autonomous agencies,
whose authorities are stipulated in their respective federal statutes. Canada follows the
principle of federalism, whereby political power is divided in the Constitution Act
between the federal government and the ten provincial governments (Joseph 2001),
with each level being responsible for relatively distinct services. Although the provincial
governments receive transfer payments from the federal government to finance some of
their services, they also have the authority to levy their own provincial income taxes
and sales taxes on goods and services.

Mediating effect

Formal strategic
planning

(H1)

Control variables
Resource slack; organization size; environmental favourability; strategic planning expertise

Stakeholders uncertainty
(H3)

Strategy implementation
success

Managerial involvement
(H2)

Moderating effect

Direct effect

Figure 1: Research model

1024 Public Management Review

Historically, there has been a sharp increase in provincial government expenditures
relative to the total government expenditures (Rosen et al. 2008), indicating an
increasing decentralization trend. Canadian municipalities are under the provincial
jurisdiction, with their authorities granted by the provincial laws of each province
(Joseph 2001). The majority of funding for municipalities comes from local property
taxes, with very little funding from the provinces, often resulting in financial pressures
(Noe and Ross 2004). Given the significant size of the Canadian public sector, and
increased public pressures for accountability and transparency (Pollitt and Bouckaert
2004), effective strategy formulation and implementation are important at all three
levels.
An online survey of senior public administrators in Canadian public organizations was

conducted during May–June 2012. Survey participants were identified from the
‘Governments of Canada’ and ‘Canadian Almanac and Directory’ online databases
accessible through the ‘Canada’s Information Resource Centre’ data portal. In some
cases, participant information was confirmed or supplemented with information from
other sources, for example, organizational websites. Targeted participants were senior
public officials with responsibilities for strategic planning and priority setting in
organizations, in which English was identified as the primary language, and for whom
e-mail addresses were available.
A structured online questionnaire was used to collect data from all three major levels

of Canadian Governments. It was organized into four parts: strategic planning and
priority setting, environment and resources, organizational and participant profile and
space for optional comments. The online survey was administered through an indepen-
dent Canadian web survey host provider. Hyperlinks to the survey and the detailed
cover letter were inserted into individually addressed invitation messages sent through
the account established on the survey host provider’s website. In designing the online
survey, close attention was paid to the easiness of navigation through the survey,
readability of the questions and pleasing professional appearance. For example, the
survey design allowed respondents to answer questions in any order, and save and
modify partially completed responses. The respondents were assured anonymity and
confidentiality of their responses, and they could unsubscribe from follow-up mailings.
The research protocol was approved by the research ethics committee of the Canadian
University which facilitated in conducting the survey.
A total of 1,548 invitations to potential respondents (out of 1,739 names on the initial

mailing list) were successfully delivered via e-mail, after disregarding a few duplicate
names detected by the survey host software and undeliverable e-mails. The initial mail-out
was followed by two rounds of reminder e-mails using the same procedures. A total of 222
individuals answered at least some questions and 191 substantially completed the entire
survey by the closing date for a usable response rate of 12 per cent. In the case of missing
responses to a few items on a few questionnaires, the analysis is based on the number of
completed responses. The number of participating organizations is 180 or 16 per cent of

Elbanna et al.: Strategic planning and implementation success 1025

the total of 1,133 organizations contacted. Multiple respondents were sought from
selected organizations to allow the evaluation of inter-rater reliability. The sample included
two respondents from each of eleven organizations. A profile of participating organizations
is presented in Table 1.
The survey participants represent organizations in provincial, municipal and federal

government sectors and, in smaller numbers, in education, health care and other public
agencies. The number of responses received from each sector is consistent with the

Table 1: Profile of participating organizations

Characteristics Number Percentage*

(a) Sector
1. Federal government 13 6.8
2. Provincial government 83 43.5
3. Local government 58 30.4
4. Government-controlled agency or board 11 5.8
5. Education 8 4.2
6. Health care 5 2.6
7. Others 13 6.8

Total 191 100.0
(b) Size (number of employees)

1. Less than 500 110 58.2
2. 500–999 31 16.4
3. 1,000–4,999 30 15.9
4. 5,000 or greater 18 9.5

Total 189 100.0
(c) Age of organization

1. Less than 10 years 27 14.2
2. 11–20 years 30 15.8
3. 21–30 years 13 6.8
4. 31–40 years 19 10.0
5. Greater than 40 years 101 53.2

Total 190 100.0
(d) Establishment of strategic planning processes

1. Less than 5 years ago 34 18.1
2. 6–10 years ago 45 24.0
3. 11–15 years ago 41 21.8
4. 16–20 years ago 22 11.7
5. Over 20 years ago 46 24.5

Total 188 100.0

Note: *The percentages may not add to 100 per cent due to rounding off.

1026 Public Management Review

number of mail-outs to each sector. In addition, the proportions of the organizations in
the study are roughly representative of the sizes of the three main sectors (federal,
provincial and municipal) at the time of the study. This suggests that the study results
could be generalizable to the Canadian public sector. The number of full-time employ-
ees in the organizations ranges from 10 to 35,000 with a mean of 1,696 and a median of
300 full-time employees. Close to 60 per cent of the organizations are quite small with
fewer than 500 employees. Approximately, one-half of the organizations were estab-
lished more than 40 years ago, and one-quarter of them had established strategic
planning processes more than 20 years ago. The respondents held senior positions, for
example, associate deputy minister, president, chief administrative officer, vice pre-
sident and executive director, with close to two-thirds being male.
We examined nonresponse bias by separating our sample into two sub-samples, early

(original mail-out within three weeks) and late (reminder mail-outs within the next five
weeks) respondents, and performed t-tests on the responses of each sub-sample based on
the number of employees and the sector. The two-sample t-tests were insignificant at the
p < 0.05 level, indicating no significant differences between the two samples. This may
suggest that our sample is representative of the population surveyed, but it does not reveal
whether or not the two groups of respondents may vary on some other characteristics.

Measures

Most questions were based on 5-point Likert scales used in prior studies, with some
minor adjustments made to wording to reflect the Canadian context. A few items in
some questions were initially reverse-coded. On the final online questionnaire, a few
questions were slightly modified based on the comments by two pre-test participants
(of nineteen contacted), two research colleagues and two technical experts on sub-
stantive and/or technical matters. Table 2 presents the statements of our measures.

Strategy implementation success
We did not find a relevant measure for the success of implementing …

Journal of Public Administration, Finance and Law

Special Issue 2/2015 7

WHAT ABOUT MUNICIPAL STRATEGIC MANAGEMENT AND

PERFORMANCE MEASUREMENT

Krister BREDMAR

School of Business and Economics, Linneaus University

Kalmar, Sweden

[email protected]

Abstract: The purpose with this paper is to study how environmental uncertainty affects strategic priorities

and to what extent the strategic priorities could be monitored through performance measures, within a

Swedish municipal context. The findings show that in some areas, such as a budget in balance and cost

control, there are traditional priorities and performance measures, whereas in other areas such as

monitoring day-to-day improvements and growth and expansion, there is less support from performance

measurement systems.

Keywords: Strategic areas, municipal CFOs, performance measurement

INTRODUCTION

It is from time to time stated that the single most important task for management

is strategy (Macintosh, 1994). In a classical manner this comes down to two different

tasks, i.e. formulating a strategy and implementing a strategy (Andrews, 1971). The latter

task is usually integrated with management control ideas where historically important

authors like Anthony (Anthony, 1965) places management control in the area in-between

strategy and operations in an organizational hierarchy. Still today, even though the first

thoughts in line with the above reasoning, is dated around the second world war and was

fist fostered at Harvard Business School (Merchant, 1989), there is an interest in what

circumstances that contributes to the strategic thinking in organizations and to what

extent that impacts strategic actions. In this context modern performance measurement

and management ideas have come to grow and it has had a natural impact on how

systems and models have been developed.

Even though performance measurement and management ideas in its

contemporary form could be traced back 50 years in time, there have been two

developments that have triggered the interest in the research community. Firstly there has

been an increased technological development especially around the ability to store and

present data and information in a never-ending capability. This has made it even more

important to really understand what information is needed since there is more or less an

infinite supply of data in larger organizations. Secondly there has been an increased

interest in broader information as well as in financial reporting, a trend that could be

described as a consequence of the relevance lost debate in general and the balanced

scorecard models been developed in particular. New information needs have been named

and the information market has become even more demand oriented. Much of the

Journal of Public Administration, Finance and Law

Special Issue 2/2015 8

development that is happening today comes from the industry and very few new ideas

come from public administration in general and municipal organizations in particular.

Over some time now there has been a transfer of management ideas from the

industry to public sector, which has come to be summarized in the concept New Public

Management. Since the public administration in many ways is an even more complex

operation to manage, due to several different stakeholders and due to huge volumes

handled, there is a possibility to use resources in a more effective way, if effective

management tools are used. In this study effectivity is about measuring to what extent an

operation is reaching its goals. As a consequence performance measurement comes down

to being able to follow how well a strategy is implemented, and if the goals are reached.

In a way, this also defines the purpose behind developing extensive measurement

systems, and that is to be able to measure how well the organization is fulfilling its

strategic intent and purpose.

This paper focuses on strategic management in a municipal context. Since two

basic tasks are formulating and implementing a strategy, this is also of interest in this

paper. This interest could be formulated into three questions; [1] in what areas does

municipal CFOs consider uncertainty?; [2] in what areas are there strategic focuses?; and

[3] in what ways is it possible to follow performance? In this way, strategic management

is understood as being conscious of uncertainties, making strategic priorities and then

measuring performance. Even though much of the development in the area of strategic

management and performance measurement today comes from industry, there should be a

clear interest within public administration to be able to translate and transform ideas and

models from industry to public sector. Especially since the public sector is so diversified

and deals with so many different operations and since computer technology and modern

information systems make it possible to follow and monitor complex operations.

THEORETICAL FRAMEWORKS

One important task for strategic management is to handle strategic uncertainty.

Usually this is done through an ongoing alignment with the changes and uncertainties in

the environment (Andrews, 1971; Anthony, 1965). For a municipal organization,

uncertainties can come from political and regulatory stakeholders (Ebrahimi, 2000). In

order for the organization to be able to act in a strategic way, it therefore needs to scan its

environment for potential uncertainties and threats which can be done by the top

managers, special units or parts of an organization (Porter, 1980). Because of the problem

with scanning the entire environment research have argued that it needs to be

decomposed into segments (Bourgeois, 1980; Fahey & Narayanan, 1986). One segment

consists of remote environmental sectors, such as political, economic, social, cultural and

technological ones (Asheghian & Ebrahimi, 1990; Sawyerr, 1993). From another point of

view, the task environment consists of issues dealing with goal setting and goal

achievement (Bourgeois, 1980; Duncan, 1972). Altogether, strategic management is thus

a form of continued alignment of the internal ambitions with the ongoing changes in the

environment.

Journal of Public Administration, Finance and Law

Special Issue 2/2015 9

When making strategic priorities it becomes important to understand both the

internal and external environment in order to handle strategic uncertainty. There are

several important differences between how private businesses are operating compared to

public sector management, especially shown in the environment (Rainey, Backoff, &

Levine, 1976; Ward & Mitchell, 2004). One of them is that the public sector is dependent

on formal regulations and procedures more than the private sector, which also affects

how strategic management is done. The customer is the citizen or constituent, which does

not pay for the service directly but indirectly through taxes, in most cases. It then

becomes important to understand in what areas the critical success factors can be

identified (Rockart, 1979), something that from a public management perspective gives

vital input to the strategic management in general and strategic priorities in particular.

After deciding what the strategic priorities are, it becomes important to decide in

what ways performance within the strategic areas should be measured (Poister & Streib,

1999). There are several different areas that need to be understood and dealt with in order

for the performance measurement to be effective. Measures should for example be

derived from goals and objectives, different forms of standards or targets needs to be

established and instead of focusing on what data is available there should be a focus on

what is important to measure. It is also important measure over time to be able to identify

changes in performance and also to measure and define metrics in a similar fashion over

several operations in order to be able to benchmark and compare performance. The

timing in measuring a performance is also crucial in order to be able to take action when

performance is not satisfactory.

METHODOLOGY

This paper is based on a survey conducted in March 2014. There are 290 Swedish

municipalities and they were contacted by e-mail. The CFO or the person with an

equivalent job description was asked to answer a web-based survey with mainly 18

proposals and three background questions. The proposals, which are translated from

Swedish, are presented in the appendix. The respondent was asked to give a response on

the proposal based on a seven grade Likert-scale (Norman, 2010). If the respondent

answered 1, the respondent did not agree to the proposal at all and if the answer was 7 the

respondent fully agreed to the proposal. The survey was open for the respondents for

about a month and during that period 91 answers were given. Out of them 85 answers

were complete and were used as the empirical material for this study. The method was in

many ways suitable for the purpose of the paper and even though a higher response rate

always is better, the collected material showed enough of variance to be interesting.

Since this paper is of a descriptive kind, with three rather open questions, this

method give a broader view and a more general picture of what the CFO’s opinions are

within this field. There is a problem with a general picture such as the one presented in

this paper, much due to the fact that a municipal operation is complex and multifaceted.

The picture presented is therefore of an aggregated kind and mainly based on one

respondent’s opinion and view. This could also be biased based on how the CFO wishes

things to be instead of how they actually are. Nevertheless, it gives a quick glimpse of

Journal of Public Administration, Finance and Law

Special Issue 2/2015 10

how they look at strategic management and performance measurement, which for

example gives insights into additional studies and more focused methods. In the next

section, the findings will be presented and this is done with an ambition to give a broader

picture. Likert-scale studies are not suitable for advanced mathematical calculations, due

to the type of scale used, and because of that, the only actual calculation done was three

means. In addition, seven combinations between two questions are presented in

frequency tables.

FINDINGS

From a more general perspective, the findings could be categories or clustered

into three groups. The first group consists of proposal 4 to 8 and deals with how

uncertainty is perceived. The second group of questions is proposal 9 to 15 and this group

answers to questions about strategic priorities. In the final group, proposal 16 to 20, the

respondent’s answers describe how performance measures and reports are dealt with in

the organization. In order to get the general view or picture, a mean of the answers to

each proposal or question in the groups have been calculated and the answer is presented

in a radar-diagram in the coming paragraphs.

Figure 1 Means from proposal 4 to 8, grouped into how uncertainty is perceived

In the first group of answers to proposal 4 to 8, the findings show that the

respondents agree on the fact that uncertainty is produced from external factors like the

general economy, proposal 4, and legislative and regulating authorities, proposal 5, to a

greater extent. It also shows that they agree that there are many factors that influence the

municipal outcome and economy, but it is not an uncertainty factor in the same way, nor

is the business community’s success or failure an uncertainty factor. The least source of

uncertainty is the political leadership and how they are working. The diagram, see figure

Journal of Public Administration, Finance and Law

Special Issue 2/2015 11

1 below, show a slight tendency to acknowledge uncertainty as something coming from

the outside, from the general economy and authorities, and not from the inside, e.g. the

political leadership.

When it comes to answers about strategic priorities, the means shown in a radar-

diagram can be found in Figure 2 below. In this group of findings, there is one thing that

stands out and that is the answer to proposal 9, a budget in balance, which has a mean of

6.7. It is a clear statement from the CFO’s but maybe not a surprising one. One might

think that to a CFO it is of highest importance in a strategic perspective to have a budget

in balance and a good economy in general. The answers also show a strategic interest in

growth and expansion (proposal 10) cost control (proposal 11) and in adapting service

levels, and improving operations in general (proposal 12 and 13). However, when it

comes to two additionally interesting areas, employees’ conditions and marketing, the

answers show is a slight decline, but they are still quite high since the mean is above 5.

Figure 2 Means from proposal 9 to 15, grouped into strategic priorities

The final group of answers shows two different perceptions. In a more general

way, the respondets on avarage are pleased with the report systems (the mean on proposal

16 is 5.3) and they also think that it is fairly easy to follow costs (the mean is 5.7 on

proposals 18). However, on a more specific level it is harder to follow growth and

expansion, with a mean of 4.0, and both day-to-day performance and work results are

hard to trace in the reports. The respondets give those two proposals a mean of 3.5 for

proposal 19 and 3.6 for proposal 20. So the performance reporting systems seem to be

working on a general level but when it comes to more specifik areas the respondets are

not that pleased.

Journal of Public Administration, Finance and Law

Special Issue 2/2015 12

Figure 3 Means from proposal 16 to 20, grouped into performance measurement and reports

In addition to the more general picture painted above this paper continues with

cross-tabulating different proposals with each other. With this kind of cross-referencing

the idea is to see if statements and proposals from one perspective are back with support

from other proposals and perspectives. Each of the seven presentations or cross-

tabulations is shown in summary in a table. Since working with strategic management

issues in many cases comes down to understanding how to deal with uncertainties the

first table shows how different type of municipalities see uncertainty in the general

economy, which is shown in table 1 below. There is a slight tendency towards showing

that municipalities closer to big cities see the general economy as a larger uncertainty

factor than the average municipality. Other than that, the uncertainty concerning general

economy is fairly evenly distributed.

Journal of Public Administration, Finance and Law

Special Issue 2/2015 13

Table 1 Type of municipality and general economy uncertainty

One of the strongest indications in the survey was that finding a budget in balance

was of strategic importance. This more general statement is interesting in itself but it is

also interesting to see if the respondents that thought the issue of getting a budget in

balance also think that there are many factors to deal with which would cause

uncertainty. This combination is shown below in table 2. 66 of the respondents’ answers

that a budget in balance is of highest strategic importance, but when it comes to different

factors affecting the outcome of the local economy the answers are more evenly

distributed, with a focus around 5. This might be interpreted as if an uncertainty is

recognized but its impact is not that crucial.

P9 Balanced

budget

P6 Uncertainty from many factors

1 2 3 4 5 6 7

1

2

3

4

5 3

Type of municipality
P4 Impact from general economy

1 2 3 4 5 6 7

Metropolitan 1 1

Suburbs of metropolitan 1 4 7

Town 1 2 8

Suburbs of town 1 1

Commuting municipality 1 6 2 6 4

Tourism and hospitality

municipality
2 1 2 1

Goods-producing municipality 1 6 6 2

Sparsely populated municipality 2 2 1

Municipality in densely populated

region
2 4 1

Municipality in sparsely

populated region
2 2

Journal of Public Administration, Finance and Law

Special Issue 2/2015 14

6 2 4 5 2 2

7 4 9 13 18 16 6

Table 2 Cross-tabulation from proposal 9 and 6

In a similar way it is interesting to combine two questions or perspectives that

should support each other. If the organization focuses on the budget, it should also be

interested in financial dimensions in the financial reporting system. The answers are

shown in Table 3 below. The majority of the respondents have answered that it is easy to

use the report system, but also here there is a more even distribution with several

outliners. Two respondents have answered 2 and 3 on proposal 16, which could be

interpreted that even though there is a strategic focus on a budget in balance it is not easy

to follow in the existing reporting system.

P9 Balanced

budget

P16 Easy to use the report system

1 2 3 4 5 6 7

1

2

3

4

5 2 1

6 1 3 6 5 1

7 1 1 8 19 31 6

Table 3 Cross-tabulation from proposal 9 and 16

In the survey there are some questions/proposals that ask about the same topic but

from two different perspectives. In the following section four of them are presented. One

important part of leading an organization strategically is to decide whether it should grow

and expand. However, if that decision is made then it also becomes important to follow to

what extent there actually is a growth. Among almost half of the answers that state that

growth and expansion is of strategic interest, a majority is not stating that they have clear

metrics and reports showing this. The answers to this combination are presented in Table

4. It seems like there is a tendency to think that growth and expansion is important but the

CFO does not have measures to follow whether this is accomplished.

P10 Growth

and expansion

P17 Metrics and reports that show growth

1 2 3 4 5 6 7

1

2 1

Journal of Public Administration, Finance and Law

Special Issue 2/2015 15

3 1 1 1 1

4 2 4 1

5 3 4 10 5

6 1 4 9 11 1

7 1 1 4 6 5 6 1

Table 4 Cross-tabulation from proposal 10 and 17

Traditionally, financial information systems have focused on costs and

consumption of resources. In the next combination of proposals, shown in Table 5, there

should be dominance towards showing costs, especially if cost control is of strategic

importance. That is to a certain extent also true since there is an even distribution around

answer 6 on proposal 18 (if the report systems show costs). However, it is also interesting

to see that as much as a quarter of the answers are a 5 on the proposal if costs are of

strategic importance. Overall, the findings are more or less as expected.

P11 Cost

control

P18 Reporting systems show costs

1 2 3 4 5 6 7

1

2 1

3

4 1 1 2 2 1

5 2 4 16

6 2 2 6 11 4

7 1 6 10 11

Table 5 Cross-tabulation from proposal 11 and 18

For sometime there has been a focus on improving day-to-day operations within

industry, something that also is a part of New Public Management. Two of the proposals

were centered on this, proposal 13 and proposal 19 as shown in Table 6 below. This

seems, however, to be an area where there has been little or not sufficient development.

When it comes to being able to measure day-to-day performance, there is a great variance

among the answers, with a center around 3 and 4. These answers are in this context fairly

low. At the same time, a majority says that improving daily operations are of strategic

importance.

P13 Improve

operations

P19 Measure day-to-day operations

1 2 3 4 5 6 7

Journal of Public Administration, Finance and Law

Special Issue 2/2015 16

1

2 1

3

4 1 1 2 2 1

5 2 4 16

6 2 2 6 11 4

7 1 6 10 11

Table 6 Cross-tabulation from proposal 13 and 19

Being able to measure daily performance is also something that involves the

ability for an employee to follow their work, which was one of the strategic proposals.

Combining proposal 14 with 19 shows to what extent respondents’ look at employee’s

conditions as a strategic issue and if there is a possibility to measure what is done, what

the performance is. This combination is shown in Table 7. As presented earlier in this

chapter there is a somewhat weaker tendency towards focusing on employee conditions

as a part of strategic issues, which also is shown in Table 7. Nevertheless there is a slight

linear pattern showing that the two proposals follow each other to some extent.

P14 Employee

conditions

P19 Measure day-to-day operations

1 2 3 4 5 6 7

1

2

3 1 2 1

4 3 3 5 3 1

5 4 6 7 6

6 2 3 5 6 5 2

7 3 4 3 5 2

Table 7 Cross-tabulation from proposal 14 and 19

Altogether, the findings show that some of the answers are close to what could be

expected while others show a greater variance. In the following section, the paper

continues with a short discussion of the findings.

DISCUSSION

Overall answers show what might be expected. CFOs think that it is of strategic

importance to have a budget in balance and they also feel that they can use their reporting

Journal of Public Administration, Finance and Law

Special Issue 2/2015 17

systems to follow this. They also see it as important to follow costs and consequently

they find that information to a large extent in the reporting systems. When it comes to

handling uncertainty as a part of the strategic management process, there seems to be an

emphasis on issues they can not control, such as the general economy and legislative and

regulatory authorities. The political leadership, which is one of the most important

stakeholders, seems not to create to much of a problem or uncertainty. In a more general

perspective, it seems like the respondents have a higher profile among the answers when

it comes to strategic intent and a slightly lower response distribution when it comes to

performance measures and reporting. In a way, this might be interpreted as intention and

reality, what the CFO wish for and what they live by.

In some areas there seem to be answers that might not be expected. One of those

areas is that if there is a specific strategic intent it is not always easy to follow what the

organization performs. One such example is the ambition to grow and expand, which

seems not to be that easy to follow in reports. In the same way, there is an intention to

improve on a day-to-day basis but at the same time this is an area that is hard to measure

and report on. This is an interesting result since at the same time the respondents say that

they are interested in controlling costs, and that is something that can be monitored in the

systems. But for some reason that is not connected to day-to-day operations. Being able

to follow and monitor daily operations is also something that on average shows lower

distributions among the answers. When the relevance lost debate turned into a balanced

scorecard solution, many public administration managers were quick to embrace the non-

financial reporting thought. As a last question in this survey, the respondents were asked

to name non-financial measures and reports that they used on a regular basis. Only one

forth of the respondents did this, which might signal that they do not work with that kind

of reporting to the extent that it sometimes has been presented.

CONCLUSIONS

In this paper, three different areas have been connected to strategic management,

that is, dealing with strategic uncertainty, making strategic priorities and working with

performance measurement. In a way the findings show that these three areas could be

understood together, as parts of strategic management. In order to be able to work with

strategic management, one must understand the uncertainties, make priorities and follow

performance. Theories within this field have a heavy focus on business operations, which

in several ways are different from working in the public sector. In many cases the

stakeholders are harder to grasp, compared to in a business environment, where, for

example, the customer is equal to a citizen and boards are made of different political

opinions. Nevertheless, the findings show that municipal CFOs are heavily focused on

thinking strategically.

When it comes to the three areas, which in this paper makes up strategic

management in a municipal context, the proposal that got the highest average was how

the general economy had an impact on operations. This is truly something that neither the

CFO nor the politicians can do something about. In the same way, it seems like the CFOs

do not think that the political leadership is creating uncertainties, which might mean that

Journal of Public Administration, Finance and Law

Special Issue 2/2015 18

they have an executive management function that is working. Among strategic priorities

the proposal saying that it is of strategic importance to work with a budget in balance got

the highest average. In general all of the proposals in this grouping received high

averages. This might be explained by a general interest among CFOs in strategic

question. On average the third group of proposal answers was much lower. This could be

due to the fact that the respondents have high intent, strategically, but it might be more

difficult to follow that intent in reports and measures. Even though saying that the highest

average among answers in these categories was on the proposal that it is easy to follow

planning and outcome in the report systems.

Since the municipal environment is so much more complex in many aspects, it

becomes interesting just to study traditional business logic, when it comes to

contemporary management control theories. In some cases that logic is easy to transfer

and translate (such as a budget in balance) but in other areas (such as growth and

expansion) it becomes harder to compare ways of working with the theories. In the long

run, benchmarks between different branches and environments could enrich the other

areas and maybe in the future, businesses will look at how the public sector have chosen

to solve issues with strategic management and performance measurement.

Journal of Public Administration, Finance and Law

Special Issue 2/2015 19

APPENDIX

The following proposals were used in the survey.

P4 The general economy in Sweden largely impacts municipal operations.

P5 Legislative and regulatory authorities often alters our business conditions.

P6 There are so many factors that affect the outcome of the local economy, and the

economy is then perceived as uncertain.

P7 There is a strong link between if the business community in the municipality

succeeds and if the municipality succeeds.

P8 The way the political leadership is working, is creating uncertainty for municipal

operations.

P9 A functioning economy, such as a balanced budget, is strategically important.

P10 Growth and expansion are key strategic areas that we work with.

P11 In our business, it is a strategic priority that we control our costs.

P12 It …

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https://www.tandfonline.com/action/journalInformation?journalCode=rpxm20

Public Management Review

ISSN: (Print) (Online) Journal homepage: https://www.tandfonline.com/loi/rpxm20

Relationships between strategic performance
measures, strategic decision-making, and
organizational performance: empirical evidence
from Canadian public organizations

Raili Pollanen, Ahmed Abdel-Maksoud, Said Elbanna & Habib Mahama

To cite this article: Raili Pollanen, Ahmed Abdel-Maksoud, Said Elbanna & Habib Mahama
(2017) Relationships between strategic performance measures, strategic decision-making, and
organizational performance: empirical evidence from Canadian public organizations, Public
Management Review, 19:5, 725-746, DOI: 10.1080/14719037.2016.1203013

To link to this article: https://doi.org/10.1080/14719037.2016.1203013

Published online: 05 Jul 2016.

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Citing articles: 16 View citing articles

Relationships between strategic performance measures,
strategic decision-making, and organizational
performance: empirical evidence from Canadian public
organizations
Raili Pollanena, Ahmed Abdel-Maksoudb, Said Elbanna c and Habib Mahamad

aAccounting, Sprott School of Business, Carleton University, Ottawa, Canada; bManagement
Accounting, College of Business and Economics, United Arab Emirates University, Al-Ain, UAE;
cStrategic Management, College of Business and Economics, Qatar University, Doha, Qatar;
dAccounting, College of Business and Economics, United Arab Emirates University, Al-Ain, UAE

ABSTRACT
This study investigates the role of strategic performance measures (SPM) in strategic
decision-making and their impact on organizational performance. Based on 143
online survey responses from senior administrators across Canadian public organiza-
tions, the study found that SPM of efficiency and effectiveness are positively asso-
ciated with performance, as well as, the former with both strategy implementation
and strategy assessment decisions. The study extends prior research by linking both
SPM and their use in strategic decision-making to organizational performance.

KEYWORDS Organizational performance; strategic performance measures (SPM); strategy implementation;
strategy assessment; Canadian public sector

Introduction

Strategic performance measures (SPM) are considered to be important for translating
strategy into measurable objectives and, if appropriately designed and communicated,
can facilitate strategy implementation, align management decisions and actions with
strategic goals, and enhance organizational performance (Bisbe and Malagueno 2012;
Franco-Santos, Lucianetti, and Bourne 2012; Micheli and Manzoni 2010). A few
studies have investigated the extent to which SPM are deployed and their influence
on organizational performance in public organizations (Micheli and Manzoni 2010).
They have mainly focused on the deployment of SPM, rather than on strategic use of
SPM and its longer-term performance effects, and implicitly assumed that, after SPM
are deployed, they function in intended ways to generate organizational benefits.
Furthermore, previous studies have not examined joint relationships between SPM
deployment and practical activities of strategizing, although strategic planning pro-
cesses are also associated with public-sector performance (Andrews et al. 2009; Jung
and Lee 2013; Poister, Pasha, and Edwards 2013). This void has resulted in recent
calls for further research on the use of SPM in strategic decision-making in the public

CONTACT Raili Pollanen [email protected]
© 2016 Informa UK Limited, trading as Taylor & Francis Group

PUBLIC MANAGEMENT REVIEW, 2017
VOL. 19, NO. 5, 725–746
http://dx.doi.org/10.1080/14719037.2016.1203013

sector (Hammerschmid, van de Walle, and Stimac 2013). This study contributes to
filling this gap by investigating the use of SPM in strategic decision-making and its
relationships with performance in public organizations.

Micheli and Manzoni (2010, 467) defined SPM systems by their four main
attributes: “integration of long-term strategy and operational goals, presence of
multi-perspective indicators, inclusion of cause-effect linkages, and presence of a
sequence of goals-targets-action plans”. SPM in such systems can help organizations
set and achieve strategic objectives, align individual behaviours and attitudes with
strategic objectives, and, ultimately, enhance organizational performance. In particu-
lar, greater use of nonfinancial performance measures could contribute to more
effective strategic alignment and organizational learning (Micheli and Manzoni
2010). The implications of these claims are substantial, tipping the relative impor-
tance and balance in SPM systems significantly from traditional financial measures
towards nonfinancial measures.

In contemporary SPM systems, Franco-Santos, Lucianetti, and Bourne (2012) also
emphasized the importance of nonfinancial performance measures linked to organi-
zational strategy, along with core financial measures. In public organizations, non-
financial performance measures become, in fact, relatively more important, given
nonfinancial objectives and their subjective measurement (Pollanen 2005; Andrews,
Boyne, and Walker 2006). For example, Liguori, Sicilia, and Steccolini (2012) found
that both politicians and public managers considered nonfinancial performance
measures more important and meaningful than financial measures. Although several
studies have referred to financial and nonfinancial measures, categorizing measures
as efficiency and effectiveness measures could be more relevant and useful, as they
reflect outputs, productivity, and outcomes, not just whether measures are expressed
in monetary terms. For example, Mitchell et al. (2013) argued that measurement of
operating performance requires efficiency measures, which reflect input–output
relationships, and measurement of strategic performance requires effectiveness mea-
sures, which reflect output–goal relationships. In this study, the classification of
efficiency and effectiveness measures is adopted.

Strategic planning has often been conceptualized to entail two separate functions of
strategic planning: strategy formulation and strategy implementation (Johnsen 2015;
Mitchell et al. 2013). Although strategic management and strategic planning are used by
some authors as synonyms (Elbanna 2013), the former is a more inclusive concept than
the latter, because strategic management includes strategic planning along with imple-
mentation and evaluation processes (Bryson 2011; Poister 2005). More recently, authors
have started looking towards the broader process of strategic management in the public
sector instead of strategic planning itself (Poister and Streib 2005). For example,
Mitchell et al. (2013, 19) considered strategic processes to involve: “(1) formulating a
strategic plan, (2) implementing and monitoring the achievement of the strategic plan,
and (3) reflecting, learning, and revising the strategic plan”. Thus, strategic planning
processes include control and feedback mechanisms that can indicate the achieved
degree of coherence, that is, effectiveness, of strategic plans. More broadly, Poister
(2010) surmised that “strategic planning processes need to facilitate understanding of
the forces driving issues, explore options in terms of their feasibility and likely con-
sequences, and stimulate candid discussions regarding the costs and risks associated
with various alternatives”. However, such complex relationships have not specifically
been tested in the public sector. This study contributes to filling this gap by building on

726 R. POLLANEN ET AL.

prior research to consider the role of SPM both in strategy implementation and strategy
assessment decisions, along with their performance consequences.

Organizational performance in public organizations has widely been recognized as a
multidimensional construct. For example, Boyne and Gould-Williams (2003) argued that
financial measures alone are inadequate and inappropriate in capturing important multi-
ple aspects of public-sector performance. They included indicators of service quality, cost,
efficiency, and cost-effectiveness in their study and further reasoned that their relative
importance can vary across stakeholder groups, complicating the assessment of impact of
strategic planning on performance. In earlier research, Boyne (2002) had identified
responsiveness (e.g., customer, citizen, and staff satisfaction), and democratic outcomes
(e.g., accountability, probity, and participation) as potential outcomes. Subsequently,
Andrews and van de Walle (2013), recognizing that most studies have focused on
efficiency, incorporated multiple dimensions of public-service performance. They identi-
fied four dimensions of performance: efficiency, effectiveness, responsiveness, and equity,
and found that strategic orientation exhibits a positive association with all four dimen-
sions. In addition, Elbanna (2013) identified three main categories of strategic planning
outcomes: strategic direction, fit with environment, and organizational performance.
Organizational performance attributes included operational efficiency, effectiveness in
achieving organizational objectives, and service quality. Therefore, the design of this
study appropriately integrates multiple dimensions of organizational performance.

To conclude, this study contributes to the literature by focusing on use of perfor-
mance information for strategic decision-making in public organizations, as well as, its
impact on organizational performance. More specifically, it extends prior research in a
comprehensive manner by: (1) considering SPM of both efficiency and effectiveness;
(2) examining effects of SPM use on both strategy implementation and assessment
decisions; (3) investigating both direct and indirect relationships between SPM, strate-
gic decision-making, and performance; (4) incorporating multiple measures and ana-
lytical techniques; and (5) studying the less researched Canadian public organizations.
In general, the findings reveal positive associations between SPM and organizational
performance and, in particular, between SPM of efficiency and both strategy imple-
mentation and assessment.

The next section reviews relevant literature and develops the study hypotheses.
The following two sections present the research method and the results, respectively.
Finally, major findings and conclusions are discussed.

Literature and hypotheses

In this section, we review the relevant literature and introduce our research model.
Building on prior empirical research in public-sector management, management
accounting, and strategic and general management literature, we develop five main
hypotheses underlying our research model, which is presented in Figure 1.

SPM and organizational performance

In a review of performance measurement literature, Franco-Santos, Lucianetti, and
Bourne (2012) concluded that contemporary SPM can confer organizational benefits,
such as behavioural modifications and improved organizational capabilities and
performance. Similarly, Micheli and Manzoni (2010) argued that the design of SPM

PUBLIC MANAGEMENT REVIEW 727

systems and their roles or uses are fundamental factors affecting organizational
performance. On the other hand, Cavalluzzo and Ittner (2004) found that, although
SPM were positively related to perceived results to date, they were unrelated to
expected future results. Furthermore, any benefits were weak at best, if such measures
were mandated instead of voluntarily implemented, signalling only symbolic use of
mandated measures. In addition, SPM are multidimensional, requiring measures of
both efficiency and effectiveness (Lebas and Euske 2002). Efficiency is concerned with
achieving relatively short-term results with minimum resources and effectiveness
with attaining longer-term organizational objectives (Boyne 2002). This dichotomy
of measures is important for public organizations, in which direct measures of
outcomes are typically not available (Pollanen 2005). For example, Mitchell et al.
(2013) argued that it is important to differentiate between operational measures and
SPM, and that strategic fit is achieved through strategic, not operational, perfor-
mance, and it requires a long-term perspective. These examples demonstrate that
measuring public-sector performance is faced with methodological and practical
complexity.

Performance of operating units is often gauged by efficiency measures (i.e., input–
output relationships), but alignment of operational and strategic performance
requires effectiveness measures (i.e., output–goal relationships) (Mitchell et al.
2013). Andrews and van de Walle (2013) pointed out that efficiency has been over-
emphasized as compared to other performance dimensions, particularly effectiveness.
This practice likely reflects internal efficiency measures being more objective and
readily available in the short term than longer-term subjective effectiveness measures

Figure 1. Conceptual model.

728 R. POLLANEN ET AL.

that require external data (Pollanen 2005). Not surprisingly, Hoque and Adams
(2011) found that process efficiency measures were the most common measures
and measures for employee learning and growth, which reflect effectiveness, were
the least common. Similarly, Pollanen (2005) found that more efficiency measures
than effectiveness measures were used, but that effectiveness measures were consid-
ered more desirable and their use was expected to increase. However, Andrews,
Boyne, and Walker (2006) asserted that neither objective nor subjective measures
are inherently superior and that both types of measures are needed.

Although an association between the use of SPM and organizational perfor-
mance has been posited in several studies, such relationships can be difficult to
validate empirically in public organizations. In the absence of internal accounting
and market-based financial performance measures, measurement of performance
in public organizations is complex and empirical studies scarce (Pollanen 2011).
Cavalluzzo and Ittner (2004) argued that SPM are built on the assumption that
they can improve efficiency and effectiveness by making public managers more
accountable. Similarly, Umashev and Willet (2008) claimed that they were intro-
duced in government organizations to increase accountability, effectiveness, and
efficiency of resource use. Subsequently, Hoque and Adams (2011) found that
SPM were perceived to enhance both programme efficiency and effectiveness.
Furthermore, Pollanen (2011) concurred that SPM have commonly been adopted
in response to widespread pressures on public organizations to improve the
efficiency and effectiveness of their operations and services, as well as, account-
ability to regulators, public, and other stakeholders. However, McAdam, Hazlett,
and Casey (2005), after finding increased focus on effectiveness, concluded that
typical SPM are often oversimplified and still do not necessary address complex
needs of diverse stakeholders. In recent years, advances have been made in
developing more sophisticated outcome-oriented effectiveness measures, but it
is clear from these examples that further efforts are warranted. There is still a
notable research void in understanding relationships between the use of efficiency
and effectiveness measures and organizational performance in public organiza-
tions. Therefore, this study incorporates SPM of both efficiency and effectiveness
and their associations with organizational performance, leading to the following
hypotheses:

H1a. There is a significant positive association between SPM of efficiency and organi-
zational performance.

H1b. There is a significant positive association between SPM of effectiveness and
organizational performance.

SPM and strategic decision-making

In order to investigate how benefits from SPM accrue to organizations, it is
important to consider characteristics of SPM and roles they play in strategic
processes, that is, for what purposes and how they are used. Franco-Santos,
Lucianetti, and Bourne (2012, 99) concluded that SPM can ‘facilitate the devel-
opment, implementation, and review of business strategies by focusing people’s

PUBLIC MANAGEMENT REVIEW 729

decisions and actions on strategic goals and by encouraging a continuous dialogue
about strategic endeavours’. Bhimani and Langfield-Smith (2007) found use of
both financial and nonfinancial performance information in strategy development
but more emphasis on financial information in strategy implementation.
Subsequently, Gimbert, Bisbe, and Mendoza (2010) discovered that, although
SPM did not influence the frequency of strategy formulation processes, they
were associated with strategic agendas arising from these processes. Although
SPM and strategy linkages have not been specifically studied in the public sector,
the so-called planning school approach to strategic management, which involves
programming, forecasting, and budgeting, has attempted to bridge public policy
and strategy formulation and implementation, and it is widely used in public
organizations (Johnsen 2015). Thus greater emphasis on nonfinancial information
embedded in SPM could be beneficial for strategy formulation and implementa-
tion, as well as, strategy assessment, in public organizations.

More recently, attention has also been paid to strategy evaluation or assessment
subsequent to its formulation and implementation in order to complete the
strategic management cycle. Mitchell et al. (2013) aimed to develop a measure-
ment tool for assessing the quality and strength of strategy and argued that
strategy involves three functions: strategy formulation, strategy implementation
and monitoring, and strategy revision based on reflection and learning. They also
considered strategic fit to be the central purpose of strategic processes and stated
that strategic performance assessment could be used to reveal the best possible fit
between the organization’s environment and its internal capabilities and
resources. These processes are consistent with the learning school of thought
(Johnsen 2015), which allows strategies to be refined in an emergent manner
and used concurrently with formal strategic planning embedded in the planning
school approach prevalent in public organizations. It is also consistent with
feedback and emergent properties associated with complexity theory, which is
particularly suitable for dealing with complex or so-called wicked problems
common in many public organizations (Klijn 2008)1.

Several recent studies have examined determinants of performance information use
in strategic decision-making in different contexts. In a literature review, Kroll (2015)
identified important and promising drivers of performance information use, with the
maturity of performance measurement systems being the first of six important drivers.
Taylor (2011) found measurement systems and their perceived impact to be signifi-
cantly associated with use of performance measures in decision-making in Australian
state governments. Earlier, Taylor (2009) had found that performance measures were
used more for meeting external reporting requirements than for internal decision-
making, but that governments were more likely to use them for internal decision-
making when they demonstrate validity, reliability, and legitimacy – characteristics that
SPM information aims to satisfy. Cavalluzzo and Ittner (2004) also found top manage-
ment commitment, decision-making authority, and training in performance measure-
ment techniques to positively influence measurement system development and use in
US government agencies. However, Hammerschmid, van de Walle, and Stimac (2013)
discovered the use of performance information to vary among several European
countries studied, different policy fields, and levels of government; and formal manage-
ment practices, including strategic planning, to affect such use. Elbanna (2013) also
found significant use of strategic management processes in general, and strategy

730 R. POLLANEN ET AL.

evaluation in particular, along with related benefits in the public sector of the United
Arab Emirates. These findings indicate that contextual factors can affect the use of
performance information, particularly SPM, in strategic decision-making.

More specifically, considering important aspects of strategic decision-making
separately, Abdel-Maksoud et al. (2015) investigated the use of financial and non-
financial performance information for strategy implementation and strategy assess-
ment decisions in Canadian public organizations and found that the importance of
nonfinancial performance measures in general, and operational efficiency measures
in particular, were significantly associated with the use of performance information
for both strategy implementation and strategy assessment decisions. However, they
did not specifically consider effectiveness measures or study impacts of measures
and their use in decision-making on organizational performance. Furthermore,
Elbanna, Andrews, and Pollanen (2015) considered it beneficial for future studies
to incorporate determinants of strategy implementation success, including organi-
zational systems and processes. This study extends the findings of these two studies,
as well as, some others more generally (e.g., Taylor 2011; Cavalluzzo and Ittner
2004; Hammerschmid, van de Walle, and Stimac 2013) by investigating relation-
ships between both efficiency and effectiveness measures and their use both for
strategy implementation and assessment decisions, as expressed in the following
hypotheses:

H2a. There is a significant positive association between SPM of efficiency and the use of
performance information for strategy implementation decisions.

H2b. There is a significant positive association between SPM of efficiency and the use of
performance information for strategy assessment decisions.

H3a. There is a significant positive association between SPM of effectiveness and the
use performance information for strategy implementation decisions.

H3b. There is a significant positive association between SPM of effectiveness and the
use of performance information for strategy assessment decisions.

Strategic decision-making and organizational performance

The need to link strategy to performance and to evaluate such linkages by using
SPM has been widely acknowledged. In general, Mitchell et al. (2013) argued
that strategic planning can connect strategic objectives and related performance
outcomes by monitoring and measuring the degree of their coherence or
achievement. Similarly, Jung and Lee (2013) maintained that strategic planning
and setting clear goals are critical functions of public managers, which are
closely related to enhancement of organizational performance. They found that
strategic planning capacity has positive impact on public-sector performance.
Likewise, Poister and Streib (2005) claimed that strategic planning processes can
link individual performance with strategic goals and objectives, report SPM to
the public, evaluate the feasibility of proposed strategies, and track performance
over time. Recently, Poister, Pasha, and Edwards (2013) cautiously concluded

PUBLIC MANAGEMENT REVIEW 731

that formal strategic planning and performance measurement can contribute to
improved public-service effectiveness, although their findings suggested that the
impact of performance measurement may be stronger than that of strategic
planning. These conclusions imply that both performance measurement and
strategic planning functions are generally considered important in public orga-
nizations, but more precise mechanisms through which such benefits could
accrue, as well as, their impacts are still not well understood.

Empirical research linking strategic planning with performance in public orga-
nizations is still rather scarce and results mixed (Poister, Pasha, and Edwards
2013). For example, Boyne and Gould-Williams (2003) provided early mixed
evidence that some aspects of planning (e.g., favourable attitudes towards plan-
ning) were positively associated with organizational performance in Welsh local
government; whereas, other aspects (e.g., number of quantitative performance
targets) were negatively associated. Similarly, in a study of both public and private
sectors of the United Arab Emirates, Elbanna (2012) reported that comprehen-
siveness of strategic decision-making positively influences organizational perfor-
mance; whereas, extensiveness of strategic planning does not. In addition, Poister
and Streib (2005) found in US local government that linking performance mea-
sures to strategy was less common than linking budgets to strategy. Moreover,
Poister, Pasha, and Edwards (2013) reported that, while incrementalism in US
local transit services was detrimental to performance, formal strategic planning or
a combination of the two was associated with enhanced performance. With
respect to strategy choices, Andrews et al. (2009) discovered that incrementalism
and the lack of formal strategy can have negative implications for performance in
Welsh local government; whereas, formal prospector and defender strategies are
likely to enhance organizational performance. They concluded that both strategic
processes and strategy content are important factors affecting performance of
public organizations. In a subsequent study, Andrews et al. (2011) concluded
that, in spite of only limited empirical evidence, strategy implementation is widely
considered to be a critical element of strategy with a significant impact on public-
sector performance.

Given some mixed results and a narrow local-government context of the above-
mentioned studies, this study further extends prior research by examining relation-
ships between strategic decision-making and performance in various Canadian public
organizations. In particular, it investigates empirically the performance consequences
of the use of performance information in strategy implementation and assessment
decisions, and also implicitly links strategy implementation success to organizational
performance (Elbanna, Andrews, and Pollanen 2015). These arguments lead to the
following hypotheses:

H4. There is a significant positive association between the use of performance
information for strategy implementation decisions and organizational
performance.

H5. There is a significant positive association between the use of performance informa-
tion for strategy assessment decisions and organizational performance.

732 R. POLLANEN ET AL.

Research method

Sample selection and data collection

The data were collected from Canadian public organizations, including all three levels
of Canadian government organizations (federal, provincial, and municipal) through
an online survey. Survey participants were identified from the Governments of
Canada online database. The survey, in which a structured pretested questionnaire
was used, was administered in 2012. Individually-addressed invitation emails that
included links to the online survey and the cover letter were sent to 1,568 senior
government officials with experience in performance measurement through an inde-
pendent survey host company, followed by two rounds of reminder emails. A total of
249 individuals logged onto the survey site and 196 answered at least some questions,
for a response rate of 12.5 percent. The analyses were based on the 143 substantially
completed questionnaires. In rare cases of missing responses to a few individual
items, analyses were based on the number of completed responses.

The response rate is consistent with that found in other recent online studies using
similar procedures (Mirzaee 2014). However, in order to test for nonresponse bias,
one-way ANOVA tests (Appendix 1) were performed to compare responses of early
and late respondents on the number of employees reported – a proxy for organiza-
tional size (Wallace and Mellor 1988). As the results indicate no significant differ-
ences, the existence of nonrespondents does not likely pose a significant validity
threat (Bryman and Cramer 2001).

Measurement of variables

Multi-item 5-point Likert-type scales were used to measure all constructs included in
this study (Appendix 2). The scale items were adopted, or in some cases adapted,
from prior studies and the final composite measures used were empirically validated.

SPM
An 11-item scale was adapted from previous public- and private-sector studies …