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STRATEGICMANAGEMENTINTHEPUBLICSECTOR

Thestrategictriangleasanewconcept

presentedwithinarelevantcasestudyBy:LukeMcBain,MBAGeneralManagementluke.mcbain@web.deDr.JonathanSmith,CharteredFCIPD,SeniorLecturerSTRATEGICMANAGEMENTINTHEPU

Conceptsandtheoriesimpactingpublicmanagement

Thechallengetoday:GrowingcomplexityofsocialproblemsThegrowingdemandsofcitizensAccelerationofsocialchangeSolutionof80ies:?NewPublicManagement“PrivatesectorprinciplesandtoolsEnrichmentin90ies:Perspectiveof?Governance“ShapingandoptimizingoftheinterdependenciesbetweenactorsinasocietywhichcooperativelyattempttoproducepublicvalueToday:PublicadministrationasapartnerofpoliticiansinthedefinitionofwhatvalueshouldbecreatedinwhatwayFormulatingpolicySettingobjectivesPoliticalrationaleManagementrationaleAttainmentofobjectivesImplementationofobjectivesEvaluationofoutcomesDocumentationofoutcomesQuantifiyingobjectives?Translation“StrategicManagementinthePublicSector2

ConceptsandtheoriesimpactiConceptsandtheoriesimpactingpublicmanagementTherationalplanningmodelseemstobeunrealisticinthefaceofcomplexsocialinteractionWhatisactuallyhappeninginpublicmanagement?“Boundedrationality”(Simon,1997;Kehlmann,2003)“Logicalincrementalism”

(Quinn,1980;Quinn&Voyer1994)“Managementofmuddlingthrough”

(Lindblom,1959)“Satisficing”(Mayhew,1974;Bogumil&Jann2009)…crosscuttingthemesinallstepsofstrategicmanagementinthepublicsectorandconveytheimportanceofnegotiationandbargaining3ConceptsandtheoriesimpactinCharacteristicsofthepublicsectorshapingstrategicmanagementTheauthorizingenvironmentandtheinterdependentactorscanbeconsideredtheactualmarketofthepublicorganization,furtherfactorsimpactstrategicmanagement:EnvironmentalfactorsInfluenceofthepoliticallevelLegalmandatesTransactionalfactorsCoercivenessScopeofimpactPublicscrutiny,accountabilityCollectiveownershipManagementmustincludesocietalvaluessuchasfairness,openness,inclusiveness,honestyFactorsintheorganizationGoalsettingprocessesareconflictedMeasuringperformancecomplexanddifficultStrategicManagementinthePublicSector4CharacteristicsofthepublicCharacteristicsofthepublicsectorshapingstrategicmanagementImpactonthemodelsavailabletostrategicmanagement:Strategyaspositioningorscope:Themorepublicanorganizationis,themoreitwillhavetopositionitselfwithintheauthorizingenvironmentasits“market”intermsofproducingoutcomeandadjustingitsscope.Strategyassettinglong-termdirection:Duetotheturbulentnatureoftheauthorizingenvironmentacoreunitofthestatewillhavemoredifficultyinsettinglong-termdirectionthanamoreperipheralonewhichdeliversconcreteproductsandservices.Strategicfit……canbeseenherebymaximizingpublicvaluewhileatthesametimeattractingamaximumofpermissionandresources.Thismightleadtotrade-offsbetweenwhatisperceivedvaluableandacceptabletothepoliticalenvironment.Strategyasstretchingcompetencies:Notonlymustthepublicmangeruseinternalcapabilitiesbutratherrallysupportfromco-producersandexternalactors,whichmeansthattheorganizationsstrategymustbeattractiveenoughforoutsideactors.StrategicManagementinthePublicSector5CharacteristicsofthepublicThestrategictriangleAnewapproachtostrategicmanagementinthepublicsector:Thestrategictriangle(adaptedfromMoore,1995)ThreethreemainmanagementdimensionsPoliticalmanagementPoliticalsupportas“…anaxiomaticprincipleofpublicsectormanagement.”CooperationmanagementCollaboration,coproductionandnetworkingbetweensocialactorsOperationsManagementMaximizingefficiencyandeffectiveness(Managingup)(Managingoutward)(Managingdown)Keyperson:HeadofdepartmentresponsibleforallthreedimensionsofstrategicmanagementKeypersons:MiddlemanagementmainresponsibilityforcooperationandoperationsmanagementKeypersons:StaffmainresponsibilityforoperationsStrategicManagementinthePublicSectorThestrategictriangleAnewaTheCase:TheTrainingCentreforDevelopmentCooperation(V-EZ)HumanresourceandcapacitybuildinginstitutioninthefieldofdevelopmentcooperationPublicutilitylimitedliabilitycompanyfinancedbytheFederalMinistryofEconomicCooperation(BMZ)Offerstrainingcoursesintheareasof:InterculturalcompetenciesandcountryspecificorientationsDevelopmentpolicyConsultingandmanagementcompetenciesLanguageSpecifictrainingforpartnersandspousesofex-pats2008:Over1.700participantstrainedBudgetof3.9mEuroCurrentmandate:“Preparationandtrainingforinternationaldeploymentofexpertsindevelopmentcooperation”.Since2005theV-EZhasgivenitselfnewstrategicaims:ExpansionofpreparationtowardsinternationalhumanresourcesdevelopmentExpansionofcustomergroups(cross-departmental,privatesector)Internationalization/Europeanfocus(trainers,offers,partneringwithinternationaltrainingcenters)V-EZ,thedepartment8ofInWEnt–CapacityBuildingInternational:7TheCase:TheTrainingCentreTheCase:TheTrainingCentreforDevelopmentCooperation(V-EZ)Chronologyofeventsinatacticaltimeline2006200720082009StrategyformulationProcessstandardizationandcentralization(analysis)FocusonmeetingacquisitionobjectivesAdaptingacquisitionobjectivesChangeinmarketingstanceModularizationDevelopmentpolicycurriculumNewcoursestructureExtensionofmandatemeetsresistanceDivisioncoordinationstructureimplementedSickleavedivisionmanager“Strategyrests”StaffchangesFromextensionofmandateto‘ModernPreparation’‘ModernPreparation’PilotsInnovationFormulationofnewmarketingstrategyBuildinginternalcompetenciesNewdepartmentalstructurePersonnelfluctuationMid-termFutureCapacityCompetenciesCommunicationInfrastructureLong-termFutureElectionsFinancialcrisis2005TheCase:TheTrainingCentreTheCase:TheTrainingCentreforDevelopmentCooperation(V-EZ)Mainfinding1VE-ZmanagedstrategicallyveryclosetoQuinn’sconceptof“l(fā)ogicalincrementalism”,blendingintendedandemergingstrategyTheorganizations'focusisonkeythemesorthrusts“Broadinitiativesthatcanbeflexiblyguidedinanyofseveralpossibledesirabledirections.“(Quinn&Voyer1998):ThesethemesarecommunicatedagainandagainandarewellreflectedintheanswersgivenbyrespondentsAsetbackinextendingthemandatewasoffsetbyfocusingofinnovationandestablishinginternationalcooperations“Tacticalshiftsandpartialsolutions”(Quinn&Voyer)internalreform,qualitymanagement,processoptimization,restructuringandstandardizationcanbeseenasaseriesoftacticaladjustmentstocreateorganizationalreadiness“Experimentation(that)canoccurwithminimizedrisk”(Quinn&Voyer)Currentfocusmoreoninnovationandpilotprojects“FromtrainingtoHRdevelopment”&“Fromnationaltointernational”StrategicManagementinthePublicSector9TheCase:TheTrainingCentreRelevancyofthestrategictriangleobservedinthecaseDifferenceinthedimensionsimpactingtheformulationofstrategy,theimplementationandtheadaptionofstrategy.Intheformulationphasepoliticalmanagementisdominant:Strategywasformulatedinalignmenttointernationalpoliticaldevelopments,MillenniumDevelopmentGoalsin2000andtheParisDeclarationin2005“Isthevalueweareproducingsignificantenoughtosecurethefutureinlightofinternationalizationofdevelopmentcooperation?”WardingoffthreatofafurthermergerforInWEntandtheV-EZ(in2010imminent)Futureneedsandinterestsoftheexistingcooperationpartnerswereanticipatedbytheorganization.However:GermancooperatingpartnerswerenotassupportiveofthesenewstrategicaimsThisstrategycanbelabeledas“pro-active”.Theorganizationistakinga“prospector”stancebyseekingnewmarketsandnewalliancesandcreatingnewservices(Miles&Snow1978;Nutt&Backoff1995;Boyne,2004).ManagementdimensionsofthestrategictriangleareinterdependentPoliticalManagementOperationsManagementCooperationManagementMainfinding2Mainfinding3StrategicManagementinthePublicSector10RelevancyofthestrategictriPoliticalManagementOperationsManagementCooperationManagementRelevancyofthestrategictriangleobservedinthecaseImplementationphasefocusesoncooperationandonoperations:GermancooperatingpartnerswerenotassupportiveofnewstrategicaimsShifttowardsinternationalcooperationpartnersStrategywasalsoadaptedtothecooperationpartnersneeds,whichwereanticipatedornotIncreasedflexibilityandnewandhigherqualityservicesCompetencieswereseennotbeingmatchedwithacquisitionobjectives,butalsonotwithstrategicaims.SurprisinglittleadaptioninimplementationisduetopoliticalfactorsThepoliticallandscapeandtheenvironmenthavenotchangeddrasticallysince2005.Mostrespondentsstillsee“securingthefuture”asoneofthemainthemestobedealtwithstrategically.Thedivisionmanagerrespondenttothistopic:“Wheneverythingisgoinginagoodway,wedon’thearanythingfromthepoliticallevel.”Mainfinding3StrategicManagementinthePublicSector11PoliticalManagementOperationsSummaryfromcasefindingsThemanagementdimensions“political”and“cooperation”weredominantduringplanningThedimensions“cooperation”and“operations”weredominantduringimplementationandadaptationLookingintothelong-termfuture,politicalfactorsdominatethestrategydiscourseCooperationandoperationsdominatethemid-termandshort-termtimehorizonValueOverarching

vision

and

strategic

themesachievedby:Incremental

expansion

of

value

providedInterdependencyofmanagementactivitiesLong-termtimehorizonMid-termtoshort-termtimehorizonPoliticalManagementCooperationManagementOperationsManagementSummaryfromcasefindingsTheConclusionsGeneralconclusionsBuildingrobustalliancesinternallyandexternallyisthekeytostrategicsuccessinthepublicsectorThepublicmanageroftodayisconstantlychallengedtoprovideanswersfortheconstantdevelopmentandre-adaptationofwhatandhowoftheorganizationOwnershipofstrategybyalllevelsadamant,sinceadaptionofstrategywilloccuronatacticallevelSpecificconclusionsThestrategictrianglecouldserveasaconsulting,teachingorresearchtoolinthepublicsectorBenefitsincrementalflexibilityreductionofcomplexitycreatesfocuseasilycommunicatedandunderstood.Drawbacksfocuscanshiftovertimecomplexityandbreadthofoperationsis“underrepresented”Additionalplanningtools,suchasstakeholdermapping(Scholes,1989),strategymaps(Kaplan&Norton2005)ortheadaptivematrixofSchedlerandSiegel(2005)shouldbeusedtoanalyzepreconditionsandtoplanstrategy.StrategicManagementinthePublicSector13PoliticalManagementOperationsManagement

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