The Implementation of Strategic Management in Local Governments. an International Delphi Study

INTRODUCTION In recent decades, local governments have introduced a wide range of techniques to improve their management. The objectives pursued vary depending on the initiatives, the implementers, the specific contexts and the moment. Nevertheless, they have usually been to reduce costs, to improve performance in terms of quality, efficiency and effectiveness, to improve citizen satisfaction, to become more responsible and accountable and to improve citizen trust in government. In spite of the criticisms about the suitability of some of these techniques or the difficulties that they imply in practice, public sector organizations are obliged to introduce new ways of managing their resources as traditional managerial processes seem to have serious shortcomings. Management improvement has become a must as the environment has become more competitive and uncertain (Naschold and Daley, 1999). This atmosphere of necessary change has encouraged the implementation of performance measurement (Bouckaert, 1993; OECD, 2005; Yang, 2007) and strategic management systems (Vinzant and Vinzant, 1996b; Poister and Streib, 1999, 2005). Public organizations, particularly local governments, have embraced different management initiatives and municipal managers have adopted recognized private sector management tools (Chan, 2004), such as the Balanced Scorecard (BSC), the Triple Bottom Line (TBL) and Global Reporting Initiatives (GRI), in their quest to introduce strategic management. Poister and Streib (1999, 2005) show the growing interest in strategic management in the public sector, despite the difficulties of implementing it in the public arena. According to Chan (2004), in the USA and Canada, most municipal governments have developed measures to assess their key organizational areas such as finances, customer satisfaction, operating efficiency and employee performance. This paper aims to analyze the different factors involved in the implementation process of strategic management and how they affect the result of the implementation. We study the behavior of local governments when implementing strategic management, taking the BSC (1) as a benchmark, and to what extent that behavior explains the degree of alignment between local governments' publicized objectives and the actual configurations of their strategic management system. The sample is made up of local governments with acknowledged experience in strategic management in Australia, Spain, Sweden and the USA. This study contributes to a better understanding and planning of the implementation of strategic management initiatives in local governments. The rest of the paper is structured as follows: in Section 2, we introduce strategic management in the context of the public sector; in Section 3, we present the theoretical framework; Section 4 develops the methodology; Section 5 contains the analysis of the results and Section 6 the discussion. Finally, we draw conclusions about the main findings of our study. STRATEGIC MANAGEMENT FRAMEWORK IN THE PUBLIC SECTOR In the eighties, New Public Management initiatives drove the public sector in the direction of management. Since then, the focus on securing organizational change as opposed to organizational maintenance has become more important in the public sector (Ferlie, 1992), and public sector reforms have increased awareness of the importance of strategic choices about how to provide public services. The need for strategic management practices in the public sector grew when public organizations moved from relatively stable environments into more rapidly changing and competitive ones that are characterized by resource scarcity (Montanari and Bracker, 1986). Ansoff and Hayes (1976) argued that strategic management was needed in environments where new patterns of power and influence were emerging, where basic norms and values were being challenged and where the legitimacy and social utility of the organizations was being redefined. …