Strategic management in the public sector the innovation journal. The effectiveness of strategic management in the public. The advantages and disadvantages of strategic management. Chief among these are the direction and destination of the firm. Because of the importance of proactive management and planning to keeping pace with a changing environment, strategic management is a major alternative to traditional planning. Pdf the importance of strategic human resource management. The opinions expressed and arguments employed herein do not necessarily reflect the official. Finally, strategic management helps in bringing order and discipline to the activities of the firm in its both internal processes and external activities. Strategic management thinking and practice in the public. Strategic management is about success and failure, about the ability to plan wars and defeat them. The art of strategic management remained primarily associated with the military history. Strategic management is critical to staying competitive and standing out in a crowded marketplace. The importance of strategic financial leadership in the uk.
Applying strategic management theories in public sector. Importance of strategic management in business expert. Strategic thinking and planning implementations and patterns that are considered to capitalize the management of profitoriented organizations in the private sector have started to play a role in the unique structure and service requirements of the public sector within the recent worldwide approach of public management and public services. South african perspective each task fits into the larger business goal to gain a greater sense of importance in the larger. The purpose of the present article is to raise awareness of the central importance of strategic management in government, define the critical elements in a holistic. Public sector management policies and strategies be succinctly spelt out in the national development plan 9. Despite several recent studies in the field of hrm, the context in which hrm is implemented is. Strategic management is the most exciting of management disciplines. A public administrator must be ready to be a key player in this process and be able to anticipate issues in public discussion just as the manager of a private company has to deal emerging market forces. It guides the company to move in a specific direction. In recent years, virtually all firms have realized the importance of strategic management.
Its goal is only to broaden and stimulate the discussion regarding a fruitful. The importance of strategic financial leadership in the uk public sector in a time of financial austerity 7 introduction dealing with the effects of financial austerity is a key challenge facing the public sector in the uk and many other countries. The elements of the new zealand approach to strategic management. The guiding principles in any strategic management process, whether in the public or private sector, are about understanding what changes are needed, how to implement. Public and private sector strategic managers operate in different con texts tbat generate. Strategic management and strategic planning process. In the face of rapid change and increasing competition all over the world, strategic management has begun to gain importance. The current management is not possible without strategic.
Supply chain management in public sector procurement. Performance management in the public sector commissioners foreword 5 what is required to develop a skilled workforce that will support the public sector now and in the future is a sustained effort on behalf of all agencies to ensure that employees are regularly and positively engaged in the performance management process. Hughes 2003 acknowledges that there are more problems and constraints in the public sector as compared to the private sector, yet he is of the view that public organizations could conceivably benefit from a. Strategic management in the public sector the public sector organizations are faced with the greatest challenges in decades. The study recommends a strategic management model for the public service that will encourage management to see the department as a system that is influenced by and also influences other systems within its environment to achieve its objectives. Do we need a different strategic management for the public sector. Key principles of public sector reforms the commonwealth. For those concerned with the enterprise, strategic issues, initiatives, and plans are those that affect the entire enterprise in important ways. The commonwealth key principles of public sector reform were recommended and endorsed by the commonwealth working group on public administration cwgpa, which met on 2728 november 2014 in london. This suggests that npm becomes an important contextual aspect to consider when smare implemented in the public sector. This will facilitate the interactions between the department and its stakeholders during the.
An effective strategic management performance can transform an organization, bring wealth to shareholders, or change the structure of an industry. A good strategy helps management prioritize activities within the company and how resources get spent. Not only in the private sector, considering all organizations operating in the public and third sector, more strategic thinking and strategic planning has become more important than before in the face of globalization and competition cases it brings. Benefits of strategic management management study guide. However, the key difference between those who succeed and those who fail is that. The more public an organization is, the more it will have to position itself within the authorizing environment as its market in terms of producing outcome and adjusting its scope.
Its goal is only to broaden and stimulate the discussion regarding a fruitful application of strategic management in the public sector. One of the major criticisms of strategic management is that it requires the organization to anticipate the future environment in order to develop plans, and as we all know, predicting the future is not an easy undertaking. Characteristics of the public sector shaping strategic management impact on the models available to strategic management. The use of strategic management in the public sector. Good governance in the public sector consultation draft for. The history is filled with the examples where the strategic management of offensives and counter offensives paved the path for decisive victories. Strategic management is all about specifying organizations vision, mission and objectives, environment scanning, crafting strategies, evaluation and control. The meaning of strategy in the public sector moore and to a lesser extent, bryson covers both the political positioning of the agency in relation to stakeholders, as well as the management of internal relations moore 1995. The pressure is on many organizations to change the mission and practices of the organization is made up of rule making bodies, such as legislature or a board appointed by public official. Challenges to effective management of public sector. Pdf strategic management in public sector challanges. Strategic management in an organization ensures that goals are set, primary issues are outlined, time and resources are pivoted, functioning is consolidated, internal environment is.
The private sector, driven by a profit motive, has long recognized that a strategic fit between organizational goals and capabilities and changing environmental conditions is critical to the achievement of these goals kriemadis, 1997. Perspectives on strategic planning university of south. The most important feature of strategic management is that it provides the opportunity for an organization to analyze both its own status and the environment outside of the organization. Strategic management is widely seen as essential to the public services, leading to better performance and better outcomes for the public. Strategic management sm has become prominent on the agenda in several public organizations due to new public management npm reforms. Expenditure on public services accounts for more than one third of gdp in most countries, hence interest and expectations of these services are high and management of public funds needs to be able to withstand scrutiny from all quarters. Strategic management in the public sector and public policymaking. An investigation into the 669 paper aims to explore the contextual characteristics of hrm in the iranian public organizations.
Pdf this article discusses strategic processes in the public sector. Importance of strategic management in an organization keka. It also does not aim to be comprehensive nor to provide a template. It is a systematic way to execute a companys initiatives and goals under the guidance of its leadership. What those initiatives are is the subject of the next section.
However management in the public sector is defined and delineated, it differs from corporate management in several important ways. Jun 06, 2016 strategic management and the role it plays in the accomplishments of firms has been a subject of thorough research and study for an extensive period of time now. Good governance in the public sector consultation draft. Privatesector experience with strategic management. The cwgpa was a direct outcome of the fifth commonwealth ministers for public service. It is within this context that this case study is presented. Strategic management is all about identification and description of the strategies that managers can carry so as to achieve better performance and a competitive advantage for their organization. Strategic management sm emphasizes the importance of longterm, proactive and.
A public administrator must be ready to be a key player in this process and be able to anticipate issues in public discussion just as the manager of a. The importance of strategic human resource management to the performance of the public sector and sustainable development. It defines organizations goals and fixes realistic objectives, which are in alignment with. Good governance in the public sector 6 foreword the public sector1 plays a major role in society. Given the widespread use of public sector strategic planning and management, additional insight into exactly what works best, in which situations, and why, is likely to be helpful for advancing. Strategic management which is in broad use in the private sector has also become indispensable for public sector. Failure to meet strategic plan targets in the department is attributed to 1 the government prescribed strategic choice and linear approach to strategic management that does not take into account the complexity and uncertainty of the departments environment and the views of stakeholders. In the corporate sector, its emergence started after the culmination of second world war. Strategic planning is a relatively new innovation in the public sector management, and according to some observers, it represent a major change in the management of public sector organizations e. Strategic management, public sector application, reinventing. It is therefore interesting to study how strategic management practice in the public sector reflects strategic management thinking after five and three decades of extensive critique of formal planning in public policy and business strategy respectively. Applying strategic management theories in public sector organizations. Therefore, given to these questions, the importance of strategic management should be further investigated.
An organization is said to have competitive advantage if its profitability is higher than the average profitability for all companies in its industry. Nov 21, 2005 the disadvantages of strategic management. Pdf strategic management in public sector challanges in. In fact, the private sector idea of strategic management has become so powerful in the public sector that politicians and policy makers have begun to talk about the importance of the modern state being. In the corporate sector, its emergence started after. In most economies, public expenditure forms a significant part of gross domestic product gdp and public sector entities are substantial employers and major capital market participants. Management tools for creating government responsiveness. The strategic management processes of the public sector also. Feb 28, 20 the importance of human resource management in the public sector, future challenges and the relevance of the current collection published on 28 feb 20 by edward elgar publishing. Strategic management in the public sector draws on experience and. This broader conceptualisation aligns public sector strategy much more clearly with its private sector counterpart. The importance of human resource management in the public sector, future challenges and the relevance of the current collection published on 28 feb 20 by edward elgar publishing. Perspectives on strategic planning in the public sector by richard d.