strategic planning environment- process and performance in public agencies

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ABSTRACT

This research presents a theoretical framework for studying strategic planning in the publicsector that merges research on planning in the private sector and research on the differ-ences between public and private organizations. The study identifies a set of variables rele-vant to this framework and measures these variables for fourteen departments within the Cityof Milwaukee using a wide range of survey questions that were tested and implemented inextensive interviews. Correlations for these variables display consistent patterns that lend ev-idence to key debates and direct future research in the field.

Since the 1980s governments at all levels of this country and others have been implement-

ing a series of related reforms that focus on making government more productive, respon-sive, and focused on performance. For many governments the first stage of reform was

adopting total quality management or similar quality-focused innovations. Soon after-

ward governments began adopting other private-sector management practices such as strate-

gic planning, performance-based budgeting, cost accounting, and benchmarking under the

assumption that what works for business would work for government. However, numerous

scholars and practitioners have noted that significant differences exist between public and

private organizations that may preclude simply extrapolating these methods to the public

sector. At a minimum such differences may affect how the methods are implemented and,

possibly, their overall effectiveness (Bryson and Roering 1987; Nutt and Backoff 1993;

Ring and Perry 1985). Although there has been much empirical research in the past thirtyyears on the effectiveness of strategic planning and how it is implemented in different en-

vironments, most studies focus on organizations in the private sector. Additionally, our the-

oretical and practical knowledge of this key reform in public organizations is primarily

defined by the case studies and descriptive surveys that constitute the majority of research

in this area (see, e.g., Berry and Wechsler 1995; Boston and Pallot 1997; Kissler et al. 1998;

Roberts and Wargo 1994; Streib 1989; Wheeland 1993).

If the academy is to help inform the debate on the public-sector reforms of the past

twenty years, we need to move our understanding of strategic management beyond knowl-

edge of how it functions in unique settings to broader-based knowledge of what works in a

Strategic Planning Environment, Process,and Performance in Public Agencies:

A Comparative Study of Departments inMilwaukee

Rebecca Hendrick

University of Illinois at Chicago

DOI: 10.1093/jopart/mug031

Journal of Public Administration Research and Theory, Vol. 13, no. 4, pp. 491519 2003 Journal of Public Administration Research and Theory, Inc.


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range of settings. Such efforts will be facilitated if they are grounded in an accepted theo-

retical framework and are built on existing knowledge of strategic management in the pri-

vate sector. This study works toward fulfilling this larger agenda in two ways. First, it brings

together two strains of research to identify a theoretical framework within which to study

strategic planning in the public sector and a set of variables relevant to this framework. Onestrain is represented by the wealth of empirical research on strategic planning and manage-

ment in the private sector. The other strain examines the differences between public- and

private-sector organizations.

Second, this research explores the application and possible relationships of key vari-

ables from this framework for fourteen departments in the City of Milwaukee, Wisconsin,

which began implementing strategic planning at a citywide level in 1990 and the depart-

mental level in 1993. The primary purposes here are to pilot test a wide array of survey

questions and indexes and to provide preliminary information on the reasonableness of the

framework and theoretical constructs presented in step one. The survey was implemented

using focused interviews of key strategic planning personnel in all departments in the win-ter of 199495, and a lengthy survey was administered through a second round of inter-

views with the same people in the winter of 199697. Although this research is clearly ex-

ploratory, the consistent patterns among some of the variables lend evidence to key debates

and propositions within the two strains of research and provide a good foundation for future

studies of strategic planning in government.

The next section presents the theoretical framework and summaries of relevant re-

search. Following sections present a brief history of strategic planning in Milwaukee and a

discussion of the survey, methodology, and findings.

ENVIRONMENT, PROCESS, AND IMPACT OF STRATEGIC PLANNING

Theoretical Underpinnings

The application and study of strategic planning and, more generally, strategic management

began with descriptive analyses of strategies, strategy formulation, and organizational envi-

ronment in private corporations in the early 1960s (Chandler 1962; Cyert and March 1963).

Essentially, strategic management is formalized strategic policy making that targets the or-

ganizations primary tasks. The activity encompasses procedures for developing strategies

and monitoring their impact as feedback for the next round of planning, as well as broader

issues such as strategy implementation and strategic thinking. But the central focus of strate-

gic management is on planning or strategy making (Nutt and Backoff 1987). At its core

strategic planning requires that organizations establish objectives, scan the environment for

opportunities and threats, assess their capabilities, and match environmental opportunities

and threats to capabilities (Andrews 1980). Although the emphasis is on formal or structured

strategy making, these activities could be applied to any deliberate strategizing, as opposed

to emergent strategizing, taking place throughout an organization (Miller et al. 1996).

By the early 1970s researchers of planning were addressing whether there were signi-

ficant performance differences between firms engaged in formal planning and those that

were not (Harold 1972; Rue and Fulmer 1973). Other work in this area was more prescriptive

in proposing strategic management practices to improve corporate strategy development

and performance (for early examples, see Ansoff 1979; Mintzberg 1973, 1979). Since then

a great deal of empirical research has been conducted on how to classify strategic planning

492 Journal of Public Administration Research and Theory


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and management functions and the relationships among the context in which these func-

tions take place, the types of processes employed, and the impact of these activities on orga-

nizational performance (for reviews of this research, see Bourgeois 1980; Miller and Cardi-

nal 1994; Papadakis, Lioukas, and Chambers 1998; Pearce, Freeman, and Robinson 1987;

Ring 1989).Underlying this research is a broader theoretical paradigm encompassing two processes

critical to this model: decision making or strategy making under uncertainty and adapta-

tion of the organization to its environment. With respect to decision making, strategic plan-

ning is characterized as structured problem solving by a group of individuals rather than

one person. According to this view, planning processes are often arrayed along various con-

tinuums, two of which are important here. One continuum reflects the methods of problem

solving as incremental versus synoptic. The second continuum, which is particularly rele-

vant to public organizations, refers to stakeholder participation in planning as integrative

versus exclusionary. Synoptic planning is more comprehensive, formal, and sophisticated,

but incremental planning tends to be simpler, less rational, and based more on trial and error.Integrative approaches include a broader range of stakeholders from inside and outside the

organization throughout the planning process, which means that bargaining and agreement

can be an important factor in each stage of planning. In contrast, exclusionary approaches

concentrate planning among fewer people. The process may be centralized within top man-

agement or specialized to another part of the organization (Deyle 1994; Methe and Perry

1989; Toft 1989).

The adaptation dimension of this paradigm emphasizes that how an organization adapts

to its environment is contingent on that environment and the long-term interactions taking

place. Adaptation is defined by whether an organizations structure fits its environment as it

moves through cycles of fit, environmental change, misfit, structural and procedural change,and new fit. Also, the greater the fit between the organizations environment and structure,

the better its performance. Applied to strategic planning, this conceptualization suggests

that if planning is to improve organizational performance, then the process should fit the en-

vironment or context within which planning occurs (Child 1972). Exactly how context,

planning process (or other organizational process), and organizational performance are

linked is the subject of some debate. Figure 1 (Boal and Bryson 1987, 213) presents the

range of possible relationships among the three conceptual areas that are being examined by

empirical research in this field. Although these relationships are not necessarily mutually ex-

clusive, type A specifies that context directly affects planning process, which directly affects

performance. Type B specifies that context and process may have joint or independent ef-fects on performance. Type C, which is closest to the notion of environmental fit, specifies

that the relationship between process and performance is contingent on context.

One point of agreement in organizational and planning research is that organizational

adaptation is the result of managing uncertainty and the environment to achieve a wide

range of political and operational objectives. Thus, an organization in a rapidly changing en-

vironment would not benefit from a highly bureaucratic organizational structure (formal,

rigid, rule-based, and hierarchical) that would hinder internal change and responsiveness.

Similarly, an organization in a complex environment will tend to delegate decision making

to specialists and invest more in monitoring. In contrast, an organization in a threatening en-

vironment or under greater pressure will have more slack and tend to centralize authorityand decision making (Chakravarthy 1987; Donaldson 1996).

Applying the notion of environmental fit to problem solving and strategic planning

Hendrick Strategic Planning Environment, Process, and Performance in Public Agencies 493


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suggests that organizations in more turbulent environments will tend to have less synoptic

and integrative approaches, and those in more complex environments will be more synop-

tic and specialized (which is also less integrative). Although uncertainty increases with en-

vironmental complexity and turbulence, it also is altered by how structured the organiza-

tions problems are (e.g., whether means-ends and cause-effect relationships are clear) and

how much information is available to the organization on its activities, environment, and

performance (Ring 1989). Given that the purpose of strategic planning is to reduce uncer-

tainty associated with ill-structured problems and a general lack of information and to in-

crease coordination, one might expect planning to be less synoptic but more integrative

when this type of uncertainty is high.Figure 2 presents a diagram that conceptualizes the primary components of this theo-

retical paradigm and their relationships. The center of the planning system is the planning or

decision-making process, which often involves numerous stakeholders inside and outside

the organization. The uncertainty and perceptions of those involved, which are a function of

both the environment and the characteristics of the participants, are the most immediate fac-

tors affecting this process and the strategies it produces (Boulton et al. 1982; Deyle 1994;

Jauch and Kraft 1996; Papadakis, Lioukas, and Chambers 1998; Ring 1989). As an example,

consider two sets of planning participants in the same environment who have different lev-

els of familiarity and experience with strategic planning. In this case, one might expect to see

very different planning processes and strategies from each group (Simon 1969).Additionally, the planning environment is conceptualized in two dimensions. One is in-

ternal to the organization and represents characteristics or features of the organization such


Figure 1Possible Theoretical and Empirical Relationships among Conceptual Areas of Strategic Planning

CONTEXT PROCESS PERFORMANCE

A) Intervening & Direct Effects

B) Independent & Joint Effects

C) Interactive Effects

CONTEXT

PROCESS

PERFORMANCE

CONTEXT

PROCESS PERFORMANCE

P P


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as its structure, technology, culture, capabilities of staff and management, leadership qual-

ities, and degree of internal change. The second dimension represents characteristics or fea-

tures that are external to the organization such as availability of resources, competitive pres-

sures, hostility, complexity, and turbulence or change. Features of both the internal andexternal environments will affect the level of uncertainty decision makers face and, through

adaptation, the way in which planning occurs, who is involved in the process, and the prob-

lems it must focus on (Goll and Rasheed 1997; Grinyer, Al-Bazzaz, and Yasai-Ardedani

1986; McArthur and Nystrom 1991; Papadakis, Lioukas, and Chambers 1998; Yasai-

Ardedani and Haug 1997). Thus, a complex or rapidly changing organizational structure or

market is likely to increase uncertainty, which, in turn, may encourage more frequent and

shorter planning cycles in the long run.

The strategies developed through strategic planning are intended to help the organiza-

tion achieve its goals and solve problems in either environment. For instance, an organiza-

tions goal may be to improve coordination among mid-level managers or to obtain a highershare of market sales. Although either of these objectives can be characterized as improv-

ing organizational performance, the former is associated more with improving strategic and

managerial capacity, which is an internal characteristic, than with the sales objective, which

focuses on changing the organizations external environment. As indicated by figure 2, the

planning process may improve organizational performance directly and independently of the

strategies being developed. In this case the act of planning and strategizing may improve

communication, coordination, and shared vision within the organization even if the primary

purpose of strategic planning is to develop new marketing or sales strategies.

An important factor that can affect the impact of planning on organizational perform-

ance or strategy development is the participants satisfaction with the planning process and thestrategies it produces. Although satisfaction with planning is a perceptual feature that applies

to planning participants, it is often used as an indicator of planning impact or effectiveness.


Figure 2Detail of the Conceptual Areas of Strategic Planning

External Environment

Organizations Internal Environment

Uncertainty

Strategic Planning Process

& Perceptions

OrganizationalPerformance

Organizational

Performance

Goal

SuccessStrategy

Satisfaction


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Yasai-Ardedani and Haug 1997). Other researchers find that the nature of the decision prob-

lem (crisis, familiarity and uncertainty, expected impact of problem) alters the comprehen-

siveness, formality, centralization, lateral communication, and politicalization of the plan-

ning process (Papadakis, Lioukas, and Chambers 1998).

Evidence from the Public Sector

At this date much of the research on strategic planning and management in public organi-

zations is descriptive, so there is little agreement on what variables are important among the

three dimensions of environment, process, and performance or on how these dimensions

are likely to be related. More fundamentally, there is little evidence on whether strategic

planning is useful or effective in public organizations. Contrary to this trend, Bryson and his

colleagues utilize the private-sector approach and focus on the relationships among the three

dimensions in government and nonprofit organizations (see also Roberts 1993; Roberts and

Wargo 1994).Although many variables examined by Bryson and others are very different from those

included in private-sector research, their overall findings are somewhat similar. They find

that context (environment) is not directly related to outcomes (performance) but that some

contextual factors make certain processes more likely and other factors moderate the rela-

tionship between context and process (Boal and Bryson 1987; Bryson and Bromiley 1993;

Bryson, Bromiley, and Jung 1990). Similar to the case in research on private-sector organ-

izations, comprehensiveness is an important process variable in the research done by Bryson

and his associates, but they define it very differently. Here, comprehensiveness consists of

three components: problem and solution identification, frequency of communication, and

use of a problem-solving framework. Other process variables such as level of communica-tion, forcing of solutions, and degree compromise are also unique to this research. Some of

the contextual variables examined here, such as environmental stability, are the same for the

private sector; others, such as the skills of the planning staff, activation of affected groups,

and level of planning resources, are distinct. In this case the distinct variables are meant to

reflect possible differences between planning in the public and private sector, including

variations in the role of planning in the organization, its politicalization, and the degree of

innovation required to implement planning processes.

Differences between Public and Private Organizations

Although Bryson and associates research is a good start toward understanding the relation-

ships among planning, environment, and performance in public organizations, future re-

search in this area might benefit from more systematic examination of the differences be-

tween public and private organizations. Applied to the theoretical framework of private-sector

studies, these differences could help identify environmental and process variables that might

be critical to planning and performance in public organizations but irrelevant to private

organizations. Most of this literature is theoretical or conceptual, drawing primarily from

organization theory as well as political science and economics.

One of the earliest debates on the key differences between public and private organi-

zations that could affect strategic management in the public sector focuses on the opennessof government, the ambiguity of its policies, the greater attentiveness of its stakeholders, and

the tenuous nature of its coalitions (Ring and Perry 1985). Nutt and Backoff (1987, 1993)



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claim that stakeholders are a critical difference between these sectors and that government

has a much broader scope of impact on its environment. Their research emphasizes the fol-

lowing points about public organizations. First, its goals are more vague, ambiguous, and

complex and often change, and information on achieving goals is weak or unavailableas

is information about other aspects of its internal and external environment (Bozeman andBretschneider 1994).Second, its goals and operations have more external influence and con-

trol that is often broadly based, is more fragmented, and requires more interaction and co-

ordination with outside groups (Bozeman and Bretschneider 1994). Somewhat later, Nutt

and Backoff (1995) argue that the private-sector variables of market volatility and compe-

tition, which define environmental turbulence in those settings, should be replaced by the

need for action and responsiveness in public settings.

Perry and Rainey (1988) review thirty-two conceptual and empirical studies that focus

on the differences and similarities of organizations in these two sectors. In addition to the

items listed above, they note that governments tend to be more bureaucratic than private or-

ganizations. They define bureaucratic organizations as having more elaborate hierarchies andgreater centralization, rigidity, standardization, and formalization and as being more resistant

to change. The empirical studies they review also support arguments made by Nutt and Back-

off regarding the two key features of government noted above, but other studies by Rainey

and his colleagues are not as supportive of these claims. Their surveys of public managers

perceptions and reviews of more current research do not show goals to be more vague and in-

formation to be less available in public organizations, and they only partially support the

claim that public organizations are subject to more external influence and control (Lan and

Rainey 1992; Rainey 1983; Rainey and Bozeman 2000; Rainey, Pandey, and Bozeman 1995).

One important study that deserves mention here is by Hickson and associates (1986)

and compares sixty-five top decisions in thirteen public organizations with eighty-five topdecisions in seventeen private organizations. Hickson and others find that top decision mak-

ing in public organizations, such as policy decisions associated with strategic planning,

tends to be sporadic. Consistent with claims regarding the bureaucratization of the public

sector, they note that sporadic decision making takes more time, involves more informal

interactions, has more impediments, is based more on negotiation, and requires authoriza-

tion. Contrary to surveys of managers, however, they note that sporadic decision making

also uses less accurate information and tends to occur in environments that are more com-

plex (many components that are diverse and interdependent) and more political (contentious

and externally influenced).

Variables Relevant to the Public Sector

The relatively brief discussion of these three areas of research suggests a broad range of vari-

ables that might be examined in future research linking the dimensions of environment, strate-

gic planning process, uncertainty and perceptions, and the performance of public organiza-

tions. Figure 3 presents the theoretical constructs that are examined and evaluated within the

four dimensions for the fourteen departments in the City of Milwaukee. Although not com-

prehensive with respect to the entire range of variables, the constructs examined here consti-

tute factors that are important to all organizations and unique to those in the public sector.

Based on empirical research, it appears that one of the primary differences between pub-lic and private organizations is the environmental dimension and conceptual area. Externally,

public organizations may face more diverse pressures and greater control by outside groups



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because of their openness, their broader constituency, the greater attentiveness of their stake-

holders, and the authority of oversight entities (Bozeman and Bretschnieder 1994; Nutt and

Backoff 1987, 1993). As a result of such pressures, public organizations may also operateunder greater conflict. These characteristics constitute their political environment, which is

considered an important attribute of this sector relative to private organizations. However,

there is evidence that some political features are not more relevant or important to the be-

havior of public managers than to that of private managers (Hickson et al. 1986; Rainey and

Bozeman 2000). Including political variables in future research on strategic planning in the

public sector will be an important contribution to this debate.

Hostility or munificence is another critical element of an organizations external envi-

ronment, although primarily for private-sector organizations, and is defined by the scarcity

or abundance of resources (Castrogiovanni 1991). Based on the argument that public-sector

organizations have a wider range of objectives than obtaining resources (e.g., market share, in-creased profits), the concept of munificence and hostility should be defined more broadly for

public organizations. In addition to resources, economic conditions, and external organizations


Figure 3Constructs Examined in the Primary Conceptual Areas of Strategic Planning

Strategic

PlanningProcess

Rationality / Comprehensiveness- Process: methods & tools, frequency

of review and monitoring,

sophistication

- Content: # of items considered, depth

of analysis and problem

identification

Centralization / Delegation, Exclusion/Inclusion of External Stakeholders

Stakeholder Activation & Involvement:breadth of participation, commitment

to planning, degree of effort

Monitoring of Activities (not limited tostategic planning)

Uncertainty &Perceptions

Experience With and Knowledge ofEnvironment and Outcomes

Nature of Decision Problem and Goals:e.g. Structured vs unstructured,

ambiguity

Environmental

Context

Internal Environment

Dynamism/Turbulence

Structural Complexity & Size

Staff planning skills/Supportive culture

Commitment & Resistance to Planning

Centralized/Decentralized

Technological (complexity):

heterogeneity, tight coupling Core Technology: routineness,

External Environment

Hostility / Munificence

Conflict

External influence

Strategic PlanningImpact: Performance

Satisfaction & Difficulty with planning

Strategic Capacity: improve managerial

control, budgeting, communication


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(e.g., other governments), munificence or hostility in the public sector may be affected

greatly by political and social conditions that both determine objectives and constrain an or-

ganizations ability to meet them. Other dimensions of the external environment that are

important for understanding the behavior of private-sector organizations, such as turbulence

and dynamism and the complexity of the task environment, could also be adapted to public-sector organizations, but they are not examined here.

With respect to the internal environment, the greater bureaucratization of public or-

ganizations is a key difference between the public and private sector, and it is one that is

likely to affect the planning process (Perry and Rainey 1988). Two elements of this feature

are examined herethe centralization of the organization and its resistance to change. The

latter variable will be especially important, given that planning is relatively new to the pub-

lic sector in general and Milwaukee specifically. However, one element of bureaucratization

is not included here, which is the formalization of procedures and reliance on rules or stan-

dards (rule-based functioning), because of the failure of the instruments attempting to meas-

ure this variable.Although the concept was developed with reference to private firms, technology is an-

other feature of the internal environment that is important to strategic planning and other or-

ganizational processes. In this case technology refers to the work being performed by the or-

ganization and encompasses many qualities beyond how work is structured and facilitated,

including the skills and knowledge of workers, the characteristics of the objects on which

work is performed, and even the cause-and-effect relations between actions and outcomes

(Thompson 1967). For private organizations, protecting their core technology from obso-

lescence and insuring its adaptability in a volatile market are the primary objective of plan-

ning and are likely to affect the design of the planning process (Grinyer, Al-Bazzaz, and

Yasai-Ardedani 1986). However, the vulnerability of the core technology does not seem asrelevant to public organizations as other dimensions of core technology, such as complex-

ity (interdependence and diversity of the work being performed) and uncertainty (lack of

knowledge regarding outcomes and the relationship between work and objectives). In this

case public organizations with more complex and uncertain technologies might have very

different planning processes or likelihoods of success in achieving objectives.

As discussed previously, the role and importance of technological uncertainty in public-

sector organizations are also the subject of much debate in the research on publicprivate

differences. Most authors assume that governments have broader goals that are more diffi-

cult to comprehend and measure and that this will affect such organizations in significant

ways. However, little research has been conducted on the impact of technological uncer-tainty, and the many surveys implemented nationwide by Rainey and his colleagues do not

support the claim that public organizations have unclear and unmeasurable goals by com-

parison to private organizations. In this case, examining the impact of technological uncer-

tainty on planning processes and performance, with an emphasis on perceptions of goals and

cause-and-effect relationships, will contribute to this debate.

Inclusion of size and structural complexity in this analysis is based on the wealth of re-

search showing that organizational processes change depending on the size and complexity

of the organization (Scott 1998). Size is one component of complexity that can alter

economies of scale and affect the range of factors that must be incorporated into the plan-

ning process, how the process is conducted, and the impact of the process on the organiza-tion. Change and turbulence in the internal environment may also affect how planning is

conducted and the difficulty organizations may experience with the process.



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Three dimensions are examined in this analysis with respect to the strategic planning

process: comprehensiveness, the centralization and exclusion of external groups, and the

activation and involvement of stakeholders. Comprehensiveness is a key process variable in

much of the planning research on private organizations that is related to bureaucratization,

but it is also associated with more rational decision making and synoptic approaches toplanning (Goll and Rasheed 1997; Grinyer, Al-Bazzaz, and Yasai-Ardedani 1986; Methe and

Perry 1989; Toft 1989). Rational or synoptic processes, which may characterize decisions,

planning, or other areas of organizational behavior, are often contrasted with incremental

processes. The latter are associated with political processes involving more stakeholders,

which require more negotiation than is likely to exist in highly structured, centralized, and

bureaucratic situations. Given the political nature of planning in the public sector, it will

be important to examine these qualities of the planning process. Another feature of the plan-

ning process that is examined heregreater monitoring of organizational activities

also is associated with rational and synoptic processes and the reduction of technological

uncertainty.As indicated previously, three dimensions of the impact of strategic planning have

been studied in prior research: satisfaction with planning, organizational performance, and

goal success. Only the first two dimensions are examined here. Satisfaction with planning

is measured by perceptions of difficulty with the planning process, and organizational per-

formance is measured by determining whether planning improved the strategic capacity of

the organization. Technically, difficulty and satisfaction with the planning process repre-

sent the implementation of planning rather than organizational performance, but the former

are prerequisites to improving organizational performance and goal success. If planning is

not implemented adequately, or if participants are not satisfied with the process, then per-

formance is unlikely to improve. Although these variables have been used in the past tomeasure the impact of strategic planning, it should be noted that their validity has been

questioned and that their use is somewhat controversial (Nutt 1986; Stone and Brush 1996).

The second dimension of planning impact, strategic capacity or the ability of planning

to improve managerial functions, represents the outputs of planning. The third dimension of

success in achieving objectives, which is not examined here, represents true performance

outcomes. This last dimension may be the most important, but assessing the performance of

public organizations may be difficult compared to assessing private organizations because

of the lack of data and the unclear goals in public organizations, as claimed by some of the

literature on differences between public and private organizations. The lack of data on public-

sector performance is apparent from private sector research that easily captures firm per-formance from financial statements, in contrast to public organizations whose financial state-

ments indicate little about the policy objectives of government.

Keeping in mind that there are too few cases with which to examine complex rela-

tionships among variables, this research is only preliminary. Its primary focus is on testing

survey research questions and building a basis for future research. As such, a more thor-

ough discussion of the survey, the operationalization of the variables, and the methodology

is critical here. But, prior to that, the initiation and implementation of strategic planning in

Milwaukee are reviewed briefly to provide the larger context within which planning took

place.1


1 A more in-depth discussion and analysis of the initiation and implementation of strategic planning in Milwaukee

is presented in Hendrick 2000.


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STRATEGIC PLANNING IN MILWAUKEE AND ITS DEPARTMENTS

Milwaukees reforms began in 1988, shortly after Mayor Norquist was elected as the citys

first new mayor in almost thirty years. Upon his election, Milwaukee changed from a weak

to a strong mayoral system. This new structure greatly reduced the fragmentation of powerand authority among the other elected and appointed officials, which include seventeen dis-

trict aldermen, four elected departmental heads (noncabinet), and ten appointed department

heads (cabinet). The four departments with elected heads are the Offices of the Comptrol-

ler, the City Attorney, the City Treasurer, and the Chief Municipal Judge, who serves as the

head of the Municipal Court.

Norquist and his staff quickly took advantage of the opportunities offered by the more

centralized political structure and the new administration to make significant budgetary re-

ductions and organizational changes in the first years he was in office. This laid the ground-

work for more sweeping managerial reforms that occurred by 1990, and it upset the usual

course of politics within each department and between the departments and the executiveofficers. Based on consultations with a strategic planner from a large, well-known manu-

facturing firm in Milwaukee, the Office of Strategic Planning was created in 1990. The con-

sultant was then hired to oversee the development of a citywide strategic plan and the im-

plementation of planning at the departmental level (Benson et al. 1995; Riemer 1997).

To implement the citywide plan and bring departmental operations in line with it, the

mayor and his staff realized that strategic planning would have to be implemented at the de-

partmental level and at even lower levels in some cases. They believed that requiring plan-

ning throughout the government would provide an opportunity to link lower-level plans

with the citywide plan and would encourage agencies to focus on the broader objectives of

city government. Beginning in 1993 the administration began implementing System 94,

which required all departments to submit strategic plans with their budgets and that the

plans be linked to their budgets and the citywide strategic plan in specific ways. By 1995 de-

partments were required to add objectives and outcome indicators to their budgets, as well

as an updated strategic plan (Benson et al. 1995; Kinney 1995a).

Most departments indicated that they used Brysons (1995) model as a guide for their

own planning process. However, there was a great deal of variation in the approach each de-

partment used to implement that model. Some hired outside consultants and let them direct

their planning; others sought to learn how to do it on their own. Some departments chose to

keep planning within the upper levels of management, relying on the knowledge of key

managers and decision makers to identify objectives and develop strategy; others viewed it

as a long-term process that would evolve to engage a broad range of internal and external

stakeholders. Some departments used a retreat approach, while others implemented it as

part of their regular activities over a longer period of time. It was the intention of this re-

search to capture some of this variation in the questionnaire items of the survey.

The administration also changed the budgeting process at this time in order to increase

departmental compliance with citywide objectives and departmental plans. Prior to 1994

the annual budget process was bottom-up. It commenced with departments developing their

budget requests, often in contrast to the mayors priorities and based more on their own ob-

jectives. Under the top-down approach of System 94, each department was given an aggregate

budget allocation by the Budget and Management Division prior to preparing its request.

The allocation is based on inflation, budgetary priorities, and other goals established by the

mayor and his staff. Departments then decide how they will distribute their allocations among



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their units and objects of expenditure in accordance with objectives stated in their strategic

plans.

The final element of System 94 was to link the plans, budget, and objectives with in-

ternal management indicators and the accounting system by way of a new financial man-

agement information system. The internal management indicators were to be developed andused by managers to monitor and measure their service delivery. Numerous measures al-

ready existed in some departments prior to 1993, which provided an infrastructure to de-

velop more comprehensive performance-monitoring systems. Development of the new

financial management information system, under the authority of the elected comptroller,

had been planned and under way for some time prior to 1994 (Benson et al. 1995; Kinney

1995b; Kreklow 1999).

METHODOLOGY AND OPERATIONALIZATION OF VARIABLES

In addition to the theoretical and empirical work on planning discussed at length here, thechoice of variables and their operationalization were based on responses to questions from

semistructured interviews conducted in the winter of 199495. The survey was imple-

mented in a second round of interviews in the winter of 199697. All interviews were con-

ducted with persons responsible for strategic planning in each department, and both sets of

interviews were conducted with many of the same people. In most cases, the departmental

heads were responsible for strategic planning in their units along with one or more top aides,

and many interviews were conducted with more than one departmental representative pres-

ent. By the second round of interviews, the departments had completed their first strategic

plans for the 1994 budget and were working on revising their plans for the 1995 budget.

Doing the survey at this juncture helped to insure that those responsible for strategic plan-ning would have had time to reflect on the conditions, process, and impact of strategic plan-

ning in their units.

The survey consisted of an extensive sixty-two-item questionnaire developed to meas-

ure the variables identified here. One department declined to be included in this second

round of interviews, which yielded fourteen rather than fifteen completed surveys. The pri-

mary advantage of using an interview format to administer the survey is that, given its

length, the format increased the chances of obtaining completed questionnaires. This format

also improved measurement validity and reliability by insuring that the meaning of ques-

tions was clear and consistent to the interviewees, and it provided us with feedback for fu-

ture questionnaire construction.The appendix presents the variables tested here, the questions used to construct these

indexes, a summary of how the indexes were constructed, means, standard deviations, and,

if relevant, Cronbachs alpha measures.2 Two variables were measured with respect to the

impact of strategic planning and organizational performance: perceptions of the degree of

difficulty (A) the department had with the planning process and whether planning improved

managerial andstrategic capacity (B). Difficulty of planning is measured as an average of

responses to seventeen items that represent different areas of planning, such as acceptance

and participation, conflict, integration, and communication. These areas were identified using

a content analysis of responses to questions about difficulty with planning in the first round

of interviews. Additional areas that may not have been represented in the first interviews


2 A more detailed list of the questions and items within each question can be obtained from the author.


14/29

were included in consultation with a colleague who had implemented similar questions in

a survey of strategic planning in the private sector.3 Strategic and managerial capacity is

measured as an average of nine items that represent administrative concerns, such as re-

source allocation, communication, and coordination.

Five indexes were constructed to measure different characteristics of the planningprocess: the comprehensiveness of planning, the breadth of stakeholder participation, the

participation by persons who are external to the department versus those who are employed

within the department, the centralization of planning within the department, and the extent

to which the department monitors its performance in five areas. The questions included in

the comprehensiveness of planning(C) index measure the areas in which planning occurs

(C-4: capital improvement, personnel, technology), the environmental factors considered,

the depth of analysis of these factors (C-7: monitoring, forecasting, developing assump-

tions), and the tools used (C-3: documents, written plans, forms). The index also includes el-

ements of formalization (C-3 and C-4: written plans and forms), frequency (C-5: scheduled

review), and the sophistication of the planning process (C-6 and C-7), which are all factorsrelated to comprehensiveness.4 The tasks of monitoring, forecasting, and developing as-

sumptions in question C-7 are documented in research on environmental scanning in private

organizations (Yasai-Ardedani and Nystrom 1996). As indicated in the appendix, this index

represents the percent of positive responses for all items in C-3 through C-6 plus positive re-

sponses to all three tasks in each of the eight items of C-7 (thirty-nine total possible items).

One other aspect of comprehensiveness is the extent of monitoring(D) of objectives

and operations, but this index also includes measures of the resources and expertise avail-

able for such tasks, which are not necessarily related to comprehensiveness. Although mon-

itoring is important to planning, it might also be viewed as a dimension of uncertainty and

the perceptions of the environment rather than the planning process because it measuresthe availability of information about the environment and organizational performance.

The index forbreadth of stakeholder participation (E) measures the involvement of

eight stakeholder groups in four key process areas of triggering awareness and the elabora-

tion of strategic issues (E-11), generating actions to resolve these issues (E-12), evaluating

and choosing strategies (E-13), and monitoring the impact of strategies (E-14). Each area

represents a different recognized stage of the planning process, although triggering aware-

ness and the elaboration of strategic issues were combined based on analysis of responses

to the first round of interviews (Bryson 1995). Given the emphasis on public organizations

having more external influence than private ones, and the importance of stakeholder par-

ticipation to planning in government, the index external versus internal participation (F) iscalculated as a ratio of external to internal participants in the four planning stages above. In-

ternal centralization (G) of planning measures the involvement of department heads in all

four stages relative to the influence of division heads and employees. One other process

variable, commitment to planning(H), is my subjective assessment of the commitment of

the departments leadership to strategic planning, which is based on two rounds of extensive

interviews.

Ten contextual or environmental variables are measured, as well as another indicator

of uncertainty and perceptions. Seven contextual variables target the internal environment,


3 Masoud Yasai-Ardedani contributed valuable assistance in reviewing and helping to construct questions andresponse areas in the survey, especially those in the performance and planning process dimensions (see Yasai-

Ardedani and Haug 1997).

4 The C-number designations refer to the survey questions associated with variable C as presented in the appendix.


15/29

and three measure characteristics of external environment. The index clarity/measurability

of objectives (I) estimates the extent to which departments have a clear understanding of

how to achieve their objectives and whether objectives can be measured easily. This di-

mension of uncertainty and perceptions is considered to be a critical difference between

public and private organizations, and it represents participants general knowledge of cause-and-effect relationships in solving the problems they face. Scope of operations measures

(K) gauges two areas of technological complexity related to the breadth of the departments

mission and the number of services it delivers.Need to coordinate technology (L) combines

another area of technological complexity, that of the interdependency or coupling of serv-

ices, with the extent to which service delivery is organized in a specific way. A third inter-

nal, context variable, routine and structured processes (M), measures the extent to which the

departments core technology is routine and standardized.Internal change (P) measures

turbulence within the department.

Data for constructing thesize and complexity (J) index, which is another internal vari-

able, were obtained from organizational charts and documents indicating the number of em-ployees and positions in the department. Size was merged with the other dimensions of

complexity because of their high correlation both here and in other studies of organizational

planning. Culture and training(N) in strategic planning measures the departments non-

monetary support for planning and the capacity of the department to accept and implement

innovation, which is one aspect of bureaucratization. This variable also indicates the ease of

implementing strategic planning in the department. Centralization/decentralization (O)

measures another aspect of bureaucratization within the department, but the actual index

was not constructed or utilized in the analysis because of the difficulty respondents had in

answering the questions and the problems of finding a logical way to combine them. Given

that bureaucratization is such an important construct in the literature on public and privatedifferences, it will be necessary to resolve these issues and develop a means of measuring

this characteristic in future research.

One of the external environmental characteristics examined here is goal conflict and

congruence (Q). This variable measures stakeholders agreement with the departments mis-

sion and objectives, the strength of their opinions about the department, and how attentive

the public is to the departments actions.Favorableness or hostility of the environment(S),

which is an important variable in research on private organizations, examines the effect of

fifteen external conditions (e.g., legislation, resources from other governments, political and

social conditions, media) on the ability of departments to meet their objectives. Finally, ex-

ternal influence (R), which is a key external factor for research on public organization, is ameasure of a departments autonomy in conducting its affairs (e.g., developing objectives

and mission, types of programs and services delivered, workload and service standards)

and the influence of five external groups (e.g., mayor, council, unions).

Two issues relevant to the validity of the variables should be mentioned here. One is

that the strategic planning process is not well developed or institutionalized in Milwaukee,

or in other public-sector organizations for that matter, which presents the problem that some

of these variables may be measuring attributes of innovation rather than attributes of strate-

gic planning. Additionally, Milwaukee had experienced significant political and institutional

changes in the years prior to the surveys. Thus, the effects of these events may also be con-

founding the measures reported here. The second issue, which is a central debate in muchof the research on strategic management, is the weak measurement validity of subjective as-

sessments of goal success and the improvement of strategic capacity (Pearce, Freeman, and



16/29

Robinson 1987). However, the same concern applies to the responses to other questions in

the survey. In fact, based on my years of observing the departments and the city as a whole,

it was apparent that some departments responses were biased in their favor.

DATA ANALYSIS

Although there are not enough cases to perform an analysis of three-way relationships

among the different dimensions of planning, the data do allow for simple correlations and

the presentation of scatterplots to determine if observed trends are reasonable and worth

exploring in future research. Consistent with the theoretical framework, correlations were

examined for each performance variable with all contextual and process variables and for all

process variables with all other process and contextual variables. Table 1 presents correla-

tions for all variables; however, those in boldface type are not relevant to the theoretical

framework presented here.5

Figures 4 and 5 present scatterplots of the dependent variable strategic capacity withtwo key-process variables (independent) as visual examples of the kinds of relationships

present in table 1. However, scatterplots for all sets of variables were examined to determine

where individual departments fit along these trends and if any one department might be re-

sponsible for the high correlations, as is prone to happen with a few cases.

With respect to organizational performance, the correlations show that strategic ca-

pacity (B) is higher in departments with more comprehensive planning (C), more extensive

monitoring practices (D), a greater need for coordination (L), and clearer and more easily

measurable objectives (I). The correlations also show that planning is more difficult (A) in

departments that have a more decentralized planning process (G) and greater commitment

to planning within the organization (H). The former findings are consistent with evidencefrom the private sector that firm performance is improved in organizations with more formal,

comprehensive, and rational planning processes. The latter findings make sense from the

perspective that strategic planning is more difficult to implement than bureaucratic (top-

down command and control) means of determining objectives and resolving strategic is-

sues because those who are committed to planning put more effort into it and, as a result,

have more problems implementing it.

Examining figure 4 shows how specific departments are arranged with respect to strate-

gic capacity and the comprehensiveness of planning. In this case, most of the departments

that indicated that they had comprehensive planning were the same as those identified

throughout the interviews with other departments and top administrative personnel as hav-ing a reputation for good planning or a long-term commitment to the process. Moreover,

many of these departments were known for monitoring their environments and having rel-

atively clear or narrow objectives (e.g., the Health Department, Fire Department, and As-

sessors Office).6

The surprising outcome among the performance relationships was in the City Trea-

surers Office. This department ranked high on comprehensiveness of planning, monitor-

ing, and capacity but had no clear mandate to implement strategic planning because its


5 The table also indicates which correlations have probabilities less than or equal to .1 and .05 as an indication of

the reliability of the relationships.6 The Milwaukee Assessors Office maintains an extensive property file that is used by other departments and

many researchers in the area, and it has been on the forefront of developing geographic information system applica-

tions using these data.


17/29

507

Table

1

Pearson

s

Correlations

Standard

Average

DeviationA

B

C

D

E

F

G

H

I

J

K

L

M

N

P

Q

R

Organizationalperformance

A)Diffi

cultywithplanning

1.44

.55

B)Strategic&managercapacity

1.43

.57

.09

Strategicplanningprocess

C)Com

prehensiveplanning

.63

.21

.20

.73**

D)Extentofmonitoringa

4.0

.72

.31

.60**.31

E)Broadparticipationinplanning

2.2

.32

.46*.25

.08

.63**

F)Exte

rnal/internalparticipants

.53

.20

.06

.43

.17

.51*

.63**

G)Internalcentralization

14.0

4.3

.58**.03

.04

.39

.36

.33

H)Com

mitmenttoplanning

.50

.52

.51*

.23

.57**.05

.34

.01

.30

Uncertain

tyandperceptions

I)Clear&measurableobjectives

2.1

.45

.02

.55**.60**.58**.64**.66**.03

.07

Context:internalenvironment

J)Size

&structuralcomplexity

.06

1.0

.11

.39

.24

.24

.40

.04

.34

.29

.30

K)Scopeofoperations

3.3

1..4

.46*.41

.17

.73**.65**.28

.61**.25

.43

.51*

L)Needtocoordinatetechnology

3.0

1.1

.03

.60**.17

.63**.57**.69**.13

.08

.63**.1

4

.2

9

M)Rou

tineandstructuredprocess

2.1

1.1

.23

.24

.00

.26

.12

.27

.19

.15

.21

.2

6

.0

5

.3

3

N)Stra

tegicplanningculture

and

training

3.2

.59

.36

.20

.16

.24

.35

.08

.15

.37

.05

.2

6

.0

6

.0

9

.11

P)Internalchange

3.3

.57

.14

.34

.09

.01

.14

.19

.01

.27

.23

.16

.22

.3

3

.14

.49*

Context:externalenvironment

Q)Goa

lconflictandcongruence

4.0

.51

.16

.34

.23

.12

.07

.04

.32

.20

.02

.0

9

.3

4

.06

.1

1

.2

6

.5

0*

R)Exte

rnalinfluence

.34

.17

.10

.17

.01

.24

.13

.04

.14

.39

.15

.63**.2

6

.0

3

.1

4

.5

1*.2

1

.52*

S)Favo

rable-hostileenvironment

.10

.47

.02

.10

.12

.03

.17

.10

.03

.15

.15

.1

9

.1

6

.1

0

.23

.31

.4

0

.0

3

.1

9

Note:Corre

lationsinboldfacetypearenotrelevanttoth

eoreticalframework.

aAlsoacom

ponentofUncertaintyandperceptions.

*p

.10;**

p

.05.


18/29


Figure 4Dependent Variable Strategic Capacity, Comprehensiveness of Planning

2.50 -

2.00 -

1.50 -

1.00 -

.50 -

.00 -

.10 .20 .30 .40 .50 .60 .70 .80 .90 1.00

Comprehensiveness of Planning

S

trategicCapability

r = .73 assessor

courtcomptroller treasurer

healthfirelibrary

employ relatn

port

public works

administration

build inspct

econ develop

police

Figure 5Dependent Variable Strategic Capacity, Clarity and Measurability of Objectives

3.00 -

2.50 -

2.00 -

1.50 -

1.00 -

.50 -

.00 -

3.00 3.50 4.00 4.50 5.00

Clarity/Measurability of Objectives

StrategicCapability

r = .55; .59withouttreasury assessor

courtcomptroller treasurer

health

firelibrary

employ relatnport

public worksadministration

build inspct

econ develop

police


19/29

head is elected and not subject to the authority of the mayor. However, the City Treasurer

has many characteristics similar to the Port of Milwaukee (an enterprise), which also has

relatively high scores on these variables. The Port of Milwaukee also was noted for im-

plementing innovative management methods that greatly improved its profitability in the

face of a dramatically declining market for port facilities in Milwaukee. Both departmentsare small, which may make it easier to implement comprehensive planning, and are man-

aged by persons with more experience in and a stronger identity with the private sector. Ad-

ditionally, much of the City Treasurers mission encompasses, by statute, monitoring and

data collection.

However, figures 4 and 5 and the descriptive statistics for the capacity variable reveal

issues about the capacity variable that undermine these findings. First, none of the fourteen

departments indicated that planning had any negatives effects on managerial or strategic

capacity. Thus, the range of values for this variable is lowfrom 0 (none) to 2 (highly pos-

itive). This raises the possibility that a more broadly and appropriately ranged response

scale of 0 (none) to 5 (highly positive) might yield a different set of correlations. Addition-ally, it was apparent from discussions with respondents that additional items such as setting

priorities, generating strategies, and linking actions with objectives should be added to this

question. Most organizations also claimed to have very comprehensive planning processes.

In fact, half of the fourteen departments answered yes to at least 70 percent of the seventy

comprehensiveness items, which seems inflated.7

The correlations for difficulty with planning (A) indicate that departments that involved

more people, both inside and outside the organization, in planning (E) and gave them greater

control over the process (G) were more likely to perceive the process as difficult. These de-

partments included the Department of City Development, the Department of Public Works,

the Health Department, and the Department of Employee Relations, which is consistentwith information obtained from the first interviews and discussions with other departments.

In this case the Department of City Development expressed much frustration over the plan-

ning process because of the number of different constituencies involved in its operations, the

departments responsibility for many goals in the citywide plan, and pressure from the

Mayors Office on the content of the its plan. Both the Department of Public Works and the De-

partment of Employee Relations were noted for their attempts to implement a more bottom-

up approach to strategic planning, especially during the second or third round of strategic

planning.

Examining the correlations for the process variables shows that departments with more

comprehensive planning (C) tend to have clearer and more measurable objectives (I) andgreater commitment toward planning (H). These departments also monitor their environ-

ments (D) more. This is consistent with the impact of these variables on strategic capacity

(B) and involves the same departments: the Fire Department, Assessors Office, Health De-

partment, Port of Milwaukee, and City Treasurer have high values for these variables; the

Police Department, Building Inspection, Department of Administration, and Department of

City Development have low values for these variables. It must be noted, however, that the

relationships among the process variables of monitoring (D) and comprehensiveness of

planning (C) with the performance variable of strategic capacity (B) may be spurious and


7 Figure 5 suggests that the City Treasurers Office may account for much of the correlation between strategiccapacity and the clarity and measurability of objectives, given its outlying location on the scatterplot. However,

removing the City Treasurer and recalculating the Pearsons rincreases the value slightly from .55 to .59, showing

that this department is not defining the relationship between these two variables.


20/29

can be explained by the clarity and measurability of objectives (I), which is characteristic of

uncertainty. This claim is supported by the correlations of clarity and the measurability of

objectives (I) with monitoring (D) and the comprehensiveness of planning (C); the theoret-

ical framework in figure 2 shows that uncertainty and perceptions should have a direct im-

pact on the planning process in comparison with the process variables. However, past re-search indicates that performance is determined by process more than other dimensions,

and determining the existence of such complex relationships requires more cases and other

methods of analysis beyond the simple correlations presented here. Monitoring (D) also is

higher in departments with a smaller scope of operations (K), which is a dimension of tech-

nological complexity and may represent another aspect of uncertainty.

Other conditions associated with monitoring among the fourteen departments are a

greater need for coordination (L) and more exclusionary planning practices (B). Likewise,

the clarity and measurability of objectives (I) are associated with fewer external partici-

pants in the planning process (F) and fewer participants overall (E). However, the latter cor-

relation is explained to some extent by the Office of the City Treasurer, and the former is re-duced from r= .66 to r= .51 when this department is removed from the analysis. There

is also a trend toward fewer external participants (F) and less overall participation by stake-

holder groups in the planning process (E) when the need for coordination (L) is high, but ob-

servation of the scatterplot also shows that the City Treasurer may explain the relationship

with overall participation. This outcome is confirmed when the correlation drops to .25

when this case is removed from the analysis.

Examining the scatterplots for the variables of participation, monitoring, coordination,

and clarity of objectives also does not show much consistency among the placement of de-

partments. For instance, the Department of Public Works is high on participation and low on

the clarity and measurability of objectives, but it is moderate on coordination and monitoring.Additionally, there are some departments whose scores for the participation and coordination

variables are not consistent with responses from the interviews, such as Building Inspection,

which should have a high need for coordination, and the Comptrollers Office, which should

have a lower level of participation by stakeholder groups in its planning process.

If extent of monitoring (D) is viewed as an uncertainty variable rather than a process

variable, then it becomes apparent that the variables representing uncertainty about the en-

vironment, decision problems, and the means-ends relationships between activities and out-

comes have the most consistent relationships with different features of the planning process

in Milwaukee. In this case departments with more uncertainty have planning processes that

are less comprehensive and may exclude most stakeholders except top managers. It is alsointeresting that the two internal environmental variables with the strongest correlations with

the organizational performance and planning process variables are scope of operations (K)

and the need to coordinate technology (L). Both variables represent different features of

the services and activities of the department.

One very surprising result here is the consistently low correlations for the external en-

vironmental variables in table 1. In this case, none of the three external variables, each with

numerous items, appears to have an effect on the strategic planning process or perform-

ance. This is also true for the associations between individual questions comprising the ex-

ternal variables and the process and performance variables. This is contrary to findings from

research on strategic planning and management in the private sector, and it may indicatethat Milwaukees departments are paying more attention to their internal environments than

their external environments during planning, which is a relatively new procedure for them.



21/29

Once departments become more experienced with planning and it becomes more institu-

tionalized, they may use it more to manage their external environments. The weak or non-

existent relationships between the combined size and complexity variable (and the separate

variables) and any process variable is also surprising given the importance of this variable

in private sector research.

SUMMARY AND CONCLUSIONS

The primary contributions of this research are (1) its elaboration of a theoretical framework

that merges research on private sector strategic planning with research on the differences be-

tween public and private organizations; (2) its development and testing of a wide range of

survey questions and indexes that measure various features of planning performance, plan-

ning process, and environmental context; and (3) its findings that some planning processes

may improve organizational performance and that certain features of organizations activi-

ties and services and their uncertainty about objectives may influence the planning process.Particularly interesting is the importance of clear goals and objectives and monitoring to

strategic planning processes and organizational performance, especially in light of the de-

bate surrounding whether public and private organizations differ on these dimensions.

Although research on private organizations does incorporate uncertainty in its analy-

sis, it does not examine goals, objectives, means-ends relationships, and monitoring as its

source. For this reason future research might focus more on the role of this area of uncer-

tainty in planning and other rational-based activities, such as performance measurement,

that are becoming more predominant in the public sector. Additional emphasis also should

be given to measuring bureaucratization of both the organization and the planning process,

given the significance of this variable in past research and the tenuous findings here re-garding exclusionary planning practices.

Finally, special attention should be paid to the impact of the external environment and

the size and complexity variable. Although, as suggested, the absence of the impact of ex-

ternal variables may be a function of the newness of planning, it is also possible that both

of these variables and size and complexity have more complex and contingent relationships

with process and performance variables than can be evaluated here. Much of the research on

private-sector organizations that incorporates these variables finds that they have these types

of relationships, but many more cases are required to perform the analyses required to de-

tect such relationships. Thus, future qualitative research might incorporate departments from

different local governments that have implemented strategic planning. It might also makesense to focus on governments or other public organizations in which strategic planning

has become more institutionalized to avoid confounding the effects of planning with inex-

perience with a new management technique.

Alternatively, a nationwide survey that incorporates some of the variables from this

survey would yield many cases, but it would limit the number of variables that could be

tested. However, the results presented here suggest that many of the survey questions have

enough validity to encourage testing in other settings. Some questions and indexes, such as

those measuring the centralization of the organization and strategic capacity, obviously re-

quire alteration or additions as suggested. Other variables, which have relatively low alpha

levels, such as those measuring change culture and goal conflict, need to be reconsidered.Using the model and theoretical framework presented here will help to guide all of these

future efforts in a systematic way.



22/29

APPENDIX

VARIABLES AND INDEXES

Performance Indexes

(A) Difficulty with Planning: average of responses to seventeen items below; = .76;

= 1.44; = .55

1. How much difficulty do you encounter with strategic planning in the following

areas?

seventeen items represent different areas where planning may be difficult, e.g.,

communication, participation; five-point scale: (0) none, (2) some, (4) great deal

(B) Strategic and Managerial Capacity: average of responses to nine items below;

= .85; = 1.43; = .57

2. How does your strategic planning process impact your organization with respect

to the following?

nine items represent general managerial areas, e.g., coordination, communica-

tion, awareness of problems; five-point scale: (-2) highly negative, (0) none, (2)

highly positive

Process Indexes

(C) Comprehensiveness of Planning: total percent of yes responses to questions 37

plus all three activities circled in question 7; = .79; = .63; = .21; thirty-nine total

items

3. Do you use the following in strategic planning? (Please circle all that apply.)

five items represent areas of formalization, e.g., documents, written schedules,

preprinted forms: yes/no

4. Does your department develop writtenplans, either separate or as part of the

strategic plan, for each of the following areas? (Please circle all that apply.)

eight items represent areas where planning may occur, e.g., capital improvement,

technology: yes/no

5. Are plans relating to each of the following areas reviewed on a scheduled basis?

eight items represent same areas as in question 4: yes/no

6. What inputs and/or techniques are used in developing your plans? (Please circle

all that apply.)

ten items represent techniques such as forecasting, cost-benefit analysis, surveys:

yes/no



23/29

7. Please circle (M) if your department monitors, (F) if your department produces

forecasts, and(A) if your department develops assumptions with respect to each

area indicated.

eight items represent conditions such as government legislation, labor market,media, technology; M (monitor), F (develop forecasts), A (develop assumptions);

all three circled

(D) Extent Monitoring: average of responses to seven items in questions 810; = .84;

= 3.96; = .72 (also relevant to dimension of uncertainty and perceptions)

8. To what extent does the department monitor the following items to evaluate its

performance or effectiveness?

five items represent monitoring areas, e.g., performance, workload, efficiency;

five-point scale: (1) not at all, (3) somewhat, (5) to a great extent

9. To what extent are resources and infrastructure available to the department to

properly monitor its performance and effectiveness?

five-point scale: (1) not at all, (3) somewhat, (5) to a great extent

10. To what extent do employees and managers have the training or expertise to

properly monitor the departments performance and effectiveness?

five-point scale: (1) very little, (3) some, (5) great deal

(E) Broad Participation in Planning: average response to eight items in questions

1114; = .77; = 2.21; = .32

(F) Ratio of External/Internal Participation: average ratio of four items in questions

1114 and three items in questions 1114; = .53; = .20

(G) Internal Centralization: measured as the average of the following for questions

1114: [(item c / item d) + (item c / item f)] * item c; = 13.97; = 4.3

Questions 1114 have the same eight items and possible responses; eight itemsrepresent different stakeholder groups such as council, mayors office, employees,

client groups; five-point scale: (0) none, (2) some, (4) extensive

11. To what extent are the following groups involved with triggering awareness of

issues that can significantly affect departmental operations (called strategic

issues) and consideration and elaboration of these issues?

12. To what extent are the following groups involved withgenerating policies,

programs, or services aimed at resolving strategic issues?

13. To what extent are the following groups involved with evaluating and choosing

strategic proposals?



24/29

14. To what extent are the following groups involved with monitoringthe implemen-

tation of the strategic plan?

(H) Commitment to Planning: my subjective assessment regarding the commitment of

the department to planning and the effort given to the tasks, based on two sets of exten-sive interviews over a three-year period

Uncertainty and Perceptions

(I) Clarity and Measurability of Objectives: average of four items in questions 1516;

= .84; = 3.91; = .46

15. In your opinion, to what extent does your department have a clearunderstanding

of the following?

three items represent relationship between services and objectives, objectives and

mission, validity of measurement; five-point scale: (1) not at all, (3) somewhat,

(5) to a great extent

16. To what extent can your departments program objectives be quantified and

measured?

five-point scale: (1) very few, (3) some, (5) most

Context Indexes: Internal Environment

(J) Size and Structural Complexity: = .062; = 1.0

Calculated (Z-score average) from three components obtained independent from the

survey:

1. number of employees

2. geographic dispersion in delivery of services: 1 = yes; 2 = no

3a. number of levels of management; 3b. average number of sections in each level

(K) Scope of Operations: average response to questions 1718; = .78; = 3.3;

= 1.35

17. Relative to other departments within the city, how broad or comprehensive is

your departmental mission?

five-point scale: (1) very narrow, (3) about equal, (5) very broad

18. Relative to other departments within the city, how many different programs or

services does your department implement or administer?

five-point scale: (1) very few, (3) about equal, (5) many



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(L) Need to Coordinate Technology: average response to five items in questions 1922;

= .68; = 3.0; = 1.05

19. To what extent must your department coordinate with or is your department

dependent on the following to achieve its objectives or departmental mission?

two items (broad mission, number of programs and services); five-point scale:

(1) very little, (3) some, (5) great deal

20. How interdependent are the services in your department? In other words, to what

extent must departmental services be coordinated?


21. To what extent are the services delivered to clients or constituents by the depart-

ment organized sequentially (e.g., one service cannot be delivered to a clientuntil a prior one is implemented)?


22. To what extent are the services delivered to clients or constituents by the depart-

ment organized by case (e.g., case management in health or welfare services)?

five-point scale: (1) very little, (3) some, (5) most

(M) Routine and Structured Processes: average response to questions 2324; = .92;

= 2.1; = 1.02

23. To what extent are the work and duties performed by the employees within your

department routinized or performed regularly?


24. To what extent are the work activities and duties performed by employees within

your department codified or standardized?


(N) Change Culture and Strategic Planning Training: average of five items in ques-

tions 2324; = .43; = 3.0; = .59

25. To what extent have your departments managers and supervisors had training or

exposure to the following concepts and processes through education, past experi-

ence, or attendance at professional meetings?

four items represent different technical areas, e.g., strategic planning, perform-

ance measurement; five-point scale: (1) few, (3) some, (5) all

26. In your opinion, how easy is it to get employees within your department to do

the following (assuming that it does notincrease the number of tasks they per-

form or their workload)?



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five-point scale: (1) very easy, (3) moderate, (5) very hard (direction of measures

is reversed)

(O) Centralization/Decentralization: not used because respondents had difficulty in

answering both questions

27. If the department head or chief administrator is the first level of management in

your department, what are the titles of managers at each level along the longest

chain of command?

28. At what levels of management are the majority of the following decisions made?

six items represent different decisions, e.g., workload targets, objectives, mission

(P) Internal Change: average response to seven items; = 3.3; = .57

29. To what extent has your department experienced any of the following changes in

the past five years?

seven items represent different types of change, e.g., employee turnover, major

policies, technology use; five-point scale: (1) none, (3) some, (5) great deal

Context Indexes: External Environment

(Q) Goal Conflict and Congruence: average of twelve items in questions 3032;

= .50; = 4.0; = .51

30. To what extent do the following groups agree with the departments mission and

established programmatic objectives? (direction of measures is reversed from

what is given below)

four items represent different stakeholder groups, e.g., elected officials, employ-

ees, clients; five-point scale: (1) not at all, (3) somewhat, (5) to a great extent

31. What is the visibility of your department to the following groups?

four items, same as in question 30; five-point scale: (1) not visible, (3) somewhatvisible, (5) highly visible

32. What is the strength of the opinions of the following groups (eitherpositive or

negative) regarding your department, its services, its objectives, or its mission?

four items, same as in question 30; five-point scale: (1) very weak, (3) moderate,

(5) very strong

(R) External Influence:percent of all cells checked; = .34; = .17

33. For Cabinet Departments Only: Which of these groups have a majorinfluence

on the following areas (AH)? (Check all groups that apply.)



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seven areas + five groups = thirty-five cells; areas include objectives, mission,

budget priorities; groups include mayors office, council, unions

(S) Favorableness/Hostility of Environment: average of fifteen items: = .77; = .09;

= .47

34. What has been the effect of the following externalconditions on the ability of

your department to meet program objectives in the past five years?

fifteen items represent conditions such as legislation, resour

strategic planning environment- process and performance in public agencies

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