UNIVERSITY OF GUYANA

BACHELORS IN PUBLIC
MANAGEMENT
STRATEGIC PUBLIC
SECTOR
MANAGEMENT
DPM 4106

WEEK 6
Phases of strategic management,
benefits of strategic management.

Ms Rhonexie Anderson, MBA; B Soc Sc; Dip

NOV, 2020
 Test Questions

WEEK 1-7
MULTIPLECHOICE/TRUE ANDFAL
SE FAMILIARIZEWITHTHOUGHTS
PUT FORWARD BYHOOD/HUGHES
DISCUSSION QUESTIONS
Strategy is how you are going to get things
done.
 Strategic Management

Strategic management is a set of

managerial decisions and actions that
determines the long
performance run
an organisation. This includes
of scanning (internal and external),
environmental
strategy formulation (strategic and long range
planning) and strategy implementation and control.
Strategic management constitutes a process.
 https://www.youtube.com/watch?v=fQzOe6HE3ME&list=WL&index=45&t=78s
Phases in the evolution of Strategic Management
in the private sector.

Strategic management in the private sector was

originally called business policy.
However, this concept ascribes the phenomenon to a general
management orientation and tends primarily to look
inward with the concern of integrating the many functional
activities of an organization.
Strategic management evolves over four (4) phases
of refinement.
 Four Phases of Strategic Management
Phase 1: Basic Financial Planning
Organizations in phase 1 emphasize preparing and meeting annual budgets. Financial targets
are established and revenues and costs are carefully monitored. The emphasis is short-
term, and the primary focus is on the functional aspects of the organization. Most
organizations in this phase exhibit few other characteristics relating to the future.

During this phase managers initiates serious planning then they are
required to propose the next year budget. The focus of financial
planning is therefore related to the annual budget. Projects are
prepared on the basis of very little analysis with most information
coming from within the organisation. Field staff usually provided the
small amount of environmental information. The time horizon for which
this type of planning focuses is one year.
 Four Phases of Strategic Management
 Phase 2: Forecast based Planning
Organizations in phase 2 usually extend of the time frames covered by the budgeting process. Managers
tend to seek more sophisticated forecasts and to become aware of their external environment and its
effect on their organizations. Therefore, organization in phase 2 has more effective resource allocation
and more timely decisions relating to organization's long-range competitive position.

The second phase involves a consideration of projects that may take more than one year
since annual budgets have become less useful; at stimulating long term planning.
Managers therefore attempt to propose 5 year plans. On this occasion in additional
information managers gather any available environmental data and extrapolate current
trend five years into the future. This process gets very political as managers compete for
larger shares of the funds. The time horizon for this type of planning is usually three (3)
to five years. The main focus of forecast based planning is based on projects that takes
more than one year.
 Four Phases of Strategic Management

Phase 3: Externally oriented

planning (Strategic Planning)
This phase is marked by the transfer of planning for lower level managers
to top management. This phase, therefore, involves strategic planning.
With strategic planning organisations seek to increase its responses to
the changing environment. Top management begins to evaluate
strategic alternatives in a formalized manner to planning and actions.
Consultants often provide the sophisticated and innovative techniques
that the planning staff uses to gather information and forecast future
trends.
This top down planning emphasizes the formal
strategy formulation and leaves the implementation
issues to lower management levels. Top management
typically develops 5 year plans which helps some
consultants but minimal inputs from lower
management levels.
 Four Phases of Strategic Management

 Phase 4: Strategic Management

 Merging of strategic planning and management into a single
process. This integrated approach is accomplished through the
presence of three elements: pervasive strategic thinking (managers
at all levels have learned to think strategically), comprehensive
planning process, and supportive value system.

Frederick W. Glueck, Stephan P. Kaufman, and A. Steven Walleck https://www.introduction-to-

management.24xls.com/en232
 Four Phases of Strategic Management
 Phase 4: Strategic Management
The forth stage is marked with the involvement of key players from various
levels of the organization. Realizing that even the best strategic plans are
worthless without the input and commitment of lower managers and
other key players, top managers seek to form planning groups. These
groups include lower level managers and key employees from various
depths and work groups. The group's task is to develop and
integrate a series of strategic plans aimed at achieving to
organization's primary objectives.
Strategic plans now detail the implementation,
evaluation and control issues. Contingency strategies
are also emphasized at the new planning phase.
Although top management may still initiate the
strategic planning process, the resulting strategies
may come from anywhere in the organisation. The
process is no longer top down, people at all levels are
now involved. Strategic management therefore
incorporates strategic planning and implementation.
 https://www.youtube.com/watch?v=ZGiQycargmQ&list=WL&index=46
Benefits of Strategic Management
Research has revealed that
organisations that engage in
strategic management generally
outperform those that do not.
Such organisations are able to
attain an appropriate match or
fit between the environment and
theory strategy, structure and
process. This situation impacts
positively on the performance or
such organizations.
 Benefits of Strategic Management
 In addition, Wheleen et al (2000) identified the following
benefits that have been reported from studies.
 1. Identification -Clearer sense of strategic vision of the
organisation to satisfy the mission / objectives.
 2. Prioritization-Sharper focus on what is strategically
important.
 3. Exploration of Opportunities- Improved
understanding of a rapidly changing environment.
 Strategic Management in the Public Sector

Strategic management is a private sector

management concept which evolves over various
stages of planning. This approach was non
existent in the public sector until the 1980’s.
Some scholars believed that the principles of
strategic management could be applied to the public
sector to manage in long term or short term.
However, the applications of principles to other
scholars must be done with some degree of caution
since the context within which organisations each
sector operate is different.
 The application of strategic management in the public sector must take
into consideration that:

1. Public organizations operate with governmental authority

rather than a market system. Accordingly strategic choices
emulate from sources other than the market. Public
organizations function within complex multilateral power,
influence bargaining voting and exchanged relationship and
are therefore subjected to political decisions based on the
objectives of compromises, consensus and democratic
representation.
Moreover, public organisations must be responsive
to oversight by external political authority as well as
to their clients in the provision of services. Their
strategic emphasis therefore shifts from simple
marketplace dependence to a more complex set of
political economic and legal considerations.
 The strategist must therefore take into account all parties
who either affect or who are affected by organizational
strategy by including them directly in the process by
consulting with them or by considering their views. Given
the political authority system in which such organisation
operates. Many parties have stakes in their strategies.
The stakes will be communicated not only by client demands,
but also by political mandates voting bargaining budgeting
and judicial renderings. For strategic management to
work in the public sector, it must include the
building of joint commitments to carry out job
strategies.
2. The realities of accountability- management in the public sector is
influenced by the extent to which control is emphasized. For e.g.
government revenues and bets of expenditure are controlled by
representatives of the people through the parliamentary organisation
and members of parliament are not in the true sense of the world, part
of the administrative personnel. This is quite preferrent in the private
sector. There is no external control. Moreover, public managers are
accountable to their political bosses.
Against this background and the fact that public
management is more closely regulated by laws and
regulations than in the private management the
actions of public managers are dictated and
creativity is stifled. As a result, strategic actions are
rarely defined. Applying the strategic approach to the
public sector would therefore see the need to
establish a balance between directions and vision,
while meeting the organisations demands for
accountability and control.
 Benefits of Strategic Planning/Management

 https://www.youtube.com/watch?v=Lpg8UuS3pFg
 Conclusion

 It is within the foregoing context that Hughes (2003) contends that the
strategic management as a private sector concept should not
be taken for granted that the ideas will work in the public
sector. However, the era of Ad Hoc decision making has passed and
the aim of governments is to develop better planning methods.

Strategic planning is now widely used in organisations to chart direction

and manage resources effectively. The application of strategic planning
and management in the public sector does not guarantee that mistakes
will be made. As concluded by Hughes (2003) the movement towards
strategic management in this sector may prove to be the most
promising as it has been in the private sector.
 The early stages in a strategic approach in the public sector were aimed
at planning rather than management. Budgeting and financial control
started very early in the public sector, however the main aim was to
spend the budget allocation. Most recently the focus changed from
planning to management.
Strategic management aims to integrate the planning function with the
overall management task. The task for practicing managers within the
public sector is to design a type of strategic planning which has a clear
purpose and to be introduced to that sector with an acknowledgment of
the realities of the sector.
 According to Graham, Alison (1982) strategy in this regard
involves establishing objectives and priorities for the
organization on the basis of forecasts of the external
environment and the organizational capacities, and also
devising operational plans to achieve these objectives.
Without strategy an organisation lacks direction.
 Day-to-day activities do not add up to a coherent goal.
Strategy is used to create focus, consistency and purpose of
an organization, strategic management in the public sector
will now require public managers to scan both the external
and internal environments to identify strengths and
weakness within the organization and opportunities and
threats outside the organization.