Journal of Public Administration Research and Theory

Figure 1

Strategy Content Matrix Combining Miles and Snow’s Typology with Porter’s Typology

Simplistic Classification Schemes

Existing classifications of strategy in the private sector have been extensively criticized because they do not meet the criteria of a good typology. Important typological criteria for judging the conceptual boxes include completeness, mutual exclusiveness, and internal homogeneity. Chrisman, Hofer, and Boulton (1988) argue that the elements of Porter’s (1980) typology are not mutually exclusive because businesses pursue cost leadership and differentiation simultaneously (see also Hill 1988). Empirical tests of Porter’s typology have also highlighted problems. Research by Miller and Dess (1993) has shown that the classification system is not complete because it does not cover all strategies adopted by private firms. Moreover, other work has suggested that Porter’s ‘‘stuck in middle’’ category is not necessarily the ‘‘lemon’’ of competitive strategy (Campbell-Hunt 2000) and can result in higher performance (Yamin, Gunasekaran, and Mavondo 1999). Similarly, Miles and Snow’s (1978) categories are not mutually exclusive—the analyzer category is an intermediate form of strategy that shares key characteristics of the prospector and defender types (Zahra and Pearce 1990).

Figure 2

The Unidimensional Taxonomic Approach. Organizations can be assigned exclusively to one box (e.g. B).

Figure 3

The Two-Dimensional Taxonomic Approach. Organizations can be located precisely and exclusively on the two dimensions (e.g. position A1).

These criticisms highlight significant taxonomic flaws in attempts to classify organizational strategies (Chrisman, Hofer, and Boulton 1988). However, they miss a more fundamental point: a taxonomy is a simplistic and unidimensional device for conceptualizing and measuring strategy (Ginsberg 1984; Venkatraman and Grant 1986). A taxonomic approach assumes that all organizations can be placed in one of a small set of strategy types (see figure 2). This is reflected clearly in empirical work that takes the form of asking private managers to identify whether their company is, for example, a ‘‘cat,’’ ‘‘dog,’’ or ‘‘fish.’’ However, strategies are not like species of animals because they can be mixed and combined. Furthermore, strategies need not be mutually exclusive, so the attempt to satisfy this taxonomic criterion is inappropriate. As we have argued above, strategy consists of two dimensions (stance and actions), so organizations cannot be placed on a single list of conceptual categories. Moreover, they are unlikely to fit a single location on two dimensions (see figure 3). Rather, the relevant question is the balance of an organization’s strategies among a variety of combinations of stance and actions. We

Figure 4

The Two-Dimensional Mapping Approach. Elements of strategy present in most boxes to some extent (indicated by percentage figures).

236 Journal of Public Administration Research and Theory

suspect that the idea of a single dominant strategy that pervades a whole organization exists more in the realm of abstract academic models than in the reality of management practice. An organization may have a variety of strategies in different spheres of its activities. For example, it may be part prospector, analyzer, and reactor and use a combination of changes in markets, products, and prices (see figure 4). It follows that strategy variables are continuous, not categorical, and that a conceptual framework for identifying strategy content should be consistent with this.

Private Strategies and Public Organizations

Almost all of the literature on strategy content has been developed for private firms. Even if the available taxonomies were valid, they might still have limited relevance to the external circumstances and internal characteristics of public organizations. Bozeman (1987) has usefully identified three variables that encapsulate the extent to which an organization is public or private: the level of collective ownership, the level of state funding, and the degree to which the behavior of managers is constrained by political forces rather than market forces. A purely public organization would be owned by a political community rather than private shareholders, receive all its money from a ‘‘political sponsor’’ rather than fee-paying customers, and be responsive to instructions from its political masters rather than the economic demands of consumers. These elements of publicness have profound implications for strategy content in public-service organizations.

First, the literature on private organizations tends to assume that senior managers are free to select their strategies from a wide range of available options, albeit within constraints such as market forces and technological feasibility. For example, private firms can abandon unprofitable markets or products and seek better returns elsewhere and can vary the quality or price of their services in a search for a higher market share. By contrast, public agencies are much more likely to have strategy content imposed on them (Boschken 1988; Bozeman and Straussman 1990; Nutt and Backoff 1993; Ring and Perry 1985). In other words, public organizations are more likely than private firms to be subject to pressures of coercive isomorphism (DiMaggio and Powell 1983) that influence their strategic orientation. For example, in recent years local governments in Australia and the United Kingdom have been required to contract out specified proportions of their services as part of a quest for efficiency savings (Aulich 1999; Boyne 1998). Indeed, there is evidence that the external constraints on local governments are so great that the turnover of political and managerial elites makes little difference to strategic decisions on organi-zational growth (Boyne, Ashworth, and Powell 2001).

Second, even if strategy content is not directly imposed, public organizations are likely to be highly regulated by the political sponsors that provide their funding (Hood et al. 1999). The regulatory instruments that can be wielded by governments include performance indicators, planning systems, inspection, audit, budgetary controls, and annual reports (Ashworth, Boyne, and Walker 2002). Such regulatory frameworks are likely to constrain public-sector strategy content in two ways: by placing actual limits on strategic decisions and by inhibiting ‘‘entrepreneurial’’ behavior by public managers who may constantly have to consider whether new strategies will be acceptable to their regulators (Boschken 1988). Although the issue of regulation is considered in the literature on private companies, it is usually included as an ‘‘auxiliary hypothesis’’ to account for cases that do not fit easily into strategy taxonomies (e.g., Snow and Hrebiniak 1980). By

Date: 2015-01-11; view: 952