Paul Joyce

Strategic management in public organizations: European practices and perspectives

Introduction 1. Overview of strategic management in the public sector in Europe Paul Joyce and Anne Drumaux Part I: Strategic Management in Practice (Varieties and Different Contexts) 2. Strategic Management at National Government Level in Denmark Morton Froholdt 3. Strategic Management Schools of Thought and Practices in the Public Sector in Norway Aage Johnsen 4. Strategic Management in Finnish Municipalities Ismo Lumijarvi and Ulriika Leponiemi 5. From Urban Planning to Smart Collaborative Strategies: Lessons from Italian Cities Benedetta Trivellato and Dario Cavenago 6. Using Cultural Events as Strategic Levers for Territorial Governance Design in the French Context Charlene Arnaud and Bruno Tiberghien Part II: Key Roles in the Strategic Process - Political and Administrative Leaders, and Dont Forget the Citizens 7. Political Leaders and Public Administrators in Finland: Key Values and Stumbling Blocks in Decision-Making and Interaction Vuokko Niiranen and Minna Joensuu 8. Competencies for Effective Strategic Leadership in Estonia? Eve Limbach-Pirn 9. When Civic Culture Meets Strategy: Exploring Predictors of Citizen Engagement in Participatory Strategic Plans in Italy Daniela Cristofoli, Laura Maccio and Marco Meneguzzo Part III: Does it work? 10. A State of Research on Strategic Management in the Public Sector: an Analysis of the Empirical Evidence - Bert George and Sebastian Desmidt 11. How Dynamic Capabilities Mediate the Link Between Strategy and Performance Isabella Proeller, Alexander Kroll, Thomas Krause, and Dominic Vogel 12. Strategic Competence-Based Management in Finnish Health Care Services Seja Ollila and Pirkko Vartiainen Part IV: Reforms, Developments, and Challenges 13. Strategic Management and Budgetary Reforms: a Meta-Analysis of Benefits and Anomalies in OECD Countries Anne Drumaux 14. Strategic Management and Public Management Reforms in Turkey Ahmet Kesik and Hasan Canpolat 15. The Development of the Strategic State and the Performance Management of Local Authorities in England Peter Murphy 16. Driving Strategic Change Through Management Tools: The Case of Program-Based Budgeting in French Higher Education Emil Turc and Robert Fouchet 17. Reshuffling the Strategic Management System to Develop Capacity for Strategic Agility: the Case of Lithuania Jurgita Siugzdiniene, Egle Gaule and Rimantas Rauleckas 18. Strategic Management in the Italian NHS: the Implementation of Cost-cutting Plans for Regional Health Services Sephan Kunz, Gloria Fiorani and Marco Meneguzzo Conclusion 19. The Development of the Strategic State in Europe Paul Joyce and Anne Drumaux

Conclusion: The development of the strategic state in Europe

Introduction 1. Overview of strategic management in the public sector in Europe Paul Joyce and Anne Drumaux Part I: Strategic Management in Practice (Varieties and Different Contexts) 2. Strategic Management at National Government Level in Denmark Morton Froholdt 3. Strategic Management Schools of Thought and Practices in the Public Sector in Norway Aage Johnsen 4. Strategic Management in Finnish Municipalities Ismo Lumijarvi and Ulriika Leponiemi 5. From Urban Planning to Smart Collaborative Strategies: Lessons from Italian Cities Benedetta Trivellato and Dario Cavenago 6. Using Cultural Events as Strategic Levers for Territorial Governance Design in the French Context Charlene Arnaud and Bruno Tiberghien Part II: Key Roles in the Strategic Process - Political and Administrative Leaders, and Dont Forget the Citizens 7. Political Leaders and Public Administrators in Finland: Key Values and Stumbling Blocks in Decision-Making and Interaction Vuokko Niiranen and Minna Joensuu 8. Competencies for Effective Strategic Leadership in Estonia? Eve Limbach-Pirn 9. When Civic Culture Meets Strategy: Exploring Predictors of Citizen Engagement in Participatory Strategic Plans in Italy Daniela Cristofoli, Laura Maccio and Marco Meneguzzo Part III: Does it work? 10. A State of Research on Strategic Management in the Public Sector: an Analysis of the Empirical Evidence - Bert George and Sebastian Desmidt 11. How Dynamic Capabilities Mediate the Link Between Strategy and Performance Isabella Proeller, Alexander Kroll, Thomas Krause, and Dominic Vogel 12. Strategic Competence-Based Management in Finnish Health Care Services Seja Ollila and Pirkko Vartiainen Part IV: Reforms, Developments, and Challenges 13. Strategic Management and Budgetary Reforms: a Meta-Analysis of Benefits and Anomalies in OECD Countries Anne Drumaux 14. Strategic Management and Public Management Reforms in Turkey Ahmet Kesik and Hasan Canpolat 15. The Development of the Strategic State and the Performance Management of Local Authorities in England Peter Murphy 16. Driving Strategic Change Through Management Tools: The Case of Program-Based Budgeting in French Higher Education Emil Turc and Robert Fouchet 17. Reshuffling the Strategic Management System to Develop Capacity for Strategic Agility: the Case of Lithuania Jurgita Siugzdiniene, Egle Gaule and Rimantas Rauleckas 18. Strategic Management in the Italian NHS: the Implementation of Cost-cutting Plans for Regional Health Services Sephan Kunz, Gloria Fiorani and Marco Meneguzzo Conclusion 19. The Development of the Strategic State in Europe Paul Joyce and Anne Drumaux

Strategic Management in Government: Looking Backward, Looking Forward

The research carried out into strategic management in government and the wider public sector has made a lot of progress since the early 1980s. As a result, there have been major steps forward in the theory and understanding of topics, such as the development of strategy in the context of stakeholders and their relative powers, the responses of individual public sector managers to their experiences of strategic planning, and how to make strategic planning more effective. Some research directions have proved less fruitful. For example, some studies have taken ideas and propositions from the private sector literature on strategic management and investigated their extension to the public sector; this has involved substantial and rigorous research endeavors and produced only modest results. Future priorities for research should include research into strategic learning within the public sector, both in the form of emergent strategy and of intentional evaluation and learning as part of formal strategic planning. A second major example of where more research is urgently needed is research into the reform of public governance to make it more strategic, which is a matter where policy-makers and practitioners have been quite active and experimental since the mid-1990s. In this case priorities include research into the role of leadership in the conscious and purposeful reform of public governance institutions, and, probably even more urgent at the present time, research into how governments can engage citizens and other stakeholders in the formulation and implementation of government strategies.

Public Governance in Member States

The purpose in this chapter is to help set the scene for our analysis of the governance processes developed by the European Union to deliver the Europe 2020 Strategy. It specifically sets out to build a deeper understanding of the variations in the strategic capabilities of the national governments of Member States. As we noted in the first chapter, the strategy document drafted by the European Commission in 2010 was very clear that there were important differences between Member States and very clear that this should be reflected in the delivery of the Europe 2020 Strategy by national governments. It was proposed to reflect this in varying the national targets under the Union-wide strategy. Presumably the success of the multi-level approach of the Europe 2020 Strategy would depend on the strategic capabilities of national governments and parliaments and on their cooperation with the European Union institutions. Nevertheless, there was no explicit assessment of the strategic capabilities of Member States in the document, nor of their readiness and fitness to be integrated into a European Union-wide effort to deliver the Europe 2020 Strategy. This omission is not explained in the document, and it may be that such assessments were made but not included in the strategy document. Alternatively, perhaps the Commission assumed that it was not needed and that strategic thinking and planning would also be undertaken at national level using the Europe 2020 Strategy as a framework. If so, perhaps it was further assumed there would be a great deal of involvement of national level governments and parliaments in strategic thinking and planning.

Political Leadership and the Europe 2020 Strategy

The European Union has government institutions that are very unusual, making it unlike the government structures of the Member States that compose the Union. In part these specificities reflect concerns to ensure national governments and citizens are represented in its governance system; and in part the functions and relationships of the European Commission have been moulded to help support a process of transition to political solidarity across Europe. We would also suggest that European Union governance varies from policy to policy and that the European Union is a system of differentiated integration in levels of centralization (competition versus foreign policy) and also in territorial extension (Schengen/non-Schengen, Euro/non-Euro) (Heidbreder and Brandsma 2017). The European Union is a polity in the making but European policies have developed in a piecemeal way with a varying influence over time of Member States in their formulation and this in a context of globalization reshaping the Europeanization process itself (Leontitsis and Ladi 2017). The European Union edifice is characterized by incompleteness and fluidity, which is not a new thesis at least for political control on policies (Marks 1996).

Member States’ Outcomes and Desirable Societies

In this chapter we offer an interpretation of the national level data to suggest how national circumstances, government effectiveness and credibility, and societal outcomes are linked together as interrelated phenomena. We will suggest that it is possible to interpret the evidence as showing the plausibility of a model of sustainable societal progress achieved by effective and credible governments that have strategic management capabilities.

The Member States’ Willingness and Capabilities

In this chapter we investigate the Member States’s actions in delivering the Europe 2020 Strategy. We have already analysed the governance mechanisms of Europe’s multi-level governance system and the issue of political leadership in relation to the Europe 2020 strategy. Both Chaps. 4 and 5 left some matters unfinished, including the contribution of Member States to delivering the Europe 2020 Strategy. One aspect we wanted to follow up on was whether the strategy might have been delivered partially on the basis of a voluntary system of alignment of national visions, priorities, and strategic targets. In other words, Member States might have voluntarily adjusted national strategies. This would be a strategic system based on self-alignment of the constituent Member States. It would have meant, in the light of our earlier findings, that Member States would have probably provided the necessary leadership and monitoring of their delivery of the Europe 2020 Strategy on the basis of national initiative and action.

The Commission as Part of the ‘Centre of Government’ for the Europe 2020 Strategy

If there is an effective ‘centre of government’ at the European Union level, we expect it might be located partially in the European Union. The nature of the Commission’s contribution to a centre of government function might go beyond its obvious roles in initiating and formulating legislative proposals and its work of monitoring and guiding Member States with respect to the Europe 2020 Strategy. We have noticed that the Commission, starting in 2014, may have been taking on a more overtly political involvement in the work of leadership of the European Union. It looks as though this might have happened to compensate for the way in which the European Council has discharged its political leadership role towards the Europe 2020 Strategy and other collective endeavours. From a neo-Weberian perspective, the change could be seen as politically sensitive since bureaucrats and politicians are meant to occupy different formal positions within a mass democracy system. From an early 1990s governance perspective this change in the Commission may seem unsurprising—assuming that the move to a more overtly political orientation in the leadership of the Commission was a part of a trend to ‘de-differentiation’ of the roles of bureaucrats and politicians within a system moving towards a greater capacity for partnership in problem solving and a move away from hierarchical coordination in society. These preceding comments suggest a need for some theoretical open-mindedness when approaching the empirical data presented in this chapter on the leadership and monitoring activities of the European Commission.

The Governance System for the Europe 2020 Strategy

Governance has been widely discussed by scholars since the nineties in the different but related fields of politics, public administration and European studies. Research and theorizing of governance has resulted in a complex, diverse and at times bewildering array of writing. Governance has been written about as a new approach by the modern state (Kickert et al. 1997). In contrast, it has also been analysed as governance without government (Peters and Pierre 1998). It has been studied in relation to regimes, law, rules, judicial decisions and administrative practices (Lynn et al. 2001). Then again, it has been studied in relation to non-state actors and policy entrepreneurs building networks (Klijn 2005; Kooiman 2005). One influential view suggested that there are a number of approaches to the concept of governance in the study of public administration, including the study of: (1) inter-jurisdictional governance, (2) extending state function by exporting it to third parties (profit or non-profit), and finally (3) non-state governance in accounting for NGO activities (Frederickson 2005).

Leadership in Europe’s Public Sector

European research into probably the best-known model of leadership in the public sector—the transformational–transactional leadership model—emerges from this chapter as potentially more important for what it says about a leader’s focus on followers’ needs as what it says about charismatic and empowering leadership. The remaining perspectives, including systems leadership, are at an early stage in research terms, but do serve to highlight that models of leadership need to keep up with evolutions in the public sector, including the extensive use of partnerships and networks. This chapter also includes some materials on public governance developments in Scotland to highlight the role of public sector leaders in relation to public governance, including their role in redesigning public governance institutions.