STRATEGY CONTENT AND PUBLIC SERVICE PROVIDER PERFORMANCE IN THE UK: AN ALTERNATIVE APPROACH
| DOI | http://doi.org/10.1111/padm.12090 |
| Author | IAN HODGKINSON,PAUL HUGHES |
| Date | 01 September 2014 |
| Published date | 01 September 2014 |
doi: 10.1111/padm.12090
STRATEGY CONTENT AND PUBLIC SERVICE
PROVIDER PERFORMANCE IN THE UK: AN
ALTERNATIVE APPROACH
IAN HODGKINSON AND PAUL HUGHES
This article presents an alternative empirical test of the relationship between strategy content
and service provider performance. Strategy content, conceptualized as comprising strategic stance
and strategic action, has been shown to be a means to improve public service performance. We
contribute to this growing body of research by deriving an alternative typology of strategy to
better reflect competitive conditions in the public sector, which existing strategy typologies cannot
fully explain. By assuming that public service providers must follow strategies best suited to their
internal and external conditions for improved performance, we evaluate the significance of ‘fit’
between alternative strategic stances and organizational characteristics. Compromising the delivery
of a strategy invariably leads to a misfit between strategy and what the service provider is actually
doing. We highlight how to optimize strategic fit, to maximize service provider performance.
Conclusions are drawn for public management theory and practice.
INTRODUCTION
In an environment in which public management reforms emphasize the value of a
comprehensive approach to strategy, a core managerial function is to shape strategy
content, that is, how an organization interacts with its environment, and the way it seeks
to improve performance (Andrews et al. 2009). The idea that strategy content influences
performance is central to generic management theory (Meier et al. 2007) and implies that
managers can make a major difference in service standards through the strategies they
follow (Andrews et al. 2006). Boyne and Walker (2004) conceptualize strategy content
in the public sector at two levels. First, strategic stance is the broad way in which an
organization seeks to improve its performance. Second, strategic actions are the specific
steps that an organization takes to operationalize its stance, referring to how organizations
actually behave, rather than their intended approach (Andrews et al. 2006).
The contention that strategy content is a means to improve public service provider
performance is increasingly supported (e.g. Andrews et al. 2006, 2009; Meier et al. 2007,
2010; Walker et al. 2010). However, these examples are based on the application of the
Miles and Snow (1978) typology. The absence of evidence assessing the appropriateness
of alternative strategic management models associated with the private sector has arisen
from a lack of attention from public administration academics, with many being critical of
the movement towards the adoption of private sector practices. With reforms introducing
private sector management practices into key areas of service provision (Liu et al. 2008),
it is timely to consider the contribution of alternative strategic management models to
service provider performance.
As outlined by Vining (2011), public management research and practice could draw
more extensively on generic management and organization theory knowledge. In extend-
ing this research, we investigate the relationship between strategy content and service
provider performance in two important ways. First, it is inappropriate to categorize
Ian Hodgkinson is in the School of Business and Economics, Loughborough University, UK. Paul Hughes is in the
Business School, Durham University, UK.
Public Administration Vol. 92, No. 3, 2014 (707–726)
©2014 John Wiley & Sons Ltd.
708 IAN HODGKINSON AND PAUL HUGHES
service providers as belonging solely to a single strategic stance (Boyne and Walker
2004; Meier et al. 2010) and we expect strategies to reflect a combination of strategy
dimensions. From public leisure sector data, we derive an alternative typology of strategic
stance comprising strategy dimensions drawn from Porter’s (1985) and Faulkner and
Bowman’s (1995) strategy typologies. Second, we follow strategic fit theory: to maximize
performance, service providers must follow strategies best suited to their internal and
external conditions. Strategic fit is achievable by aligning internal strategic resources with
external environmental opportunities and threats through a market orientation (Hughes
and Morgan 2008). The relevance of market orientation and resource-based theories to the
public sector has been evidenced in the public administration literature (e.g. Bryson et al.
2007; Walker et al. 2011).
While the two streams of research form relatively independent literatures (the former
emphasizing the need to base strategy on external, market considerations and the latter
on internal, organizational resources and capabilities), these two approaches can be
reconciled through the concept of strategic fit. Indeed, authors such as Andrews et al.
(2009, p. 747) state that it will be essential to evaluate ‘whether public organizations that
achieve the tightest fit between strategies and organizational characteristics are also the
highest performers’. Our research is a step in this direction.
This study contributes to public administration theory in two important ways. First,
and to the best of our knowledge, this is the first study to empirically derive an alternative
typology of strategic stance for the public sector while accounting for performance
implications. Accordingly, the study contributes new evidence to expand the relevance
of alternative strategic management models to public service management. Second, we
believe that this is the first study to test empirically the role of market orientation
and strategic resources concurrently in relation to fit with stance. In doing so, we can
determine the extent to which different strategies rely on market orientation and strategic
resources. We also contribute to public service practice as providers can use our research
to determine the optimum strategy for their respective strategic resource endowments
and degree of market orientation.
In the first part of this article we review strategy content (stance and actions), considering
the limitations of its conceptualization and derive a series of research propositions for
the public leisure sector (e.g. public indoor sports and recreation facilities that are
managed between public, private, and non-profit domains). In the second part of this
article we outline our research methods and interpret our findings. We then evaluate
the significance of fit between strategies and organizational characteristics for service
provider performance.
STRATEGIC STANCE
Stance is depicted in strategic management through the use of typologies. The two
dominant typologies in the private sector were developed by Miles and Snow (1978) and
Porter (1985). Research in the public sector has typically adapted the former, examining
the central components of the Miles and Snow typology (Prospector–Defender–Reactor)
(e.g. Andrews et al. 2006, 2009; Meier et al. 2007, 2010; Walker et al. 2010). These studies
have developed and tested hypotheses that different strategic stances have different
effects across public services (Boyne and Walker 2010). In doing so, these examples have
extended the broad but mixed support for the Miles and Snow model of strategy and
performance from the private to the public sector.
Public Administration Vol. 92, No. 3, 2014 (707–726)
©2014 John Wiley & Sons Ltd.
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