Strategic Planning Environment - Process and Performance in Public Agencies

Strategic Planning Environment, Process, and Performance in Public Agencies: A Comparative Study of Departments in Milwaukee
Rebecca Hendrick
University of Illinois at Chicago
ABSTRACT This research presents a theoretical framework for studying strategic planning in the public sector that merges research on planning in the private sector and research on the differences between public and private organizations. The study identies a set of variables relevant to this framework and measures these variables for fourteen departments within the City of Milwaukee using a wide range of survey questions that were tested and implemented in extensive interviews. Correlations for these variables display consistent patterns that lend evidence to key debates and direct future research in the eld.
Since the 1980s governments at all levels of this country and others have been implementing a series of related reforms that focus on making government more productive, responsive, and focused on performance. For many governments the rst stage of reform was adopting total quality management or similar quality-focused innovations. Soon afterward governments began adopting other private-sector management practices such as strategic 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 signicant 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 thirty years on the effectiveness of strategic planning and how it is implemented in different environments, most studies focus on organizations in the private sector. Additionally, our theoretical and practical knowledge of this key reform in public organizations is primarily dened 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 knowledge of how it functions in unique settings to broader-based knowledge of what works in a
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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Journal of Public Administration Research and Theory
range of settings. Such efforts will be facilitated if they are grounded in an accepted theoretical framework and are built on existing knowledge of strategic management in the private sector. This study works toward fullling 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. One strain is represented by the wealth of empirical research on strategic planning and management 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 variables 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 departmental 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 winter of 199495, and a lengthy survey was administered through a second round of interviews with the same people in the winter of 199697. Although this research is clearly exploratory, 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 research. Following sections present a brief history of strategic planning in Milwaukee and a discussion of the survey, methodology, and ndings.
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 environment in private corporations in the early 1960s (Chandler 1962; Cyert and March 1963). Essentially, strategic management is formalized strategic policy making that targets the organizations 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 strategic 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 signicant performance differences between rms 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
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and management functions and the relationships among the context in which these functions take place, the types of processes employed, and the impact of these activities on organizational performance (for reviews of this research, see Bourgeois 1980; Miller and Cardinal 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 adaptation of the organization to its environment. With respect to decision making, strategic planning 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 continuums, two of which are important here. One continuum reects the methods of problem solving as incremental versus synoptic. The second continuum, which is particularly relevant 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 management 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 dened by whether an organizations structure ts its environment as it moves through cycles of t, environmental change, mist, structural and procedural change, and new t. Also, the greater the t 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 t the environment 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 eld. Although these relationships are not necessarily mutually exclusive, type A species that context directly affects planning process, which directly affects performance. Type B species that context and process may have joint or independent effects on performance. Type C, which is closest to the notion of environmental t, species 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 environment would not benet 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 environment or under greater pressure will have more slack and tend to centralize authority and decision making (Chakravarthy 1987; Donaldson 1996). Applying the notion of environmental t to problem solving and strategic planning
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Figure 1 Possible Theoretical and Empirical Relationships among Conceptual Areas of Strategic Planning
A) Intervening & Direct Effects

CONTEXT PROCESS P PERFORMANCE P
B) Independent & Joint Effects

CONTEXT PERFORMANCE
PROCESS
C) Interactive Effects
CONTEXT
PROCESS
PERFORMANCE
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 synoptic and specialized (which is also less integrative). Although uncertainty increases with environmental complexity and turbulence, it also is altered by how structured the organizations 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 uncertainty associated with ill-structured problems and a general lack of information and to increase 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 theoretical 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 factors 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 levels 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 internal to the organization and represents characteristics or features of the organization such
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Figure 2 Detail of the Conceptual Areas of Strategic Planning
External Environment
Organizations Internal Environment Uncertainty
S a t i s f a c t i o n
Organizational Performance Goal Strategy Success Organizational Performance
Strategic Planning Process
& Perceptions
as its structure, technology, culture, capabilities of staff and management, leadership qualities, and degree of internal change. The second dimension represents characteristics or features that are external to the organization such as availability of resources, competitive pressures, hostility, complexity, and turbulence or change. Features of both the internal and external 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 problems it must focus on (Goll and Rasheed 1997; Grinyer, Al-Bazzaz, and Yasai-Ardedani 1986; McArthur and Nystrom 1991; Papadakis, Lioukas, and Chambers 1998; YasaiArdedani 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 organization achieve its goals and solve problems in either environment. For instance, an organizations goal may be to improve coordination among mid-level managers or to obtain a higher share of market sales. Although either of these objectives can be characterized as improving 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 gure 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 performance or strategy development is the participants satisfaction with the planning process and the strategies 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.
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In this case satisfaction with planning is considered to be a prior factor in organizational performance or goal success; thus participants organizational performance is more likely to improve and planning goals are more likely to be achieved if planning participants are satised with the process (Boal and Bryson 1987; Nutt 1986; Simpson 1992). Finally, changes in organizational performance and the degree of success in achieving goals as a result of planning and developing strategies are recognized by participants in future planning efforts, as is indicated by the feedback loop in gure 2. In the long run, this continuous feedback provides the mechanism by which an organization adapts its planning process to both the internal and the external environments (Miller and Cardinal 1994; Ring 1989).
Evidence from the Private Sector
Although there is contrary evidence, research on planning in the private sector generally supports the larger theory that the relationship between process and performance depends on the environment (Chakravarthy 1987). Three related characteristics of the planning process formality, comprehensiveness, and rationalityhave been examined extensively. These characteristics are measured by features such as the extensiveness of the planning process, the number of written documents used, and whether the rm has a regular planning schedule. The conditions of formality, comprehensiveness, and rationality in planning also appear to improve performance overall, although the evidence for these claims is mixed (Jones, Jacobs, and Spijker 1992; Miller and Cardinal 1994; Pearce, Freeman, and Robinson 1987; Smith et al. 1988). There is evidence, however, that such claims may be true for organizations in stable and municent (growing market) environments (Fredrickson 1984; Fredrickson and Mitchell 1984; Goll and Rasheed 1997). This research focuses on other contingent effects on the relationship between planning process and performance: rm size, environmental complexity, and capital intensity (level of capital assets for production and technology) (Grinyer, Al-Bazzaz, and Yasai-Ardedani 1986; Kukalis 1991). More generally, this research shows that rm performance depends more on planning process than on environmental characteristics (Miller and Cardinal 1994). Other research from this vein examines the direct effects of the environment on the planning process. The evidence is inconclusive regarding one prominent variable, organizational size, and supports the claim that larger organizations use more rational, formal, and comprehensive planning processes (Fredrickson and Iaquinto 1989; Hickson et al. 1986). Other research, however, shows that the relationship between size and planning depends on other environmental characteristicsthat larger organizations have more comprehensive, sophisticated, and formal planning processes only if they have more complex and stable environments (Grinyer, Al-Bazzaz, and Yasai-Ardedani 1986; Lindsay and Rue 1980). On one hand, environmental complexity is associated with more extensive planning processes, more frequent planning, greater involvement of top management, shorter planning horizons, less reliance on planning specialists, and more resources devoted to planning (Kukalis 1991; Yasai-Ardedani and Haug 1997). On the other hand, organizations in competitive environments have more top management involved in planning and shorter planning horizons, but there is no difference in formality (Yasai-Ardedani and Haug 1997). Organizations with core technologies that are more vulnerable to environmental change, such as those in competitive environments, also have more sophisticated planning processes, use longer planning horizons, devote more resources to planning, and are more likely to delegate planning to specialists (Grinyer, Al-Bazzaz, and Yasai-Ardedani 1986;
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Yasai-Ardedani and Haug 1997). Other researchers nd that the nature of the decision problem (crisis, familiarity and uncertainty, expected impact of problem) alters the comprehensiveness, formality, centralization, lateral communication, and politicalization of the planning 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 organizations 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 nonprot 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 ndings are somewhat similar. They nd 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 relationship 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 organizations, comprehensiveness is an important process variable in the research done by Bryson and his associates, but they dene it very differently. Here, comprehensiveness consists of three components: problem and solution identication, frequency of communication, and use of a problem-solving framework. Other process variables such as level of communication, 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 reect 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 relationships among planning, environment, and performance in public organizations, future research in this area might benet from more systematic examination of the differences between 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 organizations that could affect strategic management in the public sector focuses on the openness of 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 following 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 and Bretschneider 1994).Second, its goals and operations have more external inuence and control that is often broadly based, is more fragmented, and requires more interaction and coordination with outside groups (Bozeman and Bretschneider 1994). Somewhat later, Nutt and Backoff (1995) argue that the private-sector variables of market volatility and competition, which dene 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 organizations. They dene bureaucratic organizations as having more elaborate hierarchies and greater centralization, rigidity, standardization, and formalization and as being more resistant to change. The empirical studies they review also support arguments made by Nutt and Backoff 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 information to be less available in public organizations, and they only partially support the claim that public organizations are subject to more external inuence 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-ve top decisions in thirteen public organizations with eighty-ve top decisions in seventeen private organizations. Hickson and others nd that top decision making 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 authorization. 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 complex (many components that are diverse and interdependent) and more political (contentious and externally inuenced).
Variables Relevant to the Public Sector
The relatively brief discussion of these three areas of research suggests a broad range of variables that might be examined in future research linking the dimensions of environment, strategic planning process, uncertainty and perceptions, and the performance of public organizations. 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 comprehensive with respect to the entire range of variables, the constructs examined here constitute 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 public 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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Figure 3 Constructs Examined in the Primary Conceptual Areas of Strategic Planning
Strategic Planning Process
Environmental Context
Rationality / Comprehensiveness
- Process: methods & tools, frequency of review and monitoring, sophistication - Content: # of items considered, depth of analysis and problem identication Centralization / Delegation, Exclusion /Inclusion of External Stakeholders Stakeholder Activation & Involvement: breadth of participation, commitment to planning, degree of effort Monitoring of Activities (not limited to stategic planning)
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 / Municence Conict External inuence
Uncertainty & Perceptions
Strategic Planning Impact: Performance

Satisfaction & Difculty with planning Strategic Capacity: improve managerial control, budgeting, communication
Experience With and Knowledge of

Environment and Outcomes Nature of Decision Problem and Goals: e.g. Structured vs unstructured, ambiguity
because of their openness, their broader constituency, the greater attentiveness of their stakeholders, 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 operate under greater conict. 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 behavior 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 municence is another critical element of an organizations external environment, although primarily for private-sector organizations, and is dened 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, increased prots), the concept of municence and hostility should be dened more broadly for public organizations. In addition to resources, economic conditions, and external organizations
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(e.g., other governments), municence or hostility in the public sector may be affected greatly by political and social conditions that both determine objectives and constrain an organizations 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 publicsector organizations, but they are not examined here. With respect to the internal environment, the greater bureaucratization of public organizations 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 public sector in general and Milwaukee specically. However, one element of bureaucratization is not included here, which is the formalization of procedures and reliance on rules or standards (rule-based functioning), because of the failure of the instruments attempting to measure this variable. Although the concept was developed with reference to private rms, technology is another feature of the internal environment that is important to strategic planning and other organizational processes. In this case technology refers to the work being performed by the organization 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 obsolescence and insuring its adaptability in a volatile market are the primary objective of planning 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 as relevant to public organizations as other dimensions of core technology, such as complexity (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 publicsector 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 difcult to comprehend and measure and that this will affect such organizations in signicant ways. However, little research has been conducted on the impact of technological uncertainty, 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 comparison to private organizations. In this case, examining the impact of technological uncertainty 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 research 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 planning process, how the process is conducted, and the impact of the process on the organization. Change and turbulence in the internal environment may also affect how planning is conducted and the difculty 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 to planning (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 planning 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 rst two dimensions are examined here. Satisfaction with planning is measured by perceptions of difculty with the planning process, and organizational performance is measured by determining whether planning improved the strategic capacity of the organization. Technically, difculty and satisfaction with the planning process represent 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 satised with the process, then performance is unlikely to improve. Although these variables have been used in the past to measure 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 difcult 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 publicsector performance is apparent from private sector research that easily captures rm performance from nancial statements, in contrast to public organizations whose nancial statements indicate little about the policy objectives of government. Keeping in mind that there are too few cases with which to examine complex relationships 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 thorough 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 briey to provide the larger context within which planning took place.1
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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 rst 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 power and authority among the other elected and appointed ofcials, which include seventeen district aldermen, four elected departmental heads (noncabinet), and ten appointed department heads (cabinet). The four departments with elected heads are the Ofces of the Comptroller, 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 signicant budgetary reductions and organizational changes in the rst years he was in ofce. This laid the groundwork 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 executive ofcers. Based on consultations with a strategic planner from a large, well-known manufacturing rm in Milwaukee, the Ofce of Strategic Planning was created in 1990. The consultant was then hired to oversee the development of a citywide strategic plan and the implementation 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 departmental level and at even lower levels in some cases. They believed that requiring planning 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 specic ways. By 1995 departments 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 department 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 research 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 objectives. 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 ination, 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 nal element of System 94 was to link the plans, budget, and objectives with internal management indicators and the accounting system by way of a new nancial management information system. The internal management indicators were to be developed and used by managers to monitor and measure their service delivery. Numerous measures already existed in some departments prior to 1993, which provided an infrastructure to develop more comprehensive performance-monitoring systems. Development of the new nancial 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, the choice of variables and their operationalization were based on responses to questions from semistructured interviews conducted in the winter of 199495. The survey was implemented in a second round of interviews in the winter of 199697. All interviews were conducted 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 present. By the second round of interviews, the departments had completed their rst 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 planning would have had time to reect on the conditions, process, and impact of strategic planning in their units. The survey consisted of an extensive sixty-two-item questionnaire developed to measure the variables identied here. One department declined to be included in this second round of interviews, which yielded fourteen rather than fteen completed surveys. The primary 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 questions was clear and consistent to the interviewees, and it provided us with feedback for future 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 difculty (A) the department had with the planning process and whether planning improved managerial and strategic capacity (B). Difculty of planning is measured as an average of responses to seventeen items that represent different areas of planning, such as acceptance and participation, conict, integration, and communication. These areas were identied using a content analysis of responses to questions about difculty with planning in the rst round of interviews. Additional areas that may not have been represented in the rst interviews
2
A more detailed list of the questions and items within each question can be obtained from the author.
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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 resource allocation, communication, and coordination. Five indexes were constructed to measure different characteristics of the planning process: 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 ve 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 assumptions), and the tools used (C-3: documents, written plans, forms). The index also includes elements 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 factors related to comprehensiveness.4 The tasks of monitoring, forecasting, and developing assumptions 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 responses 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 available for such tasks, which are not necessarily related to comprehensiveness. Although monitoring 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 measures the availability of information about the environment and organizational performance. The index for breadth of stakeholder participation (E) measures the involvement of eight stakeholder groups in four key process areas of triggering awareness and the elaboration 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 awareness and the elaboration of strategic issues were combined based on analysis of responses to the rst round of interviews (Bryson 1995). Given the emphasis on public organizations having more external inuence than private ones, and the importance of stakeholder participation to planning in government, the index external versus internal participation (F) is calculated as a ratio of external to internal participants in the four planning stages above. Internal centralization (G) of planning measures the involvement of department heads in all four stages relative to the inuence 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,
Masoud Yasai-Ardedani contributed valuable assistance in reviewing and helping to construct questions and response areas in the survey, especially those in the performance and planning process dimensions (see YasaiArdedani and Haug 1997). 4 The C-number designations refer to the survey questions associated with variable C as presented in the appendix.
3
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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 dimension of uncertainty and perceptions is considered to be a critical difference between public and private organizations, and it represents participants general knowledge of causeand-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 services, with the extent to which service delivery is organized in a specic way. A third internal, 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 the size and complexity (J) index, which is another internal variable, were obtained from organizational charts and documents indicating the number of employees 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 nonmonetary 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 difculty respondents had in answering the questions and the problems of nding a logical way to combine them. Given that bureaucratization is such an important construct in the literature on public and private differences, 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 conict and congruence (Q). This variable measures stakeholders agreement with the departments mission 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 fteen external conditions (e.g., legislation, resources from other governments, political and social conditions, media) on the ability of departments to meet their objectives. Finally, external inuence (R), which is a key external factor for research on public organization, is a measure 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 inuence of ve 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 strategic planning. Additionally, Milwaukee had experienced signicant political and institutional changes in the years prior to the surveys. Thus, the effects of these events may also be confounding the measures reported here. The second issue, which is a central debate in much of the research on strategic management, is the weak measurement validity of subjective assessments of goal success and the improvement of strategic capacity (Pearce, Freeman, and
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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 correlations 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 with two 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 t along these trends and if any one department might be responsible for the high correlations, as is prone to happen with a few cases. With respect to organizational performance, the correlations show that strategic capacity (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 difcult (A) in departments that have a more decentralized planning process (G) and greater commitment to planning within the organization (H). The former ndings are consistent with evidence from the private sector that rm performance is improved in organizations with more formal, comprehensive, and rational planning processes. The latter ndings make sense from the perspective that strategic planning is more difcult to implement than bureaucratic (topdown command and control) means of determining objectives and resolving strategic issues because those who are committed to planning put more effort into it and, as a result, have more problems implementing it. Examining gure 4 shows how specic departments are arranged with respect to strategic 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 identied throughout the interviews with other departments and top administrative personnel as having 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 relatively clear or narrow objectives (e.g., the Health Department, Fire Department, and Assessors Ofce).6 The surprising outcome among the performance relationships was in the City Treasurers Ofce. This department ranked high on comprehensiveness of planning, monitoring, and capacity but had no clear mandate to implement strategic planning because its
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 Ofce maintains an extensive property le that is used by other departments and many researchers in the area, and it has been on the forefront of developing geographic information system applications using these data.
5
Table 1 Pearsons Correlations B C D E F G H I J K L M N P Q R
Standard Average Deviation A
1.44 1.43 .09 .21 .20 .73** .72 .31 .60** .31 .32 .46* .25 .08 .63** .20 .06 .43 .17 .51* .63** 4.3 .58** .03 .04 .39 .36 .33 .52 .51* .23 .57** .05 .34 .01 .30 .07 .30 .43 .51* .63** .14 .29 .21 .26 .05 .37 .27 .32 .14 .03 .20 .39 .15 .05 .23 .02 .15 .15 .26 .16 .15 .01 .06 .22 .09 .34 .63** .26 .19 .16 .07 .13 .17 .04 .04 .10 .45 .02 1.0 1..4 1.1 1.1 .59 .57 .51 .16 .17 .10 .47 .02 .34 .17 .10 .23 .01 .12 .12 .24 .03 .36 .14 .20 .34 .16 .09 .24 .01 .35 .14 .08 .19 .11 .39 .24 .46* .41 .17 .03 .60** .17 .23 .24 .00 .24 .40 .04 .34 .29 .73** .65** .28 .61** .25 .63**.57**.69**.13 .08 .26 .12 .27 .19 .15 .55** .60** .58**.64**.66**.03
.55 .57
.63 4.0 2.2 .53 14.0 .50
2.1
.06 3.3 3.0 2.1
.33 .09 .33 .06 .03 .10 .11 .14
Organizational performance A) Difculty with planning B) Strategic & manager capacity Strategic planning process C) Comprehensive planning D) Extent of monitoringa E) Broad participation in planning F) External / internal participants G) Internal centralization H) Commitment to planning Uncertainty and perceptions I) Clear & measurable objectives Context: internal environment J) Size & structural complexity K) Scope of operations L) Need to coordinate technology M) Routine and structured process N) Strategic planning culture and training P) Internal change Context: external environment Q) Goal conict and congruence R) External inuence S) Favorable-hostile environment .49*
3.2 3.3
4.0 .34 .10
.11 .26 .50* .14 .51* .21 .52* .23 .31 .40 .03 .19
Note: Correlations in boldface type are not relevant to theoretical framework. a Also a component of Uncertainty and perceptions. *p .10; **p .05.
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Figure 4 Dependent Variable Strategic Capacity, Comprehensiveness of Planning
2.50 2.00 1.50 1.00 police econ develop
assessor
r = .73
court comptroller treasurer health port public works administration build inspct fire library employ relatn
Strategic Capability
.50 .00 .10
.20
.30
.40
.50
.60
.70
.80
.90
1.00
Comprehensiveness of Planning
Figure 5 Dependent Variable Strategic Capacity, Clarity and Measurability of Objectives
3.00 2.50 -
r = .55; .59 without

treasury
comptroller court fire health port econ develop police public works administration library employ relatn assessor treasurer
Strategic Capability
2.00 1.50 1.00 .50 .00 3.00
build inspct
3.50
4.00
4.50
5.00
Clarity/Measurability of Objectives
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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 implementing innovative management methods that greatly improved its protability in the face of a dramatically declining market for port facilities in Milwaukee. Both departments are small, which may make it easier to implement comprehensive planning, and are managed by persons with more experience in and a stronger identity with the private sector. Additionally, much of the City Treasurers mission encompasses, by statute, monitoring and data collection. However, gures 4 and 5 and the descriptive statistics for the capacity variable reveal issues about the capacity variable that undermine these ndings. 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 positive). 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. Additionally, 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 inated.7 The correlations for difculty 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 difcult. These departments included the Department of City Development, the Department of Public Works, the Health Department, and the Department of Employee Relations, which is consistent with information obtained from the rst interviews and discussions with other departments. In this case the Department of City Development expressed much frustration over the planning 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 Ofce on the content of the its plan. Both the Department of Public Works and the Department of Employee Relations were noted for their attempts to implement a more bottomup 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) and greater commitment toward planning (H). These departments also monitor their environments (D) more. This is consistent with the impact of these variables on strategic capacity (B) and involves the same departments: the Fire Department, Assessors Ofce, Health Department, 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 Ofce may account for much of the correlation between strategic capacity and the clarity and measurability of objectives, given its outlying location on the scatterplot. However, removing the City Treasurer and recalculating the Pearsons r increases the value slightly from .55 to .59, showing that this department is not dening the relationship between these two variables.
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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 theoretical framework in gure 2 shows that uncertainty and perceptions should have a direct impact on the planning process in comparison with the process variables. However, past research 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 technological 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 participants in the planning process (F) and fewer participants overall (E). However, the latter correlation is explained to some extent by the Ofce of the City Treasurer, and the former is reduced 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 stakeholder groups in the planning process (E) when the need for coordination (L) is high, but observation of the scatterplot also shows that the City Treasurer may explain the relationship with overall participation. This outcome is conrmed 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 departments. 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 Ofce, 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 environment, decision problems, and the means-ends relationships between activities and outcomes 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 also interesting 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 environmental 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 performance. This is also true for the associations between individual questions comprising the external variables and the process and performance variables. This is contrary to ndings from research on strategic planning and management in the private sector, and it may indicate that Milwaukees departments are paying more attention to their internal environments than their external environments during planning, which is a relatively new procedure for them.
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Once departments become more experienced with planning and it becomes more institutionalized, they may use it more to manage their external environments. The weak or nonexistent 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 between 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, planning process, and environmental context; and (3) its ndings that some planning processes may improve organizational performance and that certain features of organizations activities and services and their uncertainty about objectives may inuence 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 debate surrounding whether public and private organizations differ on these dimensions. Although research on private organizations does incorporate uncertainty in its analysis, 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 uncertainty 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 signicance of this variable in past research and the tenuous ndings here regarding 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 external 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 nds that they have these types of relationships, but many more cases are required to perform the analyses required to detect such relationships. Thus, future qualitative research might incorporate departments from different local governments that have implemented strategic planning. It might also make sense to focus on governments or other public organizations in which strategic planning has become more institutionalized to avoid confounding the effects of planning with inexperience 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 require alteration or additions as suggested. Other variables, which have relatively low alpha levels, such as those measuring change culture and goal conict, 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.
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APPENDIX VARIABLES AND INDEXES Performance Indexes
(A) Difculty with Planning: average of responses to seventeen items below; = .76; = 1.44; = .55 1. How much difculty do you encounter with strategic planning in the following areas? seventeen items represent different areas where planning may be difcult, e.g., communication, participation; ve-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, communication, awareness of problems; ve-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.) ve items represent areas of formalization, e.g., documents, written schedules, preprinted forms: yes/no 4. Does your department develop written plans, 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-benet analysis, surveys: yes/no
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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? ve items represent monitoring areas, e.g., performance, workload, efciency; ve-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? ve-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? ve-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 items represent different stakeholder groups such as council, mayors ofce, employees, client groups; ve-point scale: (0) none, (2) some, (4) extensive 11. To what extent are the following groups involved with triggering awareness of issues that can signicantly affect departmental operations (called strategic issues) and consideration and elaboration of these issues? 12. To what extent are the following groups involved with generating policies, programs, or services aimed at resolving strategic issues? 13. To what extent are the following groups involved with evaluating and choosing strategic proposals?
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14. To what extent are the following groups involved with monitoring the implementation 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 extensive 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 clear understanding of the following? three items represent relationship between services and objectives, objectives and mission, validity of measurement; ve-point scale: (1) not at all, (3) somewhat, (5) to a great extent 16. To what extent can your departments program objectives be quantied and measured? ve-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? ve-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? ve-point scale: (1) very few, (3) about equal, (5) many
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(L) Need to Coordinate Technology: average response to ve 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); ve-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? ve-point scale: (1) very little, (3) some, (5) great deal 21. To what extent are the services delivered to clients or constituents by the department organized sequentially (e.g., one service cannot be delivered to a client until a prior one is implemented)? ve-point scale: (1) very little, (3) some, (5) great deal 22. To what extent are the services delivered to clients or constituents by the department organized by case (e.g., case management in health or welfare services)? ve-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? ve-point scale: (1) very few, (3) some, (5) most 24. To what extent are the work activities and duties performed by employees within your department codied or standardized? ve-point scale: (1) very few, (3) some, (5) most (N) Change Culture and Strategic Planning Training: average of ve items in questions 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 experience, or attendance at professional meetings? four items represent different technical areas, e.g., strategic planning, performance measurement; ve-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 not increase the number of tasks they perform or their workload)?
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ve-point scale: (1) very easy, (3) moderate, (5) very hard (direction of measures is reversed) (O) Centralization/Decentralization: not used because respondents had difculty in answering both questions 27. If the department head or chief administrator is the rst 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 ve years? seven items represent different types of change, e.g., employee turnover, major policies, technology use; ve-point scale: (1) none, (3) some, (5) great deal
Context Indexes: External Environment
(Q) Goal Conict 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 ofcials, employees, clients; ve-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; ve-point scale: (1) not visible, (3) somewhat visible, (5) highly visible 32. What is the strength of the opinions of the following groups (either positive or negative) regarding your department, its services, its objectives, or its mission? four items, same as in question 30; ve-point scale: (1) very weak, (3) moderate, (5) very strong (R) External Inuence: percent of all cells checked; = .34; = .17 33. For Cabinet Departments Only: Which of these groups have a major inuence on the following areas (AH)? (Check all groups that apply.)
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seven areas + ve groups = thirty-ve cells; areas include objectives, mission, budget priorities; groups include mayors ofce, council, unions (S) Favorableness/Hostility of Environment: average of fteen items: = .77; = .09; = .47 34. What has been the effect of the following external conditions on the ability of your department to meet program objectives in the past ve years? fteen items represent conditions such as legislation, resources from other governments, media, economy; ve-point scale: (2) very adverse, (0) neutral, (2) very favorable
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Strategic Planning Environment, Process, and Performance in Public Agencies: A Comparative Study of Departments in Milwaukee

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