Tough
Contemporary
Public
Management
Dilemmas
Richard M. Walker is a professor
of public management and policy at the
University of Hong Kong (Department of
Sociology and Kadoorie Institute) and
Cardiff University (School of City and
Regional Planning). His research interests
include public management and performance, innovation, urban management, and
sustainable development.
E-mail: [email protected]
Rhys Andrews is a senior research
fellow in the Centre for Local and Regional
Government Research at Cardiff University.
His research interests focus on civic culture,
organizational environments, and public
service performance.
E-mail: [email protected]
George A. Boyne is a professor of
public sector management at Cardiff Business School, Cardiff University. His research
interests include public service performance,
organizational strategy, and leadership
succession in public organizations.
E-mail: [email protected]
Strategic Management, Network Alarms, and Performance 731
Kenneth J. Meier is the Charles H.
Gregory Chair in Liberal Arts and Distinguished Professor of Political Science at
Texas A&M University. He is also a professor
of public management at Cardiff Business
School, Cardiff University. In addition to his
major research agenda on empirical studies
of public management, he is interested
in race and public policy, methodological
innovations in public administration, and
the relationship between democracy and
bureaucracy.
E-mail: [email protected]
Laurence J. O’Toole, Jr., is the Robert
T. and Margaret Hughes Golembiewski
Professor of Public Administration in the
Department of Public Administration and
Policy, School of Public and International
Affairs, at the University of Georgia. His research interests include public management
and performance, interorganizational policy
implementation, and public management in
complex institutional settings.
E-mail: [email protected]
Richard M. Walker
University of Hong Kong and Cardiff University
Rhys Andrews
George A. Boyne
Cardiff University
Kenneth J. Meier
Texas A&M University and Cardiff University
Laurence J. O’Toole, Jr.
University of Georgia
Wakeup Call: Strategic Management, Network
Alarms, and Performance
New empirical evidence suggests that service performance
is shaped by the strategies adopted by public organizations
and the networking behavior of public managers.
Strategy captures two central behavioral aspects of public
organizations: the way in which objectives and actions
are selected (processes), and an organization’s approach
to service delivery (content). Networking is similarly
concerned with the behavior of public managers as they
interact with others. Th ese twin themes are linked in an
integrated study that explores the relationship between
strategy, networking, and service performance within a
sample of English local governments. Th e results show
that strategy processes based on rational planning off er
long-run positive eff ects on public services, as does a
strategic proactive stance.
Management’s contribution to the performance of public programs is increasingly
recognized as positive and substantively
important (Boyne et al. 2006; Ingraham, Joyce,
and Donohue 2003). Although managers are by no
means the only determinant of performance, they
can improve organizational eff ectiveness—sometimes
in substantial ways. While the literature in this fi eld
grows apace, the generation of systematic research
to validate this idea has only just begun. Th is article
develops this theme further
by synthesizing research on
two well-recognized managerial infl uences on performance
in the public sector—those
regarding strategic management
and managerial networking
(Agranoff and McGuire 2003;
Moore 1995).
Strategy refl ects a broad, longterm orientation to how an
organization should conduct its
operations. If the mushrooming
literature on strategy is correct,
this aspect of management is
ignored only at peril to
performance (Lane and Wallis 2009; Moore 1995).
Similarly, the networks in which public organizations
operate and the actors with whom managers deal in
their environment have emerged as prominent themes
in an era of “governance†encompassing more than
just individual governments (Agranoff and McGuire
2003; Huxham 2000; Rhodes 1997, 1999). Th e
objective of this article is to examine both potential
contributions to performance. We do so for an
important empirical context beyond the United
States: English local government.
Th e eff ects of strategy and networking on performance
are worthy of attention for a number of reasons. First,
strategy captures two central behavioral aspects of
public organizations: strategy processes are concerned
with how objectives and actions are selected and
thereby encapsulate the internal dynamics of decision
making in public organizations, and strategy content
refers to an organization’s approach to service delivery (Boyne and Walker 2004; Elbanna 2006; Hart
1992). Second, networks are constellations of actors
who, operating interdependently, coproduce public
services. Networks have structural and behavioral
(i.e., networking) facets, and the majority of attention
in the fi eld of public management has been on the
former (Walker, O’Toole, and
Meier 2007). While network
structure is clearly important,
behavior shapes performance
consequences through the
actions of public managers and
is an essential feature of modern
public management research.
Th ird, taken together, strategy
and networking are among
the most important aspects of
public management because
they are concerned with how
organizations and their management align themselves with
their socioeconomic, political,
and institutional environments.
. . . networks in which public
organizations operate and the
actors with whom managers
deal in their environment have
emerged as prominent themes
in an era of “governanceâ€
encompassing more than just
individual governments. . . .
[T]his article [examines] . . .
an important empirical context
beyond the United States:
English local government.
732 Public Administration Review • September | October 2010
A “fi t†between organizations and the external circumstances that
they face has long been considered essential to high performance
(Blau and Scott 1962; Ketchen, Th omas, and McDaniel 1996).
To date, these theories, and empirical tests thereof, have been developed independently. We bring together these two lines of theorizing
by testing the relationships of strategy, networking, and external
constraints with organizational performance. Some semblance of
causality in our modeling is achieved by introducing a lag between
the measurement of our dependent and independent variables, and
by controlling for environmental eff ects. We also analyze whether
strategy and networking add to (or subtract from) performance
by controlling for baseline performance. Th is enables us to judge
whether, for example, more networking activity occurs in settings
that experience lower performance at an earlier time.
Strategic Management, Networking,
and Performance
We develop expectations about how strategy
and managerial networking might infl uence
public organizational performance using
two prominent lines of theorizing that have
treated them separately, and then draw the
two together for analysis.
Strategic Management
Th ose examining how organizational strategy
relates to performance typically make a distinction between the mode by which organizations develop their approach to action and the actual substance
of the strategy employed. Th e term “strategy processes†(or strategy
making) refers to how an organization’s objectives and actions are selected or formulated (Hart 1992). Th e outcome of strategy making
is strategy content, or “stance,†which can be defi ned as an organization’s approach to service provision. Previous empirical studies have
examined the impact of strategy content or strategy processes, but
rarely both.
Rational planning and logical incrementalism are the two main
models of strategy formulation in the management literature
(Elbanna 2006; Quinn 1980). Th ey are anticipated to have diff erent consequences for organizational performance: rational planning
is assumed to have a positive impact (Boyne 2001; Crittenden,
Crittenden, and Hunt 1998; Odom and Boxx 1988), and logical incrementalism a negative consequence (Dean and Sharfman
1996; Elbanna 2006; but see Braybrooke and Lindblom 1963). Th e
benefi cial eff ects of rational planning are argued to fl ow from the
analytical, formal, and logical processes through which organizations
scan the internal and external environment, and develop policy options that are diff erent from the status quo (Dror 1973; Mintzberg
1994). Logical incrementalism is based on a political rather than
an analytical approach to strategy formulation, and therefore it is
characterized by confl ict over resource allocation, policy goals, or
organizational power, inside or outside the organization (Elbanna
2006). Such confl ict is likely to damage performance because it may
lead to inopportune decision making, drift in seeking goal attainment, a lack of transparency, and a poor interpretation of the external organizational environment (Dean and Sharfman 1996; Elbanna
2006). Recent evidence presented by Andrews et al. (2009) shows
that logical-incremental processes result in organizations struggling
to meet the performance requirements of key stakeholders in their
external environment.
Our conceptualization of strategy content is derived from the wellknown perspective of Miles and Snow (1978), which designates
three diff erent strategies—prospecting, defending, and reacting.
Prospectors are organizations that “almost continually search for
market opportunities, and . . . regularly experiment with potential
responses to emerging environmental trends†(Miles and Snow
1978, 29). Th ese organizations often pioneer the development of
new products and services. Defenders are organizations that take a
conservative view of new product development. Th ey typically compete on price and quality rather than on new products or markets
and “devote primary attention to improving the effi ciency of their
existing operations†(29); in short, they seek
better performance on a limited number of
core products and services. Reactors are organizations in which top managers frequently
perceive change and uncertainty in their organizational environments but lack a consistent
and stable strategy. A reactor “seldom makes
adjustment of any sort until forced to do so by
environmental pressures†(29). We argue that
all organizational strategies are a mix of prospecting, defending, and reacting (for a similar
perspective, see Boyne and Walker 2004).
Th ese stances cover the major possible
organizational adaptations to new circumstances. A prospector is a
proactive agency (Boschken 1988) and will be scanning the external
environment and may innovate in response to changes. By contrast,
a defender is focused on its core business and will seek to consolidate its position in response to changes in the external environment,
perhaps adopting innovations once they have been tried and tested
elsewhere. A reactor awaits instructions from the external environment and has no consistent or coherent strategy of its own; as such,
it displays an absence of strategy (Inkpen and Chaudhury 1995).
Using data drawn from very diff erent governmental contexts, a
number of studies have shown that the central hypothesis of Miles
and Snow—that prospectors and defenders are higher performers
than reactors—does not hold in all situations (see, e.g., Andrews,
Boyne, and Walker 2006; Meier et al. 2007). Th is is to be expected
because if organizational strategy is contingent, so are its chances for
success (see similar results from Woodside, Sullivan, and Trappey
1999; Zajac and Shortell 1989).
Networking
Along with developing strategy to achieve public purposes, public
managers and their organizations operate in a network of other
organizations and actors who infl uence users, resources, programs,
goals, and reputation. “Networks†in this sense consist of a pattern
of interdependence among social actors in which at least a portion
of the links are framed in terms of something other than superior–
subordinate relations (O’Toole 1997).
Networks have been documented as an important part of service production and delivery in many national settings and diff erent levels of
We develop expectations
about how strategy and
managerial networking might
infl uence public organizational
performance from two
prominent lines of theorizing
that have treated them
separately, and then draw them
together for analysis.
Strategic Management, Network Alarms, and Performance 733
government. Such networks are typically located within a governance
framework (Kickert, Klijn, and Koppenjan 1997; Lynn, Heinrich,
and Hill 2001; Rhodes 1997). Governance systems are “self-organizing, interorganizational networks†(Rhodes 1999, xvii) that have four
characteristics: interdependence between organizations, a signifi cant
degree of autonomy from the state, continuing interactions between
network members, and game-like interactions. Much scholarship has
been directed at the fi rst two of these characteristics, which focus on
the structural aspects of networking, and when behavior is examined,
it is typically confl ated with structural arrangements. Nonetheless, a
literature is emerging on the latter two behavioral aspects, and these
are our concern in this article (Edelenbos and Klijn 2007; Meier and
O’Toole 2001; Walker, O’Toole, and Meier 2007).
It is important to explore network behavior because researchers have
argued that management in a network is diff erent from that in a
hierarchy (see Klijn 1996). External organizations and actors typically elude the formal control of actors within a given organization.
Given the potential infl uence of these external agents, how public
offi cials respond to the complexity of their setting and manage the
interdependent environment is nonetheless important and contributes to the performance of their organizations (Donahue et al. 2004;
O’Toole and Meier 2004a, 2004b).
In this article, we seek to advance knowledge by analyzing the
eff ects of networking as an aggregate activity (Meier and O’Toole
2001), and also by decomposing networking into its constituent
nodes. Based on prior research, we anticipate
that networking will be positively associated
with organizational performance, but that
when we examine dyadic interactions with
specifi c nodes, a variety of more complex
relationships will be found. In particular, one
function potentially performed by managers’
openness to the interdependent environment
is the receipt of performance-related feedback that can enter the
core organization’s production system and positively infl uence the
direction of public service outputs and outcomes. Indeed, norms of
accountability and tenets of democratic theory would expect such
feedback to be an encouragement to performance (Redford 1969).
We are particularly interested in exploring whether specifi c groups
of network actors might ring out a “wakeup call†when performance
deteriorates or, alternatively, chime the bells of success when performance moves in the desired direction.
A lack of systematic evidence thus far on such relationships hampers
our discussion of the likely consequences of networking with particular network partners for organizational performance. Th e theoretical literature on legislative-bureaucratic interactions, however,
provides some guidance (McCubbins and Schwartz 1984). To monitor the performance of bureaucracies, legislatures create opportunities for user groups and others to comment on agency performance
either through formal hearings or constituent complaints (Aberbach
1990; McCubbins, Noll, and Weingast 1987). Legislatures have a
wide variety of tools (budgets, legislation, oversight, etc.) to transform this information into a “wakeup call†for the agency.
How does this wakeup call process fi t into the agency’s network?
Agencies have regular contact with a wide variety of actors—user
groups, other agencies, elected offi cials. User groups in particular
have detailed knowledge of agency performance and can directly
communicate with the agency. While the agency has the incentive
to respond to user group demands, for many reasons, it may not
do so immediately. In such circumstances, the user group can
appeal to a legislator in regard to the complaint, or more bluntly
seek someone in a position of power who can issue a wakeup call to
the underperforming agency.
Because of that earlier work, we anticipate that elected offi cials who
have direct or perhaps indirect political responsibility for administrative performance would be most likely to press concerns about
underperformance or complaints from constituents on to public
managers. Other sorts of actors—for instance, user groups and business leaders—might also raise concerns about poor performance,
while also being in position to provide potentially useful information to public managers about how services might be improved.
Public managers in other jurisdictions might serve as sources of useful information and assist performance, as has been found in earlier
research by O’Toole and Meier (2004a) in school districts in the
United States. In short, managerial networking might carry various
implications for performance, depending on which actors interact
and the nature of those interactions.
Public Management in English Local Authorities
English local authorities are the primary subnational governing
arrangement and an important deliverer of public services. Local
authorities are directly governed by politically elected bodies with a Westminster-style
cabinet system of political management. Th ey
are multipurpose units delivering education, social services, regulatory services (such
as land-use planning and environmental
health), housing, libraries, leisure services,
and welfare benefi ts in specifi c geographic
areas. In urban areas, authorities deliver all of these services; in
rural areas, a two-tier system prevails, with county councils providing environmental, housing, welfare, and regulatory functions.
Authorities are not all-purpose; for example, health is provided by
separate authorities. As such, they employ professional career staff ,
including public managers, and receive around two-thirds of their
income and guidance on the implementation of legislation from
the central government.
Beyond broad environmental characteristics, an aspect of the
management of English local authorities that can be noted is a fairly
diverse set of external actors with which the organizations might be
interdependent and with whom managers can be expected to interact. Two sorts of political actors can be noted: “elected membersâ€
heading the local authorities, along with members of Parliament—
MPs—representing the locality in the national political arena. Both
types are likely to make regular and frequent demands on managers.
Elected members are part of a local authority but are somewhat
removed from the bureaucracy. Th ey are more likely to interact with
managers when there are performance problems. Th is could be in
response to complaints they receive from electors or the judgments
passed on to services or the organization as a whole from regulators. Th ey can be expected to seek to ensure that such problems are
resolved, to either guarantee the delivery of better services to citizens
English local authorities are the
primary subnational governing
arrangement and an important
deliverer of public services.
734 Public Administration Review • September | October 2010
or to enhance their chances for success in the next round of elections; we anticipate that elected members will respond to performance-related alarm bells when things go awry. Th e same argument
applies to MPs. If constituents or others bring problems about the
local authority to MPs’ offi ces, contact with managers is likely to be
initiated in regard to apparent diffi culties.
Explicitly political actors, however, are not the only ones who are
likely to care about performance. A second cluster of external actors
with whom authority managers may interact can bring performance defi cits to the attention of the authority and/or off er useful
information about how to improve service delivery. In the English
context, these are principally user groups (stakeholders who receive
public services and care about such programs), business leaders, and
representatives of the voluntary sector. Such external actors may
make demands on managers and ring out alarm calls when there are
performance problems, but they are also capable of providing valuable information to managers on how improvements to service may
be made. Th is sort of interaction can be expected to be based on the
immediate service delivery experiences of these groups, their perceptions about the local organizational environment, and the pressures and demands that these groups place on local authorities for
changes in services. Managers in other local authorities, still another
type of possible interaction partner, can be a source of information
on practice elsewhere and therefore can provide technical assistance.
We expect such peer-to-peer network interaction to be positively
related to organizational performance.
Finally, two other kinds of actors in the networked environment
of English local managers can be noted, and interactions with each
could have either positive or negative performance implications:
central government actors in the national bureaucracy and trade
unions. Trade unions are able to provide authority managers with
information on human resource management issues within an
authority. Th is information and interaction with unions may assist
managers in moving toward higher performance goals, and it may
equally frustrate them. Similar arguments apply to central government, which can be a force for improvement by providing advice
and guidance on strategies for performance enhancement. Equally,
given the distance from local authorities, the relatively infrequent
interaction with managers, and the focus on policy, oversight, and
matters of fi nance, central government actions may be seen as
interference in authorities’ organization and management (“micromanagementâ€), resulting in a detrimental eff ect on service improvement. We therefore have no ex ante expectation regarding the likely
performance consequences of either of these network nodes.
Data and Methods
Given these considerations, our approach is to model the performance of English local authorities as a function of strategic management, managerial networking, and authorities’ environmental
circumstances. Data for this study were drawn from a survey of
English local authorities (for data collection procedures and pilot
information, see Enticott 2003), along with information collected
by government departments and the decennial national census. Th e
survey explored informants’ perceptions of strategy processes and
content as well as managerial networking. All questions were in the
form of Likert-scales, ranging from 1 (disagree) to 7 (agree), unless
otherwise stated.
Multiple informant data were collected from staff at the corporate
and service level in each organization.1
Two echelons were used to
overcome the possible sample bias problem faced in surveying large
numbers of informants from one organizational level. Research has
shown that the attitudes of employees diff er systematically (Aiken
and Hage 1968), and in this study, we selected corporate and service
offi cers for the two echelons because attitudes have been found to
vary between these positions. For this sample, a simple organizational mean would drown out the voices of the smaller numbers of
corporate offi cers surveyed.2
To avoid this problem, we calculated an
organizational mean by averaging the mean of corporate offi cers and
the mean of service offi cers.
Th is study is based on a sample of 101 authorities that were surveyed in 2002 and 2003.Th e authorities in this sample are representative of all authorities on key background characteristics.3
Analysis
is conducted on the 69 major authorities that replied in each year
and that provided full data.4
Measures of management were collected in the summer of 2003 (t), and measures of performance were
recorded in December 2002 (t – 1) and 2003 (t + 1). Data for the
environmental control variables were derived from the 2001 census.
Th e collection of data at three points in time addresses some of the
potential causality ambiguities that may arise in the relationship between networking and performance. Put simply, in a cross-sectional
research design, it may be diffi cult to establish whether performance
prompts managerial networking, or whether networking infl uences
performance. It is the latter causal connection that we primarily test
in this study: managerial networking as an explanatory variable, and
performance as the dependent variable.
One way we deal with the potential causal ambiguity is to include
a lag between our measures of management (t)—both strategy and
networking—and performance (t + 1) (see models 1, 2, and 3 ). We
go beyond this step and off er a tougher test by controlling for prior
performance (t – 1) (see model 4). In this way, we examine whether
strategy and networking add to (or subtract from) the performance
baseline at t – 1. We supplement this core line of analysis by examining the relationship between performance at t – 1 and networking at time t. Doing so provides a check on whether more network
activity occurs in settings that experience lower performance at the
earlier time.
Measures
Th e core service performance (CSP) element of the Comprehensive
Performance Assessment, devised by the Audit Commission (2002),
is the dependent variable in this article. Th e CSP is determined
for each of the seven service areas; it is based largely on archival
performance indicators, supplemented by the results of inspection and assessment of statutory plans (Andrews et al. 2005). Th e
archival performance indicators cover six aspects of organizational
performance: quantity of outputs (e.g., number of home helps for
the elderly), quality of outputs (e.g., number of serious injuries
on highways), effi ciency (e.g., cost per benefi t claimed), formal effectiveness (e.g., average school passes at age 16), equity (e.g., equal
access to public housing), and consumer satisfaction (e.g., satisfaction with waste collection). Inspection of services draws on internal
improvement plans, fi eld visits, and other documentation. Statutory
plans are assessed against the criteria of the service’s relevant central
government department. Evaluators external to the local authority
Strategic Management, Network Alarms, and Performance 735
conduct all assessments. Each service area is given a performance
score by the Audit Commission, ranging from 1 (lowest) to
4 (highest).
After calculating the CSP score for each service area, the Audit
Commission derives a score for the whole organization by weighting
services to refl ect their relative importance by budget (the weight
for education and social services is 4; for environment health and
housing, it is 2, and for libraries and leisure, benefi ts, and management of resources, it is 1). Th e Audit Commission then combines
these weights with the performance score (1–4) for each service area
to calculate the CSP. Th e resulting scores range from a minimum of
15 (12 in the case of county councils, which do not provide housing
or benefi ts) to a maximum of 60 (48 for county councils). To make
the CSP scores comparable across all authorities, we calculated the
percentage of the maximum possible CSP score for the given local
government. Th erefore, the measure of organizational performance
in this study is an aggregate measure across the key services areas of
local governments and includes multiple indicators of performance
for each service area.
To measure strategy process, an aspect of strategic management,
factor analysis was used to create indices of our multiple measures
of logical incrementalism and rational planning. Th e extent and
intensity of formal analysis in processes of strategy formulation are
captured in our measures of rational planning. Also included is a
measure of consultation with stakeholders, which is part of environmental scanning in public organizations. Th e second major model
of strategy-making processes in public agencies is logical incrementalism (Quinn 1980). Our measures include the central features
of this type of strategy process: bargaining and negotiation, small
changes from the status quo, and a reliance on partisan mutual
adjustment rather than formal analysis.5
Strategy content was measured with single items. Th e prospector
stance was operationalized through a measure of innovation (“Th e
authority/service is at the forefront of innovative approachesâ€);
this feature is central to Miles and Snow’s (1978) defi nition, which
includes risk taking and proactive responses to changes in the
external environment. To explore the extent to which services in
English local authorities display defender characteristics, focusing
on tried and tested strategies in an existing market, informants
were asked whether “[f]ocusing upon key business areas (e.g., our
statutory responsibilities not our discretionary services)†was part of
their approach to service delivery. Reactors were expected to await
instructions on how to respond to environmental change. Th e major
source of external pressure in English local government is currently
the auditors and inspectors deployed by central government (there is
at least one for each of our sampled services).
Th erefore, we asked whether “the activities
of auditors†and “inspectors’ reports†were
important in driving improvement.
We sought to examine the reported networking behavior of English local government offi –
cers in interacting with a variety of important
stakeholders in their environment. We asked
respondents to “[i]ndicate how frequently
you interact with individuals in the following
groups: elected members, user group representatives, trade unions,
local business leaders, voluntary sector actors, MPs, managers in
other councils, and central government offi cials†(eigenvalue 3.023,
37.79 percent of variance explained). Each informant was asked
how often he or she interacted with each of the several other actors.
A six-point scale was used, where 1 = never, 2 = yearly, 3 = monthly,
4 = weekly, 5 = more than once a week, and 6 = daily. Th ese items
were developed to adapt measures shown to be valid and reliable
in the U.S. context (Meier and O’Toole 2001, 2003; O’Toole and
Meier 2004a) to the interdependent, networked setting characteristic of English local government.
Controls
A variety of external circumstances may cloud the relationship
between management and organizational performance and require researchers to control for the diffi culty of the environment
as managers seek to deliver performance results. In this paper, two
factors are included in our statistical models that are derived from
measures of the quantity and diversity of service need: an index of
deprivation, the number of single parents in a local authority, and
the employment, ethnic, and social class mix within the population
(all drawn from the 2001 census).6
We control for prior performance at t – 1 by including CSP in
2002 in the statistical models. Doing so overcomes the potential
for bias in the coeffi cients for other variables such as strategy and
networking. When the autoregressive term is included in the model,
the coeffi cients for strategy and networking show what these variables have added to (or subtracted from) the performance baseline,
and allow us to make observations about eff ect of strategy and
networking on performance at diff erent points in time.
Findings
Table 1 presents the results of four multiple regression analyses
designed to estimate managerial impacts on the performance of
local authorities.7
All models contain strategy content and process,
plus managerial networking. Model 1 examines strategic management and networking at the aggregate level. Model 2 disaggregates
the networking measure by estimating the performance-related
impacts of interactions with each of the separate sets of actors in the
authority’s environment. Model 3 takes a parsimonious look at the
infl uence of four key networking nodes. Th ese three models are not
fully specifi ed equations: while each has a lag between the measure
of management and performance, they are not autoregressive—they
do not include past performance as a partial determinant of future
performance. Model 4, on the other hand, includes the lagged
dependent variable, and therefore is the most fully specifi ed model
estimated. Th is specifi cation permits a clearer analysis of causality and allows us to draw conclusions on the
impact of management over diff erent time
periods.
Th e discussion of the results focuses on the
fi ndings for strategic management and managerial networking; we leave aside extended
commentary on the impact of the environmental controls. With regard to the latter,
nonetheless, it can be noted that in all models aside from the fi nal one, the coeffi cients
We sought to examine
the reported networking
behavior of English local
government offi cers in
interacting with a variety of
important stakeholders in their
environment.
736 Public Administration Review • September | October 2010
Table 1. Strategy, Networking, and Performance
Model 1 Model 2 Model 3 Model 4
B SE B SE B SE B SE
Strategic management
Rational planning 1.76+ 1.02 1.94* .95 2.26** .97 .52 .63
Logical incrementalism –.78 .89 –1.12 .87 –1.02 .88 –.00 .54
Prospector 4.02** 1.36 3.44** 1.26 2.99* 1.29 –.77 .85
Defender –3.83** 1.22 –3.38** 1.13 –3.29** 1.15 –2.40** .78
Reactor –.32 .73 –0.82 .67 –.47 .69 .21 .44
Networking
Networking –.40 .84 — — — — — —
Elected members — — –3.45+ 2.10 –5.17** 1.97 –1.86 1.33
Managers in other councils — — 4.32+ 2.65 4.31+ 2.38 .95 1.59
User group representatives — — 4.80* 2.34 5.37** 2.09 4.59*** 1.32
Central government offi cials — — –6.46** 2.32 –5.42*** 2.29 –2.99* 1.44
Local business leaders — — –.41 1.94 — — — —
Voluntary sector actors — — 3.23 2.18 — — — —
MPs — — –1.46 2.21 — — — —
Trade unions — — –1.86 1.70 — — — —
Prior Performance
2002 performance — — — — — — .66*** .00
Controls
Deprivation –1.76** .77 –2.17** .79 –2.51*** .76 .40 .53
Diversity –1.84* .81 –2.90*** .83 –2.35** .86 –1.66** .54
(Constant) 68.87*** 13.60 80.02*** 16.59 83.50*** 17.06 38.21** 12.17
R2
/Adjusted R2 .41/.34 .59/.47 .51/.42 .83/.79
F 5.30*** 5.13*** 5.45*** 21.50***
+ p < .10; * p < .05; ** p < .01; *** p < .001.
for the variables deprivation and diversity are in the anticipated
direction and statistically signifi cant (p < .05). In the fi nal model
(model 4), the coeffi cient for deprivation is not signifi cant (past
performance may capture this aspect of the external environment),
whereas the impact of the diversity variable persists in the face of
prior achievements. Overall, these fi ndings confi rm that diffi cult
environments limit English local authorities’ progress toward
higher levels of service performance (Andrews et al. 2005).
Strategy Processes, Strategy Content, and Networking
Table 1 reports results for strategy formulation, strategic stance, and
our aggregated measure of networking. Th e fi rst fi nding, and one
that supports prior research in this fi eld, is that rational planning
processes are associated with better organizational performance.
By contrast, logical incremental processes of strategy formulation
appear to have little eff ect on service achievements. Th e second fi nding is that prospecting leads to higher levels of performance. Th is
fi nding is consistent with the view that organizations that are innovative, outward looking, and responsive to changes in the external
environment are likely to be better performers.
A number of the fi ndings in model 1, however, are counter to extant
empirical evidence from other settings. First, defending is negatively
associated with organizational performance; this result is persistent
through the four models. Th e fi nding is at odds with some prior
studies, and it is contrary to the argument of Miles and Snow,
who maintain that there are no performance diff erences between
prospectors and defenders. While this view has been supported in
the private sector literature (Slater and Olson 2001), prior fi ndings
in U.K. local government and elsewhere (Woodside, Sullivan, and
Trappey 1999) typically suggest that “prospecting beats defending,â€
and that prospecting and defending organizations both outperform
those that are predominately reacting. Prospectors clearly beat defenders in this case, but defenders do not outperform reactors when
strategy processes and managerial networking are held constant.
Central government in England has exhorted local authorities to
abandon traditional ways of working and become more innovative (Walker and Boyne 2006). Perhaps the authorities that are best
managed have shifted to a prospector stance, whereas defenders
have stuck with a strategic posture that is ill-adapted to this policy
environment. Further longitudinal analysis would be required to
examine whether prospecting is a recent shift in the English local
government system, and to examine whether it is associated with
other indicators of managerial quality. Given the divergent fi ndings
on strategy content across diff erent empirical contexts, it may be
that the optimal strategic posture depends on organizational type
(including public–private diff erences), relevant production function,
and organizational context.
Strategic Management, Network Alarms, and Performance 737
Th e second surprising fi nding is that when we consider networking
as an aggregated variable, it has no eff ect on performance. Th is result is at odds with research on this measure in other governmental
contexts. Positive results have been found in settings such as public
education, state administration, and law enforcement in the United
States, and it is possible that networking behavior is contingent on
context. It may be that when we control for strategy, some of the
eff ects of networking may be diluted; however, this pattern did not
hold in a recent evaluation of strategic management and other management practices, including networking, in Texas school districts
(Meier et al. 2007).
Examining Network Nodes
Th e fi ndings in model 1 suggest the need to unpack networking
behavior more fully. Th e key question we are now interested in
pursuing is, why is overall networking not signifi cant? Model 2 in
table 1 includes the networking measure in its disaggregated form.
Th is specifi cation reveals that one of the coeffi cients for the dyadic
interactions—that for central government offi cials—is negatively
related to performance, and that for elected members could be
considered negatively related to performance at a more relaxed level
of signifi cance (p < .10). A fi rst observation we can draw from this
pattern is that some of the network nodes have little or no eff ect
on service performance. Additional research would be required to
understand the value that networking with these nodes has for English local government: for example, they may make contributions
in indirect, nonlinear, or interactive ways. Second, networking with
central government actors is related to lower levels of performance.
Our data do not permit us to model who initiated the interaction
over time—the local authority managers or central government actors. We can get a sense of the causal direction, however, by correlating the extent of networking in this dyadic pair with performance in
the preceding period. Th e negative result (–.102) suggests that lesser
performance attracted some increased attention to local authorities
on the part of central government actors. More extensive longitudinal data would assist in clarifying causality in this relationship by
exploring the leading and lagging eff ect of networking on performance. Th e evidence now available points toward poor performance
attracting interest from higher levels of government.
One of the dyadic interaction coeffi cients in model 2—that for
user group representatives—is positive and statistically signifi cant,
and the coeffi cient for interacting with managers in other councils
is positive and signifi cant at the lower 10 percent threshold. When
public offi cials network with managers in other councils and with
user group representatives, they are likely to achieve higher levels of
organizational performance. User group representatives often give
advice on their needs and perspectives, and this channel of communication should encourage and assist managers in local authorities in delivering appropriate services. Th e role of users is important
in the Comprehensive Performance Assessment regime through
performance indicators and the inspection process. Th erefore, their
perspective is likely to be treated rather seriously. Th e fi nding is
consistent with the notion that authorities that respond to the needs
of their users are directly rewarded by higher performance. Th e correlation pattern between performance and networking supports this
interpretation. A negative relationship between prior performance
and networking (–.060) becomes a positive one between the networking measure and subsequent performance (.097). Our results
also suggest that performance is higher when managers consult their
peers in other councils, as this presumably allows them to acquire
information that they can use to improve services in their own
organizations, another result that refl ects fi ndings in U.S. public
education (O’Toole and Meier 2004a). (Th e correlation between
this networking measure and performance is positive for both earlier
and later performance measures.) Interaction with managers in
other localities can also be juxtaposed with evidence on interorganizational learning and innovation diff usion. Evidence from these two
processes suggests that the collection of information and knowledge from other localities can be used to improve or develop new
practices, which are, in turn, associated with higher performance
(Crutchfi eld and Grant 2008; Walker and Damanpour 2009).
Finally, the other interaction dyad with a (marginally) negative sign
is of particular interest: the result for elected members is signifi cant
at the 10 percent level and negative.8
Interestingly, the correlation
between earlier performance and networking in this dyad, too, is
negative (–.133), a relationship that again suggests performance
defi cits attract the attention of elected members. While the relationship between networking in this dyad and subsequent performance
remains negative, the correlation between the two moves closer
toward zero (–.061). It is possible, therefore, that elected members
begin during this period to assist in achieving improved levels of
performance by providing additional information and strategies
for action to public offi cials, but that the improvements have only
begun to take eff ect at time t + 1 in this empirical sequence. Again,
a longer time series would be essential to explore the pattern more
thoroughly. If validated in further extensive studies, this relationship
could bode well for those interested in the responsiveness of public
organizations to the broader political-electoral system.
Network Nodes of Interest and Importance
Th e results from model 2 suggest that the network node actors
elected members, managers in other councils, user group representatives, and central government actors are important (at 10 percent or
better). Accordingly, we move on to examine the independent eff ects
of these four actors in model 3, and thereby present a more parsimonious model. In separating out these four nodes from the others,
we fi nd, fi rst, that all of them are statistically signifi cant (at p < .10
or better). Th ese results bring networking with elected members
into statistical signifi cance at the 5 percent level, and the coeffi cient
remains negative—as it was in model 2. Interactions with central
government actors remain negative and statistically signifi cant.
Dyadic interactions with user group representatives remain positive
and benefi cial to organizational performance; public offi cials possibly use these external network nodes as sources of information and
technical assistance to enhance performance. A similar argument
can be made in relation to managers in other authorities, although
this variable is only signifi cant at the 10 percent level. Th e coeffi cients for the strategic stance and strategy formulation variables
remain unchanged from model 2.
Networking and Strategy in the Face
of Prior Performance
Model 4 in table 1 presents results for the fully specifi ed model by
introducing the autoregressive performance term. Model 4 confi rms
our assumptions about prior performance: it is far and away the
most statistically signifi cant variable in the model. Th e results in
738 Public Administration Review • September | October 2010
model 4, when compared with model 3, suggest some diff erences
between the short-run and long-run eff ects of the management variables. Prospecting, rational planning, and networking with elected
members and managers in other local authorities have long-run
eff ects on performance (assuming some stability in these activities
across councils), but their short-run impacts from 2002 were negligible (falling from statistical signifi cance in model 4). By contrast,
in that year, defending continued to be bad for performance, as did
interactions with central government. Networking with user group
representatives remains a positive contribution to performance in
both time periods.
Changes in the statistical signifi cance for the networking node
variables between models 3 and 4 provide evidence in support of
a causal logic of the following sort: managerial networking with
elected members is related to lower performance in model 3. Given
the negative simple correlation results between networking at time t
and performance at t – 1, as reported earlier, the likely explanation
is that lower performance attracts attention from elected members.
Over a longer time series, it is possible that we would see networking of this sort move performance upward. When the autoregressive
term is included in model 4, this variable is
not statistically signifi cant. In other words,
when we take into account prior performance, the short-run eff ects of interacting
with elected members do not immediately
register—although, again, the simple correlation between networking and performance
shortly afterward is less negative than in the
preceding period. Th e evidence suggests that
elected members ring out alarm calls when
performance deteriorates (see the results for
models 2 and 3), and that this is a normal
aspect of organizational life in English local
governments. In the full specifi cation, the
variable tapping interaction with managers in other councils also
drops out of signifi cance (model 4). Again, this suggests that this
activity may be a normal and ongoing management function rather
than one that has particular short-term eff ects on performance.
Interactions with two of the network nodes in our parsimonious
model remain statistically signifi cant in model 4. Managers interact
with user group representatives to collect information and possibly
to gain assistance in order to eff ectuate performance improvement.
Th ese fi ndings indicate that elected members ring out wakeup calls
when performance deteriorates, and managers in such councils take
action by talking with user groups. We also fi nd that interaction
with central government offi cials continues to be negatively related
to service performance. Th at networking with central government
offi cials remains consistently negative and signifi cant would seem
to suggest that they off er bad advice. Th ree reasons, all of which
require further work, may explain this pattern.
In a centralized political system such as that in England, civil servants
are responsible for pushing forward with the implementation of
universal prescriptions. Examples of this pattern have included
privatization and outsourcing during the New Right Th atcherdominated 1980s and the modernization agenda of the New Labour
administration during the late 1990s. Such practices are at odds with
the contingent nature of management, as has long been argued in the
public administration literature (Greenwood, Hinings, and Ranson
1975). Second, based on our prior conjecture, these central government offi cials are at both a hierarchical and a spatial distance from
local governments. It would be interesting to see whether central government offi cials off er better advice to councils nearby, rather than
those more geographically removed. Th ird, as central government
civil servants many of these offi cers will have little or no experience
in directly managing services, the basis of the recommendations they
off er to councils may not be founded on the best or most reliable of
evidence. Indeed, the central offi cials may provide pressure or advice
that borders on micromanagement, even if well intended. In any
event, the statistical evidence adduced here suggests a performancebased reason for the often-observed central-local tensions in multilevel governance systems. Th e good news, such as it is, appears to be
that lower performance attracts attention even from the center. Th e
bad news is that the resulting interactions do not seem to help.
Conclusions
Strategic management and managerial networking have been shown
in this analysis to be important for the performance of a sample of
English local governments. Th ese fi ndings
off er new insights into two important and
topical issues in public management research.
We are able to conclude that the strategy
process of rational planning appears to have
positive eff ects. Th is fi nding suggests that
logical, clearly planned strategies in which
options are appraised are a useful route to
better performance. We are cautious, however,
about the generalizability of this result because
of the policy context that prompts English
local governments to seek rational plan-based
solutions. Consequently, alternative settings
may point toward the importance of adaptive or emergent strategies
(Mintzberg 1994), notably when the organizational environment is
turbulent, making the process of planning more complex and demanding. We fi nd that a strategic stance of prospecting has positive
eff ects, but that defending is detrimental to performance. Clearly
further research in diff erent contexts, and ideally with longitudinal data sets, is needed to substantiate this and all of the fi ndings
presented in this article.
We fi nd that networking overall, as an aggregate concept, has no
impact on performance, but rather that interactions with diff erent
network nodes matter—some more than others. Th e “whole,†in a
sense, is less than the sum of its parts. It is only by examining the
dyad-by-dyad interactions that one can discern which nodes matter
for performance, in the short and longer haul, and in which directions. Furthermore, this analysis shows that such interactions are
not necessarily an unmitigated good thing—some appear to weaken
performance, while others boost it. Future research certainly should
examine networking in terms of individual nodes, where appropriate, and it also would be helpful for scholars to unpack the diff erent
types of functions that such networking can fulfi ll: feedback on performance, technical assistance, and building support, for instance.
Th ese functions can be distinguished, and it is likely that diff erent
parties are more or less eff ective at the diff erent functions.
Strategic management and
managerial networking
[are important in the] . . .
performance of a sample of
English local governments.
Th ese fi ndings off er new
insights into two important
and topical issues in public
management research.
Strategic Management, Network Alarms, and Performance 739
In the present instance, our evidence is consistent with the following
sequence of events.9
Alarm bells are rung out by elected members
in the face of poor performance; managers in other councils chime
in (or are encouraged to do so) to help remedy poor performance;
user group representatives harmonize by consistently providing
valuable information to managers in the search for higher levels
of performance; central government offi cials attend to the signals
but persistently strike chords of dissonance and may actually harm
performance. Th is pattern suggests that networking is a particularly
complex process and that more theoretical and empirical attention
needs to be focused on the various roles played by network nodes in
diverse governmental settings.
If validated by further studies in other contexts, these results suggest
that practicing public managers would do well to consider serious
eff orts at rational planning and that, under some circumstances, at
least, a strategy of prospecting can pay performance dividends. Further, managerial networking carries implications for the delivery of
public services, albeit not in an undiff erentiated or simplistic fashion.
External parties clearly can be the source of valuable information and
advice regarding performance, and managers would do well to attend
to such wakeup calls. But it seems also important for managers to
know about the credibility and reliability of advice emanating from
particular actors; those at some remove and perhaps those with little
service-delivery experience may do more harm than good.
Th ese practice-relevant conclusions must be seen as tentative, and
the patterns adduced here should be explored further in other studies. One fruitful avenue for additional research would be to test
these results on a wider range of performance indicators. Th e majority of the research on strategic stance has been undertaken in the
United Kingdom. Th is work has used aggregate or composite measures of organizational performance that encapsulate a number of
performance indicators or a single measure of consumer satisfaction.
Recent work by Meier and colleagues (Meier et al. 2007) suggests
that diff erent strategic stances are likely to benefi t diff erent aspects
of the production processes. Under these circumstances a strategy
of prospecting can have a positive impact on high-end performance
indicators, as indeed can reacting. Th erefore, it is plausible that
diff erent strategic stances will pay off in diff erent ways. Similarly,
we might fi nd that the impact of networking with diff erent actors is
contingent on organizational context. While progress has been made
here in unpacking the relationships between the alarm calls from
diff erent network nodes, strategy, and performance, clearly much
work remains to be undertaken. In that sense, then, this paper is
itself a wakeup call to catalyze further research on these and related
questions.
Acknowledgments
An earlier version of this paper was presented at the International
Research Symposium on Public Management in Potsdam, Germany,
April 2–4, 2007. Th e authors acknowledge the Economic and Social
Research Council (RES-062-23-0039) for its fi nancial support. Th is
paper is part of an ongoing research agenda on the role of public
management in complex policy settings. Th at agenda has benefi ted
from the helpful comments of Stuart Bretschneider, Gene Brewer,
Amy Kneedler Donahue, Sergio Fernández, H. George Frederickson, Carolyn Heinrich, Peter Hupe, Patricia Ingraham, J. Edward
Kellough, Laurence E. Lynn, Jr., H. Brinton Milward, Sean
Nicholson-Crotty, David Peterson, Hal G. Rainey, and Bob Stein
on various aspects of this research program. Needless to say, this
paper is the responsibility of the authors only.
Notes
1. Corporate offi cers include the chief executive offi cer, or head of paid service, and
corporate policy directors with cross-organizational responsibilities for service delivery and improvement. Service offi cers include two sets of offi cers: First, there
are chief offi cers who are the most senior offi cer with specifi c service delivery responsibility; they include the director of education and the director of planning.
Second, there are service offi cers or frontline supervisory offi cers; they include
head of school organization and planning and head of business effi ciency.
2. In each authority surveyed, questionnaires were sent to up to three corporate
offi cers, and up to 28 service offi cers—four across seven core services: education,
social care, land-use planning, waste management, housing, library and leisure,
and benefi ts services.
3. Independent sample t-tests were undertaken on fi ve variables: population, ethnic
diversity, deprivation, occupational mix, and age mix. No statistically signifi cant
diff erences between sample and population were found.
4. Major authorities include county councils, metropolitan boroughs, London
boroughs, and unitary authorities. District councils, the tier of local government below county councils, were excluded from this study because there is no
aggregate external measure of performance.
5. Strategy formulation was measured thus: Rational Planning (eigenvalue 1.85,
61.75 percent of variance explained): Please indicate the extent to which you
agree or disagree with the following statements: When the service/authority
formulates strategy it is planned in detail; When the service/authority formulates
strategy, options are identifi ed and evaluated before the best option is selected;
Strategy is made in consultation with our external stakeholders. Logical Incrementalism (eigenvalue 1.67, 32.71 percent of variance explained): Please indicate the
extent to which you agree or disagree with the following statements: Th e strategy
with the greatest political support is usually adopted as our policy; When we
make strategy we produce policy options which are very similar to those we already have; Strategy develops through a process of adjustment; Strategy develops
through a process of bargaining and negotiation between groups or individuals.
6. Two measures of the level of need are included. Th e index of deprivation is the
average ward score in each local authority area. It is the standard populationweighted measure of deprivation used by U.K. central government. Th e second
measure is the number of lone parent households; it is a proxy for the capacity
of lone parents to coproduce services because the time and money pressures on
these households are likely to impede positive contributions to service delivery.
Th e diversity of need facing a local authority is also likely to aff ect its performance because it increases the variety of needs to be met. Th ree measures of
diversity were calculated as Herfi ndahl-Hirschman indices from the proportions
of the various subgroups within each of the diff erent categories identifi ed by
the 2001 national census within a local government area (e.g., ages 0–4, Black
African). Factor analysis produced two factors: Factor 1, named Deprivation
(eigenvalue 2.243, 44.87 percent of variance explained), included the ward index
of multiple deprivation, social class mix, and single-parent households. Factor 2,
named Diversity (eigenvalue 1.85, 36.94 percent of variance explained), included
ethnic diversity and employment diversity.
7. Th ere are no diffi culties in our analysis arising from multicollinearity; the highest
variance infl ation factor is 2.27 and the average is under 2. Diagnostic tests,
however, did reveal a number of outliers, and the results of White’s general heteroscedasticity test confi rmed the presence of nonconstant error variance for our
ordinary least squares model. Th erefore, robust estimation of the standard errors
was used to reduce the eff ects of heteroscedasticity in the data set.
8. Th is pattern is very similar to that found in empirical work conducted in
U.S. school districts. O’Toole and Meier consistently show that top managers’
740 Public Administration Review • September | October 2010
interactions with elected school board offi cials are negatively related to performance (see, e.g., O’Toole, Meier, and Nicholson-Crotty 2005).
9. Conclusive evidence on our argument can only be confi rmed by longitudinal data that would permit the use a Granger test of causality to identify the
occasions when performance causes networking and when networking causes
performance.
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ASPA’s WEBINAR Series Announces:
How to Champion Disaster’s First 72 hours
November 9, 2010
1pm to 2pm ET
(deadline for registering is November 3)
Th is presentation will focus on the public perceptions of public safety and utility
service organizations’ ability to provide essential services within the fi rst 3 days of
a disaster. It will also address how contingency plans underestimate the issue of
responders as victims, and what those organizations can do to prepare an immediate and sustained response following a disaster.
For More Information, go to:
http://www.aspanet.org
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