CHAPTER
9
Strategic Management
and Government
Regulation
I. LEARNING OBJECTIVES
After reading Chapter 9 in the textbook, the student should be able to:
1. Define Strategic Management as a framework for under-
pp. 363–370
2. Assess the major techniques and applications of strategic
pp. 370–373
3. Explain how government regulations are determined, formed
and implemented across all levels of government (federal,
state, and local).
pp. 374–383
II. SUGGESTED LECTURE
A. Strategic Management
Strategos is the Greek word for strategy, and means the art of the general. From
this military heritage, we get the term strategic management today. Strategic man-
1. Strategic Management and Planning: Public management has been slower
than the private sector in embracing the strategic management and planning
concept. Today, however, it is seen as imperative that a public organization
have strategic intent to proactively shape the future for the organization
the way that private corporations do, rather than merely reacting to events.
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CHAPTER 9
planning is often done at the federal level and can draw national attention to
a cause. However, sometimes little is achieved and planning efforts are merely
a goal in themselves, undertaken to give exposure to political elites. Planning
is messy in more wealthy democratic governments where competing inter–
ests must be accommodated. In his 1959 article, “The Science of Muddling
Through,” Charles E. Lindblom argued that incremental decision making
was more achievable in the messy, complex, disorderly, ill-structured world of
and evaluation.
2. Matching Agency Capabilities and Agency Environments: When the envi-
ronment is stable, a more custodial, authoritarian strategy might suffice,
but when the organization is turbulent, a more risk-taking entrepreneurial
capability is required. When a mismatch exists between environment and
capability, management must take action to match its technological and
human resources to what is required. The SWOT analysis is an organizational
B. Management by Objectives (MBO)
Management focus on goals and objectives was pioneered by Peter Drucker in
1954 with the publication of The Practice of Management . Many other books on
MBO followed, each with the basic premise that measurable goals have to be estab-
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II. Suggested Lecture
C. On the Uses and Effectiveness of Strategic
Management Concepts
Business and government are both fundamentally different, and fundamentally
similar: this is the private-public paradox and it shapes the application of strategic
management concepts in each realm. Additionally, bureau managements exist in
different layers of control and power that shape and limit their autonomy, com-
plicating strategic decision making far more than in the case in the private sec-
D. Government Regulation for Health, Safety
and Economic Equity
Public administrators retain significant power to set and enforce rules governing
citizens’ everyday lives. The contours of regulation originate in legislation, but since
E. Strategic Management Future Challenges
Strategic management in the public sector has evolved from its traditional func-
tional management focus to one which now looks toward measurable objectives.
As it relates to government, the term “strategic management” refers to a statement
of goals that can be translated into a statement of specific targets or objectives.
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CHAPTER 9
III. ASSESSMENTS
Multiple-Choice Questions
1. Strategic management concepts in the public sector:
a. come to organizational strategy from a military lexicon.
b. are about reaching military targets.
c. are about employment and management of overall resources to gain a
preset objective.
d. a. and c.
p. 364, d
2. Peter Drucker introduced the term into organizational management:
a. Total Quality Management
3. The statement of strategic planning objectives calls for:
a. self-actualization, survival, safety, esteem, love, organizational
requirement.
b. succinct, directional, time-limited, and measurable objectives.
c. assessment, decision making, evaluation.
d. inputs, transformation, outputs.
p. 364–367, b
4. An organization’s refers to the time of organizational planning
beyond which the future is considered uncertain, or unimportant to waste
5. Because the Tenth Amendment to the US Constitution reserves powers for the
states:
6. A SWOT analysis
a. is a tool to assess organizational fit with its internal and external
environments.
b. is a “strengths and weaknesses” look at an organization’s internal
resources and capabilities.
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III. Assessments
c. is an “opportunities and threats” look into the opportunistic and
predatory aspects from the outside that are possible threats to an
organization’s survival.
d. all of the above.
p. 369, d
7. A process that systematically compares work processes of competitors or to
do with best practices in an industry is called:
8. Taxes on activities deemed not good for the individual and society are
called:
a. luxury taxes.
b. sin taxes.
c. indulgence taxes.
d. progressive taxes.
p. 383, b
9. Which of the following are examples of government regulation?
10. The Food and Drug Administration is housed in which cabinet office?
a. Homeland Security
b. Health and Human Services
c. Treasury
d. None of the above
p. 378–379, b
11. Janet Yellen is the Chairperson of the “Fed.” She and the panel of governors:
a. regulate monetary policy in the US.
12. The Bernie Madoff scandal involved the failure of which of the following?
a. Securities and Exchange Commission
b. Environmental Protection Agency
116 Strategic Management and Government Regulation
CHAPTER 9
c. Federal Communications Commission
d. North American Free Trade Agreement
pp. 384–385, a
Chapter 9 Student Self Assessment Questions
Q1 When comparing and contrasting the conservationist and the
preservationist movements, which of the following best describes the
conservationist movement?
Q2 Which of the following is not one of the features of the strategic
management approach?
Q3 Looking at the strategic management as a framework, what is the most
years in the future are federal agencies required to plan for?
Q8 A tool used to tally the performance of the individual units or functions of
a large organization is called a what?
Q9 What is the term for how public, private and nonprofit organizations
compare with each other, moving across industries and cities to determine
the best-in-class strategic outcomes?
Q10 What is the term for how public, private, and nonprofit organizations
compare with each other in terms of product and service features, speed,
and other performance features?
Q11 The description of the exact process to be followed in formulating
regulations can be found where?
Q12 Where are all new federal rules published?
Q13 The final stage of the rulemaking process is to incorporate the rule in
what document?
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IV. Activities
Q18 The Bush administration’s use of a scorecard was part of his
management agenda. Which was not a criteria that agencies were
graded on annually?
Q19 Which of the following methods is one of the ways the government
regulates behavior that is deemed contrary to the good of society?
IV. ACTIVITIES
Individual Exercise
Watch the PBS Frontline feature, “The Madoff Affair,” available at http://www.pbs.
org/wgbh/pages/frontline/madoff/view/#morelink. After watching the film, answer
the following questions:
1. To what extent did the SEC do its job?
2. What ultimately went wrong in the Madoff Ponzi scheme?
Class Discussion
Think tanks and policy institutes include organizations whose primary function
is research, as the textbook notes. Think tanks can be non-profit, non-partisan,
for-profit, or partisan. Think tanks are funded through a wide variety of means,
including the government, private foundations, businesses, and interest groups.
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CHAPTER 9
Class Exercise
A SWOT Analysis—Organizational Strengths, Weaknesses,
Opportunities, and Threats: An Individual or Team Game
You are the newly appointed warden of the Cedarville County Jail. Because there
are many problems existing in the jail administration in Cedarville, you have been
brought in as a “change agent.” You have come to your position from a previous
position in Illinois in the same capacity. You are known there for being an entrepre-
neurial and transformational leader. You will bring with you part of your strategic
management team: your deputy warden for human resources and your deputy war–
den for administration.
The jail in Cedarville is a recently built incarceration facility with the latest
There are employee morale problems. Officers are not properly trained in
the use of restraint and safety techniques. There are some drug and alcohol
abuse problems among the employees. Women have traditionally been employed
only in the lower clerical ranks. The jail has a “macho” culture, which the county
wants to see being changed to a more caretaking culture with emphasis on reha-
bilitation and training for inmates and a special-needs program for juvenile
offenders.
Counseling, library, and chaplain services are not available to staff or inmates.
The organization could outsource (privatize) gardening, laundry, and janitorial ser–
vices more cheaply than by keeping these services in-house.
119
IV. Activities
Instructor’s Note: The following provide examples of possible student responses:
Q Mission Statement: The Cedarville County Jail is committed to becoming a
model prison facility in the Commonwealth of Pennsylvania, especially in
the areas of security, inmate housing and rehabilitation, and employment
practices.
Q Goals: The Cedarville County Jail is committed to conforming to this mission
Q Objectives: 1) Provide training for all officers in security and restraint
techniques by the end of the fiscal year; 2) Provide six vocational training
programs and related resources for inmates in the next 3 years; 3) Within
the next 3 months, bring in drug and alcohol counselors from county
governments to advise employees on the law, and health and employment
Q SWOT Analysis.
Strenths: New facility with latest technology in security
Budget flexibility during “honeymoon” period
Leadership strength
Weaknesses: Macho organizational culture
Accounting practices not acceptable
Low morale of staff
Loss of juvenile program
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CHAPTER 9
Class Discussion Issues with Instructor’s Notes
1. What is meant by the term “strategic management”?
The term “strategy,” like many other terms in public administration,
2. Explain the essential elements of strategic planning.
All strategic plans have a set of core features: 1) a vision. 2) a “planning
3. Why is strategic management often called a “matching process”? When an
organization moves from a stable state to turbulence, explain what kind of
strategic management change is required.
H. Igor Ansoff has written about the need to tailor strategy and capabil-
V. ADDITIONAL WEB RESOURCES
Center for Strategic and International Studies (CSIS)
www.csis.org
CSIS provides strategic insights and policy solutions to decision makers in government,
Center for Strategic Management (CSM)
www.csmweb.com
This center strives to transform slow-moving, bureaucratic organizations into high-performing
Rand Corporation
www.rand.org
This organization, the world’s archetypal think tank, strives to improve policy making and
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V. Additional Web Resources
Strategic Planning Institute
http://pimsonline.com
This site enables business managers to “reality test” and strengthen their strategic thinking
strategy+business
http://www.strategy-business.com/
All of the big four consulting and auditing enterprises have journals and studies available—
World Future Society
http://www.wfs.org/blogs
The professional membership spans industry, government, academia and science. Located in
Regulations Gov
www.regulations.gov
No more trolling the federal register—there is a clearinghouse site for federal rulemaking—