meaning of strategic management in the context of public
Transkrypt
meaning of strategic management in the context of public
Studia i Materiały. Miscellanea Oeconomicae Rok 18, Nr 3/2014 Wydział Zarządzania i Administracji Uniwersytetu Jana Kochanowskiego w Kielcach Rozwój regionalny w liczbach Marta Włóka1 MEANING OF STRATEGIC MANAGEMENT IN THE CONTEXT OF PUBLIC ADMINISTRATION FUNCTIONING Introduction Now in the decade of the XXI century, the image of public sector, in the case of many countries underlies inevitable changes, strictly connected with intensification of environment, on the basis of which take place a number of transformations likewise economic reorientations. Multitude of these conversions is result of numerous challenges facing governments of each countries, both in the area of social changes therein involving inter alia preferences and expectations of society as well as changes of political or economic nature. 1. Management influence on organizational development Without regard for distinctness of specificity of implemented solutions, their common priority, oriented at increase of public sector units significance in the context of process of satisfying community’s needs, focuses especially on implementation of these activities, which aim at amelioration of public services process. It takes place through emphasis on improvement their quality, process of decentralization, implementation to their activity managerial techniques, growth of collaboration between public sector units or giving them autonomy and at the same time larger responsibility. Essential significance in this aspect role plays the issue of theoretical framework of management2 and its academic progression. Literature on the subject 1 2 Mgr Marta Włóka, doktorantka Wydziału Zarządzania Politechniki Częstochowskiej. On the background of experiences of many units both in the private as well as public sector, over time didn’t create one solely definition of management. This term by many authors is perceived as difficult to defining. M. Parker Follet treats management as an ‘art of getting things through 61 indicates that on the background of mentioned changes, fundamental becomes mutual attaching of practical and theoretical areas of management. According to A. Frączkiewicz-Wronka, successive development of economy, society and policy creates requirements for scientific work in the field of economy’s theory, management or political sciences. Due to the increasing complexity of contemporary organizations based on challenges of present reality, functioning of many entities becomes more complicated. Thus management comprises one of the most important determinants of social-economic development3. Strategic management which comprises theme of this publication (next to that kind of operations as analysis of customer’s satisfaction and assessment of activity’s quality), presents solution, universally promulgated within the private sector. In terms of mentioned problematic, it is so much important because its assumptions and rules are borrowed from private sector organizations and implemented to functioning of public sector units. This practice similarly as decentralization process and increase of emphasis on autonomy chosen individuals, expresses foundation of public management conception4. 3 4 people’ and through this concept expresses primary difference between managers and their teams, within which managers perceives as people who aim at achieving of unit’s objectives by ‘directing the efforts of others–not by performing the task himself’ and on the other hand the others perceives as people who aim at achieving unit’s objectives ‘by performing the task himself’. P. C. Tripathi, P. N. Reddy, Nature and functions of management [in:] Principles of management, 4th edition, The McGraw-Hill Publishing Company Limited, New Delhi 2008, p. 2. Generally the management term is understood as ‘working with and through other people to accomplish the objectives of both the organization and its members’. P. J. Montana, B. H. Charnov, What is management: definition and overview [in:] Management, Classical management theory, Organizational structures, Human resource management, Work group dynamics and much more, Fourth edition, Barron’s Educational Series, Hauppauge 2008, p. 1. Other definition of the management term leads on achievement of unit’s objectives by using efficient and efficacious way based on management functions, therein: planning, organizing, leading and controlling of unit’s resources. D. Samson, R. L. Daft, The changing world of management [in:] Introduction to management [in:] Management, Fourth Asia Pacific edition, Cengage Learning, South Melbourne 2011, p. 10. See also: R. Daft, R. L. Daft, M. Kendrick, N. Vershinina, Innovative management for turbulent times [in:] Management, Cengage Learning, Andover 2010, p. 7-9, Ch. Williams, Management [in:] Introduction to management [in:] Management, 6th edition, Cengage Learning, Mason 2011, p. 7-12. Nowadays more important significance takes the issue of application of theory, ideas and models of management in practice. By contrast their adaptation conditions real possibility of achievement of assumptive objectives. A. Frączkiewicz-Wronka, Wstęp [in:] Zarządzanie publiczne – elementy teorii i praktyki, Wydawnictwo Uniwersytetu Ekonomicznego w Katowicach, Katowice 2009, p. 12. S. Mazur, K. Olejniczak, Rola organizacyjnego uczenia się we współczesnym zarządzaniu publicznym [in:] Organizacje uczące się, Model dla administracji publicznej, K. Olejniczak (ed.), Wydawnictwo Naukowe Scholar, Warszawa 2012, p. 34. Mentioned approach to public management relates to management reform in public sector understood as New Public Management, which created in the late 1970s in Anglo-Saxon countries as response to applied at that time rules of ‘Weberian’ public administration. This idea which assumptions are postulated in many countries to this day, expresses alternative to classical bureaucracy through implementation of methods and techniques used in private sector. S. P. Osborne, Public Governance and Public 62 From considered thematic point of view, essential significance role plays therefore the issue of public sector, which essence has been presented in next part of this publication. 2. The role of strategic management in activity of public sector units Due to the multitude and difference of theories created over time, in view of the public administration concept, literature on the subject focuses especially on definitions presented by two scholars, operating in this field, namely: Woodrow Wilson and Frank Good now, which expressed that public administration area should be separated from policy and its daily confrontations. First of them, i.e. Wilson phrased that ‘the business of government is to organize the common interest against the special interest’ while second of them i.e. Good now, postulated differentiation between policy (therein its functions) and administration, within which policy is performed by administration. According to definition established by M. Holzer and R. W. Schwester, public administration presents manners of formulation and introduction of public policy, which comprises connection of several strategies, based on management, namely: planning, organizing, directing, coordinating and controlling. Strategies fulfilled in terms of these practices are based on rules of democratic responsibility, therein mainly formulating and introducing public policy. By contrast formal supervision more and more is developed by including commercial and non-profit units5. 5 Services: ‘A Brave New World’ or New Wine in Old Bottless? [in:] The Ashgate Research Companion to New Public Management, T. Christensen, P. Laegreid (ed.), The Ashgate Publishing Limited, Farnham 2011, section 29. New Public Management is oriented at improvement public services and increase of effectiveness of public sector units through emphasis on ‘performance’, disaggregation, contracts, using market methods, and perceiving society as customers. Ch. Pollit, G. Bouckaert, Comparative public management reform: an introduction to the key debates [in:] Public management reform, A comparative analysis New Public management, Governance, the Neo-Weberian State, Third edition, Oxford University Press, Oxford 2011, p. 10. According to S. F. Goldfinch, the New Public Management idea is based on three fundamental mutually correlated spheres, namely: ‘disaggregation, competition and incentivization’. S. F. Goldfinch, Introduction [in:] International Handbook of Public Management Reform, S. F. Goldfinch, J. E. Wallis (ed.) Edward Elgar Publishing Limited, Cheltenham 2009, p. 1. See also: J. Łukomska-Szarek, M. Włóka, Theoretical Aspects of New Public Management, ‘Oraldyn Fylym Zarsysy nr 10(46)’ 2012, p. 50-51. J. Łukomska-Szarek, M. Włóka, Teoretyczne podstawy zarządzania publicznego [in:] Współczesne problemy zarządzania organizacją, A. Wójcik-Mazur (ed.), Sekcja Wydawnictw Wydziału Zarządzania Politechniki Częstochowskiej, Częstochowa 2012, p. 48-57. According to authors, narrow approach to public administration presents similar ideas as public management. Basically it highlights questions strictly connected with management problematic in public and non-profit sector. Management in private sector on the other hand in contrast to public management (which aims at achievement objectives and its mission) is oriented at making a profit. Thus public management comprises imperative constituent of democratic rules which influences at activity of management principles. M. Holzer, R. W. Schwester, Public Administration: An Indispensable Part of Society [in:] Public Administration, An Introduction, M. E. Sharpe, Inc., New York 2011, p. 31-32. 63 H. A. Khan public administration treats as ‘management of government affairs’. Other definitions in turn indicate that public administration is understood on the one side as planning and management of human and material resources in order to obtainment government objectives and on the other side is considered to be a set of organizational and individual processes of enforcement law and its principles, accepted by legislature, government and other authorities6. Generally, public administration is treated as obligatory and joint activity for all countries of the world. Without regard for location, its principal priority comprises implementation of public policy established by decision-making bodies. Differentiation affects only mentality, culture, scheme and operations of specific countries. As per R. B. Denhardt, J. V. Denhardt and T. A. Blanc, fundamental in terms of public administration is the issue of ‘public administrators’ and areas of their activity which are identified with three functions of government (executive, legislative and judicial), among them distinguish7: · ‘managerial approach to public administration’, which links to executive aspect and focuses on the issue of management and organizing of public entities. It indicates that management in public sector has common characteristics such as management in private sector, where the most important role plays efficiency; · ‘political approach to public administration’, which leads on legislative aspect and centres on assuring constitutional protection throughout establishment of legislation. The more significance gains effectiveness; · ‘legal approach to public administration’ which affects judicial aspect, and involves implementation and enforcement the law by executives in exceptional situations. Overall, the strategic management concept, which comprises primary theme of this publication, itself expresses process of defining, appraising and introducing strategies in order to achievement assumptive, unit’s objectives. Without regard for nature of entities functioning it fulfills very important function in the context of management oriented at obtainment success, because delivers structured scheme of analysis containing a set of instruments and theoretical assumptions, necessary to appraisal of internal and external environment of investigated unit and following on from this, delivers rational approach to decision-making process8. 6 7 8 H. A. Khan, Introduction to public administration [in:] An introduction to public administration, University Press of America, Lanham 2008, p. 1-3. R. B. Denhardt, J. V. Denhardt, T. A. Blanc, Personal action in public organizations [in:] Public Administration, An Action Orientation, Cengage Learning, Boston 2013, p. 4. Ch. Jeffs, Core areas of the curriculum [in:] Strategic management, Sage Publications Ltd, London 2008, p. 13. 64 G. A. Cole on the basis of Ansoff’s and McDonell’s definition of strategic management presents that it ‘is a systematic management approach for managing strategic change which consists of the following’9: · allocation of organization by using strategy rules and performance planning; · strategic reaction in real time throughout management idea; · methodical management of intolerance during strategy introducing. Strategic management understood as management process of general unit’s aim affects ensuring that current needs and enablers are sustainable with those future. It perceives unit’s management from the general and blanket point of view. It postulates that diverse components of strategic management should be correlated in order to providing expected value to stakeholders10. According to L. Partridge and M. Sinclair-Hunt, strategic management indicates that processes of defining and introducing strategy are analogical parts of strategic decision-making process, within which necessary is including of operational managers. Mentioned operations of formulating and implementing strategy are based on a set of broad, standardized activities, namely: thinking, reflecting, appraisal, education, decision-making, designing, planning, programming, managing change, etc.11. On the background of afore mentioned assumptions of strategic management, the primary role play especially the issue of operations, resources and ways of 9 G. A. Cole, Strategic management: the concept [in:] Strategic management: theory and practice, 2nd edition, Thomson Learning, London 2006, p. 4. 10 B. J. Witcher, V. S. Chau, Overview of strategic management [in:] Strategic management, Principles and practice, Cengage Learning, Hampshire 2010, p. 6.Seealso: G. Gierszewska, M. Romanowska, Analiza strategiczna przedsiębiorstwa, Polskie Wydawnictwo Ekonomiczne, Warszawa 2009. 11 L. Partridge, M. Sinclair-Hunt, Introduction to strategic management [in:] Strategic management, Select Knowledge Limited, Cambridge 2005, p. 4. Literature on the subject treats strategic management as epistemic process characterized by high level of prescience of future occurrences, which enables understanding both nature of units functioning inside of its, as well as outside of its, i.e. environment therein its changes and challenges. In terms of this process very important role plays identification of threats and opportunities and then adapted them to unit’s activity. Moreover, in the context of strategic management, author presents defines it as deliberate, analytical and creative process within which strategic planning comprises essence. A. C. Amason, An introduction to strategic management [in:] Strategic management, From theory to practice, Routledge, New York 2011, p. 7. Among key characteristics of strategic management distinguish: the strategy concept, mission and vision. First of them, i.e. strategy presents operational and partial ends which are oriented at achievement of overall organizational objective. Strategy encompasses specific actions, realized by unit, directions on the basis of which unit heads and decisions which takes in order to obtainment of desired level of success. Mission and vision, similarly as strategy expresses the most essential objective of unit. Mission presents entity’s nature and its needs, toward assumptive goals. Vision defines current and future image of existence of unit and directions needful to their achievement. J. L. Thompson, F. Martin, Introducing strategy and strategic management [in:] Understanding strategy and strategic management [in:] Strategic management: Awareness and change, Cangage Learning, Andover 2010, p. 11. 65 objectives achievement. Notwithstanding the fact, that these rules, the most commonly relate to private sector, over time (mostly, because of public management reform) their analogy has become identical with policies used in public sector12. From the public administration point of view, as per J. Supernat‘ managerial approach’ (which has been created on the basis of New Public Management) presents common characteristics between public administration organizing and commercial sector organizing13. The multitude of the strategic management definitions suggests some scheme of actions, which should be applied by public sector units. These operations are oriented especially at formulation of development strategy based on analysis of environment’s occasions and challenges both at the social (therein standard of society’s life) as well as economical level (e.g. promotion of local progression)14. The issue of strategic management in public administration is considered to be instrument of administrating within which role plays fundamental function in the context of decision-making processes, what is strictly connected with rationalization of these operations. Thus, in this case the most important is appropriate choice of directions of entity’s progression, taken by executives, moreover incorporation of public managers (at all levels of organization) into planning process, coordinating of decisions affected diverse level of functioning of entity, creating abilities of anticipation as well as abilities of adjustment and prevention, controlling of assumptive scheme and structure of activity. In view of strategic public management necessary is generalization and specification of vision, therein its development and intentions15. Implementation of strategic management to public administration comprises one of the many solutions consequent on reorganization of public sector over time. This conception, current to this day expressed mission, vision, organizational objectives and assessment of organizational condition, therein measurement of 12 J. Hermaszewski, Koncepcja zarządzania strategicznego w jednostce samorządu terytorialnego – problemy organizacyjne [in:] Finanse publiczne, J. Sokołowski, M. Sosnowski, A. Żabiński (ed.) Wydawnictwo Uniwersytetu Ekonomicznego we Wrocławiu, Wrocław 2010, p. 219-228. 13 See also: A. Wójcik-Mazur, K. Wieczorek, New Public Management w kontekście zarządzania administracją państwową [in:] Zarządzanie finansami, finanse publiczne, instrumenty rynku finansowego, Zeszyty Naukowe Uniwersytetu Szczecińskiego Nr 766, Finanse, Rynki Finansowe, Ubezpieczenia Nr 62, D. Zarzecki (ed.), Wydawnictwo Naukowe Uniwersytetu Szczecińskiego, Szczecin 2013. K. Wieczorek, The use of the New Public Management in Activity of Public Administration Units [in:] Management Trends in Theory and Practice, S. Hittmar (ed.), EDIS, University Publishing House, University of Zilina, Zilina 2013. 14 J. Supernat, Administracja publiczna w świetle koncepcji New Public Management [in:] Administracja publiczna, Studia krajowe i międzynarodowe, Zeszyty Naukowe Wyższej Szkoły Administracji Publicznej w Białymstoku 2003, nr 2, p. 28-46. 15 B. Kożuch, Publiczne zarządzanie strategiczne, Zasady i metody [in:] Strategiczne zarządzanie miastem, W teorii i praktyce Urzędu Miasta Poznania, Monografie i Studia Instytutu Spraw Publicznych Uniwersytetu Jagiellońskiego, B. Kożuch, C. Kochalski, Instytut Spraw Publicznych Uniwersytetu Jagiellońskiego, Kraków 2011, p. 7. 66 performance shortages, gives public managers larger area of accountability, therein greater freedom to managing, organizing structure of unit, distribution organizational resources and implementation of managerial methods and techniques. Strategic planning in public administration which comprises basis of strategic management focuses especially on decision-making process, essence of taken decisions about desired, future image of unit and process of planning instruments16. Afore mentioned assumptions comprise only introduction to the strategic management concept in public administration. Their development takes place in next part of this publication. 3. The basis of strategic management in public administration Among problematic of strategic management in public sector, analysis of literature’s investigations leads on frequent and invalid using interchangeably the strategic management and strategic planning terms. First of them encompasses considerably broader area of functioning than strategic planning, which comprises only its primary part. As presented contents, strategic management to this day role plays fundamental role in the context of functioning of public sector units. Basic impact on significance growth of strategic management in public administration have: 1) Dichotomy between purchasers and providers – this trend distinguishes service purchasers and service providers. First of them, centre on the best ways of delivering public services to their customers, within which their activity is limited only to process of delivering and cannot involve other operations (e.g. organizing resources). Among their functions distinguish: defining what kind of services should be provided, signing the contracts, adjusting conditions to services process. Second of them, i.e. services providers are characterized by ‘qausi-commercial nature’ and wide area of commerce objectives, namely: contractual, financial and strategic goals. 2). Striving for improvement of performance – it is strictly connected with performance measurement by using formal indexes and conclusions result from formal research. 3). Delegating of decision-making processes- it sets an expansion of some provider units within which specific departments become small official units, functioning on the basis of common objectives. They are oriented at limitation of daily control by common entities17. Process of strategic management in public administration doesn’t comprise only a way of achievement unit’s objectives but presents also cultural creative approach to management in public sector. During the decision-making process it 16 F. Longo, Managing public reforms effectively: A strategic change management approach [in:] Strategic change management in the public sector, An EFMD European case book, F. Longo, D. Cristofoli, John Wiley & Sons Ltd, Chichester 2007, p. 14. 17 M. Prowle, Strategic management in the public sector [in:] The changing public sector: A practical management guide, Gower Publishing Limited, Hampshire 2000, p. 31-33. 67 leads to confrontation between politician and public managers what influence at increase of involvement and employees participation. Generally, process of strategic management in public sector contains following elements18: · Progress of beginning assumptions involving the area of strategic planning process; · Defining and specifying of empowerments; · Progress and specifying of unit’s mission, vision and desired values; · Appraisal of external unit’s environment; · Appraisal of internal unit’s environment; · Definition of the fundamental strategic aspects; · Progress of strategy; · Presentation of future, potential image of public organization. Defining the one, standardized model of strategic management in public administration is very difficult and even impossible. It results from complexity and differentiation of specific public organizations activity. From the successive development of public sector point of view, implementation of strategic management carries many advantages especially in the long-term perspective, but in reality it is possible only due to adequate introducing of strategic planning process, what comprises the most difficult operation. In the picture 1 presented modern approach to strategic management system (with its fundamental components), formulated and adapted in public sector, which contains amalgamation of two diverse strategic management systems, developed by R. Kaplan, D. Norton and J. Bryson. As results from picture 1, presented management system is beginning by operation of developing strategy which contains establishment of several key issues, namely introductory assumptions, therein strategy aim, following processes, expected effects result from implemented strategy, moreover formulation of mission, organizational long-term objectives and potential image, which should consider stakeholders’ requirements. Strategic analysis understood as part of this activity encompasses mostly assessment of internal and external environment therein analysis of strengths, weaknesses, threats and opportunities, on the basis of SWOT analysis19. Strategy formulating based on Norton and Kaplan includes: funding and grants, risk management, proposition of customer 18 D. Cepiku, A. Bonomi Savignon, L. Corvo, Strategic management in Italian Ministries: An empirical assessment of gains from gaps in reforms [in:] Reforming the public sector, How to achieve better transparency, service and leadership, G. Tria, G. Valotti (ed.), Brookings Institution Press, Washington 2012, p. 195. 19 See also: J. Łukomska-Szarek, TOWS/SWOT analysis as a tool for strategic management in local self-governments, ‘Sovremennyj Naucnyj Vestnik Seria: Ekonomiceskie nauki nr 18 (130)’ 2012, p. 85-99. 68 value, common social accountability, innovations, partnerships, productivity, positioning20. Picture 1. Strategic management system applied in public administration organizations Strategy planning e.g. Strategy Map, standards funding Aligning the organizationbusiness and support units and also employees Planning the activities: · fundamental processes · planning of outcomes and outputs · budgeting process · resouice productivity Defining strategy: · mission, vision, desiredvalues · strategic analysis · strategy formulating Strategic plan: · StrategyMap · BSC Operational plan: · budget · dashboards · prognosic of outcome and efficiency · need for recsources Testing and adapting: · analysis of output/outcome · efficiency analysis · strategy correlation · emerging strategies Controlling and learning: · supervisions at the operational as well as strategic level ACCOMPLISHMENT · initiatives and processes Resources: author’s own study based on: Technology One, Business, software, solutions, Strategy challenges in the public sector [in:] Strategic management in the public sector, Improving organizational intelligence, p.20, web site materials: http://www.technologyonecorp.com/media/docs/Strategic_Mgt_Public_Sector_WP002_LR.pdf (04.11.2013) on the basis of R. Kaplan, D. Norton, The execution premium: Linking strategy to options for competitive advantage, Harvard Business School Press, Boston 2008, p. 8. J. Bryson, Strategic planning for public and non-profit organizations, A guide to strengthening and sustaining organizational achievement, 3rd edition, John Wiley & Sons, San Francisco 2004, p. 32-51. The next operation, i.e. strategy planning focuses on progression of strategic aims, measures, initiatives, etc., on the basis of ongoing strategic plan, budget plan and ways of resources allocation. Aligning chosen aspects of organizational functioning is considered to be necessary to effectiveness strategy implementation. 20 Technology One, Business, software, solutions, Strategy challenges in the public sector [in:] Strategic management in the public sector, Improving organizational intelligence, p.9, web site materials: http://www.technologyonecorp.com/media/docs/Strategic_Mgt_Public_Sector_WP002_LR.pdf (04.11.2013) on the basis of R. Kaplan, D. Norton, The execution premium: Linking strategy to options for competitive advantage, Harvard Business School Press, Boston 2008, p. 155. 69 For example, employee alignment can be obtained through improvement of communication. Planning the operations presents a number of targets and initiatives involving resources allocation, processes of improvement and measures instruments. The last two steps in presented strategic management system, relates to monitoring and testing processes. First of them encompasses successive assessment of implemented strategy in order to achievement information whether strategy is functioning according to its assumptions, and second studies how strategy, gets by challenges of strategic plan21. Conclusion Over time, public sector in many countries changes under the influence of a lot of challenges result from environment. Without regard for the fact of multitude of public sector reforms and following on from this their differentiated, without exceptions, they are oriented at improvement of public services quality. The strategic management issue, which comprises theme of this publication presents one of many solutions applied in public sector organizations on the background of public management reforms, therein New Public Management. By many scholars, public executives and as well as public managers is considered to be the best way of achievement organizational objectives and improvement of public service quality. Moreover besides these mentioned aspects provides to public entities new approach to organizational culture and collaboration. Reference 1. Amason A. C., An introduction to strategic management [in:] Strategic management, From theory to practice, Routledge, New York 2011. 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(ed.), Wydawnictwo Naukowe Uniwersytetu Szczecińskiego, Szczecin 2013. 72 Abstract The aim of this publication focuses on a role of strategic management in the context of economic entity functioning, therein units of public nature, within which an implementation of strategic management’s assumptions comprises one of the fundamental area, adequate to public management paradigms, created as the turn of the century (therein, especially New Public Management idea). This publication performed on the basis of literature on the subject analysis, leads on a number of advantages for public sector, resulted from activities application as its part, which are typical of private sector, i.e. assumptions of strategic nature. Znaczenie zarządzania strategicznego w kontekście funkcjonowania publicznej administracji Cel niniejszej publikacji skupia się na ukazaniu roli zarządzania strategicznego w kontekście funkcjonowania podmiotów gospodarczych, w tym uściślając, jednostek o charakterze publicznym, w aspekcie aktywności, których implementacja założeń zarządzania strategicznego stanowi jeden z fundamentalnych obszarów adekwatnych do wykreowanych na przełomie wieków i wdrażanych na ten czas paradygmatów zarządzania publicznego (w tym szczególnie New Public Management). Niniejsza publikacja opracowana w oparciu o studia literaturowe wskazuje na szereg korzyści dla sektora publicznego, wynikających z zastosowania w jego ramach działań typowych dla sektora prywatnego tj. założeń o charakterze strategicznym. MA Marta Włóka, post-graduate student in the Czestochowa University of Technology. 73