Strategic Management in Finnish and Norwegian Government Agencies

administrative sciences Article Strategic Management in Finnish and Norwegian Government Agencies Jan-Erik Johanson 1, Åge Johnsen 2,3,* , Elias Pekkola 1and Stephen Affleck Reid 4,5 1Faculty of Management and Business, Tampere University, FI-33014 Tampere, Finland; [email protected] (J.-E.J.); [email protected] (E.P.) 2Oslo Business School, Oslo Metropolitan University, PO Box 4 St. Olavs Plass, NO-0130 Oslo, Norway 3The Norwegian Defence University College, PO Box 1550 Sentrum, NO-0015 Oslo, Norway 4NLA University College Oslo, PO Box 7153 St. Olavs plass, NO-0130 Oslo, Norway; [email protected] 5The Open University Business School, PO Box 197, Milton Keynes MK7 6BJ, UK *Correspondence: [email protected] Received: 1 September 2019; Accepted: 30 September 2019; Published: 14 October 2019   Abstract: The purpose of this article is to analyse the design and implementation of strategic planning and performance management in governmental agencies in two Nordic countries, Finland and Norway. Nordic countries are an interesting study from a comparative perspective because while they are commonly assumed to have been high-intensity new public management reformers, they are also commonly assumed to have a distinct public management tradition. Moreover, these two countries are interesting to study because within the Nordic public management tradition, Finland and Norway specifically represent two different public management traditions. Finland belongs to the Eastern Nordic public management tradition, with an emphasis on decentralisation and agency autonomy, while Norway belongs to the Western Nordic public management tradition, with an emphasis on hierarchical governance, and hence, much performance management and reporting. Therefore, we expected to find more decentralised strategic management and an emphasis on evaluation in Finland, and more central, planning-like strategic management and reporting in Norway. Our comparison shows that both countries had mandatory strategic planning and utilised decentralised strategic planning in government agencies. The stronger legal orientation in the public administration in Finland, however, made strategic changes more complicated in Finland than in Norway. Keywords: agency governance; central government organisations; formal strategic planning; Nordic administrative traditions; performance management; strategy content 1. Introduction The purpose of this article is to analyse the design and implementation of strategic planning and performance management in governmental agencies in a Nordic context. A common definition of strategic planning in the public sector is that it is “a deliberative, disciplined approach to producing fundamental decisions and actions that shape and guide what an organisation (or other entity) is, what it does, and why it does it” (Bryson 2018). Strategic planning is often integrated in budgeting, performance management, and evaluation (Vinzant and Vinzant 1996). Performance management comes in a wide variety and is documented as being a practice long before the term was employed academically. Here, we settle with a functional definition: “Performance management is a type of management that incorporates and uses performance information for decision-making” (Dooren et al. 2015, p. 20). This definition implicitly combines the performance focus with performance measurement as a basis for decision-making, thereby linking it to central processes such as strategic management. Adm. Sci. 2019,9, 80; doi:10.3390/admsci9040080 www.mdpi.com/journal/admsci Adm. Sci. 2019,9, 80 2 of 20 Much of the research on strategy in the public sector has revolved around questions related to the diffusion and applicability of management models that many perceive as originating largely in the private sector to the public sector context (Alford and Greve 2017;Hansen and Ferlie 2016). Many public agencies at all levels of government fail to develop and implement strategy, and to manage performance effectively (Poister 2010). The design and implementation of strategic planning and performance management is, therefore, an important issue for government agencies. Much of the empirical research on strategic planning and management has, however, been conducted in Anglo-American and local government contexts (Walker 2013). Given different national administrative traditions, we expect much diversity in strategic planning management, in particular in central government. There is, therefore, a need for more knowledge on the diffusion and applicability of strategic planning and management outside the Anglo-American and local government contexts. Governance, including strategic planning and performance management, in Nordic countries is particularly interesting for policymakers and practitioners to study because countries within “the Nordic Model” consistently score high in international rankings on dimensions such as rule of law, transparency, low corruption, high trust, equality, and government effectiveness (Fukuyama 2014; Rothstein 2011). The Nordic countries are also interesting to study from a comparative perspective because while they are commonly assumed to have been high-intensity new public management reformers (Hood 1995), they are commonly assumed to also have a distinct public management tradition (Pollitt and Bouckaert 2017). In this article, we compare strategic management in governmental agencies in two Nordic countries, Finland and Norway. These countries are interesting to study because within the Nordic public management tradition, Finland and Norway represent two different public management traditions (Öberg and Wockelberg 2016). Finland and Sweden belong to the Eastern Nordic public management tradition, with an emphasis on decentralisation, while Denmark and Norway belong to the Western Nordic public management tradition, with an emphasis on hierarchical governance and much performance management and reporting. Therefore, we expected more central, planning-based, short-term strategic management, with an emphasis on performance management, in Norway than in Finland, and also expected more decentralised and long-term strategic management and more emphasis on evaluation in the Finnish government. In order to compare the governmental strategic management systems in these two countries, we employed the New Zealand model of integrated strategic planning and performance management (Boston and Pallot 1997) as an ideal model (in a Weberian sense). This model shares many core assumptions with the normative strategic planning models (Bryson 2018) that originated in theory developed from Anglo-American contexts, such as North America and the UK. Moreover, since a similar model has been used previously in small countries like our focal countries, it is a compelling benchmark for our case study of the two Nordic countries. Our comparison of the two cases shows that both countries had mandatory strategic planning, as expected for high-intensity new public management reformers, but, unexpectedly, both countries utilised decentralised strategic planning in the government agencies. The tradition of a stronger legal orientation in the public administration in Finland made strategic changes more complicated in that country than in Norway, contrary to what we expected based on the emphasis on decentralisation and agency autonomy in the Eastern Nordic public management tradition. In Norway, the Western Nordic public management traditional emphasis on hierarchical governance could be related to the practice of a strong emphasis on agency governance by performance management and the practice of formally less-binding agency strategic planning. The implications of these findings are that different national public management traditions and performance management regimes impact how strategic management is utilised in government and within countries that are often assumed to be distinct from a comparative perspective. The rest of this article is outlined as follows: Section 2first the central strategic management concepts and then reviews empirical studies on strategy in central government and agencies. Section 3 documents the research design and data. Section 4compares the design and implementation of the Adm. Sci. 2019,9, 80 3 of 20 strategic planning and performance management in government in Finland and Norway. Section 5 discusses the findings, and concludes. 2. Literature Review: Strategic Management in Central Government 2.1. Strategic Management in the Public Sector Strategy is a multi-dimensional concept. Therefore, we first discuss a few definitions related to the concept of strategy in public sector organisations. Ervin (1992) conceptualised strategic planning in line with the traditional strategy conceptions of alignment (Bracker 1980) by stating that “the fundamental idea of strategic planning is that the institution may need to be organizing itself for operations in some future environment very different from that of today” (Ervin 1992, p. 539). Ronda-Pupo and Guerras-Martin (2012) argued that the focus in strategy has shifted from the organisation’s (firm’s) achievement of goals to its improvement in performance, a shift that also has been evident in public sector strategy (Moore 1995;Mulgan 2009; Joyce 2017). In a national survey of the use of strategic planning in government agencies, Berry and Wechsler defined strategic planning as “( . . . ) a systematic process for managing the organization and its future direction in relation to its environment and the demands of external stakeholders, including strategy formulation, analysis of agency strengths and weaknesses, identification of agency stakeholders, implementation of strategic actions, and issue management” (Berry and Wechsler 1995, p. 159). Mulgan defined public strategy as “the systematic use of public resources and powers, by public agencies, to achieve public goals” (Mulgan 2009, p. 19). This definition, being utterly instrumental, is relevant in our case, especially concerning the integration of public goals as an element of strategising. Thesurroundingenvironmentcomesintoaccountwhenweaskhowstrategicplanningandperformance management contribute to the setting of public goals and the implementing of public policies. A different take on the definition of strategy is found in Walker et al. (2010), which distinguishes between strategy processes and strategy content: “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” (Walker et al. 2010, p. 731). This definition underlines internal processes and seems to presuppose a high level of strategic autonomy in the organisation. Whether this is applicable in our context remains to be seen. Different definitions highlight different aspects of the use of strategic management in public organisations: “strategic planning”, “public strategy”, “strategy processes”, and “strategy content”, including using management tools. The conceptual diversity reveals the need to envision a larger, more integrative picture of how these perspectives fit in. Most relevant for this study is to view strategic management in relation to the governmental performance management system and administrative traditions. One aim of strategic planning is to influence performance, and thus it is often conducted in relation to performance management. There is a substantial complexity linked to performance management in the public sector (Bruijn 2007;Moynihan 2008). Which results one shall measure, and for whom, what kind of efficiency is desired in public agencies, and how to measure public value (Pollitt and Bouckaert 2017) are just a few of the many challenging and relevant questions. However, focusing more on the theme of strategic management, such questions fall outside the scope of this study. See, for example, Pollanen et al. (2017), discussed below, for an analysis of performance measures used in strategic management. 2.2. Administrative Traditions A central premise for our study is that different administrative traditions may have important imprints on public policy and the usage of governmental strategic planning, as well as the implementation and design of performance management. While new public management theory Adm. Sci. 2019,9, 80 4 of 20 (Hood 1995) implies that strategic planning and management could be expected to have been similarly, or at least extensively, adopted in the Nordic countries, and that the public management cultures in both countries are relatively similar (Hood 1998;Verhoest 2011), different Nordic public management traditions may imply differences in strategic planning and management between the Nordic countries. Administrative tradition is “an historically based set of values, structures and relationships with other institutions that defines the nature of appropriate public administration within society” (Peters 2008, p. 118). There are several such administrative traditions in Europe, such as Anglo-Saxon, Continental European, Nordic and Eastern European (Pollitt and Bouckaert 2017). Administrative traditions are related to the political and administrative culture within a given society. The Eastern Nordic administrative tradition, commonly associated with Sweden and Finland, is characterised by restrictions on modes of steering and state authority control in collegial governmental decision-making (Öberg and Wockelberg 2016). The Swedish public administration, in particular, is organised differently than in the other Nordic countries. The Swedish ministries are not expected to control the agencies to the same extent as in the Western Nordic administrative tradition. Hence, the Swedish agencies enjoy a more autonomous position than in Denmark and Norway. Finland falls somewhere between the Norwegian and Swedish cases with semi-autonomous agencies, but with ministerial accountability (Greve et al. 2016). The Western Nordic tradition associated with Denmark, the Faroe Islands, Norway and Iceland implies significant ministerial administration (the “ministerial model”). This tradition allows for a high degree of spontaneous individual ministerial steering of the state authorities (Öberg and Wockelberg 2016). In Norway, for example, the Parliament traditionally holds only the ministers to account. This is also common in Denmark, but in Denmark the agencies may also be held to account. How strategic planning and management relates to the Eastern and Western Nordic administrative traditions is an unknown issue we explore in this study. First, we review some empirical studies of strategic planning in central government and agencies. 2.3. Research on Strategic Planning and Management in Central Government and Agencies Previous studies of strategy in agencies include several singleand multi-case national case studies (Wechsler and Backoff1986;Ervin 1992;Boston and Pallot 1997;McHugh 1997;Roberts 2000; Llewellyn and Tappin 2003;Barzelay and Campbell 2003;Johanson 2009;Tama 2015a,2015b,2018), some international comparative case studies (Proeller 2007), a case study of strategy-making in two EU agencies (Ongaro and Ferlie 2019), and some large-N studies of local and central agencies mainly from North America (Chun and Rainey 2005;Elbanna et al. 2016;Pasha et al. 2018;Carrigan 2018). In the early 1980s, Wechsler and Backoff(1986) studied four agencies in one U.S. state and identified four distinct strategies that the agencies used (developmental, transformational, protective and political), including the environmental, institutional, political, financial and administrative factors that influenced these strategies. These four strategies have some similarities with the four strategic types that Miles and Snow (1978) developed in their generic strategy framework, which has had much influence on later research in public sector strategy (Boyne and Walker 2004;Meier et al. 2007;Walker 2013). This research shows that the concept of the content of strategies is relevant in explaining the design and implementation of strategic planning in government. Ervin (1992) analysed 25 U.S. agency plans using the common public-sector strategic planning model and found that the studied agencies commonly had mission statements, environmental scans and organisational analyses, and he identified strategic issues and strategic options. Attention to implementation was less developed, albeit the two most common means for implementation were budgeting and performance evaluation. Some agencies also used a bureau or standing committee in charge of strategic oversight and plan implementation, a means later used, for example, in strategy execution in the UK government (Mulgan 2009). Many agency managers also stated the importance of top-management commitment. In addition, there was some confusion regarding the difference Adm. Sci. 2019,9, 80 5 of 20 between ordinary planning (programming) and strategic planning, such that the strategy processes could be overwhelmed by issues without importance at the institutional level. Reviewing many of the later empirical studies, it is striking that the content of and challenges in strategic management which Ervin (1992) described seem to persist. McHugh (1997), for example, used a single-case study of a social security agency in Northern Ireland for arguing that when senior management wants to use strategic management for changing traditional public sector bureaucracies into better-aligned organisations to changing environments in the Next Steps initiative, they must adopt an integratedapproach. Whilethe impetusand plansfor changemay bepresent, an integratedapproach includes communication and time in order to implement the plans and hence improve performance. While McHugh (1997) called for the attention to subordinates (employees) in the UK context, others have called for attention to superiors (politicians) in the U.S. context. In the United States, the Government Performance and Results Act (GPRA) of 1993 required nearly all agencies and government corporations to develop and report strategic plans to Congress by 1997. Based on the pilot studies conducted in the early stage of implementing the system, Roberts (2000) concluded that the synoptic model of strategic planning the GPRA championed was a poor fit for many bureaus because “they confront value and stakeholder conflicts, manage cross-cutting programs and experience a high degree of change and instability in their task and general environments” (Roberts 2000, p. 309). Her analysis sums up much of the critique of the rational planning frameworks developed for public sector organisations outside the U.S. context, in particular, for central government organisations, and highlights that public management is dependent on its political environment. The New Zealand model of integrated strategic planning and performance management is one of the earliest cases reported in the literature and is also a case in point relative to Roberts (2000) critique. Boston and Pallot (1997) described the New Zealand model of integrated strategic planning and performance management in government, as it was evolving in the mid-1990s. (See also Horn (1995) and Boston et al. (1996) for analyses of the New Zealand model of public management at that time.) The New Zealand model is interesting, as it is almost a blueprint of a new public management-inspired, textbook version of an ideal integrated, rational, strategic planning model, such as the one described by Ervin (1992) and Bryson (2018). The New Zealand model consisted, first and foremost, of three mechanisms: first, prior reforms in accounting and information systems gave politicians and civil servants better information on costs, liabilities and non-financial performance information than using traditional, cash-based accounting systems only; second, the development of a nation-wide governmental strategic vision that integrated the political decision-making with the administrative strategic planning accomplished both a political commitment to long-term planning for outcomes and made clear political priorities prior to the governmental organisations’ strategy processes; and third, a devolved government with a clear emphasis on outputs and accountability through policy-devised strategic result areas (SRAs) and organisational objectives, termed key result areas (KRAs), for the public sector agencies to pursue. Despite—or maybe because—this system closely resembled the conventional wisdom of prudent strategic management, it soon experienced many of the problems that Roberts (2000) and many others (Van Gunsteren 1976;Mintzberg 1994) have warned against regarding attempts at implementing rational planning systems in the public sector. The strategic planning system that Boston and Pallot (1997) described is still not in use in its original form. 1 The government changed in the 1999 election, and the Labour Party led the new government. The Labour Party was sceptical about the benefits of strategic planning systems for government and did not continue the approach pioneered by the previous National government. There were probably several reasons for the Labour Party’s decision; they tended to be sceptical about strategic planning for government seeing it as “managerialist” rather 1 The description of the strategic planning system in the New Zeland government after 1997 is based on information from personal communication with Iain Rennie August 7th 2019 based on his experience as head of the State Services Commissioner of the New Zealand public service, 2008–2016. Adm. Sci. 2019,9, 80 6 of 20 than relying on relationship-based approaches to clarify direction and motivate performance. In addition, there were philosophical tensions within the governing coalition, and there was likely a concern that clarifying a government-wide vision could highlight those differences. The Labour Party was in power until 2008 when the National (centre-right) government returned to power. The Better Public Service targets were introduced in 2012 and could be seen as the beginning of rebuilding the strategic planning system. The Labour Party once again discontinued that approach after it returned to office in 2017. For a period in 2018, and at the urging of officials, there was a brief attempt to recreate some kind of strategic planning for government, but it is uncertain if this has gained traction. The New Zealand case illustrates the impact of political context on the design and implementation of strategic planning in government, including the need for top-management commitment and time, in order for such systems to be viable. Llewellyn and Tappin (2003) explored how strategy emerged in the public sector by comparing strategic management in the U.S. and UK. They found that although legislation may require strategies, strategic plans may be dormant documents. This changed when strategic plans were used less for legitimacy and more for external signalling and providing funding, given the increased budget constraints of many public sector organisations. This situation created a dilemma for public managers, as external funders generally want to influence the organisation while public managers want strategic autonomy. Thus, while traditional strategy theory sees strategy as a means for reducing uncertainty and influencing the environment, using strategy may be a trade-offin this respect. Chun and Rainey (2005) analysed goal ambiguity based on a population study of 115 U.S. federal agencies from 1995 to 2000. They developed measures for mission comprehension ambiguity, directive goal ambiguity, evaluative goal ambiguity, and priority goal ambiguity. They found that the last three variables were related to organisational age, financial publicness defined as the proportion of funding from government allocations, competing demands, policy problem complexity and regulatory status in U.S. federal agencies. The 1990s witnessed a wave of new public management and government reforms affecting strategy in public sector organisations in general. The period also witnessed the demise of the Soviet Union, which caused increased uncertainty for many organisations in the defence sector, as well as opportunities for many governments to trim the size and scope of many such organisations in order to rebalance the public sector. Barzelay and Campbell (2003) studied how one big complex organisation, the U.S. Air Force, conducted strategic planning during this period. Barzelay and Campbell distilled four “leverage points” that are important for such organisations to better prepare for the future. These leverage points essentially describe an integrated strategic planning system, with a vision that guides policy foresight, reciprocity between strategic planning and policy, linking planning with human resources (knowledge), and, finally, implementing the policy and strategy. Such an integrated strategic planning system does not guarantee alignment but helps such large, complex organisations to build “capacity for guided incrementalism”, meaning that an organisation can better position itself for conflicts and exploit opportunities that will occur than it can without using foresight and strategic planning. Proeller (2007) conducted one of the few available international comparative studies of strategic management forstatesin ananalysis ofsix countries(GreatBritain, NewZealand, Ireland, USA,Finland, and Switzerland). Proeller (2007) concluded that the experience and results of strategic management overall were positive, and most of the analysed approaches had been under development for years and became institutionalised. However, enhancing strategic management in public administration was seen to be a long-term and costly process of change, and most of the approaches analysed had a history of five to ten years and were often built on even older reforms. In addition, all the six countries in 2007 saw themselves in the middle of the implementation process, which suggested an even longer process of change overall in order to fully implement strategic management in the state, according to Proeller (2007). Adm. Sci. 2019,9, 80 7 of 20 Johanson (2009) used an organisation-based view of public sector strategy and studied strategy formation in agencies. By using the organisation-based view, his study put public agencies at the centre of the strategic examination. Based on strategic thinking about the agencies’ corporate environment, Johanson identified three modes of strategy for public agencies: strategic design, internal strategic scanning and strategic governance. The essence of these strategic modes consists of programming actions (strategic design), combining capabilities (strategic scanning) and the formation of networks (strategicgovernance). Johanson proposedthatthese modesembodythreedistinctstrategicorientations relevant in the public sector. By recognising the environment, the management processes internal to the agency and the agency’s relationships to others in order to create public value, his framework for strategy in agencies is largely congruent with another well-known contingency theory-based framework (Poister et al. 2010) that has been used by others in the strategy field (George and Desmidt 2014). The distinction into strategic design, strategic scanning and strategic governance can be used to separate macro government strategies from those of individual agencies (Johanson 2019). In several case studies, Tama (2015a,2015b,2018) has analysed strategic planning in the U.S. central (federal) government. He found that agency strategies may be more driven by legislators’ needs than by the agencies’ desire for new ideas and major changes. Moreover, the practice of strategic planning may be diffused more by imitating than by learning, which may reduce its potential benefits, and it is influenced by networking (collaboration), economic factors (capital investments), political support and legislative mandates. Nevertheless, strategic planning in the form of strategic reviews may be helpful for agency leaders who may find value in the strategic reviews in helping advance incremental changes and aid congressional oversight. This study is based on U.S. institutions and practices but is likely to be relevant also in other contexts, in particular for studies of the blurred distinction between policy-making and strategic planning, which is typical for the public sector, thus attenuating an earlier critique of the merit of GPRA, at least in its early stage. These studies together highlight the importance of taking the political and institutional context into account in analyses of the design and implementation of strategic planning in governmental agencies. Elbanna et al. (2016) studied how strategic planning determines the success of strategy implementation in public service organisations in a wide variety of governmental agencies, including some federal agencies in Canada. Notable findings were the importance of formal strategic planning and management involvement for strategy implementation. Another study from Canada found that strategic performance measures for efficiency and effectiveness were positively related to organisational performance (Pollanen et al. 2017). Though hardly surprising relative to the conventional wisdom in performance management, the documentation of these often taken-for-granted assumptions are important for justifying the integration of strategic planning with performance management, as in the New Zealand model, for example, which uses aims in strategic results areas (SRAs) and follows up with performance measures for key results areas (KRAs) (Boston and Pallot 1997). Pasha et al. (2018) studied how local transit agencies aligned their strategy formulation to their environment by their strategic stances. In their analysis of this classical strategy problem, they did not, however, find support for the common propositions that prospectors using logical incrementalism and defenders conducting formal strategic planning perform better. Carrigan (2018) examined a broad set of U.S. federal agencies looking for the effects of competing mandates on agency performance and found that diverse missions impede performance, as expected by conventional wisdom. This is relevant in our context, as (internal) strategic management and (external) performance management can constitute competing mandates, in particular if there are many strategic aims, objectives and targets. This competition could be amplified without a governmental-wide strategic vision or co-ordinated governance, such as in the New Zealand model of integrated strategic planning and performance management. Ongaroand Ferlie(2019)studiedtwoagencies intheEUadministrationand foundusageofstrategy processes in non-new public management and public service settings. The de-linking of strategic management from the typical new public management (NPM) context in many Anglo-American Adm. Sci. 2019,9, 80 8 of 20 countries is relevant for our study because we analyse agencies with strong traditions of the (neo-) Weberian State in the European context (Pollitt and Bouckaert 2017). The above reviewed literature reveals some common and evolving themes. The earliest research started by distinguishing the different types of strategic frameworks in public sectors. After the pioneering studies, most of the discussion on strategic management relates to actual planning. However, the overly rationalistic ideas of comprehensive central planning have given way to organisational planning within agencies and other public organisations, which has given strategy discussion a bottom-up flavour. Yet again, many of the public sector reforms such as agencification, decentralisation and the emergence of multi-level governance in fluid networks, have put forward a need for more integrated governments. Here, strategic management may serve as a powerful co-ordination and controlling device which aims to provide coherence in national policies rather than to achieve any comprehensive design. 2.4. Research Propositions Based on the review of the literature, we developed three research propositions. Hood (1995, p. 106) argued in his “motive-and-opportunity” proposition “that countries in the “Swedish way” box (like the U.K., France, the Scandinavian countries and possibly the Netherlands) would be the type most prone to make rapid strides toward the development of NPM in the 1980s”. Many countries mandated strategic planning and performance management in government in the 1980s and 90s, including Finland and Norway. Some have argued that at least some of the Nordic countries have been slow to implement radical NPM-reforms (Olsen 1996) but recent empirical research shows that the Nordic countries have been high-intensity, albeit pragmatic and results-oriented, new public management reformers, including strategic planning and performance management (Greve et al. 2019). We, therefore, have expected strategic planning to have been widely adopted in the central government agencies in the Nordic countries. Proposition 1. Strategic planning has been widely adopted in the central government agencies in the Nordic countries. Moreover, Finland and Norway have relatively similar—in an international context—public management cultures (Verhoest 2011), and both countries belong to the Nordic administrative tradition, with emphasis on the rule of law, transparency and decentralisation (Pollitt and Bouckaert 2017;Greve et al. 2019), which should imply relatively similar strategic planning and performance management systems. Finland and Norway differ, however, by belonging to the Eastern and Western Nordic public management traditions, respectively (Öberg and Wockelberg 2016). We, therefore, have expected Finland to have a more decentralised system and to emphasise long-term planning and evaluation the most, and we expected Norway to have the most hierarchically steered system and therefore to emphasise short-term organisational control and performance management the most. Proposition 2. Finland has a decentralised strategic management system emphasising long-term planning and evaluation. Proposition 3. Norway has a hierarchical steering system emphasising short-term organisational control and performance management. 3. Research Design and Data We chose a comparative case-design (Yin 2013), with an emphasis on describing the design and implementation of the governmental strategic planning and performance management systems in Adm. Sci. 2019,9, 80 9 of 20 Finland and Norway between 2013 and 2019. Because the government systems and availability of data were different in the two countries, we pursued different data collection strategies for each country. In Finland, the analysis was mostly based on the documents steering the strategic management, rather than the actual strategic plans. In practice, ministries consider strategy documents internal to the agencies, and ministries do not make them publicly available as part of the performance dialogue. The strategy documents can be obtained only from the webpaeges of individual agencies. We therefore took the instructions in the regulations for the strategic management, as well as operational and financial reporting for the government agencies, as our point of departure. The latest annual reports, multi-year planning documents, and the Government Programme were used as first-hand material. In the description of the strategic positioning of the agencies, we relied on an administrative survey on the nature and scope of the duties of government agencies, which therefore deviates from the strategy typology of the Miles and Snow (1978) framework used in the analysis of the Norwegian case. In Norway, the data were collected by content analysis (Krippendorff2019;Rapley 2007) predominantly of the ministries’ letters of allocation, the agencies’ formal strategic plans encompassing the year 2017, where these were available, and the agencies’ annual reports for 2017, published in 2018 (Reid 2019). Other data were retrieved from the Norwegian Centre for Research Data. We studied all the 61 governmental agencies as of 1.1.2017 (NSD 2018). We categorised the agencies’ strategic content by employing the Miles and Snow (1978) strategic types framework, adapted to a public sector context by Boyne and Walker (2004), to the content analysis of strategic plans. 4. Comparing Strategic Planning and Performance Management in Finnish and Norwegian Agencies Boston and Pallot (1997) described the New Zealand model of integrated strategic planning and performance management in government as it was evolving in the mid-1990s. Albeit the strategic planning system that Boston and Pallot (1997) described is no more in use in its original form, the New Zealand model is interesting to use as an ideal model (in a Weberian sense) and can, therefore, serve as a benchmark for comparing different systems, including the systems in Norway and Finland that we analyse. The New Zealand model consisted, as earlier mentioned, of three mechanisms: First, prior reforms in accounting and information systems. Second, the development of a nation-wide governmental strategic vision. Third, a devolved government, with a clear emphasis on outputs and accountability. We conceptualise these as governmental structure and public sector reforms, strategic planning and performance management. Using Boston and Pallot (1997) description of the strategic planning and management system in New Zealand in the late 1990s—although later abolished—as an ideal type, we can discuss the results from the Finnish and Norwegian case in relation to the three important traits of this model. Table 1summarises the main traits of the governmental structures, strategic planning and performance management, used in Finland and Norway, as outlined above. Adm. Sci. 2019,9, 80 16 of 20 5. Discussion and Conclusions The purpose of this article was to analyse the design and implementation of strategic planning in central government agencies in a Nordic context by a comparative case study of two countries representing the Eastern and Western Nordic management traditions. We found that both countries had mandatory strategic planning, as expected for high-intensity, new public management reformers, but, unexpectedly, both countries utilised decentralised strategic planning in the government agencies. The tradition of a strong legal orientation in the public administration in Finland made strategic changes more complicated in Finland than in Norway, and formal, long-term strategic planning in the agencies seemed to have a less prominent role than in the Norwegian agencies, contrary to what we expected based on the emphasis on decentralisation and agency autonomy in the Eastern Nordic public management tradition. In Norway, the Western Nordic public management traditional emphasis on hierarchical governance could be related to the practice of a strong emphasis on agency governance by performance management, but there was also a practice of formally albeit less-binding agency strategic planning. We agree with Ferlie and Ongaro (2015) that context is extraordinarily important in strategically managing organisations. In our attempt to interpret the differences between Finland and Norway’s design and implementation of performance management and strategic planning in government agencies, we were driven to use finer distinctions between contexts than those of Peters and Painter (2010). Differing public management traditions, some with quite recent developments, might explain the variations within what is considered uniform regions when seen through a wider lens. The variation of findings, both in the empirical studies we have reviewed above and in the comparison of the Finnish and Norwegian cases, underlines the need to further develop the understanding of how strategic planning and performance management are context sensitive. Oursomewhat unexpected findings relativetotheEastern and WesternNordicpublic management traditions, however, may give rise to a conception that many years of new public management reforms, on top of national practices, have made the “old” Eastern and Western Nordic public management tradition divide obsolete for explaining many current public management practices in the Nordic countries, such as strategic planning and performance management. This resonates with what Greve et al. (2019) found in their analysis. The Nordic countries were found to be active reformers resulting in “a layered, complex and hybrid Nordic administrative reform model in which new reform elements are added to existing ones”, and which was “more difficult to understand and explain in full” (Greve et al. 2019, p. 10). This conception could moreover imply that also the concept of geography-dependent contextual traditions, such as the Nordic public management tradition, may become awkward to use in empirical studies and could possibly better be replaced by concepts such as “maintainers”, “modernisers”, “marketisers”, and “minimizers” (Pollitt and Bouckaert 2017), both for organisations at the same level of government and across countries. The implications of these findings for public sector strategic management theory is that different national public management traditions and performance management regimes impact how strategic planning is designed and utilised in government, also in countries that often are assumed to be distinct from a comparative perspective. The implication for policymakers and practitioners is that these findings are useful in understanding how the national public management tradition shapes the implementation and usage of strategic planning, even though the design of the strategic planning system may have been modelled after standard international templates for strategic management. This knowledge can be used in the future redesign and improved utilisation of the strategic planning systems in government, for example, to mandate agencies that produce formal strategic plans to publish these plans in order to make them publicly accessible and to produce guidelines for formal strategic plans in order to avoid unintended variation. The present study has some methodological limitations. First, the analysis utilised different data sources. The Norwegian case enjoyed extensive use of primary data collected from the agencies’ formal strategic plans. However, in the examination of the Finnish case, there was more reliance on the Adm. Sci. 2019,9, 80 17 of 20 documents guiding the strategy process and the reports provided by the civil servants than on the formal strategic plans proper. Second, the analysis has mostly relied on document analysis, which means that strategy content in agencies without formal strategic plans has not been documented. Third, this comparison analysed the design and implementation of strategic planning in the governance system. Analysing agency performance and policy outcomes of the strategic planning was beyond the scope of this article. This analysis gives rise to several suggestions for future research in comparative research. First, there is a need to study the content of the agencies’ strategic plans (such as in Finland) and to study other clues to the strategic content than document analysis for those agencies that lack a formal strategic plan (such as in Norway). Second, there is a need for in-depth studies of how policymakers and managers use strategic plans in policy making and management in different countries. Third, there is a need to explore how strategic planning relates to agency performance and policy outcomes in different contexts. Author Contributions: The authors contributed equally to this article. Funding: This research received no external funding. Acknowledgments: Thanks to Iain Rennie for information regarding the New Zealand model. Thanks also to two anonymous reviewers for very constructive comments to earlier versions of this article. Conflicts of Interest: The authors declare no conflict of interest. References Alford, John, and Carsten Greve. 2017. Strategy in the public and private sectors: Similarities, differences and changes. Administrative Sciences 7: 35. [CrossRef] Askim, Jostein. 2015. The Role of Performance Management in the Steering of Executive Agencies: Layered, Imbedded, or Disjointed? Public Performance and Management Review 38: 365–94. [CrossRef] Barzelay, Michel, and C. Campbell. 2003. Preparing for the Future: Strategic Planning in the U.S. Air Force. Washington, DC: Brookings Institution Press. Berry, Frances Stokes, and Barton Wechsler. 1995. State agencies’ experience with strategic planning: Findings from a national survey. Public Administration Review 55: 159–68. [CrossRef] Boston, Jonathan, and June Pallot. 1997. Linking strategy and performance: Developments in the New Zealand public sector. Journal of Policy Analysis and Management 16: 382–404. [CrossRef] Boston, Jonathan, John Martin, June Pallot, and Pat Walsh. 1996. Public Management: The New Zealand Model. Auckland: Oxford University Press. Boyne, George A., and Richard M. Walker. 2004. Strategy content and public service organizations. Journal of Public Administration Research and Theory 14: 231–352. [CrossRef] Bracker, Jeffrey. 1980. The historical development of the strategic management concept. Academy of Management Review 5: 219–24. [CrossRef] Bruijn, Hans de. 2007. Managing Performance in the Public Sector, 2nd ed. London: Routledge. Bryson, John M. 2018. Strategic Planning for Public and Nonprofit Organizations, 5th ed. San Francisco: Jossey-Bass. Carrigan, Christopher. 2018. Unpacking the effects of competing mandates on agency performance. Public Administration Review 78: 669–83. [CrossRef] Chun, Young Han, and Hal G. Rainey. 2005. Goal ambiguity in U.S. federal agencies. Journal of Public Administration Research and Theory 15: 1–30. [CrossRef] Dooren, Wouter van, Geert Bouckaert, and John Halligan. 2015. Performance Management in the Public Sector, 2nd ed. London: Routledge. Elbanna, Said, Rhys Andrews, and Raili Pollanen. 2016. Strategic planning and implementation success in public service organizations: Evidence from Canada. Public Management Review 18: 1017–42. [CrossRef] Ervin, Osbin L. 1992. Administration and change: American practices in strategic planning. International Review of Administrative Sciences 58: 539–54. [CrossRef] Ferlie, Ewan, and Edoardo Ongaro. 2015. Strategic Management in Public Services Organizations: Concepts, Schools and Contemporary Issues. London: Routledge. Adm. Sci. 2019,9, 80 18 of 20 Finnish Ministry of Finance. 2012. Tulosohjauksen käsikirja. [Conversion Management Handbook]. Helsinki: Ministry of Finance. Available online: https://vm.fi/hallintopolitiikka/ohjausjarjestelmat/tulosohjaus/ tulosohjauksen-kasikirja. (accessed on 15 August 2019). Finnish Ministry of Finance. 2014. Keskushallinnon virastorakenneselvitys 2014. [Central Government Agency Structure Survey 2014]. Helsinki: Valtiovarainministeriö. Fukuyama, Francis. 2014. Political Order and Political Decay: From the Industrial Revolution to the Globalization of Democracy. New York: Farrar, Straus and Giroux. George, Bert, and Sebastian Desmidt. 2014. A state of research on strategic management in the public sector: An analysis of the empirical evidence. In Strategic Management in Public Organizations: European Practices and Perspectives. Edited by Paul Joyce and Anne Drumaux. New York: Routledge, pp. 151–72. George, Bert, Sebastian Desmidt, Eva Cools, and Anita Prinzie. 2018. Cognitive styles, user acceptance and commitment to strategic plans in public organizations: An empirical analysis. Public Management Review 20: 340–59. [CrossRef] Government of Prime Minister Erna Solberg. 2013. The Sundvolden Platform for a Government Formed by the Conservative Party and the Progress Party, Sundvolden, 7 October 2013. Available online: www.regjeringen. no/contentassets/a93b067d9b604c5a82bd3b5590096f74/politisk_platform_eng.pdf (accessed on 15 August 2019). Greve, Carsten, Per Lægreid, and Lise H. Rykkja. 2016. Introduction: The Nordic model in transition. In Nordic Administrative Reforms: Lessons for Public Management. Edited by Carsten Greve, Per Lægreid and Lise H. Rykkja. London: Palgrave Macmillan, pp. 1–21. Greve, Carsten, Niels Ejersbo, Per Lægreid, and Lise H. Rykkja. 2019. Unpacking Nordic administrative reforms: Agile and adaptive governments. International Journal of Public Administration. [CrossRef] Van Gunsteren, Herman R. 1976. The Quest for Control: A Critique of the Rational-Central-Rule Approach in Public Affairs. London: John Wiley and Sons. Hansen, Jesper Rosenberg, and Ewan Ferlie. 2016. Applying strategic management theories in public sector organizations: Developing a Typology. Public Management Review 18: 1–19. [CrossRef] Hood, Christopher. 1995. The new public management in the 1980s: Variations on a theme. Accounting, Organizations and Society 20: 93–109. [CrossRef] Hood, Christopher. 1998. The Art of the State: Culture, Rhetoric, and Public Management. London: Clarendon Press. Horn, Murray J. 1995. The Political Economy of Public Administration: Institutional Choice in the Public Sector. Cambridge: Cambridge University Press. Johanson, Jan-Erik. 2009. Strategy formation in public agencies. Public Administration 87: 872–91. [CrossRef] Johanson, Jan-Erik. 2019. Strategy Formation and Policy Making in Government. Cham: Palgrave Macmillan. Johanson, Jan-Erik, Elias Pekkola, and Päivi Husman. 2017. Government programme as a strategy—The Finnish experience. Administrative Sciences 7: 16. [CrossRef] Johnsen, Åge. 1999. Implementation mode and local government performance measurement: A Norwegian experience. Financial Accountability and Management 15: 41–66. [CrossRef] Joyce, Paul. 2017. Strategic Leadership in the Public Services, 2nd ed. London: Routledge. Kettunen, Pekka, Siv Sandberg, and Cecilia Fredriksson. 2016. Eurooppalaiset hallintojärjestelmät vertailussa. [A comparison of European state administration systems.] Valtioneuvoston selvitys 37/2016. Helsinki: Valtioneuvosto kanslia [Prime Minister’s Office]. Krippendorff, Klaus. 2019. Content Analysis: An Introduction to Its Methodology, 4th ed. Thousand Oaks: Sage. Lægreid, Per, Paul G. Roness, and Kristin Rubecksen. 2006. Performance management in practice: The Norwegian way. Financial Accountability and Management 22: 251–70. [CrossRef] Llewellyn, Sue, and Emma Tappin. 2003. Strategy in the public sector: Management in the wilderness. Journal of Management Studies 40: 955–82. [CrossRef] McHugh, Marie. 1997. Trouble in paradise: Disintegrated strategic change within a government agency. International Journal of Public Sector Management 10: 433–43. [CrossRef] Meier, Kenneth J., Laurence J. O’Toole Jr., George A. Boyne, and Richard M. Walker. 2007. Strategic management and the performance of public organizations: Testing venerable ideas against recent theories. Journal of Public Administration Research and Theory 17: 357–77. [CrossRef] Miles, Raymond E., and Charles C. Snow. 1978. Organizational Strategy, Structure, and Process. New York: McGraw-Hill. Adm. Sci. 2019,9, 80 19 of 20 Mintzberg, Henry. 1994. The Rise and Fall of Strategic Planning. New York: Prentice Hall. Moore, Mark H. 1995. Creating Public Value: Strategic Management in Government. Cambridge: Harvard University Press. Moynihan, Donald P. 2008. The Dynamics of Performance Management: Constructing Information and Reform. Washington, DC: Georgetown University Press. Mulgan, Geoff. 2009. The Art of Public Strategy: Mobilizing Power and Knowledge for the Common Good. Oxford: Oxford University Press. Norwegian Government Agency for Financial Management. 2010. Veileder: Resultatmåling. Målog resultatstyring i staten. [Guide: Performance Measurement. Management by Objectives and Performance Management in Government]. Oslo: Senter for økonomistyring i staten. Norwegian Government Agency for Financial Management. 2018. Veiledningsnotat—Årsrapport for statlige virksomheter. [Annual Reporting for Government Agencies: A Guideline]. Oslo: Direktoratet for økonomistyring. Norwegian Ministry of Finance. 2011. Veileder i etatsstyring. [Guideline for Agency Governance]. Oslo: Finansdepartementet. Norwegian Ministry of Finance. 2015. Reglement for økonomistyring i staten. Bestemmelser om økonomistyring i staten. [Regulations for Management Control in Government]. Oslo: Finansdepartementet. NSD. 2018. Forvaltningsorgan fordelt på tilknytningsform—per 01.01.2017. [Governmental agencies by affiliation]. Bergen: NSD Norwegian Centre for Research Data. Available online: http://www.nsd.uib.no/polsys/data/ forvaltning/forvaltningsenhetsliste?y=2017&m=1&d=1&t=20 (accessed on 7 November 2018). Öberg, Shirin Ahlbäck, and Helena Wockelberg. 2016. Nordic administrative heritages and contemporary institutional design. In Nordic Administrative Reforms: Lessons for Public Management. Edited by Carsten Greve, Per Lægreid and Lise H. Rykkja. London: Palgrave Macmillan, pp. 57–78. Olsen, Johan P. 1996. Norway: Slow learner—Or another triumph of the tortoise? In Lessons from Experience. Experiential Learning in Administrative Reforms in Eight Democracies. Edited by Johan P. Olsen and B. Guy Peters. Oslo: Scandinavian University Press, pp. 180–213. Ongaro, Edoardo, and Ewan Ferlie. 2019. Exploring strategy-making in ‘non-new public management’ public services settings: The case of European Union agencies. Administrative Sciences 9. [CrossRef] Pasha, Obed Q., Theodore H. Poister, and Lauren Hamilton Edwards. 2018. Mutual relationship of strategic stances and formulation methods, and their impacts on performance in public local transit agencies. Administration and Society 50: 884–910. [CrossRef] Peters, B. Guy. 2008. The Napoleonic tradition. The International Journal of Public Sector Management 21: 118–32. [CrossRef] Peters, B. Guy, and Martin Painter. 2010. Tradition and Public Administration. Basingstoke: Palgrave Macmillan. Poister, Theodore H. 2010. The future of strategic planning in the public sector: Linking strategic management and performance. Public Administration Review 70: 246–54. [CrossRef] Poister, Theodore H., David W. Pitts, and Lauren Hamilton Edwards. 2010. Strategic management research in the public sector: A review, synthesis and future directions. American Review of Public Administration 40: 522–45. [CrossRef] Pollanen, Raili, Ahmed Abdel-Maksoud, Said Elbanna, and Habib Mahama. 2017. Relationships between strategic performance measures, strategic decision making, and organizational performance: Empirical evidence from Canadian public organizations. Public Management Review 19: 725–46. [CrossRef] Pollitt, Christopher, and Geert Bouckaert. 2017. Public Management Reform: A Comparative Analysis—Into The Age of Austerity, 4th ed. Oxford: Oxford University Press. Proeller, Isabella. 2007. Strategic Management for the State: International Approaches in Comparison. Gütersloh: Bertelsmann Foundation. Rapley, Tim. 2007. Doing Conversation, Discourse and Document Analysis. London: Sage. Reid, Stephen Affleck. 2019. Strategic Management and Performance Management in Government Agencies. Master’s Thesis, Oslo Metropolitan University, Oslo, Norway. Roberts, Nancy. 2000. The synoptic model of strategic planning and the GPRA: Lacking a good fit with the political context. Public Productivity and Management Review 23: 297–311. [CrossRef] Ronda-Pupo, Guillermo Armando, and Luis Á ngel Guerras-Martin. 2012. Dynamics of the evolution of the strategy concept 1962–2008: A co-word analysis. Strategic Management Journal 33: 162–88. [CrossRef] Adm. Sci. 2019,9, 80 20 of 20 Rothstein, Bo. 2011. The Quality of Government: Corruption, Social Trust, and Inequality in International Perspective. Chicago: University of Chicago Press. Tama, Jordan. 2015a. The politics of strategy: Why government agencies conduct major strategic reviews. Journal of Public Policy 35: 1–28. [CrossRef] Tama, Jordan. 2015b. Does strategic planning matter? The outcomes of U.S. National Security Reviews. Political Science Quarterly 130: 735–65. [CrossRef] Tama, Jordan. 2018. How an agency’s responsibilities and political context shape government strategic planning: evidence from US Federal agency quadrennial reviews. Public Management Review 20: 377–96. [CrossRef] Verhoest, Koen. 2011. The relevance of culture for NPM. In The Ashgate Research Companion to New Public Management. Edited by Tom Christensen and Per Lægreid. Farnham: Ashgate, pp. 47–64. Vinzant, Douglas H., and Janet C. Vinzant. 1996. Strategy and organizational capacity: Finding a fit. Public Productivity & Management Review 20: 139–57. [CrossRef] Virtanen, Turo. 2016. Finland: Active reformer looking for more centralisation and horisontal coordination. In Public Administration Reforms in Europe: The View from the Top. Edited by Gerhard Hammerschmid, Steven Van de Walle, Rhys Andrews and Philippe Bezes. Cheltenham: Edward Elgar, pp. 129–39. Walker, Richard M. 2013. Strategic management and performance in public organizations: Findings from the Miles and Snow framework. Public Administration Review 73: 675–85. [CrossRef] Walker, Richard M., Rhys Andrews, George A. Boyne, Kenneth J. Meier, and Laurence J. O’Toole. 2010. Wakeup call: Strategic management, network alarms, and performance. Public Administration Review 70: 731–41. [CrossRef] Wechsler, Barton, and Robert W. Backoff. 1986. Policy making and administration in state agencies: Strategic management approaches. Public Administration Review 48: 321–27. [CrossRef] Yin, Robert K. 2013. Case Study Research. Design and Methods, 5th ed. Thousand Oaks: Sage. © 2019 by the authors. Licensee MDPI, Basel, Switzerland. This article is an open access article distributed under the terms and conditions of the Creative Commons Attribution (CC BY) license (http://creativecommons.org/licenses/by/4.0/).