Strategic Planning for Public and Nonprofit Organizations
John M Bryson, University of Minnesota, Minneapolis, MN, USA
Ó 2015 Elsevier Ltd. All rights reserved.
Abstract
Strategic planning is a deliberative, disciplined approach to producing fundamental decisions and actions that shape and
guide what an organization (or other entity) is, what it does, and why it does it. Strategic planning is not a substitute for
strategic thinking, acting, and learning, or for leadership. Instead, strategic planning is a leadership tool meant to enhance
strategic thinking, acting, and learning. Strategic planning can produce several benefits, but there is no guarantee that it will.
There are a variety of approaches to strategic planning; some approaches emphasize process, while others emphasize content.
Strategic management is a broader concept that links planning and implementation.
Strategic planning may be defined as ‘a deliberative, disciplined
approach to producing fundamental decisions and actions that
shape and guide what an organization (or other entity) is, what
it does, and why it does it’ (Bryson, 2011: pp. 7–8). This defi-
nition implies that strategic planning is not a single thing, but is
instead a set of concepts, procedures, and tools that must be
carefully tailored to situations if desirable outcomes are to be
achieved. Poister and Streib (1999), in a review of the field of
strategic planning and management, asserted that strategic
planning should:
1. Be concerned with identifying and responding to the most
fundamental issues facing an organization.
2. Address the subjective question of purpose and the often
competing values that influence mission and strategies.
3. Emphasize the importance of external trends and forces, as
they are likely to affect the organization and its mission.
4. Attempt to be politically realistic by taking into account the
concepts and preferences of internal, and especially
external, stakeholders.
5. Rely heavily on the active involvement of senior-level
managers, and often elected officials, assisted by staff
support where needed.
6. Require the candid confrontation of critical issues by key
participants in order to build commitment to plans.
7. Be action-oriented and stress the importance of developing
plans for implementing strategies.
8. Focus on implementing decisions now in order to position
the organization favorably for the future.
In process terms, a generic strategic planning process typi-
cally might consist of the following steps, although not
necessarily in this order (Bryson, 2011):
1. Initiate and agree on the need for a strategic planning
process, who should be involved and how, what key deci-
sion points will be, and a work program.
2. Clarify the various legal and other requirements that must
be addressed.
3. Clarify organizational mission, vision, and values.
4. Assess the external and internal organizational environ-
ments to identify strengths, weaknesses, opportunities, and
threats.
5. Identify the strategic issues, which are the fundamental policy
questions or critical challenges affecting an organization’s
mandates, mission and values, product or service level and
International Encyclopedia of the Social & Behavioral Sciences, 2nd edition, Volume 23
mix, clients, users or payers, costs, financing, organization,
and/or management (Bryson, 2011: p. 55), facing the
organization.
6. Formulate strategies to manage the issues.
7. Review and adopt the strategic plan or plans.
8. Perhaps establish a more refined organizational vision.
9. Develop an effective implementation process.
10. Reassess strategies and the strategic planning process.
In addition to key decision makers, there typically will be
a strategic planning team, and possibly various task forces to
address different strategic issues. Varied analysis, synthesis,
group process, negotiation, and decision tools will be used in
the different steps depending on the specific situation.
It is important to highlight what strategic planning is not.
Strategic planning is not a substitute for strategic thinking
(thinking in context about how to pursue purposes or achieve
goals (Bryson, 2011: pp. 14–15)), acting (acting in context in
light of future consequences to achieve purposes and/or to
facilitate learning (Bryson, 2011, p. 15)), and learning (any
change in a system (which could be an individual) that, by
adapting it better to its environment, produces a more or less
permanent change in its capacity to pursue its purposes
(Bryson, 2011: p. 15). It may help people do that, but used
unwisely it may hinder strategic thinking, acting, and learning.
Strategic planning is not a substitute for leadership. At least
some key actors must be committed to the process, or it is
bound to fail. Strategic planning is also not a substitute for an
organizational or community strategy. Strategies have numer-
ous sources, both planned and unplanned. Strategic planning
is likely to result in a statement of organizational or
community intentions, but what is realized in practice will be
some combination of what is intended with what emerges
along the way. Finally, strategic planning is not synonymous
with what is called ‘comprehensive planning’ for communities
in the United States, or what has been called ‘structure
planning’ or ‘strategic spatial planning’ in Europe. There may
be little difference if the agency or cross-organizational group
doing the comprehensive or structure planning has strong ties
to government and other important decision makers. However,
in practice there may be significant differences.
First, the plans are often prepared to meet legal require-
ments and must be formulated according to a legally prescribed
process with legally prescribed content. As legal instruments,
these plans have an important influence. However, the plans’
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516 Strategic Planning for Public and Nonprofit Organizations
typical rigidity can conflict with the political process with
which public officials must cope. Therefore, strategic plans can
provide a bridge from legally required and relatively rigid
policy statements to actual decisions and operations.
Second, comprehensive or structure plans are usually
limited to a shorter list of topics than a government’s full
agenda of roles and responsibilities. For that reason, they are of
less use to key decision makers than strategic planning, which
can embrace all of a government’s actual and potential roles
before deciding why, how, where, and when to act.
Third, strategic planning on behalf of a community is
typically more action oriented, more broadly participatory,
more emphatic about the need to understand the community’s
strengths and weaknesses as well as the opportunities and
threats it faces, and more attentive to intercommunity
competitive behavior. Strategic planning is thus typically more
comprehensive than comprehensive planning or structure
planning, while at the same time producing a more limited
action focus.
To summarize, strategic planning for communities
comprises a set of concepts, procedures, and tools that are
broader than those of more traditional urban planning.
Community strategic planning is typically viewed as an
important precursor of comprehensive or spatial strategic
planning, since it tends to focus on the community holistically
as an integrated social, economic, political, and environmental
system. Strategic planning thus can help frame and articulate
the broad strategies that show how land use, transportation,
housing, the environment, education, economic development,
health, social services, and urban branding and marketing
efforts, among others, might be linked; what key points of
leverage and priorities among specific strategies might be; how
progress might be measured and communicated; and what
lessons might be learned from ongoing implementation.
United Cities and Local Governments (UCLG) (http://www.
uclg.org), the largest association of local governments in the
world (whose member governments cover half the world’s
population), calls such precursor plans City Development
Strategies (CDSs). The specific form and content of CDSs vary
across the globe. For example, in Latin America, many local
governments have used them to address issues of inequality; in
Europe, CDSs often address issues of urban competitiveness; in
Asia, some cities have developed CDSs to address issues of
economic development, climate change, and the need for
social dialog; in North America, CDSs often address issues of
financial and infrastructure crises and poverty; and in Africa
and Eurasia, CDSs are being used to facilitate moves toward
more decentralized planning (United Cities and Local
Governments, 2010).
Strategic planning also is typically distinguished from stra-
tegic management. Strategic management, also known as
performance management systems or results-based manage-
ment systems are ongoing organizational designs or arrange-
ments for strategically managing the implementation of
agreed-upon strategies, assessing the performance of those
strategies, and formulating new or revised strategies (Bryson,
2011: p. 323), is a far more encompassing process and is
concerned with managing an organization in a strategic
manner on an ongoing basis. Strategic management links
strategic planning and implementation by adding ongoing
attention to budgeting, performance measurement, evalua-
tion, and management, and by adding feedback relationships
among those elements (Poister et al., 2010).
Brief History of the Development and Use
of Strategic Planning
Strategic planning for public nonmilitary and nonprofit
purposes has its roots primarily in the business world. This
history has been amply documented by others (Eden and
Ackermann, 1998; Mintzberg et al., 2009). However, since
around 1980, public and nonprofit use of strategic planning
has skyrocketed. This experience and a growing body of
literature have indicated that strategic planning approaches,
when adapted to public and nonprofit organizational or
community purposes, can help these entities deal effectively
with their often dramatically changing environments.
In the United States – where strategic planning has pro-
ceeded the furthest – surveys indicate that strategic planning is
widely used in state agencies and by local governments and
jurisdictions. In addition, strategic planning is mandated for all
federal departments as a result of the Government Performance
and Results Act of 1993 (GPRA) and the Government Perfor-
mance and Results Modernization Act of 2010. Other nations
are also making increased use of strategic planning concepts,
procedures, and tools for public and nonprofit organizations
and communities (Bovaird and Löffler, 2009; Hughes, 2012).
Benefits of Strategic Planning
When done well, strategic planning offers a number of benefits.
Advocates usually point to six main potential benefits. The first
is promotion of strategic thinking, acting, and learning. The second
is improved decision making, while the third is enhanced organi-
zational effectiveness, responsiveness, and resilience. The fourth is
enhanced organizational legitimacy. The fifth is increased effec-
tiveness of broader societal systems to which public and nonprofit
organizations contribute. Finally, strategic planning can directly
benefit the organization’s people by helping them better perform
their roles, meet their responsibilities, and enhance teamwork
and expertise. There is no guarantee, however, that these
benefits will be achieved. For one thing, strategic planning is
simply a set of concepts, procedures, and tools that must be
applied wisely to specific situations. Also, even when they are
applied wisely, there is no guarantee of success.
The empirical evidence on whether strategic planning actu-
ally helps is unclear. Reports published by the US Government
Accountability Office (2004, 2005) indicate that while federal
agency strategic planning has improved, there are still problems
in establishing outcome-oriented goals, dealing with cross-
agency issues, ensuring adequate consultation with external
stakeholders, linking long-term and short-term goals, and
identifying the financial, human, and other resources needed to
implement strategies. Some also argue that the federal govern-
ment’s mandated top-down, fairly rigid approach limits
agencies’ abilities to tailor strategic planning efforts to their
particular situations. However, there are numerous case study
examples of successful strategic planning in public and nonprofit
 Strategic Planning for Public and Nonprofit Organizations
organizations. In addition, surveys of public managers in the
United States and United Kingdom have found that strategic
planning efforts generally have helped improve organizational
capacities and performance. An important feature of newer
research is its emphasis on strategic planning as a way of knowing
(Bryson et al., 2009; Balducci et al., 2011). A way of knowing
means, in the first instance, a practice or customary way of
doing something that allows its users jointly to develop, show,
or possess knowledge or understanding. In this sense, what
clearly matters is the extent to which strategic planning helps
its users think, act, and learn strategically.
Approaches to Strategic Planning
Strategic planning may be divided into process and content
approaches. We start by discussing broadly encompassing
process approaches, then consider more narrowly conceived
process approaches, and finally discuss two content approaches.
The Harvard Policy Model
The Harvard policy model was developed as part of the business
policy courses that have been taught at the Harvard Business
School since the 1920s (Bower et al., 1991). The approach
provides the principal (although often implicit) inspiration
behind the most widely cited recent models of public and
nonprofit sector strategic planning. The main purpose of the
Harvard model is to help an organization develop the best ‘fit’
between itself and its environment; that is, to develop the best
strategy for the organization. One discerns the best strategy by
analyzing the internal strengths and weaknesses of the
company and the values of senior management, and by
identifying the external threats and opportunities in the
environment and the social obligations of the firm. Then one
designs the appropriate organizational structure, processes,
relationships, and behaviors necessary to implement the
strategy, and focuses on providing the leadership necessary to
implement the strategy.
Effective use of the model presumes that senior management
can agree on the organization’s situation and the appropriate
strategic response, and has enough authority to enforce its
decisions. A final important assumption of the model, common
to all approaches to strategic planning, is that if the appropriate
strategy is identified and implemented, the organization will be
more effective. For the model to be useful for public and
nonprofit purposes, it typically has to be supplemented with
other approaches, such as the portfolio and strategic issues
management approaches (also discussed in this section).
A portfolio approach is needed because a principal strategic
concern at the organizational level is oversight of a portfolio of
agencies, departments, or programs. Strategic issues manage-
ment is needed because much public and nonprofit work is
typically quite political, and articulating and addressing issues
are at the heart of political decision making.
The systematic assessment of strengths, weaknesses, oppor-
tunities, and threats – known as a SWOT analysis – is a primary
strength of the Harvard model. This element of the model
appears to be applicable in the public sector to organizations,
functions, and communities. Another strength is its emphasis
517
on the need to link strategy formulation and implementation
in effective ways. The main weaknesses of the Harvard model
are that (1) it does not draw attention to strategic issues; (2) it
does not consider the full range of stakeholders; and (3) it
does not offer specific advice on how to develop strategies,
except to note that effective strategies will build on strengths,
take advantage of opportunities, and overcome or minimize
weaknesses and threats.
Strategic Planning Systems
Strategic planning is often viewed as a system whereby leaders
and managers go about making, implementing, and controlling
important decisions across functions and levels in the organi-
zation. When viewed this way, strategic planning is synonymous
with strategic management. Strategic planning systems vary
along several dimensions: the comprehensiveness of decision
areas included, the formal rationality of the decision process,
and the tightness of control exercised over implementation of
the decisions, as well as how the strategy process itself will be
tailored to the organization and managed. The strength of these
systems is their attempt to coordinate the various elements of an
organization’s strategy across levels and functions. Their weak-
ness is that excessive comprehensiveness, prescription, and
control can drive out attention to mission, strategy, and inno-
vation, and can exceed the ability of participants to comprehend
the system and the information it produces (Mintzberg et al.,
2009). In other words, the systems are prone to driving out
the very strategic thinking, acting, and learning they are meant
to produce.
Strategic planning systems are potentially applicable to
public organizations (and, to a lesser extent, communities), for,
regardless of the nature of the particular organization, it makes
sense to coordinate at least some decision making across levels
and functions and to concentrate on whether the organization is
implementing its strategies and accomplishing its mission.
However, it is important to remember that a strategic planning
system characterized by substantial comprehensiveness, formal
rationality in decision making, and tight control will work only
in an organization that has a clear mission, clear goals and
objectives, relatively simple tasks to perform, centralized
authority, clear performance indicators, and information about
actual performance available at reasonable cost. While some
public and nonprofit organizations – such as hospitals and
police and fire departments – operate under such conditions,
most do not. As a result, most public and nonprofit strategic
planning systems typically focus on a few issues, rely on
a decision process in which politics plays a major role, and
control something other than program outcomes (e.g., budget
expenditures).
Stakeholder Management Approaches
Freeman (1984) states that strategy can be understood as an
organization’s mode of relating to or building bridges with its
stakeholders. For Freeman, a stakeholder may be defined as
any individual, group, or organization that is affected by, or
that can affect, the future of the organization. He argues, as
do others who emphasize the importance of attending to
stakeholders, that a strategy will be effective only if it satisfies
518 Strategic Planning for Public and Nonprofit Organizations
the needs of multiple groups. Because it integrates economic,
political, and social concerns, the stakeholder model is one of
the most applicable approaches to the public sector. Many
interest groups have stakes in public organizations, functions,
and communities. If the model is to be used successfully,
however, there must be the possibility that key decision
makers can achieve reasonable agreement about who the key
stakeholders are and what the response to their claims should be.
The strengths of the stakeholder model are its recognition of
the many claims – both complementary and competing – placed
on organizations by insiders and outsiders and its awareness of
the need to satisfy at least the key stakeholders if the
organization is to survive. Because of its attention to
stakeholders, the approach may be particularly useful in
working collaboratively with other organizations, since each
party to a collaboration must be viewed as a stakeholder
(Huxham and Vangen, 2005). The weaknesses of the model
are the absence of criteria with which to judge competing
claims and the need for more advice on developing strategies
to deal with divergent stakeholder interests.
A number of other encompassing process approaches to
strategic planning have been developed, primarily in the United
Kingdom in the field of operations research. These include
Ackermann and Eden’s (2011) strategy mapping approach and
Friend and Hickling’s (2005) strategic choice approach. They
are now beginning to be used more widely around the world.
Strategic Issues Management Approaches
These approaches are process components, pieces of a larger
strategic planning process. The concept of strategic issues first
emerged when practitioners of corporate strategic planning
realized that a step was missing between the SWOT analysis
of the Harvard model and the development of strategies.
That step was the identification of strategic issues, or crucial
challenges facing the organization. Many organizations now
include a strategic issue identification step as part of full-blown
strategy revision exercises, and also as part of less comprehensive
annual strategic reviews between major strategy revisions. In
addition, many organizations have developed strategic issue
management processes actually separated from annual
strategic planning processes. Many important issues emerge
too quickly to be handled as part of an annual process.
Strategic issue management is clearly applicable to public
organizations, since the agendas of these organizations consist of
issues that should be managed strategically (Ackermann and
Eden, 2011). The strength of the approach is its ability to
recognize and analyze key issues quickly. The approach also
applies to functions or communities, as long as some group,
organization, or coalition is able to engage in the process and
manage the issue. The main weakness is that, in general, the
approach offers no specific advice on exactly how to frame the
issues other than to precede their identification with
a situational analysis of some sort. Nutt and Backoff (1995)
have gone the furthest in remedying this defect.
The final four process approaches to be discussed are
process strategies. Two are primarily organizational: logical incre-
mentalism and strategic planning as a framework for innovation.
Two are primarily multiorganizational: contract approaches and
collaboration. Process strategies are approaches to implementing
a strategy that typically has already been developed in very broad
outline and is subject to revision based on experience with its
implementation. Other important process approaches not dis-
cussed in this article, due to space limitations, include total
quality management (Cohen and Eimicke, 1998), the mutual
gains approach (Susskind and Field, 2010), and the
management of culture (Schein, 2010).
Logical Incrementalism
In incremental approaches, strategy is a loosely linked group
of decisions that are handled incrementally. Decisions are
handled individually below the organizational level because
such decentralization is politically expedient – organizational
leaders should reserve their political clout for crucial decisions.
Decentralization also is necessary since often only those
closest to decisions have enough information to make good
ones. The incremental approach is identified principally with
Quinn (1980), although the influence of Lindblom (1959) is
apparent. Quinn developed the concept of logical incrementalism
– or incrementalism in the service of overall organizational
purposes – and, as a result, transformed incrementalism into
a strategic approach. Logical incrementalism is a process
approach that, in effect, fuses strategy formulation and
implementation. The strengths of the approach are its ability to
handle complexity and change, its emphasis on minor as well
as major decisions, its attention to informal as well as formal
processes, and its political realism. A related strength is that
incremental changes in degree can add up over time into
changes in kind. The major weakness of the approach is that it
does not guarantee that the various loosely linked decisions
will add up to fulfillment of organizational purposes.
Logical incrementalism would appear to be very applicable
to public and nonprofit organizations, as long as it is possible
to establish some overarching set of strategic objectives to be
served by the approach. When applied at the community
level, there is a close relationship between logical incremen-
talism and collaboration. Indeed, collaborative purposes and
arrangements typically emerge in an incremental fashion
as organizations individually and collectively explore their
self-interests and possible collaborative advantages, establish
collaborative relationships, and manage changes incre-
mentally within a collaborative framework (Huxham and
Vangen, 2005; Innes and Booher, 2010).
Strategic Planning as a Framework for Innovation
As noted in the ‘Strategic Planning Systems’ section, strategic
planning systems can drive out attention to mission, strategy,
and innovation. The systems, in other words, can become ends
in themselves and drive out creativity, innovation, and new
ventures without which the organization might become irrelevant
or die. Many organizations, therefore, have found it necessary
to emphasize innovative strategies as a counterbalance to the ex-
cessive control orientation of many strategic planning systems
(Osborne and Brown, 2012). The framework-for-innovation
approach relies on many elements of the approaches discussed
in this article, such as SWOT analyses and portfolio methods.
This approach differs from earlier ones in four emphases: (1)
innovation as a strategy; (2) specific management practices to
 Strategic Planning for Public and Nonprofit Organizations
support innovation; (3) the development of a mission or ‘vision
of success,’ which provides the decentralized and entre-
preneurial parts of the organization with a common set of
superordinate goals toward which to work; and (4) the
nurturing of an entrepreneurial organizational culture.
The main strength of the approach is that it allows for inno-
vation and entrepreneurship while maintaining central control
of direction. The weaknesses of the approach are that typically –
and perhaps necessarily – a great many, often costly, mistakes
are made as part of the innovation process and that there is
a certain loss of accountability in very decentralized systems.
Those weaknesses reduce its applicability to the public sector,
in particular, in which mistakes are less acceptable and the
pressures to be accountable for details (as opposed to results)
are often greater. Many nonprofit organizations will also have
trouble pursuing this approach because a shortage of impor-
tant resources will magnify the risks of failure.
Contract Approach
The contract approach is another popular system of institu-
tionalizing strategic planning and management, especially in
simple to moderately complex shared-power environments. The
contract model is employed for much of the planning and
delivery of many publicly financed social services in the
United States via either public or nonprofit service providers
(Milward and Provan, 2003). The system is also used to
institutionalize strategic planning and management in school
districts with site-based management.
In this system, there is a center that establishes strategic
objectives for the jurisdiction or organization as a whole, nego-
tiates contracts with individual units of management, monitors
performance, and ensures the integrity of the system. In the
language of economics and principal–agent models, the center is
the principal and the individual units of management are the
agents. The contract between the center and a unit outlines the
unit’s expected performance, defines its resources, lists other
support the unit can expect from the center, and describes
a review and renegotiation sequence. Within the framework and
legal strictures of the contract, general managers of individual
units and their staffs are free to do whatever they think is neces-
sary or desirable to ensure adequate performance. At its best, this
approach allows both the center and the individual units to focus
on what is important for them – both are empowered to do their
jobs better. In such a system, there would be a strategic plan for
the center and one for each of the units. Key system concerns
would include the content and approach embodied in the
center’s plan, the center’s difficulties in acquiring adequate
information, the proper alignment of incentives for the
principal and the agents, the difficulties that the center may
have in exercising control in the face of a large number of
contractors, and ways to ensure adequate investments by the
units if they cannot be sure of a long-term contract.
Collaboration Approach
Collaboration represents the final process approach to be dis-
cussed. Like contracting, collaboration is increasingly being used
to govern and manage in shared-power environments. In fact,
the contract system represents a classic form of collaboration,
519
but there are many different (and often more complicated)
approaches to collaboration that are more suitable than
competitive contracting for situations involving moderate to
high levels of complexity and ambiguity (Agranoff, 2007).
Human service systems often embody contracting and
additional collaboration approaches – contracts for what can be
specified and governed with reasonable ease, and supplemental
collaboration for those situations involving higher levels of
complexity and ambiguity, and therefore requiring greater
reliance on trust, shared norms, professionalism, and learning-
by-doing for effective governance and management (Huxham
and Vangen, 2005). In the latter case, collaboration overlaps
with strategic issue management and stakeholder management
approaches.
Collaboration is particularly useful when addressing problems
for which no organization is fully in charge. Situations of this sort
occur when, for example, there is a marked degree of separation
between the source and use of funds, services are jointly produced
(that is, service recipients are at least partly responsible for effec-
tive production, as in mental health services), or the key gover-
nance and management task is arranging networks rather than
managing hierarchies (Milward and Provan, 2003).
Collaboration involves varying degrees of sharing power and
resources (such as information, money, clients, and authority)
between units to achieve common ends that could not be ach-
ieved separately. There are three different archetypal approaches
to collaborative network management (Provan and Kenis,
2007): lead organization, shared governance, and partnership
administrative organization.
In the lead organization approach, a single partner organization
coordinates the major collaboration activities and key decisions.
The lead organization has more power than the other partners,
who typically are moderate in number. Milward and Provan
(2003), in their longitudinal study of mental health service
delivery networks, have found that network effectiveness is
greatest when there is a strong central integrating unit; clear and
consistent lines of authority and accountability embodied in
contracts; aligned incentives that give everyone a stake in the
success of the network; system stability; and munificent
resources. These factors allow constructive norms, social capital,
and network learning capabilities to develop, and needed
incremental investments and changes to be made.
A key system concern with the lead organization approach is
how to achieve the right balance between network stability and
adaptability. Because of the importance of stability to perfor-
mance, a system probably should be changed infrequently
and, if possible, incrementally. Another key concern will be
the continual need to make sure that incentives are aligned
properly so that participants have an incentive to maintain the
network and high performance levels.
The shared governance approach is likely when no partner
has significantly greater power and resources than the others
and no external governance organization is formed or mandated.
The viability of the approach depends on each organization’s
involvement and commitment, as the partners are responsible
for managing internal and external relations (Provan and Kenis,
2007). Viability also depends on reasonable goal consensus,
since exit is always an option for member organizations. If the
number of organizations participating in shared governance
becomes too large, and if trust levels decline, goal consensus
520 Strategic Planning for Public and Nonprofit Organizations
becomes a bit shaky, and the collaborators have limited
collaboration abilities, the partners may create a separate
administrative entity – a partnership administrative organization
(PAO) – to govern the collaboration and its activities and
decisions. The PAO is a separate organization whose purpose is
to manage the collaboration. A strength of the PAO approach
is that presumably the capacity exists to manage the network.
A weakness is that the PAO may become disconnected from
the concerns of the organizations in the network.
In sum, ‘process’ approaches do not prescribe answers,
although good answers are presumed to emerge from appro-
priate application. In contrast, ‘content’ approaches do yield
answers. In fact, the models are antithetical to process when
process concerns get in the way of developing the ‘right’ answers.
In the ‘Portfolio Models’ and ‘Competitive Analysis’ subsections,
we discuss two content approaches: portfolio models and
competitive analysis. Other important primarily content
approaches not covered in this article, due to space limitations,
include reengineering and systems analysis.
Portfolio Models
The idea of strategic planning as managing a portfolio of
‘businesses’ is based on an analogy with investment practice in
which an investor manages a portfolio of stocks to balance risk
and return. Although the applications of portfolio theory to the
public sector may be less obvious than those of the other
approaches described in this section, they are nonetheless just
as powerful (Bryson, 2011). Many public and nonprofit
organizations consist of ‘multiple businesses’ that are only
marginally related. Often, resources from various sources are
committed to these unrelated businesses. That means that
public and nonprofit managers must make complex portfolio
decisions, although usually without the help of portfolio
models that frame those decisions strategically.
The strength of portfolio approaches is that they provide
a method of measuring entities of some sort (e.g., programs,
proposals, or problems) against dimensions that are deemed to
be of strategic importance (usually the attractiveness of the
option versus the capability to implement it). Weaknesses
include the difficulty of knowing what the appropriate strategic
dimensions are, the difficulties of classifying entities against
dimensions, and the lack of clarity about how to use the tool as
part of a larger strategic planning process.
Portfolio approaches can be used in conjunction with an
overall strategic planning process to provide useful information
on an organization, function, or community in relation to its
environment. However, unlike the process models, portfolio
approaches provide an ‘answer’; that is, once the dimensions for
comparison and the entities to be compared are specified, the
portfolio models prescribe how the organization or community
should relate to its environment. Such models will work only if
a dominant coalition is convinced that the answers they produce
are correct and the coalition is willing to act based on the
answers.
Competitive Analysis
Another important content approach that assists strategy
selection has been developed by Michael Porter (1998a) and
his associates and adapted to public purposes by Vining
(2011). Porter (1998a) hypothesizes that five key
competitive forces shape an industry: the relative power of
customers, relative power of suppliers, threat of substitute
products, threat of new entrants, and amount of rivalry
activity among the players in the industry. The assumption
is that the stronger the forces, the greater the profitability
potential for businesses and industries. For many public
and nonprofit organizations, there are equivalents to the
forces that affect private industry. An effective organization
in the public and nonprofit sector, therefore, must
understand the forces at work in its ‘industry’ in order to
compete effectively, and must offer value to its customers
that exceeds the cost of producing it. On another level,
planning for a specific public function (health care,
transportation, or recreation) can benefit from competitive
analysis if the function can be considered an industry.
Vining (2011) has adapted the five-forces model specifically
for a public agency. He hypothesizes that the relevant five
competitive forces are the relative power of agency sponsors
and customers (a modification), the relative power of
suppliers, the threat of substitute products and new
entrants (combining two of Porter’s forces), political
influence (a new force), and the intensity of rivalry among
agencies. Vining posits that the stronger the forces, the less
the agency’s autonomy and the poorer its performance,
because it will have little room or incentive to make
improvements. Similarly, the weaker the forces, the greater
the public agency’s autonomy and, up to a point, the
better the agency’s performance. Too much autonomy is
presumed to be bad for performance.
In addition, Porter (1998b) points out that for the
foreseeable future, self-reinforcing agglomerations of firms
and networks are crucial aspects of successful international
economic competition. In effect, not just firms and nations
but also metropolitan regions (Shanghai, the Silicon Valley,
New York, London, and Paris) are key economic actors.
Regions interested in competing on the world stage should
therefore try to develop the infrastructure necessary for
virtuous (rather than vicious) cycles of economic growth to
unfold. In other words, wise investments in education,
transportation and transit systems, water and sewer systems,
parks and recreation, housing, and so on can help firms
reduce their costs – particularly the costs of acquiring an
educated labor force – and thus improve the firms’ ability to
compete internationally.
The strength of competitive analysis as proposed by Porter
is that public and nonprofit organizations can use competitive
analysis to discover ways to help the private firms in their
regions. When applied directly to public and nonprofit orga-
nizations, however, competitive analysis has two weaknesses:
it is often difficult to know what the ‘industry’ is and what
forces affect it, and the keys to organizational success in the
public and nonprofit world are often success in accommo-
dating political forces and using collaboration instead of
competition. Competitive analysis for public and nonprofit
organizations, therefore, must be suitably adapted and
coupled with a consideration of social and political forces and
the possibilities for collaboration (Vining, 2011; Huxham and
Vangen, 2005).
 Strategic Planning for Public and Nonprofit Organizations
Conclusions
It should be noted that careful studies of corporate-style strategic
planning in the public and nonprofit sectors are few in number,
but the evidence on balance indicates that strategic planning in
general appears to be helpful (Poister et al., 2010; Andrews
et al., 2012). Beyond that, it is possible to reach some tentative
conclusions. First, it should be clear that strategic planning is
not a single concept, procedure, or tool. In fact, it embraces
a range of approaches that vary in their applicability to the
public and nonprofit sectors and in the conditions that govern
their successful use. Second, while any generic strategic
planning process may be a useful guide to strategic thinking,
acting, and learning, it will have to be applied with care in
a given situation, as is true of any planning process. Because
every planning process should be tailored to fit specific
situations, every process in practice will be a hybrid. Third,
public and nonprofit strategic planning is well on its way to
becoming part of the standard repertoire of public and
nonprofit leaders, managers, and planners. Because of the
often dramatic changes these people and their organizations
confront, we can hypothesize that the most effective leaders,
managers, and planners at the beginning of the twenty-first
century are, and will be increasingly in the future, the ones
who are best at ‘strategic’ planning. Finally, research must
explore a number of theoretical and empirical issues in order
to advance the knowledge and practice of public sector
strategic planning. In particular, strategic planning approaches
that are responsive to different situations must be developed
and tested. These approaches should specify key situational
factors governing their use; provide specific advice on how to
formulate and implement strategies in different situations; be
explicitly political; indicate how to deal with plural,
ambiguous, or conflicting goals or objectives; link content and
process; indicate how collaboration as well as competition are
to be handled; and specify roles for those involved in the
process. Other topics in need of attention include the nature of
strategic leadership; ways to promote and institutionalize
strategic planning across organizational levels, functions that
bridge organizational boundaries, and intra and
interorganizational networks; the ways in which information
technologies can help or hinder the process; and how best to
engage the public in strategic planning. Progress has been
made on all of these fronts, but work is clearly necessary if we
are to understand better when and how to use strategic planning.
See also: Governance; Innovation; Leadership in Organizations,
Sociology of; Learning: Organizational; Organizational Control;
Organizational Decision Making; Organizations: Negotiated
Orders; Public Administration: Organizational Aspects; Public
Sector Organizations; Social Innovation; Strategizing.
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