Strategic scenarios, concepts that assist business managers in developing market interventions, represent the action component of strategic management. In some fields of public policy (especially national defense and electoral politics) scenarios have been discussed for years. For the most part, however, a theory of action involving specific scenarios has not been given attention by scholars of public policy and administration. In this article, the literature of these fields, along with that of business strategy, is reviewed and synthesized for the purpose of beginning the process of developing a theory of action for managers of public policy. Two concepts in particular – the agency power matrix and the change scenario – are presented as necessary components of this theory. When completed, the theory of strategic action should be viewed as an integral part of the literature of strategic management.
Strategic management literature written for business firms provides executives with a sequence of sophisticated procedures for achieving corporate objectives in their chosen markets. Beyond procedures, however, this particular body of literature also conceptualizes possible scenarios that the firm may choose to follow (Leontiades, 1982; Tourangeau, 1981). Scenarios are stimulated courses of action that map alternative moves by the firm and likely reactions of competitors. In short, strategic management procedures allow business executives to plan and implement courses of action in the form of “if … then” propositions.
Such propositions are useful rules-of-thumb with descriptive or normative, rather than predictive, value (Leontiades, 1982, pp. 45-46). Nevertheless, classifications and typologies have been formulated to aid corporate managers in conceptualizing and generalizing about the behavior of organizational environments or markets. Leontiades (1982, p. 80), for example, was able to observe that a firm operating primarily in one mature market will be unlikely to improve on past rate of growth because market share would have to be captured from a competitor – ” not an easy task in the highly competitive environment typical of a mature market.”
Unfortunately, the substantive aspects of strategic management for public policy are undeveloped. In fact, the concepts necessary to begin developing a comparable body of knowledge for the public sector have yet to be outlined. What environmental variables, for example, should a manager of a public agency evaluate before launching a move to alter policy within the agency’s domain? Some, such as the ideology of the current political leadership, are of obvious importance. Others, such as possible reactions of congressional committees, courts, interest groups, clientele, media, and general public opinion also are important at varying levels of significance.
The massive scandals of political favoritism in the U.S. Department of Housing and Urban Development (HUD) illustrate this situation. The HUD Inspector General and the General Accounting office (GAO) reported to congress as early as 1984 their findings of mismanagement and influence peddling at HUD (”Watchman Kemp,” 1989; “Loss May Hit $2 Billion,” 1989). However, this information had virtually no effect on policy at HUD for several years. The patterns of favoritism continued in the department even though official notice of the behavior had been taken. It was not until the Reagan administration had left Washington and the full extent of the HUD scandals had become public knowledge that policy corrections began to take shape.
Could a different (possibly more aggressive) approach by the auditors and law enforcement agencies have brought about policy changes at HUD at an earlier time? What systematic body of knowledge could administrators in these agencies have used to conceptualize the policy problem facing them, to identify alternative courses of action, and to estimate the possible consequences of their actions for their agencies? Which political factions might have become alienated if major aggressive actions had been taken? Would the strength of the current political alliances supporting these agencies have been adequate to sustain them thoughout the partisan struggle likely to follow?
