Glimmers of reform in the public sector: the use of. participative-strategic-decision-making, and its effects on

Size: px

Start display at page:

Download "Glimmers of reform in the public sector: the use of. participative-strategic-decision-making, and its effects on"

Melvin Blankenship
6 years ago
Views:

1 Doctoral Symposium 2009 BBS Doctoral Symposium 23 rd & 24 th march 2009 Tariq Kashmiri Glimmers of reform in the public sector: the use of participative-strategic-decision-making, and its effects on middle manager Job satisfaction and Strategy Implementation, in a changing but non-democratic environment Keywords: participative decision making strategic decision making middle managers job satisfaction strategy implementation public sector Abstract: In search for higher performance, the public sector is focused upon in this study to investigate the effects of involving middle managers in the strategic decision making process. An integrated model is used to explore the use of participative strategic decision making with middle managers and the effect it has on their job satisfaction and successful strategy implementation by taking into account the middle managers age and educational background, external environmental factors, as well as internal organizational characteristics such as organizational size, culture, activities and the use of technology. Furthermore, this study goes deeper into the analysis of participative strategic decision making by focusing on its effects in an environment experiencing gradualisms of reform (Hamzawy, A. 2005); the municipalities of Saudi Arabia. 1

2 Introduction: The public sector is in constant pursuit of achieving greater performance (Boyne, Farrell, Law, Powell, & Walker, 2003; Pollitt & Bouckaert, 2000 in Boyne, 2006). Boyne and Walker (2004) recommend public reform by developing strategies for better performance. In the United States, the public sector has been applying strategic management tactics for the past 20 years (Poister and Streib, 2005). Later, the Government Performance and Results Act of 1993 required all federal agencies to construct strategic plans and link them to financial budgets and performance measuring systems (Poister and Streib, 2005). Researchers have proven the importance of making the correct decisions during the strategic management process and have argued that the main reason for the failure of strategic management and strategic planning is the poor linkage with sound decision making (Mintzberg 1994). Therefore, strategic decision making is an important issue that strategic management depends on for its success. Boyne presented a study which examined the importance of strategic planning in a public organization (2001). He states that the most difficult obstacles faced are the critical strategic decisions made in the public sector because of the direct relation between strategic planning and overall organizational performance. His research also found that strategic planning leads to overall organizational success. Because public organizations often lack resources, they often opt for the quick fix-it methods rather than long term strategic planning. Nutt (2000) states that gathering information when making strategic decisions is one of the most important steps that affects the success or failure of the strategic plan. Nutt also states that public 2

3 organizations rarely spend enough time gathering thorough information about available alternatives. Therefore, if top management include middle managers in the strategic decision making process, they are insuring that they get information from the most important part of the public organization which is the front end because of its direct contact with the public. Managers who participate in the decisions related to strategic planning effect the direction of the entire organization. Middle managers should be allowed to cross the borders of their daily job descriptions and participate in the organization s strategic plan. When middle managers are involved in the strategic planning process, they are more aware of the goals and aims of the organization. The clarity of the strategic goals and exact plans helps them in the stages of implementation. Floyd and Wooldridge (1994, 1997) argue that it is the middle managers that can not only be responsible for executing the strategy but can contribute in its main decision making processes as well. Not only can middle managers provide top management with valuable information, but if there are involved in the strategic planning process, they will feel happier and more satisfied with their jobs. Petty, McGee and Cavender (1984) argued that there is a strong relationship between job satisfaction and increased organizational performance. Researchers such as Brayfield and Crokett (1955) have argued that there is no clear relationship between job satisfaction and performance, but despite this difference of opinion, job satisfaction has proven to have a negative effect on absenteeism and turnover (Petty, McGee and Cavender, 1984), which are costly and destructive to the organization and its strategic goals and aims. 3

Focus of the study: Research suggests that strategic decision models are complex with considerable implications for further research (Hitt, M. and Tyler, B. 2006).

4 Focus of the study: Research suggests that strategic decision models are complex with considerable implications for further research (Hitt, M. and Tyler, B. 2006). Other studies have found inconsistencies possibly due to the fact that they applied oversimplified models to a complex issue (Elbanna and Child, 2007). Therefore, by putting forward an integrated model, this study aims to investigate the effects of participative strategic decision making with middle managers and the effect it has on job satisfaction and strategy implementation by taking into account vital internal and external moderating variables, as well as middle manager characteristics (see figure 1). 4

5 Developing the model: While Kim (2002) examined the effects of participative decision making on job satisfaction, she did not take into account internal and external moderating variables. As argued by Elbanna and Child (2007) it is important to consider environmental characteristics when investigating the effects on strategic decision making. Hart and Banbury (1994 in Elbanna and Child, 2007) describe the moderating role of company size on strategy making, while Sagie and Aycan (2003) examine the strong effect of culture on Participative decision making. Alexander (1984) presented a study that found that organizational culture had a great affect on the degree of participation in decisions between top and middle management. He explains that the cultural value system in the organization often leads top management to adapt certain styles that have been repeatedly used in the past (Alexander, 1984). A study conducted by Yousef (1998) found that the level of technology, and the decision makers educational background have effect on the decision making style. Furthermore, a study conducted by Hitt and Tyler (2006) found that models relating to strategic decisions varied greatly depending on the industry of the organization and characteristics of the managers involved such as age and educational background. Hence, by developing the models and studies completed by the above mentioned, an integrated model is suggested to study the effect of participative decision making with middle managers in the public setting, taking into account the above mentioned moderating internal and external variables, and although there may be other moderating variables effecting this relationship such as gender, this study will not be covering these variables because they are irrelevant to the context. 5

6 Context: A study by Somech (2006) presented a contingency model theory suggesting that one cannot examine management style without careful attention to the given context. This study will be conducted in Saudi Arabia, where elections, freedom of speech, gender equality, and political parties are non-apparent (Seznec, J. 2002) until recently. For the first time in history of this monarchy, in 2005, Saudi Arabia prepared for historic municipal elections (Blitzer, W. 2005). By taking these events, and past studies into consideration, one may assume that the effect of using participative decision making in such an environment may have very different results than in democratic countries such as the United States and United Kingdom. When investigating participative decision making, it is difficult to generalize its effects on countries with different social and environmental conditions. For example, countries like the United States may enjoy greater social equality compared with countries in the Middle East (Doumato, E. 1999). Therefore, it could be predicted that using a participative strategic decision making style may have greater effects on job satisfaction and strategy implementation in Saudi Arabia than demonstrated in other studies conducted in other social and environmental conditions. Locke (1976) introduced a satisfaction model stating that satisfaction is established by an inconsistency or difference between what one desires in a job and what one actually has. By taking into account this theory in the case of this study, it is most likely that the social environment, organizational culture, and individual values of employees in a country like Saudi Arabia are very different than in the United States or Britain, for example (Seznec, J. 2002). 6

7 Furthermore, participation is regarded as a behavioral act compatible with a democratic environment (Arendt, 1958), and because Saudi Arabia is recognized as applying a more centralized and autocratic decision making style (Seznec, J. 2002), and currently takings its steps to applying a more participative, decentralized decisions (Blitzer, W. 2005), it will be interesting to study the effect of participation in such an atmosphere. Several researchers have shown that there is a positive relationship between participative management style and job satisfaction but its application to public service organizations have not yet been widely addressed (Kim 2002). Unlike private organizations, one may ask if frameworks on the factors that affect job satisfaction in for-profit firms also apply in public sector organizations. Public service motivation is defined by Mann (2006) as the aspiration to make changes, the capability to have an effect on the community, and the feeling of commitment and honor. People with high public service motivation do not rely on salary, job security, or other extrinsic rewards (Mann, 2006). Instead, their main goal consists of intrinsic rewards (Mann,2006). Brewer, Sleden and Facer (2000) believe that involving employees in the decision making process increases their public service motivation, and therefore, increase job satisfaction. Fitzgerald et al. (1994) state that employee job satisfaction is an important criterion because it affects the quality of service they provide. This is especially important to the public sector, where their main priority is providing service to the public with quality and efficiency. In an attempt to uncover more ways to encourage job satisfaction and better service to the public, this study will focus on the effects of using participative strategic decision making 7

8 with middle managers on job satisfaction and the strategy implementation. Kaufman (2001) defines participative management as empowering the employee and involving him or her in decision making; it also includes adding to their responsibility and authority. Participative management also calls for more contribution of information, incentives and power (Kaufman, 2001). Kim (2002) adds that participative decision making is when managers include their subordinates in information-processing or problem solving activities. Strategic decision making in the public sector: The effect on Strategy Implementation: Several researchers, such as Floyd and Wooldridge (1997), have argued the importance of middle managers role is not only creating organizational strategies but more importantly the implementation of the strategy as well. Several studies have investigated the effect of participation in decision making on the implementation of strategic decisions (Mintzberg and Waters, 1985). Lines (2004) believed that participation in decision making lead to less resistance to change and better implementation of the decisions. Noble (1999, p. 132) states that, the degree of involvement across the organisation appears to be a predictor of implementation success. Other researchers such as Hrebiniak and Joyce (1984) suggest that middle managers have a vital role in participating in strategic decision making because they have the ability to translate long term corporate level strategies into short term action plans that are executable in various organizational divisions by concentrating on operational behaviors that achieve such goals, thus increase the success of strategic implementation. Therefore, 8

9 while top management sees the organization from a bird s eye view, it is important to include middle managers in the strategic decisions to insure that a correct picture is painted and information is complete. Conflicting views: Various other studies have conflicting views about the effects of using participative decision making on overall performance such as Wernerfelt (2007). Wernerfelt preferred the use of Delegative strategic decision making because of time and cost saves when delegating authority to mid level managers and committees of managers who are more likely to have more information about the subject in matter and may provide greater efficiency. Others such as Miller et al. (2007) suggest that involving shareholders and other stakeholders may lead to greater trust, joint problem solving, commitment, and strong communication. Methodology: This study will use both qualitative and quantitative research methods for investigating the variables in question. Following a thorough literature review, a conceptual model will be developed summarizing relevant research propositions. This will be refined through a brief qualitative research stage and hypotheses will be tested by using a survey. The survey will be administered to 16 different municipalities in the capital city of Riyadh, Saudi Arabia. Self-report measures will be used to assess middle managers participation and involvement in strategic decision making. An ordinal scale of 1 4 may 9

10 be used (with 4 Representing the highest participation). Respondents will be asked to indicate their age and highest formal education. Similar to a survey conducted by Kim (2002), to measure the degree of job satisfaction, a Likert scale will be used to measure the feelings and attitudes the middle managers have towards their jobs. Strategy implementation will be measured by asking the respondents how successful they perceived the most recent strategy implementation process was using a 10-point scale. Because the moderating variables will be investigated for their effect in this research, it is crucial to keep a natural log and use observational methods to record organizational size, activities, organizational culture, and technologies used in the organizations. Finally, the moderating effects of the external environment must also be measured to study its relation to variables in question. The characteristics of the environment, the presence of environmental uncertainty and hostility must be recorded. The measure that will be taken in order to collect information about the environment requires further investigation. References: 1. Alexander, K. (1984). The Promise and Perils of Worker Participation in Management. American Journal of Economics and Sociology, vol. 43, no. 2, pp Arendt, H. (1958) The Human Condition; The University of Chicago Press Chicago. 3. Brayfield, A. and Crockett, W. (1955) Employee Attitudes and Employee Performance. Psychological Bulletin, vol. 52, pp

11 4. Brewer, G. Selden, S. and Facer, R. (2000) Individual Conceptions of Public Service Motivation. Public Administration Review, vol. 60, no. 3, pp Blitzer, W. (2005) Saudi Arabia holds municipal elections. CNN Online, Available from [Accessed on Feb. 27 th 2009]. 6. Boyne, G. (2001) Planning, Performance and public service. Public administration review, vol.79, no. 1, pp Boyne, G. and Walker, R. (2004) Strategy Content and Public Service Organizations. Journal of Public Administration Research and Theory, vol.14, no.2, pp Boyne, G. (2006) Strategies for Public Service Turnaround: Lessons from the Private Sector? Administration Society, vol.38, no.3, pp Doumato, E. (1999) Women and Work in Saudi Arabia: How flexible are Islamic margins? Middle East Journal, vol.53, no Elbanne, S. and Child, J. (2007) Influences on Strategic decision effectiveness: development and test of an integrative model. Strategic Management Journal, vol. 28, no. 4, pp Fitzgerald, L., Johnston, R., Brignall, S., Silvestro, R. and Voss, C. (1994) Performance Measurement in Service Businesses, The Chartered Institute of Management Accountants, Cambridge. 12. Floyd, S. W. and Wooldridge, B. (1994). Dinosaurs or dynamos? Recognising middle management s strategic role. Academy of Management Executive, vol. 8, no. 4, pp

12 13. Floyd, S. W. and Wooldridge, B. (1997). Middle management s strategic influence and organizational performance. Journal of Management Studies, vol. 34, no. 3, pp Hamzawy, A. (2005) Saudi Municipal Elections: Gradualism of Reform and Traditional Politics. Carnegie Endowment for International Peace online, Available from [Accessed on Feb. 27 th 2009]. 15. Hitt, M and Tyler, B. (2006) Strategic decision models: Integrating different perspectives. Strategic Management Journal, vol. 12, no.5, pp Hrebiniak, L. G. and Joyce, W. F. (1984). Implementing Strategy. New York: Macmillan. 17. Kaufman, B.E. (2001) The theory and practice of strategic HRM and participative management: Antecedents in early industrial relations. Human Resource Management Review, vol. 11, no. 4, pp Kim, S. (2002) Participative Management and Job Satisfaction: Lessons for Management Leadership. Public Administration Review, vol.62, no.2, pp Lines, R. (2004) Influence of participation in strategic change: resistance, organizational commitment and change goal achievement. Journal of Change Management, vol. 4, no. 3, pp

13 20. Locke, E. A. (1976) The nature and causes of job satisfaction. In M. D. Dunnette (Ed.), Handbook of industrial and organizational psychology (pp ). Chicago: Rand McNally. 21. Mann, G. (2006). A Motive to Serve: Public Service Motivation in Human Resource Management and the Role of PSM in the Nonprofit Sector, Public Personnel Management, vol. 35, no. 1 pp Available from [Accessed on Feb. 10, 09]. 22. Miller, S., Hickson, D. And Wilson, D. (2008) From Strategy to Action: Involvement and Influence in Top Level Decisions. Long Range Planning, vol. 41, no. 6, pp Mintzberg, H. and Waters, J. A. (1985) Of strategies, deliberate and emergent. Strategic Management Journal, vol. 6, no. 3, pp Mintzberg, H. (1994) The Rise and Fall of Strategic Planning: Reconceiving Roles for Planning, Plans, Planners. New York: Free Press. 25. Noble, C.H. (1999) The eclectic roots of strategy implementation research. The Journal of Business Research, vol. 45 no. 2, pp Nutt, P. (2000) Decision Making Success in Public, Private and Third Sector Organizations: Finding Sector Dependent Best Practice. Journal of Management Studies, vol.37, no.1, pp Petty, M., McGee, G. and Cavender, J. (1984) A Meta-Analysis of the Relationships between Individual Performance. Academy of Management Review, vol. 9, no. 4, pp

14 28. Poister, T.H. & Streib, G. (2005) Elements of Strategic Planning and Management in Municipal Government: Status after Two Decades. Public administration review, vol. 65, no. 1, pp Sagie, A. And Aycan, Z. (2003) A Cross-Cultural Analysis of Participative Decision-Making in Organizations. Human Relations, vol. 56, no.4, pp Seznec, J. (2002) Stirrings in Saudi Arabia. Journal of Democracy, vol. 13, no. 4, pp Somech, A. (2006) The Impact of Participative and Directive Leadership on Teachers' Performance: The Intervening Effects of Job Structuring, Decision Domain, and Leader-Member Exchange. Educational Administration Quarterly, vol. 42, no. 5, pp Wernerfelt, B. (2007) Delegation, Committees, and Managers. Journal of Economics & Management Strategy, vol. 16, no. 1, pp Yousef, D. (1998) Predictors of decision-making styles in a non-western country. Leadership & Organization Development Journal, vol.19, no.7, pp

A STUDY ON HRM PRACTICES AND ITS IMPACT ON JOB SATISFACTION AND ORGANIZATION PERFORMANCE IN BPO SECTOR, TIRUCHIRAPPALLI

A STUDY ON HRM PRACTICES AND ITS IMPACT ON JOB SATISFACTION AND ORGANIZATION PERFORMANCE IN BPO SECTOR, TIRUCHIRAPPALLI International Journal of Advanced Research in Management (IJARM) Volume 7, Issue 3, September December (2016), pp. 01 09, Article ID: IJARM_07_03_001 Available online at http://www.iaeme.com/ijarm/issues.asp?jtype=ijarm&vtype=7&itype=3