Private and Public Sector Models for Strategies in Universities^*

Abstract

Increasing formalization of disciplined management of UK universities over the last 30 years has been accompanied by moves to articulate universities' strategies, by attempts to connect organizations' plans and management of activity to those strategies and by a desire to measure how well outcomes are fitted to universities' goals. In this complex change in the orientation of universities' management, lessons have been drawn from the contemporary development of the analysis of strategy and strategic process in commercial and, latterly, in public sector settings. It is argued that there have been very significant errors and weaknesses in the importation of such models of strategy, especially in the stress on strategic planning rather than strategic process and in the insensitivity of universities' planning to the underlying strategy process of the typical university. Most universities, it is argued, mistake planning -and even budgeting -for strategy itself, having failed to make proper sense of their own organizations' processes of generating strategies and putting them into practice. They have typically missed the crucial context of strategy and change. It is argued that there are crucial lessons to be learned from recent advances in theorizing about strategy in the private or commercial sector, particularly in relation to the development of modelling complex and path-dependent systems; and it is argued strongly that universities' strategic process can fruitfully be analysed through the perspectives of real options analysis. This can also accommodate the richness of universities' traditions of strategy formation and implementation within 'loose-coupled ' organizations. Strategy and its place in university managementIn understanding how and why organizations are created and run, the management literature has tended to stratify their control and direction, segregating the operational activity of the organization -policy or tactics -from the direction and control of its purposes -strategy. 1 Thus strategy is associated with how the activities of the organization are selected to be consistent with its objectives and purposes. This 'higher-level' strategic management enables the organization to avoid infeasible management tasks, such as the appraisal of all potential activities using its resource endowment. It also permits the organization to identify the resources appropriate to desired strategies, without, again, testing their suitability against all feasible actions.Strategy, then, is fundamentally associated with how organizations confront and shape complex realities: with how they use 'bounded rationality' to solve otherwise infeasible problems (Cyert and March, 1963; see also Simon, 1996). The concept is universal in that, by default, all organizations have strategies by which complex environments are confronted. Survivor organizations, in this *The comments and insights of colleagues, especially

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