Public Agency External Analysis Using a Modified “Five Forces” Framework

Abstract

Strategy matters in the public sector as well as in the private sector. Michael Porter's ''five competitive forces'' (5 Forces) framework (Porter 1979;1980; is widely used by private-sector firms to analyze the external environment and specific external forces. Can public agency managers use some version of 5 Forces analysis to effectively analyze the external environments of their programs? What modifications are required for public agency use? The case is made that a version of the 5 Forces framework can be useful when appropriately modified for public agency programs. The public agency version of the 5 Forces framework that is presented specifically considers public agency goals from three perspectives: descriptive, instrumental, and normative. The descriptive focus on autonomy is laid out. Another modification to the standard framework explicitly introduces political influence as an external force. Thus, the modified framework considers and integrates both political and economic external forces. Several significant modifications to Porter's other forces are also proposed and discussed. A number of strategic implications of public program 5 Forces analysis are discussed. The modified 5 Forces framework is illustrated both in terms of autonomy (descriptive level) and social efficiency (normative perspective).

Corporatisation and the Emergence of (Under-Managered) Managed Organisations: The Case of English Public Hospitals

“…First, we contribute to ongoing debates concerning the emergence (or not) of new organisational forms. As noted earlier, moves towards corporatisation and agencification are frequently understood as stages along a continuum, from regular public organisations -subject to political control and semi-anonymised within a wider bureaucracy -through to fully privatised, independent firms (Bilodeau et al 2007;Vining 2011). Looked at it in this way, corporatisation is associated with a shift towards more 'complete' organisations (Brunsson and Sahlin-Andersson 2000), implying 'changes in governance and organisation structure' along this continuum (Nelson and Nikolakis 2012;p.…”

“…A starting point for this paper was the debate about the re-structuring of public organisations and trends towards 'corporatisation' (Laegreid et al 2013;Vining 2011). …”

“…An enduring characteristic of government reforms over the past two decades has been moves to increase the (formal) autonomy of public organisations such as hospitals, universities and civil service agencies (Laegreid, Roness and Rolland 2013;Vining 2011). In its most developed form, this reform programme has been described as a process of 'corporatisation'.…”

Are generic strategies ‘fit for purpose’ in a public service context?

“…The most fundamental contention to the direct application of private-sector frameworks, such as the above strategy typologies, to public agencies relates to the differences between the goals of public and private sector organisations (Vining, 2011). Vining (2011, p. 65) suggests that 'while it may be plausibly argued that some concepts and tools originally developed for the private sector are directly transferable to public agencies, most are only likely to be useful if appropriately modified'.…”

“…Additionally, extant strategy research has successfully adapted 'marketised' models of organisational behaviour for their application in the public sector. Andrews et al (2006), for example, draw on Porter's typology of strategy content to identify types of action that public organisations may use to operationalize their strategic stance; while, Vining (2011) makes the case for the value of a modified version of Porter's five forces framework for public agency programmes. The public leisure sector is a particularly suitable research setting to consider the contribution of Porter's and Faulkner and Bowman's strategy typologies in a public service context, on the basis that public leisure providers are characteristically market-facing owing to both their close interface with customers and the increasing involvement of private agents in the management of leisure services (Audit Commission, 2006); furthermore, for many leisure services, customers are charged for using the service which represents a revenue-generating capacity (Liu et al, 2008) and highlights competition for customers as a feature of the organisational environment (Robinson, 2003(Robinson, , 2004.…”