Strategy Formulation and Performance

Abstract

Building on an initial stream of research on the relationship between strategy process and performance, this article analyzes the effect of strategic planning and logical incrementalism on the performance of 104 small and medium-size urban transit agencies in the United States. Data on strategy development were obtained through an online survey of agency managers, while objective performance data were drawn from the National Transit Database. Ordinary least squares regression models were used to test the effects of the two planning approaches and of the interaction between them in 2008, controlling for contextual and operational variables as well as performance in 2004. The results suggest that strategic planning exerts a positive influence on effectiveness and system productivity measures, but does not influence efficiency or cost-effectiveness measures. Logical incrementalism by itself appears to have a negative effect on the number of passenger trips per capita and transit system productivity measures. However, conducting strategic planning efforts within a larger framework of logical incremental decision-making, as represented by the interaction term, positively affects both the effectiveness and the system productivity measures. Taken together, these results suggest that strategic planning, whether on its own or combined with logical incrementalism, has a positive effect on some dimensions of performance, at least within the context of the public transit service industry.

Mutual Relationship of Strategic Stances and Formulation Methods, and Their Impacts on Performance in Public Local Transit Agencies

“…Strategy is still an under-discussed topic in the transit literature, and the research to date has focused primarily on strategy formulation methods (e.g., Obeng & Ugboro, 2008; Poister, Edwards, Pasha, & Edwards, 2013). Strategic stances, however, are largely ignored and we are not aware of any study in the public transit sector that includes an analysis of strategic stance in the transit industry.…”

“…where unlinked passenger trip is an industry standard defined as a single trip undertaken by one passenger on one transit vehicle, regardless of the fare or transfers. Focusing of the impact of strategy formulation methods on transit system performance, Poister et al (2013) found that FSP has a positive effect but logical incrementalism has a negative effect on service effectiveness and system productivity of transit agencies.…”

“…To ensure comparability of performance data, we used the National Transit Database (NTD) maintained by the Federal Transit Authority, to identify a subset of transit agencies in the United States that were similar in size and operations to ensure a fair amount of comparability between the agencies surveyed (see Poister et al, 2013). We did not include agencies with fewer than nine vehicles in operation from our sample, because they are exempted from reporting to the NTD.…”

The strategy process as a result of learning, questioning, and performing in a city organization

“…Some have claimed that while strategies positively affect public organizations, it is difficult to know how, and there is a risk of oversimplification (Andrews et al 2012;Ferlie and Ongaro 2015;George 2017) and a lack of relevant empirical studies (Poister et al 2010). Moreover, there is an increased emphasis on performance in public-sector organizations, which could be linked to greater demands for accountability and results from external stakeholders (Poister et al 2014). When a strategy is adopted, new things are measured, which does not necessarily imply that something entirely new is happening within the organization.…”

Explaining the competitive advantage in strategic research and technology management for research and technology organisations

“…Environmental dynamics and turbulence, intensity of uncertainty in the business environment, and the increasing volume of information and knowledge related to various aspects of the business which is presented in the context of information and communication technology, including the basic characteristics of business environment in the knowledge-based economy (Schiuma, 2012). In such an environment competitive mechanisms considered by active businessmen to achieve superior performance is also getting more sophisticated and diversified (Poister et al, 2013). RTOs which are known as a driving force behind the development and growth of knowledge-based economy in developed countries encounter with more depth of challenges due to the highly dynamic and uncertainty in these organisations (Campbell and Naidoo, 2017).…”