A Review on the Relationship Between Strategic Management and Performance: The Role of Internal and External Contexts

Abstract

Over the last few decades, strategic management practices have been widely applied in the public sector across the world. Though this approach and its component techniques are still in their infancy, most practitioners and academics have reached a consensus on the role of strategic management in enhancing organisational efficiency. Accordingly, there have been many studies examiningthe relationship between strategic management and performance in public organizations. However, as far as the public sector is concerned, there is still insufficient evidence to indicate that strategic management has a direct link with organizational performance, and it is still unclear whether there are any other determining factors that might affect this alignment. This study aims to investigate the theoretical background to the relationship between strategic management and organizational performance. It also identifies how internal and external contextual factors have mediating and moderating effects on this relationship, and suggests that studies analysing the fit between strategic management practices and performance in public sector organizations should take the influence of contextual parameters into consideration.