Who Cares: Stakeholder Participation and the Use of Performance Information in Strategic Planning

Abstract

Performance measurement translates organizational goals into objectives and actions. In empirical performance information scores and ranks functional departments and subordinates based on their implementation capacity— such capacity indexes could be linked to strategic planning and its adjustment. Previous research in strategic plans and performance measurement focused on the nature of performance information. This study further detects how it relates to different stakeholders’ interests and capacity. Does various stakeholders’ participation in strategic plans enhance the use of performance information in the planning process? Do external stakeholders generate different effect on the use of performance information if compared to internal stakeholders? The author attempts to answer these questions by examining whether external stakeholders (including interest groups and citizen groups) and internal stakeholders (including Chief Administrative Officers, local government staffs and elected officials’) participation in strategic plans could positively influence the application of performance information in strategic planning. Data are mainly from International City/County Management Association (ICMA) “State of the Profession” survey in 2006. The methods of logistic regression and predicted probability are employed. The statistical results show that the participation of CAOs, local government staffs and elected officials are positively and significantly influence the application of performance information to strategic planning. Based on technical rationality, managerial effectiveness and political accountability, internal stakeholders can generate a more significant effect on the use of performance information than external stakeholders.