Analysis Of Implementation Success Of Strategic Planning: A Case Study Of A Local Government In Indonesia

For more than two decades following its adoption in the public sector, strategic planning has become standard practice in most government agencies. However, studies have found that that many plans are not being executed or successful. In order to provide a method for governments to systematically examine the causes, this thesis applied and improved previous research to study the factors affecting the implementation success of strategic planning in an Indonesian local government called Batu Bara, a newly-formed organization assessed by the national government as having low implementation performance. Furthermore, this research seeks to identify the issues of the examined government and draw policy recommendations for further enhancement. In addition to the planning itself, this study also examined the mediating role of managerial involvement, the moderating role of stakeholder uncertainty, resource slack, environmental favorability, strategic planning expertise, and organizational size. The data were gathered through structured direct questionnaires to three levels of managers in all 38 agencies in the government and Structural Equation Modelling-Partial Least Squares (SEM-PLS) was used for analysis. Data analysis comprise of confirmatory factor analysis and hypothesis testing. Cross-table assessments were conducted to complement the results' explanations. Further analysis was undertaken to find the effect size of resource slack, environmental favorability, strategic planning expertise, and organizational size in several cases related to stakeholder uncertainty circumstances. The findings shown that formal strategic planning in a single government entity is beneficial and that formal strategic planning, regardless of context, posits a positive impact on the success of the strategy implementation. This result indicates the public organization’s adoption of formal strategic planning as one of New Public Management vi practices is proven to be worth doing and reference to the debate between formal and incremental plan. The results also confirmed the mediating effects of managerial involvement and the moderating effects of stakeholder uncertainty and found that the perception of stakeholder uncertainty, resources and expertise are main problems in the studied government. Therefore, for improvement, it is recommended to enhance the manager’s capacity and better to consider stakeholder uncertainty in the strategic planning process. Furthermore, resource adjustment is recommended for agencies to deal with stakeholder expectations. Finally, maybe it is best to encourage managers to use their expertise to build a clear strategy so that changes can be minimized, rather than enforce expertise in managing changes in the implementation phase. This research strengthened previous studies in developed countries and extended to the context of a single-level public organization in a developing country, presented a comprehensive analytical method for analyzing the implementation success of formal strategic planning, and provided policy recommendations for the further improvement of the studied governmen