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Strategic scenarios, concepts that assist business managers in developing market interventions, represent the action component of strategic management. In some fields of public policy (especially national defense and electoral politics) scenarios have been discussed for years. For the most part, however, a theory of action involving specific scenarios has not been given attention by scholars of public policy and administration. In this article, the literature of these fields, along with that of business strategy, is reviewed and synthesized for the purpose of beginning the process of developing a theory of action for managers of public policy. Two concepts in particular—the agency power matrix and the change scenario—are presented as necessary components of this theory. When completed, the theory of strategic action should be viewed as an integral part of the literature of strategic management.

The literature on strategic management for public policy and administration has developed without adequate theoretical grounding in regard to the nature of competition among public agencies, the arenas within which competition occurs, and the resources used in the competitive interactions. In this article I review relevant literature from business strategy, public policy, and bureaucratic politics to help construct a theoretical paradigm on which to build usable concepts of strategic management for public policy and administration.The author suggests the following vision of public sector strategic management: Agencies compete within a pluralist political universe composed of dynamic public policy subsystems whose members accumulate and use resources to advance the power and policy preferences of their agencies. Competition among public agencies is seen as offensive (pirating) or defensive (turf-protecting) and as intrasubsystem or intersubsystem in nature. The writings of Downs (1967) and Leontiades (1982) are particularly useful in suggesting the development of these concepts. Public policy subsystems are seen as being distributive, redistributive, or regulatory in accordance with the typology developed by Ripley and Franklin (1984) and others. Resources, varying in the degree of liquidity, are seen as growing out of knowledge and political support as suggested by Rourke (1984), Meier (1987), and others.The article concludes that scholars of public policy and administration should concentrate upon further development of empirical concepts to build a usable theory of public sector strategic management.

In this article, a study of the budget process in Pennsylvania state government over the two fiscal years 1975-1976 and 1976-1977 is conducted in an effort to develop a hypothesis which accurately reflects the empirical events of the actual process during that period and which takes into account other recent empirical research findings. It is concluded that in state government budgeting there are two distinct styles of budgetary decision-making- distributive and redistributive. As long as the process remains in a distributive mode, rational-comprehensive approaches and techniques may have some success in influencing the final outcome; however, when the process turns from distributive to redistributive, rational-comprehensive analysis is replaced by traditional partisan-mutual-adjustment techniques.