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Service strategy to improve operational capabilities in the public sector

ABSTRACT Public institutions, such as emergency services, face unique operational challenges because they do not have a clear profit motive, operate in a political system as opposed to a market system, and have a fragmented authority structure. This study applies traditional operations and service strategy theory to the not-for-profit, public sector context. Synthesizing research from these theoretical domains, a contingency framework is developed to determine the effect of environmental uncertainty and strategic choices on operational capabilities in emergency services under different governance structures. Operations strategy research traditionally uses survey-based measures, while emergency services research focuses on mathematical modeling techniques. In contrast, this study analyzes archival data with 9800 emergency incidents using hierarchical regression. The results support that in the public not-for-profit context, strategic choices mediate the impact of environmental uncertainty on operational capability. Furthermore, governance structure moderates the impact of environmental uncertainty and strategic choices.