strategy as a multi-player game. In

ALVES, Paulo Vicente dos Santos; ZEIDAN, Rodrigo Mariath. Strategizing in the public sector: strategy as a multi-player game. In: INTERNATIONAL RESEARCH SOCIETY FOR PUBLIC MANAGEMENT, 17., 2013, Prague. 17th Annual Conference of the International Research Society for Public Management. Zurich: IRSPM, 2013. 18 p.

Strategizing in the public sector: strategy as a multi‐player game

ABSTRACT: Strategy is often pictured as a decision science in which the cycle goes through analysis, advocacy, decision and implementation. But this is not a single person process even without direct competition as in the public sector. There are many other actors like politicians, other states and nations, opposition, voters and taxpayers, each one trying to maximize its point of view in a series of interactions. Therefore strategy is more like an extensive incomplete information multi-player game, rather than a single-sided rational decision process. The research question is: what are the necessary competencies of a strategist, if strategy is an extensive, incomplete information, multi-player game? The literature review will use not only game theory, but also, game design, role-playing, strategy as a process, and competency development. Game theory is an important body of knowledge since it can explain several game concepts like the Nash Equilibrium and Pareto Optimal. Also it can show how creating or removing options can create new pure or mixed equilibriums. That is a key to redesign games by changing the rules that is possible under public policy by altering the laws and policies. Game design can help us better understand how a game is an incentive system that molds behavior and is a good complement to negotiation theory, contract theory and political theory as building and negotiating contracts and policies is very similar to game design. Role-playing is clearly within the action frame of reference of administrative theory, and relates to the sociological view of games. Both see in the human organizations the importance of interpretation of roles and a theatrical aspect of organizational life. The strategy process views strategy as an ongoing process that never ends. Basically there is a cycle of analysis, advocacy, decision and implementation in which strategists are always involved. The competency development is important because it helps us understand how a strategist is formed and can we prepare someone to become a strategist. Understanding that knowledge, skills and values can create behaviors will allow us to understand which competencies are necessary for a strategist and how we can develop them in the future, giving a practical application of this study for public administration schools. The methodology is a theoretical essay of what constitutes strategy as a game, and from the standpoint of the strategist as a gamer. The findings include a series of situations and behaviors that the strategist has to deal with.

By looking at the analysis, advocacy, decision and implementation cycle, it was possible to identify game-like situations and behaviors faced by the strategist during the strategic process. During the analysis the strategist must not only understand the best technical solution, but rather the position of the main stakeholders involved and plan ahead how the interaction of their behaviors will result either into a Pareto optimal or Nash equilibrium. This may require understanding their preferences and whether there are transitivity problems as the Condorcet paradox. In many cases changing the conditions of the decision involves a situation that is similar, if not equal to, redesigning the game and with that creating new equilibriums or altering the Pareto optimal. Also the strategist must understand the effects of an extensive game so that a quick solution may not be stable in the long run, and therefore planning for several rounds of interaction maybe necessary. Like in many games the ability to see many turns ahead is crucial, and some interactions may seem obvious after they occurred but unclear beforehand. New governments may be tempted to change some rules but information technology systems can be designed to stabilize solutions by raising the switch cost not only in terms of designing and installing a new system, but also creating a thinking and behavior pattern that all stakeholders abide to, and thus raising a mental switch cost. Advocating for a solution requires not only persuasion and competition, but also cooperation and role-playing. Understanding what can bring some actors into an alliance around a solution is fundamental to soften resistance by at least creating mixed feelings on them. In some cases, a crisis may be required in order to consolidate an alliance around a decision; his may be the result of a deliberate action or consequence of a runaway situation. The problem in trying to rely on crisis for changes is that they may not be controllable and in some cases it can be reached a situation that instability is so high that we approach a complexity theory situation in which the systems new stabilization is unpredictable. Decision is always under uncertainty since not all variables can be controlled. It’s necessary to tolerate risks, the unknown factors, and the fact that one may not even be aware of some factors. This means that being capable of reassessing and reevaluating at any time is critical. Decision is not a static act like in decision theory and many textbook examples, but rather a dynamic process. Particularly important here is the fact that it’s an incomplete information game, and some stakeholders may have lied about their preferences, only to reveal them at the right moment. Implementing is always under scarcity of time and resources, leading to maximization under constraints. Many strategists are hindered by waiting for perfect conditions, while in fact moving forward with what is available can generate more resources as it gathers attention. As a conclusion the cycle points out to a few critical competencies a strategist must develop: analyzing game situations, redesigning games, creating alliances, playing games of power and emotionally detaching from decisions.