Association for Public Policy Analysis & Management

Public service organizations develop diverse strategies to adapt to rapid changes of the patterns of service need and to compete with private service providers. However, the relationship between strategic stance of public service organization and citizen perception of public service performance is still unclear. Existing literature failed to explain the mechanism of how strategic stance influence public service performance. This study applies service-dominant logic to develop a theoretic framework explaining the links among organizational strategic stance, value co-creation in service, and perceived public service performance. Following Miles & Snow strategic typology, this study examines the impact of strategic stance (i.e. prospecting, defending, and reacting) on perceived service quality and citizen satisfaction. Using hierarchical linear model to analyze survey data from China's local public service organizations, we find that prospecting strategy is positively related to public service performance, while defending strategy is negatively related to public service performance. This is because prospecting strategy fosters citizen engagement and public value co-creation, and thus promote citizen perception of public service performance. Moreover, prospecting strategy moderates the relationship between perceived service quality and citizen satisfaction. These findings contribute to literatures on citizen assessments of public performance, and to the policy debate about the public institutions’ strategic selection in turbulent environment.