Strategic management argues that administrators can significantly affect agency performance. This article examines the role of the organizational environment in determining agency effectiveness, arguing that performance is in part constrained by external conditions that cannot be altered by managers. Factor analysis is used to identify relevant community characteristics and create a multidimensional model of the public sector environment that is parsimonious and theoretically grounded. This model is used to examine the performance of 170 Texas municipal police departments over an extended time period. As expected, environmental characteristics produced significant negative effects on performance and demonstrates the value of modeling the agency environment in this way.
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