Essay on "Comparative Public Management"

Essay 10 pages (2886 words) Sources: 10

[EXCERPT] . . . .

Public Management

The dynamic changes which impacted the world up to the 21st century have materialized in a series of outcomes. Within the business community for instance, managers are required to develop and implement strategies which increase the firms' competitive levels, which increase operational efficiency, which better serve the needs of the customers or which better allocate the resources, to create cost efficiencies. While the general conception is that these requirements impact solely the private sector, it has to be noted that similar demands have become more common within the public sector. In other words, the governmental and not for profit agencies strive to reduce their operational costs while maximizing their results, they strive to hire and retain the best staff members and they intend to best serve the needs of the various stakeholder categories. Given this context, public managers develop and implement a series of strategic approaches, organized under the generic name of public management.

2. Importance of Hierarchies, Markets and Networks for Public Management

At a global level, the general trend is that of developing the federal structures and their service offering so that they better answer the changing needs of the populations. And the changing needs of the stakeholders -- employees, general public, citizens, employees in the private sector, entrepreneurs and so on -- are determined by the modifying elements within the markets. For instance, the penetration of foreign companies into the domestic market generates the need for enhanced legislation regulating the activities of foreign players.

Another example is constituted by the evolving role of the staff members within the private sector. Large scale employment has been obvious during the Industrial Revolution, moment in which the work was not regulated. In time however, legislations were developed to forbid the utilization of children as workforce, to limit the access of women to dangerous jobs or to force employers to grant the employees the ability to rest. Today, the legislation is more complex than ever and it includes elements such as equal opportunities, human rights or disabilitation acts.

In this setting of changing market features, it becomes obvious why and how the characteristics of the market impact and change the practices of public management. But the markets also play another role within the implementation of public management. They constitute a benchmark in terms of efficient operations. The market, represented by the private agencies, is focused on profits maximizations. In order to achieve it, it will develop and implement strategies of efficient resource allocation, stakeholder satisfaction and cost reduction. These strategies, alongside with others, offer the public sector a good example of how to operate in a means that leads to the desired results.

The modifications which occur at federal level due to the modifications within the market impact directly the hierarchies and the networks within the public system. They for instance generate the need for a horizontally implemented structure, rather than the traditional vertical structure, in which the agencies and the individuals were set in strict hierarchies. The new public system reduces the need and the utility of high dominant structures and generates as such mutations in the hierarchies and the networks.

Yyvone Fortin and Hugo van Hassel (2000) explain: "Markets, hierarchies and networks represent key organizing principles in the way public services and provided […], though organizations invariably display a mix of these three principles […]. New public management seeks to alter this mix by introducing markets into government. Public services are increasingly organized along market principles with the introduction of contracts and competition […]. Consequently new public management represents an attack on bureaucratic and professional models of service provision based upon the respective principles of hierarchies and network that were traditionally dominant in government […]."

The authors offer the example of the police force, which was traditionally organized in military like hierarchies and command chains. Today however, with the gradual introduction of new public management tools and concepts, as well as given the changing features and role of the markets, the police are turning away from their traditional structures and are emerging as a new entity, constructed on the principles of policing by contract. As a parenthesis, government by contract is understood as a process by which federal services are offered based on a contract, rather than a hierarchy. A particularity of this government by contract has been constituted by the outsourcing of several federal processes -- generally IT&C related ones -- to tertiary parties outside the government, and even outside the United States (Freeman and Minow, 2009).

The role of the market within the new public management is systematically increasing. From the point where the marketplace stimulated the public sector to better allocate its resources, it has now come to a position from which it is able to support the development of the people and the economy. Probably a more relevant example in this sense is the introduction of market principles and concepts in the administration of the public utilities. The governments in several states have decided to privatize part of their private utilities companies. In most cases, the results have materialized in a higher quality of the products and services, generally explicable through the fact that the new leaders of the utilities companies were dedicated to their particular field and they were 100 per cent committed to the respective company, whereas the government, the previous leader, had to joggle multiple tasks at the same time.

Another example of a positive result has been the emergence of some other utilities companies. With the introduction of market principles within the utilities sector, numerous barriers were lifted and the market could be penetrated by other players as well. This eventually materialized in an increased competition, which forced the purveyors to implement lower retail prices and to increase the quality of their offering. The telephones industry constitutes a relevant example. The increased competition generated the main effect of improved offering to the population, but also the socio-economic effect of creating more employment opportunities, and as such reducing the problem of unemployment. Additionally, it creates savings to the state budget, which is no longer required to administrate the utilities companies, and can as such redirect the respective resources in efforts which improve the social and economic status of the country (Davies, Wright and Price).

In terms of the hierarchy, this is also able to generate adjacent effects upon the federal agencies. In a traditional context of vertically integrated workplaces, the public servants are subjected to their direct supervisor. In other words, their professional formation and future is directly interconnected with the hierarchy (Organization for Economic Co-Operation and Development, 2004). This brings about increased levels of stress. In a context in which public management is no longer constructed on strict vertical hierarchies, a new and more relaxed working environment is created. In this new setting, the public servant is better supported and motivated to complete his tasks at superior levels of quality. Overall, the performances of the public agencies thrive when the traditional hierarchies are readjusted.

In time, the hierarchies are likely to be replaced with internal structures based on networks. These networks will have equal rights and powers within the federal agencies; they will lead to the creation of organization like structures, managed in accordance with efficiency and results criteria. The occurrence and role of networks within the public sector is generally pegged to the reduction of the hierarchical structures. In other words, the integration of market concepts within the public sector materializes in the introduction of network structures, which in turn leads to the reduction of vertical hierarchies. "Networks are seen as complements to markets, and hierarchies as governing structures for authoritively allocating resources, exercising control and co-ordination" (Salminen, 2003).

3. Public Management Reform in New Zealand and South Korea

New Zealand and South Korea have early on identified a necessity to reform their public sectors. New Zealand is often recognized as a promoter of the reforms, and alongside with Australia, is generally studied to retrieve valuable lessons. Some elements worthwhile mentioning in the public management reform of New Zealand include the following:

the introduction of a payment system based on the achieved performances the move towards accrual accounting the increased signing of contracts with outside service providers (and the subsequent move towards a contract-based government, rather than a hierarchy-based governance)

the creation of a distinct separation between policy making and adjacent operations (Boston, 2001)

While some researchers state that the effects of the reform in New Zealand are difficult to commensurate, Graham Scott (2001), a leading figure of the reform, argues that valuable lessons are drawn. He for instance argues that for a new public management reform to succeed, it is pivotal that:

the roles and responsibilities are clearly assigned the decision making structure and responsibilities are well assigned and understood the federal authority has to have realistic expectations and great commitment the reform has to be backed with structural reform in the federal cabinets the mistakes made need to serve as lessons for the future… READ MORE

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