Icons of New Public Management : four studies on competition, contracts and control

University dissertation from Stockholm : Företagsekonomiska institutionen

Abstract: Public organizations have undergone major changes over the past few decades. The umbrella term used to characterize these changes in the style of public administration is ‘New Public Management’ (NPM). NPM is a cluster of ideas borrowed from the conceptual framework of private-sector administrative practice –– a multifarious concept, covering diverse ideas and theories about what the nature of public management and administration should be. Arguably, then, NPM is primarily not a practitioners’ product but, rather, a construct of the research community, which assembled the programmatic aspects of NPM. The impact of these programmatic aspects on public administrative routines, operations and everyday work is a matter of analysis at the technological level.This thesis studies both the programmatic and the technological aspects of NPM. It focuses on how the programmatic aspects of NPM transform into technological aspects and how we can understand the outcome of these transformations, i.e. NPM’s impact on public administrative practice. The four discrete papers of the thesis cover three aspects (‘Icons’) of NPM – ‘Competition’, ‘Contracts’ and ‘Control’ – in depth:1. Paper I presents a method for isolating effects of the competition threat, with three possible approaches. All three include cost-cutting with respect to full-time annual staff appointments, but combine it with a number of changing variables. The results indicate one plausible conclusion: that one effect of the threat of competition has been to boost savings. In the units concerned, this effect – in terms of a mean cost reduction – may be estimated between 4 and 6 per cent.2. Paper II seeks to study how quality issues have been managed by contract. First, it presents some of the conceptual (programmatic) arguments of ‘Management by Contract’, discussing the structural arguments generally used (the purchaser/ provider split) and a common method (competitive tendering). Second, it presents some technological effects based on empirical findings. The paper’s concluding statement is that there is a gap between the programmatic and technological dimensions. Five interpretations intended to explain this gap are put forward.3. Paper III investigates the existence and function of various mechanisms of internal change in relation to broader aspects of change and characteristics of management control systems. The findings indicate that organizations can continuously transform their management control systems by creating, and promoting the use of, specific transformation mechanisms. In the two organizations studied, these mechanisms include internal benchmarking and internal contracting.4. Paper IV evaluates the City of Stockholm’s decentralization reform, which resulted in 24 local suborganizations (district councils). The empirical findings do not appear to fit into a single, allembracing theory, and the kaleidoscopic nature of the reform demands a broad, multidisciplinary approach. This paper therefore contributes to knowledge of the organizational changes that took place by addressing them both in rational terms and as symbolic acts. Although reforms tend to be perceived as ways of shaking up an organization, it is suggested here that they may in fact have a cohesive function – serving to hold the organization together.One general conclusion of this thesis is that NPM cannot readily be described in terms of success or failure. Instead, the four papers provide widely varying perspectives on, and interpretations of, NPM’s practical impact and the technologies that are taking shape in the field. Based on the notion of NPM as a management doctrine, seven contradictory general observations are presented. Sometimes all goes according to plan. Alternatively, the outcome may deviate from the plan; the result may be ‘business as usual’, i.e. little may change; things may only get worse; programmes may have contradictory effects; change may be excessive; and, finally, there may be unexpected but positive effects. Here, the conclusion is that in some cases the solution is to develop the theories and concepts, i.e. the programmatic level, while in others the solution may, instead, involve developing the application and implementation of existing theories and concepts – i.e. the technological level.

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