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A NEW MANAGEMENT IN THE PUBLIC


SECTOR?

Paul Haggett

This paper examines the crisis ofthe bureau- the organisation and management of the public
cratic mode of organisation within public sector. This is the purpose of this paper.
and private sectors and the emergence of
new forms of organisational control within
A restructured private sector, a
which maximal operational decentralisation
restructured public sector?
occurs alongside the further centralisation
Here is not the place to dwell at length upon the
of strategic command. It is suggested that
current state of argument surrounding the nature
the new basic principle of post bureaucratic
of restructuring in the private sector. I have
management corresponds to the idea of giv-
attempted to sketch some of the main differences
ing managers 'freedoms within boundaries'
of analysis in a previous paper (Hoggett, 1990).
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and leads to the development of much more


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Perhaps one of the few advantages of the term


horizontal contractual forms of control.
'post-Fordism' is its agnosticism about the future,
'The New Public Management' is considered
i.e. it suggests that we're clearer about where we're
within this framework and it is suggested
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coming from than where we're going to. Some of


that trends towards much more internally
the most interesting analyses presently emerging
devolved forms of organisation are indeed
from the debate are those which suggest that dif-
noticeable within the civil service, local
ferent nations, regions and sectors shape the new
govern ment, ed ucati on and elsewhere in the
forms of organisation of production in different
UK. Finally it is suggested that the new or-
ways. Thus what emerges is not a single, new
ganisational forms are compatible with the
restructured model but a range of basic types-
full range of political values and examples
Californian, neo- Fordist, Saturn ian, Japanese-
are given to show how one labour and one
each of which is shaped from the same basic
liberal london local authority have shaped
template (Leborgne and Lipietz, 1987; Lane,
these forms in differing fashions.
1988).

Introduction So what might this new basic template or para-


Over the last six or seven years a remarkable vol- digm consist of? There appear to be two essential
ume of research and argument has been generated dimensions to it. First of all it gives emphasis to
by what;s sometimes referred to as the 'restructur- flexibility- more flexible production strategies
ing debate'. This debate, conducted by a mixture and manpower strategies. Secondly it replaces the
of economists, geographers and sociologists, has notion of 'vertically integrated' production (i.e.
focused upon the question of whether Western integrated around the centralised hierarchies of the
capitalist economies are beginning to generate classical industrial bureaucracy) with much more
entirely new forms of the organisation of produc- decentralised (organisationally and spatially)
tion. The debate has by no means been simply a methods of organising production. In this paper I
parochial or academic one. Many of its terms- wish to focus primarily upon the latter of these
e.g. post- Fordism, flexible specialisation - have dimensions, that is, the decentralisation of pro-
been embraced by fashionable politicians, journal- duction and particularly the forms of managerial
ists, and the like. However, with a few exceptions devolution that correspond to this. But before
(Cousins, 1988; Hoggett, 1987, 1990; Winckler, considering in more detail the nature of this devel-
1990), there has been little attempt to consider the opment I wish to consider the notion of 'restruc-
relevance that this debate might have for under- turing' and its possible application to the public
standing contemporary developments within sector.

Policy and Politics Vol. 19 No.4 (1991),243-256


The term 'restructuring' suggests a particular form of a 'new' public management when the idea of
of change, something which is discontinuous, 'management' (as opposed to administration) is
major and qualitatively different to that which has a comparatively recent addition to our way of
gone before. It therefore amounts to something thinking about the running of the state. In a bold
more than the kind of change that might be pro- but, I feel, illuminating argument Aucoin (1990)
duced by switches in corporate or governmental suggests that we think of the discourse of Public
policy. In particular it suggests some kind of basic Administration as one which was congruent to our
paradigmatic change in how we think about the thinking about the organisation of the state in an
organisation and management of production - a era in which the model of bureaucratic control
qualitative shift in the techniques of organisational dominated organisational practice in private and
control. Moreover a shift which has been brought public sectors. The logic of this argument leads us
about by radical changes in both technological to the supposition that the new forms of manage-
and market conditions. ment are based upon essentially post-bureaucratic
Given that a consensus appears to be emerging methods of organisational control. The purpose of
that some such process is at work within the pri- this paper is not so much to test this hypothesis (an
vate sector (even though disagreement abounds ambitious if not impossible task given that many of
concerning the particular nature of this process) the changes referred to are of an extremely recent
is the state sector also undergoing some kind of origin) as to examine it in more detail, particularly
restructuring? There would seem to be two ways of in the light of changes which have occurred in the
answering this question. Firstly, is the role and British public sector over the last decade.
function of the state itself changing radically to Strategies of organisational control
suit the requirements of this 'post- Fordist' world
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Within the organisational literature a tradition has


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(Clarke and Mayer, 1986)7 Secondly, isthe organ- emerged which focuses upon the way in which
isational form of the state changing in a way which work is controlled within public and private organ-
corresponds to the new forms of organisational
isations. This tradition (Edwards, 1979; Clegg,
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control we now see being adopted within large


1981; Burris, 1989) has sought to demonstrate
private companies? how a variety of different strategies for control
I wish to concentrate on the latter of these two have emerged and developed over time. A full list
questions in this paper. My thesis is that during the of these control strategies would include craft,
last decade a distinctively new set of organis- simple control. technical control, bureaucratic
ational forms and approaches to management control and professional control. Table 1 outlines
have begun to emerge within the public sector, each of these control strategies, their origins and
both within central and local government, edu- distinctive characteristics.
cation and the health service. I wish to concentrate Within most complex organisations, where
on one facet of this development - the creation of manual workers, professionals and managers
more internally decentralised forms. Arguably in co-exist. more than one control strategy will be
Britain forms of external decentralisation - con- adopted, The key issue is which control strategy
tracting out and the creation of quasi-markets dominates. I would argue that for much of the
within the public sector - have been equally 20th century there has been a relative congruence
important, especially since the return of the third between technical and bureaucratic control strat-
Conservative government in 1987 (Le Grand, egies. It is this congruence which has provided the
1990). However, I wish to concentrate on forms of basis for the development of the giant industrial
internal decentralisation, partly because I am more
and public bureaucracies of the post-war period.
familiar with these developments, partly because However, bureaucratic control strategies rested
they appear to be less specific to the distinctively very uneasily with professional control strategies.
New Right political project of Britain and the USA. Since the Second World War, particularly within
I would like to take as a starting point the concept the state sector, where professions have a stronger
of 'The New Public Management' to which a base (Johnson, 1972), professional and bureau-
special issue of the journal 'Governance' was cratic control strategies increasingly collided. In
recently devoted (Aucoin, 1990). Focusing pri- the UK, particularly since the 1970s, there has
marily upon the reorganisation of the civil service been an increasing attempt to subdue profession-
this discussion examined recent developments alism by bureaucratic control strategies. We might
across a range of Western-type societies particu- think in this light of the rise of corporate manage-
larly Britain, Canada, New Zealand and Australia. ment in local government in the 1970s and the
It might seem strange to talk about the emergence emergence of general management within the

244 Policy and Politics


TABLE 1
Organisational Control Strategies (derivative of Burris. 1989. p. 4)

Strategy Periodisation Characteristics

Craft - pre-capitalist - apprenticeships


-though subject to deskilling process - decentral ised
throughout 20th century (Braverman,
1974) some evidence exists (the 'flexible -traditionally based upon
specialisation' literature) that the male 'labour aristocracy'
emerging wave of capitalist - integration of 'expertise'
development may rehabilitate some and labour.
forms of skilledlcraft production.
Simple - 18th century to present - coercive authority
control - conditions of full employment tend ('macho management')
to undermine the basis for its - direct, personal
coercive approach, as does strong supervision of work
unionisation. - 'hiring and firing'
- conflictuallabour
relations.
Technical - really came into its own at beginning - control embedded in
control of 20th century through the work of machine systems
Frederick Taylor and Henry Ford. - machines dictate pace of
work
- worker isolation
- deskilling.
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Bureaucratic -early 20th century - centralisation


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control - Henri Fayors 'General and Industrial - formalisation


Management' (1916) was the classic - specialisation
exposition - hierarchies of
- an application of the ideas of 'sound legitimated authority.
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administration' originally developed


within the civil service of the most
advanced European states.
Professional -some 'professions' (academia, medicine, - self - regulation
control law) essentially pre-capitalist - colleg ial ity
-remarkable 'explosion' of - credentialism
professionalism since Second World -semi-autonomy
War as educated labour becomes
increasingly integral to production in
private and public sectors.
Post- -first 'emerges' in mid-1970s - devolved or remote
bureaucratic - first detailed analysis in Mintzberg's control
control discussion of 'adhocracy' (1979) - decentralised
- rides forth upon the rhetoric of centralisation
'management excellence' in the 1980s. -formalised informalism
- regulated autonomy.

National Health Service within the 1980s. Similar capitalist countries, It would be foolish to separate
trends within the American welfare sector have out this particular ideology (of the organisation of
been charted by Kenneth Alford (1975) where he production) from wider ideologies and 'ways of
speaks of managers and professionals as compet- seeing things' which were common to the period
ing structural interest groups (the professionals of post-war development which is sometimes
being dominant but managerialism being emerg- regarded as a period of 'modernism' par excel-
ent). A similar line of analysis can also be found in lence. The mechanistic and rationalistic principles
Heydebrand's (1977) analysis ofthe bureaucratis- of bureaucratic organisational control appear to
ation of the American legal profession. have corresponded to much wider, and deeply
rooted, ways of visualising the world and using
Bureaucratic control language.
As I have already suggested, the apogee of
bureaucratic control corresponded to the post-war It is difficult, if not impossible, to peel down and
period of growth and development in the Western succinctly capture the nature of the bureaucratic

Hoggett: A new management in the public sector? 245


TABLE2 own antithesis, an antithesis perhaps summarised
Essential characteristics of bureaucratic most succinctly by Kanter (1984) through her
organisation analysis of organisational segmentalism. The
problem of segmentalism (or 'departmentalism',
Dominant principle Inevitable consequence
'divisionalism') becamerecognised asa basic dys-
function of the bureaucratic form which emerged
in terms of the tension between the principle of
Centralisation Segmental ism
ordered and centralised command on the one hand
Formalisation Informal strategies for
'making out';
and the necessary forms of functional specialis-
Discretion. ation within complex bureaucracies on the other.
Where this tendency towards functional special-
isation overlapped with forms of professional
interest group structure then the resulting com-
organisation. Whilst Weber's 'ideal type' of model partments tended to be driven far more by the
remainsa valid exposition of the basic dimensions needs of occupational interest groups than the
of bureaucracy, somehow or another it lacks suf- requirements of the firm (and in the context of the
ficient vividness to capture the main dynamics state this presumably provides some explanation
of bureaucratic control. Countless subsequent for the behaviour of bureaucrats as 'budget maxi-
attempts have been made to capture 'the essence' misers'). Paradoxically, then, far from resembling
of bureaucracy (Albrow, 1970). Some have monolithic structures, large bureaucratic organis-
pointed to the strongly mechanistic nature of ations were much more akin to 'pluraliths'.
bureaucratic strategies (Morgan, 1986); others The formalisation of organisational life, which
(e.g. Aucoin, 1990) have noted the 'highly stan-
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perhaps was the other essential characteristic of


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dardised systems of co-ordination and control, bureaucratic control strategies, also produced its
and excessive attention to formalised procedures' own antithesis. Within organisational sociology
(p. 198). Others have noted the primacy of imper- the 'symbolic interactionist' literature was con-
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sonal forms of regulation, of objectivity, of detailed cerned primarily to study the informal strategies
prescription and differentiation. Indeed, it may adopted by people within bureaucratic organ-
come as a reassurance to many public sector isations to subvert the formalised and regu-
workers that such forms of organisational life
latory regimes in which they found themselves
appear to have been as prevalent within the post- immersed. Within the social policy literature the
war private sector as within government, health samephenomenon becomesexplored through the
and other social servicesagencies. concept of 'discretion', 'a ubiquitous phenomenon
However, to fully appreciate the nature of organis- linked to the inherent and logical limits to control'
ational bureaucracy, it is necessary to get away (Ham and Hill, 1984).
from those mechanistic ways of thinking which
An analogy may be useful here in enabling us to
were so much a part of the bureaucratic world,
think through the character of the organisational
ways which felt uncomfortable with handling
regimesduring the bureaucratic era. Leaving aside
paradox, contradiction, and conflict. In Table 2 I
the issue of coercion, a very close comparison
attempt to outline some of the essential character-
can be made between the experience of working
istics of bureaucracy, but in a way which demon- within bureaucratic regimesand the social experi-
stratesthe essential contrariness of bureaucracy (a
ence of citizenship in post-totalitarian regimes
contrariness which bureaucratic ways of thinking
within eastern Europe (Havel, 1987). Within both
could neverfully apprehend).
regimes we find an ascendant principle of regu-
Anyone familiar with large private sector latory control through attempts to define, specify
companies in Britain (e.g. British Aerospace), or and regiment all aspects of social life. We might
with the National Health Service and local govern- think of such systems as bureaucratic command
ment in Britain in the 1970s would be familiar structures - an attempt to reach out and control
with the many highly autonomous departments, all pores of society/organisation. The point is that
enclaves and territories which characterise these where no formalised freedoms exist then the result
large bureaucratic formations. Nevertheless,there is widespread, informal subversion. And this is as
is still some truth in suggesting that the dominant true within British local government or British
characteristic of such bureaucratic forms was cen- Aerospace in the 1970s as it was within eastern
tralisation, the problem being that such processes European societies under Brezhnev, Husak, etc.
of centralisation in themselves constituted their The problem for bureaucratic regulationists was

246 Policy and Politics


their failure to understand that people are always changes in the market environment. By the mid-
both objects and agents of social and organis- 1970s both of these conditions had altered.
ational processes. So, rather than seeing informal Turbulence within the market environment (par-
subversion and discretion as 'dysfunctions' of ticularly after the Opec oil price rise in 1973) had
bureaucracy, we need to adopt a position from become the norm and if organisations lacked the
which we can see how such phenomena are internal capacity to adapt to changed market con-
actually constituted by bureaucracy, and essential ditions, they would quickly go to the wall. Morris
to its very nature. Suzuki (1984, 1986) termed this new phase of
Incapable of containing mentally the notion of capitalist development 'the Permanent Innovation
such paradox, bureaucratic agents persisted in Economy' (PIE). The need for a much greater
seeing segmentalism and discretion as aspects of degree of innovation (or at least, an ability to
imitate the innovations of competitors) has meant
bureaucratic dysfunction which could be con-
that organisations have had to harness the poten-
trolled and remedied. The problem, however, was
that the remedy was essentially 'more of the same'. tial of their own 'expert labour' far more shrewdly
than was possible under bureaucratic regimes-
Bureaucracies attempted to cope with discretion
the problem for bureaucracies was that it was diffi-
via more regulation, renewed efforts to assert hier-
cult for talent to flourish within regimes charac-
archical control, more information gathering and
terised by regulation, formality, and delegation
monitoring, and so on; in other words, by more
upwards.
bureaucracy. So the spiral continued. Similarly,
as I have noted elswhere (Haggett, 1990), faced To summarise, the demise of bureaucratic control
with the disintegrative processes of segmentalism, strategies was made possible by alterations in
bureaucracies tended to fall back upon traditional technique which revolutionised the handling of
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methods of asserting control and in doing so information concerned with the planning, design,
merely exacerbated existing tensions. Thus, the co-ordination and supervision of production. But
centre of the organisation reacted to the emerg- this demise was made imperative by the develop-
ence of divisionally based, or departmentally ment of PI E, turbulent market conditions and (par-
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based, power centres by seeking to impose greater ticularly for state democracies) the fiscal crisis of
degrees of corporate regulation and control. the state itself.
'Centralised units devoted to development of By the 1970s, mechanistic and rationalistic
corporate strategy grew like Topsy, budget- approaches to management, e.g. management by
making processes became geared to under- objectives, had more or less had their day (except
mining the dysfunctional autonomy of the in the British public sector where they were under-
corporate sub-units, the culture of mistrust going something of a renaissance). Signs of new
necessitated the enforcement of the principle thinking were clearly beginning to emerge through
of 'delegation upwards', and so on' (Hoggett, the work of the Palo Alto school of 'communi-
1990, p, 10). cations theory' (Watzalwick, Beavin and Jackson,
Increasingly, then, the centre of bureaucracy was 1968) and the important work of Gregory Bateson
forced to adopt a policing role which led it towards (1973). Bateson studied complex forms of animal
progressive encroachment on routine and admin- learning and applied this to theories of learning
istrative operations and details themselves. Hence within family and social systems. This in turn
the constant experience of policy makers within became the basis for thinking through issues
state bureaucracies in the later 1970s and 1980s of of imitation and innovation within management
being bogged down in detail, of never having time learning. What some have referred to as the 'New
to focus upon real strategic issues. Wave' of management writing (Wood, 1989)
really began to take off in the early 1980s with
The demise of bureaucratic control the work of Tom Peters and others (Peters and
Such 'dysfunctions' could be contended with so Waterman, 1982; Peters, 1987; Kanter, 1984). The
long as the bureaucratic form was congruent with book by Peters and Waterman (1982) announced
prevailing market and technological conditions. In itself as a full-blown critique of the basic mana-
terms of their liking for centralisation, massifica- gerial assumptions of the bureaucratic era. This
tion and 'the vertical integration of production' single text has had a most remarkable impact upon
bureaucracies seemed geared to the mass pro- the rhetoric, if not the practice, of managers in
duction of goods and services. Moreover, the the British public sector producing a plethora
giant, slow moving organisations which emerged of 'Excellence' seminars, conferences and even
during this period could not respond swiftly to annual awards (e.g. the winner ofthe annual Local

Hoggett: A new management in the public sector? 247


Government Chronicle Leadership Award earns of schools (Burgess, 1986). The Cambridgeshire
the chance to go on a two week Tom Peters 'skunk model became very much the prototype for the
camp'). government's Educational Reform Act in the third
At a broader level the crisis of bureaucratic regu- term of the Conservative Administration. Within
lation within the British public sector is signalled the local authority housing service progress was
clearly by the arrival of the first Thatcher govern- much more uneven, most of the innovation occur-
ment in 1979. Interestingly enough, the first at- ring at the very localised level of the individual
tempts to begin to develop more debureaucratised housing estate. Here the government's own Pri-
approaches to management within the public sec- ority Estate Programme initiative was instrumental
tor came from the 'municipal left' in the early in disseminating ideas concerning the creation of
1980s. A large number of largely Labour controlled estate-based budgets but a number of local auth-
local authorities embarked upon the administrative ority housing departments, particularly Glasgow
and political decentralisation oftheir services in an and Rochdale, had also pioneered such highly
attempt to enhance the popularity of such services localised forms of resource devolution.
in the face of the threat of privatisation (Labour What one detects in all of these developments
Co-ordinating Committee, 1984). Throughout the across a range of service areas is a process of
1980s we developed first hand knowledge of management learning which moves backwards
such developments through our work as consult- and forwards between local and central levels of
ants and researchers to such local authorities government. That central government was quite
(Hambleton and Haggett, 1984; Haggett and capable of picking up on innovations from a dis-
Hambleton, 1987). What eventually became clear parate range of institutions was demonstrated
however was that many of these initiatives were most clearly through its own proposals for the
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going to amount to little more than an attempt to reform of the civil service, proposals which drew
disperse services spatially into districts and neigh- quite heavily upon the Swedish model of state
bourhoods. Management control often remained administration (Fudge and Gustafsson, 1989). As
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quite hierarchical, comparatively little progress a result, the Ibbs Report Improving management in
was made in devolving managerial decision- government: the next steps (1988) recommended
making. Nevertheless by as early as 1984 the Audit reconstituting much of central government along
Commission was taking note of the fact that the lines of a devolved or 'executive agency'
decentralised arrangements appeared to have an approach.
impact upon organisational efficiency (see the
Audit Commission document Bringing council By the late 1980s devolved approaches to man-
tenants' arrears under control, 1984). agement were being heralded by the Audit Com-
mission very much as if they constituted the new
It wasn't until the mid-1980s that real progress in orthodoxy for the public sector to follow (Audit
creating more devolved managerial forms began to Commission, 1988, 1989). Clearly we should re-
occur. In the National Health Service 'cost centre main sceptical of the extent to which such ideas
budgeting' was introduced through the Griffiths have taken hold of the practice of public sector
reforms in 1984 (Petchey, 1986). Within Social managers as opposed to the rhetoric. There has
Services a number of Shire County Social Services
been considerable resistance to such change from
Departments began to experiment with more trade unions, managers and politicians alike. Inad-
devolved approaches to management - the equate, and often manually based, financial infor-
Eastbourne Area Social Services Team in East mation systems presented a major block to many
Sussex was probably the first to acquire fully such developments as did the attitudes and prac-
devolved financial and personnel powers in 1987. tices of the many powerful senior officers within
Such developments were followed closely by the centralised financial, personnel and legal sections.
Social Work Inspectorate of the then Department However it would seem that the further extension
of Health and Social Security. This led tothe publi- of competitive tendering through the Local
cation of a major package oftraining materials, The Government and Housing Act of 1989 has finally
decentralisation of social services departments provided the catalyst for a major shake up of
(1988) which encouraged further developments. central services. Three basic models for the re-
The Department of Education and Science (DES) organisation of central services appear to be
had been similarly interested in developments in emerging. The first opts for a radical devolution of
Cambridgeshire's Education Department, where financial and personnel functions to the main ser-
attempts were being made in the mid-1980s to vice departments. The second, for the creation of
devolve financial management down to the heads an internal market for support services through the

248 Policy and Politics


construction of Service Leval Agreements (C IPFA, The first thing to appreciate is that under con-
1988). The third reconstitutes support services ditions of post-bureaucratic control an essential
along the lines of 'Quasi Trading Units' -the dif- bifurcation develops between strategic and oper-
ference being that in this case service departments ational levels of organisational work. The new
can 'shop outside' for support services if internal paradigm comprises a paradoxical development
suppliers are felt to be inappropriate or inadequate through which radical forms of operational decen-
(LGTB,1990). tralisation become combined with the further
centralisation of strategic command. In the case
The kinds of developments I have outlined all share of international companies operations may be
the same essential characteristic - the devolution devolved and distributed across several continents
of previously centralised managerial powers to the but overall strategic control remains tightly cen-
operational level. It is important to understand that tralised, albeit within vastly reduced company
such forms of structural change do not necessarily headquarters. Fergus Murray coined the phrase
imply an equivalent change in the culture of public 'the decentralisation of production and the cen-
sector management. Much ofthe new managerial- tralisation of command' to describe these pro-
ism also gives emphasis to changes in style and cesses at work in Italian companies such as Olivetti
approach - to 'learning from the customer', 'valu- (Murray, 1983). In the case of state institutions
ing one's staff, being clear about one's 'core operational devolution to schools, hospitals, ex-
values', etc. Whether such principles are taking ecutive agencies, etc. occurs in the same movement
hold as the new values-in-use or whether they as the centralisation of strategic command via
remain simply 'espoused values' (Argyris and enhanced control over expenditure, the national-
Schon, 1978) remains a moot point. As I have isation of the curriculum, etc. (Walker, 1988).
suggested elsewhere, more devolved patterns of
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management within the public sector are compat- The key point is that such processes of decentral-
ible with a range of political and institutional ob- ised centralisation occur at all institutional levels.
jectives-they can lead towards more genuinely They are as pertinent to our understanding of the
relationship between the centre of a social services
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emancipatory forms of public service manage-


ment, but they can also be the means of achieving department and its devolved area teams as they
a much greater degree of financial control and are to an understanding of emerging patterns of
service rationalisation (Hoggett and Bramley, central-local government relations. The point is
1989). To understand this fully we must examine that this new form of organisational control pro-
in much more detail the nature of decentralisation vides the basis of the articulation of the full range
as a dimension of the restructuring process in the of traditional political projects but in a contempor-
private and public sectors. ary organisational form. Institutions committed to
the pursuit of egalitarian values could benefit from
the centralisation of strategic command as much
Towards post-bureaucratic control? as those committed to the strategy of cost-control.
'The centre may not be 'doing' the work in a
decentralised organisation, but it makes sure The second issue to appreciate is that decentralis-
that it knows how the work is going. The new ation may assume two basic forms - internal or
technology, of course, makes it even easier for external. Under internal decentralisation oper-
that information to flow more copiously and ational management is devolved to internal units
more immediately than ever, making it even within the organisation. In the context of the pub-
easier to contemplate still further decentralis- lic sector I have suggested that we use the term
ation, in theory at leasf (Handy, 1989, p. 94). 'devolved service unit' (DSU) to describe the new
generation of schools, libraries, leisure centres,
It is the revolutionary advances in the automation area housing and social services teams, etc. oper-
of information handling which have provided the ating within decentralised health and local
conditions necessary for entirely new approaches government authorities. Under external decentra-
to organisational control. The concept of decen- lisation, operations are devolved to units and
tralisation is crucial to an understanding of the agencies outside the organisation altogether, i.e.
emerging post-bureaucratic forms of organisation contracting out. The point is that under conditions
both within private and public sectors. However of maximum internal or external decentralisation
we tend to have a number of preconceptions con- the nature of control is actually the same - i.e.
cerning the term 'decentralisation' which should control by contract - it is just that in the first
be suspended if we are to grasp the full meaning situation operations are 'contracted in' rather than
which I wish the term to convey. out.

Hoggett: A new management in the public sector? 249


This brings us to a third essential characteristic of the creation of 'executive agencies' within the
decentralisation. It is equivalent to a fundamental British civil service (Winckler, 1990, pp. 149-50).
shift in the focus of organisational control- from Full devolution of operational control to service
a concern for internal methods and procedures to managers can only occur within a set of clear
a concern for results. As I have previously noted boundaries which include 'the kind of results' the
commentators such as Aucoin (1990) have organisation is looking for. What emerges then is
suggested that we think of the era of bureaucratic a form of non-legal contract between the centre
control as one corresponding to that within which and the devolved service units in which the centre
the discourse of Public Administration dominated prescribes the framework (including values, ob-
our thinking about the organisation of the state. jectives, targets, etc) within which the DSU can
Central to this was 'the adherence to formalised operate and the DSU describes clearly the forms
processes and procedures' (p. 118) as opposed to of support it requires to convert its enhanced
concern for results, performance, outcomes and organisational freedom into results. Whether such
effectiveness (p. 197). Charles Handy makes a 'contracts' give most emphasis to the specification
similar point regarding the shift in thinking within of inputs, outputs or outcomes will vary according
private sector management in the 1980s. He to the strategic objectives underlying the devol-
speaks of the increased pressure for results and ution. Whereas cost-led strategies will prioritise
the need for organisations to deliver. He adds, inputs, quality-led strategies will give emphasis
'organisational fashion used to imply that the work to outcomes and outputs. In most public sector
of most of the organisation could be precisely organisations in Britain the actual nature of the
described and defined, and therefore carefully strategic objectives underlying devolution are by
monitored and controlled' (p. 103) whereas now no means unproblematic. They cannot be simply
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organisations have to be managed by specifying read off from the formal statement of an organis-
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'the essential core' and 'by being clear about ation's values. Because pressures to control costs
boundaries and areas of discretion by specify- are so great there is a tendency for organisations
ing the kinds of results which are required' (pp. to espouse service quality whilst privileging cost-
Copyright The Policy Press

103-4). control.
This new concern for results rather than methods Another way of thinking about this notion of
and procedures corresponds to the abandonment control by contract is to return to the problem
of control by hierarchy and its replacement with of discretion within bureaucratic organisational
control by contract. The development of commer- regimes. The post-bureaucratic organisation seeks
cial contracts between purchasers and suppliers is to overcome 'the problem' of informal discretion
just one manifestation of a much broader move- by replacing it with 'formalised freedom'. It is
ment towards contractual relationships within the important to note that the emphasis of much of
contemporary management process, the point the 'New Wave Management' (Wood, 1989) on
being that fully decentralised organisational 'intraprenneurialism', 'looseness', chaos, etc. is not
arrangements are incompatible with traditional so much a sign of a shift towards a greater degree
forms of hierarchical control, irrespective of of informality within organisations as it is of a
whether these arrangements are internal to the licensing (and hence control) of the informal that
organisation itself or an expression of external forms an inevitable part of all working environ-
decentralisation (i.e. contracting out). As I have ments. Cooper and Burrell (1988) note how the
said before my main interest in this paper is to look bureaucratic mentality could never get to grips
at internal forms of decentralisation. I have argued with the paradox of formality within organisations.
elsewhere (Hoggett. 1990, p. 21) that in Britain They suggest that 'post-modernist' approaches to
the impetus towards forms of external decentralis- the analysis of organisational life celebrate such
ation (i.e. contracting out) has come essentially contradictions rather than seeing them as irresol-
from the Conservative government. The objective able conceptual problems, They note, 'the formal'
underlying this strategy is clearly cost control and and 'informal' reflect each other like the obverse
hence, contrary to Aucoin's suggestion, it has and reverse sides of a coin; to the extent that they
focused more upon the specification of inputs in can never be separated, they are not just mutually
contractual relationships than upon outputs and defining but can be said to be self-referential'
results. (p. 109).
Cost control can clearly also be the main strategic This development of formalised informality within
objective underlying forms of internal decentralis- organisations is equivalent to the abandonment of
ation. Arguably this is the primary impulse behind regimented and regulated orders by more liberal

250 Policy and Politics


regimes of organisational authority. We might add individuals exercise freedoms within agreed frame-
that such liberalisation can itself assume a number works of conduct. Laws only tend to be invoked
of quite different forms - from being just another when such boundaries fail to contain behaviour
variant of what Marcuse once described as 'repres- and transgression occurs. In this sense laws (a par-
sive tolerance' to more genuinely emancipatory ticular kind of rule) act as a sign or marker-we
forms of institutional relationships. Such liberalis- tend to behave within accepted frameworks not
ation processes seek to harness human agency because 'there is a law about it' but because of the
rather than regulate it, the latter being an imposs- internalisation of certain standards for which laws
ible task as we have already seen. In this sense the act primarily as signifiers. So liberal-democratic
new organisational regimes are far more subtle in regimes rely heavily upon the power of socialis-
their use of power, they insinuate themselves upon ation processes to regulate behaviour, and the
our better nature - as a quick scan of the work of same is true for the new forms of organisation.
Tom Peters (1987) quickly reveals. Hence the paramount importance given to the
concept of 'organisational culture' and 'cultural
In summary, then, I would suggest that post- change' within the management literature of the
bureaucratic organisational regimes recognise the 1980s (Schein, 1985).
inevitability of human agency within organis-
ational life and therefore seek to formalise free- The concept of 'freedom within boundaries' is
doms for it. Managerial devolution is therefore therefore central to the post-bureaucratic organis-
equivalent to 'freedom within boundaries', i.e. a ation. But the creation of radically devolved forms
form of regulated autonomy. It is to an inves- of operational management corresponds to a
tigation of this notion of 'freedom within transformation in all aspects of management, par-
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boundaries' that I now turn. ticularly in the role of the centre. In Table 3 I
attempt to sketch these changes.
Freedom within boundaries
Copyright The Policy Press

If control is to be devolved rather than abrogated The role of the centre is crucial in all this. There are
then devolution must take place within a given many who have argued that organisational decen-
framework or set of boundaries. Within organis- tralisation sounds fine in theory but in practice it
ations these boundaries consist essentially of sets would crucially weaken the ability of the centre
of rules and expectations, for exampe rules relating (and hence of the elected local or national poli-
to financial control or expectations relating to ticians) to direct and influence policy. But as
standards of performance. Without such bound- Handy (1989, pp. 95-6) notes, in the end organis-
aries there could be no accountability. The point ations 'have to stop trying to run everything from
about such boundaries is that they both open-up the centre, they have to begin to let go'. The
and close-off, they define what can be done and paradox of contemporary developments is that it
what can't be done, they constitute a space for is precisely by letting go of operational matters
legitimate action whilst precluding certain other that strategic command can be concentrated more
actions as illegitimate. This holds for any kind of effectively at the centre. The Thatcher government
rule irrespective of whether it consists of a 30 mph appeared to clearly appreciate this paradox. Its
speed limit, a rule relating to financial underspend- 'Next Steps' strategy was designed to increase
ing or to the invoicing of sub-contractors. In other efficiency in resource management within the
words a boundary constitutes both a constraint British civil service by re-organising it on a
and a freedom. devolved 'executive agency' basis whilst simul-
taneously enhancing the executive authority of
Typically people operating within bureaucratic Ministers over their departments (Kemp, 1990).
environments found that they could never do At the local governmental level it also tends to
anything (other than a strictly limited number have been Conservative councils who have been
of actions prescribed by their job specification) quickest to appreciate the nature of this paradox.
without first going 'back up the line'. This was Many Labour controlled local authorities have
how 'control by hierarchy' was experienced at the strongly resisted devolution, particularly of finan-
individual level. Because the boundaries were so cial and personnel powers, because of a feeling
tightly drawn they invited rule-bending as a that it would undermine the ability of elected
modus operandi. In a sense the development of politicians to direct local affairs. In reality I would
post-bureaucratic organisational forms is equiv- argue that it is only by embracing the new devel-
alent to the creation of more liberal-democratic opments that Labour politicians have any real
organisational regimes. Within such democracies chance to shape and direct events at a local

Haggett: A new management in the public sector? 251


TABlE3

Function Contribution to devolved management

Strategic leadership Responsible for making sure the boundaries


are set - e.g. the core values, strategic
C priorities, minimum performance standards,
E non-negotiable personnel and financial rules.
N
T Regulation/Control Monitoring/policing of boundaries.
R (e.g. performance review)
E
Support services Supports managers/staff in using new freedoms.
(e.g. accountancy, training)

Operational management Adapts strategic priorities and objectives


to local needs; may create local policy;
manages available resources to produce the
most effective 'input mix' to achieve efficient
and responsive service.

level- even the cut-back local councils of today 4. Has the unit any control over what services
are far too complex an organisational system to be it provides, how they are provided, and to
controlled from the centre. whom?
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What then is the role of the centre vis-a-vis the


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Taking each of these in turn we have suggested


devolved units in the post-bureaucratic organis- elsewhere (Hoggett and Bramley, 1989) that there
ation? Firstly to establish and maintain the corpor- are of course choices to be made in terms of how
ate culture, or, in today's jargon, to create the far an organisation wishes to go. Regarding the
Copyright The Policy Press

vision or mission around which the new, liberal- budget itself a prerequisite is that control over
consensual organisational regime can be con- the revenue budget should be delegated to oper-
structed. Secondly, to be absolutely clear about ational management as well as a budget for all
the kinds of results it is looking for from operational non-major capital items. Typically the centre will
managers through the provision of practical objec- maintain tight control over the allocation of such
tives and performance targets. Thirdly, to develop budgets but devolved units may be granted (or
frameworks for monitoring, evaluation and in- may claim) influence through lobbying and bid-
spection both to encourage, reward and develop ding processes. Even if the devolved unit has no
performance and to police the boundaries for control over the central allocation it may have
possible transgression. The key point is that it no power to raise extra revenue. Schools (through the
longer has line-management (i.e. control through work of PTAs) have traditionally had such powers,
hierarchy) responsibilities and therefore no longer but housing teams may also be given the power to
needs those layers of senior managers (assistant develop agreements with tenants tying rents to
directors and principal officers) whose role, under services (this has been tried in Glasgow and else-
the old regimes, always contained an ambiguous where) or decentralised neighbourhoods may be
mixture of policy and administration. In the private granted the power to generate and keep their own
sector, the term 'down-sizing' is given to the capital receipts (as occurs in the London Borough
process of peeling off layers of redundant staff at of Tower Hamlets).
the centre.
Control over how the budget can be used (i.e.
Delegated powers expenditure control rules) constitutes an essential
What then are the managerial freedoms which facet of the boundaries within which the new
become delegated under the new organisational freedoms may be exercised. A consensus seems
arrangements? We can approach this issue by to be emerging, encouraged in part by the Audit
asking four questions: Commission document Towards better financial
1. Has the devolved unit its own budget? management (1989), which challenges overly
2. Has the unit any control or influence over the restrictive approaches to expenditure control.
size of this budget? Considerable scope for virement of sums between
3. What control does the unit have over how different budget heads can be provided so long as
this budget can be used? certain rules, e.g. preventing virement from capital

252 Policy and Politics


into revenue budgets, are observed. Previously services) or to deliver existing services in radically
restrictive rules concerning underspend have also new ways.
been challenged providing managers with a much We have recently been involved in an extensive
greater degree of flexibility in terms of how they examination of decentralisation initiatives in the
use their resources. Many local authorities are London boroughs of Islington and Tower Hamlets
now delegating 'client side' functions to the level (Hambleton, Hoggett and Franklin, 1991). The
of the DSU so that schools, estate teams, leisure research throws much light on many of the politi-
centres, acquire direct control over tendering cal and managerial choices which can shape such
processes. approaches to public service reform. Decentralis-
Finally there is the crucial question of the DSU's ation in Tower Hamlets has been led by the local
ability to influence policy. The new arrangements, Liberal Party which took control of this area of
as we have noted, provide the conditions for a London's East End in 1986 (the local activists
much greater degree of centralised control over eschew the new title 'Liberal Democrats' adopted
strategic issues. The point is however that whilst by the national party to which they belong). The
the centre is responsible for the organisation's Liberals totally reorganised the vast majority of
strategic direction it does not have to perform this services that the borough traditionally provided by
strategic role itself, it merely has to ensure that it placing them under the de facto control of seven
gets done. Centralised responsibility for strategy neighbourhoods. Political control of each neigh-
is one thing, the centralised creation of strategy bourhood corresponds to the strength of the
and policy is something entirely different. It is of political parties in that area. A deliberate and
course quite possible to envisage an organisation systematic attempt has been made to restrict the
in which operational units have radically devolved power of the corporate centre so that the autonomy
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financial and personnel powers and yet have no of neighbourhoods could be maximised.
control over what services are produced, how they Such a radical approach to political and managerial
are delivered or to whom. It is equally possible to devolution has provided the conditions necessary
envisage an organisation, say for instance a social
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for the creation of locally specific policies. Thus,


services department, within which area teams are for example. the Stepney Neighbourhood. which
accountable to sub-committees of locally based was controlled by Labour between 1986 and 1990
councillors and user groups and where the free- quickly developed a reputation for allocating
dom exists not just to develop local services which resources to its local community and voluntary
can respond to local needs but also to shape and sector primarily as a means of diverting resources
influence the overall strategic direction of the to the neglected local Bangladeshi community.
department. This brings us back to the question of Globe Town, which has been controlled by the
the values of the organisation and how the Liberals since 1986, has experimented with the
newly emerging post-bureaucratic forms have the further devolution of powers to much smaller areas
capacity to realise a range of different service and with the encouragement of tenant manage-
objectives. ment co-operatives. Two other Liberal controlled
If an organisation simply devolves financial con- neighbourhoods- Bethnal Green and Bow-
trol whilst retaining tight centralised control over gave priority to massive estate modernisation pro-
policy making then it may certainly achieve greater grammes. Of course once operational units have
control over costs and encourage innovation in been given power to make local policy then tra-
the use of resources at operational levels but it ditions of uniformity in service provision may be
may have done nothing to improve the degree of replaced by rampant diversity as our own research
responsiveness or local accountability of services. in Tower Hamlets is currently revealing. Deakin
Devolution will only permit greater responsiveness and Wright raise this issue regarding decentralis-
if DSUs either have the ability to create locally- ation when they allude to the problem of 'equity
specific policies or to interpret and adapt corporate and maintaining common standards - how much
policies to local requirements. For example this diversity is tolerable if these other standards are to
would imply that devolved units had the power to be met?' (1990, p. 205).
target services towards the needs of particular In contrast, the London Borough of Islington has
groups (e.g. elderly people, children with special been far more cautious in granting autonomy to its
learning difficulties, etc.) or to introduce entirely 24 neighbourhoods. This is partly a reflection of
new kinds of services to a particular area (e.g. a the tradition of tight centralised political control
community education initiative attached to a local which has been a feature of Labour's leadership in
library, a support unit for survivors of psychiatric this borough. However it is also a reflection of the

Haggett: A new management in the public sector? 253


genuine commitment of both officers and poli- to open up the space for new political roles at
ticians in Islington to equal opportunity policies the grass roots level and for much greater user
and a concern that radical devolution could under- involvement at the point of service delivery. With-
mine this commitment. However neighbourhoods out managerial devolution there really was very
have had sufficient autonomy to interpret central little point in users becoming involved in service
policies in a way which was responsive to local delivery matters except as complainants and
requirements. In Islington, unlike Tower Hamlets, antagonists, but once real power over decisions
no single ethnic minority group dominates, instead and resources has been located at the point of
a large range of smaller communities can be found delivery user- based forms of local democracy
dispersed in different parts of the borough. How- become a more tangible possibility. The fasci-
ever decentralisation has enabled neighbourhoods nating question is whether such involvement will
to respond more flexibly to the needs of the par- lead to an increased bottom-up demand for public
ticular groups in their area - the Irish in the north resources or whether it will absorb and side-track
of the borough, Turkish Cypriots in the east, and such demand. This would appear to be a useful
soon. topic for anyone researching the new school
governing bodies to look at (Jones and Stewart,
As by now should be clear our view is that devol-
1990) !
ution, even in its radical forms, is not incompatible
with a commitment to egalitarian values. In Tower Bureaucracy, professionalism and beyond
Hamlets a strategic decision was made by the In this final section I would like to return to some
Liberals to restrict the role of the centre as much as of the issues raised at the very beginning of this
was practically possible. But even here we have article concerning the different models of organ-
found that the power of the centre has tended to
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isational control to have emerged, particularly


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re-assert itself. By devolving control over oper- during this century. We noted the tension between
ational matters the strategic centre is freed up from bureaucratic and professional models of control
absorption in day to day administrative detail. This and the development of the attempt to 'subdue'
Copyright The Policy Press

facilitates a much greater degree of centralised professionalism through bureaucratic manage-


command over those policies which provided the ment. In Britain in the 1980s this struggle was
boundaries within which managerial freedom can most obvious in the tension between the medical
be exercised. Decentralisation is an innovation in profession and the new generation of 'General
the organisational means through which policies Managers' introduced into the N HS after the
and services are delivered; as such it is compatible Griffiths Report in 1984.
with the full range of possible political and ad-
The Griffiths reforms within the NHS very much
ministrative values including egalitarian ones.
stand at the watershed between the old and the
Indeed at this very moment Islington is itself
new paradigms. They contained elements of the
embarking upon a programme of financial devol-
old (rational planning, corporate management,
ution to its neighbourhoods in the belief that
etc.) (Day and Klein, 1983) but also some el-
central controls over equality policies are now
ements of the new thinking. The introduction of
securely established.
'cost centres' within the NHS was very much part
A final question to examine is the relationship of the latter, and we can see how current govern-
between post-bureaucratic forms of public insti- ment proposals (self-managing units, General
tution and democratic accountability. This is a Practitioner budgets) build upon this approach
complex issue and one should be wary of provid- (Hoggett, 1990, p. 23). The essential difference
ing premature answers. Certain questions can be between the old and the new thinking seems to
raised however. The radical left and the radical be this: rather than attempt to strengthen 'man-
right may differ in terms of their preference for agement' in order to control 'professionals' the
internal or external decentralisation (the right pre- strategy shifts towards creating managers out of
ferring to contract-out, the left preferring to main- professionals. Suddenly doctors, headteachers,
tain a public monopoly of service provision) but senior social workers, etc. find themselves man-
whatever the preference a much greater degree of aging a budget (often measured in £ millions).
administrative and spatial separation of strategic invoicing contractors, switching money out of one
and operational matters is likely in the future. A budget heading into another, developing strat-
slimmed down centre would appear to be incom- egies for dealing with vacancy levels, etc. A new
patible with a large and unwieldy political execu- generation of unit managers begins to emerge who
tive. On the other hand the creation of a whole combine technical expertise with managerial com-
new layer of devolved service units would appear petence. As Burris (p. 12) notes, professional/

254 Policy and Politics


bureaucratic conflicts are not so much being Argyris, C. and Schon, D. (1978) Organisation learning:
extended as transcended as the new form of con- a theory of action perspective, Reading, Mass;
trol strategy (one she calls 'technocratic' rather Addison-Wesley.
Aucoin, P. (1990) 'Administrative reform in public
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management: paradigms, principles, paradoxes and
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Burgess,T. (1986) 'Cambridgeshire's financial manage-
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In this essay I have tried to develop a hypothesis CIPFA (1988) Accounting for support services,
which could provide a framework for understand- London: Chartered Institute of Public Finance and
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Clegg, S. (1981) 'Organisation and Control', Adminis-


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within the private sector since the early 1970s. Studies, 9.1, 91-112.
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