Public Sector Management

Week 3-4
Old Versus New Public Sector
Management & Beyond

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 Historical Review
• Major developments in research, theory, and thinking
about organizations and management have taken place
over the last century.

• Theories about motives, values, capacities have evolved.

• Theories are not impractical abstractions but frameworks

of ideas that play a key role in trends, practices, and so on.

• Historical overview illustrates generic theme and also sets

up controversy for debate about distinctiveness.
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 Old Public Sector Management
• Frederick Taylor and Scientific Management
• Time motion studies
• Workers increase well-being through productivity.
• Highly impersonal

3
 Old Public Sector Management
• Max Weber: Bureaucracy as an Ideal Construct
• Advanced organizations are grounded in rational-
legal form of authority and are superior.
• Defined the basic characteristics of a good
bureaucracy
• Bureaucracies can develop problems of
accountability.

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 Weber’s Bureaucracy
• Fixed, official jurisdictional areas are established by means of rules. The
rules distribute the regular activities required by the organization among
these fixed positions or offices, prescribing official duties for each. The
rules distribute and fix the authority to discharge the duties, and they also
establish specified qualifications required for each office.
• There is a hierarchy of authority, involving supervision of lower offices by
higher ones.
• Administrative positions in the bureaucracy usually require expert training
and the full working capacity of the official.
• Management of subunits follows relatively stable and exhaustive rules, and
knowledge of these rules and procedures is the special expertise of the
official.
• The management position serves as a full-time vocation, or career, for the
official.

5
 The Administrative Management School:
Principles of Administration
• Sought to develop principles of administration for all
organizational forms
• Ideas reflected in Gulick’s POSDCORB and Mooney’s Scalar
principle
• Emphasis on hierarchy and specialization
• Division of work based on task, geographic location,
interdependency of work processes
• Coordination of work
o Span of control
o One master
o Technical efficiency
o Scalar principle
6
Old model, crises & new model

7
 The Old Public Sector, Economy, Society &
Bureaucracy
• The public sector was considered as panacea
to all problems. The public Sector was heavily
involved in the production and distribution of
goods and services.
• The public sector had huge investments in
industries, finances and commerce as well
social services for citizens.
• Public managers were heavily involved in all
activities until 1970s
8
 Reactions, Critiques, and New
Developments
• What went wrong?
• Since the late 1970s, the public sector was
heavily criticized for being over-sized,
spending many resources but inefficient
compared to the relative efficiency of the
market.
• Market or private sector is considered more
efficient in terms of productivity, profit making
and incentives.
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 Reactions, Critiques, and New
Developments
• Bureaucracy was accused of:
• Inefficiency
• Rigid
• Avoiding risks
• Having inertia to innovation
• Corrupt
• Being apathetic to performance culture
• Being power monger

10
 Reactions, Critiques, and New
Developments
• The accumulated problems gave rise to
rethink the scope and role of the public sector
and the management practices of the
bureaucracy.
• The role and scope of the public sector is
reduced to involve the private and the non-
profit sectors (through contracting, franchise,
public-private partnership etc.)

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 New Developments
• On the other hand, traditional Weberian
management practices were reformed by
implanting market-oriented management
practices. The new system is popularly known
as New Public Management (NPM) or
Managerialism Entrepreneurial Government.

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 New Developments
• Characteristics of NPM
– The use of management practices such as strategic
management, Total Quality Management, market
orientation, organizational design, HRM and
remuneration practices. Broadly drawn from the
private sector.
– Operational autonomy of line managers
– Controlling public organizations through output and
outcome measures (performance measurement and
evaluation, program budget etc.
– Performance culture
– Use of market competition (contracting, joint ventures,
management contract out) etc
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 New Developments
• What differences do you see between the old
public sector management and NPM?

????????

14
From NPM to Collaborative Governance
• Relational governance is the study of
exchanges that include significant
relationship-specific assets combined with a
high level of interorganizational trust and “is
embodied in both the structure and the
process of an interorganizational relationship”
(Zaheer and Venkatraman, 1995, p. 374).

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• Many terms used interchangeably and not always
differentiated (e.g., P3, cross-sector partnership,
alliance, network)
– An alliance is “any agreement between two or more
organizations to jointly carry out a task involving more
interaction than the one-time arm’s-length contract”
(Rivera-Santos and Inkpen, 2009, p. 199).
– Network are “structures of interdependence involving
multiple organizations or parts thereof, where one unit is
not merely the formal subordinate of the others in some
larger hierarchical arrangement” (O’Toole, 1997, p. 44).
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 Reasons for Collaboration
• Most frequently cited reasons:
– To obtain needed resources (invoking theories of
resource dependence and resource-based view)
– To solve complex problems, also called “wicked
problems”

17
Collaboration to Solve Complex Problems

• A single organization is unlikely to have the

capacity or range of know-how to address
complex social problems (e.g., homelessness).
– Homelessness has implications for health, drug,
and employment policies, and so on (multiple
policy areas).
– Government increasingly turns to cross-sector
collaboration to address complex social issues of
this kind.

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Collaboration to Solve Complex Problems

• Problems can also be complex when they

involve a range of different stakeholders with
different views on how the problem should be
addressed. Example:
• Health care delivery
– A range of public, private, and nonprofit
organizations have a part in shaping how any
health program will operate.
• Community hospitals, labs, insurance companies

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