Third Edition

1. Introducing Public Administration Third Edition Chapter 7 . . . . . . . . . . . . . . . . . . . . . . Managerialism and Performance Management Jay Shaftitz & E. W. Russell Dr. Wasim Al-Habil.

2. Chapter Seven Managerialism and Performance Management

3. Key Topics • Definition of Managerialism • Definition of Reingineering • New Public Management • Performance Management • Total Quality Management

4. Managerialism is “an entrepreneurial approach to public management that emphasizes management rights and a reinvigorated scientific management.”

5. Beginning of Managerialism • In 1960s and 1970s, there was a vast expansion in the intellectual development and technical capabilities of PA. Organizations are created to serve human ends. • “Managerialism” as term has long been used by sociologists with reference to the economic and bureaucratic elites that run the industrial society. • James Burnham in his 1941 The Managerial Revolution announced that the world has in transition from capitalist or bourgeois to a type of society which we shall call “Managerial” in this chapter. • Now managerialism refers to efforts to force the bureaucracy to be more responsive to the needs of its customers.

6. Deterioration of PA • 1980s became a period of decline in the public service. • Decline included budgets, productivity, quality of services, and reputation of public services itself. • Managerialism came as trail of remedy to deal with all the different kinds of declining.

7. Types of PA Budgets • Planning, programming, budgeting systems (PPBS): It is a budgeting process that requires agency directors to identify program objectives, to develop methods of measuring program output, to calculate total program costs over the long run, to prepare detailed multiyear program and financial plans, and to analyze the costs and benefits of alternative program design. • Zero-based Budgeting: A budgeting process that is, first and foremost, a rejection of the incremental decision making model of budgeting. It demands a re-justification of the entire budget submission (from ground zero). • Incremental Budgeting: It essentially respects the outcomes of previous budgetary decisions (referred to as the budget base) and focuses examination on the margin of change from year to year.

8. Major Aspects of Managerialism • There are three aspects of managerialism: • Reengineering: It takes reorganization beyond its traditional focus by seeking to totally rethink and refocus how programs are managed and to take maximum advantage of new technology. • Empowerment: It reflects the paradox that managers can often make themselves more powerful by giving power away. • Entrepreneurialism: It calls for managers to be transformational leaders who strive to change organizational culture to develop a new vision for the organization and then convert that vision into reality.

9. Reengineering • Reengineering: It is the fundamental rethinking and redesign of organizational process to achieve significant improvements in critical measures of performance, such as costs or quality of services. • Reengineergin aims to: • Promote bureaucratic responsiveness to central executive control. • To professionalize administrative affairs.

10. Reengineering As Opposed To Incremental Change • The Message of Reengineering is that all large organization must undertake a radical reinvention of what they do, how they do it, and how they are structured. • Reengineering has no room for incremental improvement – for small and cautious steps. • It is the fundamental rethinking and radical design of business process to achieve dramatic improvements in critical contemporary measures of performance, such as cost, quality, service, and speed. • Reengineering is the search for new models for organizing work.

11. Becoming Reengineer • Reengineering is as much a mental discipline and a philosophy as it is a process. • Reengineering includes three steps: • Process Mapping: The flow charting of how an organization presently delivers its services and products as a process. • Customer Assessment: The evaluation of the organization’s customers’ needs, both presently and in the future, by means of focus groups, surveys, and meetings with consumers of the organization’s products and services. • Process Visioning: A total rethinking of how the work processes ought to function, keeping in mind the latest available technology.

12. Empowerment • Empowerment: It means giving a person or organization the formal authority to do something. • By empowering others, leaders actually acquire more “productive power”– the power truly needed to accomplish organizational goals. • Managers who cannot delegate, who will not trust or empower subordinates, become less and less powerful, and correspondingly more and more incompetent, as they increasingly seek to hoard power.

13. The Self-Directed Work Team • Self-directed work team: A work group that will accept responsibility for their processes and products – as well as the behavior of other group members. • Self-directed work team differ in several “revolutionary” way from conventional work groups: • Fewer job categories: Each member of a self-directed work team performs multiple tasks. • Authority: Because self-directed teams handle tasks that historically have been the purview of management, the teams need adequate authority. • Reward System: If self-directed teams are to produce their potential benefits, the organization needs to reward individual behaviors that promote team flexibility.

14. Entrepreneurialism • Entrepreneurialism calls for managers to be transformational leaders who strive to change organizational culture. • Each must develop a new vision for the organization and then convert that vision into reality. • Entrepreneur vision should not be limited to the top; at every organizational level managers need vision and dreams, need the ability to assess the situation and plan for a better future.

15. Entrepreneurialism • Entrepreneurialism calls for: • Management By Objectives (MBO): An approach to managing, the hallmark of which is a mutual setting – by both organizational subordinate and superior – of measurable goals to be accomplished by an individual or a team over a set period of time. • Organizational Development (OD): A process for increasing an organization’s effectiveness. As a process it has no value bias, yet it is usually associated with the idea of maximum effectiveness is to be found by integrating an individual’s desire for personal growth with organizational goals. • Quality Circle (QC): Small groups of employees working in the same organizational unit who, with the approval of management, voluntarily meet on a regular basis to identify and solve problems that directly affect their work.

16. The New Public Management (NPM) • The concepts of New Public Management (NPM) emerged in PA in the mid 1980s, it stressed dealing with citizens as “customers.” • NPM is a theory of governance that is heavily influenced by market theory and economic decision-making, public choice, principal agent theory and transaction cost economics in particular (Hood, 1991; Kaboolian, 1998), rather than civic choices. • NPM and the ‘Reinventing movement” turn the citizen into a customer, the public is removed and distanced from administration and in its place are free market principles. • Both these “theories” believe in entrepreneurship as proposed solution for government problems; entrepreneurs will use resources to maximize productivity and effectiveness.

17. The New Public Management (NPM) • NPM shifts the notion of public service to customer satisfaction. • Christopher Pollitt has four main aspects of NPM: • Market like mechanism • Decentralization • Improvement of service quality • Pursuing the wishes of the individual service user/customer.

18. NPM & Osborne and Gaebler • The early 90’s were marked with the effort to reinvent government; President Clinton’s effort to use Osborne and Gaebler’s “Reinventing Government” (1993) to transform government into an enterprise. • The goal was to bring government out of that “sluggish” state and end self-serving bureaucracy (Shafritz & Hyde, 1997, pg. 475).

19. 10 Principles of Osborne and Gaebler • Osborne and Gaebler’s (1992) Reinventing Government: How the Entrepreneurial Spirit Is Transforming the Public Sector introduced 10 principles for a massive government reform. • The 10 principles: • steering rather than rowing, • empowering rather than serving • injecting competition into service delivery • transforming rule-driven organizations (result-oriented government) • finding outcomes not inputs • meeting the needs of the customer not the bureaucracy • earning rather than spending • preventing rather than curing • from hierarchy to participation and teamwork • and market-oriented government.

20. Performance Management • Performance Management: It is, the primary responsibility of the organizational leader, the systematic integration of an organization’s efforts to achieve its objectives. • It includes the comprehensive control, audit, and evaluation of all aspects of organizational performance. • Closely associated with this is the concept of contracting, because individual or organizational goals are often embodied in quasi commercial contracts.

21. Productivity and Performance Management • Productivity: A measured relationship between the quantity and quality of results produced and the quantity of resources required for production. • Productivity is, in sense, a measure of the work efficiency of an individual, a work unit, or a whole organization. • Measuring productivity of an organization, program, or individual is particularly problematic in the public sector because of the problem of defining outputs and of quantifying measures of efficiency, effectiveness, and impact.

22. Components of Performance Management • Components of performance management include: • The specification of clear and measurable organizational objectives. • The systematic use of performance indicators to assess organizational output. • The application of the performance appraisal of individual employees. • The use of performance incentives. • The linking of human and financial resource allocation to an annual management or budget cycle. • Regular review at the end of each planning cycle of the extent to which goals have been achieved.

23. Total Quality Management (TQM) • Total Quality Management: A new phrase for quality control in its most expanded sense of a total and continuing concern for quality in the production of good and services. • It is a process to ensure that all aspects of an organization are performing at an optimal level.

24. Total Quality Management (TQM) • Edward Deming provides 14-point guide: • Create constancy of purpose for improvement • Adopt the new philosophy. • Cease dependence on mass inspection. • End the practice of awarding business on the basis of price alone. • Improve constantly and forever the system of production and service. • Institute training. • Adopt and institute leadership. • Drive out fear. • Break down barriers between staff areas. • Encourage education and self-improvement. • Take action to accomplish the transformation. • Eliminate slogans, exhortations and targets for the workforce. • Eliminate numerical quotas for the workforce. • Remove barriers that rob people of pride of workmanship.

25. Review