Week12 rainey chapter_14
- 1. Understanding and Managing Public Organizations Chapter 14 Advancing Effective Management in the Public Sector
- 2. The Performance of Public Organizations • Criticism of government is widespread but not universal. • Some popular management texts, such as Peters and Waterman’s In Search of Excellence (1982), brought management issues to light and stimulated thought about what it takes to be effective. • Many books mount the case for the value and record of government. – One example in this tradition: Goodsell (2003) pointed to myths and fallacies about public organizations and provided evidence that they do not always fit the stereotypes.
- 3. Profiles of Corporate Excellence • Peters and Waterman found eight themes that they argued were responsible for the success of select corporations. – A bias for action—avoid analyzing decisions to death – Close to the customer—have concern for quality, earning from the people served by the business – Autonomy and entrepreneurship—foster innovation and nurturing “champions” – Productivity through people—treat rank-and-file employees as a source of quality – Hands-on, value-driven—follow a management philosophy that guides everyday practice; management showing its commitment – Stick to the knitting—stay with the business that you know – Simple form, lean staff—work with minimal staff and relatively simple structures – Simultaneous loose-tight properties—balance the need for direction and control with flexibility and initiative
- 4. Research on Effective Public Organizations • Gold’s (1982) study of ten successful organizations (five private and five public) – Learning: They support learning , risk taking, work measurement. – A focused mission: They emphasize clarifying and communicating mission. – A nurturing community: They provide a supportive culture. – Enabling leadership: They facilitate learning, communication, flexibility, developing a vision.
- 5. Propositions About Effective Public Organizations Public agencies are more likely to perform effectively when there are high levels of the following conditions: Effective relations with oversight authorities (legislative, executive, judicial) Authorities are: • Attentive • Demanding • Supportive • Able to delegate Effective relations with other stakeholders • Favorable public opinion and general public support • Multiple, influential constituent and client groups that can be mobilized • Effective relations with partners and suppliers – Effective management of contracting and contractors – Effective utilization of technology and other resources – Effective negotiation of networks
- 6. Propositions About Effective Public Organizations Public agencies are more likely to perform effectively when there are high levels of the following conditions: • Responsive autonomy in relation to political oversight and influence • Mission valence (the attractiveness of the mission) • Difficult but feasible • Reasonably clear and understandable • Worthy, worthwhile, and legitimate • Interesting and exciting • Important and influential • Distinctive • Strong organizational culture, linked to mission
- 7. Propositions About Effective Public Organizations Public agencies are more likely to perform effectively when there are high levels of the following conditions: • Effective leadership Stability of leadership Multiplicity of leadership–a cadre of leaders, teams of leaders at multiple levels Leadership commitment to mission Effective goal-setting in relation to task and mission accomplishment Effective coping with political and administrative constraints • Effective task design Intrinsically motivating tasks (interest, growth, responsibility, service, and mission accomplishment) Extrinsic rewards for task accomplishment (pay, benefits, promotions, working conditions) • Effective development of human resources Effective recruitment, selection, placement, training, and development Values and preferences among recruits and members that support task and mission motivation
- 8. Propositions About Effective Public Organizations Public agencies are more likely to perform effectively when there are high levels of the following conditions: High levels of professionalism among members • High levels of special knowledge and skills related to task and mission accomplishment • Commitment to task and mission accomplishment • High levels of public service professionalism High levels of motivation among members • High levels of public service motivation among members • High levels of mission motivation among members • High levels of task motivation among members
- 9. Trends and Developments in the Pursuit of Effective Public Management • Total Quality Management (TQM) • Reinventing Government Movement (REGO) • National Performance Review (NPR) • President’s Management Agenda
- 10. TQM • TQM raises challenging alternatives for management. • It has clearly influenced the objectives of current government reform efforts, such as focusing on the customers, the use of teams, and continuous improvement. • In his approach to TQM, Deming (1986) emphasized teamwork, continuous improvement of the production system, creating trust and the climate of innovation, and eliminating numerical production quotas. • Measures of quality should be used at all phases of production. • The quality measures should be based on the customer’s view. Performance evaluation must be based on group and organizational performance, rather than individual, so that people will have the incentive to support one another. • The basic principles of TQM emphasize that successful total quality efforts depend heavily on commitment and strategic implementation. • Failed TQM efforts often display insufficient leadership, weak culture, weak management of the change process, poor provisions for motivation and teamwork. • However, it proposes a management philosophy quite opposed to the one that has prevailed in many government reforms.
- 11. REGO • See Osborne and Gaebler’s book Reinventing Government (1992). • They called for more entrepreneurial activities to supplant the old-fashioned, centralized, bureaucratic model of government. However, to support their call for a more entrepreneurial approach in government, they cited many government practices they had observed around the country that were already quite effective. • Their proposals had a major impact, including the establishment of the Clinton administration’s National Performance Review. • The REGO trend heavily influenced a broad array of developments. Yet the REGO ideas have been controversial. Some examples were unsuccessful. Some critics have raised concerns about thinking of citizens as “customers” of public organizations. • Challenging new ideas require effective implementation, and in government that means public management, even in cases when government seeks to devolve its services to the private sector.
- 12. REGO • Osborne and Gaebler (1992)—Reinventing Government – Catalytic government: leverage government authority and resources by using private and nonprofit resources and energies—government should steer rather than row – Community-owned government: empower local communities and groups – Competitive government – Mission-driven government – Results-oriented government – Customer-driven government – Enterprising government – Anticipatory government – Decentralized government – Market-oriented government
- 13. Osborne and Gaebler’s Strategies for Reinventing Government Catalytic Government “Leverage” government authority and resources by using private- and nonprofit-sector resources and energies, through such strategies as privatization of public services and public-private partnerships. Government should “steer” rather than “row,” by emphasizing directions and priorities but letting private and nonprofit organizations deliver services and carry out projects. Community-Owned Government Empower local communities and groups. Allow more local control through such strategies as community policing and resident control of public housing. Competitive Government Introduce more competition between government and private organizations, within government, and between private organizations through such strategies as competitive contracting, private competition with public services, and school choice and voucher programs. Mission-Driven Government Focus government programs on their missions rather than on bureaucratic rules and procedures, through such strategies as flexible budgeting procedures (such as expenditure control budgets) and more flexible personnel rules and procedures (such as broader, more flexible pay categories).
- 14. Osborne and Gaebler’s Strategies for Reinventing Government Customer-Driven Government Give customers of public programs and services more influence over them. Pay more attention to customers through procedures such as customer surveys, toll-free numbers, TQM programs, and complaint tracking. Give customers more choice through voucher systems and competition among service providers. Enterprising Government Find ways to earn money through user fees, profitable uses of government resources and programs, and innovative cost-saving and privatization projects. Anticipatory Government Prevent problems before they occur rather than curing them after they do, through strategic planning, futures commissions, long-range budgeting, interdepartmental planning and budgeting, and innovative prevention programs in environmental protection, crime, fire, and other service areas. Decentralized Government Decentralize government activities through such approaches as relaxing rules and hierarchical controls, participatory management, innovative management, employee development, and labor management partnerships. Market-Oriented Government Use economic market mechanisms to achieve public policy goals and deliver public services, through such techniques as pollution taxes, deposit fees on bottles, user fees, tax credits, and vouchers. Results-Oriented Government Place more emphasis on outcomes rather than inputs, through greater investment in performance measures, including using them in budgeting and evaluation systems. Source: Adapted from Osborne and Gaebler, 1992.
- 15. NPR • REGO influenced President Clinton’s National Performance Review. • Four main features 1. Cutting red tape (use biennial budgeting, decentralize personnel policy, streamline procurement, eliminate unneeded regulations, empower state and local governments) 2. Customer-driven influence (use market dynamics) 3. Empowering employees (decentralize decisions making, use results orientation, provide better training) 4. Greater efficiency (eliminate unnecessary programs, generate more income and collect more debt, utilize existing technologies) • The first report argued that the federal government needed a drastic overhaul to improve its operations, but the structures and systems were the problems, not the employees. • The reforms would decentralize and relax personnel and procurement regulations, for example.
- 16. President’s Management Agendas • Reform put forward by George W. Bush in 2001. • This agenda included five government-wide management reforms of priority 1. Strategic management of human capital 2. Competitive sourcing 3. Improved financial performance 4. Expanded electronic government 5. Budget and performance integration • Implementation involved an agency scorecard on compliance with standards for success. • That scorecard contains several core criteria for each of the five reforms, with a rating of “green” given if an agency meets all of the criteria for a reform, and a rating of “yellow” for partial success. For each reform there are also several negative situations listed, called Conditions. If any one of these conditions exists, then the agency automatically receives a rating of “red” on that initiative.
- 17. Human Capital Movement • OMB Comptroller David Walker and others became advocates for a focus on “human capital.” Some of the cornerstones: • Leadership and commitment to a human capital focus • Strategic human capital planning, that is, alignment with the overall mission • Acquiring, developing, and maintaining talent • Results-oriented organizational talent
- 18. Governance • Governance is a term meant to describe the enhanced and changed nature of government. • According to Lynn, Heinrich, and Hill (2000), governance is a regime of laws administrative rules, and judicial rulings and practices that constrain, prescribe, and enable government activity, in which such activity is broadly defined as “the production and delivery of publically supported goods and services.” • The central question of research in their work is “How can public sector regimes, agencies, and programs be organized and managed to achieve public purposes?” • They propose a general model that focuses on the main relationships of governance to isolate elements of effectiveness. = f (E,C,T,S,M) • Outputs and outcomes are a function of environmental factors, client characteristics, treatments (such as organizational missions), structures, and managerial roles.
- 19. Privatization and Contracting Out • This is another strategy for reform and reaction to the tightening of public budgets. • Often overlooked is the fact that privatization increases the imperative for effective management.
- 20. Managing Privatization • Privatization takes many forms. – Granting a franchise to private operators – Providing vouchers to service recipients to purchase services from private providers – Using volunteers – Providing subsidies – Initiating self-help or co-production programs in which citizens perform services for their own benefit or share in providing them – Selling off or shedding activities to private operators
- 21. Conditions for Successful Privatization and Contracting Out 1. Environment Bidders. There must be a set of competitive bids for the contract. Bidders need to be experienced in the service area, have a good record, and be qualified on such criteria as having the capacity to operate in the geographic area where the service is needed and in the manner required by the size and scope of the required operation. Political Environment. The environment should be free of of inappropriate political pressure for privatization, especially pressure to select a particular provider. Resource Support. Authorities should be willing to provide resources to support the provisions for privatization listed in the sections that follow. Legal and institutional environment. The privatization initiative must conform to federal and state government mandates. Examples: federal statutes may require payment of prevailing wages; state laws may limit contracts to the present fiscal year. Liability issues should be reviewed. 2. Goals and Values The privatization initiative should support the agency’s mission and its primary goals and values. Governments should usually avoid contracting out certain core functions, such as those involving public safety and security, deadly force, and the handling of public funds. The goals and values of the privatized activity should be clear. 3. Leadership, Strategy, and Culture Agency leaders should be carefully involved with privatization policies and activities, including their coordination with agency strategies and culture.
- 22. Conditions for Successful Privatization and Contracting Out 4. Structure Specialization and responsibility. Responsibility for privatization and contracting out should be clearly defined. Qualified personnel need to be hired, trained, and otherwise set in place to supervise and run the process. Examples: agencies need expertise in contracting processes, in legal issues related to contracting out (or vouchers, franchising, or other modes), and in accounting and financial issues, such as cost accounting and comparisons of the cost of in- house service provision versus contracting out—all coordinated with expertise in the policy or service area involved. Responsibilities for contract development and monitoring need clear definition. Departmentalization or subunits. Agencies should have effective organizational structures for contracting out, with effective locations of offices and units with expertise and responsibility. Example: small agencies may have a central contracting office as well as contracting officers in an administrative services unit; larger agencies may have contracting and privatization units in larger subunits. Departments may place subunits in charge of monitoring contracts. Agencies may need to maintain the capacity to take over the activity if the contractor goes bankrupt or the contracting process otherwise encounters problems. The responsible units need to be clearly designated and provided with appropriate resources (for example, to maintain the necessary equipment and personnel). Hierarchy and centralization. Accountability, reporting, and authority relationships should be effectively designed, with clear arrangements for reporting and review of contracts and contracting-out processes and for involvement and awareness of appropriate managers and executives. Rules and regulations. Appropriate rules and procedures should be in place for the provisions mentioned previously (reporting, review, taking back the contracted activity) and subsequently (precontracting procedures, monitoring).
- 23. Conditions for Successful Privatization and Contracting Out 5. Process Power relationships. Authority and power relationships related to issues of contracting out should be clarified. Authority and accountability relationships with the contractor, and the responsibilities of the contractor, should be clear and carefully reviewed and specified. (For example, details such as the responsibility for maintaining equipment and machinery should be clarified. Required approvals, such as agency authority to approve the contractor’s decision to raise user fees, should be clear. Quality control and review procedures should be clarified). Incentives for effective performance and sanctions for poor performance should be clear and effective. Decision-making processes. Precontracting and contract selection and supervision processes should be well developed. Precontracting processes should involve careful specification of needs and requirements and of the pros and cons of contracting out, including cost comparisons. Meetings and communications with potential bidders about RFP details and goals should be carefully planned. Processes for monitoring and evaluation, and for related evaluative decisions and actions (sanctions and incentives), should be clear and well developed. Communications. As suggested above, communications with potential bidders and contractors and among responsible agency personnel should be well planned, with responsibilities and procedures well clarified.
- 24. Conditions for Successful Privatization and Contracting Out Change and innovation. The role of contracting out and privatization in relation to change and innovation should be carefully developed, to make use of the advantages of these strategies for gaining access to new flexibility, technologies, personnel, and other opportunities. People. The effects on agency personnel should be assessed. Often new contracting out initiatives should not go forward if there is sharp employee resistance, without effective plans for responding to the resistance. Effective plans for existing employees should include provisions for supportive discharge of those employees as necessary (that is, effective management of downsizing). Contractors can sometimes offer existing employees attractive alternatives, and contracts can sometimes include provisions that the contractor will hire some existing employees. Analysis of the costs of contracting out should include consideration of the costs to the jurisdiction of layoffs or reduced employment. 6. Performance and Effectiveness Privatization initiatives should have performance measures associated with them that are monitored and used in evaluation, with incentives and sanctions attached, as feasible. These measures should include public sector performance criteria, such as equity, representativeness, responsiveness, and community and social goals (see Goals and Values earlier).