18 February, 2011

New Public Management vs Public Value Management

(This paper was made as a response to a case called 'The education of the police police commissioner')

Introduction

The most obvious result to be expected from a police department is to have a reduced number of crimes. That was also what expected by the President to Mayerbeer who appointed to become the new Chief Executive Officer (CEO) of the National Police Force (NPF) in 1997. In addition, the new country's constitution demanded for improvement of political accountability of the NPF and to make it subject to government and civilian oversight.
Mayerbeer brought his knowledge and experiences from his previous assignment in a brewery company called NAB which was moving to be the second largest brewery in the world. The new assignment was a great challenge for him, not only because he came from private sector but also because the NPF was in a transition of a major organizational reforms. Unfortunately, at the end of his term in office, he was end up with a failure. Number of serious crime was significantly increased. But the most shocking one is that he even failed to improve the operational capacity of the NPF. Many police stations were running with insufficient facilities and resources such as pen and papers and patrol cars. Operational capacity is something that Mayerbeer should have as his strength as a former CEO of a success big company.


Critical issue

The critical issue of the failure of the NPF under Mayerbeer's leadership is a lack of public sector management and leadership approach.

The public administration has been evolved from the ancient kingdoms with increasing demand for reorganizations following the changes on jurisdiction, functions, and political civilization which led to the transformation from the kingship to the traditional model of government administration in the 19th century (Caiden 1982, pp. 7-11). In the early 1980s, the bureaucracy reform began and developing what we now know as New Public Management (NPM) (Hughes 2003, pp. 2-4). Among of major characteristics of the NPM are performance based and customer-centred (Stoker 2006, p. 50; Borins 2002, p. 191).

Over the last decade or so, the NPM has been under serious attack from many scholars. Jouke de Vries concludes that NPM, although not really dead, is in trouble (2010, p. 5).
The latest, and still developing, idea on public management and leadership is public value management (PVM). One major characteristic is that the PVM encourage more public organizations and managers to get exposed to political marketplace (Moore 1994, p. 297). The aim is to maintain support and legitimacy which would help to create public value directly as well as indirectly through the improvement of the public organization operational capability (Moore 1995, pp. 22-23). Another difference is that under the PVM public manager required to be more adaptive in terms of determining the means to achieve the broader ends of public organization; that is public value (O'Flynn 2007, p. 360-363).

The pressure to public organizations to be more effective and efficient has been increasing in line with the growing of public sectors size and better quality of democracy. But at the same time people have bad perceptions on public bureaucracies such as red-tape seeker, unpleasant officials, poor service and corrupt practices (Caiden 1991, p. 74). By contrast, the private sector performance is considered to be better than public sector (Vigoda-Gadot & Kapu 2005, p. 261).


Alternative solutions

Option-1: Apply the NPM model

Mayerbeer should focus on the NPF's customers. The most obvious ‘customers’ for a police department such as the NPF are those who seek for the police assistance (Moore & Braga 2004, p. 6). He would talk to elected politicians but only to the senior ones, included the President as his boss, to help him to set the NPF’s performance targets. In order to make the targets easy to be measured, he must prefer to have outputs rather than outcomes .
Mayerbeer should concentrate on management to achieve his performance target with the available resources and authority permitted by the elected politicians. He must concern on things outside of his organization, but it should be limited to their customers, competitors and things that would shift their customer’s value in the future time (Moore 1995, p. 65-7)
Mayerbeer should charge some of the NPF’s products which are excludable, such as the driver license, to his customers. This must provide the NPF economic profit and help the NPF to get financial surplus.
He must ensure all standard procedures and expenditure plans are set to achieve the performance target. Flexibility might be possible to some extent but certainly not to anticipate the change in the political environment. All managers under him must be committed to cost-efficiency. Therefore, the structure of the organization must be slim as much as it can.
Although this approach could produce a neat strategic plan, it would lead the NPF to create things valueless to the public. Moreover, there is no guarantee at all that all activities will be implemented and all outputs will be achieved. Without sufficient political support and legitimacy, the NPF would suffer with limited resources.

Option-2: Apply the PVM model

Mayebeer must manage the NPF to provide values to the citizens of his nation. He should not limit his work in internal component of his organization, rather to expose himself to the political context of his organization. He must continuously interact not only with politicians in different levels but also with citizens from different interest groups. The interaction aims to understand what things citizens would value most—both for individual desires and political aspiration—which the NPF could or should achieve, and also to gain supports and authority for the NPF to act on behalf of the nation.
Mayerbeer must concern on performance targets of the NPF, but they must be on outcome level which meaningful for citizens. The performance target must be subject to change according to the changing environment.
Mayerbeer must define carefully who the customers, clients, subjects and different kind of stakeholders of the NPF . He should not work for citizens who seek for the NPF assistance only, but also with those who have obligations to contribute to the creation of a safe environment as well as to understand the political aspiration of the general citizens. He thus set a stakeholder management strategy to maintain an effective network to to achieve citizens' desired values.
When necessary, Mayerbeer should be able to convince citizens to pay more taxes and advocate politicians to provide more resources and authority if he believes that what currently available do not sufficient to create public values in the most efficient way the NPF could do. He must be able to make citizens understand that they still would get higher value compare to the money they should pay for taxes. It is also important to ask support from citizens to be able to sacrifice some part of their liberty and privacy for the achievement of public value.
In regard to a the driver license service, as an example, he should concerns more on the objective to have a safe traffic environment rather than number of driver licenses they produce and amount of money they collect. Therefore, he should make sure that the driver licence service works effectively which should assure that all people with the license will most likely behave well on the roads. Time to spend of license processing is important, but that is not the ultimate objective. There is no point of the NPF to produce a license for every 15 minutes, for example, if most of the drivers with license drive crazy on the roads.
Although the interactions with citizens and political actors are more intensive in this approach, the possibility of the NPF lost its way is still there. This option requires more flexibility in planning and performance targets. Therefore, without capable managers on applying an adaptive management approach, the NPF would go everywhere and will not achieve public values.


Proposal

By applying the following criteria: (a) possibilities to meet public expectation; (b) resiliency on dealing with democracy and management at the same time, option-2 is more plausible to make the NPF works better.
The first criterion is important because the aim of public management is to meet public expectation. As a public organization, the NPF acts on behalf of public, consuming public resources, and the benefits or the losses they made would directly affect public (Rainey 1991, p. 24). Option-1 may achieve their performance targets, but it does not necessarily meet public expectation. That is because in option-1, the NPF would work mostly on its own way without continuously consulting to its stakeholders. By contrast, option-2 would have more possibilities to be in line with citizens’ aspiration because the NPF maintain the network to achieve the public expectation. The network would not only help the NPF work on the right direction but also to help the NPF to strengthen its operational capacity.
The second criterion is crucial and unique to public management. And it is particularly important because the NPF was on the process of a major organizational reforms which involve different interest groups included ethnicity. In order to achieve its objective, public management must be succeeded on dealing with both democracy and management at the same time. Option-1 tends to work very minimal in politic. This could make the NPF either as a victim of politicians (if the NPF weaker than the politicians) or take control the politicians for its own interests. Option-2 would make the democracy and management go hand in hand through maintaining the stakeholder network to achieve public values and strengthening the operational capacity of the NPF. In short, option-2 would make the NPF more effective and efficient.

References

Alford, J & O'Flynn, J 2009, 'Making sense of public value: concepts, critiques and emergent
meanings', International Journal of Public Administration, vol. 32, no. 3, pp. 171-191.

Borins, S 2002, 'New public management, North American style', in K. McLaughilin, S.P. Osborne, & E. Ferlie (eds), New Public Management: Current Trends and Future Prospects, Routledge, London, pp. 181-194.

Caiden, GE 1982, Public administration, Palisades Publishers, Pacific Palisades, Calif.

—— 1991, Administrative reform comes of age, W. de Gruyter, Berlin, New York.
Hughes, OE 2003, Public management and administration: an introduction, Palgrave, New York.

Mintzberg, H 1996, 'Managing government, governing management-balancing the private and public sectors', Harvard Business Review, vol. 74, no. 3, pp. 75-83.

Moore, MH 1995, Creating public value: strategic management in government, Harvard University Press, Cambridge, Mass.

—— 1994, 'Public value as the focus of strategy', Australian Journal of Public Administration, vol. 53, no. 3, pp. 296-303.

Moore, MH & Braga, AA 2004, 'Police performance measurement: a normative framework', Criminal Justice Ethics, vol. 23, no. 1, pp. 3-19.

O'Flynn, J 2007, 'From new public management to public value: paradigmatic change and managerial implications', Australian Journal of Public Administration, vol. 66, no. 3, pp. 353-366.

Rainey, HG 1991, Understanding and managing public organizations, Jossey-Bass, San Francisco.

Stoker, G 2006, 'Public value management', The American Review of Public Administration, vol. 36, no. 1, pp. 41 -57.

Vigoda-Gadot, E & Kapun, D 2005, 'Perceptions of politics and perceived performance in public and private organisations: a test of one model across two sectors', Policy and Politics, vol. 33, no. 2, pp. 251-276.

de Vries, J 2010, 'Is new public management really dead?', OECD Journal on Budgeting, vol. 2010, no. 1, pp. 1-5.

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