New Public Management, the Traditional Public and Private Sector - Essay Example

New Public Management al Affiliation Introduction The difference between the public and the private sector usually comes out in terms of how the two are managed and how they strive to achieve their objectives. According to Hood (1991), the public sector rarely operates with objectives that can be easily measured. This is unlike the private entities that are always striving to achieve clearly set and defined goals and objectives. They do so by setting a clear bottom line on how they can meet their goals. This is not possible in public organizations since there are no straightforward objectives to guide the workers and managers towards achievement of specific targets. In some public organizations when the measure of success is considered to be on the basis of powerlessness or apathy, all efforts would be geared towards this even if it compromises the quality of services given to the service users. In such instances, the traditional tools and avenues for measuring success in the business and private sector cannot be employed. While the two sectors share several similarities in terms of management methods, they are not entirely the same. This difference can only be appreciated when one accepts that the administration means as well as the values in the sectors are very much dissimilar. Ferlie et al. (2006) notes that the public sector greatly values the interest of the public and also puts emphasis on political compromise when undertaking its initiatives. On the other hand, the private entities are more focused on profitability and they therefore strive to come up with ways of management and operation that will ensure that they achieve the goals. Despite this being the case, there has been a very interesting phenomena whereby there appears to be a convergence between the public and the private sector aided by the New Public Management (NPM). This treatise discusses how this convergence has taken place and the effect it has had on the delivery and the organization of public services. The Traditional Public and Private Sector Esping-Anderson (1990) remarks that in order to appreciate the effect that New Public Management has had on both the private and private sector operations, it is imperative to explore the traditional sectors and how the two operated in terms of management and priorities. Haynes (2003) says that businesses in the private sector normally engage in the creation and distribution of services and other commodities to be able to enhance the quality of life of the buyers while at the same time making profits for the shareholders. This, therefore, calls for constant innovations to reward entrepreneurial efforts and also respond to the changing market demands. Such organizations draw the skills from the efforts of the workers who share the same economic goal with the entities that they work for. On the other hand, the public sector organizations seek to build and also protect certain human values through the provision of different services such as health care, clean water, shelter and food (Dunleavy & Christopher, 1993; Griffiths 1983). The services are meant to ensure that the users develop both physically, mentally and spiritually. In addition, they play a very important role in the protection of the environment, human capacities and in maintaining the diversity of life. It means that they are propelled by desire to ensure that the service users live more fulfilling lives so that they can achieve their full potential in the various settings. There are also those public sector entities that are tasked with the responsibility of protecting and expanding the principles of democratic freedom in their various areas of operation. Such organizations measure their success on the basis of the extent to which they protect the interest of the public through the services that they offer. Their operations are normally guided by the laws of the nation which presumes that all citizens should be given a level playing field through the provision of crucial services such as healthcare and education. Mintzberg (1993) notes that over the last couple of years, however, the boundaries that existed between the public which basically the government-run sector and the private sector have been getting blurred. This is attributed to the New Public Management which blends the social and environmental aims of the businesses with the goals and objectives of the public sector entities. This trend is expressed in several ways that include corporate social responsibility, philanthropy, privatization of businesses, community development and sustainable businesses. Hughes (1998) states that these activities are maturing to form what may be referred to as a third sector which is a blend between public and businesses. The shift is caused by the organizational behavior changes that are being seen in the various sectors as a result of the NPM. More businesses are now dedicating more of their resources in the delivery of social and environmental benefits to the communities (Flynn, 2012). Such trends are described by several words that are commonly used in the business circles. They include cause-based marketing, CSR and triple bottom line (Hood, 1991; Lawton & Rose, 1994). The public entities on the other hand have adopted the operations of the private sector. There are several government agencies which are currently attempting to operate just like the businesses do. This leads to the attainment of the benefits that were initially being enjoyed by the private sector alone. While the missions and the methods of the two sectors are becoming more and more similar, something which is more than the blurred boundaries is taking place. Judging by the nature of services that the government agencies are currently offering to the general public, it is quite clear that it is something more than what meets the eye. Ferlie et al. (2006) points out that the pioneering agencies in these two sectors are working towards a fundamentally different and new entity which incorporates the quality of each of the two industries. New Public Management Hartley (2005) defines New Public Management to be deliberately created policies and strategic actions which are meant to alter the processes, organization structures and behavior in a particular entity so that it can improve the administrative capacity which brings about efficient and effective public and private sector performance. These changes can be artificially induced to transform the administrative structures and styles. The legitimacy of such induced measures is dependent on the level of government involvement in that particular entity. Propper et al. (2004) however adds that there are certain pull and push factors which also result in such changes even before they become artificially induced. NPM has resulted to reforms in the public administration with the impact being seen on the quality of services that are currently being given (Flynn, 2012). According to Le Grand (1991), this is now a worldwide phenomenon that is being used by governments which had been previously grappling with various social and economic challenges such as globalized economies. There are several countries which have implemented these comprehensive public sector reforms based on New Public Management to be able to have clearly set objectives and incentives not only for productive performance but also for transparency. With such provisions, the people working in the sector take it upon themselves to ensure that their organization complies and the overall effect is the enhanced service delivery and quality. Propper et al. (2008) remarks that this is a trend which began in the 1980s and continue to be seen even to date. The opening up of various government run organization to competition, privatization and accountability has ensured that performance within these entities is enhanced. Such reforms are intended to reduce the involvement of the government in the market in comparison to the total economy. There have been many developed countries that have put these reforms into practice. United Kingdom, France and Sweden are just some of the developed countries which have been able to enhance service delivery and quality through these strategically initiated measures and policies that are aimed at transforming the public organization to operate as though they are businesses. The implementation of NPM has not been limited to the developed countries as there are developing and transitional nations such as those in African and Latin America which are using it to enhance their performance. Walker et al. (2007) remarks that there is a new global paradigm in the management of public organization thus the rise and implementation of NPM cannot be avoided. In addition, the internationalization of public management by means of private sector strategies are slowly causing a movement from non-effective approaches of management towards more business oriented ones. The public is greatly benefiting from this since the organization do not only focus on ensuring that their needs are met but also striving to use the best available structures and approaches borrowed from the private sector to boost efficiency and effectiveness of service delivery. There are those entities that have fully integrated and implemented similar structures to the ones used by businesses thereby doing away with the old and outdated administrative strictures (Hood, 1995). The impact has been a very positive one for both the service users and the government. There are some scholars who deny the applicability and universality of NPM in regard to the quality of service delivered. According to Ingraham (2007), there are several other philosophies that are responsible for the shift in management approaches such as reforming initiatives and rationalization reengineering. Ingraham (2007) argues that despite the fact that such initiatives appear to be transforming management of public organizations for the better, they are greatly contributing towards environmental turmoil. However, the author adds that even with this being the case, such initiatives require communities and private organization to work together so as to come up with various solutions to the already existing problem. Thus, even though the author seems to be disregarding the importance of the reforms on service delivery, it is evident that he still appreciates the positive influence that such initiatives have on the organization and the general public when used strategically. In some countries, NPM has been selectively implemented by adopting some sections while disregarding others (Adamolekun et al. 2000). A good example is China where the public sector organization selects the aspects of the private sector entities which they deem to be applicable to the specific needs of the community. After the selection, these policies are implemented at various levels to address the specific immediate needs. One area where NPM has been used to create this kind of convergence for the benefit of the public service users is in ensuring accountability. Traditionally, most public organizations have been known to suffer from accountability problems (Kaboolian, 1998). This is something that is greatly minimized in the private sector. Accountability not only compromises the quality of services but also influences the funds allocated towards the attainment and delivery of services (Pettigrew, Ewan & McKee, 1992). This single concept of NPM is implemented by various public sector entities and in the long run it allows them to achieve the level of operations that were initially witnessed only within the business circles alone. Kelman (2000) states that those public organization and stakeholders who continue to take NPM as just another management fad or a tool that promise things that it cannot deliver are very wrong since the end results of the implementation is very evident in terms of the integration and convergence of the two traditional sectors. Businesses are currently operating with the various goals that were previously held by public entities. Similarly, public entities are using strategies derived from the business circles so as to ensure that they achieve practical results and put in place measurable objectives (Kettl, 2007). From these measurable objectives, the right approaches and effort is put in place and this guarantees the overall success of the sector. It is for this reason that several governments in various world countries are in support of such initiatives as they are key in ensuring that the citizens get the best available service which meet their specific needs NPM and the Realignment of Operations   According to Elgar.Kosecik & Kapucu (2003), NPM has over the decades transformed to become a standard for the administrative reforms due to its ability to realign how businesses and private entities are operating. When they are used, it is believed that government organizations will be run as if they were a business organization being guided by the market trends and factors rather than the hierarchy which guides tradition public sector organizations. It does this by reducing the micro management of the operations of the public entities by the legislative and the executive arms of the government as well as the other central administrative agencies. It is not easy to find a county that has not used this approach in its operations. Even among the third world countries, it is normally a condition that they implement such strategies before they get funding from various bodies like the World Bank and the International Monetary Fund. Such financiers put this as a condition because it has been proven that when the donations are managed in a business kind of way, the impact that it will have on the locals will be optimized. On the other hand, relying on the traditional hierarchical administration only leads to wastage and thus the delivery of low quality of services to the citizens. Kickert (1997) notes that some of the traditional characteristics of the public sector which hinder good service delivery included political management trends, need to implement decisions made by political masters, permanence, lack of need to question decisions and stability (Peters, 2006). Moreover such entities were controlled by the hierarchical rules that are set by those in political power. With NPM, there has been shift from such practices to a more efficient and better cost organization. This kind of realignment has been caused by the increasing socio-political heterogeneity as well as the decline in the capacity of the governments to control these public sector organizations. This market model of reform has gradually transformed the organizations from their traditional politically designed administrative models and approaches. With the implementation of NPM, the decision making process between the public and the private sector is also becoming the same. Traditionally, the decision making process in the two sectors were very much different and this influenced how services were delivered in each respective sector. The private sector has always had a smoother decision making process whereas that in the public sector is characterized by conflict sand turbulence (March & Olsen, 2005). This kind of difference is specifically attributed to the roles that each of the two sectors play in the society in general. The businesses are in the market to create wealth to its owners and shareholders (Lane, 2003). On the other hand, the public organizations which are majorly funded by the government collect information about the citizens so that they can provide various services that will support the wellbeing of the population. This implies that the two have different expectations and levels of accountability. As noted by Moore (2009), the role played by each of these sectors will dictate how decisions are made on various matter that directly impact in the overall outcome and service deliver With the coming of the NPM into play, organizations which had earlier been constrained in practices which hindered the making of strategic decisions are now able to do so. The legislative mandate that had earlier contained the budgets, the operations and the priorities of such entities has been done away with to allow for more effective management and administration (Olsen & Peters, 2006). Agency people no longer have to report to those in the supervisory roles before they can choices known to have a positive impact on the overall performance of the public sector entities. This also gives them the chance to carry out appropriate planning guided by the principles which are used by profit making organizations. NPM has done away with the restrictions which had initially been acting as barriers towards smooth and evidence based decision making processes. This way, the heads and workers in the public organization are able to prioritize the kind of services that need to be delivered, how it should be delivered for maximum benefit and the quality that is needed (Osborne & Geabler, 2002). With such approaches, countless improvements have been noted in many agencies both in the developed and in the developing nations. According to Norman (2003), planning is a very vital part in the overall success of any kind of organization irrespective of whether it is in the private or in the public sector. However, most government run and funded organizations are politically driven and managed. As such, planning is not central and key to their operations. NMP however, values the planning process as one of the fundamental ingredients of success (Exworthy & Falford, 2003). It is for this reason that businesses that make profit take it as one of the principal processes in their operations. It dictates how various undertakings are done so that the service users are able to get optimal quality services at the time it is required. Such advantages have been drawn and used by some public sector agencies through the use of NPM to streamline and redesign their operations thus making them similar to the business enterprises (Peters, 2006). This way, they are able to offer same quality of services that may have only been found in the private sector circles. Conclusion There are several proofs to back up the claim that the implementation of New Public Management is leading to the convergence of the public sector and the private sector. This has, however, required a compromise in the objectives, organizational structure and the approaches in these sectors. NPM is therefore an avenue which supports the public sector towards becoming as effective and efficient as business organization. Pioneering agencies which have implemented this approach have been able to offer better quality services aided by good administrative structures, efficient operations, planning and redesigned decisions making process. 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Walker, R, Brewer, G, Boyne, G, & Avellaneda, N 2011, “Market orientation and public service performance: new public management gone mad?” Public Administration Review, vol. 71, no. 5, pp. 707-717. Read More