The New Public Management System - Essay Example

How Has The New Public Management Transformed The Organisation And Governance Of Public Services, And To What Extend Do Contemporary Reforms Illustrate A Post-New Public Management Era? Table of Contents Introduction 3 Discussion 4 Overview of New Public Management and its Characteristics 4 Impact of New Public Management on Organisation and Governance of Public Services 6 Extent of Contemporary Reforms in Post-New Public Management Era 10 Conclusion 12 References 14 Introduction In the contemporary scenario, the effectiveness and the efficacy of any business unit is largely dependent on the approaches of the business units towards the changing business environment (Pride & et. al., 2011). Contextually, it is important for the organisations to possess a mind-set through which they can adopt a systematic process of conducting business activities in order to attain numerous beneficial results (Gopal, 2009). It has been apparently noted that the effectiveness of the companies operating in private sector is largely owing to the aspect that they operate in a systematic and professional manner with the execution of advanced business practices. Companies in the private sector also deemed to perform in the most efficient manner because of the presence of high level of competition and pressure of attaining long-term sustainability (Laegreid & Christensen, 2013). It will not be ambiguous to state that companies in the contemporary context largely intend to assure customer satisfaction through their respective operations so that their business can be able to assure sustainable operations (Gonzalez-Perez & Liam Leonard, 2013; Fox, 2006; EU, 2009). However, these aspects or approaches of companies are not quite visible in the operations of the public sector companies. Notably, it is often believe that public sector is less effective in operations in comparison with the private sector. This is largely because of the aspect that companies in the public sector are less effective in designing their respective management policies along with proper adoption of advanced business practices (Flynn, 2012; EU, n.d.). This aspect further effects the efficacy of the public companies in an unfavourable manner altogether. In order to deal with this particular scenario, concerned authorities have developed the concept of New Public Management (NPM), which is expected to revive the public sector altogether towards a favourable direction (Lane, 2000). Contextually, this particular essay will analyse the concept of NPM in a comprehensive manner. The essay will also assess the impact of the NPM concept on the organisations and the governance of public sector companies. The essay will be further concluded with the evaluation of the contemporary reform after the emergence of the NPM era. Discussion Overview of New Public Management and its Characteristics With the changing course of the modern day business, the approach of conducting business by companies also seems to be transforming in a rapid manner. In this similar context, the changes or the reforms in the public management practices also contributed in organisational behaviour as well as governance especially in the public sector/services (Fenwick & McMillan, 2010). Observably, New Public Management (NPM) is a particular concept, which has been formulated with regard to ensure effectiveness and efficacy in the public sector business management. It is worth mentioning that public companies operate in a systematic manner in order to deliver high quality products and services to the customers, further ensuring high level of business performance. In this context, the role of NPM is deemed to quite vital (Vries, 2010; McLaughlin & et. al., 2005; Smith, 2008). According to the study of Rajca (2010), the concept of NPM is a blend of several self-contradictory concepts that are directly influenced by the operational approaches of the private sector. It can also be mentioned that NPM was emerged with the intention to enhance the business management approaches of the public sector operations (Kalimullah & et. al., 2012; Vance, 2006). It can be affirmed that the implementation of NPM in the public sector operations is largely owing to the failure of the state and the public sector administration towards enhancing the operational functions. Contextually the aim of NPM is to affect the economy of countries positively towards enhancing the efficacy and effectiveness of the public sector business operations (Turkiye Scholarships, 2014). The concept of NPM also intends to improve the quality provisions in the public sector operations. There are certain specific characteristics that are prevailing or associated with the concept of NPM (Rajca, 2010; Hood, 1995; Nasu, n.d.). These have been discussed in the following. The first characteristic of NPM is to ensure the development of public sector operations as a performance-oriented sector. Furthermore, the concept of NPM also includes assuring proper planning as well as strategic management amid the private sector companies. In this similar regard, NPM also intends to separate the roles and responsibilities of the people who are involved in the operations of the public sector. This is mainly to assure that the public sector employees are able to work in a systematic manner with depicting maximum accountability towards their respective tasks (Kalimullah & et. al., 2012). Another characteristic of the NPM concept includes creating proper market relations along with assuring utmost competition in the domain of service deliverance to the customers. It is believed that customers are the key component for any sort of business. Furthermore, the concept of NPM also includes the formation of proper flexibility amid the work and the pay relevant aspects of the public sector employees. NPM also proposed that public sector companies would need to be more independent in their approaches wherein they require assuring that they remain unaffected from the external politics prevailing in nations. Apart from this, Christopher Hood (the proposer of NPM) also advocated the need for the formation of performance indicators in the public sector so that performance of the business units in this particular sector could be easily ascertained in a comprehensive manner altogether (Kalimullah & et. al., 2012; Rajca, 2010; Teehankee, 2003). There are certain changes that need to be initiated in the public sector in order to ensure the accomplishment of the characteristics mentioned by Christopher Hood as per the concept of NPM. Contextually, it has been analysed that the concept of NPM needs the introduction of a proper management approach in the public sector business operations. The concept also requires the formation of clearly defined measures as well as performance indicators to analyse the level of business operations of the companies pertaining within this particular sector. Additionally, introduction of the aspect of competition in the public sector is another important approach, which is necessary for the accomplishment of the goals of NPM that have been mentioned in the earlier discussion (Rajca, 2010). Impact of New Public Management on Organisation and Governance of Public Services The concept or the aspect of New Public Management has gathered utmost attention in recent past owing to the impact that it imposed on organisation and governance of public services in comprehensive manner altogether. Contextually, as described earlier, the concept aims at changing the past policies of the government in order to modernise as well as enhance the public sector in a succinct manner. Notably, NPM has been basically developed from two fields that include the administration and the management together. In this regard, Pollitt (2011) depicted the impact of NPM on the aspect of public management in the European nation. According to the study of Pollitt (2011), the approach of the companies towards evolving with NPM was mainly to determine a business-like approach in the public sector management. The reforms of NPM were mainly emerged on a trial and error basis where concerned authorities intended to analyse the impact of reforms in the public sector in the initial phases. Notably, prior to the formation of the NPM approach, proper performance management, competitive strategies, offering quality services to the customers and positive contribution towards the society were certain aspects that remained absent in various public services (Public Sector Management, 2013; Pollitt, 2011). Observably, keeping those challenges in concern, the authorities in the public sector emerged with the approach of NPM, which further entails bundles of specific concepts that were applied towards mitigating such problems. With the emergence of NPM concept, companies in the public sector expected to have a better control in their respective performances with the measurement of numerous outputs of business. The NPM concept focused on instructing the companies in preferring lean, small or specialised approaches over that of adopting large multifunctional approaches wherein there existed immense level of complexity. With the proposition of NPM, a large substitution was expected to be experienced in the contracts of public sector over that of the hierarchal approach prior to that. The policies of NPM also included the aspect of ensuring proper deliverance of high quality products and services to the customers through implementing the techniques of Total Quality Management (TQM) (Pollitt, 2011). Observably, the concept of NPM has not been widely covered each and every nation of the European context but its impact can be experienced in every domain of the European continent. However, its impact can be witnessed in various public sectors of the European nations where it has been implemented. The reforms initiated as per the NPM concept have largely affected the performance of the organisations in a favourable direction altogether. Observably, owing to the reforms as per NPM concept, school and other educational institutions in the public sector were instructed as well as supervised to perform their operations by delivering quality results that further directly or indirectly enhanced the learning standards of the students(Andrews & Walle, 2012; Pollitt, 2011). Additionally, reports suggested a change in organisational approach towards operating in a systematic manner. In this regard, various players in the public sector were seen to have initiated the approach of dividing working responsibilities in a proper manner, segregating the authority in the workplace and adopting standardise procedures in working among others. These aspects further improved the resource handling capabilities of the organisations in the public sector that included proper utilisation of staff, monetary resource and infrastructure among others. These changes in organisations’ operational behaviour were mainly visible in healthcare and educational sector among others (CERGAS Bocconi University, 2013; Dudley & et. al., 2005). Furthermore, in this similar context, the study of Walle (2001) stated about the impacts of NPM reforms on organisations and governance in the public sector or services. Notably, the study depicted about how NPM influenced the managerial innovations in the public sector administrations. After the emergence of NPM reforms, organisations have implied the approach of adopting management ideas from the private to the public sector. Contextually, organisations in the public sector became aware of the concepts of productivity, marketization and accountability in business after the emergence of NPM. The study of Walle (2001) also determined that owing to the emergence of the concept of NPM, the role of the government in enhancing the private sector operations has become quite crucial altogether. The governments are influenced to comprehend the importance of public sector operations in the overall growth of the economy (Walle, 2001). It was previously mentioned that the emergence of NPM initiated certain reforms in the public sector operations including the educational sector as well as healthcare sector. Focussing more on this particular aspect, Tolofari (2005) depicted that the governance and the organisational approach of educational sector in various nations have witnessed a complete transformation after the appearance of the NPM concept. For example, the public sector reforms introduced in the educational segment have changed the service quality of the educational sector in a positive manner altogether. The structure of the governance in the educational sector has also seen a positive change after the emergence of the NPM concept. Positive results have also been experienced in the sector of education in terms of governmental expenditure in the education sector (Tolofari, 2005). Observably, the impact of the policies of government as per the NPM concept is also deemed to be quite strong towards the healthcare sector, which is regarded as amid one of the major domains in public sector operations. Notably, Alonso & et. al. (2013) depicted about the public policy reform in the healthcare sector of Madrid as per the concept of NPM. The study affirmed that healthcare reforms were mainly initiated in the country with the intention of dealing with the issues of increasing healthcare spending in the sector. The NPM reforms in the healthcare sector of Madrid ensure the implementation of advanced technologies of treatment, dealing with the ageing population effectively and enhancing the service quality to the customers among others (Lauby, 2005; Martin, n.d.). Furthermore, various operators in the healthcare sector have developed the method of decentralisation, which further allowed them to follow new healthcare management models, new decision-making approaches and new public-private partnership approaches among others (Alonso & et. al., 2013). This eventually helped in the development of the healthcare organisations and their governance in the respective sector as per the NPM concept. Extent of Contemporary Reforms in Post-New Public Management Era It can be apparently noted that with the emergence of the concept of NPM, several noteworthy changes have been apparent in the public sector. However, it would be vital to mention in this similar context that NPM concept is not widely applied in all the nations of the world owing to certain challenges and issues associated with it (Hanson, 2012). Therefore, it will be worth mentioning that the reforms as per the NPM will certainly ensure visible changes in the future context. It can be affirmed that as per the reforms, a new way of conducting business in the public sector can be experienced in coming future. With the introduction of the reforms, it is expected that the government of various nations of the world could be able to experience a positive outcome from their respective public sector operations. These aspects might again prove to be quite crucial for the public sector companies to gain an equitable position with that of the private companies in terms of operational efficiency and professionalism. It can also be depicted that in the contemporary scenario as per the NPM reforms, companies in the public sector are expected to deliver efficient and effective results in their respective operations with the implementation of advanced set of business and management skills. In precise, it can be depicted that in the contemporary scenario, the reforms as per the concept of NPM, operational activities in the public sector will be conducted in the best possible manner to ensure positive outcomes that are beneficial for the entire economy of a nation (Ocampo, n.d.). In this similar regard, Flynn (2007) stated that due to the introduction of NPM, a break can be witnessed in the traditional model of managing an operational function in the public sector. The above discussed aspects are visible in several countries of the world including Australia and New Zealand among others. In this regard, it can also be stated that significant change has been visible in the public sector of Australia and New Zealand where bureaucratic paradigm has been changed into public administration (Chipkin & Lipietz, 2012). This has brought several positive changes in the governance and operational behaviour of the companies in the public domain of such nations including effectiveness in the operations of the public companies and enhancing service quality in the sector among others (Ashworth & et. al., 2013; Flynn, 2007). Potts (n.d.) stated that ‘a new era of public service reform’ is visible in the contemporary situation after the appearance of the NPM concept. Notably, the study portrayed that comptrollership is largely seen in the public sector. This shows that an approach of modernising the attitude and operating behaviour of the public sector is widely seen in various places of the world (Potts, n.d.). Hughes (2012) depicted that a ‘new era’ of change is visible in the public domain after the emergence of the NPM concept. Notably, the internal operations of government in the public sector have transformed rapidly, which further caught the attention of the public and the society. Hughes (2012) affirms that the concept of NPM is formed with the alignment of two concepts together that include management and administration. These concepts together enable governments to eliminate bureaucratic principles in the public sector and emerge with best ways of working. This also assures that governments are able to separate the political aspect with that of the administrative ones so that in any particular situation, business in the public sector remains unaffected (Hughes, 2012; Matei, 2011). It is often argued that NPM is a widely acceptable concept in the public sector, which can prove to be beneficial for all in every domain (Lodge & Gill, n.d.). It is regarded as a concept, which is quite flexible and can be easily implemented in the public domain through involving less complexity. Hood (1991) in this context stated that NPM is a concept, which would provide significant benefits to the public sector. It will certainly mark the era for one of the striking changes in the public sector, which will transform the entire public sector altogether (Hood, 1991). Hence, it can be conceived from the viewpoint of various authors that NPM has the potential to bring positive changes in the contemporary scenario in the public domain. Conclusion As per the above analysis and discussion, it can be comprehended that the operations of any business is largely dependent from its various operational approaches. These approaches might be responding to the external environment changes such as customer demand, advancement in technology and improvement of management techniques among others. It is vital to mention that the success or the failure of business is largely dependent on its operational conduct. Companies in the private sector is seen to have a responsive conduct towards the changing market conditions, business structure and altering demands along with requirements of the customers. However, these approaches are quite less visible in the domain of public sector wherein the governance and organisational behaviour is deemed to lack effectiveness and efficacy by a larger extent. It also lacks a proper structure of conducting business operations in comparison with the privatised sector. The contribution of public sector towards the development of economy is quite notable and hence operational efficacy is an important aspect to be attained by the sector. In this regard, Christopher Hood emerged with the concept of New Public Management (NPM), which is expected to ensure a total transformation of the public sector towards a favourable direction. The policies that are associated with NPM instruct companies belonging to public sector in adopting an approach of best ways of working so that maximum positive results can be attained. 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