The New Public Management & Its Legacy - Case Study Example

Running Header: The New Public Management and its Legacy Student’s Name: Instructor’s Name: Course Code: Date of Submission: The New Public Management and its Legacy Introduction The case introduces New Public Management as a means that encourages performance of certain tasks. It also improves efficiency and is responsive to political policies. NPM originated from various democracies organized by the Parliament and at this time there were strong executive powers introduced. According to Allen (1999) the new management was also a culture that involved centralized governments with less administrative law. The interest of the party was to get thing done in a more organized manner. This would be achieved by combining various contracts which would result to one policy that emphasizes on efficiency. The policy formed would be important since it was based on ministerial principal. One of the many NPM principles included the provision of several agencies which would deliver services to many. This delivery service would also be semi autonomous therefore worked with its own authority. Other principles included provision of goods and services of good quality which would be achieved through efficient management of products. NPM then created more agencies in various countries such as UK, Australia, and France etc. These executive agencies specialized on provision of quality goods as the core value. Policy making was more focused due to the existing service providers. If policy making process would be linked to purchasing then more opportunities would be created which would then provide performance incentives. NPM has won in various categories one was in early 1990s where it emerged as a public management which can be achieved at all seasons. This was due to its distinctive aspects which acted as truth in public management. Though NPM left a mark in various management programs, it was not predominant in the developing countries. This is because most developing countries are still linked to hierarchical bureaucracies. Some of the sectors that developed through this management include water and health sectors. These ministerial have quite developed since the introduction of NPM. However sectors performed by vertically integrated bureaucracies which functions are not as much. NPM’s role of adjusting economies worked since some effects have been discovered for example efficiency and equity improved in countries such as South Asia and South Africa. Identification of key problems The problems achieved through the introduction of the culture are that the issues raised outweigh the benefits achieved. One issue is that the introduction of the system incurred much transaction costs than the benefits. These costs included the formation of reforms meant to change delivery agencies. The other issue raised was that accountability was reduced especially in reforms that separated purchasers and service providers. This is because purchasers needed to see the value of the money spent in the provision of goods and services. Another issue experienced by NPM was self governing process practiced by its service providers. Some of the issues raised against autonomy showed that the system was meant to reduce closure and therefore was not meant for efficiency improvement. Cases of inefficiencies were experienced in the agricultural research organizations found in countries in Africa, Asia and others in Latin America. These problems were said to have developed due to the governing of NPM. Autonomy made management of these organizations misuse resources since they set up their own policies. The reason why NPM culture has been so modest in developing countries is because of the many operating public service providers. These service providers follow policies stipulated by the government and therefore there is few or no government intervention in case of disputes. This therefore makes NPM services appear weak thus need for support from the public. The supporters however expect better results for government performance. The other reason is that NPM consider public service culture as very important and should be maintained. NPM also assumes that central agencies should be committed in the provision of funds to run their sectors. This policy has been debated by many as one that restrict line departments. The other debated issue regards the staff members. Members of NPM have to follow a set of clear standards of behavior. The government policy used by NPM members is also authoritative showing that its credibility is not affected by incoherent ministerial declaration. The supporters of NPM do not have a clear illustration of how the policies worked. They however rely on these policies as the components that facilitate reforms. The other issue why NPM has not worked in developing countries is because the old public disciplines were not present when NPM culture was introduced. This therefore makes it difficult for members to use the new policies introduced by central agencies which restricts them from many aspects. One aspect is that the agencies tightly control operations carried out in public sectors. A clear observation shows that the main factors of NPM which include resourcing of products, introduction of credible laws and introduction of credible policies used by staff members are necessary to achieve effective contracts. To help the developing countries, ways of introducing the old public disciplines have to be put in place. One proposed way of introducing them would be leapfrogging thus making it a must for everyone to follow. The introduction of these disciplines is necessary in the commencement of reforms. As a result of this it is difficult for any change to gain footing. NPM also underperformed in developing countries due to the marginality of the effect of these reforms. Various organizations in developing countries could not see any significance in applying the culture of disciplines. This was also experienced in New Zealand as changes could not be clearly demonstrated. Unclear findings were reported from UK public service which showed few or no changes took place. Though NPM is a major tool used in achieving efficiency, annually the culture can only save 3 percent of the total running costs. This shows distinct and self-effacing savings are achieved especially where running costs are less than program costs. However the 3 percent cost saving would be more significant in developing countries since running costs include expenditures accrued. The benefits associated with NPM are achieved due to privatization of businesses and the introduction of New Public Policy. Options for addressing key issues In this case, I would introduce several options which are relevant in addressing the raised issues and coming up with informed solutions. Management should come together and form other disciplines that would be relevant to be used by the public in developing organizations. Gresham’s law shows that management that discusses bad business operations tend to drive out the implementation of good strategy. NPM should then come up with a strategy that shows the benefit achieved through the implementation of the management culture. The strategy should then be modified in order to generate efficiency and financial benefits. Most countries underperform in their economies due to collapse in company’s management systems. This refers to the integrated processes and techniques employed by the company in order to change its operational functions, formulate new strategies and carrying out evaluation and monitoring processes to improve efficiency. Most economies also fail to balance tensions between operations of an organization and the strategies used to conduct these operations. Research shows that 60 to 80 percent of organizations fail to achieve their set goals due to poor implementation of new strategies (Aucoin, 1996). To avoid this shortfall, every company should be in a position of forming closed loop management system. This system connects the strategies and operations of that company and to achieve this several steps have to be undertaken. One of the factors to consider is strategy development. This step comprises of application of various techniques, processes and concepts of management. These concepts include having a mission statement, vision and value statements which shows the direction in which the company is moving towards. Companies should also carry out an analysis of the internal and external factors that every member faces. There may be social cultural factors, economic factors or technological factors. The factors should then be analyzed and solutions be raised. This enables to promote a good working condition that produced better output. Shareholder value management is also significant in solving the issues facing NPM. Companies in which this management culture had been introduced have to be sensitized on the important of valuing shareholders. Shareholders should also seethe benefits brought about by the introduction of the management culture. This will enable them invest mote on the sectors for example through donation of resources. To facilitate reforms in the public sectors, quality and process management should be initiated. Resource and capacity planning is also necessary. These processes ensure that equal resources are provided to the public. All sectors for example the water and health sector should also form discussions in order to establish the problems they undergo in the implementation process. Once the problems are known it becomes easier to set up strategies of solving them other that depending on NPM management culture. NPM culture failed to work in developing countries due to the introduction of old disciplines. To introduce these disciplines, NPM had to connect with the purchasers and the service providers. This would enhance accountability especially in countries found in Sub- Saharan Africa. It had also been noted that transactions costs outweighed efficiency. To solve this problem the management culture had to reduce the transaction costs for example through increased equity levels. The self governing method of NPM also had various issues. These can be categorized in the difficulties faced by autonomous agencies. One of this includes lack of transformation and accountability. Various public sectors use vertical hierarchy management. This shows that top management formulate policies for the entire sector which is not the case in autonomous agencies. Countries in the Central and Eastern Europe made use of autonomy in order to avoid closure and not as a device for improving efficiency. This made is difficult for such countries to achieve desired goals as management failed to control operations. NPM also failed to work in developing countries due to generalization of contingency factors. Most of the benefits of NPM could not be accounted for and the impact of the management culture was not felt in many countries. Proposal for addressing the key issues To addressing the key issues facing New Public Management culture. I would recommend change of its policy perspectives. This means that NPM should not only concentrate on the use of old discipline but should come up with new policies according to the desired goals of the public sector. NPM should also be concerned on how tasks are undertaken for example other principles could be introduced to improve efficiency as this will enable most economies respond to the political principals. NPM’s strong executive powers should also be reduced as this will reduce autonomy which will achieve better performance. References Allen, R. (1999). New Public Management: Pitfalls for central and Eastern Europe. Public Management Forum. 1(4), 56-89. Aucoin, P. (1996). Operational agencies: From half-hearted efforts to full-fledged government reform. Institute for Research on Public Policy, 2(4), 23-78. Read More