Transcript Understanding the US Business System

Third Edition
Chapter 7 . . . . . . . . . . . . . . . . . . . . . .
Managerialism and Performance Management
Dr. Wasim Al-Habil.
Chapter Seven
Managerialism and Performance
Management
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Key Topics
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Definition of Managerialism
Definition of Reingineering
New Public Management
Performance Management
Total Quality Management
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Managerialism is “an entrepreneurial
approach to public management that
emphasizes management rights and a
reinvigorated scientific management.”
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Beginning of Managerialism
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In 1960s and 1970s, there was a vast expansion in the intellectual
development and technical capabilities of PA. Organizations are created
to serve human ends.
“Managerialism” as term has long been used by sociologists with
reference to the economic and bureaucratic elites that run the industrial
society.
James Burnham in his 1941 The Managerial Revolution announced that
the world has in transition from capitalist or bourgeois to a type of
society which we shall call “Managerial” in this chapter.
Now managerialism refers to efforts to force the bureaucracy to be more
responsive to the needs of its customers.
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Deterioration of PA
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1980s became a period of decline in the public
service.
Decline included budgets, productivity, quality
of services, and reputation of public services
itself.
Managerialism came as trail of remedy to deal
with all the different kinds of declining.
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Types of PA Budgets
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Planning, programming, budgeting systems (PPBS): It is a budgeting
process that requires agency directors to identify program objectives,
to develop methods of measuring program output, to calculate total
program costs over the long run, to prepare detailed multiyear
program and financial plans, and to analyze the costs and benefits of
alternative program design.
Zero-based Budgeting: A budgeting process that is, first and foremost,
a rejection of the incremental decision making model of budgeting. It
demands a re-justification of the entire budget submission (from
ground zero).
Incremental Budgeting: It essentially respects the outcomes of
previous budgetary decisions (referred to as the budget base) and
focuses examination on the margin of change from year to year.
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Major Aspects of Managerialism
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There are three aspects of managerialism:
Reengineering: It takes reorganization beyond its traditional
focus by seeking to totally rethink and refocus how
programs are managed and to take maximum advantage of
new technology.
Empowerment: It reflects the paradox that managers can
often make themselves more powerful by giving power
away.
Entrepreneurialism: It calls for managers to be
transformational leaders who strive to change
organizational culture to develop a new vision for the
organization and then convert that vision into reality.
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Reengineering
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1.
2.
Reengineering: It is the fundamental
rethinking and redesign of organizational
process to achieve significant improvements
in critical measures of performance, such as
costs or quality of services.
Reengineergin aims to:
Promote bureaucratic responsiveness to
central executive control.
To professionalize administrative affairs.
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Reengineering As Opposed To Incremental Change
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The Message of Reengineering is that all large organization
must undertake a radical reinvention of what they do, how
they do it, and how they are structured.
Reengineering has no room for incremental improvement – for
small and cautious steps.
It is the fundamental rethinking and radical design of business
process to achieve dramatic improvements in critical
contemporary measures of performance, such as cost, quality,
service, and speed.
Reengineering is the search for new models for organizing
work.
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Becoming Reengineer
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Reengineering is as much a mental discipline and a philosophy
as it is a process.
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Reengineering includes three steps:
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2.
3.
Process Mapping: The flow charting of how an organization
presently delivers its services and products as a process.
Customer Assessment: The evaluation of the organization’s
customers’ needs, both presently and in the future, by means
of focus groups, surveys, and meetings with consumers of the
organization’s products and services.
Process Visioning: A total rethinking of how the work
processes ought to function, keeping in mind the latest
available technology.
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Empowerment
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Empowerment: It means giving a person or
organization the formal authority to do something.
By empowering others, leaders actually acquire
more “productive power” – the power truly needed
to accomplish organizational goals.
Managers who cannot delegate, who will not trust
or empower subordinates, become less and less
powerful, and correspondingly more and more
incompetent, as they increasingly seek to hoard
power.
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The Self-Directed Work Team
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Self-directed work team: A work group that will accept responsibility for their
processes and products – as well as the behavior of other group members.
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Self-directed work team differ in several “revolutionary” way from conventional
work groups:
1.
Fewer job categories: Each member of a self-directed work team performs
multiple tasks.
2.
Authority: Because self-directed teams handle tasks that historically have been
the purview of management, the teams need adequate authority.
3.
Reward System: If self-directed teams are to produce their potential benefits,
the organization needs to reward individual behaviors that promote team
flexibility.
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Entrepreneurialism
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Entrepreneurialism calls for managers to be
transformational leaders who strive to change
organizational culture.
Each must develop a new vision for the organization
and then convert that vision into reality.
Entrepreneur vision should not be limited to the
top; at every organizational level managers need
vision and dreams, need the ability to assess the
situation and plan for a better future.
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Entrepreneurialism
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Entrepreneurialism calls for:
Management By Objectives (MBO): An approach to managing, the hallmark of
which is a mutual setting – by both organizational subordinate and superior –
of measurable goals to be accomplished by an individual or a team over a set
period of time.
Organizational Development (OD): A process for increasing an organization’s
effectiveness. As a process it has no value bias, yet it is usually associated
with the idea of maximum effectiveness is to be found by integrating an
individual’s desire for personal growth with organizational goals.
Quality Circle (QC): Small groups of employees working in the same
organizational unit who, with the approval of management, voluntarily meet
on a regular basis to identify and solve problems that directly affect their
work.
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The New Public Management (NPM)
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The concepts of New Public Management (NPM) emerged in PA in the
mid 1980s, it stressed dealing with citizens as “customers.”
NPM is a theory of governance that is heavily influenced by market
theory and economic decision-making, public choice, principal agent
theory and transaction cost economics in particular (Hood, 1991;
Kaboolian, 1998), rather than civic choices.
NPM and the ‘Reinventing movement” turn the citizen into a
customer, the public is removed and distanced from administration
and in its place are free market principles.
Both these “theories” believe in entrepreneurship as proposed
solution for government problems; entrepreneurs will use resources
to maximize productivity and effectiveness.
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The New Public Management (NPM)
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NPM shifts the notion of public service to
customer satisfaction.
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Christopher Pollitt has four main aspects of
NPM:
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Market like mechanism
Decentralization
Improvement of service quality
Pursuing the wishes of the individual service
user/customer.
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NPM & Osborne and Gaebler
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The early 90’s were marked with the effort
to reinvent government; President Clinton’s
effort to use Osborne and Gaebler’s
“Reinventing Government” (1993) to
transform government into an enterprise.
The goal was to bring government out of
that “sluggish” state and end self-serving
bureaucracy (Shafritz & Hyde, 1997, pg.
475).
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10 Principles of Osborne and Gaebler
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Osborne and Gaebler’s (1992) Reinventing Government: How the
Entrepreneurial Spirit Is Transforming the Public Sector introduced 10
principles for a massive government reform.
The 10 principles:
steering rather than rowing,
empowering rather than serving
injecting competition into service delivery
transforming rule-driven organizations (result-oriented government)
finding outcomes not inputs
meeting the needs of the customer not the bureaucracy
earning rather than spending
preventing rather than curing
from hierarchy to participation and teamwork
and market-oriented government.
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Performance Management
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Performance Management: It is, the primary
responsibility of the organizational leader, the
systematic integration of an organization’s efforts to
achieve its objectives.
It includes the comprehensive control, audit, and
evaluation of all aspects of organizational
performance.
Closely associated with this is the concept of
contracting, because individual or organizational
goals are often embodied in quasi commercial
contracts.
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Productivity and Performance
Management
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Productivity: A measured relationship between the
quantity and quality of results produced and the
quantity of resources required for production.
Productivity is, in sense, a measure of the work
efficiency of an individual, a work unit, or a whole
organization.
Measuring productivity of an organization, program,
or individual is particularly problematic in the public
sector because of the problem of defining outputs
and of quantifying measures of efficiency,
effectiveness, and impact.
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Components of Performance Management
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Components of performance management include:
The specification of clear and measurable organizational
objectives.
The systematic use of performance indicators to assess
organizational output.
The application of the performance appraisal of individual
employees.
The use of performance incentives.
The linking of human and financial resource allocation to an
annual management or budget cycle.
Regular review at the end of each planning cycle of the extent
to which goals have been achieved.
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Total Quality Management (TQM)
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Total Quality Management: A new phrase for
quality control in its most expanded sense of
a total and continuing concern for quality in
the production of good and services.
It is a process to ensure that all aspects of
an organization are performing at an optimal
level.
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Total Quality Management (TQM)
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Edward Deming provides 14-point guide:
Create constancy of purpose for improvement
Adopt the new philosophy.
Cease dependence on mass inspection.
End the practice of awarding business on the basis of price alone.
Improve constantly and forever the system of production and service.
Institute training.
Adopt and institute leadership.
Drive out fear.
Break down barriers between staff areas.
Encourage education and self-improvement.
Take action to accomplish the transformation.
Eliminate slogans, exhortations and targets for the workforce.
Eliminate numerical quotas for the workforce.
Remove barriers that rob people of pride of workmanship.
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Review
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