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THE MAIN FEATURES OF THE NEW PUBLIC MANAGEMENT (NPM)
Indeed, sometimes the new public management seems like an empty canvass: You can paint on it whatever you like.
- Ferlie et al. (1996)
The eloquent introductory quotation by Ferlie and associates suggests that there is little, if any, consensus around the meaning of the term new public management, or NPM. These authors suggest that there is not only disagreement over what the new public management is, but also about what it should be. Perhaps, however, there is some agreement at the most fundamental level; specifically, that NPM is a tool for governmental entities to use in public sector governance (Lane 2000).
The lack of agreement on a fuller definition of NPM extends to significant differences in various authors' descriptions of NPM's features, some of which are contradictory (Ferlie et al., 1996; Stark 2002). So diverse are the features identified by experts that Manning (2001) has suggested that a menu of features, from which those appropriate to a particular situation could be chosen, would be a useful tool. Considering such widely ranging features, selecting those that are the main features of the new public management is a challenging task, one which will now be undertaken through a review and analysis of selected literature.
Ferlie (1998) identifies six features of the new public management: privatisation; introduction of market mechanisms into the public sector; a separation between core, or policy, activities and peripheral, or service delivery, activities; the outsourcing of service delivery activities; enhanced management, including the use of performance management; and labour market flexibility.
Stark (2002) describes the features of NPM as decentralising and delayering government agencies, encouraging competition between public and private providers of service, providing greater choice for citizens, benchmarking and measuring output, implementing performance contracts and various financial incentives for employees of public agencies, creating internal markets, and applying private sector management approaches. Hood (1991) attributes seven features to the new public management including allowing managers to manage, establishing specific standards and performance measures, emphasising output controls, disaggregating units in the public sector, increasing public sector competition, increasing the use of private sector management approaches in the public sector, and increasing discipline in resource utilisation.
De Freedland and De Sciarra (1998) contend that NPM's features include emphasising competition and market forces, imposing threats of dismissal, instituting short-term service contracts, applying a top-down performance management structure, complying with rules, and implementing performance-based rewards. Dijkzeul (2000) identifies the bold use of market mechanisms for segments of the public sector that cannot be sold into private ownership, intense decentralisation, constant emphasis on service quality improvement, and an unyielding emphasis on customer satisfaction.
Alavaikko (n.d.) lists four of NPM's features including governance by objectives, organisational structure designed around products and customers, autonomous work groups that coordinate with other work groups without specific instructions from higher-level managers, and the purchase of peripheral services from external suppliers. Bevir and Rhodes (2003) highlight two features of NPM: introducing some level of competition into government operations without full privatisation (i.e. the use of quasi-markets) and contracting with external suppliers.
Dunleavy (1994) summarises the features of NPM as competition, disaggregation, and incentivization. Lane (2000), in claiming that NPM is more than just contracting out or outsourcing, contends that the essence of the new public management is the use of the internal and external contract process to reveal the value of services as well as their costs.
Ferlie and colleagues (1996) furnish one of the more complex and complete analyses of the features of NPM through their presentation of four ideal NPM models:
- (1) the Efficiency Drive NPM Model,
- (2) the Downsizing and Decentralisation Model,
- (3) the In Search of Excellence NPM Model, and
- (4) the Public Service Orientation NPM Model.
The Efficiency Drive NPM Model, in which attempts are made to render government more business-like, includes the following features: an emphasis on financial control, stronger senior management control and performance management, increased audits, increased responsiveness to consumers, labour market deregulation including deemphasising labour agreements, and a shift in power from professionals to management.
The Downsizing and Decentralisation Model, which recognises the trend of organisations in abandoning vertical bureaucratic structures, includes the following features: the use of quasi-markets, a shift to management by contract, contracts for non-strategic activities, fewer organisational layers and downsizing, the split between purchaser and provider organisations, adoption of new management forms such as network organisational structures and strategic alliances, and increased flexibility and variety in furnishing services.
The In Search of Excellence NPM Model, which emphasises the role of organisational culture, is subdivided into top-down and bottom-up approaches. The top-down approach involves explicit initiatives to promote culture change; promotion of a top-down vision; application of charismatic leadership at the top levels of organisations; intensive corporate training programmes; use of corporate artefacts such as logos and uniforms; a rigorous communications strategy; and an assertive, strategically-oriented human resource management activity.
The bottom-up approach involves an emphasis on organisational learning, organisational culture as the glue that holds the organisation together, top-level support for product champions, extreme decentralisation, and performance assessments based on results.
Finally, the Public Service Orientation NPM Model, which involves the acceptance that application of private sector management concepts must acknowledge the distinctive attributes of the public sector, includes the following features: an emphasis on service quality and excellence, an emphasis on user concerns as contrasted to those of the customer, a return of power to elected bodies from those that are appointed, increased focus on societal learning over providing routine services, and increased participation and accountability.
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The review of selected literature confirms that there is considerable variation in features associated with the new public management. The method used to cull NPM's main features from the rest was, first, to employ the menu proposed by Manning (2001) to list distinct features identified by the authors referenced in the literature review. This first step produced a list of twenty-five distinct features from the ten authors cited. Using this menu, an affinity analysis was conducted during which referenced authors who had identified features of the new public management were clustered under each feature listed on the menu.
Cited by all ten of the authors was the introduction of market mechanisms, including contracting and competition, into public sector. Incorporation of private sector management techniques such as performance measurement, performance-based rewards, benchmarking, and management by objective into the public sector was cited by seven authors. Organisational decentralisation/delayering was cited by five authors. A focus on customers was cited by three authors.
The following features were cited by two authors each: a focus on service quality, discipline in resource utilisation, privatisation, separation of core activities from peripheral service delivery tasks, outsourcing, and labour market flexibility. Finally, these features were cited by one author each: greater choice for citizens, permitting managers to manage, a focus on users, a focus on societal learning over routine services, autonomous work groups, a shift in power from appointed to elected bodies, a shift in power from professionals to managers, service delivery flexibility, culture change, top-down vision, charismatic leadership, energised corporate training programs, corporate artefacts, rigorous communications strategies, and a strategic human resources management activity.
The purpose of this essay was to identify the main features of the new public management. The literature review and the twenty-five distinct features listed support the observation offered in the introduction that there are significant differences in NPM's features identified by various authors. Nevertheless, by conducting an affinity analysis, the most commonly-cited features, which for the purpose of this essay are those that were cited by three or more authors of the ten referenced, were isolated. Those features - introduction of market mechanisms into the public sector, incorporation of private sector management techniques into the public sector, organisational decentralisation and delayering, and a focus on customers - may be considered the main featuresof the new public management.
References
Alavaikko, Mika (n.d.) 'Alcohol Policy and the New Public Management', Available at: http://www.nad.fi/pdf/39/Mika.pdf [Accessed: 30 December 2005].
Bevir, Mark, and Rhodes, R. A. W. (2003) Interpreting British Governance, New York: Routledge.
De Freedland, Mark, and De Sciarra, Silvana (1998) Public Services and Citizenship in European Law: Public and Labour Law Perspectives, Oxford: Oxford University Press.
Dijkzeul, Dennis (2000) Reforming for Results in the UN System: A Study of UNOPS, Basingstoke: Macmillan.
Dunleavy, P. (1994) 'The globalization of public service production: Can government be best in the world?' Public Policy and Administration 9:2.
Ferlie, E., Ashburner, L., and Pettigrew, A. (1996) The New Public Management in Action, Oxford: Oxford University Press.
Ferlie, E. (1998) 'The new public management in the United Kingdom: Origins, implementation and prospects', Paper given at the Managerial Reform of the State Seminar, Brasilia, November 1998.
Hood, C. (1991) 'A public management for all seasons', Public Administration 69:1.
Lane, Jan-Erik (2000) New Public Management, London: Routledge.
Manning, C. (2001) 'The legacy of the new public management in developing countries', International Review of Administrative Sciences 67:2.
Stark, Andrew (2002) 'What is the new public management', Journal of Public Administration Research and Theory 12:1.
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