Management, Organisation, and Ethics in the Public Sector

Patrick Bishop, Carmel Connors

• Publisher: Routledge
• Year: 2018
• Print ISBN:
  9781138711686
• eBook ISBN:
  9781351776820
• Topic: Business
• Subtopic: Business General
• Index: Business

This title was first published in 2003. Over the past two decades in Australia and other developed nations, public sector management philosophies and how the public sector is organised have changed dramatically. At the same time, there have been many demands, and several attempts, to preserve and promote ethical behaviour within the public sector - though few go much beyond the publication of a Code. Both developments require an understanding of how public organisations operate in this new environment. Organisational and management theory are seen as providing important potential insights into the opportunities and pitfalls for building ethics into the practices, culture, and norms of public organisations. This book brings together the experience and research of a range of 'reflective practitioners' and 'engaged academics' in public sector management, organisational theory, management theory, public sector ethics and law. It addresses what management and organisation theory might suggest about the nature of public organisations and the institutionalisation of ethics.

Part I
Ethics In A Changing Context

Chapter 1

The New Public Sector: Changing Management, Organisation, and Ethics

Patrick Bishop and Connors Carmel

The Reform Environment and its Influences

The combination of economic restructuring and public sector reform has been a trend in capitalist economies with a shift from administration to management replacing the traditional model of public administration. Prominence has been placed on the shaping of state institutions and policies by rational economic forces. Reconstruction of the public sector has been partially accomplished through applying private sector strategies to its administration and management with market-based remedies incorporating the introduction of competition and choice into public sector activities. These reforms have significantly transformed administrative arrangements in an attempt to make them more ‘responsive’, both to political direction and the market. A result of these changes has been a number of new governance and delivery structures in the public sector. These include contract agencies, boards, voluntary agencies, and the residual public sector. Even here, increased use of contracts and ‘commercialisation’ has developed a greater market orientation. The influence of globalisation further complicates the issue. The distinctions between politics and administration are blurred, as is the distinction between public and private, and national and international. An understanding of traditional institutional arrangements alone is no longer an adequate or sufficient basis for analysing or developing a public service ethos.

The reform process itself is complex. Reformers rarely start from a clean slate. Consensus about the need for reform, and the decline of the Weberian model does not mean that elements of the model should not be retained; or that failings of the model are easily rectified. The still large public sector is not easily turned around. Key concepts from the old model are recycled with new meanings. For example, where the Weberian model locates ‘efficiency’ in terms of equal and impartial treatment, the efficiency sought by New Public Management is derived from a more entrepreneurial and discretionary style of management. The reformed environment shifts the ground from rule compliance to ethically based management in which mangers now have a degree of latitude to decide. In short, where the focus is on outcomes, rather than process, there is a danger that ethics becomes a second, or third, order concern. Any analysis of public sector ethics needs to engage with this theoretical ambiguity and practical intransigence.

Features of Public Sector Reform

The problem confronting the political reforms of the public sector seemed clear, as was the general acceptance of the solution. The literature is in general agreement on the emergence of a philosophy of market liberalism in Australia and elsewhere. For example, Capling, Considine, and Crozier (1998), Bell (1998), Mathews and Grewal (1997), Kelly (1994), Hughes (1994), Zifcak (1994) all agree that a turning point was the oil price shock of 1973 that led to a world recession and significantly affected Australia as a commodity exporter. They also point out that the era since has seen a long period of historically high level of unemployment, declining export prices, cycles of recessions combined with brief periods of prosperity, and a decline in comparative living standards.

Likewise, a consensus emerged around the notion of economic rationalism. Head (1998) and Carrol (1992) outline the origins of ‘economic rationalism’ as an ideology, tracing its origins back to Adam Smith and its modern supporters, including Hayek and Friedman. ‘Economic rationalism’ is an ideology that derives from assumptions of neo classical economic theory and assumes that market forces stimulate growth, innovation, and efficiency; whereas, governmental regulation and expenditures hamper growth, restrain productivity and entrepreneurship, and cause inefficiencies in both the private and public sectors.

Undermining what Capling, Considine and Crozier (1998) and Hughes (1994) argue were the Keynesian ideas that pervaded the Commonwealth Treasury; a number of global factors influenced this shift, including the emergence of strong ‘stagflation’ accompanied by wavering support for the welfare state (influenced by leading ‘right wing’ pro market economic activists such as Milton Friedman), and consequent breaks with Keynesian policies. This also explains the reformers’ strong support for small, or smaller, government. Pollitt and Bouchkaert (2000), Hughes (1994), Hunt (1994), and Self (1993) also argue that regimes around the world learnt quickly from the emerging Thatcher Government in the UK in 1979 and the Reagan Government in the US in 1980, making an almost global spread of the new ideology.

Other instruments of transmission also assisted change. Partisan think tanks provided an important link in this development, as did the media in assisting the spread of ideas. Strategic bureaucracies were also infused with staff committed to the new policy direction and ideology (Self 1993, p. 69). Some argue that the reform emerged from within the bureaucracy itself. Bureaucrats from central agencies (formally educated in neo-classical economics) influenced ministers and politicians (Schroder, 1998; Hughes, 1994; Guthrie and Johnson, 1994; Zifcak, 1994; Carroll, 1992; Pusey, 1991).

Pusey (1991), for example, argued that central agencies such as Treasury and Finance dominated market-oriented departments such as Trade and Industry, Technology and Commerce, and service departments such as Social Security and Health. Control was exercised through central management of budgeting and greater reliance on corporate management in program administration.

Bell (1998), however, considers this analysis fails to offer a stimulating analysis of the wider economic context including global societal and economic interests.

These policy shifts appear to be an antipodean version of a much wider movement towards economic rationalism across the globe. While this is still an uneven process, both across countries and across policy arenas, economic rationalist policy convergence has certainly been a major facet of contemporary political economy. This has been particularly apparent in the Anglo-American countries, but economic rationalism has also challenged and largely overturned social democracy in Northern Europe (p. 162).

From the UK, Patrick Dunleavy (1991) proposed a model of ‘bureau shaping’ as contributing to public sector reform and argued that senior officials actually gain from reorganising their subordinates, both from distancing themselves from certain kinds of operational problems (through decentralisation) and by casting themselves in a high status and intellectually more interesting role of institutional design and regulation.

Reform has also been seen as part of a process of democratisation. March and Olsen (1995, pp. 194-97), for example, argued that one of the most widespread forms of democratic organisational adjustments is wide-ranging administrative reform. They suggest that governments engage in administrative reform continuously and routinely and introduce modifications in administrative structures and procedures in reaction to external and internal demands, as well as experience. In fact, March and Olsen suggest that reformers learn more about political feasibility and political rewards than about what worked from their experience. From the 1995 Olsen and Peters study of administrative reform in eight countries — Australia, Britain, France, Germany, Japan, Norway, Switzerland, and the United States — they note that administrative reforms usually appear to neither affect nor improve administrative and economic performance, or adaptability. They make a more organic (and less ideological) argument when they suggest that perhaps bureaucracies continually undermine their own effectiveness and need episodic adjustments. They argue that since the processes by which bureaucratic systems become ineffective are universal, it is logical to anticipate that all systems will corrupt in a similar way and require similar action.

Pollitt and Bouckaert (2000), Jorgensen (1999), and Ryan (1998) advance the importance of globalisation as a transfer mechanism. From a scan of the emergent literature, they identify a shared problem in Western societies. While ‘New Public Management’ and ‘Reinventing Government’ were important elements of changes, arguments that focus on these changes predominantly do not fully recognise the internationalisation of the nation state. By implication, on this account, reforms embraced in one system become more probable contenders for implementation by another system through global transmission mechanisms.

While there is an ideological dimension to the reform process, it does not fall on a traditional left/right dichotomy. In Australia, there was a steadfast desire by both the Labor Governments (1983-1996) and their Coalition successors to assert full political control over the Australian Public Service (Pollitt and Bouckaert, 2000).

In summary, the acceptance of and adherence to broadly neo-liberal values has tended to:

• Denigrate the career of public administration (underlying anti-public sector ideology)
• Downsize and hollow-out public sector capability
• Emphasise responsiveness and acquiescence in senior officers rather than frank and fearless advice
• Undervalue organisational learning, fail to appreciate corporate memory, and under-invest in training and development
• Prefer private sector solutions to policy produced by public servants
• Encourages short-term thinking and business planning rather than medium term strategic planning.

While we have seen a range of views about the mechanisms and motivations for reform, what emerges is the dominance of a particular ideology driving the reform process. This ideology has a dramatic impact on our understanding of public sector ethics and on the roles of Management and Organisational Theory in developing the new public service, which we explore in this book. Before developing these arguments, it is important to first outline some of the new structures of accountability and governance that have developed, either by default or design, from the reform process.

New Accountabilities and the Structure of Governance

Over the past two decades, all OECD countries have experienced dramatic changes to public sector management philosophies and how the public sector is organised. Developments in the public sector over this period include compulsory competitive tendering and contracting out with the formation of discrete purchaser/provider units within departments; the move to a more entrepreneurial private sector management style; and the consequent loss of corporate memory and skills base through extensive restructuring and retrenchment. These changes have produced a climate and culture significantly different from the traditional ethos of public service. There is a variety of literature discussing the effects of these changes on the delivery of public services. Generally, the literature discusses the emergent models of public service provision and the challenges due to the re-orientation of state policies and administrative reforms towards the principles of market and business management.

The reform process has not been entirely unreflective. Brereton and Temple (1999), for example, point out that there has been a great deal of research into the effects of organisational change on the traditions and structures of the public sector. They argue that much of this literature suggests that the introduction of private sector incentives and practices has undermined the core ethos of public service within the public sector. In its wake, the emerging ethos is an intermingling of public and private sector values with both the public and private sector involved in the new governance arrangements. Importantly for public servants grappling with new ethical dilemmas, they contend that bodies where both public and private values co-exist (those spanning the public/private divide) are under the most stress to develop a new culture and to update their working practices.

There is also scepticism. Doubts have been expressed whether business administration theories and techniques can be easily transposed, let alone imitated in the public sector. Walter Kickert argues that the main impediment is the fundamental ‘differences in their environments, the relationship between organisation and environment, and their organisational characteristics’. For example, management in the public sector has to ‘deal with more value patterns than business-like effectiveness and efficiency criteria, such as legality and legitimacy, social justice and equal rights’. Kickert also argues that from a historical point of view it is bizarre that governments are compelled to adopt business-like management. Pointing to a rich history of efficient and effective international public administration, he suggests the ‘managerialist’ model, as a reaction to bureaucracy, is narrow both in its conception and history. He endorses instead a keener awareness not only of the uniqueness of public management but also its long-standing qualities (1997, pp. 731-752).

In the Australian case, Jeremy Moon picks up on the language of reform and remarks that ‘new governance’ has become a catchphrase for new ways of governing that are usually contrasted with the traditional image of government by means of the public sector. Managerialism, markets, and contracts are contrasted to bureaucracy and direct performance of government tasks — that is ‘steering’ rather than ‘rowing’. In fact, ‘new governance’, he points out, is often associated with a reduced public sector and has ‘extended to a dismantling of the neat association of legislative authority, regulatory power and fiscal capacity (which governments have retained) and organisational capacity and employment relationships (which are in decline)’ (1999, p. 112). This presents particular problems within the residual public sector in the definition of the nature of government authority, responsibility, and accountability. The new boundaries of the public sector are not given and ‘even where the public sector has retreated, this does not necessarily reflect a reduction in the scope of government purposes but a change in the means’ (1999, p. 113). While traditional public sector provision might be transformed, governments nevertheless maintain regulatory responsibility, for example, in telecommunications and the Job Network retaining the ability to make and revise. Moon further questions the degree to which the public sector is restructured or simply replaced and the assumptions as to the nature of continuing government purpose (1999, p. 119). He concludes that the politics of new governance is now contingent on electoral expectations of the role of government.

Striking at the core ethical concerns of the reform, Barberis (1998) argues that the mechanisms of accountability are no replacement for the entrenched principles of public morality. He suggests that perhaps the two main practical issues in any reorganisation of accountability concern the role of parliament and the relationship between ministers and public servants. He contends that social, economic and political forces, and the media have all compromised the autonomy of parliament. In fact, in the case of the United Kingdom, Parliament has been disinclined to acknowledge officially any other body as having any comparable role, even though other institutions demonstrate a potential for certain aspects of accountability (the various ombudsmen and the National Audit Office, for example). He suggests that what is needed is a multi-centric rather than a command type of accountability. Multi-centric is defined as accountability to ‘different authorities for different purposes, to different degrees and in terms of different, though mutually complementary standards’ (1998, p. 464).

Democratic authority has also re-emerged in the guise of ‘empowerment’. Christopher Hood, in his description of an ‘empowering’ contract state argues that the foremost concern of p...

Table of contents

• Cover
• Half Title
• Title Page
• Copyright Page
• Dedication Page
• Table of Contents
• Notes on Contributors and Editors
• PART I ETHICS IN A CHANGING CONTEXT
• PART II THE CASE STUDIES
• PART III MANAGING FOR ETHICAL OUTCOMES
• Index