New dimensions of public management
NPM is a label that captures a range of reforms inspired by the idea that private sector management techniques and market mechanisms increase public sector efficiency. NPM type reforms include, for example, quantification, the introduction of performance management systems, the increase in the responsibility of public administrators, the introduction of market mechanisms into public sector, the introduction of quality management techniques, among others.
Objectives of Public Management reforms
Earlier reforms were treated as technical or legal. They were confined to national boundaries and did not have any spread effect on other countries. However, a considerable body of ideas in the form of comparative development administration emerged that tried to present the western models as the ideal ones for the developing world to follow. The first wave took place mainly in USA and UK who were the front runners of public reforms.
The second wave emerged during the global economic crisis of 1970s and it was based on the notion that the governments, particularly the welfare states, had become ‘overloaded’, unaffordable, ineffective and overly constraining on employees and citizens alike . There was an exhortation to make government more business- like, to save money, to increase efficiency and simultaneously oblige public bureaucracies to act more responsively towards their clients. The wave provided the background conditions for the emergence of New Public Management.
Managerialism can be defined as management styles that were adopted in private sector to re-invent the private sector organizations. It is believed that government can also work like a business enterprise using the practices of private sector. Thus ‘management’ becomes the key factor affecting the success of an organization. It also assumes that ‘management’ is a distinct and separate activity, and one that plays the crucial integrative role in bringing together plans, people, and technology to achieve desired results.
Public Choice theory
Public choice theory was the earlier theory applied to bureaucratic organizations against debate over managerialism. Mueller has argued that public choice theory is a sub-branch of economic thought concerned with the application of microeconomics to political and social areas.
Many arguments were made in support of public choice theory. Minimizing the role of the government, and making it only as a facilitator, enabler, promoter and regulator can yield better results. If the role of the bureaucratic organizations is minimum, then market mechanisms shall grow wider. One argument is that, there will be bureaucratic capture if the policy and operational functions are combined together.
Agency theory came from the Chicago school based on the economic theory that advocate separation of principals from the agents. . The accountability concerns were the main focus for the application of principal/ agent theory in public sector.
In the public sector, there is a difficulty to determine who the owners are and what their goals. Hence principal/agent concept is unlikely to be effective. It is difficult for the agents to find out what each principal needs or wants. Agents are less likely to perform in a situation like this. Private sector also faces similar problems but to a lesser degree.
Transaction Cost Theory The other key economic theory in the managerial changes has been that of transaction costs; this theory is concerned with the transactional costs in the public organizations. This theory focused on the reduction of transaction cost by applying contractual systems in the public service provision in contrast to the traditional hierarchical co-ordination and decision-making process.
Management of change
The management of change element helps ensure that changes to a process do not inadvertently introduce new hazards or unknowingly increase risk of existing hazards. The MOC element includes a review and authorization process for evaluating proposed adjustments to facility design, operations, organization, or activities prior to implementation to make certain that no unforeseen new hazards are introduced and that the risk of existing hazards to employees, the public, or the environment is not unknowingly increased. It also includes steps to help ensure that potentially affected personnel are notified of the change and that pertinent documents, such as procedures, process safety knowledge, and so forth, are kept up–to-date.
The main product of an management of change system is a properly reviewed and authorized change request that identifies and ensures the implementation of risk controls appropriate to the proposed change. Higher risk situations usually dictate a greater need for formality and thoroughness in the implementation of an Management of change protocol, for example, a detailed written program that specifies exactly how changes are identified, reviewed, and managed. Companies having lower risk situations may appropriately decide to manage changes in a less rigorous fashion, for example, through a general policy about managing changes that is implemented via informal practices by trained key employees. Facilities that exhibit a high demand rate for managing changes may need greater specificity in the management of change procedure and a larger allocation of personnel resources to fulfill the defined roles and responsibilities. Lower demand situations can allow facilities to operate an management of change protocol with greater flexibility. Facilities with a sound process safety culture may choose to have more performance-based management of change procedures, allowing trained employees to use good judgment in managing changes in an agile system. Facilities with an evolving or uncertain process safety culture may require more prescriptive management of change procedures, more frequent training, and greater command and control management system features to ensure good management of change implementation discipline.
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