forum 510

Introduction

Topics to be covered include:

· Executive administration

· Logical positivism

· Satisficing

· Bounded rationality

· Decision making

· Social equity

· New public administration

· Public choice

 

 

As public administration began to get comfortable in its new position as an administrative science, new theorists arose. The neo-classicists asked how the public organization could use the workforce most effectively. Building on Frederick Taylor’s theory of scientific management, Chester Barnard focused on how executives could motivate workers. Herbert Simon had a new take on those administrators in his effort to define the Administrative Man. These theorists ushered in the important new methodological approaches in the post-positivist behavior era. These theories of public administration started to move bureaucracy away from the realm of scientific management towards value politics and social equity, rejecting Wilson’s historic call for the dichotomy of politics and administration. Elinor and Vincent Ostrom built theories around rational approaches and institutionalism. Others, such as George Fredrickson explored new issues such as equity and social considerations. All of these advances in public administration were centered on decision making and responsiveness - who makes decisions and to whom are organizations responding?

 

Executive Administration

The organization is the center of the functions of the executive and is depicted by Mahoney and Godfrey (2014). The world is depicted as being comprised of the environment, the executive, and the individual. Each has its own realm of activity that makes it work. Further, the environment and the individual are related to that the environment affects the performance of the individual and the individual contributes to the attributes of the environment. All three areas have a reciprocal relationship with the organization which sits at the center of the model. Each contributes to the organization and in turn, the organization affects the characteristics of each of those areas independently. The model demonstrates that functions of the executive cannot exist without the organization and the organization is similarly situated in function with the individual and the environment.

 

Empiricism

Chester Barnard (1938) wanted to understand how organizations (either public or private) could be more effectively managed. He followed the logic of  empiricism  and began to study leaders by observation of them. Through gathering that observable data, he prepared a seminal study, “The Functions of the Executive.” What could we learn about the way managers lead and manage their staff? What is the role of training and intellectualism as opposed to following one’s gut instincts based on years of experience? He wondered whether managers responded to different incentives and what made them willing to contribute to the organization? Barnard, as the Chief Executive at American Telephone and Telegraph Company (AT&T), used his practitioner observations as the basis for his understanding of organizational functions.

Importance of Cooperation

Barnard (1938) believed that organizations could not function unless there was a willingness to cooperate with the staff and leaders. Rules and structure were insufficient to be successful. He called the result of this cooperation the formal organization. The formal organization was built on communication and purpose. This perspective of the organization allowed Barnard to suggest that the top-down management would necessarily meet the bottom-up willingness to comply. Success in an organization would be determined by the interplay of top and bottom. Organizations are managed because of the nature and mission of an organization. How people are likely to behave is based on their interaction with the organization. This is a different prospect than measuring workers productivity through a time and motion study.

Giving and Following Orders

Barnard (1938) determined that to manage in an organization, managers must recognize that it is not the orders they give that determine what gets done. Rather it is how the subordinate receives that order that determines whether the order is carried out. This supposition is not based on whether the subordinate likes the manager. Rather it is carried out because:

· The subordinate thinks the order is in line with the way he or she perceives the goals and purpose of the organization

· The subordinate has a personal interest in it

· The subordinate does not care about the order and complies without thinking, as if by routinization.

Inducement-contribution Theory

Barnard felt that the system of the organization was the key to understanding the success or failure of executive management. The morality of the organization was central to his understanding of this (Mahoney & Godfrey, 2014). Further, as people cooperated to create an organization, the theory of how they are induced must be considered. Barnard (1938) called this the Inducement-contribution theory. People are induced by money and they are induced by persuasion. They could be persuaded by propaganda about the organization’s value, an inoculation that ties the organization to larger themes such as patriotism, or coercion – the threat of firing or docking one’s pay. In this way, the organization is affected by the executive, the environment, and the individual. Barnard adopted a human behavior model of organizational systems. Within the organization there would be a commitment to quality, a public value of the organization, and a commitment to the purpose of the organization - an ethics of how the 

Logical Positivism

Barnard’s ideas of empiricism were a precursor to the philosophy of  logical positivism  – that logical analysis was empirically driven and facts and values could be separated. What could be observed inside the organization and how could that be analyzed in a way that logically derived a conclusion? Philosophers in the 1920s in Austria in the “Vienna Circle” created the basis of logical positivism (Uebel, 2016). Participant-observation is key to gathering the data used in logical empiricism (Cruise, 1997). However, behaviorists turned those observations into empirical data for quantitative analysis and hypothesis testing. Eventually, this methodological difference became a point of significant difference of opinion on which method was the most valid - qualitative or quantitative.

Logical positivism drove the development of public administration into the modern era. Herbert Simon was the leading scholar of this movement. To understand how it could have a profound impact on the study of public organizations, it is important to understand it as a philosophical concept of  epistemology . If it cannot be observed or sensed, then it cannot be verified. That is the basis of this view. There are no inherent truths – only things that are observable or sensed. Therefore, to surmise what is true or what is so, we have to be able to test it scientifically, measure it, and document it. What we believe, would like to see, or feel about something is not generating a truth, but a value. Values as such are not science.

There are three points of logical positivism according to Dobuzinskis (2007, p. 1180):

FACT-VALUE DICHOTOMY

VERIFICATION PRINCIPLE

COVERING LAWS PRINCIPLE

Rejection of the Politics: Administration Dichotomy - Satisficing

Herbert Simon (1946) rejected the politics and administration dichotomy and instead embraced the logical positivism or behaviorist approach to public administration. Behavior is a response to a stimulus and, therefore, the administration could be understood through the stimuli in organizations. Simon theorized that public administration was built on “proverbs” created by Luther Gullick, Max Weber and Woodrow Wilson and that these were not adequate for hypothesis testing as administrative science. Specifically, he rejected: the standard of bureaucracy as a hierarchy, the requirement to have a limited span of control of the decision process, and that specialization of skills and purpose improved results. His rejection of the dominant principles that defined public administration was a radical idea, but one that quickly gained favor during the behavioral revolution in social science.

Simon believed there never could be perfection in administration, no matter what a manager did. The best that could be accomplished was the best possible compromise within the large system of the bureaucracy and in working with the public. Simon (1947) used the term  satisficing  as a way to capture this sentiment and redefine administrative decision making. If managers could reach a place where most of the public, elected officials, and public workers were satisfied, then that would suffice. Satisficing became the standard for administrative decision making.

Bounded rationality  was Simon’s justification for satisficing (Simon, 1956). He said that if you could not make the perfect decision, you make the best decision you can and satisfy the greatest number of people. The Administrative Man needed to have guidance on how to ensure this happened with some consistency. To be rational is to be reasonable based on knowledge and to do what will not harm you. The bounded element was the satisficing - to satisfy as many as possible within the confines of a rational decision. You could say that this is a fine line to walk, but Simon felt it was justified and enabled replication in a less than clearly determined world. In other words, perfection is not possible, so there must be a process to actually make a decision. Bounded rationality and satisficing are now commonly used terms in business, public administration, and social science. They can be summed up in the Rolling Stones song title - “You Can’t Always Get What You Want.” To learn more, visit  Understanding Bounded Rationality  .

Simon sought to clarify the process of decision making (later he would move this into the world of computing and artificial intelligence). He identified three stages of decisions (Marume, Ndudzo, & Chikasha, 2016, pp. 39-40):

Intelligence activity: The head of the organization tries to understand the organizational environment in which decisions have to be made. Intelligence activity is finding occasions to make decisions.

Design activity: A leader of the organization tries to identify all possible options before making a final decision. This involves time & energy of the head to think over the best possible alternative.

Choice activity: Finally a head chooses one of the selected options, which becomes a decision.

Decision Making: Herbert Simon

The positivists required valid data and truth to determine the decision. The post-positivists recognized the fallibility of data and thus the need for more wiggle room in the validity. The logical positivists tried to create a logic to the decision process that included being rational. This required recognizing the presence of many interests and was bounded by consistent and replicable action based on available data and observation.

In order to make rational decisions, Simon felt the manager must be able to separate facts and values. The administration should be a  value-free zone , where decisions were based not on values, but on the best possible factual response – within the constraints of trying to satisfice (Cruise 1998, p. 281). Simon also referred to this as the fact-value dichotomy. The value-free approach to public administration implied that the public administrator is similar to the business executive. They seek the best possible option, within reason and constraint, and move on. They were not to get emotional about the solution or approach, not be overly invested in the outcome, but keep moving the process along. Simon included the need to balance  utility  and risk in his portrayal of the executive. Science for him became about how the decision was made. He theorized that instead of maximizing utility – as was the standard consideration in economics and the understanding of consumer behavior, he looked at how to satisfy interests and how to separate our normative expectations (values) from the facts. Success, he posited, would depend on being able to make decisions in that way. Simon’s Administrative Man (Cruise, 1998, p. 282), however, could only be successful by functioning in an organization. For it was in the organization that rationality could best be approximated and rational decisions made. Simon went on to win the Nobel Prize in Economics in 1978 for his theories on cooperative decision making within the organization that differed from the classical economistic vision of profit-maximizing driving the firm (organization). You can learn more about why the Nobel committee valued his scholarship at  Studies in Decision Making Lead to Prize in Economics . For Simon’s address that he gave in Stockholm to receive the Nobel Prize sees:  Rational Decision-Making in Business Organizations

The impact of Herbert Simon on public administration has been resounding. So much so that public administration as a scholarly field of study moved into Business Schools.

Decision Making: Robert Dahl

Robert Dahl

Robert Dahl (1963) was at the forefront of considering how modern politics was affecting decision making in politics and government and how the two were inescapably bound together. Rationality was conceptual. The proof was in the empirical evidence of how decisions actually were made. What are the circumstances under which decisions are made in the public sector? How do decisions change as those circumstances change? What risks were willing to be taken in order to get to a particular decision? How much uncertainty would be present before a decision is put off? These were new questions that created a new approach to the scientific examination of decisions – the behavioralist approach. They used surveys, public opinion data, and the examination of legislative voting, as types of data. By analyzing these data points, they could understand how and why and under what conditions public decisions were made. Social scientists, including public administration scholars and political scientists, wanted to create a decision-making  heuristic  that would provide a working method of understanding how public decisions are made.

Decision Making: Charles E. Lindblom

One such heuristic was Lindblom’s (1959) theory of incrementalism or “muddling through.” Lindblom suggested that decisions would be made in small steps with small changes. Once the small change was accepted, the next small change would occur. In this way, over time, larger impacts could be seen. But the public realm, he felt, would not take large risks on most issues and instead would be satisfied with muddling through. When combined with Dahl’s work, what emerged was an enormous influence on our understanding of the public decision sector – pluralism. The question was, who is making decisions? Is it an elite of powerful actors who are able to control the agenda and dominate the economy? Or is it a pluralistic conglomeration of interest groups, voters, political parties, and others that act as a tide that ebbs and flows in the realm of influencing the public sector? This disagreement between scholars continued as a significant schism for decades. To learn more, see this critique of Dahl’s study of New Haven, Connecticut. William Domhoff, Dahl’s chief critic for many years and a leading sociologist, takes apart the science of Dahl’s study of who makes decisions in this town and what the impact is on real decision making:  Who Rules America?

Public Management Theory: Dwight Waldo

While Simon and others tried to refine the logic and boundaries of the realm of decisions in public administration, it became apparent that the process was actually highly biased. The manager defined whose interests were worthy of including in the decision equation. The bias of the manager or management group might overlook significant pieces of the public at large, might be unable or unwilling to see valid points of view that were unfairly eliminated from consideration, or be unable to recognize alternative constructions of what is important to some groups of people. This bias in decision making prompted Dwight Waldo to call for an end to logical positivism and the business model of public administration. He called for more attention to politics and less attention to efficiency as the driver for decision making. Where previous theorists had tried to move as far away from politics as possible and then incorporate a rational attention to different interests, Waldo wanted to focus on citizen governance, participation, and a new conceptualization of public administration values.

In the 1960s, one only had to open the daily newspaper to understand that values were at the heart of public discourse and the disagreements that were exploding public policy. Everything from integration, civil rights, war, birth control, urban renewal, and voting rights was driven by the values that people held and wanted to see reflected in public decisions. Waldo and others at the Minnowbrook Conference in 1968 saw the need for values to be part of the study of public administration and to leave the fact-value dichotomy behind.

Public Management Theory: 1968 Minnowbrook Conference

At the Minnowbrook Conference, public administration scholars took what they saw going on around them and devised a set of propositions to reflect the reality of the public sector and the public’s involvement. They rejected value neutrality in favor of recognizing the values that were literally exploding on the streets of U.S. cities.

The Minnowbrook Conference identified these new themes in public administration:

· Break from value-free or value-neutral empirical research

· Desire to make the academic study of the social universe directly concerned with questions of social justice

· Make value judgments in his professional capacity ( Zimring, 1971, p. 230).

Waldo felt that public trust in the decisions made by public agencies and by public administrators needed to be restored. He convened the Minnowbrook conference. At Minnowbrook, public administration scholars examined the inclusion of equity and social value in public administration which was a far cry from the bounded rationality of Herbert Simon. Waldo later created the Map of Ethical Obligations (Waldo, 1988, p. 103) as the 12 key features that public administrators must adhere to in order to generate trust from the public and to be perceived as ethical stewards of the public sector. These included:

1. Constitution

2. Law

3. Nation or country

4. Democracy

5. Organizational/Bureaucratic Norms

6. Profession and Professionalism

7. Family and Friends

8. Self

9. Middle Range Collectives

10. Public Interest/General Welfare

11. Humanity or the World

Minnowbrook opened a path for new public administration that forever changed the discipline’s understanding of how public decisions are made and what is critical in making those decisions.

Public Management Theory: New Public Administration

New Public Administration became the revitalized focus of the public administration and dominated the field of study. Intertwining with political science, it sought to highlight the role of participation in how decisions are made in the public sector. More importantly, it prescribed that participation should be a major element of decision making as a value. This radically shifted the expectation of who would be involved in public decision making and how they would engage, by explicitly including the public, interest groups, and organizations in the decision process.

The participatory approach mirrored what citizens already were doing – protesting and demanding to be heard. The federal government began to incorporate participation as a requirement in agency decision making. At a minimum, agencies and the bureaucracies that ran them were required to organize and hold public hearings in order to enable the public to have access and be heard. For regulations that were being considered, for new programs, even for budgets, public hearings became a place where people outside of government would have a platform. While this requirement was a major change in the process, it also became perfunctory. Public hearings were a one-way street - people spoke and public bureaucrats listened. It was not a dialogue and no one was sure whether what they were saying ever made it into the final decision product.

Public Management Theory: Maximum Feasible Participation

Sargent Shriver led President Johnson’s new Office of Economic Opportunity (OEO) in the mid-1960s as the federal “War on Poverty” began. He wanted poor people for whom these programs were intended to not only have input but to be part of the decision process. His office instituted the process of Maximum Feasible Participation. This process proscribed that the beneficiaries of public programs, specifically in the new local Community Action Agencies, would have a statutorily prescribed seat at the table. OEO programs that were housed in Community Action Agencies in cities around the country would have boards of directors with one-third of the membership being residents in the low-income target areas. These “representatives” would be duly elected by their fellow residents to sit and serve their interests. The board was in charge of determining how budget funds would be spent, oversee how programs would be delivered, and decide what issues would be addressed by the organization. This was radical in terms of public management. To learn more about Community Action visit:  History of Community Action and  Why You’ve Never Heard of Community Action . Public officials chafed at the notion that public dollars would not be overseen by the city council or the mayor and demanded that rules be changed to give them the final fiduciary responsibility. The Green Amendment to the Community Action Agency legislation was passed by Congress in 1967 in order to give more power to local governments to make decisions. They could then determine whether and how much public participation would occur. Today, most citizen participation is advisory in nature.

Social Justice

Where has the New Public Administration taken us? Are there any lines crossed when public administrators become value-laden instead of value-neutral? Today we see the advent of guerrilla employees in the bureaucracy (O’Leary, 2010). A guerrilla employee is one who takes their values to the extreme and works with extra-governmental actors to get around public rules and regulations to implement an agenda of actions. Examples include the FBI informant who helped reporters uncover the Watergate scandal in the 1970s and whistleblowers who uncover irregularities or corruption in government.

Call for Social Equity

While today’s guerrilla employees may be violating norms and protocol, George Frederickson (1990) , coming out of the second Minnowbrook conference for public administration, made a clear call for social equity to be included as an essential element of public administration. He cites that social equity is the “third pillar” of public administration along with efficiency and economy (Frederickson, 1990, p.xv). He goes on to identify the key questions that must be asked of public administration if social equity is to be infused within the implementation of public services and activities:

· For whom is the organization well managed?

· For whom is the organization efficient?

· For whom is the organization economical?

· For who are public services more or less fairly delivered?

To answer these questions, Frederickson and others called for less quantitative data crunching and more use of the qualitative  case study.  A case study allows the researcher to interview people and get into the issue in a more in-depth manner than any survey can achieve. While case study bias by the researcher can be a problem, the knowledge gained from this qualitative method is essential for understanding social concerns that often are obscured in people’s everyday understanding. For those that are not marginalized by government decisions, there is an automatic assumption that their experience is everyone’s experience. The principle of social equity demands that public administrators look at whether they are serving all people – especially those who may be discriminated against or suffer from systemic bias. Frederickson believes that administrators can create an equality of opportunity for all citizens in distributing the benefits of the public sector.

Public Choice and Institutional Theory

While New Public Administration was developing an important new discussion in public administration around equity and values, another branch of the field forged ahead with Herbert Simon’s quest for the rational man. Vincent and Elinor Ostrom became the dominant scholars in the field of public choice (stemming from rational choice). Offshoots of this include the use of  game theory  to predict decisions based on conditions data and predictability of the decision maker. The Ostroms relied heavily on economic theory to develop their contribution to public choice. Elinor Ostrom won the Nobel Prize in Economics (as did Herbert Simon) in 2009 for her work on understanding common resources. You can learn more about her Nobel Prize win here:  Elinor Ostrom – Common Resources .

 

Ostrom used the  Tragedy of the Commons  to create an analogy game theory for how the imaginary commons could be managed. Her purpose was to demonstrate that the common good can be provided for, even when it is likely that it will be violated. Providing for the common good in a fair and equitable way is a vexing problem in the public sector.

8 Principles for Managing a Commons:

· Define clear group boundaries.

· Match rules governing the use of common goods to local needs and conditions.

· Ensure that those affected by the rules can participate in modifying the rules.

· Make sure the rule-making rights of community members are respected by outside authorities.

· Develop a system, carried out by community members, for monitoring members’ behavior.

· Use graduated sanctions for rule violators.

· Provide accessible, low-cost means for dispute resolution.

· Build responsibility for governing the common resource in nested tiers from the lowest level up to the entire interconnected system (Walljasper, 2011)

 

Public Choice Theory

While Elinor Ostrom’s work evolved into the theory of sustainable commons stemming from shared behavior and agreements, her original work was in the realm of  public choice theory .

“Thus, a model of man, the type of event characterized as public goods and services, and decision structures comprise the analytical variables in public choice theory. Our ‘man: the decision maker’ will confront certain opportunities and possibilities in the world of events and will pursue his relative advantage within the strategic opportunities afforded by different types of decision rules or decision-making arrangements. The consequences are evaluated by whether or not the outcome is consistent with the efficiency criterion” (Ostrom, 1971, p. 205)

Built on the economic principle of utility maximizing, the public choice theory applies the same construct to the public sector. Bureaucrats and politicians are not serving groups or interests such as political parties. Instead, those groups and parties, as well as public administrators, are made up of individuals who each seek to maximize their best interest in selecting which public policies and services they want from their government. There is no room for values and Minnowbrook styled public equity within the realm of public choice except as it is desired by the individual. Instead, public choice theory insists that there is no public interest, only self-interest that is represented by those both in and out of government. The government must not impede this but enable this self-interest to be communicated and acted upon. To learn more about the principles of public choice visit:  The Library of Economics and Liberty .

Support for Public Choice

For public administration, there has been a schism of support for the public choice theory. Social equity advocates do not see that public choice will reflect the interests of those for whom administrative justice has not prevailed. Systemic discrimination in public institutions is well documented, from school segregation to inequity in the judicial systems. But public choice theorists insist that the public sector has a normative responsibility to respond to the individual interests of the citizens as consumers. One of the most dominant pieces of scholarship to influence public choice theory is Charles Tiebout’s, “A Pure Theory of Local Expenditures” (1956). In this seminal work, Tiebout identifies that citizens will maximize their utility in selecting where they will live. They will base their decision on how much they are willing to pay in local taxes for the public services they want to consume. If a city offers a high performing school district and has a high tax rate, citizens may select it, despite the cost, because they value the school service to the point they will pay a premium price. Other cities may offer outstanding parks or open spaces. If this is of no value to the citizen consumer, they may not opt to live there and pay the excess taxes for services that they do not value. The criticism of this approach is that cities will cater to those who are willing to pay, leaving those who cannot pay without services of a quality that is befitting the collective public.

Conclusion

Public administration has gone through an identity crisis since the early years of Weber and Wilson. There was a period of intensive identification with the private sector using business executives as a proxy for what the administrative executive should be. There was a strong focus on examining motivations and the decision process to understand the best process for decisions, but more importantly, what individuals put into the process to come up with a decision. Simon made an influential contribution by identifying that there are no perfect decisions that are 100 percent rational. Instead, public decision-makers must focus on satisfying as many interests as possible with time and resource constraints and that this would suffice. This is satisficing. Simon supported this contention by exposing that rationalism must be bounded. One could look forever for the perfect answer and never find it. Therefore, our rational behavior must be bounded by circumstances and this might include the perspective of subordinates in the bureaucracy. As social issues took on dramatic proportions in the country, public administration scholars declared that they were not going to limit themselves as logical positivists and expect administrators to be value neutral. Instead, they embraced the need for social values and equity in the public realm and pushed hard for the methodological process to change in order to build in those ideas into a research construct. Qualitative methods and the case study became acceptable scientific approaches for many scholars. Others were less sure this approach was valued and instead built the field of public choice as the next iteration of understanding decision making. Public choice assumed that the individual (both in and out of government) would always be seeking to maximize their self-interest. It was up to the government to recognize this and to build systems that supported citizen interests and satisfaction. Understanding citizens as consumers and bureaucrats as self-interested workers could change the way we approach government systems from a public choice perspective.