Week 1 - Assignment 1: Write a Memo About Basic Concepts and Theories Related to Public Management and Week 2 - Assignment: Analyze a Case Study on Management and Organizational Behavior

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94 4: Public Institutional Th eory

of garbage can theory and March and Olsen and their defense of it are the issues of theory parsimony and methodology. Both views go even deeper to issues con- cerning the philosophy of science and competing views about how to do social science.

It is our view that modern institutional theory is past this debate, and the big tent conception of institutional theory covers both perspectives. Rational choice scholars applying principal-agent logic to information asymmetry and transac- tion costs in matters of public policy are doing institutional theory. So, too, are scholars doing interpretive thick descriptions of the same public policy matters. Both are studying public institutions and developing institutional theory.

Summary Th e vastness of institutional theory makes it diffi cult to neatly summarize its de- velopment. One must, however, acknowledge the contributions of Wilson and March and Olsen, who point out the limitations of explaining institutional behav- ior with economics and market logic. Instead, they build theory that incorporates structure and hierarchy, individual and group behavior, professional and cultural norms, institutional longevity, and the interactions of individuals and organiza- tions with their larger political, social, and economic contexts.

As a result, the framework of institutionalism can be used to explain every- thing from the behavior of bureaucrats to the diff usion of innovation across agen- cies or political jurisdictions. Earlier in this chapter, we state that today we are all institutionalists. Given the fl exibility of the framework of institutionalism, this is easy to defend. Yet because of this, institutional theory is fairly subject to the criticism that it lacks a center of gravity, a simplifying assumption. Th is is a valid criticism but should not cause us to lose sight of institutional theory’s very real ac- complishments and possibilities. Th e possibilities and limitations of institutional theory are in some ways a microcosm of the development of public management theory itself. Th ere is a growing theoretical structure, a commonly accepted set of defi nitions and agreed-upon premises, an elaborate if somewhat opaque vocabu- lary, and an increasingly iterative and cumulative body of knowledge. Above all, institutional theory highlights the unique properties and characteristics of public institutions and their problems and promises.

Frederickson, H. George, et al. The Public Administration Theory Primer, Taylor & Francis Group, 2015. ProQuest Ebook Central, http://ebookcentral.proquest.com/lib/ncent-ebooks/detail.action?docID=2039766. Created from ncent-ebooks on 2021-09-21 15:44:49.

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5 Th eories of Public Management

Introduction: Developments in Public Management Th eory Although changing tastes have had some infl uence on all fi elds of theory and ap- plication, no approach to public administration has been more subject to the fads of the day than management. Th e birth of the modern fi eld coincided with the popularity of the scientifi c management of Frederick W. Taylor, the application of time-and-motion studies to public activities, and the relentless search for the one best way. Like the “Total Quality Management” of the 1980s and today’s logic of continuous improvement, scientifi c management was borrowed from business administration early in the twentieth century and applied to public administra- tion and government.

Th rough time, in government much of what was understood to be scientifi c management separated itself from the more general subject of management, par- ticularly the management of the staff functions, budgeting, and personnel, and became the taproot of the modern fi eld of operations research. Half engineering and half business administration, operations research is a highly successful ap- plication of mathematics and computing power to classic business management issues, such as scheduling, pricing, quality control, effi ciency in production pro- cesses, and the delivery, warehousing, and inventory of products. Operations research is equally important in the public sector, particularly in public organi- zations for which such techniques are useful: the planning and development of weapons systems; highway and transportation systems; water and waste man- agement systems; nuclear-power-generating systems; air traffi c control systems; and large-scale data management tasks, such as the tax returns and records of the Internal Revenue Service and the management of the Social Security, Medi- care, and Medicaid systems.

In contemporary theory, the applications of operations research theory is most oft en found in settings described as tightly coupled systems in which machines, equipment, or technology is coupled with human management. Th e theoretical

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96 5: Th eories of Public Management

literature on high-reliability systems, covered in Chapter 4, is also oft en an ap- plication of operations research and concepts of scientifi c management (LaPorte and Consolini 1991).

Of the early features of American public administration—a merit-based civil service, the separation of administration from politics, the “principles” of admin- istration, administration as part of executive government, and the application of scientifi c management—it can be plausibly argued that both the theory and the logic of scientifi c management have been the most infl uential and enduring. Sci- entifi c management theory and logic are so persuasive in many important parts of government and the public sector that they are simply assumed, understood, and therefore usually invisible to the ordinary citizen; they are evident only when a system built on such theory and logic breaks down. When an airplane falls out of the sky, a child dies of E. coli bacteria, or a soldier dies from “friendly fi re,” the citizens and their elected leaders “see” complex public systems built and operated on the assumptions of scientifi c management. When the people “see” an airplane fall out of the sky, they oft en fail to see that at 5:00 p.m. on any workday aft er- noon in the United States, more than 300,000 people are hurtling safely through the skies at fi ve hundred miles per hour. By any reckoning, this is a scientifi c management miracle combining technology, private enterprise, and government control and management. Yet all agree that as air travel increases, these systems must be made even safer (Perrow 1999; Frederickson and LaPorte 2002). How- ever one describes it—the one best way, Total Quality Management (TQM), the high-performance organization, or continuous improvement—the legacy of sci- entifi c management is ubiquitous.

In the early years of modern self-conscious public administration, scientifi c management theory and application were most oft en found in the fi eld of pub- lic works, then a close cousin of public administration. Indeed, until the 1960s the American Society of Public Administrators, the American Public Works As- sociation, and the International City/County Management Association (ICMA) shared the same headquarters building on the campus of the University of Chi- cago. Leonard White’s original text (1929) contains a chapter on public works administration, and many of the early ICMA publications had to do with public works. Gradually, the two fi elds drift ed apart, engineers identifying with public works and comfortable with scientifi c management techniques, public admin- istrators identifying with the staff functions of government, such as budgeting and personnel administration, and seemingly more interested in the arts of man- agement. In the academy and in the literature—textbooks and journals— public works and public administration, with just a few exceptions, are now almost en- tirely separate (Felbinger and Whitehead 1991a, 1991b). In practice, however, every county has a department of public works; every county has extensive data management systems for property assessment; every state has elaborate social service data management systems as well as highway and other transportation systems; and the national government has engineering and systems operations

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97Introduction: Developments in Public Management Th eory

research specialists of many types. In practice, then, scientifi c management is still very much a part of public administration.

Scientifi c management theory, in its original Taylorist sense and its mod- ern TQM sense, is generally in the family of decision theory. Th e purposes and characteristics of decision theory are essentially problem defi nition and problem solving—how to control air traffi c, how to operate an effi cient sanitary sewer and treatment system. Sophisticated decision theoretic models deal with goal ambiguity, resource limitations, incomplete information, and satisfi cing. We cover these topics in Chapter 7. Management theory may have elements of problem solving, but it is ordinarily understood to have to do with the study and description of directing ongoing routine activities in purposeful organizations.

With the separation of public works from public administration and Herbert Simon’s assault on “the principles” in the 1950s, and the emphasis on policy anal- ysis and policymaking in the 1980s and 1990s, the subject of management lost cachet and fell off the public administration radar screen. A few blips lingered. In the 1960s and 1970s, there was some interest in generic administration, meaning essentially that management is management wherever practiced; several generic schools of business and public administration were established on the strength of this logic (Cornell, California at Irvine, California at Riverside, Ohio State, Mis- souri at Columbia and Kansas City, Brigham Young University, Yale) (Litchfi eld 1956). Most generic schools have now been discontinued or have evolved small separate and essentially autonomous departments of public administration in large business schools. Th e generic schools had virtually no eff ect on actual public administration practices or theories.

Th e 1960s and 1970s saw some interest—particularly in the New Public Administration—in theories of democratic administration, including fl at hier- archies, worker self-management, project management, matrix organizations, and the elimination of competition as an incentive for work (Marini 1971; Frederickson 1980). Th ese theories have had some eff ect on practices and are commonly found in contemporary “good public management” models.

Th e social equity theory found in the New Public Administration of the 1960s and 1970s has also had a long shelf life. It came along at a time of high concern for fairness in the workplace, equal employment opportunities, affi rmative action, and comparable worth. Many of these concepts became statutory, organizations and procedure to adopt these values appeared, and social equity is now widely practiced. In their assessment of the eff ects of the social equity aspects in New Public Administration, Jay Shafritz and E. W. Russell (1997) write this:

From the 1970s to the present day [public administration scholars] have pro- duced an endless stream of conference papers and scholarly articles urging public administrators to show a greater sensitivity to the forces of change, the needs of clients, and the problem of social equity in service delivery. Th is has had a positive eff ect in that now the ethical and equitable treatment of citizens

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98 5: Th eories of Public Management

by administrators is at the forefront of concerns in public agencies. Reinforced by changing public attitudes, the reinventing government movement and civil rights laws, the new public administration has triumphed aft er a quarter century. Now it is unthinkable (as well as illegal), for example, to deny someone welfare benefi ts because of their race or a job opportunity because of their sex. Social equity today does not have to be so much fought for by young radicals as admin- istrated by managers of all ages. (1997, 451)

From the 1950s through the 1970s, with the exception of a continuing interest in budgeting and personnel staff functions, the arguments of the New Public Ad- ministration, and a brief interest in “management by objective,” academic public administration had little to say regarding management in the practice of public administration. Beginning in the mid-1980s, the subject of management returned to public administration with a vengeance, in theory and in practice.

It being understood that the most rigorous applications of management the- ory in public administration are found in operations research and public works, and that these applications are best described as decision-theoretic, we now turn to modern theories of public management. Unlike decision theory, these theories are not primarily problem solving, but are instead descriptive of management behavior or function as prescriptive guides for management improvement in the ongoing routine work of organizations.

It is common in public administration theory to combine the subjects of man- agement and organization and to treat them either as linked or as the same thing. Th is custom has led to some conceptual and theoretical confusion. For example, decentralization is oft en described as a management phenomenon, although it is generally agreed that many, if not most, aspects of centralization and decen- tralization are organizational or structural phenomena. To reduce this confusion and to sharpen the theoretical point, we have unbundled management and orga- nization theory and treat them separately. Public management is taken to mean the formal and informal processes of guiding human interaction toward public organizational objectives. Th e units of analysis are processes of interaction be- tween managers and workers and the eff ects of management behavior on workers and work outcomes. Th e purpose of this chapter is to describe and evaluate the- ory, either empirically or deductively derived, that accounts for or explains public management behavior.

Th eories of public organization, by contrast, have to do with the design and evolution of the structural arrangements for the conduct of public administra- tion and with descriptions or theories of the behavior of organizations as the unit of analysis. Although separating management and organization for concep- tual and theoretical refi nement has its advantages, we do not contend here that management and organization are distinct in an empirical sense. Th ey are not. Management almost always occurs in the context of organization, and organiza- tion is seldom eff ective without management. Th erefore, in the closing chapter,

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99Traditional Management Th eory Th rust Forward

management and organization are bundled back together, as they are in the em- pirical world, and theories of their relationship are presented.

Th e following discussion describes theories of public management in four categories. First, and most important, is traditional public management theory, thrust forward. Second is the current popularity of leadership as public manage- ment. Th ird is the theory derived from the longer-standing practice of conducting public management by contract. Fourth are theories of governance that explain important features of public management.

Traditional Management Th eory Th rust Forward Traditional management theory has its origins with Frederick W. Taylor and his infl uential Th e Principles of Scientifi c Management, which was published orig- inally in 1911 and is still in print (2010). His subject was business, particularly the shop. His purpose was to move from rules of thumb, customs and traditions, and ad hoc approaches to business management toward a body of scientifi c prin- ciples. His principles were based on precise measurements of work processes, as well as outcomes; on the scientifi c selection of workers; on the optimal placement of workers in describable work roles; on the division and sequencing of work pro- cesses to enhance productivity; and on the cooperation of workers in achieving the organizational objective. Th e application of these principles, Taylor believed, would lead managers and workers to the one best way.

As business innovations oft en do, these concepts soon colonized govern- ment. Th ey became a central part of the Progressive Era and the movement to reform government, and they were highly infl uential in the development of civil service systems in government at all levels. Th e widespread use of tests for hiring and promotion, position descriptions, and employee evaluations are all refl ec- tions of scientifi c management. Indeed, one could argue that modern-day testing generally—for progress in school, for admission to universities and graduate schools, and for professional standing in law, medicine, accounting, teaching, and so forth—are also contemporary manifestations of the logic of scientifi c management. Th e desire for certitude, to measure precisely and thus order and categorize the world properly and thereby make sense of it, is doubtless as strong today as it was at the nadir of scientifi c management.

Luther Gulick (1937), one of the founders of modern public administration, embraced the orthodoxy of scientifi c management, applied it to government, and introduced the most famous mnemonic in the fi eld—POSDCORB, which rep- resents his theory of the seven major functions of management:

• Planning • Organizing • Staffi ng • Directing

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• Coordinating • Reporting • Budgeting

Until the mid- to late 1950s, any treatment of management in public admin- istration was essentially an elaboration of POSDCORB. Oft en combined with an essentially scalar, or hierarchical, theory of organization, these principles of man- agement had a kind of commonsense quality that was appealing to practicing pub- lic administrators as well as to those studying the fi eld or preparing for practice. Early criticisms of the principles said they were top-down, they were essentially prescriptive, and they underemphasized natural forms of cooperation—but they formed the core of the fi eld. From the 1930s to the 1950s, important modifi cations and adaptations were made to the principles of scientifi c management. Chester Barnard (1938) identifi ed and set out the acceptance theory of authority, which argues that authority does not depend as much on persons of authority or on persons having authority as it depends on the willingness of others to accept or comply with directions or commands. In classic theory, it was argued that policy, instructions, guidance, and authority fl owed down the hierarchy, and communication (what we would now call feedback) fl owed up. Barnard demon- strated that considerable power accumulated at the base of the hierarchy, and that theories of eff ective management needed to be modifi ed to account for the culture of work in an organization, the preferences and attitudes of the work- ers, and the extent to which there was agreement between workers’ needs and interests and management policy and direction. He described the “functions of the executive” as having less to do with the formal principles of administration and more to do with securing workers’ cooperation through eff ective communi- cation, through workers’ participation in production decisions, and through a demonstrated concern for workers’ interests. In a sense, then, authority is dele- gated upward rather than directed downward.

Another modifi cation to the principles of scientifi c management came as the result of the Hawthorne studies. Th ese describe the Hawthorne eff ect, which ex- plains worker productivity as a function of observers’ attention rather than phys- ical or contextual factors. Subsequent interpretations of the Hawthorne eff ect suggest that mere attention by observers is too simplistic, and that workers saw in the experiments altered forms of supervision that they preferred and that caused productivity to increase (Greenwood and Wrege 1986). Th e Hawthorne experi- ments and the work of Barnard introduced a human relations approach that for- ever changed management theory. Classical principles of scientifi c management and formal hierarchical structure were challenged by the human relations school of management theory, a body of theory particularly infl uenced by Douglas McGregor (1960). McGregor’s Th eory X and Th eory Y represented an especially important change in management theory. Here are the competing assumptions of Th eory X and Th eory Y:

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101Traditional Management Th eory Th rust Forward

Th eory X Assumptions 1. Th e average person dislikes work and will try to avoid it. 2. Most people need to be coerced, controlled, directed, and threatened

with punishment to get them to work toward organizational goals. 3. Th e average person wants to be directed, shuns responsibility, has little

ambition, and seeks security above all.

Th eory Y Assumptions 1. Most people do not inherently dislike work; the physical eff ort and the

mental eff ort involved are as natural as play or rest. 2. People will exercise self-direction and self-control to reach goals to

which they are committed; external control and the threat of punish- ment are not the only means for ensuring eff ort toward goals.

3. Commitment to goals is a function of the rewards available, particu- larly rewards that satisfy esteem and self-actualization needs.

4. When conditions are favorable, the average person learns not only to accept but also to seek responsibility.

5. Many people have the capacity to exercise a high degree of creativity and innovation in solving organizational problems.

6. Th e intellectual potential of most individuals is only partially used in most organizations.

Following these assumptions, Th eory X managers emphasize elaborate con- trols and oversight, and they motivate by economic incentives. Th eory Y manag- ers seek to integrate individual and organizational goals and to emphasize latitude in performing tasks; they seek to make work interesting and thereby encourage creativity.

It is important to point out that the work of Chester Barnard, the Hawthorne experiments, and McGregor was behavioral, which is to say that it was based on fi eld research. Th e earlier work of Taylor and others, though it was called scien- tifi c management, was less a result of nonsystematic observations and more a result of deductive logic.

One important and diff erent approach to management theory in the evolution of public administration is the sociology of Max Weber (1952), who founded the formal study of the large-scale complex organizations he labeled “bureaucracy.” Although he did his work in the late nineteenth and early twentieth centuries, it was not generally available to Americans until aft er World War II. Weber’s purpose was to describe the salient characteristics of enduring large-scale orga- nizations, which he labeled “ideal types,” ideal meaning “commonly found” or “generally characteristic.” He was particularly interested in rationality, or collec- tive goal-oriented behavior, as in the rational organization. He was opposed to the class distinctions characteristic of Europe in the early twentieth century and

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102 5: Th eories of Public Management

to the resulting nepotism and spoils. He argued that rational bureaucracy prac- tices a specialization of labor. Jobs are broken down into routine, well-defi ned tasks so that workers can perfect those tasks and so that job applicants can be tested in specialized areas to meet formal qualifi cations. He described the formal rules, procedures, and record-keeping characteristics of bureaucracies as well as their scalar, or hierarchic, characteristics. Th e bureaucracy, he argued, is imper- sonal and rational because individual selection and promotion are strictly on the basis of merit, scientifi cally determined.

Weber’s bureaucracy was more popular with academics than with practi- tioners, and it is a theory of management only in the sense that it describes what he identifi ed as characteristics commonly found in large and complex organi- zations that have endured. Th e critique of Weber’s work is well established. Th e ideal type bureaucracy tends to inertia, resists change, is mechanistic rather than humanistic, and is subject to goal displacement and to trained incapacity. Bu- reaucracy, in the present day, has become the object of a political derision that blames the problems of government on the people and organizations that operate public programs. And bureaucracy is an equally popular whipping boy for schol- ars and consultants who seek to make public programs more eff ective. Despite all this criticism, Weber is acknowledged to have developed one of the most empiri- cally accurate and universal descriptions of the large-scale complex organization in its time, a description that is oft en accurate even today.

No criticism of the principles of public administration was so devastating as Simon’s critique (1946)—dismissing them as proverbs. He demonstrated that the principles of public administration were contradictory, had little ability to be generalized as theory, and were fuzzy and imprecise. In the place of the principles of management, which he found theoretically wanting, he developed what has become decision theory. Th is theory has had a profound infl uence on public administration, most of it good. But the obliteration of the principles of management as a straw man was not essential to the presentation of deci- sion theory and to its eventual importance. Th e principles of management were obliterated, nevertheless—at least in the theoretical sense.

From the late 1950s through the mid-1980s, little serious theoretical work was done on management in public administration. Th e subject gradually disappeared in the texts as well as in the pages of the Public Administration Review. Th e irony is, of course, that management continued to be the core of public administration practice. It is no wonder that during this period there was a growing distance between public administration scholarship and theory and public administration practice.

During this period, fortunately, a strong interest in management theory in so- ciology, social psychology, and business administration continued. Much of this work was in the so-called middle-range theories, particularly group theory, role theory, and communications theory. More recently, this past decade has seen a rebirth in interest in management in public administration, with the prolifi c work

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103Traditional Management Th eory Th rust Forward

of those involved with the Texas Education Excellence Project. Th e contributions of this literature are reviewed later.

Further, a revitalization of scientifi c management has started, with new empir- ical attention to Simon’s critique of Gulick’s POSDCORB-derived management principles. Kenneth Meier and John Bohte (2000) off er and test a theory that links span of control (the number of subordinates managed by a single supervisor) to bureaucratic performance. Interestingly, Meier and Bohte conclude that both Simon and Gulick were right. Simon’s critique that there is no single correct span of control was supported, but so was Gulick’s principle that smaller spans of con- trol are preferable when the authority has more information and skill than the subordinates. Meier and Bohte (2003) followed this study with another that ex- amined diversifi cation of function, stability, and space, which Gulick viewed as the three important determinants of span of control. Gulick’s hypotheses were supported, but Meier and Bohte found that span of control needs to be thought of within the context of organizational hierarchy: What matters for span of control at one level of an organization may not matter at another. Th is research suggests that the insights and utility of Gulick’s management principles are far from over.

Group Th eory Th eories of groups are primarily theories of organization rather than theories of management, but group theory has important implications for public man- agement. Most of these implications have to do with contrasting approaches to managerial control. In classic management theory, control is exercised by policy, rules, regulations, and oversight. In group theory, the eff ective group will de- velop shared goals and values, norms of behavior, customs, and traditions (Ho- mans 1950; Shaw 1981). Eff ective management in the context of group theory nurtures, cultivates, and supports group goals and norms that are compatible with and supportive of institutional purposes and missions. Table 5.1 is a com- parison of traditional forms of managerial controls and forms of control based on group theory.

Most aspects of group theory are now embedded in the public management literature, and many public managers seek to develop the kinds of group goals, motivation, and commitments that support public institutional goals. John DiIulio Jr.’s research (1994) on the characteristics and management of the Federal Bureau of Prisons (BOP) demonstrates the power of group theory in public administra- tion. In attempting to account for the behavior of BOP employees, DiIulio found principal-agent theory and rational choice theory weak. He turned to a version of group theory sometimes called the strong-culture organization, mixed with theo- ries of leadership, to explain employee behavior:

Rational choice theories of bureaucracy are neither illuminating nor helpful. In eff ect, rational choice theorists of bureaucracy are half-baked Barnardians.

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With [Chester] Barnard, they understand that organizations are devices for fos- tering and sustaining cooperation among self-interested individuals who have disparate beliefs, dissimilar motivations, and confl icting goals. With him, they recognize that the individual is always the basic factor in organization, that the “functions of the executive” are to induce self-interested workers to cooperate in

TABLE 5.1 Comparing Traditional and Group Th eories of Management Controls

Characteristics Managerial Controls Group Controls

Means of control Policy, rules, regulation, and oversight

Shared goals, values, and traditions

Sources of control Mainly external mechanisms Mainly internal motivation

Position design Narrow subtasks; doing rather than thinking

Whole task; doing and thinking

Definition of duties Fixed Flexible, contingent

Accountability Usually individual Often in the group

Structure Tall; top-down Flat; mutual layered influence

Power Emphasis on legitimate authority

Emphasis on relevant information and expertise

Responsibility Performing individual tasks Performance of work unit or group

Rewards Extrinsic Intrinsic

Innovation Less likely More likely

Employee reaction to management

Compliance Commitment

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105Traditional Management Th eory Th rust Forward

ways that foster, rather than frustrate, achievement of organizational goals, and that money and other tangible goodies are oft en potent inducements.

But the rational choice theorists miss the other half of Barnard—and no small part of human nature to boot. Th ey discount the importance of what Bar- nard termed the “moral factor.” . . . More broadly, they discount the tug of social sentiments and relegate the effi cacy of moral motivations to a limbo of lesser behavioral reality.

In sum, rational choice theorists of bureaucracy underestimate the propen- sity of people to redefi ne their self-interest in terms of the preferences of lead- ers they respect, the well-being of co-workers they care about, and the survival and reputation of organizations they labor for. It may well be true that under most conditions, most bureaucrats, especially within government, follow nar- row defi nitions of self-interest. But that is neither the whole story nor the most important part of the story of what public servants—corrections offi cers, fi re fi ghters, police offi cers, public health workers, social workers, and others—do on a day-to-day basis. Even in the bowels of government agencies, there is more self-sacrifi ce, and less self-interest, than rational choice theory allows. For the principled agents of the BOP and other government bureaucracies Americans can and should be proud and thankful. (1994, 288–289)

Role Th eory Social psychologists tend to defi ne all human organizations as role systems. In observing organizations in action, we see that what are actually organized are the acts of individuals in particular positions or offi ces. In role theory, each offi ce or position is understood to be relational; that is, each offi ce is defi ned in its relation- ship to others and to the organization as a whole, and oft en to the organization’s purposes. Persons in roles exhibit essential persisting features of behavior, such as the behavior of school superintendents, prison wardens, or data entry workers. Role theorists observe and measure the persisting patterns of behavior of persons in common roles; they especially study the relations between persons in particu- lar roles, both inside and outside the organization. Each offi ceholder performs in a role set, a contextual set of relationships with others who hold particular role expectations toward the offi ceholder.

Perhaps the best-known study in role theory was in the public sector, a study of school superintendents (Gross, Mason, and McEachern 1958). Persons and groups in the superintendents’ role set include other internal roles, such as teach- ers, principals, and members of the school board, as well as signifi cant external roles, such as parents, parent-teacher organizations, business groups and lead- ers, social and fraternal groups, the state offi ce of education, and so forth. School superintendents behave according to perceived role expectations; in the best of circumstances, superintendents’ perceived role expectations will be accurate and

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compatible so that they will know what others expect of them and perceive a gen- eral agreement in the role expectations of others. Regrettably, this rarely happens, and superintendents are caught, or perceive themselves caught, in competing role expectations, described in role theory as cognitive dissonance.

Role theorists have consistently demonstrated that role occupants, such as school superintendents, tend to misperceive the role expectations of others. Or- dinarily, this misperception exaggerates the strength, duration, and specifi city of the positions of others and results in excessive managerial caution and organiza- tional inertia.

Of course, real observable role confl ict does occur. When the school superin- tendents experience genuine unresolvable role confl ict regarding hiring, promo- tion, salaries, and budget matters, they tend to have low job satisfaction and will probably change jobs. One key to success is the ability of some school superinten- dents not to exaggerate the expectations of others and to fi nd compromises that reduce confl ict.

Higher levels of management tend to be associated with multiple roles, and sometimes role overload. Managers, however, tend to fi nd greater job satisfaction as roles increase. Th e more roles a manager takes on, the greater the tendency to seek generalized, overall solutions, programmed solutions, one-size-fi ts-all an- swers. Th e greater the number of roles, the greater the tendency to use authority and sanctions and to search for one generalizable effi ciency—oft en a short-term effi ciency at that.

Henry Mintzberg (1992) used the concept of roles to identify the three pri- mary managerial roles, a set of categories now widely used in management the- ory for business but equally applicable to management in public administration. Managers in their interpersonal roles can act as fi gureheads performing primarily symbolic duties, as leaders building relationships with subordinates, or as liaisons emphasizing contacts at the edges of the organization. In their informational roles, managers act as monitors seeking useful information, as disseminators transmit- ting information internally, or as spokespersons transmitting information outside the organization. In their managerial roles, managers are as entrepreneurs initiat- ing and encouraging innovation, as disturbance handlers, as resource allocators, or as negotiators. Based on personal characteristics and the needs of organiza- tions at particular points of time, managers take on combinations of these role characteristics.

Th ere are now three excellent public administration descriptions of several of these role combinations: Mark H. Moore’s Creating Public Value: Strategic Man- agement in Government (1995); John M. Bryson and Barbara Crosby’s Leadership for the Common Good: Tackling Public Problems in a Shared-Power World (1992); and Barry Bozeman and Jeff rey D. Straussman’s Public Management Strategies: Guidelines for Managerial Eff ectiveness (1991). Each develops for the public sector several of the same theories Mintzberg developed for business.

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Communication Th eory Much of what is understood to be public management depends upon eff ective communication. Communication theory is a mix of cybernetics, linguistics, and social psychology. Th e language of communication theory resembles the language of systems theory: inputs, throughputs, outputs, feedback loops, entropy, homeo- stasis. Although communication is always individual or singular, communication theorists tend to regard the work group or the organization as their unit of analy- sis, and in doing so, they anthropomorphize the organization. Anthropomorphic thought promotes organizational guessing, organizational memory, organiza- tional consciousness, organizational culture, organizational will, and, especially, organizational learning—all of which are based upon communication. Th is logic is particularly helpful in building a management theory of communication, now a considerable body of knowledge (Garnett 1992).

Th e theory of communication found in public administration argues that most downward communication, or communication with subordinates, em- phasizes task directives and organizational policy and procedures. Th e com- munication of agency mission and performance is oft en neglected, the result being low morale, preoccupation with routine tasks, and indiff erence to agency performance (Garnett 1992). Public managers overestimate the power of com- munication through memoranda, e-mail, telephone, and other such channels, and they underestimate the power of direct communications through or by managerial action. Th e use of internal models of eff ectiveness or examples of organizational success is an eff ective means of organizational learning. Eff ec- tive communication occurs when managers establish work standards through collective means and provide feedback on performance as measured against agreed-upon standards. Keeping channels clear for upward communication is a staple in communication theory, as is the importance of redundant, multiple, and overlapping communication channels downward, upward, and laterally (Garnett 1992).

Eff ective communication with other agencies and with agency publics is an enduring feature of managerial communication theory. Communication between organizations is most oft en associated with shared professional training perspec- tives and with regular training. In a metropolitan area, city public works direc- tors, chiefs of police, fi re chiefs, and city administrators oft en communicate both formally and informally with their counterparts; indeed, lateral communication networks are oft en robust and enduring. It is sometimes said that a city public works director will spend more time communicating with other city public works directors in a metropolitan area than with other agency heads in his or her own city government (Frederickson 1997a). Lateral communication and coordination in complex organizations are aided by assigning key people to so-called lynchpin responsibilities (Likert 1961, 1967).

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Communication with external publics ordinarily involves segmenting publics and specifi cally designed procedures for communicating agency positions, per- formance, services, and so forth. Agency communication with an interest group would diff er from its communication with a legislative body or committee, or an individual member of that body, for example. Eff ective agency communication with publics has as much to do with receiving as with sending signals, most agen- cies being much better at the latter than the former. Incoming messages are oft en highly fi ltered, agency managers receiving bits and pieces of information but of- ten not understanding the full substance or meaning of signals sent by publics. Selective listening is a persistent problem in public organizations (Garnett 1992).

Evolution of Management Th eory Th e most signifi cant progress in management theory from the 1950s through the 1970s was in developing and testing middle-range theories, such as group, role, and communication theories. Most of this work has been in the study of busi- ness management rather than public management and has now fully migrated to our literature. Th e middle-range theories, particularly group, role, and commu- nication theory, are now the guts of management theory in business and public administration.

Th e text by Herbert Simon, Donald Smithburg, and Victor Th ompson pub- lished in 1950 was far ahead of its competition, then and now, mostly because it used middle-range theory generously. For a generation, this text was the source of most faculty lectures on theories of management in the public sector (Simon 1991). Most of the texts written in the 1970s, 1980s, and 1990s treat budgeting and personnel staff functions as if they were management, and most do not in- clude a separate treatment of management theory, let alone the middle-range the- ories that contribute to it.

Th e most complete treatment of middle-range theories in public adminis- tration is found in the now-out-of-print Administrative Organization by John Pfi ff ner and Frank P. Sherwood (1960). In it, the authors set out the formal struc- tures of public organizations and then use the concept of overlays to describe how organizations actually behave and managers actually function. Overlays de- scribe modifying processes and conditions and how they infl uence behavior and outcomes. A public organization is, for example, understood to have an impor- tant “group overlay” that should inform managers of group behavior; indeed, an eff ective manager should have a rudimentary theory of groups to help with management decisions and action. Th ere are also role overlays, communication overlays, problem-solving overlays, and, most important, power overlays. Pfi ff - ner and Sherwood’s book stands as the most complete midcentury treatment of management theory in public administration. Th at it was in print only from 1960 to 1967 is evidence of the general lack of interest in the subject of management in the scholarly public administration of that era.

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Th e good news is that management theory is back. We start with this question: Aft er fi fty years, has the positivist decision-theory founded by Simon met the promise of a body of empirically verifi ed theory? Christopher Hood and Michael Jackson (1991) argue that the results disappoint on three counts. First, the old principles of management—Simon’s proverbs—persist and even fl ourish. Sec- ond, there is no commonly accepted or agreed-upon theory or paradigm of man- agement in public administration based on decision theory. Th ird, the positivist administrative science of decision theory appears to have had little eff ect on the day-to-day practices of public management, and the language, arguments, and infl uence of the principles of management in public organizations remain sur- prisingly “proverbial.” “It seems that Simon’s attack on the proverbial approach to administration might never have existed, for all the practical infl uence it has had on administrative argument” (1991, 21).

Building on his earlier “science of muddling through” critique of decision the- ory, Charles Lindblom, with David K. Cohen (1979), found that “professional social inquiry,” such as decision-science, seldom infl uences either public policy or public administration. Instead, an interactive process of argument, debate, the use of ordinary knowledge, and a form of social or organizational learning is not only a more commonly found form of social problem solving; it is also safer and less inclined to large-scale risk or error. Along the same lines, Giandomenico Majone, in his brilliant Evidence, Argument, and Persuasion in the Policy Process (1989), demonstrates that the skills of policy analysis and the capacity to engage in public problem solving are forms of a dialectic not unlike the arguments or de- bates of generally informed participants. Th is dialectic is less like the authoritative fi ndings of a scientist and more like the debate or argument of lawyers.

Finally, as a research methodology and an epistemology, positivism is now less universally accepted than it was at midcentury. In part, this is because it has not lived up to its promise. More importantly, positivism, particularly the logical positivism that distinguished between values and facts, oft en failed to account for values, norms, and traditional political philosophy, and sometimes didn’t even acknowledge them. Nevertheless, positivism and the canons of social science methodology and epistemology tend to dominate academic perspectives regard- ing management theory in public administration. In the practices of public ad- ministration, however, positivism is less infl uential.

As a way to distinguish between public management principles that are scien- tifi cally verifi able and principles that are simply understood and accepted, Hood and Jackson suggest that the principles are better understood as doctrines; and as doctrines, they are powerfully infl uential in both debating and carrying out pol- icy. Th ese doctrines, following Hood and Jackson, have six recurring features: (1) Th ey are ubiquitous, found wherever there are organizations; (2) they are based on “soft data” and “soft logic,” oft en lacking key elements and assumptions; (3) they are a constantly shift ing “received view” or “received wisdom,” having more to do with metaphor, rhetoric, packaging, and presentation and less to do with

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objectively or conclusively demonstrating the scientifi c superiority of one view over another; (4) they are oft en contradictory; (5) they are unstable, the changing fads and fashions of taste makers; and (6) they tend to rotate—old ideas dressed in new clothes (1991, 17–18).

Unlike scientifi cally verifi able principles, these doctrines are accepted for rea- sons best explained not by hard data but by the analytic techniques associated with rhetoric. In rhetoric, one persuades or infl uences another by developing a linguistic solution to a problem, or by “naming” the problem in a way that elicits general agreement about a course of action. Th e use of metaphor is key because all institutions are so-called cognitive paradigms grounded in shared understand- ings and meanings. One thinks of the deeply contentious contemporary debate over abortion in the United States. During his candidacy for president, Bill Clin- ton stated, “I am personally against abortion. Abortion is, however, the law of the land, but it should be safe, and rare.” By repeating that statement, he seemed to fi nd a center position acceptable to most, though not to those at the extremes.

Rhetoric requires the generous use of ambiguity, the craft ing of general po- sitions that can be favorably viewed from a wide spectrum of public positions. Positions must be aligned with the general or greater good. Arguments are se- lective, which means that evidence supporting the arguments is used, whereas contrary evidence is not. For rhetoric to be successful, those who listen to it or witness it must be willing to suspend disbelief, just as one does when watching good theater (Hood and Jackson 1991). A doctrine such as “a government that works better and costs less” has a powerful rhetorical appeal, is a “solution” that matches contemporary values, is ambiguous, is supported by selected best prac- tices, is identifi ed with the greater good, and, it being evident that costing less is at best unlikely, requires one to suspend disbelief.

Th e problem, of course, is that a theory of management in public administra- tion built on such an epistemology is decidedly out of phase with ordinary defi - nitions of science. Th e “doctrines of management” model tested by the logic of rhetoric is at once postmodern and retrograde, an up-to-date version of Aristotle’s description (1932) of linguistic solutions to social problems. From the perspective of those who actually practice policymaking and public administration, the logic of the doctrines of management is a close theoretical approximation of reality— certainly much closer than theories of rational choice or decisionmaking—but the latter have a much greater cachet in the academy.

Th e doctrines of administration can be described this way (this is a consid- erably adapted, much simplifi ed, and condensed version of doctrines found in Hood and Jackson [1991, 34–35]):

1. Doctrines of scale a. Large, intermediate, small b. Centralized, decentralized

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2. Doctrines of service provision (how organized and managed) a. Direct governmental service b. Contracting out c. Privatization

3. Doctrines of service provision (citizen or client choices) a. Compel both costs and benefi ts b. Allow choices of either costs or benefi ts

4. Doctrines of specialization a. By characteristics of work b. By characteristics of clientele c. By location d. By process e. By purpose

5. Doctrines of control a. By input—budget, staff size b. By process c. By competition d. By standards of professional practice e. By outputs f. By outcomes g. By direct political control h. By direct administrative control

6. Doctrines of discretion a. By law and regulation b. By professional latitude c. By deregulation d. By risk taking

7. Doctrines of employment a. Selected and promoted by merit b. Selected by representation of groups c. Selected by technical skills d. Selected by administration skills e. Selected by cultural skills

8. Doctrines of leadership a. Direct political leadership b. Direct administrative leadership

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c. Neutral competence/professional expertise d. Entrepreneurshipl/advocacy

9. Doctrines of purpose a. Carry out the law b. Maintain orderly and reliable institutions c. Facilitate change d. Add value

Another way to think about the doctrines of public management is to turn to the enduring questions of management: Under what circumstances are neutral competence and professional expertise more important than political respon- siveness? What, on the other hand, are the circumstances under which political responsiveness is more important than neutral competence and professional expertise? What are the technological, geographic, and managerial issues that determine whether an organization should centralize or decentralize? What ought to be the criteria or standards for appointment and promotion in public employment? How much discretion should be allowed to street-level bureau- crats and their managers? Th ese, and similar questions, summarized previously as doctrines, were addressed by the early principles and the contemporary doc- trines. Th e questions are essentially the same, but the answers are very diff erent. Table 5.2 compares the answers to these questions found in traditional and con- temporary principles.

Th e infl uential modern literature on management in public administration powerfully illustrates how the principles are reemerging. Virtually all of it uses the logic of rhetoric, selective case-based empirical “evidence,” and a kind of mis- sionary zeal (Graham and Hays 1993; Rainey and Steinbauer 1999; Osborne and Gaebler 1992; Barzelay 1992; Cohen and Eimicke 1995). Very oft en missionar- ies, not to mention politicians, consultants, and academics, fi nd their work easier if there is a devil, an evil empire, or a straw man. In public management the- ory, the devil is BUREAUCRACY. Preferred doctrines of public management are suggested as ways to “banish bureaucracy or to reinvent government: how the entrepreneurial spirit is transforming the public sector from schoolhouse to statehouse, city hall to the Pentagon” (Osborne and Gaebler 1992). Th ese doc- trines are argued, just as the principles were eighty years ago, on the observation of so-called best practices rather than on replicable social science (Osborne and Gaebler 1992; Cohen and Eimicke 1995). Nevertheless, the modern principles of entrepreneurial public management are now nearly a hegemony in the practices of public administration.

Th ese doctrines have been given, or have taken, the name New Public Man- agement (NPM) and are sometimes referred to as the “new managerialism.” Th ey have a particularly strong base in Western Europe, Australia, and New Zealand, as well as in the United States. Th e Organization for Economic Co-operation and

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Development is a particularly strong advocate of the New Public Management and encourages countries to adopt its principles. Although there is an extensive scholarly critique of NPM, it is a safe generalization that its principles have been widely accepted in the modern practice of public administration (Frederickson 1997b). Whether the application of these principles is better government, and particularly better government for whom, is subject to debate. No doubt the ap- plication of the early principles of management did result in cleaner, more ef- fi cient, and more professional government. But with that has come larger and more expensive government.

NPM is presently very infl uential in the practices of public administration. In a postmodern and rhetorical sense, the New Public Management can be ex- plained and understood as presently acceptable doctrines of management. But the canons of social science demand a more precise identifi cation of variables, more precision in the suggested association between variables, greater precision

TABLE 5.2 Comparisons of Traditional and Contemporary Principles of Management in Public Administration

Doctrine Traditional Principles Contemporary Principles

Scale Large—centralized Small—decentralized

Service Provision Direct government service Compel costs and benefits

Contract out Choices in costs and benefits

Specialization By characteristics of work By work processes and purpose

By characteristics of clientele By location

Control By professional practice standards

By inputs (budgets, staff size)

By outputs, processes By administration

By competition

By outcomes By administrative

Discretion By laws, regulations By professional latitude

By deregulation By risk taking

Employment By merit, affirmative action, technical skill

Same

Leadership Based on neutral competence Professional expertise

Based on entrepreneurial advocating

Purpose To carry out the law To manage orderly and reliable institutions

To facilitate change To create public value

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in measurement, and a greater replication of fi ndings. Research using these techniques indicates that NPM principles can result in a selective and short-run increase in effi ciency; are negatively associated with fairness, equity, or justice; sel- dom reduce costs; and have produced numerous innovative ways to accomplish public or collective purposes (Berry, Chackerian, and Wechsler 1995; DiIulio, Gar- vey, and Kettl 1993).

A particularly pointed empirical critique of NPM comes from Kenneth Meier and Laurence O’Toole (2009), who base their inferences on an extensive series of studies on public management produced by those involved with the Texas Edu- cation Excellence Project, which has recently been subsumed into the more en- compassing Project for Equity, Representation, and Governance. Th e sum of this work allowed Meier and O’Toole to evaluate ten “proverbs” of NPM against the evidence from the project. Specifi cally, they fi nd the following:

1. Contracting out is oft en not done for reasons of performance and effi - ciency, but rather to get rid of problems.

2. Lean and delayered organizations are vulnerable to external stress, such as budget cuts or other emergencies.

3. Good management is not necessarily good for everyone. Th e distri- butional consequences of management can aff ect some clientele more than others. If equity is a concern, this is a troubling fi nding.

4. Organizations that are stable can perform well and adapt to changes in their environment, and managerial fl exibility is not a necessary compo- nent of change.

5. Organizations are not at the mercy of their political environments. Decisions to network are choices rather than functions of the envi- ronment. Further, organizations need not even match their environ- ment; networking can be eff ective in a hierarchical environment, and hierarchy can help in a networked environment.

6. Change-oriented managers are not necessarily better than conservative managers. Change-oriented management works best only when the political environment is stable. When the environment is less stable, a more conservative approach is more eff ective.

7. Skilled management can overcome some of the failures of political ac- tors. When political institutions fail to represent citizens, agencies with skilled managers can still be successful.

8. Rather than good managers making all the diff erence, they make some diff erence. Managers cannot do everything, and even though good management matters, it can not be the “solvent for a wide range of eco- nomic and social ills” (Pollitt 1990, 1).

9. Th ere is not necessarily a pattern to follow that will produce good man- agement. Good managers consider their skills and the needs of their organizations, and then make decisions about what to do.

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10. Good managers do not necessarily have to choose between competing goals. Th ey take advantage of positive spillovers, and use training and incentives to simultaneously achieve goals that are normally thought to require tradeoff s.

Meier and O’Toole are not simply pointing out the limits of NPM; their argument is that to advance public management theory—and certainly to im- prove management practices—we need sustained, rigorous, empirical research. Improving the study of public management requires hard data rather than the repackaging of principles into doctrines and their sale under a new acronym.

Leadership as Public Management Th e most interesting aspect of management’s resurgence in public administra- tion is the prominence of leadership as an energizing and legitimating idea. Th e sources of contemporary literature on leadership in public administration are found in the schools of public policy or policy study. Most were established in the 1970s at many of America’s most prestigious universities, in several replacing or subsuming existing graduate programs in public administration. Together they formed the American Association for Policy Analysis, later changed to the Ameri- can Association for Policy Analysis and Management, and established the Journal of Policy Analysis and Management. One part of the agreed-upon or understood methodology was the case study, preferably with participant observation, de- signed to escape “the dead hand of social science.” Policy analysis, particularly the tools of microeconomics, was the second acceptable form of methodology. Th e approach is interdisciplinary, following Lasswell’s description of the policy sciences.

In the early years, the scholarship emanating from the schools of policy study mostly consisted of cases and policy analysis, the most famous being Graham Allison’s description (1971) of high policymaking as bureaucratic politics in the Cuban missile crisis. In the Allison perspective, bureaucratic politics means the mingling of outside informed experts, agency or departmental offi cials, and political (usually appointed rather than elected) offi cials to solve problems. Bu- reaucratic politics came to be a preferred way to theorize about the role of public managers in making policy, certainly preferable to theorizing about the day-to- day management of a bureau or an offi ce. Bureaucrats, in high policy, are under- stood to be leaders, a very legitimating perspective.

Over time, the leadership approach to management has grown and is now in full fl ower. Leadership is among the leading topics in the hundreds of cases in the heavily used Kennedy School of Government Case Program. Th e study of management in the policy schools has come to be the study of what leaders do, rather than the study of management theories, in either the original or the con- temporary form.

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Robert D. Behn (1991) describes leadership as the key to improved perfor- mance in the Massachusetts Welfare, Training, and Employment Program. Th e quality of education in elementary schools can be found in leadership (Meier, Wrinkle, and Polinard 1999). What determines the quality of a prison? Leadership (DiIulio 1987). In the Terry L. Cooper and N. Dale Wright (1992) collection, the legendary role of Robert Moses and Austin Tobin in the development of the New York Port Authority is explored. Th e collection also contains impressive studies of William Ruckelshous (Dobel); Elmer Staats (Frederickson); C. Everett Koop (Bowman); Elsa Porter (Radin); Marie Ragghiaonti (Hejka-Ekins); Beverly Myers (Stivers); George Marshall and J. Edgar Hoover (Hart and Hart); and George P. Hartzog (Sherwood). Even Daryl Gates, the sheriff of Los Angeles County before the Rodney King incident in 1996, is presented as a leader (Moore 1995).

While this is an impressive laundry list of eff ective leadership, it does not provide any sense of a coherent framework for understanding how leadership is carried out. A useful overview of the lessons of leadership theory is found in Montgomery Van Wart’s review of the fi ve most-recognized theories of leader- ship (2013). He identifi es and discusses the following: classical management and role theory; transactional leadership; transformational leadership; horizontal or collaborative leadership; and ethical leadership. Van Wart shows that each ap- proach to understanding leadership provides diff erent lessons for public manag- ers, as summarized here. As each is described, the links to management theory, and group, role, and communication theories will become apparent.

With classical management theory, leaders must assign and coordinate work, secure the necessary resources and information for the organization, commu- nicate goals, align incentives for workers with those goals, and then be held ac- countable for the results. Much of this classical theory of leadership can be found in McGregor’s theory of management. While perhaps seen as theoretically dated, the tenants of classical management theory hang on in many practical forms: per- formance evaluations by managers, raises in salary, awards for milestones and achievement, and opportunities for professional development.

Transactional leadership examines the interactions between leaders and fol- lowers. Th e key to this approach is to understand and facilitate what motivates followers. Followers need direction, training, and encouragement. Th e transac- tional approach acknowledges that each follower may be diff erent in needs and source of motivation, which creates a challenge for the leader. When the leader is not able to have positive interactions, mistrust and low morale will likely result.

Transformational leadership theory examines organizational change. Leaders who are able to change structure, procedure, or culture have four characteris- tics (Javidian and Waldman 2003): energy and determination; vision; ability to deal with challenges while encouraging workers; and appropriate tolerance for risk-taking. Transformational leadership is particularly important because it is not suffi cient to merely get things done now. Leaders must ensure their organiza- tions are ready for what is next, and to change them if needed.

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Horizontal or collaborative leadership recognizes that eff ective leadership can create self-managed teams. In other words, good leaders reduce the need for for- mal leadership. Van Wart notes that teams that are working well can be left alone and in these instances delegation is the best form of leadership. Many of these features (fl at hierarchies, worker self-management) can be found in the tenants of the New Public Administration of the 1960s and 1970s. Horizontal leadership, assuming a high-performing system, does not rely on the formal mechanisms of (dis)incentives and control of classical management theory. Indeed, those mecha- nisms are seen as impediments to performance.

Finally, ethical leadership theory is based on the approach that good leaders build trust, demonstrate integrity, and base their leadership on service to others. Ethical leadership is particularly important for the public sector. Public service motivation has long been identifi ed as a key feature of a successful civil service, and good leaders will be able to develop that in their workers.

Distinctions between leadership and management are sometimes found, the most famous being the Warren Bennis couplet “Th e manager does things right; the leader does the right thing” (2003, 42). Bennis argues that there is too much management and not enough leadership, particularly in American business. Ron- ald Heifetz (1994) uses group theory and communication theory to formulate a particularly perceptive argument that leadership is helping groups and orga- nizations do “adaptive work” and that it is particularly diffi cult to do that from positions of authority. Th ere is not much convincing evidence that there is an important distinction between leadership and management, aside from labeling some things as leadership and therefore important, and other things as manage- ment and therefore less important.

In the bigger picture, the emphasis on leadership in public administration has doubtless been infl uenced by the general resurgence in the study of leadership in many fi elds and disciplines. Certainly the previously identifi ed theories that Van Wart reviewed have been generated from a variety of studies and many dis- ciplines. For the purpose of understanding public administration, the two best treatments of public management as leadership are Mark H. Moore’s Creating Public Value: Strategic Management in Government (1995) and Heifi tz’s Lead- ership Without Easy Answers (1994). Neither of them relies on the principles of management, although Moore references much of the NPM literature. Th e char- acteristic or quality of leadership that Moore identifi es aft er reviewing many of the case studies in the Harvard collection is

a certain kind of consciousness: [leaders] are imaginative, purposeful, enterpris- ing, and calculating. Th ey focus on increasing the value of the organizations that lead to the broader society. In search of value, their minds range freely across the concrete circumstances of today seeking opportunities for tomorrow. Based on the potential they see, they calculate what to do: how to defi ne their purposes, engage their political overseers and coproducers, and guide their organizations’

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operation. Th en, most remarkable of all, they go ahead and do what their calcu- lations suggest they should. (1995, 293)

Th ese fi ndings are a kind of leadership version of the best practices research found in the NPM literature, and like that research, they are grounded in direct observations that describe or account for singular events that are diffi cult to rep- licate. Th is is theory built on soft , qualitative fi ndings, diffi cult to replicate and equally diffi cult as a body of knowledge or data from which one might draw de- fensible fi ndings or conclusions. Th is research is unquestionably a series of fairly clear snapshots of what has happened and how it happened in individual cases, recognizing the biases of the camera operator.

Perhaps a better way to view this framework is taken from cultural anthropol- ogy, where it is assumed, fi rst, that “reality” is a social construction rather than an objective thing or phenomenon that is the same for all observers; and, second, that organizations are a system of socially constructed and cognitively ordered meanings (Lynn 1996; Boisot 1986; Weick 1995). Th is form of knowledge is tacit, understood, oft en unspoken, but generally shared and accepted; it is also under- stood to be inherently vague, ambiguous, and uncertain, but is nevertheless oft en an important guide for behavior. “Codifi ed knowledge, in contrast, is more im- personal, associated less with proper socialization or experience than with skill in abstract thinking or linear reasoning” (Lynn 1996, 112).

Laurence E. Lynn Jr. makes informative observations on this form of manage- rial theory:

Some types of knowledge are easier to come by, because they are more linear and impersonal than others. Considerations of deference and trust do not intrude. We may call such knowledge “scientifi c” or “technocratic.” Uncodifi ed, undif- fused knowledge, e.g., the tacit, intuitive knowledge of a wise and experienced manager who communicates primarily in face-to-face forums and by the ex- ample of behavior, is diffi cult to master in any conventional sense because con- siderations other than the literal and the logical are involved. We may call such diffi cult-to-acquire mastery “artistic.”

For codifi ed, technocratic knowledge, the university course, the supervised workshop, and the problem set or other formal assignment, all emphasizing individual goal achievement, may be the most effi cient approaches to learning. For tacit, artistic knowledge, mentorship, apprenticeship, and internship tend- ing toward socialization—and perhaps prolonged on-the-job experience—are likely to be the most effi cient ways to promote learning. Where both types of knowledge, or their subtle integration, are required for success, vicarious ex- perience in simulated work situations featuring both social and intellectual demands—for example, case discussions requiring the application of a mix of analytic frameworks—may be the appropriate approach to learning (1996, 113).

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119Managing by Contract

Managing by Contract Th e contracting-out phenomenon goes by several names—government by proxy (Kettl 1993b); third-party government (Smith and Lipsky 1993; Salamon 1989); hollow government; the hollow state (Milward 1994, 1996; Milward and Provan 2000a); shadow government and the contracting regime (Kettl 1988; Egger 2006). Contracting out is also a theory of the control of bureaucracy and of organization theory. Here we will deal only with contemporary government contracting as a theory of management.

Contracting out is a key feature of the contemporary doctrines of manage- ment in public administration. Since the mid-1990s, a steadily increasing per- centage of public activities has been carried out “indirectly” by contractors and for virtually every conceivable government function (Kettl 1993b). Most theories of management assume a contained or bounded institution with managerial re- sponsibilities for directing the day-to-day internal functioning of the organi- zation as well as responsibility for conducting boundary transactions that link the organization to other organizations and to its publics. Th e work of public administrators is increasingly not this kind of management; it is, instead, the management of contracts. Virtually all the capital functions of state and local governments have always been done by contract, primarily with architectural fi rms; building contractors; bridge builders; highway construction and mainte- nance fi rms; sewer, sanitation, water works, and systems companies; and dam builders. Th e US Defense Department has always contracted for airplanes, ships, tanks, guns, and war technology. Most of the work of the National Aeronautics and Space Administration and the Department of Energy is done by contract. It is estimated that one-sixth of total federal spending (including entitlement) has gone to contractors (Milward 1994); this amount, as shown by federal spending fi gures, has been more than matched during the 2000s. Th e federal government has many more civilian employees on the “contract” payroll than on the actual civilian payroll (Frederickson 1997b). It has been shown that cuts in the federal workforce can result in an increase in the contract payroll (Light 1999).

With this background, we turn to issues of management theory, and ask these questions: Can government by contract be properly considered a form of man- agement? What would be the salient feature of a management theory that as- sumed work is being done by contract?

Can government by contract be thought of as a form of public management? Th e answer is yes. Contract management is, however, diff erent from traditional management in many signifi cant ways and therefore requires a somewhat dif- ferent theory. It is fashionable to use principal-agent theory to explain the con- tracting regime as an organizational scheme, and the theory is useful for that purpose. But principal-agent theory off ers little to management theory, particu- larly when compared with traditional theory, which is based on the direct study of managerial behavior and managerial options in contract circumstances. Th e

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120 5: Th eories of Public Management

“fi ndings” based on these observations would include those discussed in the following paragraphs.

First, the oldest and still one of the largest forms of contracting out is for cap- ital construction and repair and maintenance purposes, particularly at the state and local levels of government. To be eff ective, such contracts must be highly pre- cise regarding the quality of materials and workmanship, schedule, and the like. Contractors are ordinarily held to very tight specifi cations. Th e contracting gov- ernment, particularly for large-scale contracts, ordinarily has an on-site project manager who oft en has czarlike powers and who carefully watches to see that the contractor complies with specifi cations. Th e contracting fi rm is usually organized and managed in the so-called project management style, which brings together several skills and technologies. Large contracting fi rms almost always use a ma- trix organizational form showing established skill-based departments that assign workers to projects (Davis and Laurence 1977). Th e critical point in the contract is the link between the government’s project manager (principal) and the fi rm’s project manager (agent). To be eff ective, a combination of extensive technologi- cal knowledge, trust, and toughness must be evident (Donahue 1989).

One of the best studies of contracting and privatization concludes that con- tracting works best when (1) what needs to be done can be clearly and precisely described for purposes of contract negotiation and compliance; (2) desired out- comes can readily and easily be measured or identifi ed; (3) penalties are imposed for noncompliance with the contract; and (4) contractors may be discontinued or changed (Donahue 1989). Contracting for the construction and maintenance of buildings, highways, bridges, and other capital facilities tends to meet these cri- teria. As long as the four criteria are met, principal-agent theory can adequately explain management by contract. Th e reason for our skepticism about the value of principal-agent theory here is that these criteria are rarely met.

Th e key theoretical points here are the diff erences between a continuing per- manent hierarchy and a contract. In the former, motivation, worker acceptance of directives, group behavior, role diff erentiation, and managerial style are all crit- ically important. In the latter, these requirements are exported to the contracting fi rm, leaving government management to entail contract monitoring and over- sight. In capital contracting for discrete projects, there are usually many qualifi ed bidders, or, put another way, a genuine market and a capacity on the part of the government to get the best product at the best price (Rehfuss 1989).

Because of cost controls on government, fewer and fewer public employees become responsible for more and more contracts. Th is situation reduces contract management to paper shuffl ing and auditing (Kettl 1993b; Rehfuss 1989; Cigler 1990; DeHoog 1984). State and local governments have diminished the capacity for contract management and oversight and are gradually being hollowed out. Th e problem, then, is not the theory of management by contract so much as it is the application of the New Public Management concepts, and particularly con- tracting out, without providing for eff ective contract management.

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121Managing by Contract

Second, contracts for large-scale weapons systems, for airplanes, for space proj- ects, and for research and development are another matter. Ordinarily, only a few qualifi ed bidders are available, and it is in the government’s interest to underwrite in some form the capabilities of the limited number of potential contractors. Th e idea of a market, therefore, is less applicable in this form of contracting because there is little competition. It is oft en diffi cult to know in advance the fi nal cost of a contract. Th e government may specify a preferred result or outcome in a given period but fail to know precisely how that outcome will be achieved. It is possible to know in advance how to build a building or a bridge. It is possible to “know” that ways can be found to cure diseases, clean up toxic dumps, and destroy incoming missiles; but be- cause we do not know how to do these things, governments contract with technically qualifi ed organizations to attempt to fi nd answers. Th is form of contracting is riskier and the results less predictable than contracting for capital projects.

Th e project management approach is the most commonly used theory of man- agement for contracts of this sort (Cleary and Henry 1989). But as Donald F. Kettl (1993b) puts it, very oft en the government is not a “smart buyer.” Th e capacity to be a smart buyer depends on the quality of the market. If the market has genuine competition, as happens when construction companies bid for capital projects, the government may have the capacity to be a smart buyer. When it is clear what the government wants and can easily determine the quality of those goods or services, the government can be a smart buyer. But when these conditions fail to material- ize, as oft en happens, the government is faced with so-called market imperfections. Kettl, who bases his results on his splendid study of government contracting, sets out the following hypotheses about what happens when market imperfections increase:

1. Interdependence among buyers (government) and sellers (contractors) increases.

2. Boundaries between public and private are blurred, making it diffi cult to know what functions or activities are governmental or public.

3. Th e problem of absorbing uncertainties increases. 4. Buyers and sellers become more highly coupled, making their interests

indistinguishable. 5. Confl icts of interest on the part of contractors reduce the quality and

quantity of information they supply government. 6. Internal organizational cultures become more important than market

incentives. 7. Organizational capacity for learning declines and the likelihood of in-

stability increases. (1993b, 179–197)

For management theory, it appears that by contracting out, governments export some management issues, such as the day-to-day direction of activities, contacts with clients or customers, the organization of work, and the supervi- sion and motivation of workers. Contracting redefi nes administrative discretion

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122 5: Th eories of Public Management

by delegating it to buyers. And contracting appears to decrease public manage- ment responsibility for orderly and reliable institutions and increase the long- range probability of instability. For management objectives, contracting does save money, but not primarily because of improved management. Contractors save money through greater fl exibility with workers, including lower pay, fewer bene- fi ts, and more part-time work (Kettl 1993b).

Th ird, the social services have seen the most rapid growth in contracting, esti- mated to have grown from 25 percent to over 50 percent in the 1980s (Chi, Dev- lin, and Masterman 1989), and includes daycare centers, mental health services, foster care, drug and alcohol rehabilitation, adoption services, elderly services, job training, community development, Medicaid, and others. Contracting for social services moved from the periphery to the center of the welfare state when states were given greater latitude in service delivery and eligibility standards as part of welfare reform (National Commission for Employment Policy 1988). Most social services contracts are not put out for bid but are negotiated with one, usually continuing, provider. Contractors seldom change because the market is limited. Goals are hard to defi ne, making it diffi cult to measure outcomes or performance. Rather than a market or a government monopoly, the contracting of social ser- vices is best understood as a negotiated network. Th e management doctrines and skills required to be eff ective in negotiated networks are treated in the next sec- tion on governance.

Nonprofi t organizations are usually the contract agencies for social services. Compared to government hierarchies, nonprofi ts employ fewer professionals, recruit more volunteers, and hire more part-time and nonpermanent workers at lower salaries and benefi ts (Smith and Lipsky 1993). Th e top professionals in these nonprofi t organizations have considerably higher incomes, however, than their counterparts in government hierarchies (Herzlinger and Krasker 1987). Th ese professionals tend to fi nd nonprofi t settings particularly attractive because opportunities for wider discretion and greater commitment are more plentiful there than in government hierarchies (Majone 1984).

To counter the trend to deprofessionalize, governments have increasingly required contractors to employ qualifi ed professionals, obtain the appropriate licenses, and be able to withstand facilities inspections and audits (Smith and Lipsky 1993). Still, most contracting social service agencies keep costs down by deprofessionalizing. Steven Smith and Michael Lipsky claim that “the restrictions on professional practice in all types of nonprofi t agencies receiving government funds combined with low wages, job insecurity, and intractable social problems have made nonprofi t agencies in general less attractive work environments for human service workers. Loyalty to the agency fades when there is no advantage to working in one place rather than another” (1993, 117). As a result, workers in nonprofi t social service organizations have shown declining morale (Smith and Lipsky 1993).

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123Managing by Contract

Smith and Lipsky describe the tasks of nonprofi t social service managers in several ways. First, there is the problem of cash fl ow. Governments are notori- ously slow, feeble, and unpredictable in making reimbursements for services al- ready rendered, seldom a problem in a government hierarchy. Second, nonprofi t social service organizations usually have a board of directors that sets policy and hires the top executives. Th ese boards may stay at the policy level and simply di- rect the way of the organization; but they may also be meddling micromanagers. Th ird, renegotiating the contract and bidding for new contracts are a nonprofi t way of life. Fourth, governments contract out to hold down costs and to increase fl exibility; nonprofi ts are constantly reconfi guring their structures, processes, and payrolls to squeeze out those savings and remain competitive bidders. Fift h, the “dance of contract renewal” is oft en protracted and political, requiring manag- ers to devote large amounts of time to survival activities. In summary, compared to the hierarchical government social service director, the nonprofi t manager is more concerned with survival, cash fl ow, and the politics of a board of directors. Th is nonprofi t manager is almost always very entrepreneurial and shows a high tolerance for the tensions of contract renewal; this manager also enjoys much greater latitude in the management of the nonprofi t organization than does the hierarchical government manager.

Aft er an extensive study of four nonprofi t mental health service providers under government contract, Keith Provan and H. Brinton Milward (1995) de- termined that a stable and continuing relationship with government funders con- tributed to higher performance. Network management was more eff ective when it was centralized and monopolistic. Resource-rich governments and their con- tractors were more eff ective than resource-starved governments. Finally, direct funding to a stable, centralized, monopolistic provider proved the most eff ective.

Having described these and other diff erences between contract management and ordinary public management, we close this section with a brief consideration of how government can be an eff ective and smart buyer. Following Kettl (1993b), it is essential to recognize that contract management is a growing and impor- tant form of public management. It has made for smaller government in the sense of there being fewer employees. But it has not made government a smart buyer. Indeed, a smart-buying government must have a somewhat diff erent kind of bureaucracy, one with many more frontline bureaucrats trained, hired, and rewarded to do contract management. Midlevel bureaucrats must be trained in a contract-theoretic form of management. Elected offi cials, consultants, and ac- ademics should lower the rhetoric that has done so much to establish the NPM hegemony and the contract regime. Governments should avoid contracting for core government functions. Governments as well as public administration schol- ars and practitioners should recognize that the application of market methods in the public sector raises important new issues of governance, the subject to which we now turn.

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124 5: Th eories of Public Management

Governance Although governance is the subject of Chapter 9, here we take up several impor- tant implications of governance for management theory. Th e implications for governance of management by contract have only recently begun to be explored. Milward and Provan (2000a) showed that as of 2000 the eff ect of contracting on citizens’ perceptions of the legitimacy of the government had not been addressed, nor had questions of how to govern networks. Although our knowledge has de- veloped over the intervening years, the questions still remain. Th e answers will almost certainly center on how networks are managed, since the hollow state’s main task is to “arrange networks rather than to carry out the traditional task of government, which is to manage hierarchies” (Milward and Provan 2000a, 362).

Note that this implies a need for theories of management to incorporate networks and contract management into our understanding of public admin- istration. Our skepticism of the ability of principle-agency theory to adequately explain management by contract is now more clear: A hollow state is not en- gaged in that type of relationship. Indeed, as demonstrated by David Van Slyke (2007), agency theory assumptions need to be relaxed per Kathleen Eisenhardt’s suggestion to account for the contextual elements of the relationship, such as the length of time the parties have been in contact and the level of confl ict, in order to accurately explain contracting relationships. By comparing agency theory with stewardship theory as proposed by James H. Davis, Lex Donaldson, and F. David Schoorman (1997), Van Slyke shows that contracting relationships can change over time, as trust replaces some of the need for monitoring. Relationships that start out with an emphasis on control, per agency theory, can change to ones based on goal convergence. However, he also shows that there is room for the de- velopment of a hybrid approach that combines agency theory with stewardship, since reputation can be developed in a steward relationship, but then used as a reward to promote goal alignment, per agency theory.

One result of contracting that is important for governance is the increased infl uence of organized interests on agency decisionmaking (Kelleher and Yackee 2009). Simply put, contracts open a new way for organized interests to lobby public managers, which Christine Kelleher and Susan Webb Yackee identify as a “contract pathway.” Th is pathway has implications for governance, since the pathway raises the issue of trade-off s between equity and responsiveness (Wil- son 1989). Kelleher and Yackee also point out that contractors may be viewed in two ways: positively as partners or negatively as special interests. Th ese concerns about governance and politics surrounding contracting—as opposed to just mar- ket effi ciency—indicate broader factors at play beyond what is predicted by NPM. Amir Hefetz and Mildred Warner (2004) show that managers understand the importance of monitoring, but also see the need for responsiveness. Importantly, they point out that agencies also contract back in as a way of carrying out their duties of providing quality service in a responsive manner.

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125Conclusions

Contracting may also have perverse eff ects on policy outcomes. Janice Dias and Steven Maynard-Moody (2007) show that the fi rm monitoring structures oft en present in contracts can create confl icts between management and workers, and distort the incentives for behavior on the part of the contractor. Emphasis on short-term production over long-term goals, or on maximizing output while minimizing costs, can create policy failure, since contracts such as these simply ignore the importance of public management. Th e key here is that a focus on establishing a principal-agent relationship, traditionally understood to be neces- sary for successful contracting, can actually come at the expense of success, rather than enhancing it. Clearly, the usefulness of agency theory and New Public Man- agement approaches is being increasingly questioned. We can conclude that, even though management by contract is not new and is here to stay, we are only just beginning to fully understand its implications for governance.

Our discussion on contracting out described the changed functions of the public manager in a contract regime. Contracting, however described, weakens a manager’s capacity to manage directly by delegating management. In the abstract and theoretical sense, those who support contracting argue that contracting out should allow managers to focus on goal setting, performance standards, and pol- icy framing—referred to in the popular literature as steering—and leave the con- tractor to do the rowing (Osborne and Gaebler 1992). But the evidence appears to run in the other direction. Contracting appears to export not only the details of day-to-day government work but also much of the capacity to direct or to con- trol policy (Peters 2000; Rhodes 1994). Several approaches to eff ective contract management have already been set out. Nevertheless, insofar as contracting out is part of the governance perspective, it is diffi cult to escape the conclusion that contracting may result in short-run savings and effi ciencies as well as reduce the capacity of public managers to manage.

In addition, of course, is the matter of accountability. All systems of proxy management decrease the clarity of accountability. In tranquil times, this may not be a problem; but when there is a crisis, a lack of clear accountability in a contract, or a chain of contracts and subcontracts is oft en the subject of political inquiry.

Conclusions At its origins and for the fi rst fi ft y years of the fi eld, management was at the core of public administration. Because management is what most public adminis- tration professionals do, theories of management fundamentally informed the practices of public administration. But at about midcentury, American public administration scholars lost interest in management theory and turned to the- ories of rational choice and decisionmaking, loosening much of the early close connection between theory and practice. During this period, the fi eld of business administration, as well as social scientists in the so-called middle-range theo- ries (group theory, role theory, communication theory), was busy developing

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management theory. Th en, starting in the mid-1980s, the study of management in the public sector began to reappear, although in new theoretical clothing and speaking a new language.

One form of this theory, principal-agent theory, has been of particular interest to scholars seeking to build knowledge of organizational and managerial behavior in the public sector. Principal-agent theory has made an important contribution to our understanding of the political control of bureaucracy, the subject of Chap- ter 2; has generally demonstrated that political principals do control administra- tive agents; and has added to our knowledge of some of the nuances of political control and administrative responsiveness. But principal-agent theory appears to be less useful as a basis for management theory in the public sector.

A second contemporary form of management theory in public administration is the so-called New Public Management, or the new managerialism. Like earlier reforms, it is partly imported from business management. Some of the business management theories of the 1960s and 1970s colonized public administration, such as management by objective and Total Quality Management. And the work of the middle-range theories has been widely adopted in the reemergence of man- agement theories in public administration. And like earlier reforms, the NPM has oft en been the work of consultants, journalists, and politicians rather than the work of scholars. Th e primary reason for this is methodological and theoretical.

Among scholars, the emphasis is upon building theory and the body of knowl- edge. Th is requires the formal identifi cation of variables, some precision in their measurement, a formal articulation concerning the relationships between vari- ables, fi eld-testing of those relationships, and the replication of fi ndings. Little of the work associated with the New Public Management would satisfy the canons of social science.

Many management theorists in the newer schools of public policy represent an important exception among scholars. One of their arguments was that their schol- arship should contribute directly to solving public problems and to ensuring better government management, and that this scholarship should not be held down by the “dead hand of social science.” Th eir work tends to consist of observation-based case studies, inductive logic, and a kind of informed presentation of suggestions for either policy improvement or better management. It is oft en said that “this may be good management, but it is not very good science.” Put another way, modern con- cepts of public management work in practice, but not in theory.

Th ere is little doubt that the NPM has reconnected theory to practice. At all levels of government, public managers are reinventing government, reengineer- ing government, attempting to be entrepreneurial, attempting to better serve their customers, attempting to be more innovative, attempting to take risks, and attempting to add value. Although it may not be good science, at least in the pos- itivist conception of social science, the New Public Management is infl uential. It has replaced the old principles of public administration with a new set of prin- ciples, or doctrines. Th ese are the doctrines of contracting out, decentralizing,

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127Summary

granting greater discretion to managers, increasing citizen or customer choices, deregulating, organizing so that there is competition, and determining eff ective- ness according to outcome measurement. In applying these doctrines, the public manager must be a leader and an entrepreneur and must practice governance. But this leader/entrepreneur is still a bureaucrat. Th e irony is, therefore, that, although the New Public Management would banish bureaucracy, in fact it re- places bad bureaucracy with good bureaucracy by calling the latter something else!

Hood and Jackson, as well as Majone, suggest that the theory of New Public Management is best understood not as positivist social science but as the logic of rhetoric. Th is logic views the organization, the agency, or the government bureau as a “cognitive paradigm” of shared meanings and agreed-upon under- standings. Organizations are moved or changed by adjustments in meanings and understandings, usually brought about by changing patterns of rhetoric. In man- agement theory, the New Public Management doctrines are the contemporary “winning arguments” concerning how to manage government agencies. Th ese winning arguments have more to do with received wisdom, with shift ing met- aphors, and with presentation and packaging than with objective, scientifi cally verifi able evidence.

Finally, in the contemporary theory of management in public administration, three particularly important concepts/metaphors dominate: leadership, contract- ing out, and governance. Th e modern emphasis is upon strong, heroic, muscular leaders rather than neutrally competent technocrats. But assertive administra- tive leadership in a political world always presented dangers, both to the logic of democratic self-government and to long-run bureaucratic eff ectiveness. Th e modern emphasis is on contracting rather than on direct government service. But contracts are oft en ill managed, and serious questions of accountability persist. Governance is the modern theory of network management and has a consider- able empirical warrant.

Th e theory of management that was part of the inception of public adminis- tration made important contributions to improving the eff ectiveness and honesty of government in the United States. Only time will tell if contemporary manage- ment theory will have as lasting and profound an eff ect.

Summary Th e fi eld of public management, as we understand it today, was started by the application of Taylor’s scientifi c management principles to the public sector and was carried forward by Gulick and his mnemonic POSDCORB. Taylor’s Prin- ciples of Scientifi c Management were replaced by the human relations school of management, with McGregor’s Th eory X and Th eory Y, but in the fi eld of public administration, little attention was paid to management for nearly thirty years between the late 1950s and mid-1980s.

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