LITERATURE REVIEW AND CONCEPTUAL FRAMEWORK
3.1 Theoretical Review
3.1.1 New Public Management
The ideas of New Public Management (NPM) was implimented in public sector for management reform in many countries. “Public management reform consists of deliberate changes to the structures and processes of public sector organizations with the objective of getting them (in some sense) to run better.” (Politt &
Bouchaert, 2004, p. 8).
Hood (1991) discussed the content of the ideas of NPM, the most outstanding international trend in public administration for the past thirty years. NPM’s rise was linked with the four megatrends: efforts to slow down government growth, the shift towards privatization and away from core government institutions, the development of automation in the production and delivery of public services and the development of the international agenda. Thus, he summarized the doctrines into seven core precepts:
1) Hands-on professional management in the public sector that is free to manage and has a clear assignment of responsibility for action,
2) Explicit standards and measures of performance, that requires a clear statement of goals so that efficiency, objectives, and key performance indicators are assured,
3) Great emphasis on results rather than processes by the need to stress results rather than procedures,
4) Disaggregation of units in the public sector or an arm’s length basis in order to minimize the role of an organization and create more flexibility,
5) Greater competitiveness in public sectors by using contracts based on reducing expenses, increasing efficiency and better standards,
6) Stress private sector style of management practice by using proven tools and techniques in the private sector, and
7) Greater discipline and parsimony in resource use by cutting direct costs and raising labor discipline.
Pollitt, Bathgate, Caulfield, Smullen, and Talbot (2001, p. 274) described the concept of “agency” or “agencification” as a part of a larger trend from NPM ideals from many countries, which have all or most of the characteristics: they are at arm’s length from the domain of the hierarchical backbone of ministries and have a degree of structural disaggregation. Agencies carry out public tasks (i.e. service provision, regulation, certification) at a national level. Their core staff are public servants and are financed by the state budget. They are subjective to at least some administrative law procedures
Therefore, agencies are one branch in the category of “public service providers” and the government can “do more with less” and it is trusted that agencies can help governments to work better (Pollitt et al., 2001, pp. 275-277) and also present the assumption of agencies in many countries. There is an impressive theoretical convergence towards the hypothesis that more autonomous, more specialized public bodies will improve service quality, efficiency or other aspects as the following hypotheses have suggested:
1) The specialization of function, more professional organizations, better managed which offer higher quality services. Government separates “steering”
tasks from “rowing” tasks.
2) Separating out agencies with defined functions will also improve rank and file motivation.
3) The “distancing” of agencies from political intervention will further encourage a more professional approach to management “letting managers manage”.
4) Separation leads to “flexible” tailor-made systems of recruitment, training and promotion. Thus, more appropriate staff will produce a high quality service.
5) Separation will permit “greater transparency”
6) “Greater transparency” and a contract form of relationship will put principals in better position to apply pressure for efficiency gains, “make the manager manage”.
7) Single purpose organizations will make stakeholders identify, participate and be consulted about the work of the organization, “closer to the consumer”.
In the study about NPM and the success factors of using NPM and the experiences of transferring agencification or executive agencies ideas in many countries, the famous empirical research “Agency fever?” was an analysis of the international fashion which investigated the apparent international convergence towards ‘agencification’ to identify the reason for it, the depth and the trends. The picture emerged of a complex and variety of actual practice in different countries (Politte et al., 2001, p. 271).
Moreover, he mentioned the reform in three northern european countries, the United Kingdom, Finland and the Netherlands, agency reforms are fairly divergent in origins, aims, and the degree of emphasis on managing for performance (Politte et al., 2001, p. 285). However, some agencies are still huge and quite bureaucratic and some provide services to identifiable customers, but others are engaged in regulatory or ordering task (Politte et al., 2001, p. 287).
The argument for adoption of the NPM-style reforms by the Organization for Economic Cooperation and Development's (OECD) member countries depends on three assumptions (Roberts, 1997, p. 475) as follows:
1) Assumption of feasibility; the assumption is made that the proposed reforms can actually be implemented without major modifications. NPM reform efforts will produce governments that are "radically different in appearance and behavior".
2) Assumption of effectiveness; it is assumed that reforms will, once implemented, produce dramatic improvements in the effectiveness of the public sector.
3) Assumption of universality; it is assumed that reform principles that work well in one country will generally work well in others.
The others perspectives and approaches of the characteristics of NPM as debated by scholars are in the following table.
Table 3.1 Summary of the Characteristics of New Public Management
Proposed by Characteristics
Minogue (1998)
1) A separation of strategic policy from operational management.
2) A concern with results rather than process.
3) An orientation to the needs of customers rather than the needs of bureaucratic organizations.
4) A withdrawal from direct provision in favor of a steering or enabling role.
5) A transformed bureaucratic culture.
Toonen (2001)
1) A business-oriented approach to government.
2) A quality and performance oriented approach to public management.
3) An emphasis on improved public service delivery and functional responsiveness.
4) An institutional separation of public demand functions (councils, citizens’ charters), public provision (public management boards) and public service production functions (back offices, outsourcing, agencification, privatization).
5) A linkage of public demand, provision, and supply units by transactional devices (performance management, internal contract management, corporatization, intergovernmental covenanting and contracting, contracting out) and quality management.
6) The retreat of bureaucratic government institutions to favor the intelligent use of markets and commercial market enterprises (deregulation, privatization, commercialization), or virtual markets (internal competition, benchmarking, competitive tendering).
Table 3.1 (Continued)
Proposed by Characteristics
Schedler and Proeller (2002)
1) Organizational restructuring: delegation of responsibility, reduction of hierarchy and political and managerial roles.
2) Management instruments: output orientation, entrepreneurship and efficiency.
3) Budgetary reforms: closer to private sector financial instruments.
4) Participation: involvement of citizens.
5) Customer orientation and quality management: gain legitimacy in service delivery, and reengineering and
6) Marketization and privatization: reduction of the public sector, and efficiency gains through competition.
Newman (2002)
1) Strategic decision-making: organizational goals (survival and success of organization), partnerships developed where these can contribute to the realization of organizational goals, accountable for organizational performance policy and evaluated through performance indicators and league tables indicate performance of individual
organizations.
2) Power and control: ‘hands off’ control through contracts and framework documents, high levels of devolution to managers, competition is used to drive up performance, privatization where performance does not meet required standards and universal incentives and levers of control.
3) Relation with the public: managers are free to make decisions within the legislative and policy frameworks set by politicians, organizations are designed to deliver efficiency through structures linking common functions or forms of professional expertise, strong organizational boundaries, relations with consumers and with the public governed through the institutions or representative democracy.
Source: Pliscoff, 2009, p. 13.
Institute for Good Governance Promotion in Thailand (2013) concluded the concept of NPM in three principles:
1) Principle of Efficiency: the implementation of government jobs has to use resources efficiently to produce a worthwhile investment and bring benefits to the public. Furthermore, the need to reduce the process of working time to facilitate people, reduce costs and also the need to cancel the obsolete and unnecessary jobs.
2) Principle of Effectiveness: the implementation of government jobs has to have a strategic vision to respond to the needs of all parties and stakeholders.
Response to the mission and achieving the objectives of the organization with clear goals and the level of performance in response to the expectations of people, create systematic and standardized procedures or processes, a focus on risk management and performance excellence, including monitoring and improving performance for continuous improvement.
3) Principle of Responsiveness: The implementation of government jobs must be able to serve people with quality. Operations can be completed within the time stipulated, confidence building, trust and meeting the expectations or requirements of people, as clients and the diverse and varied stakeholders.
In sum, from the proposed ideas and characteristics of NPM by scholars as mentioned, public sector management was reformed and transformed in many countries. The summary of concepts and ideas of NPM which was used in agency reform in public organizations in Thailand are 1) the special task of the delivery service organization and disaggregation of units in the public sector to be at arm’s length from the ministry, 2) management by professionals with contracts and having autonomy and flexiblity in an organization’s management, 3) focus on results, performance and a clear statement of goals, efficiency, objectives. Thus, if we consider the actual and the concepts of public organization in Thailand, it seems to fit with NPM doctrines.