Public Management, Organizations, Governance and Performance

Citation

Apetrei, A. (2011), "Public Management, Organizations, Governance and Performance", Management Decision, Vol. 49 No. 9, pp. 1592-1597. https://doi.org/10.1108/00251741111174005

Researchers have explored the subject of public management for more than a century. Methods and insights have gradually evolved and remarkable progress has been made in researchers' efforts to build solid empirical findings on this subject. The book Public Management, Organizations, Governance and Performance (2011) by Laurence J. O'Toole and Kenneth J. Meier “presents a perspective, a model and a large set of empirical findings”. The authors investigate the effectiveness of management in the public sector. Over the eight chapters of the book, they develop a systematic theory on how effective public managers are in shaping policy results and then test aspects of this theory using a wide range of evidence, including a data set of 1,000 public organizations.

The book is based on a different approach, avoiding the population ecologists and the managerialist approaches. The analysis attempts to demonstrate that managerial influences on public program performance are multiple and statistically significant. The approach used in the book is different for three reasons: the model initiates and catalyzes a research program that needs to encompass multiple kinds of empirical investigations, the model can be adapted to the network level and finally, their model is very specific in determining the components of a model of governance.

The Texas school district data set

The research is based on three main sets of data. The first comes from more than 1,000 public organizations in the state of Texas, presenting a diversity of performance indicators that were built and refined for ten years. Although Texas schools constitute the primary data set, the authors recognize that it cannot contain all the relevant organizational and environmental variables. Second, there are five surveys carried out on a sample of top managers undertaken in 2000, 2002, 2005, 2007 and 2009. Finally, there are additional surveys of top managers with regard to how they responded to the devastating effects of the 2005 Hurricanes Katrina and Rita.

Chapter 1, “Public management and performance: an evidence‐based perspective”, begins with a discussion on governance and continues with a debate based on the literature review of the main topic for discussion. In terms of governance, the authors find that theory building is necessary providing precise predictions about how the variables relate to one another. In the second part of the chapter, the literature agrees that public management matters in the performance of public organizations, but the authors are going a step farther because using approaches and quantitative techniques and based on evidence‐based public management theory, they try to explain how effective public management at generating performance is.

In chapter 2, “A model of public management and a source of evidence”, O'Toole and Meier develop a model that can “guide the exploration of the real world of management” by answering the book's core questions: how do organizations and governance systems shape performance and how can managers influence what happens? They begin with a formal model at the organizational level and then move the modeling ideas to the network level. The general model of public management that is proposed in this book is comprised in its entirety of four variable clusters: O (program outcomes/performance), M (management), S (elements of stability), and X (environmental forces): O_t=β₁ (S+M₁) O_t−1+β₂X_t/S_e (M₃/M₄)+ε_t

The model looks reductive but, as the authors admit, its parsimony can bring more important results due to the fact that the limited numbers of concepts permit building and testing many complex relationships. For this latter reason, the model becomes complex because of its specification of nonlinear and reciprocal relationships between some variables, and its intention to model the multi‐level reality of management in networks. As it is based on a review of the literature, the model is a formal, precise and reductive one that was built inductively. The authors explain each step in building the model. They begin with the statement that organizations are inertial systems and the first relationship of the model becomes: Ot=βO_t−1+ε. This relationship proposes that current performance, O_t, is the result of the past performance at time t−1, discounted by a rate of stability, β₀, and a set of shocks to the system, ε.

Chapter 3 introduces us to the empirical examination of public management, by focusing on the externally oriented, networking behavior of top managers. It addresses the important themes of networks and managerial networking with other interdependent actors and primarily answers the following question “Do public managers network with external parties?” The findings of this chapter answer affirmatively to the previous question, because managers do operate externally and their efforts can generate performance dividends. The empirical results show that top managers do engage in networking behavior with a variety of external actors – school board members being the most frequent interaction partners, but there are also contacts with local business leaders, city governments, local police and parent groups. The research also points out that manager's network style can help to explain the emergence of inter‐organizational collaborative links, at least during crisis periods. In this sense, “managing in the network is an opportunity available to those superintendents who recognize their interdependence and opt to try to manage it actively”. Moreover, O'Toole and Meier mention that to network is a key strategic option. Indeed, the model suggests that the managerial networking contributes to performance, but even if managerial networking has real payoffs, these are neither inevitable, nor are they available to everyone.

Chapter 4 presents a concise literature review of management quality. Indeed it challenges the characterization and measurement managerial quality, but the approach used in the book relies on assessments based on salary determinations. The authors argue that this measure is correlated with local school board assessments of the quality exhibited by top management in their districts and have shown that this measurement is positively related to many performance indicators. Chapter 4 makes three principal contributions. First, this chapter offers an innovative, albeit indirect, overall measure of public management quality. It develops an original measure of public management quality thus fleshing out an aspect of managerial influence that is implicit in the model but that is tapped directly via the examination of managerial networking. Second, this research offers the fullest rigorous test to date of the proposition that public management quality contributes positively to performance; because with all the appropriate controls for the educational setting, the quality of superintendent management makes a difference. Third, managerial networking contributes positively to performance, but the returns diminish at higher levels of networking.

The importance of human capital and its management is debated in chapter 5. The analysis consists of examining three elements of internal management:

1. 1.

   creating stable personnel;

2. 2.

   managing an organization's human resources; and

3. 3.

   making decisions in the face of a significant cut in budget.

However, the authors leave open the debate over the internal management of public organizations and its impact on program performance. The authors show that in their sample of 1,000 public organizations over an eight‐year period, the internal management decisions of these units can absorb significant budgetary shocks without experiencing much, if any, performance decline. They examine two types of shocks: unexpected and sizable budget cuts and natural disasters concluding that negative shocks whether budgetary or otherwise, impede performance. In this situation, public managers have to operate internally to reduce this negative effect over performance (Bergh et al., 2011; Comeche and Loras, 2010; Martin et al., 2010; Pardo‐del‐Val, 2010; Sebora and Theerapatvong, 2010; Shook and Bratianu, 2010; Smallbone et al., 2010; Wagener et al., 2010). However, the authors draw attention to the fact that “such efforts over the short term could carry negative consequences for other performance objectives, especially if such efforts are repeatedly called upon to mitigate shocks”.

Examining the role of managerial capacity and organizational buffering, chapter 6 answers the following question “Can capacity be activated in times of crisis to protect the organization?”. In this regard, the role of managerial capacity, measured as the percentage of school district employees engaged in central office administration, is examined as one of the nonlinear relationships in the theory presented. The authors probe the relationships of managerial capacity and networking together as they affect performance and the more general nonlinearities of organizational buffering in the context of the theory. Chapter 6 also highlights that buffering helps performance but is still vague as to whether the relationship is nonlinear with respect to the environmental shock itself. Increasing the book's value, the authors advise public managers that, at least in this matter, they have to come to a decision about the amount of managerial capacity to develop and maintain on the basis of the expectations and needs facing their own public organization.

Public management in intergovernmental networks is analyzed in chapter 7. This research is based on the responses of a mail questionnaire on management styles, goals and time allocations of 1,000 plus district superintendents. Their findings concerning managerial and personnel stability impacts are interesting. One pattern shows that managerial networking and personal stability tend to matter more for performance in those districts that are more dependent on state aid (Burger and Stare, 2010; Chapelle, 2010; Fuglsang and Mattsson, 2009; Hsu et al., 2010; Rhee and Rha, 2009; Sandiford and Seymour, 2010; Sarma and Krishna, 2010; Un and Sánchez, 2010; Yusof and Jain, 2010). Concluding that “stability in at least some forms may be a platform on which managers and others can build effective performance in heavily networked settings”. Another pattern highlights questions of quality, but not in the same way and to the same extent in all settings. As the results show, management quality matters most in setting with less fiscal dependence on the intergovernmental network. The conclusion of the chapter reveals that the role of networking, managerial quality and also indirect management, seen as recruitment and retention patterns of personnel, are a crucial feature of successful performance for public education in Texas.

The final chapter, “Public management and performance: what we know, and what we need to know”, aims to address two issues: firstly, there is an overview of their work in the same well‐structured, concise manner, followed by some suggestions for future lines of research. After modeling and exploring the relationships between public management, networking and performance, as an essential element of their work, O'Toole and Meier synthetize the results offering 13 practical lessons for managers. With regard to networking, the authors suggest that managerial networking has distributive consequences and can lead to performance gains either through the acquisition of technical knowledge or the development of political/public support; it is also important that the impact of managerial networking depends on the structural context and that management capacity can enhance the impact of managerial networking. In terms of productivity, the stability of front‐line employees leads to higher productivity and managerial stability is positively related to performance. The final chapter states that management actions are generally independent from one another, so that improvements in one area are not necessarily related to management abilities in other areas. In the section “What remains to be explored?” O'Toole and Meier highlight some topics for a future research agenda. It proposes focusing on internal coordination, planning, resource allocation and communication for a better understanding of the management‐performance relationship. It also considers the topic of social capital in public management and one its important aspect, trust. In this regard, future analyses can reveal how trust enhance community support for the production of public services, improves flows of accurate information or reduce coordination costs among interdependent organizations and individuals. The problem of bridging and bonding social capital in public management needs greater attention from researches.

Through their findings, O'Toole and Meier demonstrate that managers shape performance by systematic evidence. Indeed, their simplified model was built from the case study literature and “treats management as a multifunctional enterprise”. Concise, but not without complexity, and rather flexible, the model provides an opportunity to test parts of the model through further simplifications. Regarding managerial networking, there is clear evidence that public managers devote substantial effort to interacting with external agents. Networking brings many benefits to public organizations, providing support in difficult times and most importantly, opening gates for precious information on different programs, innovations, policies and partnerships. The book shows that “networking adds to performance not in a simple linear fashion but by interacting with selective resources in the environment, thus leveraging and strengthening the impact of these resources on the outcomes of interest”.

To enhance the clarity of the information provided, the authors highlight their research results through 64 tables and nine figures. The book ends with a well‐built glossary, a nine page bibliographical reference section and an extremely complete index to round off this well‐structured and presented book.

In conclusion, the value of this book Public Management, Organizations, Governance and Performance is unquestionable. Scholars, students and consultants can find some useful recommendations on the most important aspects of public management and performance.