Letting and Making Managers Manage in the New Zealand Public Service

Abstract

Business-like control systems that seek to let managers manage and hold them accountable for results have been a feature of New Zealand’s public management model since the late 1980s. This model has been a significant break with earlier traditions of delivering public services through a centralised bureaucracy and has attracted considerable interest internationally. New Zealand was an early and comprehensive adopter of ideas known as New Public Management (NPM). The thesis examines the experience of a representative sample of 91 public servants, Members of Parliament (MPs) and informed observers with the control systems of the New Zealand model. Control systems are defined as ‘the formal, information-based routines and procedures managers use to maintain or alter patterns in organisational activities' (Simons, 1995). The New Zealand systems involve a cycle of planning and reporting that provides a ‘thermostat-like’ accountability whereby results are assessed against pre-set standards. The purpose of the control systems is to create clear objectives, provide managers with freedom to manage, generate quality information about performance and make it possible for managers to be held accountable for efficiency and effectiveness. An examination of interviewees' experiences reveals that at each stage of this planning and reporting cycle, there are observable paradoxes or contradictions. Clear objectives are difficult to achieve in a political environment and politicians have sought to rein in management freedoms. What constitutes ‘quality’ information depends on the perspective of the user, and formal accountability processes have tended to focus on measurable and auditable outputs. The New Zealand model of control is seen to be one-dimensional in its focus, having overlooked the paradox that effective control systems require a balance between control and empowerment. A greater balance is needed between the formal focus on easily measurable diagnostic information and less easily observed controls that relate to organisational purpose and opportunities to learn from experience. The control systems have been based on a model of business and market efficiency that was dominant during the 1980s and 1990s. Thinking about what constitutes effective control systems is currently subject to a pendulum swing away from the doctrines of the 1980s, as a result of a change in political leadership but also because of the type of frustration experienced by interviewees. The challenge for the creation of a new model of control is to avoid an extreme swing of the pendulum, and achieve a necessary balance between control and empowerment.