New public management is an ideological perspective that aims to improve organizational performance. New public management reforms place emphasis on the need to make public Organizations business-like. Public organizations have become competing entities with the private sector, hence there is a need for managerial. NPM plays a very significant role in the delivery of goods and services. Gave rise to most organizations putting clear distinction between management and Administration. Here are the benefits and Importance of new public management in today’s world.
Origin of NPM
During the 1980s the UK experienced an economic setback, hence people began to lose confidence in the governing force at the time. It led to the privatization of state-owned companies to the private sector. Some economists argued and claimed the hand of government in the affairs o the economy caused issues. Economic theory outlines, that the biggest economic problem is the involvement of government in the affairs of the economy. Hood, further argued and stated the United Kingdom needed a system that is not rigid. Bureaucracy was just too slow for the delivery of services. Proposed three essential requirements that the United Kingdom needed;
- Cutting the red tape system
- Creating a people-based economy
- Putting customers first when doing business
- Competing with the private sector
Factors that led to the growth of New Public Management
Before analyzing the importance of new public management in today’s world. Its important to also look for reasons and drivers of NPM. According to the organization for economic cooperation and development (OECD), there are reasons most developing countries and developed began adopting the reforms. These include attacks on the public sector that came from people. Especially after coming to notice the incompetence and inefficiency. Another factor was technological changes, government scope, and the process of delivery. It was built on bureaucracy which had placed emphasis on following rules and regulations, rather than efficiency in the public sector.
Importance of New Public Management
- Here is the importance of new public management in today’s companies and organizations. This comes from the school of thought that combines economic perspective thinking with management to derive positive outcomes.
- NPM brought the introduction of performance management and management by objective. It helps organizations to focus on inputs and not the outputs. Each individual becomes responsible for the delivery, monitoring, and evaluation.
- Another importance of new public management is making administrators accountable for the actions and process delivery.
- Promotes individualism which leads to efficiency and effectiveness in the delivery of goods and services. Looking at the new public management improves product delivery.
- Makes bureaucratic systems more efficient and cost-benefit. Improves structures of the public sector, while reducing the cost and spending.
- Finally, the importance of New Public Management includes the aspect of putting customers first.
- Training employees to become better at their jobs in order to compete with the private sector.
- An important factor that led to the birth of New Public Management is a change in technology. Therefore NPM ensures organizations keep up with the fast-changing technology and globalization.