New public management is a paradigm shift from the traditional model of public administration to a new model of administration. Proposes need of government based organizations to operate through on an entrepreneurial business-based model. It began in the 1980s to 1990 and has been an advanced way of increasing efficiency and effectiveness in the public sector are its core elements. Hence, the intent of the approach remains the same, despite many definitions of new public management existing in our time.
History of new public management
New public management traced from the economic downtime, that had taken place in the United Kingdom. The United Kingdom was going through depreciation and privatization at the time. A writer by the name of Hood had proposed the UK government take a new broader approach to management in order to help the economy. Therefore, he argued and proposed management to be administrative as observed in the definition of new public management. Because management is involved in ensuring results are delivered as expected. While on the other hand, the administration only involved an administering role of following instructions. Since then, the UK shifted from an administrative-based system, that placed emphasis on the need of following rules and not the delivery of results.
Hood and other socialists, stated it is based on improving the daily activities of public enterprises. This business model or paradigm shift increases efficiency, effectiveness and upholds values. In America, the publication of a book and report titled “Reinventing government”, led to the consideration of New public management. USA Government in 1992 got advised on transforming and adopting an entrepreneurial approach by Osborn and Gaebler. They argued America needed to come up with an entrepreneurial type of government. One that focuses on running these institutions effectively and is not rigid to rules or regulations of bureaucratic procedures.
Traditional model of public administration
The traditional model of public administration, definition of new public management, or post-bureaucratic approach, mainly concentrated on the need to ensure employees followed strict rules and regulations. People created institutions to help them benefit. Preventing abuse of power by administrators, inputs observed could not be measured or controlled after being implemented. Hence, results and outputs became difficult to track over time and not easy to measure employee performance and delivery.
Organizations running through bureaucracy, a theory proposed by Max Webber a German socialist. Henry Fayol’s scientific management and Woodrow Wilson’s politics dichotomy. Internal issues had been discovered, despite these theories being embodied in Traditional public Administration in the first place was to provide effectiveness and efficiency. Time had come for change. The traditional model of public administration could not compete with the private sector. Therefore, important aspects of New public management, include NPM elements that promote building up an economic competitive-based form of system. One that brings efficiency and delivery of products while maximizing the cost for organizations.
OEDC Contribution to the raise of New public management
The Organization for economic cooperation and development OEDC, based in Paris France released a publication. This document proposed and highlighted important points to support the New public Administration. Many countries have been following through and utilizing the new public management, due to its important features. New public management emphasizes the delivery of results through a number of management methods. This includes management by objective and performance measurement for understanding the outputs of workers. Combines sophisticated methods of economic approaches, aligned with modern practices of management.
Characteristics of new public management
Hood had noted New public management brought the need to cut red tape. Therefore, people valued the work and delivering results, not working just to fulfill the tasks due to rules. This has been the most common case, even for contemporary organizations today. Importance of New public management formulated structures to put customers first in the mode of business. Hence, another feature involves cutting the cost of organizations while delivering improved services. The final feature of New public management is teaching employees improved methods to effectively and efficiently deliver expected results.
Also Read: Elements of New Public Managements
- To improve employee performance and output through adoption of an improved business model based approach. Workers learnt need to deliver expect results. Not only doing things for the sake of fulfilling rules and regulations. But get involved in the decision making and delivery.
Places great emphasis on the need for organizations to operate and function like privately owned institutions. Organizations in the public sector need to deliver services. Since any market has competition and markets run through forces of demand and supply. New public management makes it easy for public organizations to compete with private entities.
- Need of improvement on outputs. New public management process the needs of people. Any organization must deliver expected outcomes, be it a service or product based. Approaches used might vary but results must align with the short and long term gaols of the organizations.
- Measuring of delivered results: Another important characteristics of new public management is measuring of results. If employees working are placed in teams through organizational structure. Each person has an individual task to complete and deliver results.