‘Management by Contract’: A Study of Programmatic and Technological Aspects
| Date | 01 September 2001 |
| DOI | http://doi.org/10.1111/1467-9299.00275 |
| Author | Roland Almqvist |
| Published date | 01 September 2001 |
‘MANAGEMENT BY CONTRACT’:
A STUDY OF PROGRAMMATIC AND
TECHNOLOGICAL ASPECTS
ROLAND ALMQVIST
The practice of ‘Management by Contract’ can – as with any practice – be charac-
terized by programmatic and technological dimensions. These dimensions contain
concepts and ideas at the programmatic level, which shape the mission of the prac-
tice (concrete tasks and routines) at the technological level. Thus, the former attach
the practice to the broader conceptual dimension. In this paper both of these dimen-
sions will be analysed. The aim is to study how quality issues have been managed
by contract. The first part presents some of the conceptual arguments of ‘Manage-
ment by Contract’. The arguments of a structure generally used (the
Purchaser/Provider split) and a method often used (competitive tendering) will be
discussed. The second part presents some technological effects through empirical
findings. The paper concludes with an analysis of the interaction or non-interaction
between these two dimensions.
INTRODUCTION
The option of entering into a contract for various goods and services has
been utilized by the public sector from time immemorial. An example of
this would be contracts for major projects and constructions, where the
public sector organization itself does not have the necessary skill and com-
petence. However, over the past 20 years there has been a noticeable
increase in activities (both support and core activities) that are put out to
tender with public organizations in the role of the purchaser. This develop-
ment is a global phenomenon and is taking place at a particularly rapid
pace in countries such as the USA and the UK (Walsh 1995).In this develop-
ment we have also been able to perceive a tendency for the public sector
to look on other established institutions as examples: institutions such as
the Market or the Company (Brunsson 1992, 1998). This means, amongst
other things, that quasi-markets have emerged in which potential producers
compete by submitting tenders to carry out the public service during the
agreed time period (Le Grand and Bartlett 1993). It also signifies a belief
in a more action-oriented administration within public organization and
where the concept and phenomenon of ‘management by contract’ is to help
form the basis for the management of quality and objectives of the activity
purchased. In a sense we can thus say that the contract has become a meta-
phor for capturing the change inmanagement and control within the public
Roland Almqvist is a doctoral student at the School of Business, Stockholm University.
Public Administration Vol. 79 No. 3, 2001 (689–706)
Blackwell Publishers Ltd. 2001, 108 Cowley Road, Oxford OX4 1JF, UK and 350 Main Street,
Malden, MA 02148, USA.
690 ROLAND ALMQVIST
sector. A paradigm shift is said to be in progress towards management by
contract instead of the previous management by hierarchy (Burns et al. 1994).
As a researcher one presumably has the perception that paradigm shifts
are not concerned with trifles. They are often accompanied by complex
processes involving the re-examination of earlier conceptions, reflection and
sometimes great soul-searching. It is thus no exaggeration to maintain that
the transformation of management systems and processes within the public
sector into management by contract may involve a substantial change in
old notions. These changed views emanate from a number of new (or at
least current) and transforming ideas. If the ideas regiment our conceptions
in the longer term, then what we generally call an institution is formed.
The ideas may also have practical consequences. Sometimes the idea and
practice may be in harmony with each other; at other times they may not
harmonise at all. In the present study it is therefore important to differen-
tiate between the concept and the phenomenon of ‘management by con-
tract’(cf. Mattessich 1995) since the latter situation may pose an obstacle
to the analysis and understanding of an institution. This means that good
analyses of an institution as an idea may be misleading if they are used to
analyse the practice of it, and vice versa. In other words, therefore, it is
important to differentiate analytically between idea and practice
(Brunsson 1992).
We can also express the above argument in terms of a programmatic
and a technological dimension respectively (refer for example to Meyer and
Rowan 1977; Rose and Miller 1992; Miller and O’Leary 1998; Miller and
Rose 1998). The programmatic dimension incorporates the main concept
and ideas. In purely general terms, programmes can be related to the nor-
mative concept and ideas, which are then transformed and introduced into
a specific activity in order thereby to form its task in practice. Focusing on
the latter, we can then talk about a technological dimension. This is where
the technologies that are engendered in the transformation and the inter-
action between these two dimensions are found (Almqvist and Skoog 1999).
Here we are concerned with concrete tasks and routines that help to create
a world for the practitioners. If we look at the phenomenon of ‘management
by contract’, the technological dimension may include the development of
different management control systems or models in the enterprise. The aims
of these models may be, for example, well thought-out purchaser functions,
management control systems for costs and quality, MBO-models, perform-
ance measurement systems, and so on. The programmatic dimension thus
links the practice and its technologies to the broader and more generally
held objectives that exist in its conceptual sphere. Moreover, it is more or
less taken for granted that the practice is capable of operationalizing,
implementing and meeting these goals (Power 1997); in other words, that
it is possible to construct technologies with a view to meeting these goals.
Thus, just as in the case of other phenomena there is again a whole range
of ideas concerning how this phenomenon should be designed, for example,
Blackwell Publishers Ltd. 2001
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