MANAGERIAL GOALS IN A PERFORMANCE‐DRIVEN SYSTEM: THEORY AND EMPIRICAL TESTS IN HIGHER EDUCATION
| DOI | http://doi.org/10.1111/padm.12124 |
| Author | KENNETH J. MEIER,AMANDA RUTHERFORD |
| Date | 01 March 2015 |
| Published date | 01 March 2015 |
doi: 10.1111/padm.12124
MANAGERIAL GOALS IN A PERFORMANCE-DRIVEN
SYSTEM: THEORY AND EMPIRICAL TESTS IN HIGHER
EDUCATION
AMANDA RUTHERFORD AND KENNETH J. MEIER
Factors inuencing managerial goals and decision-making processes have been debated for decades
among public administration scholars. Previous literature has explained goal setting through the-
ories of performance gaps, bureaucratic control, and isomorphic rationality. However, there exists
no direct empirical test of these theories to determine which theoretical expectation may have more
or less weight with managers when setting organizational goals. Using an original survey of uni-
versity presidents, this study tests how public managers prioritize competing performance goals.
Findings suggest that the goal setting decisions of these public managers is primarily driven by
political control mechanisms.
INTRODUCTION
Public managers make a wide range of decisions. While some decisions contribute to
day-to-day operations, others have greater consequences for the priorities and perfor-
mance outcomes of organizations. Among scholars of public administration, goal setting
processes have remained of central importance through discussions of how things might
be (and how they might be improved) as well as how things are at some period in time
(Barnard 1938; Simon 1947). The more recentemphasis in public management, particularly
the burgeoning empirical work, takes prioritization processes as a given and examines the
impact of managerial decisions (and the subsequent results, policies, programmes, and
structures) on the performance of organizations (Lynn et al. 2001; Meier and O’Toole 2003;
Wal ke r et al. 2011). The public management literature often treats managerial goal set-
ting and decision-making as exogenous and focuses solely on conducting impact analyses
of decisions. While this research agenda has been highly productive, Lynn et al.’s (2001)
model of governance suggests that how decisions are made and what goals are prioritized
are part of a broader model of governance and are not strictly exogenous to the perfor-
mance of public organizations. Determining how managers select goals, as a result, is an
important research question.
The primary contribution of this study is a test of the combination of three com-
monly cited theories related to goal setting and decision-making – performance gaps,
bureaucratic control, and isomorphic rationality. The impact of management action
on programme performance is clearly dependent on the specic actions that man-
agers take in accordance with their priorities and preferences, and the development of
management priorities merits study in its own right. This study steps back from the
management–performance nexus to examine the determinants of managerial priorities
by focusing on decisions about goals using a survey of university presidents in the
United States. The study will rst distil a brief theory of managerial goal setting processes
Amanda Rutherford is at the Department of Political Science, Texas A&M University, College Station, Texas, USA.
Kenneth Meier is at the Department of Political Science, Texas A&M University, and also Cardiff University, Cardiff,
UK.
Public Administration Vol.93, No. 1, 2015 (17–33)
© 2014 John Wiley & Sons Ltd.
18 AMANDA RUTHERFORD AND KENNETH J. MEIER
from the literature and then discuss how these theoretical notions apply to the context
of colleges and universities. We see the case of colleges and universities as a hard case
for examining any theory of goal setting for a set of historical reasons (albeit reasons
that appear to be changing). We then introduce our measures and data and provide an
empirical assessment of goal setting through ordered logit models. Findings indicate that
political principal–agent relationships largely trump assessments of performance gaps
or isomorphic rationality. We conclude with a discussion of the generalizability of these
ndings as well as the implications this conclusion has for the future development of
public management theory.
MANAGERIAL GOAL SETTING
The study of managerial priorities and subsequent decision-making processes began with
a consensus model of decision-making, termed ‘synoptic rationality’ (see Braybrooke and
Lindblom 1963). The model was normative in nature and specied how decisions should
be made according to managerial priorities and preferences. This approach argues that
managers, when faced with a problem, should start with a full list of alternatives, evalu-
ate each of the alternatives in terms of the goals of the organization, and select the option
that maximized the net benets to the organization. In other words, decision-making pro-
cesses are largely contingent on organizational goals. This theory, while useful in assessing
decisions, stopped short of considering the underlying causal mechanisms of the organi-
zational goals against which each decision alternative is to be compared. The seminal work
of Herbert Simon (1947) further challenged the rational decision-making model on both
empirical grounds (i.e. this was not how managers actually make decisions) and normative
grounds (i.e. managers should not make decisions in this way). Simon offered bounded
rationality and the notion that administrative man satisced rather than maximized, but
did not provide conclusive evidence as to how the priorities of managers were determined
prior to the action of satiscing to meet individual or organizational goals.
Beyond determining whether managerial actions are determined through satiscing
or maximizing, questions remained: rst, when do managers feel the need to make a
decision; and second, what information would be used to either prioritize various goals
or determine the potential efcacy of competing goals. A Behavioral Theory of the Firm
(Cyert and March 1963) incorporated the notion of performance gaps (see Downs 1967)
and the need for managers to assess the performance of their organization when making
tradeoffs among priorities. Managers might choose to emphasize one goal over others
either by making judgements about the adequacy of their own performance relative to
some ideal or by comparing their performance to that of competitors. Greve (2003), in
his extension of Cyert and March, terms the rst criterion ‘historical aspirations’ and the
second ‘social aspirations’ (see Salge 2011 for application in the public sector).
Historical aspirations generally require the manager to compare current performance
with prior performance as well as with the overall trend of performance in the organization
historically (Meier et al. 2013). If student graduation rates are improving at a slower rate
than standardized test scores, for example, a school principal may prioritize decisions that
encourage students to graduate over decisions focused on improving test preparation pro-
grammes. Within local governance structures, trash collection may take precedence over
street cleaning if the mayor of a city perceives the performance of the former to be declin-
ing while the latter is stagnant or improving in the city over time. Social aspirations, on
the other hand, require the designation of a peer group and a direct comparison between
Public Administration Vol.93, No. 1, 2015 (17–33)
© 2014 John Wiley& Sons Ltd.
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