Market Responsiveness versus Political Responsiveness
| Author | Michael B. Charles,Trevor Williams,Neal Ryan,Jennifer Waterhouse |
| Published date | 01 October 2008 |
| Date | 01 October 2008 |
| DOI | http://doi.org/10.1177/0952076708093249 |
| Subject Matter | Articles |
© Public Policy and Administration
SAGE Publications Ltd
Los Angeles, London, New Delhi
and Singapore
0952-0767
200810 23(4) 351–372
Market Responsiveness
versus Political
Responsiveness
Change and Conflict in an Australian Government
Agency
Jennifer Waterhouse
Queensland University of Technology, Australia
Neal Ryan
Southern Cross University, Australia
Trevor Williams
Queensland University of Technology, Australia
Michael B. Charles
Queensland University of Technology, Australia
Abstract
Considerable attention has recently been given to possible contradictions
between public sector reform initiatives aimed at making agencies more
responsive to political institutions and publics, and initiatives designed to make
them more responsive to markets. This article reports on a study that
demonstrates ways in which tensions and conflict can arise within a
government agency when the aims of political responsiveness and market
responsiveness are pursued simultaneously. The study also shows that conflict
arises not only from contradictions between political and market
responsiveness, but also from failures in organizational structure and change
implementation strategies. Despite this, it is possible that the contradictions
between the reforms need not be fatal if integrative structures are adopted and
if conditions are created for effective participation and collaboration.
Keywords
change management, commercialization, public sector management
DOI: 10.1177/0952076708093249
Jennifer Waterhouse, Faculty of Business, Queensland University of Technology, GPO Box 2434,
2 George Street, Brisbane, QLD 4001, Australia [email: j.waterhouse@qut.edu.au]
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Public Policy and Administration 23(4)
Introduction
Public sector reforms have shifted the emphasis of public sector management from
administrative processes to a focus on programme results and the cost-effective
achievement of improved outcomes (Codd, 1991; Hamilton, 1990; Hernes, 2005;
Howard, 1990; Keating, 1990). Initial debate about the reforms focused largely on
real and apparent conflicts between ‘traditional’ public service and the new ‘man-
agerialism’ and ‘economic rationalism’ embodied in public sector reforms
(Armstrong and Ford, 2000; Chapman, 1990; Halligan and Power, 1990; Painter,
1988; Uhr, 1987; Yeatman, 1994). More recently, attention has been paid to
possible contradictions between reforms, especially between initiatives aimed at
making agencies more responsive to political institutions and publics, and those
intended to make them more responsive to markets.
The article seeks to arrive at a more informed understanding of how public
sector organizations respond to the adoption of private sector business practices,
and the issues that emerge in these challenging circumstances. It reports a study
that demonstrates how tension and conflict can arise within a government agency
when the aims of political responsiveness and market responsiveness are pursued
simultaneously. The study also shows that conflict is accentuated when function-
al organizational structures are adopted that further divide the organization
between the two aims, and when top-down change implementation strategies that
fail to develop participation and collaboration at lower levels of the organization
are employed. Yet the contradictions between reforms need not be overtly detri-
mental to organizational coherence. This is especially the case if structures are
adopted that integrate the different aims, and if stakeholders across the agency are
involved in managing the inherent tensions.
Public Sector Reforms
A broad theme of public sector reform over the past two to three decades has been
the adoption of private sector management techniques and economic rationalist
models aimed at transforming government agencies from bureaucratic to market-
oriented entities, all the while retaining public accountability (Emery and
Giauque, 2003; Hernes, 2005; O’Faircheallaigh et al., 1999).
The reforms do not constitute a universal paradigm, as is suggested by their
inclusion under umbrella terms such as New Public Management (NPM; Barzelay,
2001; Lane, 2000). Rather, similar changes have been widely adopted by different
public sector organizations to varying extents, and in various ways. These
changes, often influenced by local history, culture, political leadership, and char-
acteristics of the public service administrative systems already in place, have
often been introduced singly rather than as cohesive programmes (Horton, 2003;
Sozen and Shaw, 2002). Nevertheless, the similarities are pronounced and
include (1) strengthening the relationship between political direction and policy
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Waterhouse et al.: Market versus Political Responsiveness
implementation by setting budgetary priorities more closely in accordance with
the government’s political objectives and agenda; (2) a focus on financial account-
ability and efficiency of individual agencies; (3) increased autonomy for agencies
to set strategic objectives within clear government policy frameworks; (4) cus-
tomer orientation and flexibility in meeting individual and local needs; and (5) the
adoption of private-sector human resource management (HRM) approaches and
techniques for dealing with government employees, including staff participation
and involvement in decisions, greater emphasis on teamwork, skills development,
and performance appraisal and management (Hamilton, 1990; Horton, 2003;
Howard, 1990).
Reforms of the type signalled above include privatization, deregulation,
government business enterprises, public–private partnerships, contracting out,
downsizing, total quality management (TQM), re-engineering, and purchaser–
provider splits (Doyle et al., 2000; Hood, 1998; O’Donnell, 1996; Ryan et al.,
1999; Yeatman, 1994). Workplace-specific aspects of reform include moderniza-
tion programmes, mission statements, work redesign, productivity agreements,
and new career paths (Ayres and Braithwaite, 1992; Emery and Giauque, 2003;
Lancaster and Brierley, 2001; Nutt and Backoff, 1993).
These reforms have been criticized on several grounds. Hernes (2005) argues
that they heighten the tension between an agency trying, on the one hand, to be
flexible and responsive to particular client needs and, on the other, treating all
members of the public according to universal criteria. Armstrong and Ford (2000)
contend that conflict arises when revenue targets, business plans, and commercial
considerations become entangled with safeguarding the public interest. Skålén
(2004) warns that reform programmes create heterogeneous conflicting and fluid
organizational identities rather than uniform and stable ones. Furthermore, Emery
and Giauque (2003) claim that performance evaluation encourages organizational
units to focus on achieving their own specific objectives. This is often at the
expense of intra-organizational cooperation and the achievement of whole-
of-government objectives, something that compounds the old problem of com-
partmentalization within and between public sector organizations.
Although a major goal of public sector reform is greater productivity, Emery
and Giauque (2003) found that staff often complained about having to do more
unproductive work, such as reporting on each individual task performed (Farrell
and Morris, 1999; Hood et al., 1999). Corham and Burnes (2001) concluded that
such reforms have overemphasized structures and paid insufficient attention to
cultural change and staff concerns. While staff participation and commitment is
widely regarded as essential to the success of the reforms, other studies (e.g.
Horton, 2003) have found that bottom–up participation was illusory.
Hernes (2005) identifies four types of organizational response to the contra-
dictions seemingly inherent in public sector reform. These include paralysis,
decoupling, loose coupling, and organic change. Paralysis, or the inability and
unwillingness to take action, occurs because of change fatigue, perceived threats
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to existing organizational modes, and incompatibility between old and new
values. Decoupling takes place when the organization appears to adopt new struc-
tures, yet actual practices remain unchanged. Loose coupling occurs when inter-
acting organizational units communicate the rhetoric of coordination but largely
pursue their own goals. These units often give attention to spurious input–output
indicators and avoid substantive issues such as productivity, quality and cost.
Finally, organic adaptation occurs when existing networks and systems of
informal discretion and cooperation accommodate formal reforms (despite their
internal contradictions and conflict with public sector traditions). The first three
types of response identified by Hernes (2005) actually exacerbate the problem of
resolving reform contradictions. On the other hand, organic adaptation offers hope
that at least some resolution of the conflict and tension arising from ostensibly
incompatible reform objectives can be achieved.
Government agencies are responsible for implementing the policies adopted by
incumbent governments (Osborne and Gaebler, 1992). While such policies have
increasingly included the general public sector reforms outlined earlier, political
agendas are broader than commercialization and encompass social objectives such
as involving citizens in policy formation and decision-making. This differs
substantially from Weber’s bureaucratic approach, whereby rules are established
through hierarchies in order to deliver...
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