Markets, Quasi-Markets and Middle Managers in Local Government
| Published date | 01 July 1997 |
| Date | 01 July 1997 |
| Author | Linda Keen |
| DOI | 10.1177/095207679701200304 |
| Subject Matter | Articles |
Markets,
Quasi-Markets
and
Middle
Managers
in
Local
Government
Linda
Keen
University
of
Kent
at
Canterbury
Abstract
Operating
as
purchasers
or
providers,
middle
managers
play
a
key
role
in
the
implementation
of
the
new
market
systems
recently
introduced
within
local
authorities.
However,
relatively
little
empirical
investigation
has
been
undertaken
into
the
first-hand
experiences
of
the
middle
managers
who
are
on
the
'receiving
end'
of
these
market
systems.
After
a
brief
review
of
the
literature,
this
paper
uses
Williamson's
(1975;
1985)
model
of
behavioural
attributes
as
an
analytical
framework
for
analysing
the
impact
of
the
new
Purchaser
and
Provider
model
on
the
performance
of
middle
line
managers
working
within
a
local
authority
well-known
for
its
commitment
to
market
service
delivery
systems.
These
managers'
responses
about
the
positive
and
negative
aspects
of
their
experiences
of
market
systems
varied
significantly
according
to
their
roles
as
either
Purchaser
or
Provider
managers,
and
to
their
location
within
particular
service
departments.
The
paper
draws
attention
to
the
important
differences
in
the
nature
of
the
transactions
within
each
of
these
departments
which
appeared
to
account,
at
least
in
part,
for
the
managers'
different
responses,
and
argues
against
the
wholesale
application
of
market
forms
of
service
delivery
across
highly
differentiated
organisations
such
as
local
authorities.
Introduction
A
key
component
of
the
'new
managerialism'
adopted
by
increasing
numbers
of
local
authorities
during
the
1980s
and
1990s
has
involved
the
establishment
of
market
conditions
for
planning
and
delivering
services.
Operating
as
purchasers
or
providers,
middle
managers
play
a
key
role
in
the
implementation
of
the
new
market
systems.
However,
despite
the
growing
volume
of
literature
on
this
topic,
relatively
little
empirical
investigation
has
been
undertaken
into
the
experiences
of
the
local
authority
middle
managers
who
are
on
the
'receiving
end'
of
these
new
service
planning
and
delivery
systems.
This
paper
adopts
a
case-study
Public
Policy
and
Administration
Volume
12
No.
3
Autumn
1997
42
approach,
based
on
a
large
local
authority
nationally
known
for
its
enthusiastic
adoption
of
market-based
approaches,
to
analyse
the
impact
of
such
systems
on
middle
manager
role
behaviour.
Using
Williamson's
(1975;
1985)
model
of
behavioural
attributes
as
an
analytical
framework,
semi-structured
interviews
were
held
with
a
sample
of
middle
line
managers
to
explore
the
impact
of
the
new
Purchaser
and
Provider
roles
on
their
managerial
efficiency
and
effectiveness.
The
'market'
approach
to
local
government
service
provision
involves
three
key
components:
'transferring
services
or
assets
to
provate
ownership,
encour-
aging
competitive
tendering
for
services
or
creating
internal
markets'
(Elcock,
1993,
p.155).
All
three
developments
represent
a
move
away
from
the
traditional
'self-sufficient'
patterns
of
local
government
management,
involving
a
hierarchi-
cally
controlled
near
monopoly
in
service
planning
and
provision,
towards
the
variously
named
'residual',
'enabling',
'competitive'
and
'mixed-economy'
local
authority
(Brooke,
1989;
Langan,
1993).
They
all
require
a
separation
between
service
planning
and
funding
(undertaken
by
the
local
authority
itself
in
a
client,
commissioning
or
purchasing
role)
and
service
provision
or
delivery
(carried
out
by
providers
or
contractors
who
may
be
either
internal
or
(increasingly)
external
to
the
local
authority).
In
accordance
with
successive
Conservative
central
government
requirements,
these
market
systems
are
now
well
established
within
local
government
manual
services
such
as
refuse
collection
and
street
cleaning.
Local
authorities
are
currently
adopting
a
variety
of
market
models
within
many
non-manual
and
professional
services,
including
social
services,
housing
management,
and
engineering,
law,
finance,
personnel
and
computer
services
(Young
and
Mills,
1993;
Young
1996).
Coordinating
Mechanisms
Markets,
hierarchies
and
(more
recently)
networks
can
be
identified
as
the
three
key
organisational
coordinating
mechanisms
available
for
regulating
the
relationships
within
and
between
local
authorities
and
other
agencies
(Mitchell,
1993;
Thompson,
1993;
Walsh,
1995).
Essentially,
market
coordination
is
characterised
by
'exchanges
based
on
the
price
mechanism
which
acts
as
the
means
of
providing
information
about
variations
in
the
valuation
of,
and
consequently
the
demand
for
and
supply
of,
particular
commodities'
(Walsh,
1995,
p.33).
In
contrast,
hierarchies
involve
the
'authoritative
allocation
of
resources
to
defined
purposes'
through
deliberately
designed
or
'rational'
structures,
systems
and
roles
to
ensure
the
achievement
of
these
purposes.
Visualised
as
a
continuum,
hierarchies
(relatively
centralised
or
unitary
'U-form
organisation'
forms,
associated
with
traditional
pre-1980s
local
government
management
systems)
are
located
at
one
end,
with
the
new
more
decentralised
market-based
'M-form'
or
'multi-divisional'
quasi-autonomous
business
unit
systems
at
the
other
(McGuiness,
1991,
p.76;
Mintzberg,
1983).
These
two
ideal
type
models
merge
gradually
into
each
other,
through
the
concepts
of
quasi-
markets
and
quasi-hierarchies
(which
involve
elements
of
both
exchange
and
authority
based
systems).
Public
Policy
and
Administration
Volume
12
No.
3
Autumn
1997
43
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