Balanced Scorecard Implementation in a Local Government Authority: Issues and Challenges

Over the last decade the balanced scorecard (BSC) has emerged as a popular strategic performance measurement and control system within various public sector organisations as it assists in effectively implementing strategy and in measuring performance. This article investigates whether the implementation of a BSC has been of value to a large Local Government Authority (LGA) within Australia. The research takes a thematic approach to identify the issues, challenges and lessons learnt in relation to the design and implementation of the BSC, which is accomplished through a review of annual reports, published relevant documents and semi‐structured interviews with 13 senior managers of various programs and divisions within the LGA. Future research opportunities are also identified in this area.     

Effectiveness: the next frontier in New Zealand

Central agencies face a critical test on how to approach the resolution of issues and problems related to improving the New Zealand public sector management systems from the author’s perspective. A decade has passed since the legislative changes were approved that initiated major financial management reform, and much of the initial reform energy has faded. It is time to assess what has and has not been achieved, and to search for ways to continue to move forward. There is a sense of anticipation, as well as some apprehension, across the New Zealand public sector, particularly in light of the election of a new Government. As New Zealand moves into a new phase of reform, one of the key challenges is to take advantage of what has already been achieved. New Zealand has one of the world’s leading public sector management systems, and should take advantage of that foundation. The key issue focused on in this article is effectiveness. A critical part of raising effectiveness is enhancing information. Better information is needed on outcomes, and it should be packaged in more accessible and relevant ways. More disciplined evaluation of the effectiveness of what is done is necessary. Systems that encourage public servants to raise their horizons should be improved or put in place. Managers who understand what they are doing and why are critical to reform success. Purchase agreements—or output agreements—will play a pivotal role, but they need to be improved. A fresh approach to output specification to better accommodate the range of output relationships that exist is required. Central agencies can facilitate customization of output specifications by being clearer about the basic output framework, and more flexible about how that framework is applied. Outcome measures should be refined and used along with outputs where feasible. Better ways must be found for managing problems of inter-agency coordination. Technology offers a new set of tools, but IT facilitates rather than creates effective relationships. Other coordination mechanisms that help agencies to communicate and to make trade-offs must evolve. New Zealand can move into a new phase of building a “world’s best” public sector. The public sector has an appetite for action at the moment, and a willingness to debate the issues. How this potential will be used is, to a great extent, the critical issue faced by the new Government.     

Do Australian public sector employees have the type of culture they want in the era of new public management?

New public management theory proposes that public sector organisations should be managed more like private sector organisations. It is therefore expected that public sector managers will have preferences for an organisational culture that will reflect the culture of private sector organisations, with an external rather than internal orientation. The current research investigated the idea that managers' perceptions of ideal organisational culture would be different to the bureaucratic model of culture (internally oriented), which has traditionally been associated with public sector organisations. Responses to a competing values culture inventory were received from 925 public sector employees. Results indicated that the bureaucratic model is still pervasive; however, managers prefer a culture that is more external, and less control focussed, as expected. Lower level employees expressed a desire for a culture that emphasised human relations values.     

The Use of Contracting in the Public Sector—Recent New Zealand Experience

This research note examines the expanding use of contracting within the public sector in New Zealand. The term 'contracting' is interpreted broadly to include both external contracting (ie outsourcing) as well as the use of more explicit or formal 'contracts' within and between public sector organisations. No attention is given here to the separate, albeit related, processes of corporatisation, commercialisation and full privatisation (ie asset sales and the termination of public funding as well as provision). The empirical data, although limited, suggest that the recent increase in contracting in New Zealand has brought significant gains in terms of fiscal savings, productive efficiency, consumer choice and managerial accountability. Recent trends, however, have also posed some important policy issues, among them the limits to contracting out and the potential dangers associated with 'hollow' government.     

Performance and Accountability: Budget Reform in New Zealand

Since 1984, New Zealand has made major changes in public sector management. This article describes the perceived problems with the previous New Zealand system and discusses the reforms designed to address these problems. The changes attempt to increase efficiency by: (1) separating commercial functions from other government operations; (2) strengthening lines of ministerial and executive accountability; and (3) designing budget and financial management systems to improve measurement of public sector performance. This last reform includes shifting from an input to an output-based system, changing from cash to accrual accounting, and creating different forms of appropriations for different types of government activities. While it is too early to assess whether the reforms are successful, we note potential problems.     

The challenge of evaluating systemic change: the case of public management reform

At what stage of reform in the public sector does it become possible to conduct a thorough appraisal of results and how does one know when this stage has been reached? How should such an assessment be undertaken? By what methods can comprehensive and far-reaching systemic reforms be evaluated in the arena of public management during recent decades, particularly in countries like Australia, Britain and New Zealand? Most assessments have focused upon specific changes in management practice including the introduction of performance pay, the move to accrual accounting, the growth of contracting-out, the separation of policy and operations or the devolution of human resource management responsibilities. Alternatively, they have dealt with management changes in particular policy domains –such as health care, education, community services or criminal justice –or within a particular organization (department, agency or private provider). By contrast, there have been relatively few macro evaluations –comprehensive assessments of the impact of root-and-branch changes to the system. The problems of evaluation in the arena of public management are inherently complex and the way ahead is by no means clear. This article offers some broad reflections on the limitations to policy evaluation in the field of public management, and more particularly explores the obstacles confronted when assessing the consequences of systemic management reforms. It focuses on recent changes in the New Zealand public sector to illustrate the general themes because these reforms constitute one of best examples of systemic change anywhere in the world.     

New Zealand experience with public management reform—or why the grass is always greener on the other side of the fence☆

This article provides an analysis of how New Zealand has achieved the successes made to date, issues and problems yet to be resolved, and directions on how to address current shortcomings in public managment reform of the New Zealand model. Four issue pillars provide the framework for the analysis: Political—problems that are inherent to the political arena under a range of public management regimes; Incompleteness—problems that reflect that the system is incomplete in some areas, but that do not suggest inherent difficulties; Implementation—problems to do with the way the system has been implemented; Inherent—problems inherent in the New Zealand regime, but not necessarily in other systems. The overall conclusion drawn is that relatively few of the problems are inherent in the New Zealand model and that most problems fall under the first of the four issue pillars: politics. The author concludes that there is much to be done—but that it can be done within the framework of the Public Finance Act and the State Sector Act by changing how the system is operated.     

Paradoxical leadership in public sector organisations: Its role in fostering employee resilience

Government organisations, and their employees, need to be resilient to manage challenges such as resource constraints, rising demands, and the tensions and contradictions that underlie much public sector work, often stemming from the need to balance different stakeholder interests. Employee resilience, defined as the capacity to continuously adapt and flourish, even in the face of challenge, is an individual level construct that also benefits organisations. Despite its benefits, little is known about how to foster it. This paper explores whether paradoxical leadership (PL) can contribute to employee resilience. PL – the ability to balance competing structural and relational demands over time – may be one means of supporting employee resilience, as it corresponds to the tensions and paradoxes that exist in public sector work. This correspondence between PL and tensions in public administration work means that PL may also help employees behave resiliently. Findings from a quantitative survey (n = 233) in a large New Zealand public sector organisation indicate that PL antecedes resilience. The effect of PL facets on employee resilience is partially mediated by perceptions of organisational support.     

New public management reform in New Zealand: The collective strategy phase

This paper examines the New Public Management movement in New Zealand. Specifically the focus is on the financial management of central government departments and the shift in emphasis from management in the public sector to management of the public sector, that is, from defining management in terms of where it takes place to defining it in terms of the nature and outcome of the task.     

New Millennium,New Public Management and the New Zealand Model

Recently the much‐discussed ‘New Zealand model’ of new public management (NPM) has become significantly revised. It now lacks the theoretical coherence and the market‐led focus that it relied on between 1987 and 1996. Labour‐led governments since 1999 have undertaken gradual and pragmatic – yet significant – changes in public management structures and principles, refining and sometimes reversing the model implemented in the late 1980s and early 1990s. This article does a ‘stock‐take’ of public management developments in New Zealand from 1999 to 2008, and argues that New Zealand can no longer be viewed as a leading exponent of market‐led NPM. Some NPM principles have been refined, but others have been quietly abandoned. The new National‐led government appears unwilling to undertake radical reforms, and, while it may seek a greater role for the private sector, looks set to continue with the ‘gradual and pragmatic’ approach adopted since 1999.     

PUBLIC SECTOR CULTURE MANAGERIALISM OR MULTICULTURALISM?

Abstract: Despite dramatic change in the Australian public sector, little attention has been paid to organisational culture. With the importation of private sector strategies and structures the traditional values of public administration have been eroded. Public organisations and their members have experienced consequences of "culture shock", even "cultural revolution". Managerialism is an introduced culture which has been criticised by some academics and public servants. It is seen as inappropriate to the distinctive values and operating context of the public domain, as purporting to value-free technique while in effect operating as the mystifying ideology of a dominant elite. Managerialism has been constructed, it is argued, on simplistic and now superseded concepts of rational "management man", goal setting and planning. While managerialism is not the culture which will endow public organisations with new meaning and propel them to excellence, it can expect to increase its hold in the absence of the development of new models of the culture of public organisation. While new public sector cultures will need to be organisation-specific, to accommodate the differentiation between and within public organisations, an overarching framework of public sector values and principles will be required. One of the distinctive features of most public sector organisations is die number and diversity of their stakeholders. A multi-cultural model of public sector culture is proposed, which construes this diversity of subcultures as an instrument of strategic flexibility.     

Performance reporting for accountability purposes:: Lessons,issues, future

This article addresses the status and directions for performance reporting in the New Zealand public sector from the perspective of the Office of the Auditor General (OAG). It outlines the role of the Audit Office, provides definitions of accountability, and projects the dimensions of a new accountability. The authors assess challenges to performance reporting and accountability, the history of reporting performance accountability in New Zealand, an Audit Office perspective on accountability to Parliament, lessons learned from reform, some issues outstanding, and future development in terms of how the public sector in New Zealand should improve reporting on non-financial performance.     

Public management reform and lessons from experience in New Zealand

This article is edited from a speech delivered to the University of Victoria, Wellington—IPMN Workshop on the theme lessons from experience in New Zealand. The author articulates a number of lessons that have been learned, and identifies some lessons that should have been learned. Scott writes from the perspective of having been directly and centrally involved in the development and implementation of what has been characterized as “the New Zealand model” of public management for more than twenty years, a record of service that continues to date. The views expressed also benefit from extensive consulting by the author for governments around the world. Among the lessons learned are (a) the need for clarity of roles, responsibilities and accountability in the implementation of management reform, (b) the importance of matching decision capacity to responsibility, (c) the significance of ministerial commitment and clarity on expectations, (d) the advantages gained from structural innovations within the New Zealand cabinet, (e) the need to analyze disasters carefully for what they teach, (f) approaches to embrace and foibles to avoid in implementing performance specification, (g) problems caused by confusion over ownership and improper assessment of organizational capability, (h) the fact that actually doing strategic management in the public sector is hugely complicated, (i) that it is time to put an end to the notion that there is an “extreme model” of public management in application in New Zealand, and (j) that public management, government and governance innovations in New Zealand are no longer novel compared to those advanced in other nations. With respect to lessons not learned satisfactorily, many are simply the dark shadow of positive lessons, i.e., having not understood or implemented the successes achieved in some parts of New Zealand government into others. The author concludes with an admonition to avoid jumping too quickly, in response to post-electoral rhetoric, to the conclusion that past reforms in have to be modified quickly and radically, and that the New Zealand Model has failed.     

With the Benefit of Foresight and a Little Help from Hindsight

This article is about New Zealand's recent experience in public sector reform. New Zealand became seized with economic rationalism about the same time as Australia did but at the national level we went faster and farther than Australia towards the creation of a commercial culture in the public sector. Here I discuss what might be learned from what has happened in New Zealand.     

Reforming the public sector for leaner government and improved performance: The New Zealand experience

Over the 10 year period from 1984 to 1994 New Zealand has gone through an intense period of restructuring, both of the public sector and of the wider economy. In the process New Zealand has been transformed from a highly protected and regulated economy with a range of intrusive and expensive interventions, to an open and deregulated economy with an efficient and leaned down public sector. The article presents the “New Zealand experience” in restructuring, not necessarily as an example to be copied but as a benchmark to be used in examining the most appropriate restructuring to apply in other circumstances. The stages in the reform are described and the three key success factors set out. One of the key factors is the establishment of a set of clear principles which are then applied with determination. The principles developed in the New Zealand context are set out. The article examines the restructuring of the science sector in New Zealand as one case study; in part because of the author's personal involvement but also because it is a particularly complete example. Areas where work remains to be done are identified including the reforms in education and health and the need for collective action across government. Finally lessons to emerge from the New Zealand experience are discussed. These include especially putting time into fully understanding market characteristics before a market oriented reform is started, carrying reforms through to their conclusion rather than stopping partway, and establishing clear principles to guide the reform process.     

“新公共管理运动”的困境与转型——新西兰公共部门改革的反思及参鉴

新西兰公共部门改革是"新公共管理运动"的先锋,作为"改革实验室"和"政策创新者",因其彻底性、持续性及成效性被誉为"改革的典范"。然而近年来,西方公共管理学界提出了若干质疑,甚至认为"新公共管理运动已经死亡"。本文在考察新西兰公共部门改革实践的基础上,对实践模式的局限性及时代转换的压力两方面的批判性反思进行了梳理和分析:其"公平"与"公共"价值已经失落?是"经济学帝国"的扩张?还是"新泰勒主义"的表现?亦或是随着改革主题的衰落,数字时代治理的来临。对这一改革的实践发掘和理论反思对于当前我国政府职能转换与行政改革具有重要的参鉴价值:首先,推进改革的政府需要具备必要的能力基础;公共部门改革的核心命题是转变理念,优化政府职能,提高政府的效率和效能;而改革能否顺利推进,取决于广大民众和政府之间的深入互动;此外,改革需要尊重地方政府的主动性,充分发挥其作用。     

Managing and Leading in the Next Century

A 'quick scan' of the literature on management and leadership reveals a wealth of writings ¹ This article offers a broad overview and some thoughts, based on personal observation and experience, on future management and leadership needs in the Australian public sector. The present article first outlines, by way of illustration, some key pressures for continuing change within Australia's public sector and their possible implications for future management needs. Second, it addresses the distinction between 'management' and 'leadership'; and suggests that while the requirements placed on public sector management will continue to change, the skills required of public sector leaders are essentially timeless (and differ, in some respects, from private sector stereotypes of 'leadership').
Finally the article suggests why and how we should be seeking to develop 'leadership in depth' within public sector organisations, drawing on some illustrations from the Australian Department of Administrative Services.     

Computer-Based Performance Information for Executives in Local Government

Performance information is crucial to effective management. Computer-based information systems (CBIS) now play a significant role in the effective delivery of information to senior managers. Executive information systems (EIS) are emerging as popular tools to assist organisations in their strategic decision-making processes. This trend has spread from the private to the public sector, and is now evident in Australian government organizations
This article draws on the findings of a survey into the uses and benefits of CBIS and EIS, from a sample of Australian local government organisations. The study shows that lessons from the private sector are being heeded by system developers in public organisations, leading to successful EIS projects, or at least improved CBIS. The study indicates that EIS, which were originally developed for profit-oriented private companies, are now seen as appropriate for many public sector organisations, providing effective delivery of information to senior managers. Survey results indicate that improved information systems give executives a more accurate picture of their organisation's performance and so provide support for improved strategic decision-making. In addition, EIS are seen by respondents as offering significant benefits not only to managers but also to the rest of the organization.     

Weapon of Mass Distraction: New Zealand’s National Security System

The New Zealand’s National Security System (NSS) document is presented as the central framework for New Zealand’s whole of government approach to national security and crisis management. This article asserts that the NSS fails to be the central framework it purports to be and proposes the true objective of the NSS is to establish clear lines of authority within New Zealand’s national security architecture. The New Zealand government’s exercise of political authority within the security sector aligns with Weber’s theory of “charisma of office” for public acceptance. Using the legitimacy of charisma of office, the New Zealand prime minister can exert significant influence over New Zealand’s national security discourse and blur the lines of it liberal democratic institutions.