THE NEXT STEPS AGENCIES, POLITICAL SALIENCE AND THE ARM'S-LENGTH PRINCIPLE: BARBARA CASTLE AT THE MINISTRY OF TRANSPORT 1965-68

The Next Steps agencies preserve a long tradition as the latest manifestation of the arm's-length principle of ministerial control. During the major part of this century, the now almost defunct public corporations offered one of the best examples of the arm's-length principle at work, and the recorded experiences of participants can provide valuable lessons for the Next Steps agencies. This article employs the diaries of Barbara Castle during her period as Transport Minister from 1965-68 in order to examine how she apportioned her time. From the evidence, a model is constructed which suggests that political salience is of greater importance than official structures in determining ministerial behaviour. Arising from the case study and the model, the final section of the article attempts to identify Next Steps agencies which have an inherently high potential for political salience, and concludes that, in this category, direct ministerial control would be preferable to the arm's-length principle.     

PERFORMANCE INDICATORS AND MANAGEMENT PERFORMANCE IN NATIONALIZED INDUSTRIES

Tracing the links between managerial performance and performance indicators reveals the limited quality of information provided by those indicators. There are two reasons. First, aggregate indices in their composition and assumption provide only a starting point for analysis and evaluation. Second, the political context inhibits publication of informative indicators of the kind which a competent organization might use for internal purposes. Part of the problem resides in misapplication of a private sector analogy. We conclude that both understanding of the nature of managerial performance in nationalized industries and conditions for working towards a more appropriate evaluation have been largely lacking in the public forum.     

DEVELOPING AND UNDERSTANDING CULTURAL CHANGE IN HM CUSTOMS AND EXCISE: THERE IS MORE TO DANCING THAN KNOWING THE NEXT STEPS

Increasingly, what was formerly known as public administration is turning itself into management, while management itself is fast becoming synonymous with the management of change. These two directions meet in government calls to change the culture of the civil service, and are to be found most clearly in the Financial Management Initiative (1982), and its successor, the Next Steps (1988). While each stresses a different aspect, the core policy idea which runs through them is one of improving performance by delegating power and responsibility down the hierarchy closer to the point of delivery. In this way the bureaucratic giants which comprise the various central government departments are transformed into more adroit organizations, to the extent that it becomes appropriate to talk of giants learning to dance (Kanter 1989). This article, through a discussion of 'experiments in change' conducted in one of the largest central government giants, HM Customs and Excise, argues that teaching giants to learn to dance is easier said than done. The main focus of the article is on what giants may need to learn in order that they can become more attuned to change and it concludes with the proposition that change in central government cannot be understood or be properly managed without an appreciation of the changing context of change itself.     

OF POLITICS AND PURPOSE: POLITICAL SALIENCE AND GOAL AMBIGUITY OF US FEDERAL AGENCIES

As scholars have observed, government agencies have ambiguous goals. Very few large sample empirical studies, however, have tested such assertions and analysed variations among organizations in the characteristics of their goals. Researchers have developed concepts of organizational goal ambiguity, including 'evaluative goal ambiguity', and 'priority goal ambiguity', and found that these goal ambiguity variables related meaningfully to financial publicness (the degree of government funding versus prices or user charges), regulatory responsibility, and other variables. This study analyses the influence of the external political environment (external political authorities and processes) on goal ambiguity in government agencies; many researchers have analysed external influences on government bureaucracies, but very few have examined the effects on the characteristics of the organizations, such as their goals. This analysis of 115 US federal agencies indicates that higher 'political salience' to Congress, the president, and the media, relates to higher levels of goal ambiguity. A newly developed analytical framework for the analysis includes components for external environmental influences, organizational characteristics, and managerial influences, with new variables that represent components of the framework. Higher levels of political salience relate to higher levels of both types of goal ambiguity; components of the framework, however, relate differently to evaluative goal ambiguity than to priority goal ambiguity. The results contribute evidence of the viability of the goal ambiguity variables and the political environment variables. The results also show the value of bringing together concepts from organization theory and political science to study the effects of political environments on characteristics of government agencies.     

FACTORS INFLUENCING THE USE OF PERFORMANCE INFORMATION FOR DECISION MAKING IN AUSTRALIAN STATE AGENCIES

Is the state of a performance measurement system the most important element for promoting the utilization of performance indicators (PIs) in the public sector? Or are there other more influential factors, such as organizational culture, or even individual perceptions on the merit of performance measurement for their agency? Through a survey on a small group of managers specializing in performance measurement in 21 Australian state government agencies, this research examines the relative influence of the following factors on the use of PIs for internal decision making: the agency's performance measurement system, stakeholder support for the agency's performance measurement, organizational culture, the external environment, and individual perceptions on the impact of performance measurement in the agency.     

TOWARDS STANDARDS FOR THE PUBLICATION OF PERFORMANCE INDICATORS IN THE PUBLIC SECTOR: THE CASE OF SCHOOLS

Since the 1990s, the media and public authorities in many developed countries have published data on the quality of public services such as schools, hospitals and police. In the education sector the publication of performance indicators and league tables generated considerable debate. In this article, the policy context of this development in the education sector is analysed in conjunction with the problems associated with the public reporting of school performance indicators. This is followed by a discussion of the need for an accepted set of publication standards. The aim of this article is to initiate a debate about whether international consensus can be reached on the content of such a set of standards, and whether a particular set of standards, developed in the Dutch context, is applicable in and relevant to other countries. These Dutch standards have been applied to a variety of English, American and Dutch publications. The results of the analysis suggest that if the Dutch standards were applied, school performance publications could be significantly improved.     

THE INSTITUTIONALIZATION OF EU AGENCIES: AGENCIES AS ‘MINI COMMISSIONS’

A stream of reviews that take stock of EU governance trends shows that the EU's governance agenda produces mixed results. EU agencies are part of the EU's search for new governance mechanisms. They have not proven to be a break with EU policy‐making processes – underpinning administrative stability rather than reform. This article explores the institutionalization of EU agencies. Using the case of the EU's human resources (HR) policy, it concludes that administrative details are important in order to understand the development of EU agencies turning into institutions. The influence of the EU's institutional environment on their operations is so strong that they must operate as ‘mini Commissions'. This tight control hinders their institutionalization.     

EU LEGISLATION AND NATIONAL REGULATION: UNCERTAIN STEPS TOWARDS A EUROPEAN PUBLIC POLICY

The EU with its supranational powers is a unique institution. Contrary to other international organizations, it can make laws that are binding to its member governments as well as to their citizens and enterprises. However, reviewing the literature, we find little consensus as to its true role as a lawmaker. This article and the articles that follow in this symposium remedy this empirical deficiency. The present article presents a comprehensive analysis of the scope of binding EU regulation. The EU is presented as an important lawmaker. It has, with considerable effectiveness, been able to overcome recurrent crises that have often called its very viability into question. But the same analysis also reveals that the EU, in spite of several treaty reforms expanding its responsibilities into new policy areas, remains a predominantly economic regulator. Finally, EU lawmaking is to an increasing extent delegated to the European Commission, dedicated to the de facto task of maintaining the internal market. Although this article and the articles that follow it cover the present, and refer to the European Union (EU), the EU, since its creation in the 1950s, has changed its official name several times.     

LEARNING FROM PERFORMANCE FEEDBACK: PERFORMANCE INFORMATION,ASPIRATION LEVELS,AND MANAGERIAL PRIORITIES

While performance management is increasingly widespread, we still know little about how performance information generates learning and affects organizational responses. Recent work on performance information and learning in private business organizations, however, suggests that perceived negative performance triggers important strategic responses related to problem identification, search, and change. In turn, how performance is perceived depends on whether performance falls short of aspiration levels that are based on an organization's historical performance and the performance of peer organizations. This article adapts this model to a public sector context and tests one implication of the model, namely that public managers will increase their prioritization of goals that are currently performing below aspirations. This question is central to the study of public organizations pursuing multiple and democratically contested goals. Empirical findings based on administrative performance data and a survey of Danish school principals support this prediction.     

PRESENTATIONAL MANAGEMENT AND THE PURSUIT OF REGULATORY LEGITIMACY: A COMPARATIVE STUDY OF COMPETITION AND CONSUMER AGENCIES IN THE UNITED KINGDOM AND AUSTRALIA

Independent regulatory agencies, faced with multiple and often conflicting demands from regulatory stakeholders, yet operating at arm's length from government, may be under considerable pressure to demonstrate the legitimacy of their decisions and the regime they administer. This article considers how regulators employ presentational strategies to establish and maintain their legitimacy by documenting the findings of a comparative study of two independent agencies responsible for the regulation of trade practices in their respective jurisdictions: the UK Office of Fair Trading and the Australian Competition and Consumer Commission. Its findings demonstrate that presentational activities may be an important means by which regulators give concrete expression to their obligations of transparency, promote the effectiveness of the regime they administer, and publicly demonstrate how their work serves the community. The mass media is relied upon by both agencies as the primary vehicle through which they seek to communicate to their targeted audiences and the public at large, actively seeking to manage the ambivalence that infuses the regulatory enterprise.     

AGENCIFICATION AND BLAME SHIFTING: EVALUATING A NEGLECTED SIDE OF PUBLIC SECTOR REFORMS

The establishment of autonomous agencies has been a strong trend in the public sector across countries for about 25 years. In line with the official rhetoric accompanying such reforms, almost all reform evaluations have focused on various kinds of performance improvements. This article investigates a set of behavioural consequences of such reforms, which have been claimed by the blame avoidance literature, but have never been subjected to systematic empirical analysis. In particular, the article examines how a reform of agencification influences the propensity of agency managers to blame the political principals when the agency is subject to public criticism. Furthermore, it examines how the reform influences the blaming rhetoric of ministers and MPs. To evaluate such reform effects systematically, the article introduces a new empirical approach and illustrates the utility of the approach in a case study of the transformation of the national Danish railway company from 1995 to 2007.     

LOCAL GOVERNMENT STRUCTURE AND PERFORMANCE: LESSONS FROM AMERICA?

The debate in the UK on the reform of local government structure is poorly informed by empirical evidence. This article bridges part of the empirical gap by drawing upon analyses of structural effects in the USA. Two main dimensions of structure are outlined: fragmentation and concentration, both of which can vary vertically and horizontally. Fourteen structural hypotheses are identified and categorized as technical, competitive and political effects. The empirical evidence from the USA suggests that fragmentation is associated with lower spending and concentration is associated with higher spending. The implications of the evidence for structural reform in the UK are analysed. It is concluded that the creation of a single-tier system may not lead to greater efficiency, and that the advantages of a two-tier system have been underestimated.     

CORPORATE CAPACITY AND PUBLIC SERVICE PERFORMANCE

Corporate capacity is arguably a key determinant of the success or failure of public sector organizations. However, while there is growing evidence on the extent of corporate capacity, few researchers have systematically examined whether it is linked to public service performance. Does a larger corporate centre lead to better or worse performance for the organization as a whole? To answer this question we apply seemingly unrelated regression to measures of effectiveness, cost‐effectiveness and equity in English local government. We find that the effect of corporate capacity on performance is nonlinear, following an inverted u‐shaped pattern, and that its positive effect turns negative around the mean for effectiveness and cost‐effectiveness, and above the mean for equity. The study therefore suggests that senior managers face important trade‐offs between organizational goals when deciding on the appropriate level of corporate capacity.     

ORGANIZATIONAL STATUS AND PERFORMANCE: THE CASE OF THE SWEDISH PHARMACIES

In recent years, studies of the relationship between organizational status and success have focused largely on organizations transferring from the public to the private sectors: pharmacies in Sweden provide a case study of organizational status change in the reverse direction. Popular belief suggests progressive deterioration in the performance of an organization where ownership changes from owner-manager to public corporation, market conditions change from competition to monopoly, and internal management becomes increasingly command orientated. This article explores change in various performance and organizational variables in the National Corporation of Swedish Pharmacies, from its creation in 1971 until 1990. The corporation displays a high degree of stability amongst its senior management team, task specialization amongst employees is low, whilst standardization of working methods is high. Decentralization of authority has occurred over several years. A review of several measures of success, including productivity, financial ratios and innovation, demonstrates substantial progress over the period, comparing favourably with other Swedish public sector organizations. It is concluded that public sector ownership and monopoly supply need not result in deteriorating performance and lack of innovation, provided that criteria for success are clearly stated and properly monitored.     

REGULATORY RED TAPE AND PRIVATE FIRM PERFORMANCE

Regulation may obstruct dynamic adaptation, innovative power, and entrepreneurial activity. On the other hand, regulation could be interpreted as a phenomenon which society just has to learn to live with, and which otherwise does no real economic harm. This article explores both of these hypotheses. We study the impact of three dimensions of regulatory red tape on the performance of private companies: regulation cost, regulation change, and regulation inconsistency. We analyse unique survey data from 530 Dutch private companies. The results show that regulation cost, inconsistency, and change limit sales turnover growth, and that regulation change hampers market competition performance.     

VERTICAL STRATEGIC ALIGNMENT AND PUBLIC SERVICE PERFORMANCE

We report the results of a study examining the effects of vertical strategic alignment (that is, the degree to which strategic stances are consistent across different organizational levels) on public service performance. Longitudinal multivariate analysis is undertaken on a panel of public organizations over four years. We find that alignment on a prospecting strategy leads to better performance, but that no such effect is observed for a defending strategy. We also find that high levels of prospecting alignment produce stronger positive performance effects in centralized organizations and when environmental uncertainty is high. The implications of these findings for research and practice are considered in the conclusion.