Introduction To Public AdministrationMGT111
NEW PUBLIC MANAGEMENT (NPM)
In the last three lectures we shall examine that public administration as a subject has moved full
swing i.e. that from the concept of administration to the concept of management.
Since the last one decade "administration" and "management" are used interchangeably. We shall
examine that what is "management" and how "administration" has evolved into "management".
New Public Management (NPM)
The 1980s and 1990s saw the emergence of a new managerial approach in the public sector, in
response to the inadequacies of the traditional model of administration. The new managerial approach was
the revival of the idea that private sector is more efficient. Administration was understood as static. It was
understood that administration was implementation of policies and programmes of government. The
concepts of efficiency were not the domain of "administration".
Management was understood as dynamic and applicable to private sector where efficiency was the
criterion of operations and task.
The various names for new public management reflect differing views of what is happening in
organizations, but they do have some points in common. These are discussed in following paragraphs:
First whatever the model is called, it represents a major shift from traditional public administration
with far greater attention paid to the achievement of results and the personal responsibility of
managers. Second, there is an expressed intention to move away from classic bureaucracy to making
organisations, personnel, and employment terms and conditions more flexible rather then rigid. Third,
organizational and personal objectives are to be set out clearly so that achievement or results are measured.
Fourth, senior staff is more likely to be politically committed to the government of the day and hence would
implement the agenda of the government. Fifth, government functions are more likely to face market tests,
such as contracting out, or reducing government functions through privatisation. This is the most important
facet of new public management, whereby the role of government as provider of service is reducing and
more and more services are being provided by the private sector. For example transport in city was
provided by government; which is now being provided by private sector.
New public management as an alternative paradigm may well offer a more realistic approach than
the traditional model of public administration, but managerialism has not been without controversy. The
main argument against new public management (NPM) is that it has attempted to take the place of
traditional model of public administration, and that public administration will be managerial
To understand the concept of administration and management we will see definition of the
The Meaning of Management
Administration means following instructions and management means the achievement of
results. Public management has semantic origins that imply taking things in "hand" and this suggest
firmness and efficiency. This means that unlike administrator a manager has greater control over
determining goals, objectives and strategy and in achieving results. It would be appropriate to understand
the concept of strategy. Allison suggests that there are three main functions of `general management'. These
are (1) strategy, (2) managing internal component and (3) managing external component. The functions of
general management are discussed below:
Strategy has following two components:
Introduction To Public AdministrationMGT111
Establishing objectives and priorities for the organisation. On the basis of forecast of
external environments and the capacity of organization the objectives of organization are
Devising operational plans to achieve these objectives
Managing Internal Components
The internal components of organization have following aspects:
Organizing and staffing: in organizing manager establish structure (position authority
and responsibility are assigned). In staffing selection of right man for the right job is done.
Directing personnel and human resource management system. The capacity of
organization is in its member and their skills and knowledge. The HRM recruits, selects,
trains etc., people to build capacity and select right people for right job.
Controlling performance: Various management information system i.e. budgeting,
accounts, reports, performance appraisal etc., help manage in making decisions and
Managing External Components
Dealing with external units of organisation subject to common authority: If the
organization is large and geographically dispersed then senior managers has to deal with
managers of unit which are geographically or otherwise dispersed.
Dealing with independent organizations: agencies from other branches or level of
government, interest groups or private enterprise that affect the organizations ability to
achieve its objectives.
Dealing with press and public whose action or approval and agreement is required
The first main function is that of strategy. This involves the future of the organization, establishing
objectives and priorities and making plans to achieve these objectives. Traditional public administration
required little conception of strategy, as that was presumed to be `given' by politicians. Public servants
`administered' in the dictionary sense, simply carrying out the instructions of the politicians, who were
presumed to develop and be responsible for policy and strategy. Managerialism on the other hand aims at
the longer term and at the relationship between the organization and the external environment. It is now
common for agencies to develop objectives and priorities rather than accepting policies from politician.
Politicians now demand that agencies and public servants under their control involve themselves in matters
The second main function is managing internal components. This involves to build structure of
organization, setting up departments (type of departmentalization) assigning roles and responsibilities etc to
achieve objective. Traditional public administration also focused on HRM but was not carried to fullest.
The NPM focuses on internal environment and on HRM policies to measure performance of individuals
The third function considers the organisation in its external context and the task of managing
external constituencies. Under the traditional model, the concepts of public service anonymity and
neutralities have certainly declined. Public servants are now much freer in performing tasks they have to
deal with press, public and other organization (NGO, private organizations etc.). There is a far greater focus
on external environment in new public management, through both strategy and the managing of external
constituencies, than was ever the case with the traditional model of public administration.
Beginning of Management Approach
For much of the twentieth century there was little difference in management structures or style
between private and public management. Large Companies were hierarchical and Weberian as any
government department. It was only from the 1950s or 1960s that the problems of bureaucratic rigidity
became evident in the private sector. Because it was realized that division of labour and working manual for
all management functions had limitation. Someone needed to take responsibility to achieve results.
Introduction To Public AdministrationMGT111
It is hard to delineate exactly when `management' as a word began to take over from administration
in the public sector. The apparent success of mangers in the private sector led to concerns being expressed
that the public sector had fallen behind.
Even if the decline of public administration in legitimacy since the 1950s is true, that decade is too
early for a change of management style.
One starting point management is the 1968 Fulton Report in the United Kingdom. This report
noted concerns with the management capability of public service. It recommended that the system be
opened up, outsiders be employed at all levels and that the rigid hierarchical structure in which barriers
were placed at several points is removed.
Reforms in the public sector in developed countries like USA and Australia were introduced and it
was questioned if the public service had the management tools, flexibility and capacities to meet the
challenges of changing external environment.
This lecture has focused on the concept of NPM. From the traditional model of public
administration which emphasized hierarchical structure, dichotomy of policy formulation and
implementation, neutrality of public servants to more flexible organization structure the concept has
evolved and generated new controversy.
The NPM is driven by market. It is driven by the concepts of measuring individual and
organizational performance to achieve results. The NPM encompasses the concepts of general management
functions, whereby the strategy, internal components and external components are to be understood well to
The NPM has evolved in developed countries after the recommendations made by the Reform
Committees in UK and UK. The concept of NPM has generat4d debate on the role of government.
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