NEW PUBLIC

MANAGEMENT
C HAPT E R 3

Lecture

Miss Farhana binti Yaaku

CHAPTER OUTLINE
3.1 Introduction to New Public Management
(NPM)
3.2 Characteristics of NPM
3.3 Differences between Traditional Public
Administration (TPA) and NPM
3.4 Advantages of NPM
3.5 Disadvantages of NPM
CHAPTER OBJECTIVES
After attended this lecture student should be able to:-
1. Define the concept of New Public Management.
2. Explain the characteristics of New Public
Management.
3. Explain strengths and limitations of New Public
Management.
3.1 INTRODUCTION TO NPM
New Public Management (NPM) is an approach to
running public service organizations that is used in
government and public service institutions and agencies.

The term was first introduced by academics in the UK and Australia to

describe approaches that were developed during the 1980s as part of an
effort to make the public service more
"businesslike" and to improve its efficiency by using
private sector management models.

As with the private sector, which focuses on "customer service", NPM

reforms often focused on the "...centrality
of citizens who
were the recipient of the services or customers to the
public sector."
INTRODUCTION TO NPM
A proactive commitment to entrepreneurial
and
accountable innovation in governance for
the purpose of raising governmental performance.
This international movement was started and strongly
showings in Australia, Britain, Canada, France, Germany,
the Netherlands, New Zealands, the United States and most
of Scandinavian nations.
(HENRY, 2010)

It is a new approach, a reform-oriented and

seeks to improve public sector performance.
(ROSENBLOOM AND KRAVCHUK, 2005)
INTRODUCTION TO NPM
NPM advocates focus on using approaches from
the private sector –the corporate or business
world–which can be successfully applied in the
public sector and in a public
administration context.

NPM approaches have been used to reform the

public sector, its policies and its programs. NPM
advocates claim that it is a more efficient and
effective means of attaining the same outcome.
3.2 CHARACTERISTICS OF NPM
CHRISTOPHER HOOD (1991)

PERFORMANCE STANDARDS
01 Its important to maintain explicit standards and measures of
performance in a workforce. Using this method promotes clarification
of goals / intent, targets, and indicators for progression.

GREATER OUTPUT CONTROLS

The third point acknowledges the "shift from the use of input controls and
bureaucratic procedures to rules relying on output controls measured by
quantitative performance indicators".
02
This aspect requires using performance based assessments when looking to
outsource work to private companies/groups.
 CHARACTERISTICS OF NPM
CHRISTOPHER HOOD (1991)

DECENTRALIZATION
03 NPM advocates often shifted from a unified management system to a
decentralized system in which managers gain flexibility and are not
limited to agency restrictions.

COMPETITION
Promote competition in the public sector which could in turn lower cost,
eliminate debate and possibly achieve a higher quality of progress/work
through the term contacts.
04
Competition can also be found when the government offers contracts to the
private sectors and the contract is given in terms of the ability to deliver the
service effectively, quality of the goods provided
 CHARACTERISTICS OF NPM
CHRISTOPHER HOOD (1991)

PRIVATE STYLE OF
05 MANAGEMENT
This aspect focuses on the necessity to establish short-term labor
contracts, develop corporate plans or business plans, performance
agreements and mission statements.
It also focuses on establishing a workplace in which public employees
or contractors are aware of the goals and intention that agencies are
trying to reach.

STRESS ON COST REDUCTION

The most effective one which has led to its ascent into global popularity,
focuses on keeping cost low and efficiency high.
06
"Doing more with less" moreover cost reduction stimulates efficiency and is
one way which makes it different from the traditional approach of
management
3.3DIFFERENCES BETWEEN TPA & NPM

NEW PUBLIC TRADITIONAL PUBLIC

MANAGEMENT ADMINISTRATION
Hands on approach Hierarchy and rules

Explicit standards Apolitical, non-partisan civil service

Emphasis on output control Internal regulations

Disconnection of units Equality & Equity

Importance of the private sector Importance of public sector

Improve timing Stability

Greater usage of money Budget control

3.4 ADVANTAGES OF NPM
1 2 3 4 5

Cutting down Reduction Public Cutting

Profit oriented
the size if of cost of private red
bureaucracy
bureaucracy production partnership tape
 ADVANTAGES OF NPM
1
6 7 8 9
0

Efficient Reducing Outcome Greater Putting

utilization budget budget accountability, customer
of natural openness and first
resources transparency in
administration
3.5 DISADVANTAGES OF NPM
DEMORALIZING BUREAUCRACY
• NPM perspective has resulted in overlooking the contribution of career
civil service by criticizing the bureaucracy as the mainspring of mal-
governance
• Higher civil servants have a unique role in policy formulation. Such roles
should not be diluted in our craze for managerialism
• It gives importance to top management and overlooks the contributions
of other level of decision making in administration

OVER-EMPHASIS ON MARKET
• NPM overemphasis market orientation and over-reliance on the
private sector
• ‘Public interest’ which lies at the heart of government operation, it is
irreplaceable by any market philosophy.
• Public management support and develops collective life by
choosing goods and services essential to the community as a whole.
 DISADVANTAGES OF NPM

CONCERN OF CITIZEN
• The ‘publicness’ aspect of the NPM is not negotiable
• The sphere of public governance has some unique
distinguishing features like constitutional framework,
fundamental rights, and accountability to the legislature,
judiciary and the people
• Less concern to citizen due to government focus to meet the
demand of majority.

ETHICAL PROBLEM CAN BE HIDDEN

• Contracts are supposed to offer improvements in accountability,
but contracts with government are often kept secret for commercial
reasons so the transparency is not there in practice
• There are certainly opportunities for the unscrupulous in the
managerial system, notably with contracting
THANK YOU
& BE HAPPY
END OF CHAPTER
3