Is it Free Cash Flow, Tax Savings, or Neither?An Empirical Confirmation of Two Leading Going-private Explanations:The Case of ReLBOs

Firms which 'go private' via a leveraged buyout (LBO) retain the option to 'go public' again, a process known as a reverse LBO transaction. This paper examines the rarer phenomenon of reLBOs; that is, the practice of going private via leveraged buyout, reobtaining public status through a new initial public offering, and then going private a second time. Among the several alternative hypotheses explaining LBOs, we focus on two prominent ones – free cash flow and tax savings – to explain reLBOs. With a sample of 21 reLBO firms, we find no empirical support for the free cash flow hypothesis but detect a significant relationship between the decision to go private for the second time and the tax savings potential of the firm.     

Absence Management in the Public Sector: An Integrative Model?

Workforce absence rates in Britain have been found to be higher in the public sector than the private. The Government has set ambitious targets for the reduction of public sector absence rates and published a range of recommendations. The authors look at the ways the two sectors manage long-term absence. Although many public sector organizations, as well as some large private services ones, have systems in place, this article shows that these often contain structural weaknesses, and frequently do not operate in an integrated way. It is therefore concluded that many public organizations have some way to go to achieve the holistic approach to absence management advocated by the Government.     

Benchmarking and Learning in Public Healthcare: Properties and Effects

This research investigates the effects of learning‐oriented benchmarking in public healthcare settings. Benchmarking is a widely adopted yet little explored accounting practice that is part of the paradigm of New Public Management. Extant studies are directed towards mandated coercive benchmarking applications. The present study analyses voluntary benchmarking in a public setting that is oriented towards learning. The study contributes by showing how benchmarking can be mobilised for learning and offers evidence of the effects of such benchmarking for performance outcomes. It concludes that benchmarking can enable learning in public settings but that this requires actors to invest in ensuring that benchmark data are directed towards improvement.     

Relationship marketing,relational capital and the future of marketing in public service organizations

This article proposes an innovative model of marketing practice for public services. This is rooted in the paradigm of relationship marketing and emphasizes the need to build relational capital between and within organizations operating in the public services arena. It is argued that this is essential for the effective management of contemporary public services in the fragmented state.     

Developing public servants for the future

ABSTRACT

The majority of UK civil servants are ‘developed’ within a particular service or profession and there is frequently very little movement into other service areas. Many current leaders therefore have limited experiences in services and organizations other than their own. This paper presents a new graduate programme for the training and development of future public leaders in Wales. The programme is a leadership and development programme for civil and public servants, exposing them to a range of services. The intention is that, through these experiences, future leaders will approach problems from a multi-service perspective, will be better networked and ready to deal with complexity. Areas of good practice are highlighted, together with some of the challenges of developing leaders in this way.     

Funder demands for quality management in the non-profit sector: challenges and responses in a non-profit infrastructure network

External pressure by funders can be a catalyst for a more proactive and strategic approach to quality management in the non-profit sector, however it can also lead to cynical responses which do little to promote learning and improvement. This case study of a national infrastructure organization that supports a network of local non-profit organizations provides insight into the attitudes and challenges that can arise from such external, top-down pressure.     

The use of performance measurement systems in the public sector: Effects on performance

We study the use of performance measurement systems in the public sector. We hypothesize that the way in which these systems are being used affects organizational performance, and that these performance effects depend on contractibility. Contractibility encompasses clarity of goals, the ability to select undistorted performance metrics, and the degree to which managers know and control the transformation process. We expect that public sector organizations that use their performance measurement systems in ways that match the characteristics of their activities outperform those that fail to achieve such fit. We test our hypotheses using survey data from 101 public sector organizations. Our findings indicate that contractibility moderates the relationship between the incentive-oriented use of the performance measurement system and performance. Using the performance measurement system for incentive purposes negatively influences organizational performance, but this effect is less severe when contractibility is high. We also find that an exploratory use of the performance measurement system tends to enhance performance; this positive effect is independent of the level of contractibility. The effectiveness of the introduction of performance measurement systems in public sector organizations thus depends both on contractibility and on how the system is being used by managers. These findings have important implications, both for practice and for public policy.     

Opciones reales: una propuesta para valorar proyectos de I+D en centros públicos de investigación agraria

Investment decisions in research and development (R&D) are important to the success of organizations, especially for public research. This paper evaluates an R&D project (seed breeding) using the traditional method, the Net Present Value, and the more contemporaneous technique of real options. Economic Surplus Theory and Monte Carlo simulations are used to estimate social benefits. The results indicate that the real-options approach is a useful tool for assessing R&D public projects.     

Strategic decision quality in Flemish municipalities

Strategic planning (SP) has taken the public sector by storm because it is widely believed that SP’s approach to strategic decision-making strengthens strategic decision quality (SDQ) in public organizations. However, if or how SP relates to SDQ seems to lack empirical evidence. Drawing on survey data from 89 Flemish municipalities, we found that SP does improve SDQ if a systematic approach is taken and if top policy-makers and managers, as well as lower-level staff and external stakeholders, are involved.     

Manageralist Thinking on Marketing for Public Services

The authors examine the nature of marketing in the public sector as a response to government-led reforms during the past 15 years. They conclude that the public sector is a context in which marketing management differs in both theory and application from the approaches found in profit-oriented, privately-owned organizations. There are elements of commercial marketing theory and practice that are useful at an operational level in public bodies, but the democratic process is a major complication. The development of a new framework for marketing in the special context of public services is urged and a tentative start is attempted.     

Debate: The need for procurement risk management

Improvement boards offer a new approach to supporting stronger performance by public service organizations, and especially those facing significant issues of change. They involve formalized peer challenge and support by senior politicians and managers from other agencies. The authors document early experiences with improvement boards in local government and draw conclusions for policy and practice. Improvement boards will have the most impact where the organization's leadership already has some understanding of the performance improvement task, and is able to position the board as part of a wider strategy for change.     

Old wine in new bottles: IFRS adoption in NHS foundation trusts

UK public sector organizations, including NHS foundation trusts, have changed to International Financial Reporting Standards (IFRS). Treasury aims were ‘to bring benefits in consistency and comparability between financial reports in the global economy and to follow private sector best practice’. This comparative analysis of foundation trusts' financial statements under IFRS shows worse financial results and lower surpluses for the year, higher values of fixed (non-current) assets and more indebtedness than under UK GAAP. Implications of the new accounting regime on comparability and transparency of NHS organizations are discussed—some wine shows improvement, while other wine looks worse in the new bottles.     

A '3Rs' Strategy for Public Service Turnaround: Retrenchment, Repositioning and Reorganization

Problems of public service 'failure' are high on the political agenda in the UK, and many national and local organizations are searching for effective turnaround strategies. Although little research on turnaround in the public sector has been undertaken, there is a substantial number of studies of decline and recovery in private firms. Evidence from these studies suggests that turnaround is more likely in companies that pursue retrenchment, repositioning and reorganization. The relevance of this '3Rs' strategy to the public sector is analysed, and the potential consequences for public service improvement are evaluated. This article will help managers to think more clearly about turnaround strategies that could work in their organizations.     

Meeting in the middle: joining reflection and action in complex public sector projects

In order for co-production to become a viable way of working in public sector management and policy-making, practitioners need to be more reflective and researchers need to be more action oriented. This article discusses reflective practice, action research and the idea of a community of inquiry in which both practice and science work together. The authors illustrate their ideas with an example from their own practice and explain the advantages of their approach.     

Lean in a cold fiscal climate: the public sector in an age of reduced resources

Reflecting on recent public sector reform, this paper examines the use of Lean during a period of financial austerity. The paper outlines several challenges for public sector organizations as they manage performance targets, and engage in service re-design. The author challenges the current use of Lean working arguing for a re-evaluation of the traditional public sector model of work and for a collective approach to co-production of service redesign.     

Decentralisation and Management Accounting in Central Government: Recycling Old Ideas?

This paper examines the Next Steps development from both contemporaneous and historical perspectives. Specifically, it traces the reliance on a distinct model of management and accounting in Next Steps (1988) and its predecessors (FMI, 1982; and Fulton, 1968). This shows not only that there are a series of commonalities within the details of these various reforms of central government, over the past three decades, but also that these various reforms share foundations which are embedded in 'management thought' on best practice in the 1950s and 1960s. We identify contemporaneous studies in both management and management accounting which could have informed these reforms, and make suggestions for situationally specific means of improving management and accounting in central government.     

Internal audit,alternative internal audit structures and the level of misappropriation of assets fraud

In recent years, the importance of good corporate governance has received significant public and regulatory attention. A crucial part of an entity's corporate governance is its internal audit function. At the same time, there has been significant public concern about the level of fraud within organizations. The purpose of this study is to assess whether organizations with an internal audit function are more likely to detect and self‐report fraud than those without. In this study, we use a unique self‐reported measure of misappropriation of assets fraud for the first time. The fraud data are from the 2004 KPMG Fraud Survey, which reported fraud from 491 organizations in the private and public sector across Australia and New Zealand. The internal audit data are from a separate mail survey sent to the respondents of the KPMG Fraud Survey. We find that organizations with an internal audit function are more likely than those without such a function to detect and self‐report fraud. Furthermore, organizations that rely solely on outsourcing for their internal audit function are less likely to detect and self‐report fraud than those that undertake at least part of their internal audit function themselves. These findings suggest that internal audit adds value through improving the control and monitoring environment within organizations to detect and self‐report fraud. These results also suggest that keeping the internal audit function within the organization is more effective than completely outsourcing that function.     

Professional Perceptions of Bureaucratic Change in the Public Sector: GPs, Headteachers and Social Workers

Public sector organizations have undergone immense changes over the last two decades. Bureaucratic structures of governance have been reformed with the aim of promoting a more market-oriented approach, intended to improve efficiency and encourage greater responsiveness to the client. On the basis of interviews with senior managers and professionals, this article argues that the public sector is not in a state of 'post-bureaucracy' as claimed in some recent academic writing. Far from reducing bureaucratic tendencies, the reforms have created additional workloads, heightened the tensions surrounding the meeting of client needs and the management of resources and led to more, and not fewer, tiers of management.     

A strategy framework for performance measurement in the public sector

This paper looks at a little-studied question: what are the strategic choices behind the selection and implementation of performance measurement practices in public sector entities? The paper presents a new strategy framework which provides a structured approach to the many options available for measuring performance effectively. The framework is primarily intended for large public sector organizations, such as municipalities, but will also be useful in smaller entities.