The failed implementation of performance management in Irish central government

Ireland's Strategic Management Initiative was launched in 1994 and aimed to improve public services delivery. In line with public sector reforms in other countries, it placed strong emphasis on performance management in public sector organisations. Initiatives stressed the need for strategic planning and performance monitoring. The overall impact of these reforms was disappointing, with the Organisation for Economic Co‐operation and Development reporting in 2008 that the Irish public sector lacked a performance culture. This paper utilizes a series of interviews with senior managers in order to identify why performance management did not gain traction and our contribution highlights the complex contextual factors which undermined this agenda.     

Strategic performance management: A balanced approach to performance management issues in local government

The drive for reform in the public sector worldwide has focussed attention on the measurement of performance in public sector organizations. This is particularly true in local government. Local government has traditionally been concerned with measuring the delivery of primary objectives, or results, at the expense of secondary objectives, or the determinants of organizational performance. Current strategic management literature suggests that there should be a strong linkage between strategic plans and performance measures.Kaplan and Norton’s (1992) balanced scorecard and Fitzgeraldet al. ’s (1991) results and determinants framework can provide this linkage. This paper reports on research into performance management systems in local government using the four dimensions of the balanced scorecard: financial, community, internal business processes and innovation and learning. It shows how the focus in this system of local government has been on the results of council work, ie. financial performance and to a lesser extent on how the community views performance. Local government performance measurement pays much less attention to the determinants, or means of achieving long-term, sustained organizational improvement in internal business processes, and innovation and learning. Whilst these issues are recognized as important, there are few measurement processes in place to manage performance in these areas. Strategic performance management demands an approach that recognizes the importance of a focus on both results and the means of achieving these results. This paper highlights a suggested framework for strategic and balanced local government performance measurement.     

Wang Anshi and the origins of modern public management in Song Dynasty China

Wang Anshi (1021–1086) is well known as one of the greatest statesmen of classical China, but it is rarely recognized that his 1058 ‘Wan Yan Shu’ is one of the first texts of public management in the modern sense. This is because Wang addressed still current concerns of a civil service—selection, training, motivation, remuneration—often presenting solutions that are completely in line with today's perspectives. Wang's work is particularly relevant now given the current global state of public management—post-NPM but with no clear new paradigm having emerged.     

Organizational management in New Zealand’s public service

This paper explores the extent to which New Zealand’s central government organizations are effectively reporting on, and arguably therefore focusing on, the management of their organizations, as well as their operations. There is widespread concern that new public management reforms have resulted in an over-emphasis on the former at the expense of the latter. A solution to this problem requires a clear and consistent framework for how organizational management should be reported.     

Revisiting carbon disclosure and performance: Legitimacy and management views

With corporate disclosure of carbon emissions rapidly increasing, the long-standing question remains whether carbon disclosure has any influence on the improvement of carbon performance. Previous studies of environmental disclosure and performance have predominantly focused on whether disclosure is a substitute for poor performance. Little attention has been devoted to the more important question about how changes in disclosure may lead to subsequent changes in performance over time. Following the rationales taken by the legitimacy and management perspectives, we revisit the relationship between carbon disclosure and performance, with a focus on changes that disclosure may (or may not) create. Using a change analysis of Global 500 companies and their carbon emission and disclosure data released between 2008 and 2012, this study finds that the change in carbon disclosure levels is positively associated with a subsequent change in carbon performance (examined through direct and indirect carbon emission intensities). Thus, regardless of whether disclosure has been used as a legitimising tool for prior poor performance, this study confirms that carbon disclosure motivates companies and creates an ‘outside-in’ driven effect for subsequent change and improvement in carbon performance. However, the association between changes in carbon disclosure and performance is relatively weaker in high energy-intensive firms.     

Change management in government

Since the days of John F. Kennedy's New Frontier, the American public's regard for the competence of public agencies and the value of the services they perform has steadily declined. During that time, innovations in management practice and thinking have mostly originated and been tested in the private sector. But recent events, such as the attacks on the World Trade Center and the engulfment of New Orleans, have demonstrated how essential it is for public agencies to be well run, too. Unfortunately, few public administrators have a background in change management, and a variety of factors-such as civil service rules, political considerations, and the limited tenures of agency heads-have combined to make true reform a rare event. These facts of public life may never go away. But some agency leaders have figured out how to court important stakeholders, rededicate staffers to an agency's true mission, undertake reform so comprehensively that resistant elements are unable to subvert it, and lay the groundwork for next steps clearly and systematically. Consultant Frank Ostroff has studied turnarounds at the federal Occupational Safety and Health Administration, the Government Accountability Office, and Special Operations Forces-the fast-response, clandestine arm of the military. From these examples and others, he has distilled five principles that underlie successful change efforts: Improve performance against agency mission; win over external and internal stakeholders; establish a road map; recognize the connections among all the organizational elements; and be a leader, not a bureaucrat. Change programs that follow these principles are more likely to survive when leadership changes hands.     

Adoption of activity management practices in public sector organizations

This paper examines the extent to which activity management practices are adopted by Australian public sector organizations at each of Gosselin's (1997) levels of Activity Analysis, Activity Cost Analysis, and Activity‐based Costing. The present paper replicates Baird et al. (2004), thereby enabling a comparison of the extent of adoption of activity management in the public sector with that reported in the private sector in Baird et al. (2004). The results reveal that the adoption of higher level activity management practices (Activity Cost Analysis and Activity‐based Costing) is less prevalent in public sector organizations, whereas they adopt Activity Analysis to the same extent as the private sector.     

Underwriter reputation,earnings management and the long‐run performance of initial public offerings

This study contributes to the extant literature on the nature of earnings management surrounding initial public offerings (IPOs) by investigating the role of underwriter reputation. We argue that prestigious underwriters will protect their reputation by carefully monitoring and certifying financial information on IPO firms, thereby limiting any potential earnings manipulation. As a result, those IPO firms that are associated with more prestigious underwriters are likely to exhibit substantially less‐aggressive earnings management. Conversely, we find the existence of a negative relationship between earnings management and the post‐offer performance of an IPO firm’s stocks only for those firms associated with less‐prestigious underwriters.     

Performance Management Systems in the Public Housing Sector: Dissemination to Diffusion

This article examines a case study of the implementation of a performance management system in public sector housing in Fiji. The aim is to explore and provide interpretations of why performance management and measures were introduced and implemented and reveal if the indicators were appropriate to serve the strategies of the organisation. The article draws on diffusion of innovation theory and explores the effectiveness of performance management. The research approach is qualitative in nature and uses a case study strategy. Interviews and documentary evidence provide the empirical basis for the research. The organisation has established formal objectives at both institutional and departmental levels and has a performance management system at both levels. With growing pressure for commercialisation from donor agencies, the accounting and managerial practices seem to contradict the organisation's original purpose to provide housing needs for the poor. The case study extends the literature on performance management in developing countries and illuminates the deficiencies within the performance management system. This study has implications for practitioners and researchers as it promotes a better understanding of a new public management practice technique which, in this case, was inadequate to satisfy local housing needs.     

Performance management systems' stability: Unfolding the human factor – A case from the Italian public sector

The aim of this study is to examine the institutional context during the emergence of New Public Management (NPM), which created pressure on public sector organizations to implement performance management systems (PMSs), such as the balanced scorecard (BSC). Drawing on Granlund's framework (2001) and Giddens' (1979) structuration theory, we engage insights from a longitudinal case study of an Italian local authority to show how managers exercise agency before the mandated implementation of the BSC. This analysis suggests a re-interpretation of Granlund’s (2001) factors of inertia (human, institutional and economic) in terms of balance among the three factors, and inclusion of a historic and culturally specific perspective. The findings also encourage a broader consideration of the agency of managers in a public entity before the design and enhancement of a NPM tool.     

Factors influencing the role of management accounting in the development of performance measures within organizational change programs

Many companies are undergoing organizational changes encompassing innovative approaches to organizing production processes, restructuring work practices and developing new planning and control mechanisms. This paper explores the role that management accounting played in the development of performance measurement systems within five organizations implementing change programs. The major case study is of a large manufacturing firm undertaking changes which included the development of team structures, the adoption of a customer-focused strategy and the implementation of new performance measurement systems. In this company, a lack of integration of operational performance measures with strategic priorities contributed to poor integration of team activities with overall strategy. The paper proposes five interrelated factors that may help explain the extent to which management accountants contribute to the development of integrated performance measures and change programs. Case evidence drawn from a further four firms is presented to provide some validation of conclusions drawn from the primary case study.     

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.     

Earnings management,incentive contracts and private information acquisition

This paper analyzes the optimal design of compensation contracts in the presence of earnings management incentives, and its interplay with investors’ information acquisition decisions. We consider a setting in which compensation contract is based on both accounting earnings and stock price when an agent engages in predictable, pernicious earnings management and stock price is endogenously determined in a Noisy Rational Expectations Equilibrium (NREE) that reflects both the public information from reported earnings and a costly, noisy signal privately acquired by investors. We show that an increase in the precision of the firm’s financial reporting system could reduce the informativeness of stock price and exacerbate the agency problem by inducing lower productive effort and higher earnings management, implying that the firm may not choose a more precise financial reporting system.     

State privatization and the unrelenting expansion of neoliberalism: The case of the Greek financial crisis

The existing literature has identified two waves of reforms within the neoliberal agenda of state privatization, deregulation and new public management. This study examines what we call the third wave of neoliberal reforms of governmentality, in which members of central governments and public servants increasingly come to think and behave like business entrepreneurs. We address the matter through the lens of crises theoretically capable of undermining neoliberalism's legitimacy. Specifically, we aim to better understand the manufacturing of consent to the neoliberal agenda of state privatization. We study the falsification of Greek public accounts as revealed in 2010, relying on empirical material, such as journalistic statements and reports from international institutions. Our analysis indicates that, although the Greek crisis provided an opportunity to question key aspects of contemporary state management, including the practice by governments of creative finance, the main problematizing trajectories articulated in both the media and political arenas did not destabilize but consolidated neoliberalism. In particular, we illustrate how discursive activity favors the emergence of a collective interpretation of crises that perpetuates the hold of neoliberalism over the social and political realms. In the discussion, we reflect on the consequences that this has for democratic processes.     

Improving the measures of real earnings management

Firms often change their operating policy to meet a short-term financial reporting target. Accounting researchers call this opportunistic action real earnings management (REM). They measure REM by the difference between a firm’s costs and those reported by its industry peers. Firms that pursue distinct competitive strategies also display different cost patterns than peers. However, the models that measure REM do not control for differences in competitive strategy. Hence a researcher can misinterpret a cost difference that stems from a firm’s competitive strategy as REM. The researcher would also find a spurious correlation between earnings management and a firm characteristic that varies with competitive strategy. A cause or effect relationship with earnings management could be wrongfully inferred. I suggest improvements in measurement models to avoid misspecification.

     

Performance of Malaysian IPOs: Underwriters reputation and management earnings forecasts

This paper examines the financial performance of Malaysian initial public offerings (IPOs) during the period 1980–1995. The major focus of the study is on the role of management earnings forecasts and underwriters in the valuation of IPOs. The results suggest extremely high and statistically significant initial premiums and positive and statistically significant long-term returns up to 3 years after listing. The findings for long-term returns contradict the consensus of the IPO literature that documents a significant negative long-term performance. Our results indicate a negative association of upward bias in management earnings forecasts with IPOs' performance during the first 12 months after the IPOs.     

Earnings management and initial public offerings: Evidence from the Netherlands

This paper presents one of the first studies of earnings management by initial public offering (IPO) firms in a European country. Using a sample of 64 Dutch IPOs, we investigate the pattern of discretionary current accruals (DCA) over time. We find that managers manage their company's earnings in the first year as a public company but not in the years before the IPO. We also examine the impact of earnings management on the long-run stock price performance of IPOs. We find a negative relation between the size of the DCA in the first year as a public company and long-run stock price performance over the next 3 years. A number of additional tests support these findings.     

A contingency theory perspective on the risk management control system within Birmingham City Council

In recent years the topic of risk management has moved up the agenda of both government and industry, and private sector initiatives to improve risk and internal control systems have been mirrored by similar promptings for change in the public sector. Both regulators and practitioners now view risk management as an integral part of the process of corporate governance, and an aid to the achievement of strategic objectives.The paper uses case study material on the risk management control system at Birmingham City Council to extend existing theory by developing a contingency theory for the public sector. The case demonstrates that whilst the structure of the control system fits a generic model, the operational details indicate that controls are contingent upon three core variables—central government policies, information and communication technology and organisational size. All three contingent variables are suitable for testing the theory across the broader public sector arena.     

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.