Public Administration 
An Action Orientation 

Fourth Edition 



- 

' 

« 



Public Administration 
An Action Orientation 

Fourth Edition 

ROBERT B. DENHARDT 
Arizona State University 

and 

JOSEPH W. GRUBBS 
Administration for Children and Families 
U.S. Department of Health and Human Services 

THOMSON 

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For Michael and Cari 



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About the Authors 

Robert B. Denhardt is a Professor of Public Administration at Arizona State University 
and a Visiting Professor at the University of Delaware. A fellow of the National 
Academy of Public Administration, Dr. Denhardt is a past president of the American 
Society for Public Administration, the leading national association promoting excellence 
in public service. 

Dr. Denhardt is the author of several books, including Managing Human Behavior 
in Public and Nonprofit Organizations, The Pursuit of Significance, In the Shadow 
of Organization, and Theories of Public Organization, and the editor of several others, 
including Executive Leadership in the Public Service, The Revitalization of the Public 
Service, Public Administration in Action, and Pollution and Public Policy. He has pub¬ 
lished more than seventy-five articles in professional journals, primarily in the areas 
of public sector management, strategic planning and public productivity, and organiza¬ 
tion behavior. 

Prior to joining the faculty at Arizona State University and the University of Delaware, 
Dr. Denhardt taught at the universities of Colorado, Missouri, Kansas, New Orleans, and 
Central Florida. He has held several major administrative positions in these universities, 
serving as vice provost at the University of Missouri-Columbia. He served as chair of the 
Governor’s Advisory Council on Quality Productivity for the state of Missouri and was a 
Fulbright scholar in Australia in 1990. 

Joseph W. Grubbs is a program analyst with the U.S. Department of Health and 
Human Services, Administration for Children and Families. Prior to this, he served as 
assistant professor of public and nonprofit administration at Grand Valley State University 
in Grand Rapids, Michigan, and as a visiting scholar for public administration at the 
University of Gdansk, Poland. He received his Ph.D. from the School of Urban Affairs and 
Public Policy at the University of Delaware, where his research focused on social policy 
and the delivery of human and social services. His published work has appeared in 
Organizational Research Methods, the Journal of Organizational Change Management, 
the JAI Press series, Research in Organizational Change and Development, the American 
Review of Public Administration, the International Journal of Public Administration, and 
the online Journal of Public Administration and Management. 

vn 



• - 



Preface 

The fourth edition of Public Administration: An Action Orientation updates the text, 
taking it into the twenty-first century with the end of the second Clinton administration 
and the beginning of the presidency of George W. Bush. But it also adds new material of 
importance to those becoming acquainted with the field of public service. Most notably, 
the book has been revised to take into account the management of nonprofit organiza¬ 
tions and should now be suitable for use in courses relating in nonprofit management as 
well as core courses in public administration. In addition, we have included important 
new material dealing with the global dimensions of public policy and administration 
today and the increasingly important connection between public administration and 
civic action or citizenship. This book also provides the latest approaches to management 
in the public sector and continues to pay special attention to the skills needed for admin¬ 
istrators at all levels of government and in nonprofit organizations. 

Like previous editions, the fourth edition contains subtle but telling differences from 
other books in the field. We assume that students in an introductory course in public 
administration do not want to learn about the profession only in the abstract, but are 
interested in influencing the operations of public agencies, as managers from the inside 
or as citizens from the outside. They want to acquire the skills necessary for changing 
things for the better. 

For this reason, it is important that the text not only introduce students to the schol¬ 
arly literature of public administration, but also help them develop the insights and abili¬ 
ties that will make them more effective and responsible actors. This book contains 
a good deal of material that is basic to working in or with public organizations; at 
the same time, the discussion attends to the complex and often confounding values 
that distinguish work in the public sector. Most significant, however, is the focus on the 
technical expertise and interpersonal skills that are crucial to effecting change in public 
organizations. 

Another feature of the book is its balanced attention to the work of managers at all 
levels of government and in nonprofit organizations. Although the federal government is 
a powerful model for the study of public administration, managers of state and local 
agencies are important actors in the governmental process, and their work is acknowl¬ 
edged and examined as well. Similarly, we show how managers of associations, non¬ 
profit, and “third-sector” organizations, and even traditionally private organizations are 
now confronting the same issues faced by administrators in the public sector. In fact, we 
frequently use the term public organizations to describe all such groups involved in the 
management of public programs. 

We also have sought to give proper attention to the global dimensions of public 
administration today. No longer are administrators confined in their work to their own 
organizations or even their own jurisdictions. The complexity of modern life means, 
among other things, that administrators must be attentive to developments around the 
world as well as those at home. Decisions made in a foreign capital may affect the work 
of a public administrator even more significantly than those made only miles away. 

ix 



Today, knowledge of international affairs and comparative issues is important not only 
to those who work in other countries but to all who work in public administration. 

Public Administration: An Action Orientation is perhaps most distinctive in its treat¬ 
ment of the ethics of public service. Not only is the topic of ethics thoroughly covered in 
a separate chapter, references to ethical concerns appear throughout the text. Ethical 
issues cannot be separated from action; indeed, every act of every public servant, at 
whatever level of government or in any related organization, has an important ethical 
dimension. For this reason, we have made a strong effort to be attentive to the ethical 
considerations that are a part of all administrative activities. 

Finally, Public Administration: An Action Orientation is the first such text to be fully 
integrated with the Internet resources that are available to assist public administrators and 
those studying public administration. In each chapter, we have highlighted networking 
resources available to students, including Web sites that contain material that supplements 
the text, provides examples and case studies, and links the student to other materials avail¬ 
able online. 

In this text we talk about action, but we also invite students to act. At the end of each 
chapter are self-diagnostic materials and exercises (cases, simulations, discussion points, 
and so on) designed to supplement students’ cognitive learning with behavioral practice. 
These activities impart a sense not only of what public administration looks like to the 
impartial observer, but also what it feels like to the manager or private individual 
engaged in public action. Students have opportunities to test, practice, and improve their 
skills. Each chapter also contains a list of key terms and definitions (which reappear in 
the glossary) and recommendations for further reading. 

There are very exciting possibilities in public administration today. Working to solve 
important public problems, sensing the human drama involved in such work, and gain¬ 
ing the satisfaction of doing something really worthwhile make being involved in public 
organizations quite fascinating. The perspective adopted here, focusing on the experi¬ 
ences of people acting in the real world of public organizations and on the skills needed 
for managerial success, permits a lively and interesting presentation of the field. We par¬ 
ticularly hope to convey, in a personal and direct manner, the challenges and rewards of 
public service. 

The views expressed in this book are those of the authors and do not represent the 
policy of the U.S. Department of Health and Human Services. 



Acknowledgements 

Many people contributed to this book. From our work with members of the American 
Society for Public Administration, we have gained special appreciation of the complexity 
of public management and of the dedication and hard work required for public service. 
We hope we have conveyed the commitment and concern that guide the work of the best 
public managers; they deserve great credit and respect. 

In the first edition of the text, Bob’s colleagues in the Department of Public 
Administration at the University of Missouri-Columbia were a great source of help and 
support. More recently, both Bob and Joe Grubbs have called upon good colleagues and 
friends at the University of Colorado, the University of Central Florida, the University of 
Delaware, Arizona State University, Grand Valley State University, and Wichita State 
University, who have contributed substantially to the recent editions. We especially want 
to acknowledge the help and support of Magdalena Borys, Joe Cayer, Linda Chapin, 
Peter and Linda deLeon, Janet Denhardt, Mark Glaser, Jay Hakes, John Hall, Ed 
Jennings, Arno Loessner, John Nalbandian, Jan Perkins, and John Thomas. 

In this new edition, we have also benefited from the comments of reviewers who pro¬ 
vide invaluable feedback on the third edition. They are: Rickert Alhaus, Southeast 
Missouri State University; Robert E. Colvin, Christopher Newport University; Nancy L. 
Fiorentino, Kean University; Judy-Lynne Peters, John Jay College of Public Administration; 
Alice Marie Schumaker, University of Nebraska at Omaha; and Douglas A. Singh, Indiana 
University-South Bend. 

While we have been going forward with this work, others have provided balance in 
our lives, and their help in maintaining our sanity should be acknowledged. Bob is espe¬ 
cially appreciative of the warmth and support of his wife Janet, as well as Michael and 
Shelly, Cari, Ben and Mary. He also wants to thank the poets and pickers of the Tyree 
Basement String Band, and to express his appreciation for the support, help, and gen¬ 
erosity of friends and colleagues from Missouri to Colorado to Florida to Delaware to 
Arizona, especially Mark, John, Jan, Ann, and Steve, and for the incredible support, tol¬ 
erance, and patience of a hapless group of very forgiving golfers. 

Joe would like to give special thanks to his wife, Heidi, for defining what love and 
strength can be and laboring with him through every challenge; to his mother, Dorothy, 
and members of his family, Charles, Lucy, Barbara, Jessica, Maggie, Seamus, Madison, 
and Clay for their undying support and spiritual guidance; and to his first academic 
mentor at the University of North Florida, David Courtwright, for instilling a sense of 
responsibility and commitment. Finally, this book is dedicated to Bob’s children, Michael 
and Cari, who have been a constant source of joy, confusion, and wonderment, and to 
the memory of Joe’s father, Robert I. Grubbs, Jr., a man who devoted his life to his faith, 
to his family, and to public service. Thanks to all. 

Robert B. Denhardt 
and 
Joseph W. Grubbs 

xi 



. 



Contents 

Preface ix 

Chapter 1 Personal Action in Public Organizations 1 

What Is Public Administration? 2 
Values of Democracy 3 
Contrasting Business and Public Administration 5 

Ambiguity 6 
Pluralistic Decision Making 6 
Visibility 7 

Thinking about Public Administration Today 7 
Publicness 8 

Why Study Public Administration? 9 
Preparing for Administrative Positions 10 
Combining Technical and Managerial Training 12 
Interaction of Business and Government 13 
Influencing Public Organizations 14 
Making Things Happen 15 

Issues in Public Administration Theory and Practice 17 
Politics and Administration 18 

Ensuring Accountability 18 

Bureaucracy and Democracy 19 
Efficiency versus Responsiveness 20 

What Do Public Administrators Do? 21 
An Inventory of Public Management Skills 22 
Voices of Public Administrators 23 

Summary and Action Implications 27 
Terms and Definitions 27 
Study Questions 28 
Cases and Exercises 28 
For Additional Reading 31 
Appendix A: OPM Inventory of Management Skills 32 

Chapter 2 The Political Context of Public Administration 34 

Administrative Organizations and Executive Leadership 35 
Administrative Organizations 37 

The Executive Office of the President 37 
Cabinet-Level Executive Departments 39 

xiii 



xiv Contents 

Independent Agencies, Regulatory Commissions, and Public Corporations 40 
Agencies Supporting the Legislature and the Judiciary 40 

The State Level 41 
The Local Level 43 

Cities 43 
Counties 45 
Native American Tribes 45 
Special Districts 46 
Nonprofit Organizations and Associations 46 

Relationships with the Legislative Body 49 
The Policy Process 49 

Agenda Setting 50 
Policy Formulation 51 

Policy Implementation 52 
Types of Policy 53 
Sources of Bureaucratic Power 56 
Legislative Supervision: Structural Controls 58 

Legislative Veto 59 
Sunset Laws 60 
Sunshine Laws 61 

Legislative Supervision: Oversight 62 
Legislative Supervision: Casework 64 

Relationships with the Judiciary 65 
Concerns for Due Process 70 
The Courts and Agency Administration 70 

Summary and Action Implications 72 
Terms and Definitions 73 
Study Questions 74 
Cases and Exercises 75 
For Additional Reading 77 

Chapter 3 The Interorganizational Context of Public Administration 79 

The Development of Intergovernmental Relations 80 
Dual Federalism 82 
Cooperative Federalism 83 
Picket-Fence Federalism 84 
The Reagan and Bush Years 87 
The Clinton Presidency 88 
The Bush Administration 90 
Judicial Influence 93 

The State and Local Perspective 96 
Funding Patterns 96 



Contents xv 

Preemptions and Mandates 98 
Preemptions 98 
Mandates 100 

Subnational Relationships 102 
State to State 102 
State to Local 103 
Local to Local 105 

Working with Nongovernmental Organizations 106 
Privatization and Contracting 107 

The Management of Nonprofit Organizations 110 
Operational Leadership 110 
Resource Development 112 
Financial Management 113 
Board Governance 113 
Board-Staff Relations 115 
Advocacy 116 

Summary and Action Implications 117 
Terms and Definitions 118 
Study Questions 119 
Cases and Exercises 120 
For Additional Reading 121 

Chapter 4 The Ethics of Public Service 123 

Approaches to Ethical Deliberation 124 
Reasoning, Development, and Action 126 

Moral Philosophy 126 
Moral Psychology 127 
Moral Action 129 

Issues of Administrative Responsibility 130 
The Limits of Administrative Discretion 131 
Avenues for Public Participation 134 
The Ethics of Privatization 136 

Ethical Problems for the Individual 137 
Interacting with Elected Officials 137 
Following Orders 138 
Conflicts of Interest 140 
Whistle Blowing 142 
Prohibitions on Political Activities 144 

Managing Ethics 145 
Establishing an Ethical Climate 146 

Summary and Action Implications 148 
Terms and Definitions 149 



xvi Contents 

Study Questions 150 
Cases and Exercises 150 
For Additional Reading 153 
Appendix A: Code of Ethics of the American Society for Public Administration 154 

Chapter 5 Budgeting and Financial Management 157 

The Budget as an Instrument of Fiscal Policy 158 
The Budget as an Instrument of Public Policy 160 

Where the Money Comes From 160 
Individual Income Tax 161 
Corporation Income Tax 162 
Payroll Taxes 162 
Sales and Excise Taxes 162 
Property Taxes 163 
Other Revenue Sources 163 
Patterns of Government Revenues 163 

Where the Money Goes 164 
The Bush Tax Plan 165 
State and Local Expenditures 167 

The Budget as a Managerial Tool 168 
Budget Formulation 169 
Budget Approval 171 
Budget Execution 173 
Audit Phase 175 

Approaches to Public Budgeting 176 
The Line-Item Budget 177 
The Performance Budget 178 
Program Budgeting 179 
Zero-Base Budgeting 180 
Outcome-Based Budgeting 181 

Budgetary Strategies and Political Games 182 
Strategies for Program Development 183 

Aspects of Financial Management 185 
Capital Budgeting 186 
Debt Management 187 
Risk Management 189 
Purchasing 190 

Accounting and Computer-Based Information Systems 191 
Government Accounting 191 
Computer-Based Information Systems 192 

Summary and Action Implications 194 
Terms and Definitions 195 



Contents xvii 

Study Questions 197 
Cases and Exercises 197 
For Additional Reading 207 

Chapter 6 The Management of Human Resources 209 

Merit Systems in Public Employment 210 
Spoils versus Merit 210 
The Civil Service Reform Act and Its Aftermath 214 
Reinvention and the National Performance Review 217 

State and Local Personnel Systems 219 
Hiring, Firing, and Things In-Between 220 

Classification Systems 220 
The Recruitment Process 221 
Pay Systems 223 
Conditions of Employment and Related Matters 225 
Sexual Harassment 226 
AIDS Policy 227 
Workplace Violence 228 
Removing Employees 228 

The Changing Character of Labor-Management Relations 229 
Steps in the Bargaining Process 232 
To Strike or Not to Strike 233 
Unions Redefined 235 

Correcting Patterns of Discrimination in Public Employment 236 
ADA 238 
Questions of Compliance 238 
Affirmative Action and Reverse Discrimination 240 
The Glass Ceiling 241 
The Debate over Comparable Worth 242 

Political Appointee-Career Executive Relations 244 
The Relationship between Political and Career Executives 246 

Summary and Action Implications 247 
Terms and Definitions 248 
Study Questions 249 
Cases and Exercises 249 
For Additional Reading 253 

Chapter 7 Planning, Implementation, and Evaluation 255 

Planning 256 
Strategic Planning 256 

Planning for Planning 257 
Organizing for Planning 258 



xviii Contents 

Steps in Planning 259 
Mission or Objectives 259 
Environmental Analysis 260 
Strengths and Weaknesses 260 
Values of Organizational Leaders 260 

Development of Alternative Strategies 260 
The Logic of Policy Analysis 261 

Problem Definition 262 
Setting Objectives and Criteria 263 
Developing Alternatives 264 
Analyzing Various Policies 264 
Ranking and Choice 265 

Costs and Benefits 265 
Other Quantitative Techniques 267 

Implementation 270 
Organizational Design 271 
Systems Analysis 273 
PERT/CPM 275 

Reengineering 276 

Evaluation 277 
Performance Measurement 278 

Program Evaluation 285 
Evaluation Designs and Techniques 286 

Qualitative Techniques 287 
Quantitative Techniques 288 

Summary and Action Implications 289 
Terms and Definitions 289 
Study Questions 291 
Cases and Exercises 291 
For Additional Reading 295 

Chapter 8 Managing Organizational Dynamics 297 

Images of Organizing in the Public and Nonprofit Sectors 297 
The Functions of Management 298 
The Early Writers: A Concern for Structure 300 
Recognizing Human Behavior 304 

Two Classic Works 305 

The Organization and Its Environment 307 
Systems Theory 307 
From Political Economy to Organization Development 309 
Decision Making in Organizations 311 



Contents xix 

Organizational Culture, Organizational Learning, and Strategic Management 312 
Total Quality Management 318 

TQM Beginnings 319 

Guidelines for Public Management 320 
Postmodern Narratives on Management 323 

Postmodernism 323 
Issues of Gender and Power 324 

Summary and Action Implications 325 
Terms and Definitions 325 
Study Questions 326 
Cases and Exercises 326 
For Additional Reading 328 
Appendix A: Description of Total Quality Management (TQM) 329 

Chapter 9 The New Public Management, Reinvention, and the Reform of 
Public and Nonprofit Organizations 333 

NPM, Reinvention, and Nonprofit Management Reform 334 
The New Public Management 335 
Reinventing Government 335 
Nonprofit Management Reform 337 
The Results of Reform 339 

IT, the Internet, and Management Reform 340 
Wired Organizations 341 

ePublic Administration 342 
The Human Side of Technological Innovation 343 
Human Resources, Innovation, and Performance 345 

Management by Objectives 345 
Quality of Work-Life/Job Enrichment 347 
Quality Circles and Related Ideas 349 
Incentive Programs 350 
Innovation 352 
Recent Examples of Performance Management 354 

GAO Cites Best Practices for Performance Management 354 
Measuring Performance in the State of Arizona 355 
Benchmarking and Performance Improvement in the City of Portland 356 

Implementation Issues in Quality and Productivity 357 
Steps to Productivity Improvement 357 

Summary and Action Implications 361 
Terms and Definitions 362 
Study Questions 363 
Cases and Exercises 363 
For Additional Reading 364 



xx Contents 

Chapter 10 Personal Skills in Public Management . ' 366 

The Manager’s Day 367 
Elements of Managerial Work 367 
Distribution of Time among Work Elements 368 
Managerial Interaction and Communication 368 
Informal Aspects of Managerial Work 368 
Themes of Managerial Work 369 

Stress Management 369 
Stress Signals and Responses 372 

Type A/Type B Behaviors 372 
Lifestyle Changes 372 
Relaxation Techniques 373 
Exercise 3 74 

Stress and the Organization 374 

Time Management 375 

Creativity and Problem Solving 376 
Models of Individual Decision Making 379 

Power and Leadership 382 
Summary and Action Implications 386 
Terms and Definitions 386 
Study Questions 386 
Cases and Exercises 387 
For Additional Reading 389 
Appendix A: “Lost on the Moon” Exercise: Answers from NASA Experts 390 

Chapter 11 Interpersonal Skills and Group Dynamics 391 
Communications 39 j 

Listening 39 ^ 
Have a Reason or Purpose 399 
Suspend Judgment Initially 397 
Resist Distractions 393 
Wait before Responding 394 

Rephrase What You Listen to in Your Own Words 394 
Seek the Important Themes 394 

Use the Thinking-Speaking Differential to Reflect and Find Meaning 394 

Speaking 395 
Writing 396 

Delegation and Motivation 397 

Motivation 399 

Pay and Job Satisfaction 399 
Reinforcement Theory 4qq 
Goal Setting 4Q2 



Contents xxi 

Conflict, Bargaining, and Negotiation 404 
Group Dynamics 405 

Advantages of Group Decision Making 405 
Disadvantages of Group Decision Making 407 
Interpersonal Dynamics in Groups 408 
Changing the Composition of the Group 409 
Managing Groups in Action 412 
Specialized Techniques for Group Decision Making 413 
Participation in Group Decision Making 414 

Organization Change and Development 417 
Diagnosing the Need for Change 418 
Strategies for Organizational Change 419 

Summary and Action Implications 421 
Terms and Definitions 421 
Study Questions 422 
Cases and Exercises 422 
For Additional Reading 424 

Chapter 12 The Future of the Public Service 426 
The New Public Service 426 
Efforts to Support the Public Service 428 
Trends in the Public Service 431 

Economic Changes and Redefining Government 432 
Globalization 434 
Technology and the Work Environment 435 
The Role of Citizens in the Governance Process 438 
The Ethical Challenges Facing the Public Service 439 

A Final Note 441 
Study Questions 441 
Cases and Exercises 441 
For Additional Reading 442 

References 444 

Appendix 464 

Journals 464 
Organizations 466 

Glossary 468 

Index 475 



¦ 

¦ 



Chapter 1 

Personal Action in 
Public Organizations 

Public administration is concerned with the management of public programs. Public 
administrators work at all levels of government, both at home and abroad, and they man¬ 
age nonprofit organizations, associations, and interest groups of all kinds. The substantive 
fields within which public managers work range across the varied interests of government 
and public affairs, from defense and national security to social welfare and environmental 
quality, from the design and construction of roads and bridges to the exploration of space, 
and from taxation and financial administration to personnel and human resources man¬ 
agement. Though public administration varies tremendously in its scope and substance, 
those who work in public organizations share certain commitments. Among these, none is 
more important than a commitment to public service. 

In this book, we will examine the work of public administrators in many different 
kinds of organizations. We will seek a clear understanding of the political and historical 
context within which public and nonprofit organizations operate; we will examine the 
commitments that underlie the notion of public service and the opportunities and con¬ 
straints they place on public action; we will examine the many technical fields, such as 
planning, budgeting, personnel, and evaluation, with which public administrators must 
be familiar; and we will consider the personal and interpersonal talents needed by suc¬ 
cessful public managers. Most importantly, we will emphasize the knowledge, skills, 
and values that you will need to be both effective and responsible as you act in the pub¬ 
lic interest. 

Although we will introduce you to many different areas of public administration, we 
will do so from a particular point of view that will provide a unifying theme in our 
examination of administrative work in public and nonprofit organizations. Briefly stated, 
that point of view is that there is something very special about public administration: 
your work in the public service is distinguished by its pursuit of democratic values, and 
this concern affects nearly everything you do as a public manager. As a public adminis¬ 
trator, you are obligated not only to achieve efficiency and effectiveness, but to be 
responsive to the many bodies that help define the public interest: elected officials, mem¬ 
bers of the legislature, client or constituent groups, and citizens generally. This special 
obligation requires that you be ever mindful of managerial concerns, political concerns, 
and ethical concerns, and that you develop structures and processes that take into 
account all three. The result is a particularly complicated approach to getting things 
done, but one that has special rewards. From service to the public, you may gain a very 



2 Chapter 1 Personal Action in Public Organizations 

special sense of accomplishment and personal satisfaction, one that comes from helping 
others and from pursuing the public interest. 

What Is Public Adnti nistration? 

We have already described public administration as the management of public programs. 
But to elaborate on this definition, it helps to know a little history. Happily, there is only 
a little history to learn because public administration, at least in this country, is a rela¬ 
tively young field of study. Of course, people have been engaged in the management of 
public programs for thousands of years. (For example, imagine the administrative 
headaches involved in building the Egyptian pyramids!) However, the self-conscious 
study of public administration is a fairly recent development, often dated to the work of 
French and German scholars in the late nineteenth century. Public administration as we 
know it today in the United States began as the study of government administration, and 
that study began as part of late nineteenth-century efforts to reform governmental opera¬ 
tions. Most scholars and practitioners date the beginnings of the self-conscious study of 
public administration in this country to an 1887 essay written by Woodrow Wilson 
(then scholar, later president). While some have recently questioned the influence Wilson 
had on the field, there is no question his essay marks the symbolic beginning of 
American public administration. 

Wilson’s essay was basically reformist in nature, and highly practical. It was designed 
to address the inefficiency and open corruption that had become a part of government 
during the late 1880s, and to suggest certain remedies within the administration of gov¬ 
ernment. Wilson argued that while scholars and practitioners had focused on political 
institutions (such as Congress or the presidency), too little attention had been paid to 
administrative questions — the questions of how the government actually operates. The 
result, according to Wilson, was that it was becoming “harder to run a constitution 
than to frame one” (Wilson, 1887, p. 200). Wilson first wanted the work of govern¬ 
ment agencies to be accomplished more effectively. He felt that such organizations 
would operate best if they pursued the private sector’s commitment to efficient or busi¬ 
nesslike operations. Wilson, of course, wrote in a period during which business, indus¬ 
try, and technology were developing in rapid and surprising new ways. Like others, he 
admired the managerial philosophies that business seemed to be developing. Among 
these notions, Wilson particularly favored the idea of concentrating power in a single 
authority atop a highly integrated and centralized administrative structure. His recom¬ 
mendation of a strong chief executive has been echoed by writers (and chief executives) 
even to the present. 

The men and women who followed Wilson in discussions of what came to be called 
public administration were very practical people, concerned with reforming governmen¬ 
tal structures and making them more efficient. But they were also quite careful to place 
these concerns within the context of democratic government. How might the principles 
of democracy, including such lofty ideals as liberty and justice, be extended throughout 



What Is Public Administration? 3 

government and throughout society? Indeed, Leonard D. White, one of the most 
thoughtful of the early writers, commented that “the study of public administration . . . 
needs to be related to the broad generalizations of political theory concerned with such 
matters as justice, liberty, obedience, and the role of the state in human affairs” (White, 
1948, p. 10). As we will see, a continued concern for operating efficiently while at the 
same time operating in a way consistent with democratic values marks the field of public 
administration even today. 

Values of Democracy 

Since their commitment to democratic values so clearly affects the work of those in public 
and nonprofit organizations in this country, it may be helpful to briefly review some of the 
key commitments we associate with democratic governance. The term democracy well re¬ 
flects its roots—the Greek words demos, meaning “people,” and kratis, meaning 
“authority.” Generally speaking, democracy refers to a political system in which the 
interests of the people at large prevail. However, it is clear that within these broad pa¬ 
rameters there are many different conceptions of democracy. As one illustration, at the end 
of World War II, representatives of the United States, Great Britain, France, and Russia 
met to consider the “democratization” of Germany. Yet, it soon became apparent that the 
Russian idea of democracy was quite different from the Western view. While Westerners 
associated democracy with such ideas as free elections, freedom of the press, freedom of 
movement, and the freedom to criticize the government, the Russians had quite a different 
conception. For them, democracy did not necessarily mean government by or of the people 
but rather whether government policy is carried out in the interest of the people. 

Even today the term democratic is used in many different ways by many different 
people. Yet, in the American experience, there is general agreement that democracy 
refers to a political system — a way of ordering power and authority in which decision¬ 
making power is widely shared among members of the society. Or, to put it in terms of 
control, democracy is a system in which many ordinary citizens exercise a high degree of 
control over their leaders. (In either case, the opposite would be an oligarchy, govern¬ 
ment by the few, or an autocracy, government by one.) 

But democracy is defined not only in terms of processes or procedures (for example, 
rule by many, etc.), but also by several important cultural values that are typically pur¬ 
sued in a democratic society. Among these, three—individualism, equality, and liberty— 
have been of special importance to those who have helped shape the American idea of 
democracy. The first is individualism, the idea that the dignity and integrity of the indi¬ 
vidual is of supreme importance. Individualism suggests that achieving the fullest poten¬ 
tial of each individual is the best measure of the success of our political system. It is the 
idea of individualism that is reflected in the familiar phrasing of the Declaration of 
Independence — that all persons are endowed by their Creator with certain inalienable 
rights and that it is the purpose of government to secure those rights. 

Second is the idea of equality, not the idea that all persons are equal in their talents or 
possessions, but that each individual has an equal claim to life, liberty, and the pursuit of 
happiness. In this view, each person should be seen as an end, not a means; no one 



Chapter 1 Personal Action in Public Organizations 

should be a mere tool of another. Moreover, equality in the field of government would 
suggest that differences in wealth or position are not sufficient reasons for giving one 
group preference over another. In a democracy, each one has an equal claim to the atten¬ 
tion of the system and should be able to expect just outcomes. 

A third central value of a democratic society is liberty. This idea suggests that the indi¬ 
vidual citizen of a democracy should have a high degree of self-determination. A person 
should have the maximum opportunity to select one’s own purpose in life and to choose 
the means to accomplish it. Liberty is more than just the absence of constraints; it sug¬ 
gests the freedom to act positively in pursuit of one’s own ends. Only by allowing indi¬ 
viduals the freedom to choose, it is argued, will social progress occur. 

That these themes have influenced the development of public administration is unde¬ 
niable. Though, as we will see, people differ over the degree to which they influence the 
day-to-day operations of public agencies. Similarly, the way in which democracy has 
been operationalized in the American political tradition has had important influences on 
the operation of public organizations. For example, take the traditional separation of 
legislative, executive, and judicial functions. While the primary task of the legislative 
branch is to make policy through the enactment of legislation, the primary task of the 
executive branch is the faithful execution or implementation of policy, and the primary 
task of the judicial branch is the interpretation of the law, especially as it relates to con¬ 
stitutional guarantees. 

David Rosenbloom of American University has argued that these three functions of 
government are related to three views of the role of public administrators in American 
society (Rosenbloom, 1993, p. 15). 

1. The managerial approach to public administration, which Rosenbloom connects to the 
executive function, emphasizes the management and organization of public organizations. 
As with Wilson, this view sometimes suggests that management in the public sector is 
very much like that in the private sector, in that it is primarily concerned with efficiency. 
2. The political approach to public administration, related to the legislative function in 
government, is more concerned about assuring constitutional safeguards, such as those 
already mentioned. Efficiency becomes less a concern than effectiveness or responsiveness. 
3. Finally, the legal approach to public administration, related to the judicial function, 
emphasizes the administrator’s role in applying and enforcing the law in specific situa¬ 
tions. It is also concerned with the adjudicatory role of public organizations. 

While we will examine these various approaches in more detail as we move through the 
book, it is important to understand at the outset that all the actions of public adminis¬ 
trators take place within an important political context: a commitment to democratic 
ideals and practices. Yet today that ideal is somewhat tarnished. Americans’ trust in gov¬ 
ernment has been steadily declining over the last several decades. Questions are being 
raised not only about the quality and productivity of government, but also about the 
responsiveness of government to the people (see Box 1.1). This tension will be a persis¬ 
tent theme as we examine contemporary approaches to the study and practice of public 
administration. Borrowing a phrase from earlier times, the task of public administrators 
is still to “make democracy suitable for modern conditions.” Doing so in a time of con- 



What Is Public Administration? 5 

BOX 1.1 

The Democratic Dream 

The predominant American political belief—attained, pretended, or otherwise — 
from before the establishment of the Republic and throughout the nation’s history has 
been the democratic dream, nominally based on some version of popular representa¬ 
tion and governance. Virtually every political structure and reform has been predi¬ 
cated on some mode of the democratic, egalitarian ethos, even as they oscillated back 
and forth between its Jeffersonian and Hamiltonian poles. 

Indeed, to imagine a widespread domestic political movement (and probably for¬ 
eign policy initiative) that does not in some very visible manner drape itself in the 
sacred vestment of democracy is inconceivable. 

It is this ambience that American political philosophies, politics themselves, and 
even certain professions (e.g., public administration) were created and nurtured. 

Not surprisingly, public service and public administration in the United States 
have shared a similar democratic coloration. From the early days of the professional 
public administrator—when Woodrow Wilson temporarily partitioned “politics” and 
“administration” into separate entities—we find a solid stream of democratic theory 
underpinning and underlining contemporary public administration. 

But the Constitution cannot serve as a singular political poultice for whatever ails 
the body politic. Within the country at large, there is a tangible sense that as often 
appeals are made to the nation’s democratic benchmarks, these are more calls to a 
fading faith than references to reality. Americans are apparently disenchanted with 
their politics, both in terms of substance and process. Our public life is rife with 
discontent. Americans do not believe they have much to say about how they are 
governed and do not trust government to do the right thing. 

SOURCE: Reprinted by permission from Democracy and the Policy Sciences by Peter deLeon, State 
University of New York Press © 1997, State University of New York. All rights reserved. 

fusion and mistrust will be a special challenge to those in public administration as we 
move into the twenty-first century. Keep this issue in mind as we examine the various 
approaches and techniques that are appropriate to public administration today. 

Contrasting Business and Public Administration 

One issue, however, deserves further comment. As we have just seen, even though work in 
public and nonprofit organizations is guided by commitments to democratic ideals, it is 
also involved with management, and, for that reason, public administration is often con¬ 
fused with business management. Indeed, such confusion has occasionally been quite 
prominent in the field of public administration. (As we have already seen, early writers in 



Chapter 1 Personal Action in Public Organizations 

the field often suggested that government should become more like business, a phrase 
heard even today.) Certainly, there are some similarities between business and public 
administration. Managers across all sectors—public, private, and nonprofit—are involved 
in questions of organizational design, the allocation of scarce resources, and the manage¬ 
ment of people. But most observers would agree that the primary distinction between busi¬ 
ness and public service is that business is primarily concerned with making a profit, while 
public service is concerned with delivering services or regulating individual or group 
behavior in the public interest. All would agree that the context of public and nonprofit 
management significantly alters the work itself. Three differences are most apparent. 

Ambiguity 

The first difference between government and business lies in the purposes to be served. 
In most businesses, even those with service objectives, the bottom-line profit is the basic 
measure of evaluating how good a job the organization is doing. In turn, the perfor¬ 
mance of individual managers can, in many cases, be directly measured in terms of their 
unit’s contribution to the overall profit of the company. The same is not true in public or 
nonprofit agencies, where the objectives of the organization in which one works may be 
much more ambiguous and where making or losing money is not the main criterion for 
success or failure. 

Often the objectives of public and nonprofit organizations are stated in terms of ser¬ 
vice; for example, an agency’s mission may be to protect the quality of the environment 
or to provide an adequate level of rehabilitative services to the disabled. Yet such service 
objectives are much harder to specify and to measure. What does “quality” mean with 
respect to the environment? What level of service to the disabled is “adequate”? The dif¬ 
ficulty of specifying objectives such as these makes it harder to assess the performance of 
government agencies and in turn their managers. Moreover, most businesses wouldn’t 
tolerate a money-losing operation in a depressed area, but a public or nonprofit organi¬ 
zation, though equally attentive to the money being spent, might well consider meeting 
human needs more important than the financial bottom line. 

Pluralistic Decision Making 

The second difference between work in the public service and in business is the fact that 
the public service, at least in a democratic society, requires that many groups and indi¬ 
viduals have access to the decision-making process. As a result, decisions that might 
be made rapidly by one individual or a small group in a business might, in a public or 
nonprofit organization, require input from many diverse groups and organizations. 
Consequently, it is difficult to speak of specific decision centers in government. 
W. Michael Blumenthal, a business executive who became secretary of the treasury in the 
Carter administration, described the situation in this way: 

If the President said to me, you develop [an economic policy toward Japan], Mike, 
the moment that becomes known there are innumerable interest groups that begin 
to play a role. The House Ways and Means Committee, the Senate Finance 
Committee, and every member on them and every staff member has an opinion and 



What Is Public Administration f 7 

seeks to exert influence. Also the Foreign Relations Committee, the oversight com¬ 
mittees, and then the interest groups, business, the unions, the State Department, 
the Commerce Department, OMB (Office of Management and Budget), Council of 
Economic Advisers, and not only the top people, but all their staff people, not to 
speak of the President’s staff and the entire press. (Blumenthal, 1983, p. 30) 

The pluralistic nature of public decision making has led many business executives who 
have worked in the public or nonprofit sectors to comment that this feature of public 
service makes public and nonprofit management much more difficult than management 
in the private sector. But, as Blumenthal points out, “the diversity of interests seeking to 
affect policy is the nature and essence of democratic government” (Blumenthal, 1983, 
pp. 30-31). Many have also found that this aspect of public service is particularly chal¬ 
lenging and rewarding. 

Visibility 

Finally, managers in public and nonprofit organizations seem to operate with much 
greater visibility than their counterparts in industry. The public service in a democratic 
society is subject to constant scrutiny by the press and by the public. Donald Rumsfeld, 
another who has worked in both government and business, once commented that 
“in government, you are operating in a goldfish bowl. You change your mind or make 
a blunder, as human beings do, and it’s on the front page of every newspaper” 
(Rumsfeld, 1983, p. 36). The media seems to cover everything you do, and this may be a 
mixed blessing. On the one hand, media coverage enables the leaders of the organization 
to communicate rapidly both to external and internal audiences. On the other hand, the 
media’s constant scrutiny of policy positions and their labeling of inconsistencies as 
weaknesses can be somewhat limiting to free discussion of issues in their formulation 
stage. And, of course, the occasional intrusions of the press into even the most mundane 
personal matters can be excessive; one local newspaper even reported a problem a new 
city manager moving to the community was having with his refrigerator. Yet, executives 
in government realize that it is essential to a democratic society that their work be visible 
to the public and subject to the interest and control of the citizenry. 

Thinking about Public Administration Today 

With this background, we can now think more carefully about how the field of public 
administration has traditionally been described and how we might develop an action ori¬ 
entation toward the study of public administration. In terms of definition, many early 
writers spoke of administration as a function of government, something that occurred in 
many shapes and forms throughout government. There were obviously administrative 
activities performed in the executive branch, but there were also administrative functions 
performed in the legislative and judicial branches. Some even noted that from time to 
time any single official might engage in both legislative and administrative functions. 

Somewhat later, public administration came to be viewed as merely concerned with 
the activities of the executive agencies of government. In the words of an early text, 



8 Chapter 1 Personal Action in Public Organizations 

public administration is concerned with the “operations of the administrative branch 
only” (Willoughby, 1927, p. 1). By the 1950s, such a perspective was so firmly 
entrenched that the leading text of that period stated “By public administration is meant, 
in common usage, the activities of the executive branches of national, state, and local 
governments; independent boards and commissions set up by Congress and state legisla¬ 
tures; government corporations; and certain other agencies of a specialized character” 
(Simon et ah, 1950, p. 7). More modern definitions of public administration have tended 
to return to the traditional view, including attention to administrative officials in all 
branches of government and even focusing on those in nonprofit organizations. 

For our purposes, a formal definition of the field may be less important than trying to 
discover how public administration is experienced by those in the “real world.” Our com¬ 
mitment to an action orientation suggests that we try to determine the kinds of activities 
engaged in by public administrators and the environmental factors that help to shape their 
work. We have already seen how the ambiguity of service objectives, the pluralistic nature 
of governmental decision making, and the visibility of management in the public and non¬ 
profit sectors create a context in which managerial work is significantly different from that 
in other settings. From the standpoint of the real-world administrator, the things that really 
make the difference in the way you operate are not whether you are employed by a gov¬ 
ernment agency but rather whether you work under circumstances that feature an ambigu¬ 
ity of objectives, a multiplicity of decision centers, and high public visibility. 

Networking 

The leading national organization for those in the field of public administration is 
the American Society for Public Administration. See http://www.aspanet.org/. 
Other related organizations with helpful Web sites include the National Academy 
of Public Administration at http://www.napawash.org; the Alliance for 
Redesigning Government, http://www.alliance.napawash.org/ALLIANCE; the 
Association for Public Policy Analysis and Management at http://qsilver.queensu. 
ca/appam/; the Council for Excellence in Government at http://www.excelgov.org/; 
the American Political Science Association, http://www.apsanet.org/; the Alliance 
for Nonprofit Management, http://www.allianceonline.org; the Independent Sector, 
http://www.independentsector.org; and the Academy of Management, Public and 
Not for Profit Sector Division, http://www.aom.pace.edu/pn/index.htm. 

Publicness 

These features in turn all derive from the simple fact that the public or nonprofit man¬ 
ager is pursuing public purposes. In terms of the actions and experiences of the public 
administrator, therefore, we may say that it is the publicness of the work of the public or 
nonprofit manager that distinguishes public administration from other similar activities. 
This view of the administrator’s role suggests that, as a public or nonprofit manager, you 
must operate with one eye toward managerial effectiveness and the other toward the 
desires and demands of the public. It recognizes that you are likely to experience an 



Why Study Public Administration? 9 

inevitable tension between efficiency and responsiveness as you work in governmental or 
nongovernmental organizations, a tension that will be absolutely central to your work. 

Let us point out some of the implications of this orientation. Many commentators point 
out that the distinction between public and private management is no longer simply a dis¬ 
tinction between business and government, or between profit and service. In fact, more and 
more frequently, we encounter situations in which traditionally public organizations are 
pursuing enhanced revenues (profits?) and traditionally private organizations are concerned 
with the provision of services. What is important is not merely what is being sought, but 
rather whose interest is being served. On this basis, a private enterprise would be one in 
which private interests privately arrived at are paramount; a public organization, on the 
other hand, would be one in which public interests publicly arrived at are paramount. 

There is a trend in our society for greater openness and responsiveness on the part of 
many organizations. Most associations and nonprofit organizations would fit this mold, 
and managers in those organizations must certainly be attentive to both efficiency and 
responsiveness. But many corporations are now finding it important to open their deci¬ 
sion-making processes to public scrutiny and involvement. The range of organizations 
engaged in the public service (and thus the applicability of public and nonprofit manage¬ 
ment) seems ever-increasing. 

On the other hand, our understanding of the manager’s role suggests that there could 
be managers in governmental or nongovernmental agencies who would be pursuing 
interests other than those of the public. Certainly, those operating agencies in totalitarian 
countries could hardly be considered to be pursuing publicly defined values. They would 
more likely be pursuing the privately defined interests of a political elite. Similarly, we 
might question from time to time whether all managers in our democratic society have 
a proper concern for the public interest. Certainly, in cases where managers pursue their 
own personal agendas, as in cases of empire building, we would question the “public¬ 
ness” of their actions. 

We now have a notion of the complexity of work in the public and nonprofit sectors — 
the complexity inherent in the technical work of governmental and nongovernmental 
agencies, but, even more important, the complexity of the political and ethical context in 
which managers operate. Indeed, as noted before, this complexity will provide a theme 
that ties together many aspects of your work as an administrator. The way you set objec¬ 
tives, the way you develop budgets and hire personnel, the way you interact with other 
organizations and with your own clientele, the way you evaluate the success or failure of 
your programs — all of these aspects of your work as an administrator, and many more, 
are directly affected by the fact that you will be managing in the public interest. 

Why Study Public Administration? 

Students come to introductory courses in public administration for many different rea¬ 
sons. Many students recognize the vast array of positions in government (and elsewhere) 
that require training in public administration and hope that the course will provide some 



10 Chapter 1 Personal Action in Public Organizations 

of the basic information and skills that will move them toward careers as public or non¬ 
profit managers. These students seek to understand the field of public administration, 
and also hope to sharpen their own skills as potential administrators. 

Other students, whose interests lie in technical fields as wide-ranging as engineering, 
teaching, natural resources, social work, and the fine arts, recognize that at some point 
in their careers their jobs may involve management in the public sector. The engineer 
may become director of a public works department; the teacher may become school 
principal; the natural resources expert may be asked to run an environmental quality 
program; the social worker may administer a welfare program; the fine arts major may 
direct a publicly supported gallery or museum. In these cases and others like them, the 
individual’s technical expertise may need to be complemented by managerial training. 

Networking 

The National Association of Schools of Public Affairs and Administration 
(NASPAA) is the accrediting body for programs in public administration and 
pursues other educational matters. See its home page at http://www.naspaa.org 
and download a list of NASPAA-accredited Master’s of Public Administration 
(MPA) programs at http://www.naspaa.org/programs/program.pdf. 

Other students may have no expectation whatever of working in a public agency, but 
recognize that as corporate executives, as businesspeople, or merely as citizens, they are 
likely to be called upon to interact with those in public organizations. Someone who 
owns a small business might wish to sell products or services to a city, a county, or some 
other governmental body; partners in an accounting firm might seek auditing contracts 
with a local or state government; a construction firm might bid on the design and con¬ 
struction of a new public building. In each case, knowledge of the operations of public 
agencies would not only be helpful, it would be essential. 

A final group of students, a group overlapping with any of the previous three, might 
simply recognize the importance of public agencies in the governmental process and the 
impact of public organizations on their daily lives. They might wish to acquire the 
knowledge and skills that would enable them to more effectively analyze and influence 
public policy. Some will find the world of public administration a fascinating field of 
study in its own right and pursue academic careers in public affairs. Because understand¬ 
ing the motives for studying public administration will also give us a more complete 
view of the variety and the importance of managerial work in the public sector, we will 
examine each in greater detail. 

Preparing for Administrative Positions 

You may be among those who wish to use the introductory public administration course 
as a stepping-stone to a career in the public service. If so, you will find that these careers 
take many forms. We sometimes make distinctions among program managers, staff 



Why Study Public Administration? ii 

managers, and policy analysts. Program managers range from the executive level to the 
supervisory level and are in charge of particular governmental or nongovernmental pro¬ 
grams, such as those in environmental quality or transportation safety. Their job is to 
allocate and monitor human, material, and financial resources to meet the service objec¬ 
tives of their agency. Staff managers, on the other hand, support the work of program 
managers through budgeting and financial management, personnel and labor relations, 
and purchasing and procurement. Meanwhile, policy analysts provide important infor¬ 
mation about existing programs through their research into the operations and impacts 
of the programs; moreover, analysts help bring together information about new pro¬ 
grams, assess the possible effects of different courses of action, and suggest new direc¬ 
tions for public policy. Managers and analysts may work with the chief executive, with 
the legislature, with officials at other levels of government, and with the public in fram¬ 
ing and reframing public programs. 

As we will see, the work of public and nonprofit organizations also encompasses a 
wide variety of substantive areas. Think for a moment of the range of activities the fed¬ 
eral government engages in. The federal government touches upon nearly every aspect of 
American life, from aeronautics, air transportation, and atmospheric sciences to helping 
juvenile delinquents, migrant workers, and the homeless; to working with waste man¬ 
agement, wages standards, and water quality. In each area, skilled managers are called 
upon to develop, to implement, and to evaluate government programs. But the work of 
managers at the federal level represents only a part of the work of those trained in public 
administration. 

At the state and local levels of government, and in the nonprofit sector, even more 
opportunities exist. As we will see in Chapter 2, whereas there is only one federal govern¬ 
ment in this country, there are over eighty thousand state and local governments (these 
include cities, counties, and special districts) and more than one million nonprofit organi¬ 
zations. Consequently, state and local government employment in this country amounts 
to over 13 million persons (compared to just under 3 million civilians employed at the 
federal level), and an additional 10.2 million people work for nonprofit organizations. 

Obviously, the work of government at the state and local levels is different from that 
at the federal level. State and local governments, for example, do not directly provide for 
the national defense; however, most have police forces, which the federal government 
does not. There are also other positions at the state and local levels that do not have 
exact counterparts at the federal level. For example, the president or chancellor of your 
state university can be considered a public administrator with significant and unusual 
responsibilities. Likewise, the city manager in a local community can also be considered 
a professional administrator appointed by a city council to manage the various functions 
of local government. 

Public service is not limited to work in government. Beyond employment in federal, 
state, or local government, those trained in public administration will find many other 
opportunities. Directors of nonprofit organizations at the state and local levels, as well as 
those in similar associations at the national level, often find that the skills required for 
their jobs — skills that combine managerial training with an understanding of the political 
system — are the skills developed in public administration courses. Again, to demonstrate 
the breadth of these activities, we might note that there are large numbers of nonprofit 



12 Chapter 1 Personal Action in Public Organizations 

associations at the national level alone, ranging from well-known groups like the 
American Medical Association or the American Bar Association to trade groups such as 
the American Frozen Food Institute and the National Association of Bedding Manu¬ 
facturers. Other nonprofit associations include everything from professional associations 
such as the American Society for Public Administration to those representing a particular 
field of interest, such as the Metropolitan Opera Guild. There is even an association of 
association executives—the American Society of Association Executives. Beyond these 
groups at the national level, there are numerous nonprofit groups operating at state and 
local levels. Examples include local United Way organizations, local food banks, art 
leagues, or historic preservation groups. 

Finally, those with training in public administration may work in a private corpora¬ 
tion’s public affairs division. Because of the increasing interaction across private, public, 
and nongovernmental sectors, corporations and nonprofit organizations often need spe¬ 
cial assistance in tracking legislation, developing and monitoring government contracts, 
and influencing the legislative or regulatory process. Thus, the combination of manager¬ 
ial and political skills possessed by someone with training in public administration can 
be highly valuable. The career possibilities in the field of public administration are seem¬ 
ingly endless. 

Combining Technical and Managerial Training 

Many students seek positions in the public service as a primary career objective, while 
many others see the possibility of work in public administration as secondary, but 
nonetheless important, to their main field of interest. As noted, the work of government 
spans many areas; consequently, the people who work for government (one out of every 
six people in this country) come from a wide variety of professional backgrounds. There 
are engineers who work in the Defense Department or for NASA, in state highway 
departments, and in local public works departments. Persons interested in natural 
resources may work for the U.S. Forest Service and the Environmental Protection 
Agency, in state conservation departments, and local parks departments. Medical per¬ 
sonnel may work for the Veterans Administration or the National Institute for Mental 
Health, for state health departments, and for local hospitals and health offices. 

Governments at all levels hire social workers, planners, personnel specialists, accoun¬ 
tants, lawyers, biologists, law enforcement officers, educators, researchers, recreation 
specialists, and agricultural specialists, just to mention a few. To illustrate the magnitude 
of government employment of technical specialists, some 154,000 engineers and archi¬ 
tects, 134,000 medical personnel, and 123,000 accountants and budget specialists work 
for the federal government alone. 

People who have worked for some time within a technical field in a public organiza¬ 
tion are often promoted to managerial positions. A surgeon may become chief of 
surgeiy, a water pollution specialist may be asked to direct a pollution control project, 
or a teacher may become a school principal. Despite having started out in a technical 
field, these individuals find themselves in a managerial position; they are public adminis¬ 
trators. Some people may desire promotion to a managerial position; others may not. 



Why Study Public Administration? 13 

(There are some jurisdictions in which continued advancement practically requires mov¬ 
ing into an administrative position.) But whatever one’s motivation, the new administra¬ 
tor soon discovers a completely new world of work. Now the most pressing questions 
are not the technical ones, but rather those having to do with management, with pro¬ 
gram planning and design, with supervision and motivation, and with balancing scarce 
resources. Often the situation is quite bewildering; it is almost as if one has been asked 
to change professions in midcareer from technical expert to public manager. 

The fact that so many people from technical fields eventually find themselves in man¬ 
agerial positions in the public sector has led many of them to seek training in public 
administration. For this reason, it is no longer unusual for students majoring in technical 
fields to take courses in public administration or for students to combine undergraduate 
training in a technical field with graduate training in public administration (even at mid¬ 
career). This, then, is a second reason for studying public administration—to prepare 
for the eventuality that work in a technical field of interest might lead you to a manager¬ 
ial position in the public sector. 

Interaction of Business and Government 

Even for students who never work for a public agency of any type, understanding the 
processes of policy formulation and implementation can be enormously helpful. One of 
the most important trends in American society is the increasing interaction of business 
and government. Clearly, the decisions of government affect the environment within 
which business operates, but government also specifically regulates many businesses, 
and, of course, serves as the biggest single customer of business. 

Those in business recognize that governmental decisions affect the economic climate. 
Most obvious are the effects of governmental decisions at the federal level; note, for 
example, the impact of government economic pronouncements on the stock market. But 
state and local governments also affect the business climate. The governors of many 
states have begun major campaigns to attract industry to their states, providing not only 
information and advice, but specific incentives for plants and industries that might relo¬ 
cate. Similar activities are being undertaken in more and more local communities as 
cities recognize that they are in competition for economic development. At a minimum, 
business recognizes that the political climate of any locality directly affects the area’s 
economic climate. 

But the influence of government on business is more specific. At the federal level, 
major regulatory agencies, such as the Federal Communications Commission and the 
Federal Trade Commission, provide specific guidelines within which certain businesses 
must operate. Moreover, requirements of agencies such as the Environmental Protection 
Agency and the Occupational Safety and Health Administration restrict the operations 
of business so as to ensure the quality of air and water and the safety of working condi¬ 
tions. Similarly, at the state level, some agencies directly regulate specific businesses, 
while others act more generally to prevent unfair or unsafe practices. Even at the local 
level, through licensing and zoning practices, public organizations directly regulate busi¬ 
ness practice. 



14 Chapter 1 Personal Action in Public Organizations 

Government is also important as a consumer of business products and services. At the 
federal level, over $116 billion is spent each year on goods and services; in the Defense 
Department alone, the figure is over $85 billion per year. Similarly, at the state and local 
levels, expenditures for products and services amount to $176 billion. Business is atten¬ 
tive to its customers, so it is not surprising that business is attentive to government. 

For all these reasons, people in business are becoming increasingly aware of the need 
to understand in detail the work of government—how policies are made, how they are 
implemented, and how they may be influenced. Not only are more and more businesses 
developing public affairs offices to specialize in governmental operations, to track policy 
developments, and to try to influence policy, but they are placing a greater premium 
upon having executives at all levels who understand how government agencies operate. 
Even if you plan a career in business, understanding the work of public organizations is 
an essential part of your training. 

Influencing Public Organizations 

Any of the motives for studying public administration we have discussed so far may 
bring you to an introductory course. However, there is another more general reason you 
may wish to study public administration—to understand one important aspect of the 
governmental process so as to be able to deal effectively with public issues that directly 
affect your life. We are all affected by the work of governmental and nongovernmental 
organizations, so it is helpful, and sometimes even essential, to understand the opera¬ 
tions of these organizations. 

We have become so accustomed to the pervasiveness of the public service and the 
range of its influence that we sometimes forget just how often our lives are touched by 
public and nonprofit organizations. Imagine a typical day: we awake in the morning to 
the sounds of a commercially regulated radio station or National Public Radio coming 
over a patented and FCC-registered clock radio operating on power supplied either by a 
government-regulated power company or by a public utility. We brush our teeth with 
toothpaste produced under a government patent and trust that it has been judged safe (if 
not effective) by a federal agency. We use municipally operated water and sewer systems 
without thinking of the complexity of their operation. We dress in clothes produced 
under governmental restrictions and eat food prepared in accord with government regu¬ 
lations and inspected by the government. We drive on a public highway, following gov¬ 
ernment-enforced traffic laws, to a university substantially funded by federal, state, and 
sometimes local dollars to study from books copyrighted and catalogued by the Library 
of Congress. Though the day has hardly started, our lives have been already touched by 
public organizations in many, many ways. 

The importance of public administration in daily life is tremendous; consequently, 
the decisions made by governmental and nongovernmental officials (and not just elected 
officials) can affect us quite directly. Imagine, for example, that one day you discover 
that the loan program that is helping to finance your college education is being 
reviewed and will likely be revised in such a way that you will no longer be eligible for 
funding. In such a case, you might well want to take some action to try to maintain 



Why Study Public Administration? 15 

your eligibility. Obviously, knowing something about the operations of government 
agencies, especially some of the ways administrative decisions can be influenced, would 
be of great help. 

As citizens affected by the public service, understanding the operations of public and 
nonprofit organizations is helpful; it is even more important if one becomes personally 
involved in some aspect of the governmental process. For those reading this book, such 
involvement is actually rather likely. Indeed, if you are a college graduate, regardless of 
your major or field of interest, chances are quite good that at some point in your life you 
will engage in some kind of formal governmental activity. You may be elected to local, 
state, or national office; you may be asked to serve on a board or commission; or your 
advice concerning government operations in your area may be sought in other ways. 
You may also become involved in the work of nonprofit organizations or charities in 
your local community. In any of these cases, a thorough knowledge of the structure and 
processes of public organizations, both government and nonprofit organizations, will be 
of great importance. 

Finally, those who are interested in understanding the work of public or nonprofit 
organizations may indeed find the field of public administration interesting from a more 
academic standpoint: studying and commenting upon the operations of government and 
nonprofit organizations contribute to our understanding of the process of policy devel¬ 
opment and support the work of those in public organizations. The opportunities for 
academic careers in public administration positions involving teaching and research are 
many, and you may find yourself drawn to those opportunities. Even here, however, one 
begins with a concern for action. 

Making Things Happen 

Of the many reasons to learn about public and nonprofit organizations, one theme seems 
to tie together the various interests — an interest in making things happen. Whether you 
are preparing for a career in the public sector, covering the possibility that you might 
someday manage a public agency, or simply preparing to affect the course of public pol¬ 
icy and its implementation as it directly affects you or your business, your interest is in 
taking action, in influencing what goes on in public and nonprofit organizations. It’s one 
thing to gain knowledge of the field in the abstract, but most students want to learn 
those things that will make them more effective actors in the governmental process. The 
desire to make a difference is a powerful motive and one that underlies much of what 
occurs in the public service. That motive certainly was demonstrated in the events of 
September 11 and the months that followed. (See Box 1.2.) 

This book is oriented toward action, toward how to make things happen in the public 
service. Our perspective will be that of the actor, not the scholar, although an under¬ 
standing of the world of administrative action is the basis for good scholarship as well. 
Action first requires a base of knowledge. There are certain things that you simply need 
to know about government and the administrative process to be effective. There are also 
value questions that must be settled in the course of making and carrying out public 
decisions. And, finally, there are both technical and interpersonal skills you must acquire 



16 Chapter 1 Personal Action in Public Organizations 

BOX 1.2 _ ' 

The Power of Public Service 

Like you, we were devastated and shaken by the tragic events of September 11. Even 
now, each hour brings a new set of images and emotions, new thoughts, and fears. As 
we look back on that day, we recognize that we both initially went through a period 
of disbelief, unable to process and accept what we were seeing over and over on the 
television screen. The scenes were baffling and though we found ourselves watching 
them repeatedly, we didn’t really comprehend what was happening. 

Later in the evening, the tragedy began to become more personal — names and 
faces began to replace the surreal images that seemed almost impossible in their hor¬ 
ror. As that happened, grief and sorrow for the people whose lives were ended in a 
fury of violence and hatred began to well up inside. We cried. 

As these scenes became more personal to us, we also began to think about the 
many who reached out to their fellow citizens, especially the thousands of public ser¬ 
vants who walked and ran toward the unimaginable to help. A most enduring image 
for us is the story told by several of those struggling down the stairs of the World 
Trade Center to escape death. “As we were trying to get down, we met police officers 
and fire fighters going up — and we clapped and cheered. Now we know that those 
same brave souls almost surely perished in the collapse of the building.” 

As hard as it is to understand planes flying into buildings, it’s also hard to under¬ 
stand the motives of these courageous men and women, who literally walked 
through the fire to save and protect the lives of others. Some of them died. Some 
were badly hurt. 

Even those who were not physically damaged were probably injured in a way that 
is fundamentally different from the injuries suffered by those of us who watched from 
the safe distance of a television newscast. Although many of us would like to think 
that their uniforms and training somehow protected them from all the terror, pain, 
and horror that we would feel, it did not. It prepared them, but it didn’t shield them. 

In the end, they are human just like us. While their uniforms and equipment may 
partially obscure their individuality, each of them has a name and a story. Each has 
families, friends, dreams, and fears. They love and laugh, work and play, talk and 
walk just like us. They are every bit as vulnerable as we are. 

Yet on September 11, these people showed America once again that they stand 
apart. What makes them different is their quiet, often anonymous heroism. They are 
public servants. They serve their fellow citizens in a way that many people would find 
very difficult if not impossible to understand. How could they be so courageous? So 
selfless? How can we understand their heroism? 

The answer to these questions goes to the very soul of the public service. Yes, it 
was their job. Yes, they were trained. Yes, they were well equipped physically and 
mentally for their tasks they had to perform. But that does not diminish the nobility, 
the honor, or the sacrifice of their actions. Nor should it detract from our gratitude 
and our respect. 

(continued) 



Issues in Public Administration Theory and Practice ly 

In a peculiar way, this ghastly act of terrorism reminds us of why we are in the 
public service. We care about our country, our community and our neighbors. Each 
of us, whether we wear a uniform, a suit, a jacket, coveralls, or a hard hat, plays 
a role in improving the lives of others. Service to the public — helping people in trou¬ 
ble, making the world safer and cleaner, helping children learn and prosper, literally 
going where others would not go — is our job and calling. 

The image of police officers and firefighters going up those stairs is compelling. But 
even more compelling is the larger and more pervasive power of public service. Those 
in law enforcement, in transportation, in health care, and in dozens of other fields at 
the federal, state, and local levels will make untold sacrifices over the coming months 
and years in order to respond to these events and to make this world a better place 
for our citizens. 

This ability to be selfless, to be open to the needs and values and wants of others, 
is a part of each public servant. And it’s a part of who we are that shouldn’t require 
effort, or even tragedy for us to recognize or acknowledge. We need not wait for such 
events to awaken our sense of humanity and respect. As these events have once again 
shown, service to the public is a proud and noble profession. 

SOURCE: Bob and Janet Denhardt. This article first appeared as an online column for the American 
Society for Public Administration (aspanet.org). 

——¦¦¦IB Hll 11 lllillllllllMBIIPIIIIHIIIIII'IWMMWWIlWIMIIMIIIMIIIIllllllllllllllllliMIIIIIlM lllll IW I I'lK |l^lll¦ll¦¦iW^^II«IUi^lrlilllĄ^l lllii'lllillTr—t WliW IK'Tl nri'T- MP|- ulll'l 

to be effective in working with others in your chosen field. Selecting an action orienta¬ 
tion, therefore, commits you to emphasizing all three areas — the knowledge, values, and 
skills that will help you to become more effective and responsible in your work in and 
with “real life” public organizations. 

Issues in Public Administration Theory and Practice 

Throughout the chapters to come, our primary emphasis will be on action — those 
things that real-world actors do in order to be successful in public and nonprofit orga¬ 
nizations. But action never stands alone. Without some degree of reflection, action is 
sterile and unguided. For this reason, we will outline here two themes that have tradi¬ 
tionally characterized work in public organizations and that continue to be of great 
importance today. As such, these themes—politics and administration, and bureaucracy 
and democracy — provide a part of the intellectual and practical context of public 
administration. While our purpose here will be simply to introduce these two themes, 
we will suggest that they are most often manifest in contemporary public administra¬ 
tion in a tension between efficiency and responsiveness. This tension is one that is 
absolutely central to the work of public administrators today and one to which we will 
return frequently within the context of specific discussions of administrative action. 



18 Chapter 1 Personal Action in Public Organizations 

Politics and Administration 

Even though the supposed dichotomy between politics and administration is one of the 
oldest issues in public administration, it continues to hold great relevance for adminis¬ 
trators today. You will recall that an early essay by Woodrow Wilson framed the initial 
study of public administration in this country. In addition to his emphasis on busi¬ 
nesslike practices, Wilson was also concerned with isolating the processes of adminis¬ 
tration from the potentially corrupting influences of politics. With respect to this issue, 
Wilson wrote, “Administration lies outside the proper sphere of politics. Administrative 
questions are not political questions. Although politics sets the tasks for administration, 
it should not be suffered to manipulate its offices” (Wilson, 1887, p. 210). In other 
words, while policies were to be debated and decided by politicians, they were to 
be carried out by a politically neutral, professional bureaucracy. In this way, the every¬ 
day conduct of government would be isolated from the potentially corrupting influence 
of politics. 

Other early writers joined Wilson in talking, at least analytically, about the distinction 
between politics (or policy) and administration. More practical reformers went further, 
creating governmental forms, such as the council-manager plan for local government, that 
were based on a separation of policy and administration. As we will see later in this form 
of government, the council presumably makes the policy and the city manager carries it 
out. The council is engaged in politics (or policy) and the manager in administration. 

Over the first few decades of this century, however, the distinction between policy 
and administration was increasingly broken down, even in council-manager govern¬ 
ments. Managers found that they had expertise that was needed by policy makers and 
began to be drawn into the policy process. By about the middle of the century, Paul 
Appleby of Syracuse University would write simply, “Public administration is policy¬ 
making” (Appleby, 1949, p. 170). 

The increasing involvement of administrators in the policy process was in part attrib¬ 
utable to the fact that the operations of government, and in contemporary society of 
nonprofit organizations, were becoming more complex and the technical and profes¬ 
sional skills needed to operate public agencies were dramatically increasing. As people 
with such skills and expertise became a part of public organizations, they were inevitably 
called upon to present their views. At the same time, the legislative branches of govern¬ 
ment (at all levels) found it difficult to be knowledgeable about every detail of govern¬ 
ment and, consequently, were forced to rely more and more on the expertise of those in 
public agencies. Additionally, the complexity of government meant that legislative bodies 
often found it necessary to state laws in general terms, leaving those within the agencies 
of government considerable discretion to interpret those laws as they saw fit, and, there¬ 
fore, make policy daily. 

Ensuring Accountability 

The acknowledgment of the interaction of politics and administration does not make the 
question of their relationship any easier. If public administrators make policy, how can 
we be sure that the policies they make are responsible to the people (as we would expect 



Issues in Public Administration Theory and Practice 19 

in a democratic society)? Presumably legislators must be at least somewhat responsive or, 
come the next election, they will no longer be legislators. But what of administrators? 
Traditionally, the answer was that the administrators were accountable to the legislators 
who, in turn, were accountable to the people. But even that argument is somewhat tricky 
today. Those in public and nonprofit agencies do indeed both work with and report to 
legislatures, but they also shape public opinion through the information they provide. 
They mobilize for support within the government and outside, and they bargain with a 
variety of public and private groups. To a certain extent, they act as independent agents. 

For this reason, more contemporary discussions of the issue of accountability (which 
we will elaborate on in Chapter 4) place an emphasis on measures that would supple¬ 
ment accountability to the legislature by either seeking a strong subjective sense of 
responsibility on the part of administrators or by providing structural controls to ensure 
responsibility. As we will see, some people have tried to assert professional standards in 
public and nonprofit organizations, while others have developed codes of ethics and 
standards of professional practice. Others have sought greater legislative involvement in 
the administrative process or more substantial legislative review. Still others have 
described mechanisms such as public participation in the administrative process or sur¬ 
veys of public opinion that would bring the administrator in closer alignment with the 
sentiments of the citizenry. 

The relationship between politics (or policy) and administration will be a theme that 
recurs throughout the remainder of this book. While the classic dichotomy between poli¬ 
tics and administration has fallen, as the role of public administrators in the policy 
process has become more apparent, the question of the relationship between politics and 
administration remains central, simply because it goes to the heart of what public 
administration is all about. If public organizations differ from others in our society, that 
difference must surely rest in the way in which public organizations participate in and 
respond to the public interest. But that question merely leads us to another—the rela¬ 
tionship between bureaucracy and democracy. 

Bureaucracy and Democracy 

A second theme that grew from the earliest discussions of public administration in this 
country had to do with the potential for conflict between democracy and bureaucracy. 
Let’s start once again with democracy. One writer has defined the moral commitments of 
a democracy in terms of three standards. First, democratic principles assume that the 
individual is the primary measure of human value, and that the development of the indi¬ 
vidual is the primary goal of a democratic political system. Second, democratic morality 
suggests that all persons are created equal — that differences in wealth, status, or posi¬ 
tion should not give one person or group an advantage over another. Third, democratic 
morality emphasizes widespread participation among the citizens in the making of major 
decisions (Redford, 1969, p. 8). 

Set against these tenets of democracy are the ideals of bureaucratic management. The 
early scholars and practitioners in public administration were, of course, writing at a 
time when businesses were growing rapidly and beginning to use both new and more 
complicated technologies and new ways of organizing appropriate to those technologies. 



20 Chapter 1 Personal Action in Public Organizations 

To some extent the public sector looked to the field of business for models of organiza¬ 
tion. They found that the growth of large-scale business had led to the development of 
large and complex bureaucratic organizations, organizations that were built around val¬ 
ues quite different from those of democracy. (While the term bureaucracy is often used in 
a pejorative sense, as in “bureaucratic red tape,” we will use it here in its more neutral 
and scientific sense, as one of the many ways of organizing work.) Consequently, the 
bureaucratic model of organizing was brought into the public sector. 

The values of bureaucracy included, first, the need to bring together the work of 
many individuals in order to achieve purposes far beyond the capabilities of any single 
individual. Second, bureaucratic systems were to be structured hierarchically, with those 
at the top having far greater power and discretion than those at the bottom. Third, 
bureaucratic organization generally assumes that power and authority flow from the top 
of the organization to the bottom rather than the other way around. (We will examine 
the concept of bureaucracy in greater detail in Chapter 7.) 

In contrast to the democratic value of individuality, there stood the bureaucratic value 
of the group or organization; in contrast to the democratic values of equality, there 
stood the bureaucratic hierarchy; and in contrast to the democratic values of participa¬ 
tion and involvement, there stood the bureaucratic value of top-down decision making 
and authority. 

How these values were to be reconciled became a difficult issue for early scholars and 
practitioners in the field of public administration, as it continues to be today. A variety 
of questions are raised. For example, is it proper for a democratic government to carry 
out its work through basically authoritarian organizations? But the key issue turns out 
to be an emphasis on efficiency as the sole measure of agency success. 

Efficiency versus Responsiveness 

As those in public administration have wrestled with the issues of politics and adminis¬ 
tration and democracy and bureaucracy, public (and increasingly nonprofit) managers 
have begun to experience more frequently the problems they face from day to day in 
terms of efficiency versus responsiveness. Indeed, in a sense, the two earlier issues seem 
to have dissolved into the single issue of efficiency versus responsiveness. On the one 
hand, there is the hope that public and nonprofit organizations will operate in the most 
efficient way possible, getting things done quickly and with the least cost to taxpayers 
and donors. On the other hand, public managers must be constantly attentive to the 
demands of the citizenry, whether those demands are expressed through the chief execu¬ 
tive, through the legislature, or directly. 

A practical and contemporary expression of this difficulty is presented in case study 
number five at the end of the chapter. (You might want to read that case study at this 
point; see “Cases and Exercises” at the end of this chapter.) The case relates a dispute 
that arose in the course of developing a new housing loan program. While the case pre¬ 
sents several different issues, most students reviewing the case focus their attention on 
the different interpretations that John and Carol have of their work. At first glance, John 
appears to be solely interested in doing things efficiently, while Carol appears to be much 



What Do Public Administrators Do? 21 

more concerned with responding to the needs of the client group. The case appears to be 
a classic illustration of the tension between efficiency and responsiveness, and indeed it 
is. But, at a deeper level, the case also illustrates how complex the issues really are. You 
might say, for example, that John was trying to be efficient in response to the demands 
of those clients who had been waiting for their loans to be processed. You might also say 
that Carol, through her educational efforts, was helping to ensure a more efficient, long¬ 
term operation. 

The main point, of course, is that, in public organizations, you may quite frequently 
encounter difficulties in reconciling efficiency and responsiveness. A key to resolving the 
ethical questions raised in situations such as that faced by John and Carol is first under¬ 
standing the various moral values represented on each side of the equation, and then 
engaging in ethical deliberation (and perhaps dialogue) in order to arrive at a proper 
approach to the problem. Interestingly enough, in this particular case, the real-life charac¬ 
ters represented by John and Carol got together and talked through the differences in 
their respective approaches. The result was a course of action they both agreed upon, one 
they felt met both their obligations to be efficient and to be responsive. In the real world, 
dialogue sometimes works. 

To summarize this point, the themes of politics and administration and bureaucracy and 
democracy have marked much of the history of the field of public administration. Today 
those themes seem often manifest in the tension between efficiency and responsiveness. Are 
public agencies to attend only to creating the desired outcomes in the most efficient manner 
possible? Or are such agencies to be responsive to the public interest and the public will, 
even though the public interest and public will may not have been explicitly articulated 
by elected officials, especially those in the legislature? Time after time, you will find evidence 
of this tension in discussions on public policy, human resources management, budgeting 
and financial management, and so on. The tension between efficiency and responsiveness 
remains an unsolved mystery of public administration. But, perhaps for that reason, it is 
a tension that helps make public administration such a fascinating and dynamic field. 

What Do Public Administrators Do? 

An action orientation to public administration requires that we focus on what public 
and nonprofit managers actually do—how they act in real-world situations. How do 
they spend their time? What skills do they require to do their work well? What are the 
rewards and frustrations of public service? From the perspective of the administrator, 
we can ask: What characterizes the most effective and responsible public or nonprofit 
management? What are the demands on administrators? What are the satisfactions that 
public managers draw from their work? 

We will approach these issues by concentrating on the skills managers need to accom¬ 
plish their work. In a classic article in the Harvard Business Review, Robert Katz 
provided the first major description of the general types of skills all managers need: con¬ 
ceptual, technical, and human (Katz, 1974). 



22 Chapter 1 Personal Action in Public Organizations 

1. Conceptual skills include the ability to think abstractly, especially in regard to the man¬ 
ager’s concept of the organization. This category also involves the ability to see the organi¬ 
zation as a whole, how all the parts or functions work and fit together, and how making 
a change in one part will affect other parts. Conceptual skills also include the ability to see 
how the organization, or parts of it, relate to the organization’s environment. 
2. Technical skills refer to an understanding of and proficiency in the methods, 
processes, and techniques for accomplishing tasks. These are, for example, the skills of 
an accountant who can conduct an audit or develop an income statement, or the skills of 
a mechanic who can repair an engine. 
3. Human skills involve the capacity to work effectively as a member of a group, or the 
ability to get others to work together effectively. (“Others” may include subordinates, 
superiors, managers at the same level, or virtually anyone with whom one might work 
on a given project or assignment.) 

All these skills are important to managers, but not equally important to all managers. 
Katz makes a strong argument that technical skills are most important to managers at 
the supervisory level who manage day-to-day operations but become less and less impor¬ 
tant as the level of management increases. On the other hand, conceptual skills are most 
important to top-level managers who must deal with the organization as a whole rather 
than with just one or a few parts of it. Conceptual skills are less important at the middle- 
management level and least important at the supervisory level. 

Human skills, however, maintain a constant, high level of importance; they are critical 
regardless of one’s level. How managers’ human skills are employed may vary from level 
to level (e.g., top managers lead more meetings than supervisory managers), but as a cat¬ 
egory, human skills remain the one constant for managerial success. In this book, we will 
consider the knowledge and values associated with public management (conceptual 
skills), the techniques public managers require in such areas as budgeting and personnel 
(technical skills), and the personal and interpersonal qualities that help managers work 
effectively with others (human skills). 

An Inventory of Public Management Skills 

One way to elaborate on an action approach is to create an inventory of the skills and com¬ 
petencies required for successful public and nonprofit management. There are many ways 
such an inventory can be constructed; one of the best ways is to talk with public and non¬ 
profit managers about their work, as we suggest in exercise one at the end of the chapter. 
Several research studies have sought to answer this question by identifying the skills that are 
critical to managerial success. Of these studies, research by the federal government’s Office 
of Personnel Management (OPM) is particularly helpful (Flanders and Utterback, 1985). 
The OPM study was based on information gathered from a large number of highly effective 
federal managers and produced a description of the broad elements of managerial perfor¬ 
mance at all levels (supervisory, managerial, and executive). These sets of competencies 
were divided into two subcategories: (1) management functions (the “what” of manage¬ 
ment, its content responsibilities), and (2) effectiveness characteristics (the “how” of man¬ 
agement, the style found most effective). (See Appendix A at the end of this chapter.) 



What Do Public Administrators Do? 23 

Networking 

Web sites dealing with management issues at the federal level include 
the Office of Personnel Management, http://www.opm.gov, and FirstGov, 
http://www.firstgov.gov. In addition to the journals listed in the back of the book, 
you might be interested in the Web sites of the following: Governing magazine, 
http://www.governing.com/; the Chronicle of Philanthropy, http://www. 
philanthropy.com; Government Executive magazine, http://www.govexec.com/, 
Government Technology magazine, http://www.govtech.net/, and Public Manager, 
http://www.feiaa.org/Public%20Manager.htm. 

According to the OPM study, the competencies of managers include such things as 
being sensitive to agency policies and national concerns; representing the organization 
and acting as a liaison to those outside the organization; establishing organizational 
goals and the processes to carry them out; obtaining and allocating the necessary 
resources to achieve the agency’s purposes; effectively utilizing human resources; and 
monitoring, evaluating, and redirecting the work of the organization. But the OPM 
researchers recognized that managerial excellence requires not merely doing the job, but 
doing it well. For this reason, they developed a set of skills, attitudes, and perspectives 
that seemed to distinguish the work of highly successful managers. 

Displaying these characteristics in terms of several concentric circles (see Box 1.3) 
makes a point about their importance at different organizational levels — that as man¬ 
agers move up the organizational ladder, they must accumulate an increasingly broad set 
of skills. The researchers suggest, for example, that first-line supervisors must apply 
communication skills, interpersonal sensitivity, and technical competence to ensure effec¬ 
tive performance on their own part and within the work unit. In addition, their actions 
must begin to reflect those characteristics in the next ring: leadership, flexibility, an 
action orientation, and a focus on results. 

Middle managers, on the other hand, must demonstrate all these characteristics of 
effectiveness and begin to acquire the skills listed in the outer ring: a broad perspective, a 
strategic view, and environmental sensitivity. Executives at the highest levels of public 
service who are responsible for the accomplishment of broad agency objectives must 
demonstrate the full complement of effectiveness characteristics to be most successful. 
Some of these characteristics are shown in Box 1.3. Clearly, a wide diversity of skills, 
regardless of how the job is constructed or of the style with which it is executed, will be 
essential to your success as a manager. 

Voices of Public Administrators 

Studies such as that of the OPM are helpful in understanding what you need to know 
and what you must be able to do to be successful in public administration. But how does 
it actually feel to work in a public or nonprofit organization? The best way to answer 
this question is to let some public servants speak for themselves. Recently, we spoke to 
three outstanding professionals in the field of public administration about their views of 



24 Chapter 1 Personal Action in Public Organizations 

BOX 1.3 

Management Excellence Framework 

Effectiveness Characteristics 

SOURCE: U.S. Office of Personnel Management, The Management Excellence Framework (Washington, 
DC: Office of Personnel Management, 1985). 

the field and their feelings about their work. The following accounts are based on those 
interviews. Jan C. Perkins is city manager of Fremont, California. When asked about her 
motivations for entering the field of public administration, she replied: 

I was interested in improving the quality of life for all people and increasing the 
access of women and minorities. I believed that I could have the most impact by 
being involved in local government at a management level. 

The most rewarding aspects of my work have been being able to articulate the 
mission of the city and focus my resources and efforts in effectively meeting that 
mission, solving the problems of residents, and seeing employees grow and develop. 

Those considering public service careers should understand that managing in the 
public arena is different from that in a private corporation. It requires a commit¬ 
ment to values of providing quality services for all and dealing with all people on 
an equal level. It is very important that people who enter the public service do so 
with a high standard of ethical behavior and an ability to deal honestly and 
directly with all people. 



What Do Public Administrators Do? 25 

Michael Stahl works for the federal government in the Environmental Protection 
Agency. He stated: 

I entered public service because I viewed (and still do) government as an instrument 
to solve social problems. Democratic government can be a tremendous positive 
force in society, and in spite of recent political rhetoric and prevailing political ide¬ 
ology, I am convinced that the institutions and programs of government are of vital 
importance to the nation and that public service is a noble calling. 

There is great satisfaction in knowing that your work has made an impact on 
persons who could only have been helped through the intervention of the govern¬ 
ment. In my own experience, for example, schoolchildren across the country have 
been helped by elimination of exposure to asbestos in their schools that were 
unable to remove asbestos materials without federal financial assistance from a 
program I helped implement. Government service provides opportunities to help 
people through means that are beyond the capabilities of the private sector. 

If you are considering a career in the public service, take the time to reflect on your 
motivation for entering the public service, because there are right reasons and wrong 
reasons. You are entering for the right reasons if you want to make a contribution to 
the solution of social problems, promote democratic values and ethical standards on 
using the powers of government, and if the concept of serving the public good is 
a passion. You are entering for the wrong reasons if you are looking for public adula¬ 
tion and recognition for your accomplishments, seeking material or financial rewards 
as compensation for your hard work, or expecting to acquire levels of power and 
change the world according to your own plan. Those entering for the wrong reasons 
will be bitterly disappointed. Yet, for those whose passion is to contribute to the pub¬ 
lic good, government service can represent the single most satisfying way of translat¬ 
ing your passion into ideas and events for improving the quality of life for scores of 
people. Very few professions offer this kind of opportunity and that is why public ser¬ 
vice will always be an exciting, challenging, and satisfying endeavor. 

Cheryle A. Broom was legislative auditor for the state of Washington. She described 
her reasons for entering the public service: 

I was working in business and felt the need to make a change to a career where my 
efforts might make more of a difference in terms of addressing public needs. While 
I had a somewhat idealistic goal to serve the public, I recognized my orientation 
was not toward professions such as social work or K-12 teaching. 

Problem solving and proposing solutions to significant public issues have been 
the emphasis of my work. It is particularly rewarding when these efforts influence 
policy and administrative changes that, hopefully, improve service delivery and cost 
effectiveness of public programs. 

Individuals with an interest should be encouraged to explore careers in the pub¬ 
lic service and to develop the skills necessary to be successful in their chosen field. 
I think it is also important to keep a perspective, that is, it won’t be easy nor will 
you do it single-handedly, but you can make a difference. 



2 6 Chapter 1 Personal Action in Public Organizations 

BOX 1.4 

Reflections of a Public Service Junkie 

In reviewing my own motivations for staying in public service, I found several, rather 
than one single answer. 

First, there is a joy in the use of skills learned through a long apprenticeship. After 
twenty years in public service, I realize my skills and abilities were not easily or pain¬ 
lessly acquired. My education in public service has been costly, and I feel an obliga¬ 
tion to repay the resources, energy, and interest others have invested in teaching me. 

A second factor is the conviction that the work is important. There is an underly¬ 
ing assumption in public service that we are all part of an effort that leads to a better 
life for individuals in our society. Public service is ultimately based on the view that 
the human condition can be improved, an optimism which perhaps forms the core of 
the motivation for staying in public service. In order to remain in government, you 
have to believe that your actions can have some small impact on the public good. 

Only in public service can you find the sense of completion that comes from work¬ 
ing on a successful program to reduce infant mortality, for example, and then realiz¬ 
ing that thirty-five more children are alive this year as a result of that effort. Only in 
public service can you participate in a process that helps move individuals from men¬ 
tal hospitals back into the community. The opportunity to help solve a community 
problem and then to witness the changes that occur is the cement that binds us to 
public service. 

A final motivation for public service is the importance of constantly reaffirming the 
legitimacy and credibility of government services in the public’s mind. One vital way to 
reaffirm our ability to govern ourselves, to control our own fate, is to have govern¬ 
ment, at all levels, that delivers the services expected of it. This presupposes a cadre of 
individuals who can understand and manage public institutions. If there is no response 
when the public demands action, then it confirms our sense of alienation and power¬ 
lessness, and we lose our ability to cooperate. If, as public servants, we are rusty, run¬ 
down, obsolete tools of government, then there will only be further reaction against 
the institution of government. The challenge is to be there whether or not we are 
wanted, to be committed to the public s business whether or not we are noticed, to 
carry the public trust whether or not we are asked, and to pick up the garbage. 

In the end, regardless of the personal reasons to stay in public service, the process 
of government demands dedicated professionals to make it work. The ability to con¬ 
tinue day-to-day government operations in the face of all difficulties is what public 
service is about. That ability is what creates a legitimate government, what creates the 
public trust. If that is too abstract, then let us say that public service is about babies 
living, fires being extinguished, garbage collected, crimes solved, people moved. That 
is all there is, ever. 

SSUlC^Zh°maS D,°wn,s’, “Reflations of a Public Service Junkie.” Reprinted with permission from the 
March 1988 issue of Public Management (PM) magazine published by the International City/County 
Management Association, Washington, D.C. 

- -- 



Terms and Definitions 27 

Obviously, these three professionals, as well as Tom Downs, the “public service junkie” 
(see Box 1.4), take very seriously their commitment to serving others. In making such 
a commitment, these administrators participate in a long and proud tradition. Indeed, the 
public service has historically been considered one of the highest callings in our society and 
has been even more highly regarded in other countries, such as France and Japan. 

For the time being, we should simply note that the idea of serving others has great 
appeal, in part because of the great joy and satisfaction it brings. Those working in pub¬ 
lic organizations experience almost daily the rewards of public service. 

Summary and Action Implications 

As noted, our focus in this book will be on the individual administrator or the individual 
citizen seeking to influence public policy through the agencies of government or through 
other public and nongovernmental organizations. We will consider in some detail the 
institutions, processes, and techniques required for work in the public and nonprofit sec¬ 
tors. But, most importantly, we will examine the real world of public administration, the 
world as experienced by the administrator. 

That world, as we have seen, is one for which you will need to develop certain capa¬ 
bilities to operate effectively and responsibly. Among these we include an understanding 
of the institutions and processes of government; an appreciation of the values underlying 
public service; technical skills in such areas as program design, budgeting, and personnel; 
interpersonal skills in communications, leadership, and decision making; and a capacity 
to put it all together to integrate knowledge, skills, and values appropriately. 

Ideally, in studying the issues discussed in this book, you will develop a good sense of 
the political context of public administration; a sound understanding of your role in 
both policy development and policy implementation; a sensitivity to the moral and ethi¬ 
cal questions inherent in the notion of public service; technical competence in such areas 
as planning and program development, budgeting, personnel, and productivity; facility 
with interpersonal relationships (including leadership, decision making, and communica¬ 
tions), and the self-confidence and self-awareness to act effectively and responsibly in 
real-life situations. Though public administration in the abstract sometimes appears life¬ 
less and remote, the real world of the practicing public administrator is a quite lively and 
interesting place, filled with challenging problems and unique opportunities. 

Terms and Definitions 

Autocracy: Government by one. 

Democracy: A political system in which decision-making power is widely shared 
among members of the society. 



z8 Chapter 1 Personal Action in Public Organizations 

Equality: The idea that all persons have an equal claim to life, liberty, and the pursuit 
of happiness. 

Individualism: The idea that the dignity and integrity of the individual is of supreme 
importance. 

Liberty: The idea that individual citizens of a democracy should have a high degree of 
self-determination. 

Oligarchy: Government by the few. 

Policy analysts: Persons who provide important information about public programs 
through research into the operations and impacts of the programs. 

Program managers: Persons ranging from the executive level to the supervisory level 
who are in charge of particular governmental programs. 

Public administration: The management of public programs. 

Staff managers: Persons who support the work of program managers through budget¬ 
ing and financial management, personnel and labor relations, and purchasing and 
procurement. 

Study Questions 

1. Discuss some of the career opportunities available to those trained in public 
administration. 

2. One of the most important trends in American society is the increasing interaction 
of business and government.” This quotation signals the need for better recognition 
and understanding of the interactions between business and government. Discuss 
the importance of this interaction and why a clear understanding of the relationship 
between the public and private sector is necessary. 

3. The differences between public administration and business management are profound. 
Explain how the two fields differ and why the two terms are not interchangeable. 

4- How did early scholars, such as Wkiodrow Wilson, view the role of public administra¬ 
tion in a democracy? 

5. The term democracy can be interpreted in a variety of ways. What significant concepts 
helped form the democratic society within which American government operates? 

6. What is the role of publicness in defining the work of public and nonprofit managers? 

Cases and Exercises 

1. Interview a public administrator. Tocate one or more people who work as a manager 
or analyst in a public or nonprofit organization and interview them. The interviewees 
might work in a public university, a local government, a state or federal agency, or 



Cases and Exercises 2 9 

a nonprofit organization. They might be a university, a city manager or department 
director (public works, parks and recreation, etc.), a county official (such as a county 
clerk), a manager in state government (perhaps someone in a welfare office or the 
highway department), a federal government manager (in a local office of a department 
such as Social Security, Agriculture, or the FAA), or someone such as an association 
executive. They might be a program manager, a staff manager, or a policy analyst. 

Ask the people you interview to describe their jobs, including the range of 
responsibilities they have and the knowledge, values, and skills that are important 
to them in their work. The following are some examples of questions you might 
want to ask: 

• Describe the work you do and how you came to this position. What is your educa¬ 
tional and work background? 

• What impact does the work you do have on the community/state/nation/etc.? What 
do you find different or unusual about working in a public organization? How do you 
think your job compares to work at a comparable level in business or industry? 

• What knowledge, values, and skills are important to your work? For instance, if you 
were hiring someone to take your place, what would you look for? 

2. Consider the following case. As an administrative assistant in the Department of 
Finance of a midsize suburban community, you are asked by the director to contract 
with an accounting firm to audit the books of the ten major city departments. You 
develop a request for bids, advertise in the local newspaper, and send written notices to 
all the local accounting firms. In response, you receive five proposals, four from local 
firms and one from a Big Eight accounting firm based in a nearby city. The proposals 
are essentially the same with respect to cost and expected quality of work; however, one 
firm, Jones and Denham, appears to have considerably more experience, having done 
similar audits locally in the past. Having gathered all the information you feel you need 
to make a decision, you make an appointment to report to the director early Tuesday 
morning. At lunch Monday, however, a friend who knows you are working on the 
auditing contract casually mentions that a certain Mr. Howard, of the firm T. P. 
Howard and Co., is the brother-in-law of the mayor. T. P. Howard and Co. is one of the 
five firms that has submitted bids for the auditing contract. Later that afternoon, you 
receive a call from the mayor, asking for a report on the auditing contract. What do you 
say to the mayor? What do you recommend be done about the contract? What does this 
case say about the relationship between business and government? 

3. Consider the following case. There wasn’t much that David Wood couldn’t do. He 
was an excellent teacher, a dedicated scholar, and a good department chair. He had 
been called to the chancellor’s office to comment on a new curriculum proposal, one 
his faculty and he had discussed and one his faculty firmly opposed. The chancellor 
began the meeting by commenting on the excellent administrative work that David 
had been doing and on the possibility that he might be considered for a deanship that 
was coming open soon. David had always wanted to be a dean. He voiced very mild 
objection to the curriculum proposal, then promised to try to convince his faculty to 
support it. 

Moving from an academic position into an administrative position or from any 
technical position into an administrative position puts you in a different world, one 



Chapter 1 Personal Action in Public Organizations 

with greater complexity and different pressures. What are some of the factors that 
affect those holding managerial jobs as opposed to technical jobs? 

4. Recently fraternities and sororities at a major midwestern university were informed 
that the property tax classification for their houses was being changed from residen¬ 
tial to commercial, a change that would increase the assessed values of the properties 
from 19 percent to 32 percent and would cost the fraternities and sororities thousands 
of dollars in new taxes. Members of the fraternities and sororities felt the change was 
inappropriate because, as one member stated, “There’s not a fraternity or sorority on 
campus that makes a profit.” On the other hand, a county official pointed out that the 
houses contain more than four dwelling units, as the law describes it. Moreover, fra¬ 
ternities and sororities are probably not residential enterprises and are definitely not 
agricultural ones (as specified in the law), so they are relegated to the third catch-all 
category, “commercial and all others.” 

If you were advising the fraternities and sororities as to how they might seek relief, 
what would you recommend? What kind of action should they take? Where should 
an appeal originate? How might it proceed? 

5. Consider the following case study (see the discussion under “Efficiency versus 
Responsiveness” earlier in this chapter): 

John Taylor and Carol Langley worked for a local, nonprofit community develop¬ 
ment agency. Following a rather massive reorganization of the agency in which a 
number of new programs were taken on, John was asked to supervise a new housing 
loan program, and Carol was asked to assist him. The program was designed to pro¬ 
vide low-interest loans to assist persons in rehabilitating housing in certain parts of 
the city. Although John and Carol had experience in related areas, neither was famil¬ 
iar with this particular program. To make matters worse, seminars to provide help in 
establishing such programs had been held some months earlier. John and Carol were 
simply given a manual and told to begin. 

The program involved a number of new activities and took considerable time to set 
up. For example, it was necessary to train new housing inspectors to coordinate their 
inspection activities with those provided by the city government, and relationships 
had to be established with the other public and nonprofit agencies that would provide 
information about the applicants being processed. 

John soon began receiving considerable pressure to complete the processing of the 
first group of applications within a brief period of time. For one thing, the first group 
of applicants consisted of some forty persons who had originally applied for other 
programs but had been turned down. Since their applications had been on file in the 
agency for as long as a year, they were quite anxious to have their applications 
processed quickly. Initial visits and phone calls from several of the applicants made 
John quite aware of their feelings. In addition, however, John was aware that this par¬ 
ticular loan program would have a significant impact on the community and that, 
consequently, his doing an efficient job under these difficult circumstances would be 
important to the agency and in turn important to his own future in public service. 

Carol recognized the necessity to do the work as quickly as possible, but she also 
felt a special obligation to the applicants themselves. She took seriously the agency 
director s comment that the agency could use this opportunity to help educate the 



For Additional Reading 31 

applicants about the procedures involved in such projects. She felt it was very impor¬ 
tant to check periodically on the inspections, cost estimates, loan amounts, financial 
information, and terms and conditions of the loans. Unlike John, who spent most of 
his time in the office, she talked frequently with the applicants, many of whom she 
knew personally from her previous position in the agency. 

For each applicant, John and Carol were to accumulate a complete file of information 
about financial status and about the rehabilitation project the applicant had in mind. 
This file was to be received and signed by the applicant, then forwarded to the federal 
regional office of Housing and Urban Development (HUD) for its action on the loan. 

John felt the process could be completed more quickly if Carol would simply get 
the applicants to sign a blank set of forms that could be kept at the office. When 
information was received regarding a loan, the appropriate items could be entered on 
the signed forms, bypassing the time involved reviewing each form with the applicant. 
Also, this procedure would eliminate the often lengthy process of coordinating several 
office visits to discuss the material. 

When John asked Carol to obtain the signed forms, she refused. Not only was she 
concerned that the applicants see and understand the materials before signing, she 
was afraid that getting people to sign blank forms might be illegal. When she talked 
with John’s supervisor about the request, she was told that the procedure was not ille¬ 
gal and had been used before by persons in the regional office. 

For Additional Reading 

Ban, Carolyn. How Do Public Managers Manage? San Francisco: Jossey-Bass, 1995. 
Cohen, Steven, and William Eimicke. The New Effective Public Manager. San Francisco: 

Jossey-Bass, 1995. 
Doig, Jameson W., and Erwin C. Hargrove. Leadership and Innovation. Baltimore, MD: 
Johns Hopkins University Press, 1987. 

Frederickson, H. George. The Spirit of Public Administration. San Francisco: Jossey-Bass, 
1997. 

Ingraham, Patricia, and Donald F. Kettl, eds. Agenda for Excellence. Chatham, NJ: 
Chatham House, 1992. 

Kettl, Donald F., and Brinton Milward, eds. The State of Public Management. Baltimore, 
MD: The Johns Hopkins University Press, 1996. 

King, Cheryl Simrell, and Camilla Stivers. Government is Us: Public Administration in 
an Anti-Government Era. Thousand Oaks, CA: Sage Publications, 1998. 

Lane, Frederick S., ed. Current Issues in Public Administration. 5th ed. New York: 
St. Martin’s Press, 1994. 

Lynn, Naomi B., and Aaron Wildavsky, eds. Public Administration: The State of 
the Discipline. Chatham, NJ: Chatham House, 1990. 

Naschold, Frieder. New Frontiers in Public Sector Management. Berlin: Walter de Gruyter, 
1996. 



32 Chapter 1 Personal Action in Public Organizations 

Perry, James. Handbook of Public Administration. 2d ed. San Francisco: Jossey-Bass, 1996. 
Rohr, John A. The President and Public Administration. Washington, DC: American 

Historical Association, 1989. 
Stivers, Camilla. Democracy, Bureaucracy and the Study of Public Administration. 

Boulder, CO: Westview Press, 2000. 
Waldo, Dwight. The Enterprise of Public Administration. Novato, CA: Chandler and 

Sharp, 1980. 
Wilson, James Q. Bureaucracy: What Government Agencies Do and Why They Do It. 

New York: Basic Books, 1989. 

APPENDIX A 

OPM Inventory of Management Skills 

The "What” of Management: Functions 

1. External awareness: Identifying and keeping up-to-date with key agency policies 
and priorities and/or external issues and trends (e.g., economic, political, social, 
technological) likely to affect the work unit. 

2. Interpretation: Keeping subordinates informed about key agency and work unit 
policies, priorities, issues, and trends and how these are to be incorporated into 
work unit activities and products. 

3. Representation: Presenting, explaining, selling, and defending the work unit’s activi¬ 
ties to the supervisor in the agency, and/or persons and groups outside the agency. 

4. Coordination. Performing liaison functions and integrating work unit activities with 
the activities of other organizations. 

5. Work unit planning: Developing and deciding upon longer-term goals, objectives, 
and priorities; and developing and deciding among alternative courses of action. 

6. Work unit guidance: Converting plans to actions by setting short-term objectives 
and priorities; scheduling/sequencing activities; and establishing effectiveness and 
efficiency standards/guidelines. 

7. Budgeting: Preparing, justifying, and/or administering the work unit’s budget. 
8. Material resources administration: Assuring the availability of adequate supplies, 

equipment, facilities; overseeing procurement/contracting activities; and/or oversee¬ 
ing logistical operations. 

9. Personnel management: Projecting the number and types of staff needed by the work 
unit, and using various personnel management system components (e.g., recruit¬ 
ment, selection, promotion, performance appraisal) in managing the work unit. 

10. Supervision: Providing day-by-day guidance and oversight of subordinates 
(e.g., work assignments, consultation, etc.); and actively working to promote 
and recognize performance. 

11. Work unit monitoring: Keeping up-to-date on the overall status of activities in the 
work unit, identifying problem areas, and taking corrective actions (e.g., reschedul¬ 
ing, reallocating resources, etc.). 



Appendix A 33 

12. Program evaluation: Critically assessing the degree to which program/project goals 
are achieved and the overall effectiveness/efficiency of work unit operations, to iden¬ 
tify means for improving work unit performance. 

The “How” of Management: Effectiveness Characteristics 

1. Broad perspective: Broad, long-term view; balancing short- and long-term consid¬ 
erations 

2. Strategic view: Collecting/assessing/analyzing information; diagnosis; anticipation; 
judgment 

3. Environmental sensitivity: “Tuned into” agency and its environment; awareness of 
importance of nontechnical factors 

4. Leadership: Individual; group; willingness to lead, manage, and accept responsibility 
5. Flexibility: Openness to new information; behavioral flexibility; tolerance for 

stress/ambiguity/change; innovativeness 
6. Action orientation: Independence, proactivity; calculated risk taking; problem solv¬ 

ing; decisiveness 
7. Results focus: Concern with goal achievement; follow-through, tenacity 
8. Communication: Speaking; writing; listening 
9. Interpersonal sensitivity: Self-knowledge and awareness of impact on others; sensitivity 

to needs/strengths/weaknesses of others; negotiation; conflict resolution; persuasion 
10. Technical competence: Specialized expertise (e.g., engineering, physical science, law, 

accounting, social science) 

SOURCE: Loretta R. Flanders and Dennis Utterback, “The Management Excellence Inventory,” Public 
Administration Review Vol. 45 No. 3, 1985, 403-410. 



Chapter 2 

The Political Context 
ol Public Administration 

Your involvement in public organizations, whether in your career or as a private citizen, 
will inevitably center on the development, implementation, and evaluation of public 
policies. You may work for an agency charged with devising new approaches to familiar 
problems, you may want to see that a particular policy or proposal is framed in a way 
that is consistent with your beliefs, or you may simply want to better understand the 
implications of a particular direction in national policy. In any case, it will be helpful for 
you to know how public policies are designed and put into practice. 

Talk of public policy is, of course, quite familiar. From one day to another, we hear 
criticisms of the U.S. policy in the Middle East, calls for a more effective drug enforce¬ 
ment policy, challenges to a school district’s approach to violence in the schools, ideas 
for changing a city’s policy toward the homeless, or proposals for altering an organiza¬ 
tion’s hiring practices. Our uses of the term policy are many and varied, and the process 
by which policies are developed is even more complex. 

We may think of a policy as a statement of goals and intentions with respect to 
a particular problem or set of problems, a statement often accompanied by a more 
detailed set of plans, programs, or instructions for pursuing those goals. Public policies 
are authoritative statements made by legitimate governmental actors (the chief execu¬ 
tive, the legislature, public agencies, etc.) or nongovernmental actors (nonprofit orga¬ 
nizations, foundations, quasi-governmental organizations, private corporations, etc.) 
about important, and sometimes not so important, public problems. We expect deci¬ 
sion makers at all levels to spend considerable time and energy dealing with such 
topics as foreign affairs, health, education, employment, the economy, civil rights, 
the environment, energy, transportation, housing, agriculture, law enforcement, and 
myriad other issues. But in each of these areas, public policy is simply what an agency 
or an entire network of public, private, and nonprofit organizations decides to do or 
not do. 

Organizations in all sectors are deeply involved in carrying out public policy—either 
executing or implementing them. But these organizations are also involved in developing 
policy. Governmental and nongovernmental organizations play an important role in shap¬ 
es public policy. Proposals are written and submitted by agency personnel; testimony 
and other expert advice are presented; and representatives of various agencies, especially 
political appointees who head agencies, often seek to build public support for particular 
ideas. Those in government agencies, and increasingly in nonprofit organizations, are 

34 



Administrative Organizations and Executive Leadership 35 

often asked to elaborate on or clarify legislative intentions, and, in doing so, they con¬ 
tinue the process of policy development. 

Moreover, public, private, and nonprofit organizations not only develop policies that 
guide their own activities, but also seek to influence the course of public policy on behalf 
of their members or other constituencies. Many such groups limit their activities to pro¬ 
viding public information and seeking to affect indirectly the formation of policies in 
their area of interest. But others are far more direct, employing lobbyists and others 
whose specific job is to influence the policy process. 

To understand the conduct of specific groups, namely public and nonprofit organiza¬ 
tions, in the policy process, you must have some understanding of the context in which 
these organizations operate. That context is not merely physical; it includes the beliefs 
and values that shape our expectations of the organizations as well as the structures we 
have developed to try to maintain those values. In large part, the complexity of the pol¬ 
icy process in this country is the result of the Founding Fathers’ fear of concentrated 
power, a fear they sought to allay by organizing the federal government into three 
branches — executive, legislative, and judicial — so that no one branch could exert itself 
above the others. As we will see, our political system has evolved in such a way that the 
relations between and among the various branches, and between governmental and 
nongovernmental institutions, remain a central issue in conducting public programs. 
This chapter focuses on the process of public policy and especially the relations between 
public administrators and the executive, the legislature, and the judiciary as they work 
together to seek important policy goals. 

Administrative Organizations and Executive Leaders hip 

As we saw in Chapter 1, public administrators work in the federal, state, and local gov¬ 
ernments and in nonprofit organizations and associations. But, understandably, the fed¬ 
eral government, simply by virtue of its size and the range of its activities, has become 
the model against which others are often judged. For that reason, we will begin our 
discussion of the political context of American public administration by examining the 
development of the national administrative system and the role of the chief executive in 
that system. 

Again it is helpful to begin with a brief historical review, primarily because some of the 
arguments that characterized discussions of administration in the early days of our nation 
are quite similar to those that continue to confront us. Take, for example, the difference 
between the Federalist view, expressed most forcefully by Alexander Hamilton, and that of 
the Jeffersonians, led by (you guessed it!) Thomas Jefferson. Hamilton and his Federalist 
colleagues argued for a strong centralized government, staffed and managed by men of 
wealth, class, and education. “The Federalist preference for the executive branch was a 
faithful reflection of their distrust of the people. An intelligent perception of sound public 
policy, in their view, could come only from well-educated men of affairs, men with trained 
minds and broad experience—in short, from the upper classes” (White, 1948, p. 410). 



Chapter 2 The Political Context of Public Administration 

The Jeffersonians, on the other hand, saw the administration of government as inti¬ 
mately connected to the problem of extending democracy throughout the nation. They 
thus preferred a more decentralized approach to the executive function and sought for¬ 
mal legal controls on the executive so that executive power would not be abused 
(Caldwell, 1994). These democratic views reached their pinnacle in the administration of 
Andrew Jackson, known for its openness to the “common man.” But the Jacksonian era 
was also notable for extension and formalization of the administrative apparatus of gov¬ 
ernment; the administration of government began to form “a link between the nation’s 
political authorities and its citizens” (Crenson, 1975, p. 10; see also Nelson, 1982). 

Despite these developments, the president’s role as chief executive officer and as head 
of the federal bureaucracy was not clearly established until well into the twentieth cen¬ 
tury, when Franklin Roosevelt was able to assert his administrative management of the 
executive branch and to set a model for all the presidents who have followed him. Some 
changes were inevitable: the growing size and scope of governmental activity simply 
required greater attention to management and organization. Other changes were more 
reflective of a greater understanding of the administrative process and of how the work 
of government might be accomplished more effectively. 

In 1936, President Roosevelt appointed a committee on administrative management, 
chaired by Louis Brownlow, which included a number of respected scholars and practi¬ 
tioners in the emerging field of public administration. The Brownlow committee 
concluded that “the president needs help” and recommended a series of possible steps to 
improve the president’s management of the executive branch (Karl, 1963). Though ini¬ 
tially sidetracked in the wake of the president’s attempt to pack the Supreme Court with 
his supporters, the major recommendations of the Brownlow committee were finally 
approved in the Reorganization Act of 1939. This act authorized the president to take 
the initiative in reshaping and reorganizing the executive branch, subject only to con¬ 
gressional veto. The Reorganization Act also allowed President Roosevelt to create the 
Executive Office of the President, composed of six assistants, to give the president the 
help he needed. (The Executive Office of the President continues today, though now it 
employs nearly two thousand people.) 

All presidents since Roosevelt have continued to assert their executive power in vari¬ 
ous ways. President Nixon, for example, sought to further centralize managerial power 
in the White House. President Carter sought greater managerial responsiveness through 
the Civil Service Reform Act. President Reagan and the first President Bush pursued the 
same ends, by extending political control further into the bureaucracy while also devel¬ 
oping programs to reduce costs and increase productivity. President Clinton carried 
through on many of his promises to streamline government and improve quality and 
productivity through implementing the National Performance Review (NPR). And, 
within the first six months of his term in office, President George W. Bush has continued 
this trend, championing several pieces of legislation that promise to redefine the scope of 
the federal government. 

Although President Clinton’s National Performance Review officially ended in 
January 2001, the larger “Reinventing Government” movement has become a central 
current in the tides of public and nonprofit reform (Light, 1995, 2000). Reinvention and 
the NPR will be discussed in more detail in later chapters, but it is important that you 



Administrative Organizations and Executive Leadership 37 

understand generally what that effort is and why it was undertaken. Basically, the NPR 
was a Clinton administration initiative headed by Vice President Gore and aimed at 
increasing the trust of the American people in their government through a broad range 
of improvements in the quality and productivity of government (as well as through 
reductions in the size of government). The National Performance Review, first presented 
to President Clinton in September 1993 and implemented over the next several years, 
made hundreds of recommendations aimed at cutting unnecessary red tape and burden¬ 
some regulations, empowering federal employees to make decisions while holding them 
accountable for the results, and emphasizing service to customers, that is, the public. 
The general orientation of the NPR is outlined in Box 2.1. 

Returning to the subject of executive powers, one important tool that presidents have 
employed is the executive order, a presidential mandate governing, with the effect of law, 
the actions of government officials and government agencies. Over time, the executive 
order has become a chief instrument of presidential power. President Bush, for example, 
used one of his first executive orders (no. 13199, January 29, 2001) to create the Office of 
Faith-based and Community Initiatives, which will serve as the centerpiece for his 
administration’s effort to extend federal funding to faith-based organizations. In this case 
and many others like it, the president is essentially making law by decree, occasionally in 
direct opposition to the wishes of Congress and constituent groups (Cooper, 1986). 

The president, as the chief executive officer of the federal government, exercises 
power over an enormous and wide-ranging set of public organizations. There are some 
2.9 million civilians employed by the federal government and another 1.5 million uni¬ 
formed military personnel. In addition, the federal government supports and pays for the 
work of a wide variety of activities in which the actual work is performed by someone 
other than a federal civil servant. The Defense Department, for example, supervises 
almost two million persons in private industry involved, directly or indirectly, in defense- 
related work. While the size of government actually grew some 8 percent during the 
1980s, it decreased nearly 7 percent during the past decade and promises to decrease still 
further under the Bush administration. 

Administrative Organizations 

You are probably already familiar with many of the agencies of government at the fed¬ 
eral level; however, several types are particularly important: (1) the Executive Office of 
the President; (2) the cabinet-level executive departments; (3) a variety of independent 
agencies, regulatory commissions, and public corporations; and (4) administrative agen¬ 
cies that support the work of the legislature and the judiciary. 

The Executive Office of the President 

The various administrative bodies located in the Executive Office of the President both 
advise the president and assist in formulating and implementing national policy. Several 
offices have come to play especially important policy roles; the Office of Management and 
Budget (OMB), for example, assists the president in preparing the budget, submitting it to 
Congress, and administering it. OMB is also involved in reviewing the management of 



3 8 Chapter 2 The Political Context of Public Administration 

BOX 2.1 

Reinventing Government 

President Bill Clinton, March 27, 1995, White House press release 
In Washington, we’re engaged today in a great debate over what the role of the govern¬ 
ment here ought to be. Just about everybody has rejected the past view that there is a big 
one-size-fits-all government that can solve all the big problems of America. Now the rage 
in Washington is to argue that the government is the source of all of our problems and 
if just there simply weren’t one, we’d have no problems. Sooner or later, the American 
people will come to agree—and I think they are quickly coming to agree—that the old 
one-size-fits-all view was wrong, but the new rage of no government is wrong as well; 
that we need a government that can be a partner to our people, to help them to compete 
and prosper in a global economy which is changing very rapidly and which presents 
great opportunity, but also real challenges as well. It’s basically an old-fashioned social 
compact about citizenship—citizenship for the twenty-first century—that requires us to 
get rid of yesterday’s government and replace it with a new government. 

Vice President Al Gore, December 5, 1994, White House press release 
It is time to get rid of the old way of managing the federal government where control is 
centralized and direction comes only from the highest levels. While that system was 
effective in the early 1900s, it no longer meets the needs of government’s customers, the 
American people. What’s needed instead is an entirely new model of leadership based 
on clear sets of principles, flexibility, innovation, accountability, and customer service. 

Federal executives are where this revolution starts or stops. In each of their depart¬ 
ments and agencies, they must be responsible for leading the change from the old way 
of doing the government s business to a more efficient, effective system where employ¬ 
ees are empowered to provide the American people with the best service possible. 

The information age has made possible “flatter” organizations, wider spans of con¬ 
trol, and quicker information sharing. It is now possible for a president—whether of a 
company or a country to decentralize, yet keep field operations accountable. It means 
empowering employees to do their jobs, yet holding them accountable for the results. 

Specifically, federal executives should: 

Encourage innovation and culture change: managers should help paint a clear 
vision and specify a mission for workers. 

Implement the laws of the United States: the expectations of the president 
should be shared with every employee. 
Be accountable to the public: use surveys and goal-setting measures to provide 
better customer service and empower front-line workers. 

Manage and empower other government employees: give employees freedom to 
accomplish goals within broad guidelines. 

Experience has shown that painting a vision of what needs to be done and allowing 
those closest to the processes to find the best way of doing it is a powerful tool to 
increase productivity and efficiency. 



Administrative Organizations and Executive Leadership 39 

various agencies, suggesting changes in structures and procedures, and searching out 
capable executives for service in government. The National Security Council (NSC) is 
charged with integrating domestic, military, and foreign policy. It is made up of the presi¬ 
dent, vice president, and secretaries of state and defense and is directed by the national 
security adviser. (Recall that in late 1986, charges that John Poindexter and Oliver North, 
among others on the NSC staff, were exceeding their statutory authority and engaging in 
covert military operations led to the Iran-Contra affair, and, among other things, a reor¬ 
ganization of the NSC.) Finally, the Council of Economic Advisors consists of three econ¬ 
omists who develop proposals to maintain employment, production, and purchasing 
power. The council also develops a variety of economic reports. 

Each of these groups, and others in the Executive Office of the President, are used in 
different ways by different presidents, according to the personality of the president and the 
particular issues that are most pressing at that time. Some presidents, such as Eisenhower 
and Reagan, have relied very heavily on their staffs, while others, such as Carter, have been 
much more personally involved in management and policy development. 

Networking 

To locate information about the executive branch of the federal government, check 
out the following Web sites: http://www.whitehouse.gov/; and http://www.firstgov. 
gov/us_gov/executive_branch.html. For access to executive orders, go to 
http://www.nara.g0v/fedreg/e0.html#t0p. 

Cabinet-Level Executive Departments 

These agencies are among the most visible, if not always the largest, of the federal execu¬ 
tive agencies. There are currently thirteen cabinet-level departments. In decreasing order of 
size, they are the Departments of Defense: Health and Human Services; Treasury; 
Agriculture; Interior; Transportation; Justice; Commerce; State; Labor; Energy; Housing 
and Urban Development; and Education. Several departments, such as Treasury and State, 
date back to the nation’s founding; others have been created by Congress as needed. 

Each cabinet-level department is headed by a secretary, who, along with a group of 
top-level staff people, is appointed by the president with the approval of the Senate. 
Each cabinet-level department is organized into smaller units, such as offices, services, 
administrations, branches, and sections. The Department of Health and Human Services, 
for example, includes the Public Health Service, which in turn includes the Food and 
Drug Administration, the National Institutes of Health, and the Center for Disease 
Control and Prevention. Though each department is headquartered in Washington, 
D.C., their offices are, of course, spread across the country. Indeed, just over 10 percent 
of the federal workforce lives in or around the District of Columbia. 

The cabinet-level secretaries, along with a few others, such as the director of the 
Office of Management and Budget and the ambassador to the United Nations, constitute 
the president’s cabinet, a group that some presidents have used sparingly and primarily 
for formal matters and others have employed extensively for help and advice. Inevitably, 



Chapter 2 The Political Context of Public Administration 

a president will come to rely informally on certain advisors, cabinet members, or others 
outside the formal inner circle for advice and consultation. Historically, for example, 
President Kennedy relied heavily on the advice of his brother, Robert, during the Cuban 
Missile Crisis, even though as attorney general his brother held no formal position that 
would involve him in foreign affairs. 

Independent Agencies, Regulatory Commissions, and Public Corporations 

A variety of independent agencies have been created intentionally outside the normal 
cabinet organization. Some are engaged in staff functions in support of other agencies. 
The Office of Personnel Management, for example, oversees the federal personnel func¬ 
tion, and the General Services Administration oversees the government’s property. Other 
agencies have simply not been viewed as appropriate to include in cabinet-level depart¬ 
ments; among these are the Environmental Protection Agency, the Small Business 
Administration, and the Veterans Administration. With rare exceptions, these indepen¬ 
dent agencies are directed by persons appointed by the president with the confirmation 
of the Senate. 

Regulatory commissions, which are formed to regulate a particular area of the econ¬ 
omy, are structured quite differently. Typically, they are headed by a group of individuals 
(variously called directors, commissioners, or governors) appointed by the president and 
confirmed by the Senate. These persons are protected in various ways from removal by 
the president; in some cases, their terms of appointment overlap presidential terms. 
Presumably, the regulatory commissions are to perform their tasks independently and 
objectively, free from undue influence either by the political incumbent or by the affected 
clientele. As we will see later, however, the nature of regulatory work makes this task 
exceedingly difficult. (Note that not all regulatory bodies are located outside the cabinet 
departments; for instance, the Food and Drug Administration is part of the Department 
of Health and Human Services.) 

Public corporations are employed where the objective of the agency is essentially com¬ 
mercial, where the work of the agency requires greater latitude in personnel and budget¬ 
ing than would be typical, and where the agency will acquire at least a portion of its 
funding in the marketplace (Moe, 2001; Walsh, 1978). The Tennessee Valley Authority, 
which has provided power in the Tennessee Valley for over fifty years, is a classic exam¬ 
ple of a public corporation. Somewhat more recent additions to the growing list of 
government corporations include the U.S. Postal Service and the National Rail Passenger 
Corporation (AMTRAK), both established in 1970. (Periodically, there are questions 
raised about the status of these two operations, indicating that the structure of public 
organizations is constantly subject to question.) 

Agencies Supporting the Legislature and the Judiciary 

Whereas both the legislative and judicial branches require considerable direct adminis¬ 
trative support for their members (legislative staff, committee staff, court administra¬ 
tors), there are also several specific agencies attached to the legislative branch that are of 
special significance. Among these, you are probably familiar with the Government 
Piinting Office and the Library of Congress. But, although less is known about the 



Administrative Organizations and Executive Leadership 41 

General Accounting Office (GAO), its duties have become increasingly important. 
Established in 1921, the GAO is responsible for auditing funds to see that they are prop¬ 
erly spent. In recent years, however, the agency’s mission has broadened to include 
formal program evaluations within various agencies (Rourke, 1978). Finally, Congress is 
supported by the Office of Technology Assessment and the Congressional Budget Office, 
whose operations we will examine more carefully in Chapter 5. 

The State Level 

The organization of state governments varies considerably, according to each state’s pol¬ 
icy interests and political development; however, there is little question that state govern¬ 
ment in this country is big business. One recent study compared the financial activity of 
state governments with Fortune magazine’s ranking of the 500 largest industrial firms. 
On this basis, the financial activity of California’s state government would rank fourth 
between Wal-Mart and Exxon, while New York’s would be sixth, just above the General 
Electric Corporation. Even Delaware, a small state, would rank in the top 500 near such 
corporate well-knowns as OfficeMax and Estee Lauder. 

Recent efforts to decrease federal involvement in domestic policy have combined with a 
general growth in the range of activities undertaken at the state level to support a vast 
increase in state activity. Between 1980 and 1995, state government employment rose from 
3.7 million to 4.7 million, with an even more dramatic rise in state expenditures. In 1996, 
states also played a key role in the federal government’s move to reform the nation’s 
welfare system, a reform agenda which has led to the devolution of many public assistance 
programs and a further expansion in the role of state government (Kettl, 2000). 

The organization and structure of state government in many ways mirrors that of the 
national government, but there are some distinctive features. You should note, for exam¬ 
ple, the large number of elected administrative officials in most state governments. In most 
states, the people elect not only the governor and lieutenant governor, but also the attorney 
general, the secretary of state, and the state treasurer. Many states still elect the head of the 
Department of Agriculture by popular vote, and it is not uncommon to have members of 
various boards and commissions (e.g., the Public Service Commission) elected by the pub¬ 
lic. These latter offices are filled at the federal level by presidential appointment. (The large 
number of elected officers at the state and local level is a carryover from a period in which 
democratic tendencies in this country were especially strong and it was felt that nearly all 
major officials of government should be elected directly by the people.) 

In addition, many state departments do not report directly to the governor, but rather 
to boards or commissions isolated from executive control in the same way as regulatory 
commissions at the federal level. For example, a Department of Conservation may report 
to a commission appointed by the governor for periods exceeding those of the governor 
and, indeed, may have dedicated sources of revenue essentially outside the governor’s 
budgetary control. Under such circumstances, the governor’s power as chief executive is 
severely limited. 

Despite structural limitations on gubernatorial powers, contemporary governors exer¬ 
cise a broad range of political and executive influence that enable them to play a major, 



42 Chapter 2 The Political Context of Public Administration 

even central, role in the operations of state government. In recefit years, these powers 
have even had an impact on national policy making, particularly in the welfare reform 
agenda mentioned previously. For example, Governors Thompson of Wisconsin and 
Engler of Michigan were instrumental in the framing of the 1996 federal welfare reform 
legislation, which built upon innovations at the state level (Katz, 2001). Most important, 
governors play a key symbolic role, helping to set the political agenda and to focus the 
attention of other political and administrative actors on a limited number of special top¬ 
ics. Many governors have accumulated special powers with respect to the budget process 
through which they are able to dramatically affect the allocation of state resources and 
to mediate policy disputes among executive agencies (Bowman & Kearney, 1986, p. 54). 

Beyond these somewhat informal powers, the strength of the governor’s formal execu¬ 
tive powers is often gauged by three measures: the presence or absence of the item veto, 
the ability of the governor to reorganize state agencies, and the number of other elected 
officials. In all states but North Carolina, the governor (like the president) has the power 
to veto legislation. Most states also give the governor the power of an item veto (also 
called line-item veto ), which is the capacity to veto specific items within an appropria¬ 
tions bill (as opposed to accepting all or nothing). The line-item veto is a helpful tool in 
shaping legislation according to the governor’s preferences. (During his final term, 
President Clinton, himself a former governor, supported passage of the line-item veto at 
the federal level. The federal provision, however, was ultimately invalidated by the 
Supreme Court in Clinton v. City of New York [1998].) The gubernatorial power to 
reorganize is more limited. Roughly half the states require either statutory or even con¬ 
stitutional action to reorganize. Finally, as we have seen, nearly all states have a variety 
of statewide elected officials in addition to the governor and lieutenant governor. Indeed, 
most states have between four and eight agencies that are controlled by individuals 
elected statewide rather than appointed. 

Networking 

For information about state governments, start with the Council of State govern¬ 
ments: http://www.statesnews.org/. Then see the state and local gateway at 
http.//www.statelocal.gov/; the National Council of State Legislatures, http://www. 
ncsl.org/, and these two library-based sites: http://www.loc.gov/global/state/ 
stategov.html; and http://www.law.indiana.edu/v-lib/. 

The growing importance of state government suggests that governors will likely con¬ 
tinue to assert their executive leadership role and will seek greater control by reorganiz¬ 
ing the executive branch. So far, however, relatively few structural moves have been 
made. However, some procedural changes have occurred; for example, many states have 
moved in the direction of more clearly establishing the governor’s leading role in the 
budgetary process and establishing centralized management improvement programs. 

Although the organization of government varies considerably from state to state, 
most states have a variety of substantive agencies concerned with state and local needs 
(Natural Resources, Highways and Transportation, etc.), as well as several agencies, 



Administrative Organizations and Executive Leadership 43 

such as the Department of Social Services, that largely administer programs funded by 
the federal government. These agencies are likely to be assisted by a central management 
support unit, called an Office of Administration or some similar title, which provides 
budget, personnel, and other general services. As mentioned, if there is one trend in the 
reorganization of state agencies, that trend would seem to be creation of a greater num¬ 
ber of state departments devoted to economic development. In some cases, these depart¬ 
ments seek to coordinate many economic development activities; in others, there is a 
more specific focus on small business or on providing incentives for industrial location 
or relocation. 

The Local Level 

According to the most recent data available, there are over 85 thousand local govern¬ 
ments (see Table 2.1). Many of these are municipalities, cities, and towns of varying sizes 
offering a full range of services; others are counties, typically more limited in their role 
but still embracing a variety of governmental functions; but most are special districts, 
created to serve one particular function, such as education, fire protection, or parks and 
recreation. (Only special districts have substantially increased in numbers over the past 
several years.) 

Cities 

American cities are organized in three ways. The mayor-council form is used by about 
49 percent of all municipalities, about 56 percent of those having a population over 
250,000, and three-fourths of those with a population over one million. In all cases, 
both the council and the mayor are elected, the latter either by direct popular vote or a 
council election. One variation of the mayor-council form features a strong mayor, with 
almost total administrative authority, including preparation and administration of the 

TABLE 2.1 

Number of Governmental Units, by Type of Government 

Type of government 
Federal 1 
State 50 
Local 84,955 

County 3,043 
Municipal 19,279 
Township and town 16,656 
School district 14,422 

Special district 31,555 

Total 85,006 

SOURCE: U.S. Bureau of the Census, Statistical Abstract of the United States (Washington, D.C.: U.S. Government Printing 
Office, 1995). 



44 Chapter 2 The Political Context of Public Administration 

budget. Policy making in this form is a joint endeavor of the mayor and the council. The 
weak mayor type places primary administrative control, including most appointments 
and development of the budget, in the hands of the council. 

The power of the mayor as chief executive is obviously greater in the strong mayor 
system and, consequently, that system is used in most large industrial cities. At least in a 
formal sense, however, several large cities, including Chicago, still maintain a weak mayor 
system, although even under such circumstances, a particular mayor may assert consider¬ 
able strength. The legendary Mayor Richard Daley of Chicago, for example, was able to 
utilize a well-oiled political machine to assert substantial administrative power. Though 
he operated in a weak-mayor system, Daley was unquestionably a strong mayor. 

One interesting recent variation on the mayor-council form is the use of a professionally 
trained chief administrative officer (sometimes called a “deputy mayor”) to oversee the 
administrative operations of city government (e.g., Los Angeles, New Orleans, Washington, 
D.C.). We find this administrative arrangement in many big cities, where mayors are often 
more interested in campaigning and in working with external constituencies and like to 
have someone else oversee the internal management of the city. But city administrators are 
also being hired in an increasing number of smaller mayor-council communities as well, 
mostly in an effort to bring professional expertise to local government. 

The council-manager form of local government is of special interest in that it repre¬ 
sents a structural effort to solve the classic question of the relationship between politics 
(or policy) and administration. In this form, the city council, usually five to seven people, 
has responsibility for making policy, including passing appropriations and supervising in 
a general way the administration of city government. The primary executive responsibil¬ 
ity, however, lies with a full-time professionally trained city manager. The mayor has no 
involvement in the administration of the city and performs primarily ceremonial duties 
and legislation. In its classic formulation, therefore, the council-manager form is designed 
so that the council makes policy and the city manager carries it out. 

The council-manager plan was first tried in Staunton, Virginia, in 1908, and a few 
years later was adopted in Dayton, Ohio, with great success. Several reform organiza¬ 
tions, such as the National Municipal League, felt the council-manager plan would be a 
good way to insulate the management of city government from the vagaries of local poli¬ 
tics and consequently added their endorsement. 

Networking 

For information about local government, see the National Civic League at 
http://www.ncl.org and the National League of Cities at http://www.nlc.org/. See 
also the Local Government Institute, http://www.lgi.org/, the Local Government 
Network, http://www.civic.net/lgnet, and the U.S. Conference of Mayors home 
page at http://www.usmayors.org/. 

The number of council-manager governments has grown steadily throughout this cen¬ 
tury and continues to increase. Today, some 42 percent of American communities employ 
the plan. Where the mayor-council system is associated with larger, industrialized, and 



Administrative Organizations and Executive Leadership 45 

heterogeneous cities, the council-manager plan is most frequently found in medium-sized 
cities. Over 60 percent of American cities with populations between 25,000 and 250,000 
operate with the plan, and 32 percent of the cities with a population below 5,000 have 
adopted it. Although a number of large cities (such as Dallas, Kansas City, Phoenix, San 
Antonio, and San Diego) use the plan, it is rare among cities over one million in popula¬ 
tion. The council-manager form continues to grow, however, with the number of council- 
manager adoptions outrunning those of the mayor-council form by three to one over the 
past twenty years. Those favoring the council-manager plan usually argue that it empha¬ 
sizes professional expertise and administrative accountability; those favoring the mayor- 
council plan emphasize its adaptability and its responsiveness to community needs. 

A small number of American cities use the commission form of government. Under this 
form, the people elect a set of commissioners. Each acts as a council member, but also as 
director of a particular city department; for example, one commissioner might head the 
Parks Department and another the Public Works Department. The commission form is 
fading; we find it today primarily in smaller rural communities, though it is still found in 
such cities as Portland, Oregon, and Tulsa, Oklahoma. These larger cities usually hire a 
chief administrative officer to provide the necessary coordination of city government. 

Counties 

Counties (or variations, such as parishes in Louisiana) are found in nearly every state and 
range in population from very small to huge. Once considered the an unexplored area of 
local government, counties are emerging as important actors in the modern governmental 
system. Counties have traditionally provided a range of services in behalf of state govern¬ 
ment, a role that has expanded considerably in the past few years. In addition, counties 
have recently assumed a wide range of new services (such as mass transit, mental health, 
waste disposal, and police services) that, for one reason or another, cannot be offered by 
individual municipalities (Dodge, 1988, pp. 2-3). 

The traditional form of county government has been a combination of a county com¬ 
mission and a series of elected administrative officials, such as sheriff, auditor, treasurer, 
and so on. An emerging trend in county government, however, is the use of appointed 
county administrators, similar in many ways to the city manager at the municipal level. 
Still another type of county government, also increasing in use, involves the combination 
of a city council and an elected executive. In this system, a chief executive is elected by the 
people and holds powers similar to that of a governor in a state system. For example, the 
elected executive often has veto power over council actions (Henry, 1980, pp. 158-164). 
Trends toward a greater range of activities, especially in the social services, combined 
with the increasing professionalism of county government, make this often overlooked 
area one of the most interesting arenas for public service today. 

Native American Tribes 

Native American tribes have had a special relationship with the United States govern¬ 
ment. This relationship was first articulated by Supreme Court Justice Marshall in three 
decisions between 1827 and 1832 known as the Marshall Trilogy. In these decisions 
Marshall acknowledged that Native Americans had inherent rights to possess and use 



Chapter 2 The Political Context of Public Administration 

their land, and that they had sovereignty to run their own affairs.’ But even though they 
were seen as nations, the tribes were not foreign nations. They could not sell their land 
without the consent of the federal government. And the federal government had respon¬ 
sibilities to protect Native American land from incursions from the states and others. 
Marshall described this relationship as similar to guardianship. 

In the last 150 years this relationship has evolved. Influenced greatly by European set¬ 
tlers’ desire to move westward, Congress made treaties, fought wars, and otherwise 
moved Native Americans out of the way of the western expansion. Despite these efforts 
to assimilate Indians into the dominant culture, many Native Americans have retained 
their heritage and maintained their tribal governance systems. Today, the Department of 
the Interior recognizes more than four hundred tribes who have sovereignty over their 
internal affairs. 

Special Districts 

Finally, we should note again the large number of special districts that exist at the local 
level. These limited-purpose districts, which may operate in the areas of natural resources, 
fire protection, libraries, schools, housing and community development, and so forth, are 
typically governed by an appointed part-time governing board and a full-time general 
manager or executive director, who plays the most significant role in the operation of the 
district. Critics claim the proliferation of special districts causes fragmentation and lack of 
coordination, but others argue that such districts remain important because they are close 
to the people. 

Nonprofit Organizations and Associations 

An increasingly significant set of institutions in the American system of public policy 
falls between what we think of as the public sector and the private sector. These institu¬ 
tions may be described as belonging to an independent or third sector of our economy. 
For the most part, independent-sector organizations do not have the distribution of 
profits to shareholders as one of their major objectives; they exist instead to meet the 
needs of the public at large, a particular portion of the public, or the needs and interests 
of their own members (Boris, 1999; Salamon, 1999; McFaughlin, 1986). Technically, 
nonprofit organizations are defined as those prohibited by law from distributing surplus 
revenues (profits) to individuals (typically, members). Such organizations may in fact 
make a profit; however, the profit must be used for the purposes of the organization. 

Nonprofit organizations may include churches, educational institutions, civic organiza¬ 
tions, schools and colleges, charitable organizations, social and recreational groups, health 
and human service organizations, membership organizations (including labor unions and 
fraternal organizations), conservation and environmental groups, mutual organizations 
(including farmers’ cooperatives), trade associations, community chests, youth activities 
(such as Boy Scouts), community betterment organizations, advocacy groups of all kinds, 
and many others. Their numbers range into the millions, depending on how they are 
counted, and, as noted earlier, include some 23,000 national nonprofits, and more than 
a million organizations of varying sizes across the country (see Table 2.2). 



Administrative Organizations and Executive Leadership 47 

TABLE 2.2 

National Nonprofit Organizations by Specialty, 1993 

Category_ Number 

Trade, business, and commercial organizations 3,755 
Environmental and agricultural organizations 1,124 
Legal governmental, public administration, and military organizations 780 
Engineering, technology, and sciences 1,381 
Educational organizations 1,310 
Cultural organizations 1,918 
Social welfare organizations 1,934 
Health and medical organizations 2,453 
Public affairs organizations 2,113 
Fraternal, nationality, and ethnic organizations 541 
Religious organizations 1,230 
Veteran, heredity, and patriotic organizations 745 
Hobby and vocational organizations 1,548 
Athletic and sports organizations 836 
Labor unions, associations, and federations 245 
Chambers of commerce and trade and tourism 160 
Greek and non-Greek letter societies, associations, and federations 337 
Fan clubs 491 
Total_22,901 

SOURCE: From Encyclopedia of Associations, Carol A. Schwartz and Rebecca L. Turner, Eds., Vol. 1, 29th 
edition, Gale Research Company, 1996. Copyright © 1996. Reprinted by permission of The Gale Group. 

Networking 

For information on nonprofit organizations, see the Alliance for Nonprofit 
Management at http://www.allianceonline.org and Compass Point Nonprofit 
Services at http://www.supportcenter.org. See also the following sites for informa¬ 
tion on foundations: http://www.cof.org/ and http://www.foundations.org/. 

While private nonprofit organizations account for between 6 percent and 10 percent 
of employment in the United States (again, depending on how you count), the voluntary 
effort that is expended in support of these groups makes their impact far greater. Nearly 
100 million American adults devote volunteer time to such organizations, an investment 
of time that has been estimated as the equivalent of over $200 billion a year. Over the 
last twenty years, the third sector has been the fastest-growing segment of our economy 
(Salamon 1999). 



Chapter 2 The Political Context of Public Administration 

The importance of volunteering was highlighted 'in President Clinton’s Summit for 
America’s Future, led by Colin Powell and held in Philadelphia in 1997. The summit 
called on all Americans to give of their time to serve others, but was especially oriented 
toward involving young people in public service activities. Various youth service organi¬ 
zations have pledged to involve more youth in service projects, perhaps doubling the 
number involved in service projects by the turn of the century. 

During the past decade, nonprofit organizations have taken a leading role in the deliv¬ 
ery of public services. As mentioned previously, change in the federal welfare system has 
led to the devolution of services to the state and local level (a trend we will explore 
later), where networks of agencies, many of which are nonprofits, manage the implemen¬ 
tation of public programs (Light, 2000). The current system has been characterized as 

an extended chain of implementation,” in which recipients of public support in some 
cases will “not even encounter a government employee — federal state or local[.]” (Kettl, 
2000, pp. 492-493). Moreover, nonprofits have become active in other areas of service 
delivery, including hospitals, museums, colleges and universities, the performing arts, 
religion, advocacy, and research (Boris, 1999). 

Nonprofit organizations can be categorized in many ways, but perhaps most easily 
according to their purposes and source of financial support. Some nonprofits are charita¬ 
ble or public benefit organizations, which provide services to the public at large or 
to some segment of the public. These organizations, such as social service organizations 
or art museums, may receive some funding from government and some from private 
contribution; they are generally tax-exempt under federal statutes. Other nonprofits are 
advocacy organizations, groups that espouse a particular cause and seek to lobby for 
that cause, or mutual benefit organizations, which produce benefits primarily for their 
members. The former would include groups like Common Cause and the Sierra Club; 
the latter would include trade associations, professional organizations, labor unions, and 
others that directly promote the interests of their own members. However, from these 
examples, the line between the two is not completely clear. Finally, churches are obvi¬ 
ously charitable organizations, but are difficult to classify in the categories mentioned. 

Indeed, the entire independent sector is sometimes confusing to categorize. For one 
thing, the distinctions among the three sectors are not clear, even to the point that a par¬ 
ticular individual might find the same service provided by one or more sectors. For 
example, you can play golf at a municipal course (public sector), a private driving range 
(private sector), or a country club (independent sector). Furthermore, the sources of 
funding are often intermixed. For example, both governments (public sector) and private 
corporations (private sector) often contribute financial support to local chambers of 
commerce. 

The fact that nonprofit organizations are required to pursue a public interest is 
reflected in their legal structure (and tax-exempt status). Typically, so that the government 
can feel that a public purpose is being carried out, there are requirements that the organi¬ 
zation be governed by a board of trustees (or directors or commissioners), the purpose of 
which, at least in legal terms, is to promote and to protect the public interest that is 
involved (Boris, 1999; Salamon, 1999). Such persons will also likely establish the mission 
and operating policies, hire an executive director, and generally oversee fiscal and pro¬ 
grammatic operations. The executive director is responsible for day-to-day operations 



Relationships with the Legislative Body 49 

and often becomes the organization’s chief spokesperson. Most nonprofit associations are 
highly dependent on their executive director’s leadership. More and more, such persons 
(and other major staff persons in nonprofit organizations) are coming from a background 
in public administration. 

Relationships with the Legislative Body 

In examining the political context of public organizations, we have thus far emphasized 
the importance of executive leadership. For example, we noted the emergence of the 
president as the chief executive officer of our national government and the pivotal role of 
the chief executive in state and local governments and in nonprofit organizations and 
associations. But though we tend to associate public agencies with the executive branch 
of government, there are numerous administrative bodies associated with the legislative 
and judicial branches. More importantly, wherever agencies are located, their role in the 
policy process will be especially clear in their relationship with the legislature. In dis¬ 
cussing the relationship between public agencies and legislative bodies, we will focus 
much more directly on the policy process. 

The Policy Process 

Before we examine the role of public and nonprofit organizations in developing public pol¬ 
icy, we should review the process by which public policies are developed. We may think of 
the policy process as involving three stages: agenda setting, policy formulation, and policy 
implementation (see Box 2.2). Whereas public and nonprofit organizations are the primary 
actors in implementing public policy (indeed, most of this book focuses on ways to effec¬ 
tively carry out public policy), they are also significant players in the first two phases. 

BOX 2.2 

Stages in the Policy Process 

1. Agenda setting 
a. Policy recognition 
b. Policy generation 
c. Political action 

2. Policy formulation 
3. Policy implementation 

SOURCE: Excerpts from pp. 196-208 from Agendas, Alternatives, and Public Policies, 2d ed. by John W. 
Kingdon. Copyright © 1995 by HarperCollins College Publishers. Reprinted by permission of Pearson 
Education, Inc. 

IHIIIII ¦ilMMWMWWIIIIIBMIllllllllllllWI'llBirT'TIMlWBIIllllllllWillllllllllWIiWiMIllllWIlllllllMWI 



Chapter 2 The Political Context of Public Administration 

Agenda Setting 
- > 

Obviously, before policies are acted upon, they must get the attention of major decision 
makers. From among all the many and competing claims on their time and interests, 
decision makers must select issues that will be given priority and those that will be fil¬ 
tered out. Through the agenda-setting phase, certain problems come to be viewed as 
needing action, while others are postponed. Naturally, there is a great deal of ebb and 
flow in what is considered most important. In the 1970s and 1980s, U.S. foreign policy 
was dominated by concerns for Soviet movement into such areas as the Middle East; in 
the 1990s attention shifted to a variety of flash points such as Somalia and Bosnia. 
Similarly, any particular issue area can gain or decline in prominence over time, as has 
the attention to energy policy over the past fifteen years. 

Many people contribute to setting the public policy agenda. The president, for exam¬ 
ple, has a special claim on the attention of the American people and their elected repre¬ 
sentatives; a presidential speech or press conference can significantly affect what decision 
makers see as important. But there are many others whose actions can give certain topics 
greater or less visibility. Members of Congress, executive branch officials, political par¬ 
ties, interest groups, the media, and the general public can all significantly shape the 
question of what will be considered important. Think, for example, how concern for 
teen pregnancy has been recently brought to public awareness. Who have been the lead¬ 
ers in shaping public opinion on this issue? 

The agenda-setting process may be viewed as the confluence of three streams of 
events: policy recognition, policy generation, and political action (Kingdon, 1995). The 
first, policy recognition, has to do with the way certain topics emerge as significant issues 
that demand action. As you can well imagine, decision makers are subject to many influ¬ 
ences in choosing what items are significant. They may respond to particular indicators 
that come to public view, such as an increase in air traffic problems or a rise in unem¬ 
ployment, or they may get feedback on current programs that indicates some need to 
reassess the status of a particular issue. Finally, some items are brought to the policy 
agenda by events that simply demand attention, such as starvation in Africa or the dam¬ 
age brought about by hurricanes or other natural disasters. 

There are many ways people try to affect the degree of attention given to particular 
items. Sometimes called policy entrepreneurs, many people are willing to invest per¬ 
sonal time, energy, and often money in pursuit of particular policy changes. They use a 
variety of tactics, such as publicity campaigns, direct contacts with decision makers 
(letters, phone calls), petition drives, and many others, or they involve themselves in 
major institutions, such as the media, political parties, or interest groups, that provide 
access to decision makers. Election campaigns, for example, often help clarify or focus 
the policy agenda. 

A second phase of the agenda-setting process may occur almost simultaneously. At the 
same time that attention is focusing on a particular issue, it is likely that many will be 
involved in trying to generate solutions to the problem. Ideas may come from decision 
makers themselves, members of their staffs, experts in the bureaucracy, members of the 
scientific community, policy think tanks (such as the Brookings Institution or the 
American Enterprise Institute), or from the public generally. Typically, proposed solutions 



Relationships with the Legislative Body 51 

swirl around through speeches and articles, papers, and conversations until a few ideas 
begin to gain special currency. Most often these will be the ideas that not only seem to 
correctly address the problem, but also seem to be politically acceptable. 

Networking 

For material on specific policy areas see Policy.com at http://www.speakout.com/ 
activism/policy/. See also the home pages of various think tanks such as the 
Brookings Institution, http://www.brookings.org, and the American Enterprise 
Institute at http://www.aei.org/. Especially interesting is the site for the Urban 
Institute at http://www.urban.org/. 

A third stream of events affecting the policy agenda is concerned with political action. 
For a proposal to reach the top of the policy agenda, it must be consistent with emerging 
political realities. Items that are consistent with the prevailing political climate, those 
that are favored by the incumbent administration and legislative majority, and those that 
have interest group support (or at least lack organized opposition) are more likely to 
reach the top of the agenda. These political realities, the proposed ideas or solutions, and 
the recognition of particular topics represent streams that must come together at just the 
right moment for action to occur. The windows of opportunity for policy action are nar¬ 
row, and it takes great skill in managing the various streams so that one’s interests are 
best served. 

Policy Formulation 

Formulation of public policy involves development of formal policy statements (legisla¬ 
tion, executive orders, administrative rules, etc.) that are viewed as legitimate. Again, we 
will focus here on policy making by the legislature and on the role of public administra¬ 
tors in the legislative process. The basics of how a bill becomes law are well known. 
At the federal level and in most state governments, a bill is introduced and referred to 
a committee (and perhaps a subcommittee), hearings are held, the committee reports to 
the larger body, a vote is taken in both houses, a conference committee works out any 
differences in the two versions, and the bill is sent to the chief executive for signature. 
In most other jurisdictions, a similar, though often simplified, approach is used. In any 
case, the complexity of the legislative process, and the fact that many different decision 
points must be passed before anything is final, means there are many occasions when 
those seeking to shape legislative outcomes can seek to exert their influence. 

The president, of course, has both formal and informal means of influencing legisla¬ 
tion, most notably through program initiatives and budget proposals. Others in the gov¬ 
ernment, including many agency personnel, interact with Congress on a regular basis and 
may also affect policy outcomes. At the same time, those outside the government—from 
individual citizens to well-organized interest groups—also seek access and influence. 
Agency personnel become involved in the legislative process in several ways. In many 
cases, agencies actually send program proposals to the legislature for its consideration. 



ji Chapter 2 The Political Context of Public Administration 

Such proposals are usually submitted to the legislative' leadership, then passed on in turn 
to the appropriate committee chairs. Though a member of Congress will actually be the 
one to introduce the proposed legislation, that person may depend on those in the agency 
for background information and other support. Whether or not legislation has been 
submitted by an agency, agency personnel will often be called upon to provide testimony 
regarding particular proposals. As you might imagine, those who staff major public agen¬ 
cies constitute an important source of expertise concerning public issues. For example, it 
is hard to imagine a group of people better able to understand the tax laws of a particular 
state than those who work in the state revenue department. 

Over time, the relationship between agency personnel and representatives of Congress 
(either members or staff) can become quite strong. After all, the two groups share com¬ 
mon interests and concerns, along with representatives of certain interest groups. A sub¬ 
committee on aging, a senior citizen’s lobbying organization, and the Social Security 
Administration, for example, are likely to agree on the need for more Social Security 
benefits. When the relationship among such interest groups, agency personnel, and mem¬ 
bers of Congress becomes especially frequent and intense, the resulting alliances are 
sometimes called subgovernments or iron triangles. These coalitions can often exert 
great, possibly even unwarranted, influence. 

You should be aware of some of the special considerations facing public administrators 
at the local level and in nonprofit organizations as they are called upon for advice and help 
during the process of policy development. As noted, the council-manager form of govern¬ 
ment was actually founded on a separation of policy and administration—the council 
made policy and the city manager carried it out. Over time, however, many city managers 
have become valued by their councils for their expertise in local government and fre¬ 
quently find themselves commenting on or even proposing particular policies. While this 
situation is quite at odds with the theory underlying council-manager government, it is the 
reality in most council-manager cities. The same is true of executives in nonprofit organi¬ 
zations and associations. Such situations are not without risk, however, for a delicate bal¬ 
ance must be maintained between the executive and legislative functions. Council or board 
members who feel that their policy-making territory has been intruded upon may exercise 
another of their council prerogatives—firing the manager or executive! 

Policy Implementation 

Members of public and nonprofit organizations play important roles in building the pol¬ 
icy agenda and shaping legislative policy, but they are also involved in policy making as 
part of the implementation process. By its very nature, legislation is general and lacking 
in detail. Legislators cannot foresee all the individual questions that might come up in 
implementing a program. Moreover, legislators don’t want to tie the hands of program 
managers by being too restrictive. Consequently, legislation typically leaves a great deal 
of discretion to public managers in working out the details of a particular program. 
The Federal Trade Commission (FTC), for example, is instructed to prevent deceptive 
advertising, but has to decide what is deceptive. The Occupational Safety and Health 
Administration (OSHA) is asked to define and set safety standards for the workplace, 



Relationships with the Legislative Body 53 

but must define more clearly what that means (Meier, 1987, p. 52). In these and many 
other cases, managers develop administrative rules or policies to give detail to the legisla¬ 
tion or to fill in the gaps and, in effect, they make policy. 

An early case involving the Environmental Protection Agency (EPA) illustrates the lat¬ 
itude administrators are often given by Congress (and other legislative bodies) and the 
difficulties they can cause (Reich, 1985). The EPA is required by law to develop national 
standards limiting the emission of hazardous air pollutants so as to provide an “ample 
margin of safety” to protect the public health. But there is no definition in the legislation 
of ample. This question was especially problematic in the case of a copper smelter in 
Tacoma, Washington. The EPA determined that, in the absence of any controls on emis¬ 
sions of arsenic from the plant, four new cases of cancer each year could be expected. 
Even with the very best control equipment, there would still be one new case each year. 
On the other hand, requiring actions to eliminate the threat would cost the company so 
much money that it could not afford to continue operations, and its annual $23-million 
payroll would be lost to the Tacoma community. Obviously, then EPA administrator 
William Ruckelshaus faced a difficult exercise of discretion. (We will see in Chapter 4 
what he did.) 

There have been several recent debates concerning the amount of discretion given to 
administrative agencies. Some analysts argue that broad grants of discretion amount to 
an abdication of legislative power; others point to the advantages of expertise and flexi¬ 
bility residing in the agencies or with the executive. Currently, the trend appears to be in 
the direction of greater detail in federal legislation, though occasionally less so at other 
levels. In any case, there inevitably remain many opportunities for the exercise of admin¬ 
istrative discretion. 

Types of Policy 

The government develops and carries out several different types of policies, and the 
involvement of public and nonprofit organizations in the policy process varies somewhat 
according to type. We will examine four types of policy: regulatory, distributive, redis¬ 
tributive, and constituent (Meier, 1987). These classifications are not precise, however, 
and indeed, many agencies work in several different areas at the same time. 

Regulatory policy is designed to limit the actions of persons or groups so as to protect 
the general public or a substantial portion of the public. For example, people are prohibited 
from selling certain drugs, polluting the air and water, and engaging in monopolistic busi¬ 
ness practices. One form of regulation simply focuses on illegal criminal activity; it is a 
crime to do certain things. State and local governments have special responsibilities in this 
area, and certain federal agencies, such as the Drug Enforcement Administration, are active 
here as well. Another form of regulation focuses on American business and seeks to assure 
fair and competitive practices. Indeed, the first major regulatory effort in this country came 
in 1887, when the federal government created the Interstate Commerce Commission to reg¬ 
ulate the railroads. Similar regulatory agencies today monitor securities (Securities and 
Exchange Commission), commodity exchanges (Commodity Futures Trading Association), 
and labor relations (National Labor Relations Board), among others. 



Chapter 2 The Political Context of Public Administration 

A more modern regulatory area is concerned with limiting access to certain goods 
available to the public generally, such as the airwaves (regulated by the Federal 
Communications Commission) or clean air and water (regulated by the Environmental 
Protection Agency). Other regulatory bodies focus on protecting health and safety, in 
such areas as consumer protection (Consumer Product Safety Commission), air travel 
(Federal Aviation Administration), food (Food and Drug Administration), and work¬ 
place safety (the Occupational Safety and Health Administration). 

While federal regulation of economic activities has seen several waves of growth 
through the past century (Ripley & Franklin, 1987), the last two decades have seen 
somewhat of a movement in the opposite direction. Fate in the Carter administration 
and extending through the Reagan administration, there were several efforts to deregu¬ 
late certain industries. The Civil Aviation Board was disbanded in 1984, and over the 
following decade significant areas of transportation, telecommunications, and banking 
were deregulated. Moreover, regulations were eliminated or enforcement slowed down 
in areas such as the workplace, auto, and consumer products safety. 

During the 1990s, however, even as other federal agencies relaxed their regulatory 
grip, the Food and Drug Administration (FDA) attempted to expand its jurisdiction to 
include one of the largest industries in the country, and certainly the industry with the 
most profound impact on public health—tobacco. Under Commissioner David Kessler, 
the FDA tried to establish nicotine as a drug, a move that would have given federal regu¬ 
lators the power to control cigarettes and other tobacco products. Tobacco companies 
quickly challenged, and in FDA v. Brown & Williamson Tobacco Corporation et al. 
(2000) the Supreme Court ruled against the federal government. Justice O’Connor, in 
her summary of the majority opinion, wrote that although smoking should be consid¬ 
ered one of the most troubling public health problems facing our nation today . . . the 
FDA’s assertion of jurisdiction is impermissible” (cited in Kessler, 2001, p. 384). 

Distributive policy, perhaps the most common form of government policy, uses general 
tax revenues to provide benefits to individuals or groups, often by means of grants or sub¬ 
sidies. If the country faces a large agricultural surplus, for example, the federal govern¬ 
ment may provide incentive payments to farmers not to produce crops that would add to 
the surplus. Similarly, the federal government provides direct grants to state and local 
governments for a variety of purposes. Finally, governments often create “public goods” 
that all citizens can enjoy. In some cases, such as national defense, the good is provided 
for all; in others, such as city, state, or national parks, it is anticipated that some citizens 
will use the benefit and others will not. (In Chapter 3, we will examine the growing trend 
toward employing user fees for certain of these traditionally public goods.) 

Unlike regulatory agencies that are often at odds with a clientele group they are seeking 
to regulate, agencies that carry out distributive policies often develop close relationships 
with their constituencies and, in turn, with interested members of Congress. The growth of 
veterans’ benefits over the past several decades is an almost classic example of the opera¬ 
tion of such a subgovernment. The Veterans Administration (VA) is now one of the largest 
federal agencies and provides a broad range of health benefits, educational assistance, pen¬ 
sions, and insurance for veterans. Such a development would not have been possible with¬ 
out the VA’s close relationship with veterans’ groups (such as the American Region and the 
Veterans of Foreign Wars) and with the veterans’ committees in Congress. 



Relationships with the Legislative Body 55 

Redistributive policies take taxes from certain groups and give them to another group. 
On rare occasions, redistribution is from the less well off to the better off; many charge 
that capital gains proposals are of this type. Redistribution is, however, generally thought 
of as benefiting less advantaged groups at the perceived expense of the advantaged. 
Among major redistributive policies are those that deal with (1) income stabilization, 
helping to support those who are unemployed or retired; (2) social welfare, providing 
either direct payments to individuals or supporting state and local efforts for the indigent; 
and (3) health care programs, such as Medicaid and Medicare. Most federal agencies 
active in the redistributive area, such as the Social Security Administration or the office of 
Human Development, are located in the Department of Health and Human Services. 

Since redistributive policies are often (though sometimes incorrectly) viewed in win-lose 
terms—that is, if one group benefits, another will surely lose—they generate perhaps 
more intense discussion than any other area of public policy. Despite this controversy, 
every American president since Roosevelt and prior to Reagan has supported some major 
redistributive efforts. Presidents Reagan and Bush, however, took the opposite position, 
seeking to limit and even reduce redistributive programs. The reform agenda also influ¬ 
enced President Clinton, whose pledge to “end welfare as we know it” resulted in legisla¬ 
tion placing a five-year cap on public assistance and tying welfare benefits to a work 
requirement. And, within the first six months of his term, President George W. Bush 
showed his administration’s commitment to continuing this trend by advancing a $1.3 tril¬ 
lion tax cut and encouraging Congress to trim federal spending. 

Constituent policies (Lowi, 1972, p. 300) are intended to benefit the public generally 
or to serve the government. Foreign and defense policies are good examples of the first 
set of constituent policies, as well as good examples of the operations of a significant 
subgovernment. The Air Force had lobbied since the 1960s to build the B-l bomber as a 
mainstay of our air defense. In 1978, President Carter was able to kill plans to build the 
B-l; however, only three years later, a combination of Defense Department officials, 
representatives from the defense industry (especially contractors), and congressional sup¬ 
porters of increased military capabilities helped President Reagan resurrect the B-l. 
(Incidentally, even though today more than a hundred B-l bombers have been built and 
are in service, the B-l remains controversial.) 

The other set of constituent policies are those directed toward the agencies of govern¬ 
ment itself. Legislation affecting the structure and function of government agencies, as 
well as policies governing their operations, falls in this area. President Carter was espe¬ 
cially interested in policies impacting government agencies and was instrumental in such 
changes as a reorganization of the federal personnel system and a reemphasis on affirma¬ 
tive action in hiring practices. Presidents Reagan and Bush were more interested in mat¬ 
ters of technical efficiency and problems of waste in government. President Clinton, early 
in his term, expressed an interest in managerial issues, pledging to implement some ver¬ 
sion of Total Quality Management in the federal government, as he had done in 
Arkansas. And as mentioned previously, President Clinton, later in his tenure, and 
assisted in significant measure by Vice President Gore, developed the National 
Performance Review, an effort to make government work better and cost less (and a topic 
we will examine in detail later). More recently, President George W. Bush has rejuvenated 
the Reagan-Bush drive for technical efficiency. In an article titled, “Trying to Run a 



5 6 Chapter 2 The Political Context of Public Administration 

Country Like a Corporation,” the New York Times characterized President Bush, the first 
president with an MBA, as “the chairman of the board of the world’s biggest conglomer¬ 
ate . . . They said his administration would apply business discipline to a bloated govern¬ 
ment. And cabinet sessions do look a lot like the Business Roundtable[.J” (Sanger, 2001, 
p. 1). Led by a cabinet of former C.E.O.s, the Bush administration has placed an empha¬ 
sis on developing more efficient, business-like practices of government. 

Sources of Bureaucratic Power 

There are several reasons governmental agencies have become so influential in the policy 
process. First, those who staff the agencies constitute an enormous source of expertise 
with respect to their areas of interest. No president, governor, mayor, or legislator could 
ever be expected to gain comparable expertise in all areas. Consequently, to make 
informed decisions, elected officials must often rely on those in the various agencies. It is 
often said that information is power; the information that is stored in government agen¬ 
cies is a distinct source of power. 

Second, as noted earlier, legislation is often both inevitably and intentionally vague, 
leaving considerable discretion to the administrator. In some cases, legislators simply 
wish to defer to the expertise of those in the agencies to provide detailed rules and 
interpretations. In others, they are recognizing the necessity of some flexibility in 
administering public programs. In still others, they are responding to the pressures of 
the legislative process itself, where specificity leads to disputes, and vagueness can often 
promote agreement. 

Administrative discretion is also necessary because changing conditions necessitate 
changing policies, and it is not always possible to wait for new laws to be passed. In the 
1960s, for example, the Department of Agriculture sought to maintain farm income by 
lowering the supply of agricultural products. Following shortages in the 1970s, the 
department sought increased production (Anderson, Brady, & Bullock, 1984). In the 
1980s, the policy once again became one of limiting production. Flexibility is also 
needed as new information is discovered. For example, a few years ago, the surgeon gen¬ 
eral sent a brochure to all households in the country outlining the latest information 
about AIDS, an action not mandated by Congress but, in the judgment of the surgeon 
general, required by emerging events. 

Through their expertise and discretionary power, those in public agencies help shape 
public policy. But there are more active and more political ways in which certain agen¬ 
cies become involved in the policy process. Whereas all agencies participate in making 
policy at some level, some agencies clearly are more politically adept than others. The 
Defense Department and the Veterans Administration, for example, both wield consider¬ 
able power, whereas the Government Printing Office has little. 

The power, influence, and, in turn, the resources an agency is able to generate depend 
on several factors, some external to the agency, some internal (Meier, 1987, pp. 54-72). 
Obviously, shifts in public opinion concerning the agency’s task are likely to affect the 
support the agency receives. The National Aeronautics and Space Administration has 
experienced wide variations in public support over the years, riding a crest of popularity 



Relationships with the Legislative Body 57 

with the first lunar landing, but later coming under special scrutiny in the wake of the 
Challenger disaster. More recently, the agency has been fighting desperately to maintain 
projects such as the space station in the light of proposed budget cuts. Not surprisingly, 
there seems to be a close correlation between favorable public opinion concerning an 
agency’s area of interest and the support it receives from Congress. 

More specific support comes from clientele groups, members of the legislature, and 
others in the executive branch. We have already noted the support certain agencies 
receive from clientele groups who benefit from the agencies’ actions. Obviously, the 
larger and more powerful the supporters of the agency, the more powerful the agency 
is likely to be. But agencies also develop opposition, which can be damaging to the 
agencies' programs. The Environmental Protection Agency, for example, interacts with 
many different groups, including businesses, state environmental agencies, members of 
the scientific community, and groups like the Sierra Club or the National Wildlife 
Federation; the EPA is likely to receive support from some groups and opposition from 
others. 

Special support can also come from individual members of the legislature who 
decide, for whatever reason, to champion an agency’s cause. Rep. Claude Pepper of 
Florida, for instance, became associated with improved benefits for older Americans 
and, in that role, worked closely with the Social Security Administration and related 
social welfare agencies. As we have seen, the combination of congressional and clien¬ 
tele support can lead to the development of subgovernments within particular policy 
areas. These subgovernments come about, in part, because each group has something 
to give and something to gain from the relationship. The agency can provide quick and 
favorable responses to congressional requests for help as well as rulings favorable 
to clientele groups. In return, the agency might receive support for expansion of its 
budget and programs. 

Support may also come from other members of the executive branch. Presidential sup¬ 
port is obviously important, whether it is diffuse support of the general area of an 
agency’s work or specific, as in a president’s support for AIDS research, increased drug 
enforcement, or a particular new weapons system. But agencies are also attentive to their 
relationships with other agencies. The development of a new state park may raise envi¬ 
ronmental issues, economic development issues, and health issues. The Parks Department 
will clearly fare better if all the relevant groups and agencies are “on board.” 

For nonprofit organizations, the capacity to influence public policy tends to be lim¬ 
ited as much by informal as formal mandates. Although federal law does set guidelines 
for the use of public and charitable resources for lobbying purposes, some nonprofit 
leaders assume that these limitations prevent them from representing their con¬ 
stituents’ interests in policy decision-making. Or, they refrain from taking a stand on 
issues, so as not to isolate themselves from opposing parties. Philanthropy groups, 
such as the Independent Sector with its Charity Fobbying in the Public Interest initia¬ 
tive, have launched campaigns to encourage nonprofit leaders to be more proactive in 
their lobbying and to expand the advocacy role of nonprofits in the public policy 
process. The Internal Revenue Service has assisted in this effort by making available 
a simplified set of guidelines from the federal tax code, which nonprofits can use to 
map their lobbying strategies. 



5 8 Chapter 2 The Political Context of Public Administration 

Networking 

For information on the advocacy role of nonprofit organizations, see http://www. 
independentsector.org. A copy of the Nonprofit Lobbying Guide can be down¬ 
loaded at http://www.independentsector.org/clpi/IS_LOBBY.pdf. For the IRS 
guidelines, see http://www. independentsector.org/clpi/IRS_Letter.htm. 

In addition to the external sources of bureaucratic power, there are several internal 
sources of power (Meier, 1987, pp. 66-72). We have already noted the importance of 
the information and expertise of agency personnel. Especially in highly technical areas, 
such as medicine or agricultural economics, those in the agencies are likely to be far 
more knowledgeable than many others involved in setting policies and priorities. If they 
can employ their expertise credibly, demonstrating effective performance over time, the 
agency will surely benefit. 

Agencies are also likely to benefit by their cohesion, the degree to which members are 
uniformly committed to the organization and its goals. An agency that is seen as divided 
over major issues will suffer a loss of credibility. Conversely, a sense of unity within an 
agency is likely to make the agency more effective, both internally and externally. 

Finally, agencies benefit from strong and effective leadership. For example, James 
Baker became known as a highly effective leader (as well as an effective politician) in his 
several roles during the Bush administration. As Secretary of State, Baker played a strong 
leadership role in U.S. policy in the Middle East and elsewhere. Similarly, in the Clinton 
administration, Madeline Albright quickly emerged as a strong Secretary of State and 
enjoyed a good relationship with Congress, especially in her early days in office. On the 
other hand, the impact of effective versus ineffective leadership is illustrated by the 
change in the EPA under the highly effective ^(/illiam Ruckelshaus and the ineffective 
Anne Burford. 

The power of particular agencies, therefore, is the result of interaction between the 
agency and its environment, a process to which the agency brings certain strengths, but 
must also exercise considerable skill to reach its goals. The external support an agency 
can generate and the internal combination of its knowledge, cohesion, and leadership 
affect the amount of power and influence it can command. ^J7hatever an agency’s degree 
of power and influence, however, that power and influence must be exercised judiciously. 
The agency is a creation of the legislature, and its programs are always subject to the 
legislature’s review, alteration, and even termination. 

Legislative Supervision: Structural Controls 

Most governmental programs (and the agencies that administer them) first take shape in 
the legislative process. In response to public demands and perhaps also executive leader¬ 
ship, the Congress or a state legislature or a city council or a board of directors passes 
legislation or policies to correct a particular problem. The problems vary widely, from 
federal environmental policy to state education requirements to local trash collection 



Relationships with the Legislative Body 59 

practices to the establishment of local health centers, but in most cases legislation autho¬ 
rizes the program. Typically, especially in larger jurisdictions, money to operate the 
program is separately authorized through an appropriations process. With a program 
authorized and money appropriated, the building (or expansion) of a public organiza¬ 
tion can commence. 

Networking 

For information on Congress, see the following: http://www.loc.gov/ for the 
Library of Congress; http://thomas.loc.gov/ for Congress; http://www.house.gov/ 
for the House; and U.S. http://www.senate.gov/ for the Senate. 

Legislation is, however, somewhat limited as a device for controlling the day-to-day 
activities of public organizations, especially at the federal and state levels. (Remember that 
legislation is usually intentionally vague at some points.) But legislation can be used as 
a control device. After a program is under way, legislation may be passed to prevent mem¬ 
bers of the executive branch from taking certain actions (Meier, 1987, pp. 140-141). 
For example, the Boland Amendment sought to prevent covert action in support of the 
Contras in Nicaragua in the mid-1980s. Whereas legislation authorizing programs must 
inevitably be somewhat general, legislative prohibitions on administrative actions can be 
quite specific. However, as in the Iran-Contra scandal, members of an administration may 
go to great lengths to reinterpret legislation to avoid even those specific prohibitions. 

Legislative Veto 

One specific device legislatures employ to control public agencies is the legislative veto, a 
statutory provision that essentially says that any action proposed by the executive (or 
administrative agency) under provisions of a particular piece of legislation is subject to 
the approval or disapproval of Congress (or some portion of Congress), usually within 
thirty to ninety days. For example, legislation might authorize a new highway program, 
but require legislative consent to undertake specific projects. The legislative veto was first 
used in the 1930s to permit the president to reorganize the government, subject to 
review by Congress. In the 1970s and early 1980s, however, the legislative veto began to 
be used in many other areas, most notably in the War Powers Resolution of 1973, which 
required the president to notify Congress of military action and to cease such action 
within sixty days unless Congress acts to continue it. 

The effect of a legislative veto provision on a public agency is illustrated in the experi¬ 
ence of the Federal Trade Commission in the late 1970s and early 1980s. An aggressive 
consumer protection effort by the FTC in the late 1970s was countered by business 
groups in Congress, which successfully passed legislation to the effect that Congress could 
disapprove any FTC rules it didn’t like. Congress used that provision in 1982 to disap¬ 
prove an FTC rule, which had been developed over a ten-year period, requiring used-car 
dealers to disclose defects in cars they sold (Ripley & Franklin, 1987, pp. 141-142). 
In a similar case that found its way to the Supreme Court as Immigration and 



6o Chapter 2 The Political Context of Public Administration 

Naturalization Services v. Chadba (1983), the Court ruled the legislative veto unconstitu¬ 
tional. The Court’s argument was that the constitutional process for passing legislation 
requires the involvement of the president, and actions under a legislative veto provision 
violate the separation of powers by failing to involve the executive. 

Despite the unconstitutionality of the legislative veto, the interest of Congress in con¬ 
trolling the work of administrative agencies has not diminished. Indeed, Congress has 
found a variety of ways to get around the Chadba ruling, either informally, or by adding 
detailed rules to legislative authorizations, or by simply continuing to include veto provi¬ 
sions in legislation despite the court’s ruling. More recently, Congress in 1996 approved 
a legislative review process that, while providing a veto alternative, would not be open 
to the types of legal challenges that limited previous procedures (Cooper, 2000, p. 172). 

It should be noted that the question of legislative control over administrative agencies 
is not limited to the federal government. At the state level, the use of the legislative veto 
has been growing rapidly, and many states have adopted the veto either in the form of 
legislation or as part of state administrative procedures. Moreover, while state courts 
have reinforced the principles of Chadba (the Chadba ruling in a federal case does not 
itself limit the use of the legislative veto at the state level), state lawmakers continue to 
employ veto-like actions in their processes of legislative review (Cooper, 2000, p. 172). 

Sunset Laws 

To assess the performance of agencies and to eliminate those that are not successful, 
another control device that legislatures employ is the sunset law. Sunset laws are based 
on the assumption that certain governmental programs should continue only after an 
evaluation of the program’s effectiveness and a specific vote in their favor by the legisla¬ 
ture. The legislation includes a provision that these programs will be terminated within a 
given time frame. A classic case on the problem of program continuation is the military 
commissary system, which was created to provide foodstuffs to the cavalry on the west¬ 
ern plains in the 1800s. The program continues today, although nearly all military com¬ 
missaries are within ten miles of two or more supermarkets! 

Sunset laws became popular in the late 1970s and early 1980s, after the state of 
Colorado, at the urging of Common Cause, passed a set of laws requiring that certain regu¬ 
latory agencies be terminated at a given point unless given new life by the legislature. Soon 
dozens of other states and many municipalities passed general sunset laws, applying termi¬ 
nation dates to a set of programs, or included sunset provisions in legislation creating new 
programs. Proposals containing sunset provisions were also presented at the federal level. 

The purpose of specifying a particular life span for a program is to force careful eval¬ 
uation of the program at some future point. Critics of automatic terminations point out 
several problems, not the least of which is the cost of evaluations and the burden to the 
legislature and legislative staff if all programs were periodically evaluated in great detail. 
Questions also arise about whether sunset legislation actually changes our assumptions 
about continuing most programs; for example, no one would seriously anticipate that 
a police or fire department would be eliminated. Finally, critics point out that most 
programs are leviewed periodically anyway and that highly ineffective programs are 
often eliminated even without sunset provisions. 



Relationships with the Legislative Body 61 

The debate over sunset provisions was fueled once again in 2001, as Congress acted 
to phase in key elements of the Bush administration’s $1.3 trillion tax cut over a ten-year 
period, but then established a sunset deadline for the end of the tenth year. Critics of the 
legislation viewed this as a political remedy, one that would carry serious economic 
implications if the then-sitting Congress failed to reinstate the tax measures. As the 
New York Times reported, “Most striking, all the tax cuts that became law today will 
expire on Dec. 31, 2010, and unless they are renewed, the tax law will revert to what it 
was this morning, before the president signed the new law. No one expects that to hap¬ 
pen, but if it did, it would mean a sudden huge tax increase that could have disastrous 
economic consequences” (Rosenbaum, 2001, p. Al). 

A final mechanism through which legislative bodies formally exert control over 
administrative agencies is passage of broad legislation to govern agency conduct. Such 
legislation, applicable to all agencies, might affect administrative procedures, contracting 
or purchasing arrangements, human resources management, or other areas. A good 
example is the continuing congressional interest in access to governmental information. 
Following World War II, governmental agencies, probably in keeping with the military 
mentality of the war years, could legally classify as confidential all records for which 
there was good cause to hold secret. As you can imagine, it was not difficult to come up 
with all kinds of good causes or reasons to withhold records. The practice of keeping 
secrets became so widespread that one congressional investigating group found that the 
Pentagon had classified as secret the construction of the bow and arrow and the fact that 
water runs downhill! Similarly, the General Services Administration had decided pho¬ 
tographs could not be taken in federal buildings without permission of the janitor 
(Archibald, 1979, p. 314). 

As a result of findings such as these, and in the belief that the public has the right to 
information gathered by the government, Congress passed the Freedom of Information 
Act in 1966. The law was based on the assumption that the public has the right to know, 
except in clearly defined and exceptional cases; in other words, it limited those in the 
executive branch from classifying documents for ill-defined purposes. Implementation of 
the new law was hindered by confusion about certain of its parts and by some agency 
officials who still tried to maintain as much secrecy as possible. These problems were 
addressed in a series of amendments passed over the veto of President Ford in 1974. 
The amendments required agencies to respond to inquiries quickly and even sought to 
penalize government officials who hid government records from the public. Although 
problems with the act have persisted, nearly all federal agencies have now implemented 
the Freedom of Information provisions. 

Sunshine Laws 

These examples of constraints on the operation of government agencies are closely 
related to sunshine laws that require various agencies, especially regulatory agencies, to 
conduct business in public view (except under specific conditions). For example, early in 
1993, based on a Freedom of Information request from a New York artist, NASA 
released forty-five photographs of wreckage of the space shuttle Challenger, which had 
exploded some seven years earlier. 



62. Chapter 2 The Political Context of Public Administration 

Florida’s Government-in-the-Sunshine Law provides the public a right of access to 
governmental proceedings at the state, county, and municipal levels, as well as other 
political subdivisions such as authorities and special districts. This law requires that any 
gathering of two or more members of any board or commission be subject to the 
requirements of the Sunshine Law if they discuss any matter that will, in the foreseeable 
future, come before that board for action. The three basic requirements of the law are: 
(1) meetings must be open to the public, (2) reasonable notice of such meetings must be 
given, and (3) minutes of the meetings must be taken. In effect, the law prohibits mem¬ 
bers of any board or commission from having informal or casual discussions of board 
business outside an open public meeting for which reasonable notice was given. 

All fifty states now have “sunshine” provisions for their own legislative bodies, for 
administrative agencies, and for local governments. In all these cases, the legislative 
body, in expressing its concern for the public’s right to be informed about the public’s 
business, has exercised control over a broad range of administrative agencies. 

Legislative Supervision: Oversight 

In addition to the structural mechanisms for legislative control, the legislature also exer¬ 
cises continuing supervision of administrative agencies through what is called the over¬ 
sight function. Each house of Congress has a government operations committee charged 
with overseeing the activities of all government agencies, including their relationships 
with other levels of government. In addition, each of the other congressional committees 
exercises oversight responsibility with respect to its particular area of interest and exper¬ 
tise (e.g., defense, welfare, the post office). Oversight is especially connected to the leg¬ 
islative and appropriations processes (see Box 2.3), but may occur at any time. For this 
reason, it is not unusual to see a cabinet secretary, complete with charts and documents, 
testifying before a congressional committee that is interested in his or her programs. 

BOX 2.3 

Testifying before the Appropriations Committee 

The most important thing in a committee hearing is creating an atmosphere of confi¬ 
dence—so that you have confidence in the committee and they have confidence in you. 
I tell my people to be perfectly honest and to have a full, free, and frank discussion with 
the committee, even if it hurts you a little bit. That will mean more than anything else in 
getting your money. Nobody likes to admit things and cast reflections on his own shop, 
but don’t try to fool the congressmen. You can’t. They have a sixth sense when someone 
is not talking freely and frankly. If you have a perfectly open discussion, they’ll have 
more confidence in you, and your appropriations troubles will be minimized. 

SOURCE: An agency budget officer quoted in Richard F. Fenno, Jr., The Power of the Purse (Boston- Little 
Brown, 1966), 298. ’ 

' 



Relationships with the Legislative Body 63 

Holding hearings is probably the most visible oversight activity of Congress, at times 
assuming a circus-like atmosphere. The Iran-Contra hearings, for example, were essen¬ 
tially an investigation of the activities of the National Security Council, an executive 
agency, but they became the arena for considerable political in-fighting concerning the 
Reagan administration’s conduct of foreign policy. (They were also noteworthy for their 
revelations of intentional efforts by Lt. Colonel Oliver North and Undersecretary of 
State Elliot Abrams to deceive Congress in the course of normal oversight activities.) 

The exposure that hearings provide members of Congress is obvious. Politicians from 
Harry Truman to Sam Ervin to Daniel Inouye to Fred Thompson have built national 
reputations through their involvement in congressional hearings. But hearings can also 
provide excellent opportunities for administrative officials at the federal, state, and local 
levels, and in nonprofit organizations, to tell their side of the story, to help educate mem¬ 
bers of the legislature and the public generally, and to build support for their programs. 
Consequently, most agencies devote considerable time and attention to legislative rela¬ 
tions, often, at the federal level, working through a legislative liaison office, or, at the 
state and local levels, on a more individual basis. 

Perhaps the most extraordinary example of legislative oversight in recent years 
occurred in 1998/99, when Congress impeached, then acquitted, President Clinton on 
charges stemming from an adulterous affair with a White House intern. The House of 
Representatives approved two articles of impeachment against the president, claiming 
that he perjured himself in his testimony before a federal grand jury and that he 
obstructed justice by interfering with the investigation of the Independent Council, Ken 
Starr. However, the Senate voted to acquit the president on both articles of impeach¬ 
ment, a decision that in many ways brought to a close eight years of allegations, investi¬ 
gations, and scandal that had plagued the Clinton presidency. 

Nationally, Congress can also exercise oversight through its staff agencies, most of 
which were significantly enhanced by legislation in the early 1970s that created the 
Congressional Budget Office and charged it with furnishing certain program information 
to Congress, and also shifted the focus of the General Accounting Office from its tradi¬ 
tional financial auditing to program evaluations. Now, in addition to holding hearings, 
Congress can exercise oversight responsibility through staff evaluations of agency opera¬ 
tions by requesting information from the Congressional Budget Office or by initiating 
audits or program evaluations by the General Accounting Office. Although legislative 
staff capabilities at the state and local levels are considerably less, and often more 
focused on policy development than oversight, all levels of government have witnessed a 
general increase in legislative staff over the past twenty years. 

Finally, there are myriad informal relationships between legislators and those in exec¬ 
utive agencies. In fact, such nonstatutory controls may be the most common form of 
congressional oversight (Davidson & Oleszek, 1990). 

Despite the array of oversight activities available to members of Congress and despite 
devoting increased staff resources to oversight, questions remain concerning the effec¬ 
tiveness of legislative oversight of executive branch operations. Part of the problem is 
simply that many legislators have relatively little interest in oversight activities. Instead, 
they tend to focus on policy issues, recognizing that they are much more likely to build 
their reputations in the policy arena than in oversight activities. Moreover, interest in 



64 Chapter 2 The Political Context of Public Administration 

oversight activities is likely to vary from time to time, increasing in times of crisis or 
public outcry, when new and different program requests are forthcoming from an 
agency, or when a member feels a particular agency has not been responsive to con¬ 
stituent groups. Generally, when a member has high confidence in a set of leaders and 
tends to agree with policies, the motivation for oversight decreases; conversely, when 
trust is low or when the member’s favored programs are being ignored, the incentive for 
oversight is greater. 

Legislative Supervision: Casework 

Legislators also interact with those in public agencies on an individual basis, usually on 
behalf of their constituents. Obviously, legislators who wish to be reelected must be 
attentive to requests for information or influence from those in their districts. And, on 
the other side of the coin, individual citizens have come to expect that they can and 
should receive help from their senator or representative in dealings with government. 
Thus, members of the legislature receive a multitude of requests for assistance, from 
someone who needs help to collect Social Security benefits to someone who hopes to 
influence the award of a particular governmental contract. Intervention in behalf of indi¬ 
viduals or groups that need assistance with or access to government agencies is called 
legislative casework. 

At the federal level, providing services for constituents has become one of the most 
time-consuming and important activities for Congress members. Requests for assistance 
are typically handled by congressional staff members who specialize in casework. If the 
request requires an inquiry into an agency activity, the staffer will likely approach the 
agency’s congressional liaison office or perhaps go directly to the agency head or a 
regional office. In most instances, inquiries are responded to promptly, and information 
about the case and any necessary explanations of the agency’s action are returned 
quickly to the member of Congress. 

Federal officials, in both the legislature and the agencies, feel the process is useful not 
only in providing a mechanism for review, but also in clarifying agency policies and pro¬ 
cedures and assessing agency performance (Johannes, 1984). Occasionally, however, 
pressure to bend the rules or to play political favoritism occurs. For example, several 
years ago. Congressman Daniel Flood of Pennsylvania was charged with conspiracy, 
bribery, and perjury in connection with his efforts to obtain certain federal grants and 
loans for a hospital in his district. 

Casework activities seem less routine and institutionalized at the state and local levels. 
Here there appear to be both benefits and costs (Elling, 1980). On the one hand, case¬ 
work activities serve to humanize the bureaucracy; on the other, there are disadvantages 
in the disruption of administrative processes and in the possibility of political influence. 
Certainly in the more highly professionalized governmental agencies, agency heads view 
legislators’ involvement positively (Abney & Lauth, 1982). 

In many European countries, and in some American states and localities, the legisla¬ 
ture’s casework function has been paralleled or even turned over to the office of the 
ombudsman, a permanent office that receives complaints and acts on behalf of citizens in 



Relationships with the Judiciary 65 

securing information, requesting services, or pursuing grievances. Many other jurisdic¬ 
tions have created similar, though less formal, structures, such as public advocates, 
citizens’ assistance offices, and so on (Hill, 1982). 

Relationships with the Judiciary 

The relationship between administrative agencies and the judiciary derives from the legal 
foundations of administrative actions, some of which are quasi-legislative and others of 
which are quasi-judicial. Those that are quasi-legislative elaborate the details of legisla¬ 
tion. As we have noted, most legislation is necessarily and intentionally general, leaving 
considerable room for interpretation or discretion on the part of the administrator. 
For example, an agency might be required by law to set safety standards for nuclear- 
powered electric utilities but receive little guidance about which specific standards 
should be employed. The agency would seek to determine appropriate standards, then 
develop rules to govern implementation of the legislation. Rule making is concerned 
with establishing general guidelines that would apply to a class of people or a class of 
actions in the future. 

Networking 

For legal research on issues of administrative law, go to http://www.findlaw.com or 
explore specific Supreme Court decisions at http://guide.lp.findlaw.com/casecode/ 
supreme.html. Information relating to the Administrative Procedures Act can be 
found at http://www.fda.gov/opacom/laws/adminpro.htm. 

At the federal level, rule making by administrative agencies, as well as many other 
aspects of administrative law, is governed by the Administrative Procedures Act (APA). 
(Similar statutes exist in each state to provide the legal framework for administrative 
actions.) The act seeks to assure that rules are based on proper legal authority, that there 
are both adequate notice of the rule making and an opportunity for citizens to be heard, 
that the rule is clear and unambiguous, and that people are given sufficient advance 
warning that the new rule will take effect (Federal Administrative Procedures Source 
Book, 1992, p. 416). 

In 1996, the APA had its fiftieth anniversary, an anniversary that had some question¬ 
ing whether the act still provided an adequate framework to resolve the increasingly 
complex legal questions in contemporary society. Recent challenges to the APA have cen¬ 
tered on issues of regulatory reform, including efforts by Congress to curb powers of 
administrative agencies. The discourse on Capitol Hill, however, has tended to be 
divided along partisan lines, with only a trace of common ground to advance the reform 
agenda, and, in fact, most of the recent criticism from Congress had little to do with 
poor administrative practices. The courts, on the other hand, remain favorable to the 



Chapter 2 The Political Context of Public Administration 

APA and during the past three years have sustained the act’s administrative framework. 
So while the legislative debate goes on, the APA continues to be the primary guide for 
the practice of administration. 

In most cases, rule making is fairly straightforward, involving notice, comment, and 
steps to assure an adequate record; in others, legislation requires greater detail and great 
formality in the rule-making process. Food and Drug Administration regulations and 
others that involve high risks require a formal rule-making process. Formal rule-making 
procedures require that the agency issue its rule only after trial-type hearing procedures 
are completed. 

Several important provisions were added to the APA during the 1970s and 1990s. 
These included measures that reduced regulatory demands in some circumstances involv¬ 
ing smaller for-profit, nonprofit, and public-sector organizations. The first of these 
changes, which appeared in the APA as part of the Regulatory Flexibility Act (RFA), 
gained approval during the Carter administration. Under the RFA, administrative agen¬ 
cies not only must take into account the impact of new regulations on smaller agencies, 
but also ensure a requisite level of flexibility in the rules to accommodate agency compli¬ 
ance and reporting without adding to administrative costs. In 1996, as part of the debt 
limit extension bill, Congress expanded the RFA by adding three statutes and approving 
a legislative review process for proposed regulations. With the review process, lawmak¬ 
ers would now have a window of opportunity to adopt a “resolution of disapproval” 
prior to final decision making (Cooper, 2000, p. 139). 

The Negotiated Rule Making Act of 1990 continued a trend toward the use of alter¬ 
native means of dispute resolution — that is, mechanisms for resolving disputes that 
would not require formal legal processes. As with other alternative means of dispute res¬ 
olutions, negotiated rule making provides a means of using consensual techniques to 
produce better, more acceptable results, reducing the likelihood of protracted legislation. 
Essentially, negotiated rule making brings together various parties involved in a particu¬ 
lar issue to discuss potential rules and to try to arrive at consensus in advance of the 
structure and content of those rules. 

Like other forms of dispute resolution, such as mediation or arbitration, no agency is 
forced to use these techniques; however, many public agencies are finding it very helpful 
to do so (Federal Alternative Procedures Source Book, 1992). 

Other administrative actions are quasi-judicial in that they produce orders relating to 
individual cases. For example, following the issuance of safety standards for nuclear 
power plants, an administrator might have to decide if a particular plant has met those 
standaids. Similarly, an administrator might have to decide if a specific individual is eli¬ 
gible for workers’ compensation. In such cases, the administrator is making decisions 
that determine one s status under the law. The substantive decisions are obviously impor¬ 
tant, but so are the procedures under which they are resolved. For example, a woman 
denied welfare support might request a hearing to argue her case before a final decision 
is made. The administrator s decision to grant or refuse the hearing represents another 
kind of quasi-judicial administrative action. 

In quasi-judicial administrative actions, often called adjudication, procedural issues 
such as those just mentioned are of special importance. There is a desire that citizens be 
treated fairly and not subjected to arbitrary decisions. Consequently, where standards of 



Relationships with the Judiciary 6y 

due process are applied, notice of the proposed action must be given, there must be 
a chance for the affected party to respond, and there must be an independent decision 
maker and an opportunity for appeal. 

The courts may review administrative actions (in rule making, adjudication, 
or other areas) through judicial review. Such review typically occurs when a party 
“suffering legal wrong because of agency action, or adversely affected or aggrieved by 
agency action” seeks judicial remedy (5 U.S.C., Section 702). The court reviews the 
case in light of constitutional, statutory, and executive provisions and determines the 
appropriateness of the administrative action. Generally speaking, courts may find 
unlawful and set aside agency actions that are unconstitutional, that extend beyond 
the limits of statutory authority, that are “arbitrary, capricious, or an abuse of discre¬ 
tion,” that are procedurally unfair or without substantive justification (5 U.S.C., 
Section 706). However, following the Supreme Court’s finding in Chevron v. National 
Resources Defense Council (1984), if a statute is silent or ambiguous with respect to 
the issue at hand, the agency’s interpretation of the statute must be upheld if its inter¬ 
pretation is a reasonable one. 

The deference to administrators underlying Chevron, a position referred to as 
contemporaneous administrative construction, stems from the court’s belief that an 
administrative agency responsible for implementing a piece of legislation has the most 
knowledge of the policy and of existing legislation concerning the issue. The courts may 
ultimately disagree with the agency interpretation, but they start with a presumption 
that the agency was correct. While some suggest that Chevron is being called into ques¬ 
tion, recent Supreme Court decisions have reinforced the doctrine of judicial deference to 
administrative agencies. 

For example, in Rust v. Sullivan (1991), the high court considered a challenge to the 
Bush administration’s abortion gag rule, which prevented family planning clinics that 
receive federal funding from offering counseling or referrals for abortion services, but 
allowed information concerning childbirth and related services. The gag rule resulted 
from a fundamental reinterpretation of the existing statute by the Secretary of Health 
and Human Services (HHS). Despite the fact that the Secretary’s position went against 
the long-standing interpretation, a divided court ruled that the agency’s policy should 
stand since Congress had given responsibility to HHS for implementing the statute. 
(The Rust decision also carries important implications for nonprofit organizations, in 
that it holds employees of nonprofit organizations that receive government funding 
responsible for the same requirements as public officials. For instance, Rust was applied 
recently in a case challenging the ability of nonprofit organizations to lobby for their 
constituents. The Supreme Court in Legal Services Corp. v. Velazquez [2001] ruled that 
employees of nonprofit organizations that receive government funding must adhere to 
the same standards and limitations as government workers with regard to advocating on 
issues of public policy.) 

In more recent cases, including Smiley v. Citibank (1996), Auer v. Robbins (1997) and 
Regions Hospital v. Shalala (1998) and others, the Supreme Court has continued to rein¬ 
force the Chevron standard, based on the principle that unless legislators give clear 
direction to the administering agency, the administrator’s interpretation must be upheld 
as long as it is permissible under the statute. 



Chapter 2 The Political Context of Public Administration 

On the other hand, the courts have established parameters for Chevron, limiting the 
standard to regulatory measures and to circumstances in which the administering agency 
clearly acts within the confines of the statute. The courts have maintained that petitions 
regarding administrative issues, but whose primary concerns relate to legal matters such 
as contracts, should be viewed as “a question of law clearly within the competence of 
the courts” (Cooper, 2000, p. 254). Despite these limitations, the consistency with which 
the court has reinforced Chevron, and in light of lower court decisions during the same 
period, it can be presumed that the judiciary will maintain the capacity and scope of 
administrative agencies into the post-Chevron era. The list of cases in Box 2.4 provides a 
summary of the principles established during the past two decades. 

That is not to say that the court always rules in favor of the administrative agency. 
Of particular interest are those cases in which the court determines that the agency has 
misinterpreted (or gone beyond) the intent of the legislation. As an example, the statute 
creating the Occupational Safety and Health Administration (OSHA) in the Department 
of Labor charged the agency with developing a standard for toxic substances in the 
workplace “which assures, to the extent feasible, that no employee will suffer material 
impairment even if such employee has regular exposure to the hazard for the period of 
his working life” (Cooper, 1983, p. 192). After extensive studies, OSHA determined that 
exposure to the toxic substance benzene created a risk of cancer and other health haz¬ 
ards and set a standard accordingly. 

The American Petroleum Institute sought judicial review that led the courts to a 
discussion of two rather interesting issues. One aspect of the case had to do with legisla¬ 
tive intent. The Fifth Circuit Court focused on this issue, finding that the phrase “to the 
extent feasible” in the legislation meant that a standard had to be both technologically 
and economically feasible. For this reason, the court set aside the OSHA standard. 
The Supreme Court concentrated more on the health aspects of the case, with the major¬ 
ity concluding that existing standards were not dangerous and the new standard was not 
necessary. The justices who dissented argued that the Court should not substitute its 
own judgment on the technical merits of the case for that of experts within the agency. 
The case illustrates several of the most important difficulties that face the courts in 
reviewing administrative actions (Cooper, 2000). 

The courts lately have more frequently acted not only to review agency actions, but to 
compel agency action “unlawfully withheld or unreasonably delayed” (5 U.S.C., Section 
706). A few years ago, the Food and Drug Administration received a petition from 
a group of death row inmates to determine whether the materials used for lethal injec¬ 
tions were safe and painless or whether they might leave the prisoner conscious but para¬ 
lyzed, a witness to his or her own slow death. The FDA responded that it did not have 
jurisdiction to review the practices of state corrections systems in cases such as this* 
however, on review, the circuit court concluded that the FDA did indeed have jurisdiction’ 
The court wrote, “In this case FDA is clearly refusing to exercise enforcement discretion 
because it does not wish to become embroiled in an issue so morally and emotionally trou¬ 
bling as the death penalty. As a result of the FDA’s inaction, appellants face the risk of 
cruel execution” (Cooper, 1985, p. 649). 

Closely related to the FDA’s failure to undertake an investigation are cases in which 
the agency refuses to make rules or delays the issuance of rules required by statute. But 



Relationships with the Judiciary 69 

BOX 2.4 

Legal Principles Relating to Judicial Review and Deference to Agency 
Interpretation 

The standard for judicial review requires the court to address two questions: First, 
has the legislature provided clear direction to the administering agency with regard to 
the implementation of the statute? If so, then the court and the agency must follow 
the direction established by the legislative body. Second, if the legislature has left the 
implementation of the statute relatively vague, and thus granted an implicit level of 
authority to the agency, is the agency’s interpretation a permissible one under the 
statute? 

Interpretation Relevant Cases 

The premise that a long-standing agency Chevron U.S.A. v. Natural Resources 
interpretation of a statute should be given Defense Council (1984) 
considerable notice, while having legal 
precedence, does not override an adminis¬ 
trator’s prerogative to reinterpret a 
statute, even if the reinterpretation repre¬ 
sents a substantive change in policy direc¬ 
tion. Administrators must be given the 
opportunity to keep pace with changing 
conditions, and their decisions merely 
have to be permissible under the statute. 
In other words, the administrator’s inter¬ 

relation does not have to be the best or 
rightest choice, only a permissible one. 

The power of judicial review in cases of Motor Vehicle Manufacturers 
administrative interpretation must be Association v. State Farm Mutual Ins. 
limited, since it is not up to the courts to Co. (1983) 
negotiate among alternate interpreta¬ INS v. Cardozo-Fonzeca (1987) 
tions of a statute or to determine which 

Rust v. Sullivan (1991) 
interpretation would be better from a 
regulatory standpoint. In such cases, NationsBank v. Variable Annuity (1995) 
the agency’s interpretation must be Smiley v. Citibank (1996) 
followed—that is, as long as the inter¬ Auer v. Robbins (1997) 
pretation adheres to the language and 
principles of the statute. Regions Hospital v. Shalala (1998) 

Martin v. Occupational Safety and 
Health Review Commission (1991) 
Thomas Jefferson University v. Shalala 
(1994) 
United States v. O’Hagan (1997) 

SOURCE: Reproduced by permission of the publisher, F. E. Peacock Publishers Inc., Itasca, Illinois. From 
Phillip J. Cooper, Public Law and Public Administration 3d ed., 2000 copyright, pp. 250-264, 269-270. 



jo Chapter 2 The Political Context of Public Administration 

there have also been several recent cases in which agencies have been found to have 
exceeded their authority in rescinding previously established rules. 

Concerns for Due Process 

At the heart of our system of jurisprudence is the assurance that people will be treated 
fairly, that they have a right to present arguments and evidence in their own behalf, 
and that those who make the decisions will be unbiased and impartial. As with issues 
of due process in administrative adjudication—whether a hearing is required, at what 
point, and the format of the hearing — some patterns have emerged in the Supreme 
Court’s evaluation of administrative matters. During the 1950s, 1960s, and early 
1970s, the Court sought to protect the rights of citizens from arbitrary action on the 
part of administrative agencies by requiring that a person be allowed an opportunity 
to challenge a proposed action before being made to suffer serious harm. The Court 
would not allow cost or inconvenience to the agency as an excuse for causing harm to 
an individual. 

Through the 1970s and 1980s however, the Supreme Court, under the leadership of 
Chief Justice Warren Burger, began to alter its approach to administrative due process, 
treating administrative hearings not as a means of protection but as devices for fact¬ 
finding. Most frequently, the Court has employed a “balancing test,” weighing the 
interests of the individual (rather narrowly defined), the value of additional safeguards, 
and the government’s interest (including the fiscal and administrative burdens that addi¬ 
tional procedural safeguards might impose). The material in Box 2.5 illustrates the 
application of this balancing test. As a result, it has become much more difficult for 
someone who feels that adequate protections have not been provided to prevail in the 
courts (Cooper, 2000). 

The flexibility in administrative law for due process has contributed to a variety of 
alternative dispute resolution (ADR) strategies, namely mediation and arbitration. 
In fact, the adoption of the Alternative Dispute Resolution Act of 1990 helped remove 
many of the barriers administrators face to such alternative approaches. For the most 
part, ADR strategies are easier to employ in less complex cases. Yet ADR should not be 
used to obtain settlements that fail to protect the public interest. The spirit and letter of 
the agreement must be clear or else face considerable challenge, and potential failure, 
during the implementation stage. 

The Courts and Agency Administration 

Over the past twenty years, one of the most dramatic developments in the relationship 
between administrative agencies and the judiciary is the direct involvement of federal 
district courts (and some state courts) in agency administration, including decisions on 
spending, personnel, organization, and management. This involvement has come about 
through court rulings in administrative equity cases, wherein individual rights, such as 
the prohibition against cruel and unusual punishment, have been violated by state and 
local administrative organizations. 



Relationships with the Judiciary 71 

BOX 2.5 ___.____ ...;. .. 

The Spotted Owl and Agency Interpretation of the Law 

When a court reviews an agency’s construction of the statute it administers, it is con¬ 
fronted with two questions. First, always, is the question of whether Congress has 
directly spoken to the precise question at issue. If the intent of Congress is clear, that 
is the end of the matter; for the court, as well as the agency, must give effect to the 
unambiguously expressed intent of Congress. 

If, however, the court determines Congress has not directly addressed the precise 
question at issue, the court does not simply impose its own construction of the 
statute, as would be necessary in the absence of an administrative interpretation. 

Rather, if the statute is silent or ambiguous with respect to the specific issue, the 
question for the court is whether the agency’s answer is based on a permissible con¬ 
struction of the statute. 

Given the ubiquity of ambiguity in regulatory statutes, Chevron looked like a 
recipe for judicial acquiescence to agency interpretations. It hasn’t worked out that 
way. Sometimes, to be sure, the Court gives full scope to the doctrine announced in 
Chevron. Other times, however, the Court virtually ignores the Chevron test. Most 
importantly, only three years after Chevron, the Court recognized a major escape 
hatch from the doctrine of deference to agency interpretation. 

Babbitt v. Sweet Home Chapter of Communities for a Great Oregon—the cele¬ 
brated Spotted Owl case—illustrates the indeterminacy of the Chevron doctrine. 
At issue was the meaning of the term harm in the Endangered Species Act. The act 
prohibits the “taking” of endangered animals and defines “take” to mean “to harass, 
harm, pursue, hunt, shoot, wound, kill, trap, capture, or collect!.]” According to 
Secretary of the Interior Bruce Babbitt, “harm” includes destruction of habitat that 
has the effect—although not the purpose — of harming endangered wildlife. Oregon 
business interests challenged this interpretation as contrary to the statute. 

The fundamental problem in administrative law is that a congressional majority 
typically favors some federal response to a problem, but no congressional majority 
favors any particular response. Rather than do nothing, Congress adopts general lan¬ 
guage and leaves it to the agencies—and the courts—to make the controversial 
choices. The Endangered Species Act is a good illustration of this. Congress knew 
quite well that habitat destruction poses the biggest threat to endangered species. 
Congress also knew, however, that regulating habitat destruction would conflict with 
economic development. So Congress waffled. 

The only clear intention Congress had regarding habitat destruction is a clear 
intention to have no clear intention. The problem calls less for lawyerly interpreta¬ 
tions of authoritative language than for a policy decision made by an institution that 
is familiar with the problem and is held politically accountable. The agency has the 
advantage (over) the courts on both counts. 

SOURCE: Donald A. Dripps, Trial 32, no. 2 (February 1996), 70-71. 



72 Chapter 2 The Political Context of Public Administration 

Two landmark cases in the early 1970s set precedents for such rulings. In the first, 
prisoners in the Arkansas penitentiary system alleged a large number of abuses, includ¬ 
ing dangerous and unhealthy conditions in the prisons. The court ruled that confinement 
in the Arkansas system amounted to cruel and unusual punishment and ordered correc¬ 
tions officials to devise a plan to remedy the problems. Similarly, in Alabama a federal 
district court judge found “intolerable and deplorable” conditions in that state’s largest 
mental health facility and ordered corrective actions. The court also established a consti¬ 
tutional right to treatment, detailing actions required to meet that constitutional stan¬ 
dard (Gilmour, 1982, pp. 26-29). 

The involvement of courts in the management of public agencies is especially well 
illustrated in a federal judge’s order demanding reform of the New Orleans Parish 
Prison. In addition to ordering adequate medical services, improved security, and devel¬ 
opment of recreational facilities, the judge directed that “the management and opera¬ 
tion of the prison be improved immediately,” that a professional penologist be hired to 
manage the prison, and that personnel practices (filling vacancies, raising wages, etc.) 
be improved in specific ways. Although court actions such as this have obviously cor¬ 
rected constitutional inequities, there are questions as to whether the courts are well 
suited for involvement in the details of administration. Moreover, many states and 
localities argue that court-ordered expenditures of funds on projects such as desegrega¬ 
tion or prison reform take money away from other needed services, such as education, 
social welfare, or mental health. Indeed, for these various reasons, the Supreme Court 
has recently taken steps to limit the involvement of courts in the work of administrative 
agencies, requiring carefully tailored plans of limited duration based on specific consti¬ 
tutional violations. 

Summary and Action Implications 

This chapter has explored the political context of public administration, including things 
you will simply need to know to operate effectively in or with public or nonprofit orga¬ 
nizations. The material in this chapter (and in Chapter 3) constitutes a knowledge base 
on which to build your action skills. Understanding the political context of work in the 
public sector will enhance the effectiveness of your actions. 

Public managers, and their counterparts in nonprofit organizations, work in many dif¬ 
ferent institutional settings, but those institutions all reflect important political values 
that lie at the heart of a democratic system. Whether at the federal, state, or local level, 
in the governmental or nongovernmental sector, a democracy’s values, especially a 
concern for operating in the public interest, affect the structure of public and nonprofit 
organizations. For example, the division of powers at the federal level expresses a fear of 
concentrated power; similarly, the council-manager plan expresses one way to view the 
relationship between politics and administration. Finally, the structure of nonprofit orga¬ 
nizations reflects their operation in the public interest. Knowing something about how 
democratic values are reflected in the structure of the various organizations and knowing 



Terms and Definitions 73 

something about the role of executive leadership in administrative organizations will 
enable you to act with greater confidence and authority. 

As a manager, you may have important interactions with a legislative body, either the 
national Congress, a state legislature, a local city council, or a nonprofit organization’s 
board of directors. Those serving in the public interest participate in one way or another 
in nearly all policy areas—a situation that our political system encourages. The distinc¬ 
tion Woodrow Wilson suggested between politics (or policy) and administration no 
longer accurately describes the relationship between the legislative and the executive 
branch. Today, the legislature and the various agencies of government share in the policy 
process, either working together in developing policy or making separate decisions in 
different realms. 

As a manager, you will also deal with the legislature in many other ways. Most impor¬ 
tantly, the legislature will establish the tasks your agency or association will undertake 
and provide human and financial resources to carry them out. Moreover, the legislative 
body will exercise continuing, though sometimes intermittent, supervision over your 
work. Thus, you may spend a great deal of time developing effective working relation¬ 
ships with those in the legislature. 

The involvement of the courts in the work of administration is both intense and 
inevitable. For this reason, your understanding of the legal system and your ability to 
interact with legal and judicial officers will improve your effectiveness as a public man¬ 
ager. Whether you are dealing with the legislative body or the courts, your relationship 
with either need not be adversarial. Indeed, in many cases, the legislature and the courts 
can help to substantially improve administrative practices. 

By now you should be coming to realize that your behavior as a public or nonprofit 
manager is bounded by a vast and complicated network of relationships in which you 
are but one of many players. Within this network, you must be attentive to questions of 
executive leadership, legislative intent and oversight, and judicial interpretation. The 
world of the public administrator is indeed complex! 

Terms and Definitions 

Agenda setting: Phase in public policy process when certain problems come to be 
viewed as needing attention. 

Cohesion: Degree to which members of a group are uniformly committed to the 
group and its goals. 

Constituent policy: Policy designed to benefit the public generally or to serve the 
government. 

Distributive policy: Policy involving use of general tax funds to provide assistance 
and benefits to individuals or groups. 

Executive order: A presidential mandate directed to and governing, with the effect of 
law, the actions of government officials and agencies. 



74 Chapter 2 The Political Context of Public Administration 

Independent agencies: Agencies intentionally created outside the normal cabinet 
organization. 

Iron triangle: Term given to a coalition of interest groups, agency personnel, and 
members of Congress created to exert influence on a particular policy issue. 

Legislative veto: Statutory provision that gives Congress the authority to approve or 
disapprove certain executive actions. 

Nonprofit organizations: Organizations prohibited by law from distributing surplus 
revenues to individuals. 

Ombudsman: Permanent office that receives complaints and acts on behalf of citizens 
to secure information, request services, or pursue grievances. 

Policy: Statement of goals and intentions with respect to a particular problem or set 
of problems. 

Policy entrepreneur: A person willing to invest personal time, energy, and money in 
pursuit of particular policy changes. 

Public corporation: An essentially commercial agency where work requires greater 
latitude and acquires at least a portion of its funding in the marketplace (e.g., 
Tennessee Valley Authority). 

Public policy: Authoritative statements made by legitimate governmental actors about 
public problems. 

Redistributive policy: Policy designed to take taxes from certain groups and give 
them to another group. 

Regulatory commission: Group formed to regulate a particular area of the economy; 
usually headed by a group of individuals appointed by the president and confirmed by 
the Senate. 

Regulatory policy: Policy designed to limit actions of persons or groups to protect all 
or parts of the general public. 

Rule making: Administrative establishment of general guidelines for application to 
a class of people or a class of actions at some future time. 

Sunset law: Provision that sets a specific termination date for a program. 

Sunshine law: Provision that requires agencies to conduct business in public view. 

Study Questions 

1. What do we mean by the term public policies? 
2. Describe how the president’s role in the administration of government has changed 

since the framing of the Constitution. 



Cases and Exercises 75 

3. Describe how the federal government is organized. 
4. State and local governments have been designed to operate similarly to the national 

level; however, both have distinct structures for administering government initiatives. 
Explain each level’s structure and the different approaches to operating the govern¬ 
ment bureaucracy. 

5. Describe the policy process and actors who play significant roles in shaping adminis¬ 
trative issues. 

6. What are the four types of policy? Define and give examples. 
7. How do agencies maintain a power base within the government? 
8. Describe some of the structural controls on bureaucratic power and how government, 

as a whole, benefits from these controls. 
9. Discuss several ways the legislative and judicial branches interact with the bureau¬ 

cracy. Explain why these interventions are necessary and useful. 

Cases and Exercises 

1. We have discussed the various powers, both formal and informal, that affect the gov¬ 
ernor’s ability to exercise executive power in the administration of state government. 
Among the informal powers that governors exercise are political powers (including 
agenda setting), budgetary powers, and executive leadership. 

Among the formal powers are the presence or absence of an item veto and the abil¬ 
ity of the governor to reorganize state agencies. Another indicator of gubernatorial 
power is the number of other elected statewide officials. Analyze the power of the 
governor in your state, giving special attention to the governor’s power to exercise 
executive leadership over the agencies of state government. How do your governor’s 
executive powers compare to those of the president of the EFnited States? How do they 
compare to those of your local mayor? 

2. The United States Government Manual is the handbook or encyclopedia of federal 
government programs and activities. It contains descriptions of the many programs the 
federal government operates, as well as information about how the government is 
organized to conduct those programs. Obtain a copy of the Manual and analyze the 
organization and structure of one cabinet-level department, such as Transportation or 
Health and Human Services. Then, using local sources, try to develop similar informa¬ 
tion about how your state and your local government are organized to deal with the 
same subject matter. What are the similarities and what are the differences? How do 
you explain them? 

3. Attend a meeting of a congressional or state legislative committee, of your local city 
council, or of the board of directors of a local nonprofit organization. Watch the 
pattern of interaction between elected members of the legislative body and full-time 
administrators. (The latter may be agency staff called to testify, legislative support 
staff, a city manager or executive director, or many others.) What strengths does 
each side bring to the exchange? What is the level of cooperation or competition? 
If possible, try to follow up with the administrator to see how he or she felt about 



Chapter 2 The Political Context of Public Administration 

the interchange. To what extent did the legislative body set a clear direction for 
the administrator’s ensuing actions? What discretion did the administrator have 
(or claim to have) following the meeting? 

4. Consider the following case: Billie Jackson was the leader of a nonprofit, economic 
development corporation in a small community in Colorado. For six years, Billie had 
been trying to interest members of the city council in purchasing an abandoned down¬ 
town hotel for conversion to a city-owned long-term care facility. Billie felt strongly 
that the community needed such a facility and that the city had a golden opportunity 
to meet that need through purchase of the hotel. The problem was that several 
extremely conservative members of the council felt differently. In their view, the city 
shouldn’t get into providing social services, especially where the need might be met by 
a private firm at some point in the future. Moreover, they felt the cost of the purchase 
and renovations would be more than the community could bear. 

The hotel issue was once again on the council agenda, and Billie was determined to 
make the strongest appeal possible. With the help of a nearby university, she had pre¬ 
pared a lengthy report documenting the need for the facility and the desirability of 
purchasing the hotel. Just as she was beginning her presentation, one of the conserva¬ 
tive council members said, “Mrs. Jackson, we have heard more on this topic than we 
care to. I just don’t want to go through all this again. I move to table the issue indefi¬ 
nitely.” The motion to table carried by a quick and somewhat confused voice vote. 

Assume the role of Billie Jackson. What is your immediate response? What would 
you do in the days and weeks that followed? Would you continue to pursue the issue? 
Why or why not? 

5. Read the following case: The U.S. Supreme Court has let stand a ruling requiring 
Alaska to collect rent or royalties from miners of gold, silver, and other hard rock, 
despite the fact that collections will be so low that the money won’t even cover state 
paperwork costs. 

Under the Alaska Statehood Act, the state received more than 100 million acres of 
land and was directed to devise a system to protect its mineral rights. The legislature 
decided to collect royalties from companies involved in the lucrative search for oil, 
gas, and coal, but waived the requirement for the mining of gold, silver, and other 
hard rock because it did not generate much money. 

Alaska received more than $1 billion a year in royalties from companies that mine 
for oil and gas, the state’s major resources. The state has argued that royalties for 
hard rock mining would amount to only $100,000 a year, not enough to make the 
paper work worthwhile. 

A coalition of environmental, fishing and native Alaskan groups had originally 
filed suit to force the state to collect fees for the mining for hard rock, accusing Alaska 
of violating the Alaska Statehood Act. 

SOURCE: City and State 4 (June 6, 1988). Reprinted by permission. 

Discuss your response to this case. Under what circumstances, if any, do you think it 
is appropriate for a federal court to order a state or locality to undertake an action it 
has chosen not to take and that will cost the state or locality to administer? 



For Additional Reading 77 

For Additional Reading 

Aaron, Henry, Thomas Mann, and Timothy Taylor, eds. Values and Public Policy. 
Washington: Brookings Institution, 1994. 

Ammons, David N., and Charldean Newell. City Executives: Leadership Roles, Work 
Characteristics and Time Management. Albany, NY: State University of New York 
Press, 1989. 

Anderson, James E. Public Policymaking: An Introduction. 2d ed. Boston, MA: 
Houghton Mifflin Co., 1994. 

Bailey, Mary Timney, and Richard T. Mayer, eds. Public Management in an Interconnected 
World: Essays in the Minnowbrook Tradition. New York: Greenwood Press, 1992. 

Baker, Randall. Comparative Public Management. Westport, CT: Praeger Publishers, 1994. 
Bingham, Richard D., et al. Managing Local Government. Thousand Oaks, CA: Sage 

Publications, 1991. 
Boris, Elizabeth T., and C. Eugene Steuerle, eds. Nonprofits and Government: 

Collaboration and Conflict. Washington, DC: Urban Institute, 1999. 
Cochran, Clarke E., et al. American Public Policy: An Introduction. 4th ed. New York: 

St. Martin’s Press, 1993. 
deLeon, Peter. Democracy and the Policy Sciences. Albany: State University of 

New York Press, 1997. 
Ehrenhalt, Alan. The United States of Ambition: Politicians, Power and the Pursuit of 

Office. New York: Times Books, 1991. 
Fiorina, Morris. Divided Government. New York: Macmillan, 1992. 
Gies, David L., J. Steven Ott, and Jay Shafritz, eds. The Nonprofit Organization. 

Pacific Grove, CA: Brooks/Cole, 1990. 
Goodsell, Charles T. The Case for Bureaucracy. 3d ed. Chatham, NJ: Chatham House, 

1994. 
Holden, Matthew. Continuity and Disruption. Pittsburgh: University of Pittsburgh Press, 

1996. 
Johnson, David B. Public Choice: An Introduction to the New Political Economy. 

Mountain View, CA: Mayfield, 1991. 
Light, Paul C. Making Nonprofits Work: A Report on the Tides of Nonprofit 

Management Reform. Washington, DC: Brookings Institution, 2000. 
Meier, Kenneth J. Politics and the Bureaucracy. 2d ed. Pacific Grove, CA: Brooks/Cole, 

1987. 
Mier, Robert. Social Justice and Local Development Policy. Newbury Park, CA: Sage 

Publishers, 1993. 
Nalbandian, John. Professionalism in Local Government: Transformation in Roles, 

Responsibilities and Values of City Managers. San Francisco, CA: Jossey-Bass, 1991. 
National Academy of Public Administration. Beyond Distrust: Building Bridges between 

Congress and the Executive. Washington, D.C.: National Academy, 1992. 
Palumbo, Dennis J. Public Policy in America. Englewood Cliffs, NJ: Prentice Hall, 1988. 
Peters, B. Guy. American Public Policy: Promise and Performance. 3d ed. Chatham, NJ: 

Chatham Books, 1993. 



Chapter 2 The Political Context of Public Administration 

Pfiffner, James P., ed. The Managerial Presidency. Pacific Grove, CA: Brooks/Cole, 1991. 
Pops, Gerald M., and Thomas J. Pavlak. The Case for justice: Strengthening Decision 

Making and Policy in Public Administration. San Francisco: Jossey-Bass, 1991. 
Reich, Robert. Locked in the Cabinet. New York: Alfred A. Knopf, 1997. 
Ripley, Randall B., and Grace A. Franklin. Congress, the Bureaucracy, and Public Policy. 

4th ed. Pacific Grove, CA: Brooks/Cole, 1987. 
Roberts, Nancy C., and Paula J. King. Transforming Public Policy. San Francisco: 
Jossey-Bass, 1996. 

Rosenau, Pauline Vaillancourt. Public-Private Policy Partnerships. Cambridge, MA: 
MIT Press, 2000. 

Seidmen, Harold, and Robert Gilmour. Politics, Position, and Power. 4th ed. New York: 
Oxford University Press, 1986. 

Svara, James H. Official Leadership in the City: Patterns of Conflict and Cooperation. 
New York: Oxford University Press, 1990. 



Chapter 3 

The Interorganizational Context 
of Public Administration 

As a manager, you will interact not only with many others at your level of government 
or the independent sector, but also with those throughout our system of governance at 
the federal, state, and local level. More and more, public administrators recognize that 
managing an agency requires paying attention to what happens in other organizations 
and that relations with those outside the agency are just as important as relations with 
those inside. This chapter will examine the interorganizational context in which public 
administrators operate. 

The traditional focus in public administration has been the agency, and that is the 
focus we have largely taken so far. However, given the transformation of governance 
that has occurred during the past decade, it may be more helpful to focus not on the 
individual agency but on the relationships among many different groups — public, pri¬ 
vate, and nonprofit (Kettl, 2000). Indeed, today more than ever, the effectiveness of 
public programs depends on the ability of various agencies to cooperate in processes of 
service delivery. 

Government resources, from federal grants for public assistance to local funding for 
health and human services, go to a variety of actors, and while the funding usually con¬ 
tains guidelines and performance objectives, the implementing agencies often have a cer¬ 
tain amount of leeway for running the program or for forging relationships with other 
groups to deliver the services. 

For example, Temporary Assistance for Needy Families (TANF), the federal program 
that replaced Aid to Families with Dependent Children (AFDC) under the Personal 
Responsibility and Work Opportunity Reconciliation Act of 1996 (the federal welfare 
reform legislation) provides funding to the states for public assistance and welfare- 
to-work initiatives. The states rely on a variety of local government, for-profit and non¬ 
profit organizations for service delivery. These organizations, in turn, may provide the 
services themselves, or they may contract with other organizations (again, public, 
private, or nonprofit) for carrying out the programs. In many cases, it is possible for an 
individual or family to receive an array of public assistance without ever coming into 
contact with a government employee (Kettl, 2000). 

This example illustrates the complexity of the interactions triggered by federal poli¬ 
cies. But equally complex relationships can grow from the bottom up as well. A local 
community that wants to attract new industry might develop a coalition of government, 
business, labor, and education groups to promote the city’s image and to work with 

79 



80 Chapter 3 The Irtterorganizational Context of Public Administration 

groups at other levels of government. These groups might include a state department of 
economic development to help contact prospective employers wishing to relocate. The 
city might request that the state or federal government designate a particular area in the 
city as an enterprise zone, thus permitting special tax incentives and other benefits for 
businesses willing to locate there. Again, a variety of government and nongovernment 
entities are involved in the task of economic development. 

One can easily understand why the effectiveness of many public programs depends on 
the quality of the relationships among various organizations. For this reason, some ana¬ 
lysts emphasize the importance of the interorganizational networks that develop in vari¬ 
ous policy areas. The various groups and organizations involved in any policy arena do 
not report to a single director, nor are they structured in a typically hierarchical fashion. 
Rather, they are loosely joined systems that often have overlapping areas of interest, 
duplication of effort, and lack of coordination. Hult and Walcott write, “Governance 
networks link structures both within and across organizational boundaries. Tike gover¬ 
nance structures, networks may be permanent or temporary, formal or informal. They 
may be consciously designed, emerge unplanned from the decisions of several actors, or 
simply evolve. A given governance structure may be part of one or several networks” 
(Hult & Walcott, 1990, p. 97). 

Whether the growing dependence on such systems is a helpful development is a mat¬ 
ter of some debate. Many experts have suggested that the use of intermediaries in the 
delivery of services is a major reason for the difficulties many programs encounter. On 
the other hand, many such networks have proven enormously stable over time, while 
others have capitalized on the inherent flexibility and adaptability of such systems. 
In any case, because interorganizational networks are such an important part of the 
management of public programs, they deserve our attention. 

The Development of Intergovernmental Relations 

In terms of your ability to operate public programs effectively and responsibly, you must 
understand the relationships among levels of government. There are various ways to 
describe the relationship between a larger comprehensive unit of government and its 
constituent parts. A confederation, for example, is a system in which the constituent 
units grant powers to the central government, but do not allow it to act independently. 
A unitary system is one in which all powers reside with the central government, and var¬ 
ious units derive their powers from that unit. France and Sweden, for instance, are char¬ 
acterized by unitary systems, as is the relationship between states and localities in the 
United States; localities hold only those powers specified or permitted by the state. 

The relationship between our national government and the states, however, is federal 
in that it involves a division of powers between the two levels of government_federal 
and state. (Local governments exist under the legal framework of the states.) Some 
poweis aie granted specifically to the central government (to conduct foreign relations, 
to regulate interstate commerce, and so on); some are reserved by the states (to conduct 



The Development of Intergovernmental Relations 81 

elections, to establish local governments, etc.), and some are held by both levels (to tax, 
to borrow money, to make laws, and so on). (This system of governance is also referred 
to as “federalism.”) A federal structure has many advantages in that it allows for diver¬ 
sity and experimentation, but it has also led to the development of a highly complex 
intergovernmental system, a fact of life with important implications for the management 
of public programs. 

The term “intergovernmental relations” is often used to encompass all the complex and 
interdependent relationships among those at various levels of government as they seek to 
develop and implement public programs. The importance of intergovernmental relations 
has been recognized in several structural developments. At the federal level, a permanent 
Advisory Commission of Intergovernmental Relations was established in 1959 and contin¬ 
ued to operate until the mid-1990s. All states and nearly all major cities have a coordina¬ 
tor for intergovernmental relations (though the specific titles vary). Finally, many scholars 
and practitioners have begun to emphasize the managerial processes involved in intergov¬ 
ernmental relations by employing the term “intergovernmental management.” 

A key to understanding intergovernmental relations in this country involves under¬ 
standing the changing patterns used to fund public programs. Although intergovernmen¬ 
tal relations consist of much more than money, financial questions are inevitably at the 
core of the process, so definitions of various types of grants, and transfers of money (and 
property) from one government to another are a helpful starting place. 

Networking 

Some basic information on federal, state, and local interactions can be found at 
FirstGov at http://www.firstgov.gov. For coverage of the changing role of state and 
local government, go to Governing magazine at www.governing.com. 

Some grants give more discretion to the recipient than do others. Categorical grants 
or project grants may be spent for only a limited purpose, such as building a new sewage 
treatment plant. Categorical grants have historically been the predominant form of 
grants in this country; however, in recent years, many categorical grants have been con¬ 
solidated into block grants, which may be used for nearly any purpose within a specific 
functional field, such as housing, community development, education, or law enforce¬ 
ment. The recipient government might spend a law enforcement grant on police training, 
new equipment, or crime prevention programs. Finally, revenue sharing, when it has 
been used, has made funds available for use by the recipient government in any way its 
leaders choose (within the law). 

Grants may also be classified in terms of how they are made available. A formula 
grant employs a specific decision rule indicating how much money any given jurisdiction 
will receive. Typically, the decision rule is related to the purpose of the grant (for exam¬ 
ple, money for housing might be distributed to qualified governments based on the age 
and density of residential housing). A project grant, on the other hand, makes funds 
available on a competitive basis. Those seeking aid must submit an application for assis¬ 
tance for review and approval by the granting agency. 



82 Chapter 3 The Interorganizational Context of Public Administration 

Grants may also be categorized as to the purposes'they serve. Entitlement grants pro¬ 
vide assistance to persons meeting certain criteria, such as age or income; for example, 
TANF or Medicaid. Operating grants are for use in the development and operation of 
specific programs, such as those in education or employment and job training. Capital 
grants are for use in construction or renovation, as in the development of the interstate 
highway system. 

Finally, grants may vary according to whether they require matching funds from the 
recipient agency. Some federal grants require the state or locality to put up a certain per¬ 
centage of the money for the project; in the case of the interstate highway system, states 
contribute $1 for every $9 of federal money. Other grants require different matching 
amounts, and some will require no matching at all. Note that the different types may be 
combined in different ways to create quite a variety of grant possibilities. A specific grant 
might be made available on a competitive basis strictly for use in programs for job train¬ 
ing and may require local matching funds. 

Dual Federalism 

Historically, the various grant types have been employed in different ways and in differ¬ 
ent times. The earliest period in our country’s intergovernmental history, a period that 
lasted well into this century, was characterized by what has been called dual federalism, 
a pattern in which the federal and state governments both sought to carve out their own 
spheres of power and influence and during which there was relatively little intergovern¬ 
mental cooperation — indeed, there was substantial conflict. 

However, some programs cut across the strict divisions of federal, state, and local 
responsibility associated with dual federalism. A notable example is the Morrill Act of 
1862, which granted land to universities to establish agricultural programs and was the 
basis for the eventual development of land-grant colleges. It was important in the devel¬ 
opment of higher education, but it was also precedent-setting in terms of the structure of 
its grants (Nathan et ah, 1987). No longer were grants made in a fairly open-ended fash¬ 
ion; specific instructions were attached, requiring that they be used for agriculture and 
the mechanical arts. In addition, new reporting and accounting requirements were added 
as a condition of receiving the grants. 

The adoption of grant programs such as the Morrill Act was accompanied by consid¬ 
erable anguish, because some saw such programs as a drastic departure from the dual 
federalism they preferred. The Morrill Act itself, signed by President Lincoln, had previ¬ 
ously been vetoed by President Buchanan, who commented: “Should the time arrive 
when the State governments shall look to the Federal Treasury for the means of support¬ 
ing themselves and maintaining their systems of education and internal policy, the char¬ 
acter of both Governments will be greatly deteriorated” (Nathan et ah, 1987, p. 25). 

In any case, the period of dual federalism was marked by considerable conflict among 
the various levels of government. The federal government sought to deal effectively with the 
increasingly broad issues being raised in a more complex, urbanized society by developing 
new grant programs in such areas as highway construction and vocational education. The 
states, though they appreciated federal money, were cautious of federal interference in their 



The Development of Intergovernmental Relations 83 

BOX 3.1 

Images of American Federalism 

spheres of responsibility. The localities, though creatures of the state and dependent on state 
grants of authority or money, sought to build their own political bases. The resulting pat¬ 
tern of federalism resembled a layer cake, with three levels of government working parallel 
to one another but rarely together (see Box 3.1). 

Cooperative Federalism 

If the layer cake was the prevailing image associated with dual federalism, the marble 
cake was the image for the period that followed, notable for its increasing complexity 
and interdependence. As opposed to the conflict and division of the earlier period, the 
emerging era of cooperative federalism was characterized by greater sharing of responsi¬ 
bilities. The marble cake image implied a system in which roles and responsibilities were 
intermixed in a variety of patterns: vertical, horizontal, and even diagonal (see Box 3.1). 

The great impetus for the development of cooperative federalism was the Roosevelt 
program for economic recovery following the Great Depression, what was called the 
New Deal. Although the majority of President Roosevelt’s programs were national in 
scope and could have been national in execution, a political choice was made to operate 
many of the programs through the states and their localities. The pattern of intergovern¬ 
mental relations that emerged revealed a dramatically increased federal role, accompa¬ 
nied almost paradoxically by greater federal, state, and local sharing of responsibilities. 
In addition, there was greater attention to vertical relationships within functional areas 
such as social welfare or transportation. 

The pattern of federal, state, and local relations that emerged from the New Deal is 
illustrated by several key programs. The first was the Federal Emergency Relief Adminis¬ 
tration, which provided grants to states for both direct relief and work relief and was 
able to revitalize many rather weak state relief agencies. A variety of public works and 
employment security programs were also attempted to supplement relief efforts. The most 
well known was the Works Progress Administration (WPA), a program that used federal 
money to hire state-certified workers for locally initiated construction projects. Finally, 



84 Chapter 3 The Interorganizational Context of Public Administration 

the Social Security Act of 1935 brought the federal government to an even greater degree 
into the area of direct relief for the poor, disabled, and unemployed, an area that had pre¬ 
viously been reserved for the states and cities. 

Through the middle part of this century, the structure of the various grant programs 
initiated at the federal level featured: 

1. Federal definition of the problem 
2. Transfer of funds primarily to the states (rather than localities) 
3. A requirement that plans for use of funds be submitted to the federal government 
4. A requirement for state matching funds 
5. A requirement for federal review and audit of the programs (Nathan et ah, 1987) 

For the most part, these grant programs were categorical — that is, directed to a particular 
category of activity, such as public works. Indeed, the use of categorical grants as the pri¬ 
mary mechanisms for federal and state transfers continued until the 1970s. Throughout 
this period, various groups appointed to review the state of intergovernmental relations 
returned the same verdict: the federal government and the states should begin “cooperat¬ 
ing with or complementing each other in meeting the growing demands on both” (Nathan 
et al., 1987, p. 33). Today, the principle of cooperative federalism is well established. 

Picket-Fence Federalism 

Through the 1960s, 1970s, and 1980s, there were dramatic shifts in the pattern of inter¬ 
governmental relations. Nowhere were these shifts more striking than in the contrast 
between the activism of the Kennedy and Johnson years and the cutbacks of the Reagan 
and Bush years. President Johnson used the phrase “creative federalism” to describe his 
approach to intergovernmental relations, which included a huge increase in the number 
and amounts of federal grants available to states, localities, and other groups. Over three 
years, the number of available grants from the federal government grew from about fifty 
to nearly four hundred. Federal aid to states and localities rose from $7 billion in 1960 
to $24 billion in 1970 (Wright, 1987, p. 236). Interestingly, state aid to local govern¬ 
ments also nearly tripled during this period. 

The new federal programs focused mainly on urban problems and problems of the 
disadvantaged. Medicaid, for example, the largest of the new grant programs, provided 
funds to states to assist in medical care for low-income people. (Medicaid is largely 
administered by the states [eligibility requirements vary from state to state], but it also 
requires state matching funds, which became a fiscal problem for many states.) But there 
were also new programs in education aimed directly at school districts, new programs in 
employment and training run by cities and other independent providers, and new pro¬ 
grams in housing and urban development in major metropolitan areas. 

Probably the most publicized domestic program of the Johnson years was the “War 
on Poverty,” launched with the passage of the Economic Opportunity Act of 1964. The 
War on Poverty and other Johnson programs were significant for both their size and 
shape. Substantially more aid was aimed directly at local governments, school districts, 



The Development of Intergovernmental Relations 85 

and various nonprofit groups, as opposed to the previous pattern of aid primarily to 
states. Second, there were requirements for detailed planning and for streamlined 
budgeting systems, as well as demands for public participation in management of the 
programs. Third, and most important, the majority of the new programs involved proj¬ 
ect grants, requiring grant applications for specific purposes. States and localities began 
to spend enormous amounts of time playing the federal grant game trying to obtain 
grants, searching for matching funds, and trying to meet planning and reporting require¬ 
ments. As a result, intergovernmental relations took on an increasingly competitive tone 
(Wright, 1988, pp. 81-90). 

Through this period, the intergovernmental system was becoming increasingly domi¬ 
nated by the relationships among professionals within various substantive areas at vari¬ 
ous levels of government. In a particular program area, the relationship among mayor, 
governor, and president might be less important than that involving a local health 
department official, someone from a state department of health, and the manager of 
a federal program in health care. A new image emerged, replacing the cakes of earlier 
periods—that of picket-fence federalism. The horizontal bars of the fence represented 
the levels of government, and the vertical slats represented various substantive fields, 
such as health, welfare, education, employment, and training (see Box 3.2). 

President Nixon’s administration brought about a reaction against many of the 
developments we have just described. Claiming that the Johnson programs were simply 
too detailed in their requirements to administer effectively at the local level and that sub¬ 
governments within particular substantive areas were coming to dominate the intergov¬ 
ernmental system, Nixon proposed what he termed a “New Federalism” that would 
reestablish greater local autonomy in the use of federal funds. Although a part of his pro¬ 
gram involved administrative changes, lessening certain requirements, the most notable 
changes President Nixon proposed involved changes in the structure of grant programs. 

One way to return power to state and local leaders, especially elected leaders as 
opposed to program professionals, was through general revenue sharing. The Nixon plan 
for general revenue sharing involved transfers of money from the federal government to 
states and localities to use for any purpose they wished. The funds were distributed based 
on a complex formula, but once in the hands of the state or local political leadership, they 
could be used for tax reduction, transportation, community development, law enforce¬ 
ment, or any other area. First passed in 1972, the Nixon revenue-sharing program pro¬ 
vided approximately $6 billion a year for five years and was continued through the 
Nixon, Ford, Carter, and early Reagan years before being eliminated in 1986. 

The Nixon administration also sought to consolidate large numbers of categorical 
grants into block grants, two of which were passed. The Comprehensive Employment and 
Training Act (CETA) provided funds to local “prime sponsors,” usually a local govern¬ 
ment or group of governments, for manpower training. Which specific programs would be 
developed was up to the prime sponsor at the local level. Similarly, two weeks after 
President Nixon resigned, President Ford signed the Community Development Block 
Grant program (CDBG) consolidating several categorical grant programs, including urban 
renewal and the model cities program. Despite these successes in altering the pattern of 
federal grants, the Nixon and Ford years actually increased the total amount of aid avail¬ 
able to states and localities. 



86 Chapter 3 The Interorganizational Context of Public Administration 

BOX 3.2 

Picket-Fence Federalism 

The Big Seven Public Interest Groups 

1. Council of State Governments 5. National League of Cities 
2. National Governors Conference 6. U.S. Conference of Mayors 
3. National Conference of State Legislatures 7. International City Management Association 
4. National Association of County Officials 

SOURCE: From Understanding Intergovernmental Relations, 4th edition, by D. Wright © 2003. Reprinted 
with permission of Wadsworth, an imprint of the Wadsworth Group, a division of Thomson Learning. 

The dependency of state and especially local governments on federal aid became more 
apparent during the administration of President Carter. The Carter years saw few dra¬ 
matic changes in intergovernmental relations, continuing the general revenue sharing 
and block grants of the Nixon administration, though there was a greater tendency to 
target funds through categorical grants. Among the more important initiatives was 
expansion of public service employment under CETA, so that local government jobs 
would be filled by the unemployed, and passage of the Urban Development Action Grant 
program to stimulate economic development in especially distressed cities. 

As a former governor, President Carter was attentive to the needs of state and local 
governments to more effectively operate intergovernmental programs, so he proposed 
a series of administrative steps for improving intergovernmental management. In this 
effort, he worked closely with a group of seven major public interest groups, known as 
the PIGS, that had come to be increasingly active in the intergovernmental system. These 
included such groups as the Council of State Governments, the National League of 



The Development of Intergovernmental Relations 8y 

Cities, the National Governor’s Association, and others. Later in the Carter years, how¬ 
ever, a new mood of fiscal restraint combined with Carter’s own fiscal conservatism to 
limit the amount of money available, something states and localities found difficult to 
handle. But, from the standpoint of state and local governments, the reductions of the 
late Carter years were just the beginning. 

The Reagan and Bush Years 

The Reagan and Bush administrations brought major structural changes in the pattern of 
fiscal federalism, including elimination of general revenue sharing and a reworking of the 
block grant system. However, these years were more significant (in intergovernmental 
terms) for the administration’s efforts to reduce the size of the federal government 
through a variety of tax and spending cuts and to return responsibility for major areas, 
especially social welfare, to the states. 

A strong ideological commitment undergirded President Reagan’s efforts to eliminate 
federal funding and federal regulation of state and local activity wherever possible. In his 
inaugural speech, the president stated, “It is my intention to curb the size and influence 
of the federal establishment and to demand recognition of the distinction between the 
powers granted the federal government, [and] those reserved to the states or to the peo¬ 
ple” (Reagan, 1981). One way he proposed to do so was by turning back responsibility 
for a variety of federal programs, and the resources to pay for them, to the states. 
(President Bush employed the same ideology, emphasizing the term “turnovers” rather 
than “turnbacks” in promoting his programs.) 

Proposals along these lines, however, quickly became intertwined with the president’s 
1981 efforts to reduce taxes and spending under the banner of supply-side economics, an 
approach that holds that decreased taxes and spending will stimulate capital investment 
and in turn economic growth (Stone & Sawhill, 1984). The defense budget was pro¬ 
tected by the Reagan administration, so the majority of cuts were sought in federal grant 
programs and general government operations. Indeed, during 1981, the Reagan adminis¬ 
tration achieved the first absolute decline in federal expenditures in decades. As part of 
these reductions, federal grants were lowered from about $95 billion in fiscal year 1981 
to about $88 billion in fiscal year 1982, with a major portion of the cuts coming in 
employment and training programs (Beam, 1984, p. 420). 

Meanwhile, state and local officials decried the depth of the cuts and the administra¬ 
tion’s failure to make available any revenue sources to pick up the slack, especially as the 
tax cuts failed to produce the expected economic growth. Moreover, concerns were 
increasingly voiced that efforts to balance the budget had been especially damaging to the 
poor, for example, by reducing eligibility for Aid to Families with Dependent Children 
(AFDC) payments (Nathan et al., 1987, pp. 52-57). Whereas the public was apparently 
concerned about excessive spending, it became clear that neither the Congress nor the 
public always considered spending for social welfare, environmental protection, and 
infrastructure maintenance excessive. 

Thus, by the middle of the second Reagan term, eligibility requirements in AFDC 
were restored; the environmental Superfund, designed to clean up toxic wastes and 
repair leaking underground tanks, was funded by Congress at a significantly higher level 



88 Chapter 3 The Interorganizational Context of Public Administration 

than the president requested; and use of the Highway Trust Fund for improved high¬ 
ways, including urban mass transit, was passed over Reagan’s veto. 

On the other hand, reductions continued in specific areas, most notably in general 
revenue sharing. Recall that the Nixon general revenue-sharing program had been con¬ 
tinued through the Carter administration; however, early in the Reagan years, revenue 
sharing for states was eliminated. Finally, in 1986, revenue sharing for local govern¬ 
ments was also ended. Many saw general revenue sharing as a way to equalize the dis¬ 
parity between rich and poor communities and allow greater flexibility at the local level; 
others saw revenue sharing as providing too much money and too much discretion, espe¬ 
cially to wealthy communities. 

President Bush continued the Reagan approach to federalism, making important, but 
largely stylistic gestures to the states and localities. In part, he could do little else. The 
budget deficit continued unabated and led to the Budget Enforcement Act (BEA) of 
1990. Under the new law, as we will see later, any legislation that exceeds the budget 
ceiling in its category will trigger an across-the-board cut in that category. In this way, 
the BEA effectively pits each domestic program against all others. When this legislation 
was combined with the savings and loan bailout, there was little enthusiasm left for 
expanding domestic spending, including state and local aid. 

As mentioned earlier, President Bush continued the Reagan strategy of turning back 
or turning over various programs to the states, but just as in Reagan’s case, there was 
great skepticism about whether the proposed turnovers were based on a commitment to 
states’ rights and responsibilities or whether they were just a strategy for placing more of 
the burden for funding various programs in the hands of the states. For example, the 
administration’s highway plan proposed to turn over four-fifths of the federal highway 
system to the states with funding to be on a 60-40 basis, federal to state. According to 
Transportation Secretary Skinner, the proposal was designed not only to permit greater 
local flexibility, but also very clearly to turn over more financial responsibility to the 
states, shifting the burden to the states. 

The Clinton Presidency 

During the Clinton presidency, the philosophical foundation of New Federalism 
remained in place. The primary themes were regulatory reform and shifting decision¬ 
making authority from the federal to state and local governments. However, the charac¬ 
ter and scope of this devolution of power have been interpreted in vastly different ways 
by the president, the Republican House, and the more moderate leadership in the Senate. 
In latter stages of the Clinton administration, state and local governments offered their 
own ideas on federalism and the overall system of intergovernmental relations. Such 
diversity of viewpoints generated a number of questions concerning not only the state of 
federalism but also the implications for government practice. 

Early on, President Clinton left little doubt as to his administration’s position on 
intergovernmental relations, a position characterized by a sensitivity to state and local 
governments. The president quickly showed his gubernatorial roots, for example, by 
choosing four of his cabinet members from the subnational level. And, within months of 



The Development of Intergovernmental Relations 89 

taking office, the administration identified the removal of burdensome federal regula¬ 
tions as a primary objective. In September 1993, President Clinton issued Executive 
Order 12866, which along with a subsequent order prevented federal agencies from 
imposing mandates without financial support. Although administrative agencies would 
gain regulatory powers under the order, central review was to be continued to ensure 
that new regulations conformed with the president’s priorities. President Clinton rein¬ 
forced his stance soon after by issuing Executive Order 12875, establishing a system of 
state and local review of intergovernmental regulations. 

The Clinton administration’s New Federalist philosophy also carried over into pro¬ 
grammatic areas. In championing the drive to “end welfare as we know it,” for example, 
the administration transformed the nation’s system of public assistance by turning to 
mainly market forces for public well-being and placing service-delivery into the hands of 
nongovernmental actors. Key provisions in the 1996 welfare reform legislation included 
setting time limits on benefits, tying welfare to work requirements, handing over author¬ 
ity for welfare programs to state government, and limiting (in some cases eliminating) 
access to public assistance for legal immigrants and the disabled. 

President Clinton’s New Federalism could be seen, as well, in his administration’s main 
community and economic development initiative, the Empowerment Zone/Enterprise 
Community Program, and its key education initiative, the Goals 2000: Educate America 
Act. In both programs, “the administration persuaded Congress to expand state and/or 
local discretion” (Walker, 1996, p. 274), reinforcing the belief that by reducing federal regu¬ 
lations and handing decision-making power to the state and local level, those closest to the 
issue would be in a better position to effect innovation and change in the given policy area. 

Vice President A1 Gore further advanced the administration’s position on intergovern¬ 
mental relations. In his National Performance Review (NPR) and related efforts, the vice 
president highlighted a variety of alternative strategies for managing public programs. 
These strategies, which echoed Osborne and Gaebler’s Reinventing Government, injected 
a new spirit of entrepreneurialism into the federal government. Gore’s NPR called for 
“a new customer service contract with the American people, a new guarantee of effective, 
efficient, and responsive government.” Although the vice president focused mainly on the 
national level, the philosophy driving his reinvention agenda fostered a greater apprecia¬ 
tion for innovation by local and state administrators. NPR also featured several practical 
measures that affected intergovernmental relations, such as collapsing categorical grants 
into more flexible funding streams and removing unfunded federal mandates. 

On this latter issue, the adoption of New Federalist ideals extended beyond the Clinton 
administration. Regulatory reform and the removal of unfunded mandates became key 
issues for the 104th Congress. As cited in the Republican Contract with America, con¬ 
servatives argued that federal agencies placed too great of a burden on state and local 
administrations by imposing regulations without adequate financial resources for their 
implementation. Republican lawmakers thus returned to two measures from the preceding 
Congress (H.R. 4771 and S. 993) and, with assistance from the Clinton administration, 
revised the bills into the Unfunded Mandate Reform Act (1995). Under the resulting act, 
the cost of any future mandate would need to be spelled out by the Congressional Budget 
Office. The act also raised the President’s Executive Orders cited above to a statutory level, 
binding agencies by law to find less expensive, more flexible ways of instituting regulations. 



90 Chapter 3 The Interorganizational Context of Public Administration 

During President Clinton’s second term, however, ties with the Republican Congress 
degenerated into political gridlock, and the administration devoted as much time to 
avoiding scandal as it did setting public policy. Though the two camps did come together 
on measures to eliminate the federal deficit and reform the nation’s welfare system, the 
prevailing story from Washington during the last years of the twentieth century was one 
of partisan extremism, culminating in President Clinton’s becoming the first elected pres¬ 
ident to be impeached, then acquitted, by Congress. Moreover, even the hallmarks of the 
period failed to gain support among many state and local governments. Governors and 
mayors across the country, while recognizing the need for fiscal constraint and welfare 
reform, remained concerned that the cost of the measures would, over time, fall primar¬ 
ily on the subnational levels of administration. 

The impact of the NPR and the reinventing government drive at the federal level also 
remains in question. While a variety of federal agencies implemented reform initiatives 
during President Clinton’s consecutive terms, many were fraught with political and 
administrative challenges. An example of this can be seen in the president’s national ser¬ 
vice initiative. In championing the National and Community Service Trust Act (1993), 
which created the Corporation for National Service (CNS), President Clinton set out 
to construct a model of reform, tying national service to key “reinvention principles— 
among them mission and competition” as well as performance-driven government 
(Lenkowsky & Perry, 2000, p. 299). 

But reform under CNS proved to be a difficult path. From the beginning, the agency 
was a target of controversy, with some in Congress viewing CNS grant programs less as 
an example of “catalytic government” and more of a way to provide “back-door fund¬ 
ing” to expand the scope of federal programs (Lenkowsky & Perry, 2000, p. 299). 
Others cited CNS as they questioned the core principles of reinvention, including to 
whom the government should be responsive, to what extent public programs should be 
decentralized, and how much competition is desirable in the public service. 

The experience of CNS during its early years, of course, does not give a full picture of the 
reinvention movement. Examples can be found at all levels of government, and in the 
nonprofit sector, as reformers strive to create a more responsive, entrepreneurial and results- 
based system of governance. Indeed, reinvention compared to many political reform move¬ 
ments has had a fairly long lifespan. On the other hand, a growing number of scholars and 
practitioners have taken issue with the assumptions underlying the reform agenda. While 
few would dispute the values within the goal of making federal agencies more responsive to 
citizens, or ensuring effectiveness in delivering public services, many have come to recognize 
that productivity and performance should not be the only measures of success. 

The Bush Administration 

President George W. Bush appears to be continuing the New Federalism of his predeces¬ 
sors, as evident in his agenda to streamline the federal government, increase the role of 
nongovernmental organizations (nonprofit, for-profit and faith-based) in the policy 
process, and shift to more market-based models of service delivery (see Box 3.3). For 
instance, the Bush administration’s first legislative victory came with a $1.3 trillion tax 
cut, which supporters say will force the federal government to tighten its belt on spend- 



The Development of Intergovernmental Relations 91 

BOX 3.3 _ 
_ 

Transformation of Governance: Globalization, Devolution, and 
the Role of Government 

Over the last generation, American government has undergone a steady, but often un¬ 
noticed, transformation. Its traditional practices and institutions have become more 
marginal to the fundamental debates. Meanwhile, new processes and institutions — of¬ 
ten nongovernmental ones — have become more central to public policy. In doing the 
peoples’ work to a large and growing degree, American governments share responsibil¬ 
ity with other levels of government, with private companies, and with nonprofit orga¬ 
nizations. 

This transformation has two effects. First, it has strained the traditional roles of all 
the players. For decades, we have debated privatizing and shrinking government. 
While the debate raged, however, we incrementally made important policy decisions. 
Those decisions have rendered much of the debate moot. Government has come to 
rely heavily on for-profit and nonprofit organizations for delivering goods and ser¬ 
vices ranging from anti-missile systems to welfare reform. It is not that these changes 
have obliterated the roles of Congress, the president, and the courts. State and local 
governments have become even livelier. Rather, these changes have layered new chal¬ 
lenges on top of the traditional institutions and their processes. 

Second, the new challenges have strained the capacity of governments — and their 
nongovernmental partners—to deliver high-quality public services. The basic structure 
of American government comes from the New Deal days. It is a government driven by 
functional specialization and process control. However, new place-based problems have 
emerged: How can government’s functions be coordinated in a single place? Can envi¬ 
ronmental regulations flowing down separate channels (air, water, and soil) merge to 
form a coherent environmental policy? New process-based problems have emerged as 
well: How can hierarchical bureaucracies, created with the presumption that they 
directly deliver services, cope with services increasingly delivered through multiple (often 
nongovernmental) partners? Budgetary control processes that work well for traditional 
bureaucracies often prove less effective in gathering information from nongovernmental 
partners or in shaping their incentives. Personnel systems designed to insulate govern¬ 
ment from political interference have proven less adaptive to these new challenges, espe¬ 
cially in creating a cohort of executives skilled in managing indirect government. 

Consequently, government at all levels has found itself with new responsibilities 
but without the capacity to manage them effectively. The same is true of its non¬ 
governmental partners. Moreover, despite these transformations, the expectations on 
government—by citizens and often by government officials — remain rooted in a 
past that no longer exists. Citizens expect their problems will be solved and tend not 
to care who solves them. Elected officials take a similar view: They create programs 
and appropriate money. They expect government agencies to deliver the goods and 
services. When problems emerge, their first instinct is to reorganize agencies or 
impose new procedures—when the problem often has to do with organizational 

(continued) 



92 Chapter 3 The Interorganizational Context of Public Administration 

structures and processes that no longer fit reality. The performance of American 
government — its effectiveness, efficiency, responsiveness, and accountability — 
depends on cracking these problems. 

SOURCE: Donald F. Kettl, “Transformation of Governance: Globalization, Devolution and the Role of 
Government,” Public Administration Review, Vol. 60, No. 6, 2000, pp. 488-497. Reprinted by permission. 

ing and stimulate economic growth by returning money to taxpayers. (Many compared 
the measure to the major tax cuts early in the Reagan administration.) 

However, even before the ink dried on the legislation, some lawmakers were concerned 
that the tax relief package, especially in light of the slowing economy in 2001, would 
make it impossible for the government to address much-needed reforms in Medicare, edu¬ 
cation and Social Security. In fact, even Bush administration officials conceded that the 
estimated budget surplus that looked substantial when Congress passed the tax bill had 
decreased significantly by the time the IRS began sending refund checks to the American 
public. Democratic leaders have indicated that while they may not advocate for an overall 
repeal, Congress may have to revisit key provisions in the tax measure. 

The Bush administration also moved quickly on decentralization. As mentioned in 
Chapter 2, the president used one of his first executive orders to create the Office of 
Faith-Based and Community Initiatives, which will outline the administration’s policy 
toward extending more federal funding to religious organizations. (Faith-based organiza¬ 
tions such as Catholic Charities USA, Lutheran Social Services, Jewish Community 
Services, and others, already receive more than $3 billion in federal aid each year.) 

While many nonprofit leaders support the plan, which would expand the amount 
in social service spending for which faith-based organizations could compete, others 
(including many religious leaders) fear that without a substantial increase in the level of 
funding the Bush initiative would do more to pit religious groups against each other for 
a share of the pie. Others argue that although federal funding would help enhance the 
role of faith-based nonprofits as service providers, most of the smaller religious organiza¬ 
tions simply lack the expertise needed to administer federal grants. Without an invest¬ 
ment in organizational capacity, critics say that the Bush plan would fail to attract a vital 
segment of the nonprofit community (Hruby & Lipman, 2001). 

Another example of President Bush’s New Federalism can be seen in his administra¬ 
tion’s reliance on the market for delivering public services. In July 2001, the president 
outlined a plan to reduce the cost of prescription drugs for the elderly. The Bush plan 
offers seniors the opportunity to join buying clubs, which would be administered by for- 
profit firms, and use discount cards to save 15 to 25 percent on their pharmaceutical pur¬ 
chases. Several such buying clubs already exist, including a cooperative venture between 
Merck-Medco, a pharmaceutical firm, and the Readers’ Digest Association. Some health 
care companies and other Bush supporters view the plan as a way to improve access to 
healthcare for the elderly, but doing so without increasing federal spending. 

Critics say the proposal would not produce the type of change needed in the Medicare 
system. They argue that under the Bush plan pharmaceutical companies would still be 



The Development of Intergovernmental Relations 93 

able to set their own prices, and that rather than relying purely on the market the federal 
government should require the discount clubs to negotiate with drug manufacturers 
and that pharmacists should be asked to set prices prospectively. President Bush agreed 
that the proposal was simply the first step in what should be a major overhaul of the 
36-year-old federal program, adding that the government should explore additional mar¬ 
ket approaches like expanding the role of health maintenance organizations and other 
private health plans (Pear, 2001, p. Al). 

Judicial Influence 

One final point relates to the role of the judiciary in shaping intergovernmental relations. 
Through the 1990s, students of federalism became increasingly aware of the role of the 
judiciary, especially the Supreme Court, in defining the relationship between the federal gov¬ 
ernment and the states. While the recent judicial activism has produced varied results, with 
the scope of federal authority limited in some cases and reaffirmed in others, an important 
outcome has been the Court once again establishing itself as “a conscious arbiter of the 
respective powers of the national government and the states” (Wise, 2001, p. 343). 

At issue has been Congress’s constitutional authority to regulate activities at the state 
level. For much of the twentieth century, the Commerce Clause, which gives Congress 
the power to regulate trade between the states (and certain functions within the states 
that may affect state capacity for interstate trade), has been the center point of federal 
legislation, but regulations also have been imposed under the Fourteenth Amendment, 
which grants Congress the power to enforce by appropriate legislation the rights pro¬ 
vided in the amendment. Regardless of its legal basis, federal regulatory authority has 
been allowed to expand virtually unchecked by the Court since the 1940s. In fact, some 
scholars of federalism began to wonder whether any boundaries would be established to 
limit the scope of the federal government relative to the states (see Wise 2001, 1998). 
The tide began to change, however, during the 1990s. 

Among the first key decisions setting parameters on Congress’s regulatory power was 
Gregory v. Ashcroft (1991). In this case, the Court ruled that the Missouri constitution’s 
rule that state judges retire at age seventy does not violate the federal Age Discrimination 
Act, as the Equal Employment Opportunity Commission had ruled. “The significance of 
this [the Gregory ruling] is that it bars individuals and groups who wish to use federal 
statutes of general applicability adopted under the Commerce Clause to attack state 
regulation in federal court from doing so, unless Congress makes it clear that the statute 
applies to the states” (Wise, 2001, p. 344). In her opinion, Justice O’Connor emphasized 
the constitutional principle of dual sovereignty and the importance of maintaining a cer¬ 
tain degree of state authority. 

Congress’s regulatory power under the Commerce Clause came into question again 
in United States v. Lopez (1995) and United States v. Morrison (2000). In Lopez, the 
Court considered a challenge to federal restrictions placed on handgun possession in a 
school zone, while the Morrison case focused on provisions in the Violence Against 
Women Act, which allow victims of violent crimes motivated by gender to seek federal 
civil action. The Supreme Court ruled in both cases that Congress had overstepped its 



Chapter 3 The Interorganizational Context of Public Administration 

regulatory jurisdiction, since the statutes were not consistent with the authority afforded 
under the Commerce Clause. At the heart of the Court’s decisions was the premise that 
clear lines must be established between national and state powers, and that under the 
Commerce Clause these lines must be limited to matters of interstate trade. 

Of course, the Lopez and Morrison decisions focused primarily on restoring a balance 
of regulatory power between the national government and state governments. The recent 
judicial activism, however, can be seen also on issues of administration, such as in 
New York v. United States (1992) and Printz v. United States (1997), where the Court 
placed restrictions on Congress’ ability to compel state and local actors to implement fed¬ 
eral statutes. The New York case involved a challenge from local governments against the 
Low-Level Radioactive Waste Policy Act, which required state and regional authorities in 
certain circumstances to assume ownership of radioactive waste and commanded them to 
implement provisions of the federal legislation. The Court ruled both alternatives unconsti¬ 
tutional, stating that Congress must not view state and local governments as “mere politi¬ 
cal subdivisions . .. [or] regional offices” (Wise, 1998, p. 95) of the national government 
and must afford the level of state sovereignty guaranteed under the Tenth Amendment. 

In Printz, the Court reviewed a challenge to provisions of the Brady Handgun 
Violence Prevention Act, which mandated background checks on prospective buyers and 
required local law enforcement officers to serve as entities of the national government in 
executing the regulation. The federal government, in an interesting twist, argued that 
unlike New York, the Brady Act did not place on the states responsibility for policy 
making and that, given the rewards, the cost to the states would be minimal. The Court 
disagreed. In its rejection of the federal claim, the Court stated that New York estab¬ 
lished in very clear terms that Congress cannot command state officials to execute or 
administer federal regulations, nor can the national government bypass the New York 
limitations by directly enlisting state actors. 

However, the decisions cited here should not be taken as a complete shift toward state 
sovereignty. Several recent rulings, including Davis v. Monroe County Board of 
Education (1999) and Saenz v. Roe (1999), have reinforced the national government’s 
capacity to monitor state activities. In Davis, for example, the Court reaffirmed Congress’ 
authority to establish state liability for certain actions as part of the states’ agreement to 
receive federal funding. The majority of the justices ruled that, under the Spending 
Clause, Congress could use its control over appropriations to enforce constitutional 
rights, in this case the guarantee against third-party discrimination in public schools, as 
long as the language in the funding program remained clear enough so that states would 
have adequate notice of the federal requirements. 

The main issue in Saenz was the State of California’s revision to its welfare laws to set 
a twelve-month residency requirement for certain levels of public assistance. While the 
Court had previously invalidated residency requirements for eligibility (in Shapiro v. 
Thompson [1969]), Secretary Saenz, of the State of California’s Department of Social 
Services, claimed that the new welfare reform provisions did not exclude new arrivals 
from welfare benefits but simply maintained their assistance levels to those in the states 
of their previous residence. The Court disagreed, ruling that the Fourteenth Amendment 
does not assign levels of citizenship according to length of residence but instead links 
citizenship with residence generally. Although the Court appreciated the State of 



The Development of Intergovernmental Relations 95 

California’s desire to reduce the cost of welfare benefits, a majority determined that fiscal 
efficiency could not be allowed to outweigh citizen guarantees against discrimination. 

When taken as a whole, the decisions cited here present a mixed image of federalism 
(see Box 3.4). On one hand, the Court clearly has reconsidered its deference to Congress on 
issues of intergovernmental relations, a practice it had followed throughout the twentieth 
century, setting restraints on the scope of federal power. On the other hand, federal regula¬ 
tory authority in other areas has been reaffirmed, particularly under the Spending Clause 
and the Fourteenth Amendment. Despite the significance of these decisions on their own 
implications, the implications go much further. Indeed, the most significant outcome is that 
the Court appears to have reassumed its responsibility for judicial review on questions of 
federal and state authority, which it had all but abandoned in Garcia v. San Antonio 

Balance of Power? The Changing Pace of Judicial Federalism 

Interpretation Relevant Rulings 

The authority of states protected under Gregory v. Ashcroft (1991) 
the Constitution: based on a balance of United States v. Lopez (1995) 
power between the national government 

United States v. Morrison (2000) 
and the states and on the principle of 
dual sovereignty. Limitations placed on 
Congress’ regulatory authority under the 
Commerce Clause of the Constitution. 

State sovereignty reaffirmed, in that state New York v. United States (1992) 
and local actors cannot be compelled by Printz v. United States (1997) 
Congress to implement federal regulatory 
statutes. 

The authority of the Congress to regulate Davis v. Monroe Co. Board of Education 
activities in the states; powers granted (1999) 
under the Spending Clause of the Saenz v. Roe (1999) 
Constitution. State and local actors may 
be required to accept certain standards as 
a condition of receiving federal funds. 

The authority of the Congress to impose Cedar Rapids Community School 
conditions-of-aid requirements to advance District v. Garret (1999) 
regulatory and administrative objectives. Davis v. Monroe County Board of 
The legislation must be explicit with Education (1999) 
regard to the conditions, making certain 
that state and local governments are 
aware of the requirements. 

SOURCE: Charles R. Wise, “Judicial Federalism: The Resurgence of the Supreme Court,” Public 
Administration Review, Vol. 58, No. 2, 1998, pp. 95-98 and “The Supreme Court’s New Federalism,” Public 
Administration Review, Vol. 61, No. 3, 2001, pp. 343-358. Reprinted by permission. 



96 CHAPTER 3 The Interorganizational Context of Public Administration 

Metropolitan Transit Authority (1985). (The Garcia case will be discussed in more detail in 
the next section.) Given not only the nature of the decisions but also the mere fact that the 
judiciary has been willing to intervene, we can be assured that the Supreme Court once 
again has become the “Arbiter-in-Chief” in our federal system (Wise, 1998, p. 98). 

The State and Local Perspective 

We have described the system of intergovernmental relations primarily from the federal 
perspective, but states and localities are also major actors in the intergovernmental sys¬ 
tem, both as they participate in federal programs and as they interact with one another 
state to state, state to locality, and locality to locality. Here also intergovernmental 
relations have been changing. While budgetary shifts have created serious problems for 
state and local governments, state and local governments have proven remarkably well 
equipped to deal with these problems, both financially and administratively. 

Funding Patterns 

As we have seen, while federal aid to state and local governments declined in the early 
1980s, this trend was soon reversed, with the amount of federal grant funding growing 
from $59.8 billion in 1980 to $148.7 billion in 1995 and to $166.5 billion in 2000. This 
roller-coaster ride created severe problems for state and local governments and still has 
not returned aid to its earlier point in terms of its importance to those governments. 
Throughout the 1980s and 1990s, the impact on state and local governments, as well as 
other service delivery organizations, was severe. As we see in Table 3.1, in 1980 federal 
grants-in-aid made up about 39.8 percent of state and local government expenditures. 

TABLE 3.1 

Federal Grants-in-Aid to State and Local Governments, 1980- 1999 (in millions of dollars) 

Federal Grants-in-Aid as a Percentage State and Local Government Expenditures 

Fiscal Year Federal Grants-in-Aid Percent State/Local Expenditures 
1980 32,652 39.8 
1985 49,352 29.6 
1990 77,132 25.3 
1995 145,793 31.7 
1999 171,136 31.4 

Office of Management and Budget, Historical Tables, Budget of the United States Government, 
t YZ002 (Washington, DC: U.S. Office of Management and Budget), pp. 117-119. 

U.S. Census Bureau, Statistical Abstract of the United States. (Washington, D.C.: U.S. Census Bureau, 
2000), 309. 



The State and Local Perspective 97 

The figure dropped to about 25.3 percent by 1990 and increased only slightly to 
31.7 percent in 1995, where it has remained fairly consistent (U.S. Census Bureau, 2000). 

All of these changes occurred at a time in which state governments were experiencing 
significant fiscal stress related to other factors such as the recession, inelastic tax systems, 
growing expenditures in health, poverty, and immigration, and so on. As an example, 
twenty years ago, the states spent approximately $8.3 billion on healthcare costs (in con¬ 
stant 1996 dollars). These costs rose to $40.1 billion in 1996 and have continued to rise 
steadily (U.S. Census Bureau, 2000). The levels of fiscal stress experienced by the states 
were especially difficult in 1991, a year in which twenty-nine states cut back expenses 
below the levels appropriated and thirty-four states raised taxes (Gold, 1992, p. 35). 
Consequently, state and localities found it necessary to curtail or even terminate many 
programs, while at the same time trying to develop new sources of revenue. 

Without question, the last several decades have presented a variety of fiscal challenges 
to state and local governments. One surprising development, however, is that the states 
have proven able to manage their new responsibilities far better than many predicted. 
Indeed, while the federal government has a huge deficit, the states continue to operate 
balanced budgets, albeit often with great difficulty. 

An important boost to state governments came in 1998, as attorneys general across the 
country reached a landmark settlement with tobacco companies to recoup expenditures 
from health costs associated with smoking and other forms of tobacco use. The settle¬ 
ment, which amounts to $246 billion nationally over the next 25 years, has given states 
much needed resources for anti-smoking campaigns, health care and a variety of other 
needs. In fact, since the settlement set few limitations on how the proceeds could be used, 
the approximately $8 billion per year has gone to state-level causes, including Michigan’s 
college scholarships for students who excel on state standardized tests and Nevada’s 
grants for public television stations to convert to digital broadcasting in exchange for a 
pledge to air anti-tobacco public service announcements (Greenblatt, 2000, pp. 42-45). 
Table 3.2 shows the array of programs afforded by the tobacco settlement. 

Once considered a weak link in the federal system, the states have been able, over the 
past twenty-five years, to dramatically increase their capacities. Although there are still 
considerable variations in the capacities of the states, most have undertaken important 
institutional reforms (such as developing legislative audits), expanded the scope and pro¬ 
fessionalism of their operations (to include new services in areas such as energy planning 
and conservation or new programs in areas such as productivity improvement), and 
demonstrated remarkable fiscal restraint. Indeed, the states are operating balanced bud¬ 
gets, and some are even making investments for the future (Beckman, 1988, p. 438). 

The states also are moving into areas of responsibility once thought to rest at the fed¬ 
eral level. The field of international trade is one area where some shifting in roles already 
seems to be taking place. Whereas the federal government has traditionally played the 
leading (if not the exclusive) role in foreign affairs, economic forces are precipitating 
much greater state and local activity in the international arena. For example, all states 
have offices of economic development involved in some way with international economic 
development. Through such units, the states provide local businesses with seminars and 
conferences on how to market themselves overseas. Over forty states also maintain per¬ 
manent offices overseas, with some of the larger states having offices in several countries. 



9# Chapter 3 The Interorganizational Context of Public Administration 

TABLE 3.2  

State Spending from the Tobacco Settlement, 2000 

State Spending Categories, Amounts, and Percentages from the Tobacco Settlement 

Category Number of States Amount Percent of Total 

Smoking Prevention 35 $754 million 9.2% 
Health Care Services 38 $3.53 billion 43.2% 
Long-Term Care 12 $269 million 3.3% 
Research 13 $207 million 2.5% 
Education 14 $483 million 5.9% 
Children & Adolescence 10 $534 million 6.5% 
Tobacco Grower Support 6 $536 million 6.1% 
Budget Reserve 11 $496 million 6.1% 
Other Uses 16 $1.36 billion 16.7% 
Total No. of States 44 $8.19 billion 100.0% 
Receiving Money 

SOURCE: National Conference of State Legislatures, cited in Governing (October 2000), Vol. 45. Reprinted 
with permission, Governing magazine, copyright 2000. 

Networking 

For data relating to federal funding to state and local governments, go to the 
Statistical Abstract of the United States at http://www.census.gov/prod/www/ 
statistical-abstract-us.html or to the Office of Management and Budget at 
http://www.whitehouse.gov/omb/budget/index.html. Analyses of the changing 
character of intergovernmental relations under the “New Federalism” can be found 
at http://newfederalism.urban.org. 

Preemptions and Mandates 

Preemptions 

As discussed previously, although our federal system of government establishes certain fed¬ 
eral powers, reserves certain powers to the states, and permits certain actions at both levels, 
there has long been controversy about the exact definition of these categories. This contro¬ 
versy has been especially intense where the question concerns the power of the federal gov¬ 
ernment to preempt the traditional powers of the states and localities or where the federal 
government coerces states and localities into doing (or not doing) certain things. 

As a case in point, the Fair Labor Standards Act (FLSA) of 1938 set the minimum 
wages and maximum hours that could be worked before overtime pay was required. 
Whereas the act originally applied only to the private sector, 1974 amendments applied 



The State and Local Perspective 99 

its provisions to all state and local governments. Many state and local officials argued 
against the amendments, citing the difficulties in applying the standards to government; 
for example, how do you measure the hours a firefighter works in off-and-on shifts 
of several days’ duration? Soon the amendments were challenged in court and, in the 
case of National League of Cities v. Usery (1976), the Supreme Court decided that 
the functions of general government were part of the powers reserved to the states by the 
Tenth Amendment and therefore could not be regulated by the federal government. 
Consequently, the FLSA did not apply. 

The Court’s ruling in many ways raised as many questions as it answered, particularly 
around the issue of what could be included under the notion of general government. The 
confusion persisted until, nearly ten years later, the Court reviewed a case that sought to 
determine whether the San Antonio transit authority was performing general govern¬ 
ment functions and was therefore exempt from the Fair Labor Standards Act. In Garcia 
v. San Antonio Metropolitan Transit Authority (1985), however, the Court went beyond 
the narrow question of whether transit is a general government function and decided 
that Congress did in fact have the power, under its responsibilities to regulate commerce, 
to intervene in the affairs of state and local governments. 

The effect of Garcia, a direct reversal of the Court’s earlier position in the Usery case, 
was to remove questions about the scope of the federal government’s powers from the 
realm of judicial inquiry. The Court essentially held that the states have sufficient input 
into the national legislative process, through the election of members of Congress and 
the influence of their governors and mayors, to be able to protect themselves politically 
from burdensome legislation. That being the case, the question of whether the federal 
government could act in areas previously believed reserved to the states should be 
decided through legislation rather than judicial action. The rights of the states were, 
therefore, viewed as raising political rather than judicial questions (Howard, 1985). 

A similar argument was developed by the Court in South Carolina v. Baker (1988), a 
case viewed by many at the time as putting a nail in the coffin of the Tenth Amendment 
rights of the states. South Carolina asked whether the federal government had the right 
to dictate the form of bonds issued by the states. The Court not only answered yes, but 
also indicated that the federal government had the right to tax income earned on tax- 
exempt bonds. Obviously, if the federal government had this right, then the states 
would have to compete directly with private firms issuing bonds. While political leaders 
tried to assure the bond market that the federal government would not try to balance 
its budget by intruding on the states’ abilities to issue tax-exempt bonds, several such 
proposals were in fact introduced in Congress. As you can imagine, states and localities 
were incensed at this intrusion into a critical area of state financing, but again the states 
were precluded from a judicial remedy and asked to rely on their political power to see 
that Congress did not act to tax state and local bonds. 

The Garcia and South Carolina cases potentially open the door for the federal 
government to move into more areas once thought to be the purview of state and local 
governments. Certainly state and local officials, who have seen the federal government 
act in areas from rat control to minimum drinking ages, have been skeptical of the self- 
restraint of Congress. At a minimum, Garcia and South Carolina set a precedent for 
expanded federal action directed at state and local governments. 



100 Chapter 3 The Interorganizational Context of Public Administration 

We should not, however, rush to judgment, since many of the' Supreme Court rulings 
handed down in the past decade have been decided by 5-4 votes, and in several key 
cases the majority has clearly reaffirmed the sovereignty of state governments (for exam¬ 
ple, New York v. United States [1992], Seminole Tribe of Florida v. Florida [1996], 
Printz v. United States [1997], and Alden v. Maine [1999]). In fact, a recent commentary 
on the emerging judicial federalism noted that the majority opinions maintained a theme 
“that state sovereignty may not be invaded, not only because it is rooted in the nation’s 
constitutional structure, but also because such invasion undermines the very operation of 
American democracy” (Wise, 2001, p. 354). 

Whereas these cases deal with the powers of the federal government over states and 
localities, similar but somewhat less complex issues have been raised with respect to the 
powers of the states over local governments. As noted, our intergovernmental system 
does not allocate separate spheres of power to state and local governments, but rather 
treats local governments merely as creatures of the state, having only those powers 
granted by the state. In what has come to be known as Dillon’s Rule, Judge John Dillon 
declared in 1911 that municipalities had only those powers granted in their charters, 
those fairly implied by the expressed powers, and those essential to the purposes of their 
being granted a charter. In other words, Dillon’s Rule allowed for state control over all 
but a narrow range of local activities. Dillon’s Rule has been somewhat relaxed, espe¬ 
cially in states that permit cities greater autonomy through home-rule provisions, but the 
powers of local government continue to derive directly from the actions of the state. 

There are various mechanisms involved in the relationship between the federal govern¬ 
ment and the states and between the states and localities. Preemptions involving the federal 
government preempting state action are traditionally associated with the lower level of 
government. For example, the federal Nutrition Labeling and Education Act of 1990 pre¬ 
empted many state and local laws regarding food labeling. Such assumptions of power 
have been particularly significant in the last few years. For example, federal preemptions of 
state and local authority more than doubled after 1970. More than 50 percent of the pre¬ 
emption statutes enacted in the entire history of our country were enacted in the last 
twenty years. Not even Ronald Reagan, despite his rhetoric promising a return of more 
power to the states, was exempt from this trend, endorsing federal limits on the regulation 
of business, as well as restraints in health and the environment (Kincaid, 1990, p. 149). 

Mandates 

The New York and Printz cases deal with what are called direct orders, requirements or 
restrictions enforced by one government upon another (the federal government on 
states and localities, the states on the cities). Direct orders might include a federal 
requirement that cities meet certain clean water standards or a state requirement that 
a city pay part of the costs of certain welfare programs. Another way control may be 
exercised over another government is through conditions tied to grants-in-aid. These 
conditions are typically of the type parents use with children: “You can go outside to 
play, if you first clean up your room.” Conditions of aid might require land-use plan¬ 
ning or an assurance of making facilities accessible to the handicapped prior to a capital 
construction project. 



The State and Local Perspective IOI 

Because cities derive their powers from the states, most state requirements are in 
the form of direct orders. But most federal requirements are conditions-of-aid tied to 
a particular grant program. Conditions-of-aid are of two varieties. 1) Cross-cutting 
requirements are rules that apply to most, if not all, grant programs. For instance, the 
federal government requires environmental impact statements before undertaking capital 
projects, certain personnel provisions in agencies receiving grant funds, and compliance 
with civil rights legislation. 2) Other conditions-of-aid are program specific, applicable 
only to the particular program. They may include rules about program planning, imple¬ 
mentation, and evaluation; for example, a particular program might prescribe certain 
maximum salaries for individuals employed under the grant or some form of citizen 
participation in program design. Most federal programs have this latter requirement. 
(Kettl, 1983). 

Congress imposes such conditions-of-aid requirements under the Spending Clause of 
the Constitution. For the terms to be valid, though, federal lawmakers must clearly state 
the conditions in the legislation, making certain that state and local governments are 
aware of the requirements. The legality of Congress using funding conditions as a way of 
advancing regulatory and administrative objectives has been reaffirmed in several 
Supreme Court decisions, notably Cedar Rapids Community School District v. Garret 
(1999) and Davis v. Monroe County Board of Education (1999) (see Box 3.4). 

The term mandate has been used to embrace both “conditions-of-aid” and “direct 
orders,” in either case an order requiring a government to do something it might not 
otherwise do. Mandates often require states or localities to spend money they would not 
otherwise spend. Today it is estimated that federal mandates cost state and local govern¬ 
ments an estimated $100 billion a year. State spending mandated by the recent immigra¬ 
tion bills alone is estimated to be over $1 billion. Moreover, states and cities claim that 
mandates unduly impinge upon the autonomy of their level of government. Consequently, 
mandates have become a source of considerable frustration for those on the receiving end. 

It’s no wonder that former Mayor Edward Koch described the “mandate millstone” 
around the necks of state and local officials as “a maze of complex statutory and adminis¬ 
trative directives [threatening] both the initiative and the financial health of local govern¬ 
ments throughout the country” (Koch, 1980, p. 42). Koch was joined then and now in 
his argument by mayors and governors across the country. The mayors were concerned 
with both federal and state mandates, while the governors were concerned primarily with 
federal mandates. 

For nonprofits, mandates tend to be a part of daily life. The key difference is that 
where a local government may have mandates from a relatively narrow number of 
sources, such as the federal and state level, a nonprofit agency often will face direct orders 
or conditions-of-aid requirements from each of its funding sources, and the larger the fun¬ 
der (and funding amount) the greater the burden. Those in the nonprofit sector sometimes 
speak of mandates as the “golden handcuffs”—the funding is great, but grant-maker 
demands usually place an excessive administrative strain on the organization. As Paul 
Light concluded, the situation has been exacerbated in recent years by trends in nonprofit 
management reform: “Unfortunately, the nonprofit sector is caught in the middle of an 
unrelenting contest between competing philosophies and advocates of reform, all of 
which produce significant motion back and forth across different reform ideologies” 



102 Chapter 3 The Interorganizational Context of Public Administration 

(Light, 2000, p. 45). The varying philosophical positions can become manifested in an 
array of reporting standards and administrative procedures imposed by grant-makers. 

The United Way of America, for example, has played a leading role across the country 
in establishing guidelines for performance (or “outcome”) management by nonprofit 
organizations, and an increasing number of local United Ways have set reporting stan¬ 
dards for agencies receiving grants. Similarly, many foundations (large and small) have 
made interagency partnerships an eligibility requirement for grant programs. If a non¬ 
profit service provider wants to apply for a grant, the leadership must show how the 
agency will collaborate with other nonprofits, government, and even for-profit firms. 

At the federal level, every president since Nixon has pledged to reduce the burden of 
mandates on states and local governments. In his 1992 State of the Union address, 
President Bush said, “We must put an end to unfinanced Federal Government man¬ 
dates. ... If Congress passes a mandate, it should be forced to pay for it and to balance 
the cost with savings elsewhere. After all, a mandate just increases someone else’s bur¬ 
den, and that means higher taxes at the state and local level” (Bowman & Pagano, 
1992, p. 4). However, shortly after the president made his remarks, he signed a budget 
agreement that contained twenty new mandates expected to cost state and local govern¬ 
ments about $17 billion over the next five years. 

An important step forward was taken in March 1995, when President Clinton signed 
the Unfunded Mandate Reform Act of 1995, presumably an effort to limit the effects of 
federally imposed mandates. While this legislation does not provide federal funding for 
all mandated activities, it does require that Congress recognize the implications of man¬ 
dates for state and local activities and, in some cases, authorize funding for such man¬ 
dates. However, there seem to be a variety of loopholes through which Congress might 
avoid funding. While most state and local government associations actively supported 
the act, most also realize that it provides limited relief from federally imposed mandates. 
And, we should note that the act does nothing about mandates imposed on local govern¬ 
ments by state governments. 

Subnational Relationships 

Even focusing on state and local activities, we find the federal government involved in 
some way—at a minimum, in providing funds for states and localities. But important 
intergovernmental activity also occurs at the subnational level: state to state, state to 
local, and local to local. 

State to State 

Relationships between and among states are mentioned several times in the U.S. 
Constitution, most notably in the requirement that states recognize the rights and 
privileges of citizens of other states and give “full faith and credit” to the public acts 
and legal proceedings of other states. Some of the most important intergovernmental 
relationships involving various state governments are not based in constitutional doc¬ 
trine, however, but are rather the result of political practices over the years. 



The State and Local Perspective 103 

Relationships among states are not without conflict. States may differ over census 
counts (important in determining the number of representatives in Congress), may dis¬ 
pute shifting state boundaries (as when a river changes course), and may debate a variety 
of substantive policy issues (such as the rights to underground water or the degree to 
which dumping pollutants into a river affects water quality in states downstream). In 
addition, states must increasingly compete with one another for economic development. 
For example, when General Motors announced its plans to build a major new plant to 
produce the Saturn, many states entered an intense bidding war, each hoping GM would 
locate the plant within its boundaries. 

States also cooperate. There are many opportunities for officials in one state to seek 
the advice of those in other states with respect to policy alternatives or new administra¬ 
tive arrangements. Many organizations, including the Council of State Governments, the 
National Governor’s Association, the National Council of State Legislators, and groups 
that bring together state officials in personnel, budgeting, purchasing, social welfare, 
health, and so forth, have been created to help officials share information and expertise. 
These groups, along with the Washington offices of various states, constitute an impor¬ 
tant lobbying group in Washington. 

One way the states come together to resolve potential disputes or work together on 
common problems is through interstate compacts. These agreements have historically 
been bilateral, involving only two states; however, increasingly, compacts are being 
developed to involve a number of states within a region or even all fifty states. Originally 
used to resolve boundary disputes, interstate compacts today cover a wide variety of top¬ 
ics, most arising from the fact that today’s policy problems do not confine themselves 
neatly to the borders of one state. Imagine, for example, the common interests of people 
in several states sharing the same underground water supply. Think also of the problems 
that are of interest to all who live in metropolitan areas, such as Cincinnati or Kansas 
City, that cross the boundaries of two or even more states. It is not uncommon in such 
areas to find interstate compacts covering air and water pollution, transportation, law 
enforcement, and so on. 

States may also use interstate compacts to symbolize their agreement to cooperate in 
especially important policy areas. For example, Arizona, California, and Nevada have 
a definite interest in ensuring access to the water supply from the Colorado River. The 
governments of these states have followed a series of compacts dating back to 1922, 
which layout strict guidelines on access rights and water usage. In cases such as this, an 
interstate compact provides a way for states to formalize resolution of a dispute or to 
arrange to work together without involving the federal government. 

State to Local 

We have seen that the relationship between states and localities is unitary—that is, local 
governments have only those powers granted by the state. However, the nature of the 
powers may vary considerably. Most cities operate under some form of charter, the local 
government equivalent of a constitution. But a state may grant charters in three ways. 
Some states develop special charters for each individual local government; others take 
exactly the opposite approach and grant a general charter for all local governments. 



i04 Chapter 3 The Interorganizational Context of Public Administration 

The classified charter approach seeks to avoid the restrictive nature of the special charter 
and the rigidity of the general charter by granting charters to various classes of cities. 
For example, all cities over 1 million in population might be designated Class A and 
have one set of charter provisions, while cities from 250,000 to 1 million might be in 
Class B and have a different set of provisions. A final means of chartering cities, called 
home rule, permits cities to write their own charters, within very broad state guidelines 
and generally subject to voter approval. 

Home rule provides the greatest flexibility for local governments in terms of basic struc¬ 
ture; however, even under home rule, there is substantial state involvement in local gov¬ 
ernment affairs. For one thing, the states are an important source of funding for local 
activities. Indeed, at a time when federal aid has leveled somewhat, state aid to local gov¬ 
ernments has increased dramatically. Between 1980 and 1995, for example, state aid to 
local governments increased from about $83 billion to well over $200 billion, with most of 
that targeted for education and lesser amounts for welfare, highways, and other purposes. 

But states not only provide money; they also regulate local government activities. State 
governments tell local governments what taxes they can levy, what services they can 
provide, and what types of management systems they must employ. In doing so, states 
provide needed uniformity, as in the case of highway signs, as well as ensure minimum 
standards of performance, as in education or welfare programs. Since states have virtually 
unlimited power over local governments, there is an obvious temptation to compel local 
governments to assume new responsibilities. In most states, there are twenty to thirty 
statutes that impose substantial financial burdens on local governments. The total number 
of mandates or regulations may number in the thousands (Berman, 1992, p. 53). 

Just as states complain about federal mandates, many local officials view state man¬ 
dates as unnecessary intrusions on local prerogatives that may require local expenditures 
that might not otherwise be made. Recently, localities have complained especially about 
sneaky mandates, actions that are required of local governments by the inaction of state 
governments. For example, Georgia failed to pick up prisoners housed “temporarily” in 
county jails, resulting in overcrowding in the prison system, to say nothing of the addi¬ 
tional financial burden on the counties. There is, however, new sympathy for localities in 
terms of mandates and about one-third of the states now have requirements for at least 
partial reimbursements of expenses created by mandates (MacManus, 1992). 

Tocahties are not powerless in their relationship with the states, especially as they 
constitute an important base of political support for those in the legislatures. Local 
representatives and senators can and often do voice the local message loudly and clearly 
in the state legislature. Moreover, various patterns of state and local cooperation have 
emerged in the past several years. Many states, for example, have developed state-level 
equivalents of the federal Advisory Commission on Intergovernmental Relations. These 
state commissions bring together state and local officials to discuss problems in the inter¬ 
governmental system and devise ways to work together more effectively. Among the 
recommendations that have emerged are suggestions for greater local discretionary 
authority and for reductions in the number of state mandates. 

In 2000, the State of Wisconsin launched a comprehensive assessment of state-local part¬ 
nerships, with the intent of developing an incentive-based, performance-driven system of 
intergovernmental relations. A primary issue for the reformers, namely Governor Tommy 



The State and Local Perspective 105 

Thompson and his predecessor, Scott McCallum, centers on ways to balance public 
demands for an integrated system of service delivery with the need for local self-governance 
in the policy-making process. Some of the early recommendations from the governors’ blue- 
ribbon commission include creating more incentives to encourage collaboration between 
governments, moving service delivery toward performance-based contracts, and integrating 
new technologies to enhance government productivity (Kettl, 2001). 

Local to Local 

In discussions of intergovernmental relations, there is an understandable tendency to 
focus on national patterns, but for those who work at the local level, relationships with 
other local governments are extremely important. One reason is that many citizens live 
in one jurisdiction, work in another, shop in another, and pay taxes to several. They nat¬ 
urally expect services, such as the quality of the streets or law enforcement, to remain 
fairly constant as they move from one place to another. 

From a political standpoint, the fragmentation of government, especially in urban areas, 
often means that problems are separated from the resources that might be employed to 
solve them. Wealthier cities have the money; poorer cities have the problems. But even 
where resources are fairly evenly distributed, it is difficult to get several local governments 
together to resolve common problems. Where this is the case, citizens often turn to higher- 
level governments for help, thus taking the problem (and its solution) out of the hands of 
local authorities (Nice, 1987, p. 191). 

But many interlocal problems are resolved at the local level. Natural, though informal, 
patterns of cooperation develop, especially in the relationships among local professionals. 
The police chief in one community talks with other police chiefs, the health officer talks 
with other health officers, and so on. More formally, one government may actually pur¬ 
chase services from another, contracting for police or fire protection, wastewater treat¬ 
ment, or trash collection. Los Angeles County, for example, provides a variety of services 
to local governments through contract arrangements. Additionally, councils of govern¬ 
ment (COGs), oversight bodies representing various localities, may be created to help 
coordinate local affairs. 

In recent years, partnerships between local governments have entered the information 
age as many cities and counties started to share technological innovations across juris¬ 
dictions. In the city of Sunnyvale, California, for example, the local government worked 
with other municipalities and the Microsoft Corporation to develop an online permitting 
software. The Silicon Valley Smart Permit initiative proved to be so successful, 
Sunnyvale has created a public-private partnership with a management firm and its 
e-government affiliate to market the application to other local authorities that are inter¬ 
ested in enhancing the efficiency and responsiveness of the regulatory process (Mariani, 
2001; Hernandez, 2001). 

Finally, special districts may be created to solve problems that cross-governmental 
boundaries. As mentioned, special districts are local governments created for a specific 
purpose within a specific area (not necessarily coinciding with the boundaries of a city 
or county). Although special districts may promote coordination of health, education, or 
other services, they also add to the number of governments within a particular area. 



io6 Chapter 3 The Interorganizational Context of Public Administration 

Thus, one city block may be governed by the city, a-county, and" several special districts; 
a resident may have difficulty figuring out which government can help with a particular 
problem. The difficulties in coordinating efforts are substantial, as are the problems of 
holding the various governments accountable. 

Working with Nongovernmental Organizations 

It is impossible to speak of intergovernmental relations without discussing the role of 
nongovernmental organizations (NGOs) in the policy process. Nonprofit, for-profit and 
faith-based organizations have taken a leading role in the delivery of public services. 
NGOs can be found at all levels of governance and in a variety of policy areas. However, 
NGOs must be considered not only for their part in implementing public programs, but 
also their growing influence in raising issues to the public agenda, lobbying for particular 
policy alternatives, and guiding political and administrative decision making. In many 
respects, even the term “intergovernmental relations” seems a bit outdated; perhaps we 
should opt for the more inclusive term, interorganizational relations. 

The use of NGOs in the delivery of public services has grown markedly in the last 
several years. Figure 3.1 compares civilian employment and overall governmental expen¬ 
ditures at the federal level. Between 1950 and 2000, government spending increased by 
over 400 percent, even holding inflation constant, but government employment grew 
only about 25 percent, with practically no significant growth in the last twenty-five 

Federal Spending and Payroll, 1970-2000 (in billions of constant dollars) 



"Working with Nongovernmental Organizations ioy 

years. This substantial growth in federal programs, occurring without comparable 
growth in federal employment, is explained by the fact that parties other than the federal 
government are actually conducting the programs and delivering the services. Federal 
money, for example, goes to private firms, such as defense contractors or banks that 
administer school loan programs, and to nonprofit organizations, especially those that 
provide human services such as care for the homeless or disabled. 

Much of the attention on NGOs tends to focus on the nonprofit sector, which we will 
discuss later in this chapter. But for-profits also deserve their share of attention. 
Traditionally, business was seen as the antithesis to government, with clear boundaries 
between the public and private sectors. Today, we have experienced a significant blurring 
between sector lines, with only vague distinctions between for-profit firms and govern¬ 
ment agencies. Such involvement of private sector firms in public programs, of course, 
isn’t completely new. Defense and aerospace companies have contracted with government 
for decades, and for-profit prisons were actually the norm in the nineteenth century. 
In fact, many of our technological innovations stem from public-private partnerships. 
Increasingly, though, these partnerships can be found in areas once viewed as purely 
public in nature, including health and human services, trash collection, education, envi¬ 
ronmental protection, and parks and recreation (Sagawa & Segal, 2000; Rosenau, 2000). 

Governments have entered into public-private partnerships to conserve revenues, 
to reduce crime in blighted areas, and to promote economic growth. We mentioned pre¬ 
viously the partnership between the city of Sunnyvale, California, and other municipali¬ 
ties with the Microsoft Corporation to create the online permitting software. Other 
examples include an alliance between the city of Daytona Beach and a private develop¬ 
ment firm to renovate a dilapidated boardwalk area and build a beachfront hotel; a part¬ 
nership between the state of Michigan and other states for correctional services; and 
school districts across the country forming relationships with private computer firms to 
bring public school classrooms into the information age. In each case, the interorganiza- 
tional relationships that arise are important to the success or failure of public programs. 

Privatization and Contracting 

The movement toward greater involvement of NGOs in the delivery of public services is 
partly ideological. Some people simply feel that services should be provided by those 
outside government wherever possible. But the movement has also been stimulated by 
recent restrictions on government spending and a resulting effort to find more efficient 
ways to conduct the public’s business. Both motives have been discussed under the head¬ 
ing privatization, which is the use of NGOs to provide goods or services previously pro¬ 
vided by government, but since the term is used several different ways, it is important to 
be clear about its various meanings (Kolderie, 1986). 

In its broader sense, privatization refers to efforts to remove government from any 
involvement in either the design or conduct of a particular service. In Great Britain, for 
example, major industries such as steel or coal, once nationalized, are returning to 
private control, typically through direct sales to individuals, firms, or other groups. 
In the United States, most such major industries, including most utilities, are already in 
private hands, so there are relatively few examples of such magnitude (the sale of 



io8 Chapter 3 The Interorganizational Context of Public Administration 

Conrail and certain petroleum reserves are exceptions). There'are many more limited 
examples of privatization, however; a city might, for example, sell a golf course to a 
country club development, thus ending the government’s involvement in golf. 

Networking 

To trace some innovative practices in government, check out the Institute for 
Innovations in Government at Harvard University’s Kennedy School of 
Government program at http://www.innovations.harvard.edu. Also see the Center 
for Accountability and Performance at http://www.aspanet.org/cap/index.html. 
For innovations in nonprofit organizations, see the Peter F. Drucker Foundation 
for Nonprofit Management at http://www.pfdf.org. 

The rationale for removing government from a particular area varies. In some cases, 
people may feel that clients will receive more personal attention from a nongovernmental or 
private group, such as one that operates a drug abuse program or a day care center. Others 
suggest that privatization enhances competition among service providers, thus ensuring that 
the new means of delivering services will provide higher quality at a lower cost to the client. 
Programs also can be turned over to the private sector because the programs seem inappro¬ 
priate to government or because the private firm can operate more efficiently. 

Privatization is used in a more narrow sense (and more frequently) to refer to various 
devices through which a government retains a policy role regarding a particular service 
but engages someone else to actually deliver the service. A federal agency might decide to 
contract with a private firm rather than handle its computer programming itself; a state 
might contract with a nonprofit organization to deliver services to welfare recipients; or 
a local government might lease a public hospital to a private firm. In each case, the ser¬ 
vices would be spelled out in detail by the government and some, if not all, funding 
might be provided, but day-to-day operation of the program would be the responsibility 
of the for-profit or nonprofit agency. 

During the past decade government at all levels has explored a variety of mechanisms 
foi privatizing public services, the most popular being the use of contracting. Supporters 
of contracting view fee-for-service and similar arrangements with NGOs as a more effi¬ 
cient method of service delivery, given the greater flexibility, different labor costs, and 
economies of scale offered by for-profit and nonprofit organizations. Some of the most 
publicized examples of contracting in recent years have been in the area of human ser¬ 
vices, as the federal government shifted to state and local authorities (and in turn to 
NGOs) a larger role in the nation’s welfare system under the Personal Responsibility and 
Work Opportunity Reconciliation Act of 1996. 

In the city of West Palm Beach, Florida, the local Work and Gain Economic Self-suffi¬ 
ciency (WAGES) Board, the public-private partnership that oversees implementation of 
welfare reform in regions statewide, invested $6.2 million on welfare-to-work programs 
in fiscal year 1998/99. The WAGES Board contracted with Lockheed Martin IMS, a sub¬ 
sidiary of the aviation-aerospace giant, to run the programs, and in a short period of 
time reduced the number of welfare cases by 45 percent. Advocates say the for-profit 



Working with Nongovernmental Organizations 109 

firm was able to be more innovative than government agencies in its hiring and develop¬ 
ment of service systems, and in the future the WAGES Board intends to examine ways to 
use privatization to streamline even the determination of program eligibility (Walters, 
2000, pp. 34-35). 

The state of Kansas used contracts to hand over to the private sector most of its child 
welfare services. Several years ago, government officials recognized that the state’s foster 
care, adoption and related programs simply had to change. “We had a failed child wel¬ 
fare system in this state,” said State Rep. Melvin Neufeld, who played a key part in 
drafting the reform legislation. Excessive costs and declining effectiveness on the part of 
government agencies, coupled with a newly elected conservative leadership in the state 
legislature, prompted state officials to shift virtually the entire system of service delivery 
over to NGOs, mostly for-profit firms, hinder the new system, state government con¬ 
tracts with lead agencies at a regional level, which in turn subcontract with NGOs to 
handle actual service delivery. State officials act mainly to administer the contracts and 
ensure standards for service quality (Gurwitt, 2000, p. 40). 

As these cases may suggest, privatization has transformed public welfare into a major 
growth industry. Maximus, Lockheed Martin IMS, and other for-profit corporations 
have capitalized on the new arrangements to expand their business operations. The 
Lockheed Martin IMS story is particularly interesting, since it also reflects changing pri¬ 
orities in public policy in the aftermath of the cold war. As the number of defense con¬ 
tracts dwindled during the 1980s and 1990s, Lockheed Martin IMS picked up the slack 
in its parent company’s defense-related operations by contracting for delivery and 
administration of welfare services. The strategy has proven to be quite a success. 
Lockheed Martin IMS has experienced a significant jump in the number of government 
clients, from zero to 25, since the passage of welfare reform in 1996. 

But privatization of human services has its challenges. Even as supporters point to the 
Kansas and Llorida examples as success stories, a closer look reveals major problems 
relating to sustainability. Next door to its thriving effort in West Palm Beach, Lockheed 
Martin IMS struggled in Miami-Dade County. The company’s costs exceeded $38 mil¬ 
lion in the same fiscal year, but failed to make a significant impact on caseloads. In fact, 
the county government has since handed the contract for welfare-to-work services over 
to a local community college (Walters, 2000, p. 35). 

In Kansas, the state’s transformation of child and family services has come under 
attack not only from liberal critics, who argue that public welfare should not be left up to 
firms whose primary motive is profit, but also from the businesses themselves. Governing 
magazine reported that “Kansas’ story isn’t really about privatization: It’s about a rushed, 
no-holds-barred effort to build a public-private social services system using managed-care 
principles, as well as its struggle to recover from the fallout” (Gurwitt, 2000, p. 40). The 
fallout? State officials have been forced to pick up the pieces from what can only be con¬ 
sidered a managed-care revolution. Unlike other states, Kansas bypassed smaller-scale, 
experimental initiatives, choosing instead sweeping reforms. The change inside the state 
resulted in confusion, as state officials struggled to learn new roles as contract managers 
rather than care givers. Lor private firms, the reforms opened a floodgate on newly cre¬ 
ated service networks, swamping many businesses that simply did not have the expertise 
or capacity to deal with the demands of public welfare programs. 



no Chapter 3 The lnterorganizational Context of Public Administration 

The use of contracts to provide public services certainly has its promise. However, as 
the Kansas example has shown, building effective alliances with NGOs must not be 
taken for granted. Nor should contracts be seen as the only mechanism. There are a vari¬ 
ety of options for partnering with NGOs. A franchise can be awarded to a private firm 
to perform a certain service within a state or locality. The firm charges citizens directly 
for the services it provides. Typically, rates and performance standards are established by 
the government, and there is often some continuing regulation of the firm. Examples 
include electric power, taxi services, cable television, and emergency ambulance services. 
Similarly, governments may provide grants or subsidies to private or nonprofit organiza¬ 
tions that are performing needed public services. The government provides full or partial 
support for activities that will benefit the community but which the local government, 
for financial or other reasons, does not wish to operate on its own. Examples include 
local government support for the arts, childcare, or shelter for the homeless. 

All levels of government have experimented with the use of vouchers, which are coupons 
citizens may use to redeem for goods or services. The federal food stamp program, for 
example, provides recipients with vouchers to purchase food, but permits the individual to 
choose both the supplier and the items to be purchased (within stated limits). At the local 
level, many jurisdictions have explored the use of vouchers for education. But while propo¬ 
nents suggest it would lead to more effective, efficient options than the public schools, the 
issue has become one of the most controversial topics in current education policy. 

What is important in all of these efforts to privatize public services is that they bring 
government officials into new relationships with NGOs. But these new circumstances 
also raise important value questions. Where government programs are run directly by 
government, responsibility for their success lies squarely with the government agency. 
But where such programs are actually delivered by those in the private or nonprofit sec¬ 
tor, traditional mechanisms for control and accountability may not work. Maintaining a 
proper concern for democratic values such as equity and responsiveness may, in the long 
run, prove more difficult than the managerial challenges of creating appropriate interor- 
ganizational policy networks. 

The Management of Nonprofit Organizations 

As we have seen, NGOs have become important players in public policy and administra¬ 
tion. Unfortunately, many public administrators fail to appreciate the distinct challenges 
faced by these organizations, especially in the nonprofit sector. In order to develop more 
effective interorganizational, cross-sector relations, it may be helpful to identify some of 
the key elements of organizational capacity within nonprofits. 

Operational Leadership 

Nonprofit management begins with effective leadership. By leadership, we mean an 
organization s internal systems for establishing a mission and vision to guide organiza- 



The Management of Nonprofit Organizations in 

tional action, for engaging in strategy making and planning as a way of setting goals and 
objectives, and for developing an operational structure to facilitate the translation of 
strategy into action. 

Creating effective leadership systems in nonprofits starts with forging a sound mis¬ 
sion and vision. The mission represents what purpose the organization will serve in 
its community; the vision is the guiding image of what members want the organiza¬ 
tion to become in the future (Smith, Bucklin & Associates, 2000; Bryson, 1997). 
While these factors are critical in virtually all organizations, they are especially 
important in nonprofits. Independent-sector groups depend upon a lot more than 
paid staff to carry out organizational objectives, including volunteers, donors, board 
members, and other resources. Without a strong sense of purpose, or a clear vision 
for the future, nonprofit leaders will find it extremely difficult to build the critical 
mass necessary for success. 

Of course, setting a mission and vision must be combined with sound planning, in 
particular establishing clear, measurable goals and objectives. A recent survey of non¬ 
profits found that the “level of support and commitment to planning by the leadership of 
the organization is ... a crucial element in an assessment of organizational capacity. 
If management neither plans nor possesses the support systems needed to enable plan¬ 
ning (e.g., budgeting systems, planning models, information about past organizational 
experiences), then the issue of capacity is largely moot. Organizational survival generally 
requires planning and the development of a shared vision and goals[.]” (Fredericksen & 
London, 2000, pp. 234-235). 

Leadership also involves building a solid organizational foundation that allows non¬ 
profits to transform their strategy into action. For those working in the charitable sector, 
this often proves to be the most difficult task. Most nonprofits begin with an idea, which 
translates very well into mission and vision. Things get much tougher, though, in trying 
to turn the idea into an organizational reality. 

In fact, one of the biggest challenges confronting today’s nonprofits involves creating 
effective, high-capacity systems of operation. Much of this stems from an unwillingness 
on the part of government and foundation grant-makers to provide funding for adminis¬ 
trative costs. Nonprofit agencies could gain access to resources for programming and 
service-delivery, but struggled to find support for the basics of management—staff, equip¬ 
ment, technology, and related expenses. Fortunately, foundations have begun to realize 
that while restricting funding to program-related needs sounds good, it s impossible to 
deliver quality services without a well-developed administrative structure (Greene, 2000). 

Networking 

To explore some of the aspects of nonprofit management, go to the Aspen Institute 
at http://www.aspeninstitute.org; the Hauser Center for Nonprofit Organizations 
at Harvard University at http://www.ksghauser.harvard.edu; the Institute for 
Not-for-Profit Management at Columbia University at http://www.gsb.columbia. 
edu/execed/INM/index.html. See Chapter 2 for a list of sites relating to the advo¬ 
cacy role of nonprofit organizations. 



iiz Chapter 3 The Interorganizational Context of Public Administration 

Resource Development 

Speaking of financial support, resource development represents another key element of 
nonprofit management. Agencies in the independent sector receive their funding from a 
variety of sources, including fees and charges, government grants-in-aid, and private giv¬ 
ing. According to Giving USA 2001 (Center on Philanthropy, 2001) nonprofit organiza¬ 
tions reported more than $203 billion in revenues in charitable contributions during 
2000, with 75 percent from individuals, 12 percent from foundations, 7.8 percent from 
bequests, and 5.2 percent from corporations. And this figure doesn’t include funding from 
fees and government grants, which make up an additional $400 billion. With such a 
diverse revenue base, it might seem strange that a primary weakness of nonprofits 
(especially the smaller organizations) is to rely too much on a single source of support, or 
to not look beyond the next grant cycle for their funding. Successful nonprofits, on the 
other hand, diversify their revenue streams, balancing between grants, fees-for-service, 
and other sources. 

Nonprofit organizations that are classified as either a public charity or private foun¬ 
dation under IRC 501(c)(3) benefit from their tax-exempt status, which allows taxpayers 
to deduct contributions as charitable donations. Some nonprofits also may receive dis¬ 
counts on postal rates, special provisions for financing, as well as various exemptions 
from state and local taxes. 

To assure sustainability, many nonprofits and their associations have developed inno¬ 
vative strategies for maintaining a sound financial base for the next generation. For exam¬ 
ple, the National Committee on Planned Giving has initiated the Leave a Legacy 
program, a nationwide effort to encourage people of all socioeconomic groups to include 
charitable contributions as part of their estates. The program in large part aims at 
attracting charitable contributions from the baby-boomer generation, which over the next 
few decades will retire with an unprecedented level of wealth. An important element of 
Leave a Legacy is its community-based focus—that is, a single organization cannot adopt 
the program, but instead the program brings together nonprofits from around a given 
community. Prospective donors are asked to work directly with the planned giving offi¬ 
cers of the foundations they currently support, or with estate planners to decide upon a 
charitable beneficiary. 

As any nonprofit manager will tell you, resource development goes well beyond 
grants and other types of financial contributions. Although most people recognize the 
challenge nonprofits face in competing for donors, few appreciate the level of competi¬ 
tion for other vital resources, such as in-kind support and volunteerism. While charitable 
giving certainly remains central to a nonprofit organization’s balance sheet, more and 
more nonprofits depend on in-kind contributions and the time, energy and expertise of 
volunteers to meet their objectives. A recent study conducted by the Independent Sector 
found that while charitable giving by individuals had declined in recent years, more 
Americans were volunteering than ever before. Figures for 1998 indicated that 109 mil¬ 
lion people, or 56 percent of Americans, volunteered in some way with a charitable 
organization, far exceeding previous records (Greene, 1999, p. 1). 

Keys for successful resource development include being able to articulate a case for 
your organization; exploring a diverse array of support; identifying an appropriate 



The Management of Nonprofit Organizations 113 

development strategy and action plan; and ensuring effective implementation of the 
action plan. Most importantly, at the heart of the resource development strategy must 
be a commitment to building and maintaining relationships with funders, donors, and 
volunteers (Smith, Bucklin & Associates, 2000). 

Financial Management 

Running a nonprofit also depends upon sound financial management. The benefits of 
being a charitable organization were discussed previously, but with these benefits come 
important requirements for accounting and public disclosure of financial transactions. 
For example, all 501(c)(3) organizations must maintain open records and prepare 
financial reports for their stakeholders on a periodic basis. Many foundations and other 
grant-makers ask grant recipients to undergo periodic audits, sometimes as an eligibility 
requirement. And charitable organizations with annual gross receipts of $25,000 
or more must submit to the IRS each year a Form 990 (Return of Organizations 
Exempt from Income Tax), as well as file disclosure statements with state and local tax 
authorities. 

In order to satisfy these requirements, nonprofits must maintain detailed financial 
records. At the very least this includes following basic accounting standards and proce¬ 
dures. But financial management includes much more than reporting. It should be at the 
heart of a nonprofit’s strategic planning and management. Without the ability to gener¬ 
ate clear, meaningful financial information, then incorporate this information into orga¬ 
nizational decision making, a nonprofit agency limits its overall capacity. Unfortunately, 
many nonprofits fail to follow established procedures and some do not even have in 
place even the simplest mechanisms for accounting. Small- to medium-sized nonprofits 
have the greatest need in this area. 

The basics of financial management include monitoring the assets, liabilities, and net 
assets of the organization, as well as the revenues and expenses for established reporting 
periods. Moreover, nonprofit managers should make sure that the budget and financial 
management process is undertaken in coordination with the governing board. In many 
cases such coordination is mandated in the articles of incorporation, but it also makes 
sense to have those responsible for setting the strategic direction informed on the organi¬ 
zation’s financial condition. 

Board Governance_ 

Most of the principles of nonprofit management discussed here have focused on the 
operational side of the organization. Flowever, independent-sector agencies also must 
have an effective governance system. Nonprofit boards are, in some respects, even 
more vital to the organization than the staff, since some smaller agencies rely on 
board members for performing day-to-day tasks. Regardless of an agency’s size, its 
board represents the final decision-making body of the organization. By law, board 
members are bound (in the articles of incorporation) to ensure the fiscal and legal 

health of the agency. 



114 Chapter 3 The Interorganizational Context of Public Administration 

The board is responsible for several important roles. These include setting the strate¬ 
gic direction for the organization, serving as champions in the external community, and 
overseeing organizational planning and implementation (Carver, 1996). First, with 
regard to the strategic direction, board members act as the primary source of vision, mis¬ 
sion and values for the agency, then ensure that these strategic factors become reflected 
in organizational action. An excellent example of this can be seen in Porter Hills 
Retirement Communities and Services, a nonprofit healthcare provider in Grand Rapids, 
Michigan. The Executive Leadership Team at Porter Hills actually brings the outline of 
the Porter Hills mission, vision, and values into its strategy sessions and considers these 
principles prior to moving ahead on all important decisions. If a new venture, partner¬ 
ship, or internal change does not reflect the core principles of the organization, or does 
not coincide with where the board wants to be in the future, then the issue is either 
dropped or taken back to the board for direction. 

Second, board members also must be the organization’s champions in the community. 
They are the principal spokespeople, representing the organization on key issues, but 
also the role models for donations and volunteerism, as mentioned previously. In this 
capacity, the board should set the policies and procedures for the operational staff and 
leadership on strategies for external communication. Board members, consequently, 
must always be kept in the loop on factors affecting the organization. 

A vital point here is that the board must speak with one voice, or it shouldn’t speak at 
all. This means that board members should support decisions of the governance body 
once a consensus has been achieved. Too often, and particularly with smaller, community- 
based organizations, members of nonprofit boards go into the community and speak 
against the other members, or against the organization. This does nothing but send a sig¬ 
nal to those listening that the disgruntled board member has failed to appreciate the core 
values of governance. 

Third, the board must support the organization’s leadership on issues of planning and 
implementation. As advisors from the Support Center for Nonprofit Management noted, 
‘ The board should make sure an effective planning process is in place, contribute its per¬ 
spective on the organization’s strengths, weaknesses, opportunities and threats, and 
woi k with staff to reach consensus on overall program and administrative priorities” 
(Allison & Kaye, 1997, p. 32). This doesn t mean that board members should try to 
manage day-to-day activities on the part of the staff. It does mean, though, that those on 
the operational side of the organization should coordinate and seek direction from the 
board on those issues that are truly strategic in nature. 

Nonprofit boards vary in size with some organizations having less than ten and 
others having more than fifty members (this tends to be toward the extreme!). The com¬ 
position of the board will reflect the history and mission of the organization, but most 
nonprofits strive to ensure that the governance system will reflect the diversity and 
values of the constituent community. A few of the considerations relating to board size 
include 

• What functions are required of the board? 
• How many individuals, and in what roles, are needed to accomplish those functions? 
• How many board committees are needed to accomplish the organization’s goals? 



The Management of Nonprofit Organizations 

' ^5“* '"d'viduals on the board ,o participate on board comm,ttees> 
(Smith, Bucklin & Associates, 2000, p. 29) 

A primary source of failure for nonprofit boards relates to the leadership’s inability 
to manage the board's tin* wisely. Most often the greatest ^efficiencyh open. « 
board meetings. How many hour-and-a-half meetings have turned into three-hour 

must set dea^tmie3 Set''n8 “ Yahab'e ^ginning point, but also the presiding officer 
his the constraints for each of the agenda items, making sure that everyone 
points! PP°rtUn,ty “ partlc,Pate when necessary but limiting comment to only the key 

mem'Ahkh ^h m0S',mPortLant attrib«“ for effective nonprofit manage- 
ment. A high-impact board with an effective board chairperson can have an extraordinary 
influence on the organization’s success. Unfortunately, the opposite is also true Many \ 

an meZ: «v“y Hm,ted’ “d m S°me C3SeS “”pfettly de« » 

Board-Staff Relations 

hnTdVtt TateSt Cla"ei.n8“ faced by n°nProfits 15 the »«<* to strike a balance in 
central roe ro ffiT'' ffi Pre™US ,discussion ^ggested, the board members have a 
central role to play in the organization s strategy making and in representing the orgam- 

VhP ln^hkeXtarna C°mmunit^ However, once the parameters for action have been 
established, board members must step back and allow staff adequate room to achieve 
the goals and objectives. Frequently, boards (especially those consisting of inexperienced 
members) tend to micromanage the operational staff. But this does little more than 
oster distrust, frustration and, in many cases, contributes to high staff turnover. 

ere are several keys to effective relationships. First, the board must set clear expec- 
tations for leadership and staff. At least once a year board members should sit down 
with the executive director and lay out the goals and objectives for the coming term 
econd the expectations must be reinforced by lines of communication between board 

and staff. Communication channels should be maintained by the executive director and 
in some rare events directly between the board and the staff. Third, the board must’rein- 
orce success. As part of its oversight function, the governing board should be ready to 

celebrate the good work being done, not just sanction the shortcomings. 
In many respects, the primary buffer between the board and staff is the executive 

director. Although some executive directors position themselves in ways that cut off the 
governance and operational sides of the agency, with very little direct involvement 
between board members and staff, this takes things a bit too far. The most effective rela¬ 
tionships feature executive directors as the main conduits, as brokers. Staff should be 
present, when appropriate, at board meetings, mainly to offer expertise and inform the 
board on key decisions; similarly, the board must provide oversight and guidance to 
the staff on key issues of agency strategy. How far to go on either side will depend upon 
the organization, but it’s up to the executive director and members of the leadership team 
to determine the appropriate balance. 



n6 Chapter 3 The Interorganizational Context of Public Administration 

Advocacy 

Perhaps the most overlooked, and largely misunderstood, aspect of nonprofit manage¬ 
ment deals with the advocacy role of independent-sector organizations. Some of this 
stems from the fact that the federal tax code limits lobbying activities by charitable orga¬ 
nizations and, depending upon the party affiliation or political position, some legislators 
and policy makers have frowned upon nonprofit activism. But nonprofit organizations 
may, even under federal tax law, engage in advocacy as a way of amplifying the voice of 
their constituents in the policy process. 

In 1976, Congress granted nonprofits the right to lobby in the public interest without 
having to worry about losing their status as tax-exempt organizations (Pub. L. No. 94- 
455, 1307 [1976]). While the IRS deliberated on the issue for more than a decade, in 
1990 the federal tax code was revised to expand the advocacy rights of nonprofits. 
Under the 1976 tax law, nonprofits that choose to come under its jurisdiction must 
comply with the definition of lobbying as “the expenditure of money by the orga¬ 
nization for the purpose of attempting to influence legislation. Where there is no expen¬ 
diture by the organization for lobbying, there is no lobbying by the organization” 
(Smucker, 1999, p. 51). 

The tax law establishes two types of lobbying: direct and grassroots. Direct lobbying 
refers to communication by the organization with legislators or other public officials on 
matters concerning legislation on which they have a role to play in the bill’s formulation, 
or with the nonprofit organization’s own membership. In contrast, grassroots lobbying 
involves influencing the legislative process by attempting to sway public opinion on the 
policy issues. The law also establishes ceilings for the amount of expenditures that may 
be allocated to lobbying, based on the total level of tax-exempt expenditures for the 
organization. A nonprofit with annual expenses up to $500,000, for example, may allo¬ 
cate 20 percent of these expenses for lobbying activities, while an organization with tax- 
exempt expenditures of over $17 million may spend a total of $1 million for lobbying 
(Smucker, 1999, p. 55). 

We should point out that many activities by nonprofits, and even a wide array of 
expenditures, which may be in some way connected with the legislative or public policy 
process are not considered lobbying under the 1976 law. For instance, using contacts with 
officials in the executive branch to influence proposed legislation; communicating to 
members of the organization — as long as they are not encouraged to lobby—even if the 
organization itself takes a certain position; and advocating legislators on issues that affect 
the existence, tax-exempt status, or other aspects of operations (the so-called self-defense 
activity) — none of these would be viewed as lobbying on the part of the nonprofit. 

The right of nonprofits to lobby in the public interest was reinforced by the Supreme 
Court in Legal Services Corp. v. Velazquez (2001). At issue in the case were provisions in 
the 1996 welfare reform law, which attempted to prohibit legal challenges to the reform 
legislation from local organizations funded by the Legal Services Corporation. The Court 
struck down these provisions, stating that since Congress allowed Legal Services 
Corporation lawyers to advocate for the poor on some matters, federal lawmakers could 
not “deprive a Legal Services client of his or her rights to a full and complete legal defense, 
which might well happen if a lawyer couldn’t challenge the legitimacy of the welfare law” 



Summary and Action Implications iij 

(Lenkowsky, 2001, p. 40). The ruling has been viewed by many in the nonprofit commu¬ 
nity as a potential expansion in the capability of independent-sector organizations, even 
those that receive federal funding, to advocate for their constituents on legislative issues. 

For others, however, the ruling may have the opposite effect. In its analysis of the 
decision, the Chronicle of Philanthropy characterized Velazquez as a Pyrrhic victory, 
stating that while the ruling may have some positive impact on the advocacy role of non¬ 
profits, it also reaffirmed the Court’s decision in Rust v. Sullivan (1991), in which 
employees of NGOs that receive federal funding were held to be agents of the govern¬ 
ment. This means that they forfeit their First Amendment rights to free speech by agree¬ 
ing to accept the federal grants and contracts (Lenkowsky, 2000, p. 40). 

As future nonprofit managers, you should take this as a caution to explore the legal 
constraints before engaging in lobbying activities, but by no means should you shy away 
from attempting to influence policy decision-making on behalf of your constituents. The 
law is on your side, and you certainly will have greater protection than you may have 
originally thought for lobbying without fear of threatening your organization’s tax- 
exempt status. 

Summary and Action Implications 

Given the complexity of modern society, your work as a public administrator will likely 
involve a complex set of relationships with all kinds of external groups. Many of these 
groups will be agencies at other levels of government. Our federal system has evolved 
from a pattern in which the various levels of government were relatively distinct to a 
pattern in which funding and programmatic relationships are extremely intense. 

The fact that public programs today operate through vast and complex webs of people 
and organizations—public, private, and nonprofit—means that new skills are required of 
the public manager. Any particular program may involve various levels of government, 
from all sectors of society, and clients or citizens with many different interests and con¬ 
cerns. As a public manager, you must be able to identify the network that is or should be 
involved in a particular situation and assess the effectiveness of that network. 

To make that judgment, you will need to consider several factors. The first is commu¬ 
nications, the type of information that goes from one organization to another and how it 
is transmitted. Second, you might focus on exchanges of goods and services, money, and 
personnel among the organizations involved. Third, you might examine the normative 
aspect of the relationship—that is, what each organization expects of the other and 
what each is willing to contribute to the alliance. Examining these same categories may 
also suggest ways to improve the effectiveness of interorganizational relationships. 

The interorganizational nature of modern public administration also has interesting 
implications for the interpersonal skills you must bring to the job. Increasingly, the govern¬ 
ment official responsible for a given program must be skilled in negotiating relationships 
with those outside the agency to ensure that the program proceeds effectively and responsi¬ 
bly. More and more, the public administrator works in a world in which older images of 



ii8 Chapter 3 The Interorganizational Context of Public Administration 

organizational hierarchy and control are quickly giving way to newer images of managing 
in ambiguity and negotiating organizational boundaries. The interorganizational nature of 
public administration today has a direct effect on what skills managers need. 

Terms and Definitions 

Block grants: Grants in which the money can be used for nearly any purpose within 
a specific functional field. 

Capital grants: Grants for use in construction or renovation. 

Categorical or project grants: Grants requiring that the money may be spent for only 
a limited purpose; typically available on a competitive basis. 

Charter: Local government’s equivalent of a constitution. 

Contracting: Government agreeing to contracts with private or non-profit groups to 
deliver certain services. 

Cooperative federalism: Greater sharing of responsibilities between federal and state 
governments. 

Coproduction: Using volunteer activity to supplement or supplant the work of govern¬ 
ment officials. 

Councils of government: Oversight bodies representing various localities to help coor¬ 
dinate local affairs. 

Cross-cutting requirements: Rules that apply to most grant programs. 

Dillon s Rule: Municipalities have only those powers granted in their charters; cities 
are creatures of the state. 

Direct orders: Requirements or restrictions that are enforced by one government over 
another. 

Dual federalism: Pattern in which federal and state governments are struggling for 
power and influence with little intergovernmental cooperation. 

Entitlement grants: Grants that provide assistance to persons who meet certain criteria. 

Formula grants: Grants that employ a specific division rule to indicate how much 
money any given jurisdiction will receive. 

Grants: Transfers of money (and/or property) from one government to another. 

Home rule: Provision allowing cities greater autonomy over local activities. 

Intergovernmental relations: A term encompassing all the complex and interdepen¬ 
dent relations among those at various levels of government. 



Study Questions 119 

Interorganizational networks: Pattern of relationships within and among various 
groups and organizations working in a single policy area. 

Mandate: Order requiring a government to do something. 

Negotiated investment strategy: Bringing together representatives of all affected 
groups to set priorities for funding. 

Operating grants: Grants for use in development and operation of specific programs. 

Picket-fence federalism: Pattern of intergovernmental relations in which the horizon¬ 
tal bars represent levels of government and the vertical slats represent various sub¬ 
stantive fields. 

Preemption: Federal government efforts to preempt an area traditionally associated 
with state government. 

Privatization: Use of nongovernmental agencies to provide goods and services previ¬ 
ously provided by government. 

Revenue sharing: Grant pattern in which the money can be used any way the recipi¬ 
ent government chooses. 

Sneaky mandates-. Actions that are required of local governments by the inaction of 
state governments. 

Special districts: Local governments created for a specific purpose within a specific area. 

Supply-side economics: Argument that decreased taxes and spending will stimulate 
capital investment and economic growth. 

Study Questions 

1. Although intergovernmental relations involve more than financial matters, funding 
programs have a significant role in the process. Define and give examples of the vari¬ 
ous kinds of grants and funding programs. 

2. Compare and contrast “dual federalism” and “cooperative federalism.” Describe the 
approach to federalism used during the Clinton and Bush presidencies. 

3. In the last decade, states and localities have faced significant changes in funding from 
the federal government. Discuss the reasons for the changes and how they affect rela¬ 
tions among the various levels. 

4. Flow do governmental mandates and regulations affect operations at the state and 

local levels? 
5. Government has been moving to “privatization” of some goods and services. 

Flow will this trend affect intergovernmental relations? 
6. Explain the importance and use of contracting for services and goods. 



120 Chapter 3 The Interorganizational Context of Public Administration 

Cases and Exercises 

1. Analyze the relationship between state and local governments in your state. What legal 
requirements govern state/local relationships? What, if any, bodies exist to help in 
intergovernmental cooperation? What kinds of mandates has the state imposed on 
local governments? What has been the reaction to these? How do you think state/local 
relations could be improved? 

2. Assume the role of a member of a task force that has been asked to consider ways 
your local parks and recreation services could be delivered at less cost to the city gov¬ 
ernment. (You may be able to obtain a budget, a list of services, and existing fees from 
the Parks and Recreation Department.) Consider alternatives such as special charges, 
citizen involvement in service delivery, and limitations on services. At the same time, 
consider what minimal level of parks and recreational services the city should provide 
as part of its general operations. 

3. John Kincaid, a prominent student of intergovernmental relations, offers a list of 
trends emerging during the 1990s that characterize what he calls America’s system of 
coercive federalism. Discuss each trend and predict its impact on the future of inter¬ 
governmental relations. 
• Aid reduction: A decline in federal aid to state and local governments. 
• Aid reduction to persons: A cutback in federal assistance programs, such as 

Medicaid and Temporary Assistance to Needy Families. 
• Aid conditions: An increase in federal mandates attached to aid programs to state 

and local governments. 
• Mandates: A rise in federal mandates, despite initiatives by Presidents Clinton and 

Bush and by Congress to curb such measures. 
• Preemption. A displacement of state and local government power by executive, leg¬ 

islative, and judicial actions at the federal level. 
• Intergovernmental tax immunities: An intrusion on the part of the federal govern¬ 

ment on the tax base of state and local governments. 
• Uncooperative programming: A deterioration in the level of cooperation toward 

intergovernmental programs. 
• Judicial indifference: A lack of concern on the part of the courts toward state and 

local government interests. 
4. Divide the class into several groups of six to eight students each. Have one group 

assume the role of a granting agency charged, by legislation, with providing funds to 
local communities to help in projects that improve the economic potential of the com¬ 
munity and assist low-income and disadvantaged groups in the community. Assume 
that the agency has $50 million to distribute, but that the legislation has given the 
granting agency the authority to determine all other details of the grant program. 

The agency group must first define as clearly as possible the intent of the legisla¬ 
tion, then prepare guidelines outlining the types of projects that will be funded under 
the program. A written Request for Proposals (RFP) should then be prepared and dis¬ 
tributed to a set of potential applicant communities, each represented by one of the 
other groups in the class. The RFP should contain, at a minimum, a description of the 



For Additional Reading IZI 

program, criteria by which proposals will be evaluated, examples of projects that 
might be funded, and instructions for submitting proposals for funding (including a 
deadline for applications). 

Each community group will then prepare a grant application to support a project or 
projects it wants for its community. Members of each community group may commu¬ 
nicate with one representative of the agency designated as liaison to that community, 
but should not talk with other agency members. Community groups can communicate 
with one another if they wish. By the deadline contained in the RFP, all proposals 
should be submitted to the agency. The agency will then determine which, if any, proj¬ 
ects will be funded and at what levels. The results should be communicated to all the 
communities. 

Following the exercise, the class as a whole should discuss the entire process. You 
might want to focus on issues such as these: 
• What is the role of the agency in defining the kinds of projects that will be funded? 
• What types of instructions are necessary to enable communities to compete fairly 

and effectively? 
• What was most attractive about the proposals that were funded? 
• For what reasons were other proposals not funded? 
• What effect on the final decisions did communications between the community and 

the liaison from the agency have? 
• Did politics play any role? 

For Additional Reading 

Bernstein, Susan R. Managing Contracted Services in the Nonprofit Economy. 
Philadelphia: Temple University Press, 1991. 

Boris, Elizabeth T., and C. Eugene Steuerle. Nonprofits and Government: Collaboration 
and Conflict. Washington, DC: Urban Institute, 1999. 

Bowman, Ann O., and Richard C. Kearney. The Resurgence of the States. Englewood 
Cliffs, NJ: Prentice Hall, 1986. 

Cook, Brian J. Bureaucracy and Self-Government. Baltimore: Johns Hopkins University 
Press, 1996. 

Cooper, Phillip J., and Chester A. Newland. Handbook of Public Law and 
Administration. San Francisco: Jossey-Bass, 1997. 

Cooper, Phillip J., et al. Public Administration for the Twenty-First Century. Fort Worth: 
Harcourt Brace College Publishers, 1997. 

Gage, Robert W., and Myrna P. Mandell, eds. Strategies for Managing 
Intergovernmental Policies and Networks. Westport, CT: Greenwood Press, 1990. 

Hill, Kim Quaile, and Kenneth R. Mladenka. Democratic Governance in American 
States and Cities. Pacific Grove, CA: Brooks/Cole, 1992. 

Hill, Larry B., ed. The State of Public Bureaucracy. Armonk, NY: M. E. Sharpe, Inc., 

1992. 



122 Chapter 3 The Interorganizational Context of Public Administration 

Jennings, Edward T., Jr., Dale Krane, Alex N. Pattakos, and B. J: Reed, eds. From. 
Nation to States. Albany: State University of New York Press, 1986. 

Judd, Dennis R., and Todd Swanstrom. City Politics. Private Power and Public Policy. 
New York: HarperCollins College Publishers, 1994. 

Katz, Michael B. The Price of Citizenship: Redefining the American Welfare State. New 

York: Metropolitan Books, 2001. 

Kemp, Roger L., ed. Privatization. The Provision of Public Services by the Private Sector. 
Jefferson, NC: McFarland & Company, 1991. 

Kettl, Donald F. Government by Proxy. Washington, D.C.: Congressional Quarterly 
Press, 1988. 

Kettl, Donald F. Sharing Power: Public Governance and Private Markets. Washington 

D.C.: The Brookings Institution, 1993. 

Fevin, Martin, and Mary Sanger. Making Government Work. San Francisco: Jossey- 
Bass, 1994. 

Light, Paul C. Sustaining Innovation: Creating Nonprofit and Government Organizations 
that Innovate Naturally. San Francisco: Jossey-Bass, 1998. 

Fight, Paul C. Making Nonprofits Work: A Report on the Tides of Nonprofit Management 
Reform. Washington, DC: Brookings Institution, 2000. 

McFaughlin, Curtis. The Management of Nonprofit Organizations. New York- Wiley 
1986. 

Nathan, Richard P., Fred C. Doolittle, et al. Reagan and the States. Princeton, NJ: 
Princeton University Press, 1987. 

National Academy of Public Administration. Privatization: The Challenge to Public 
Management. Washington, DC: National Academy, 1989. 

Nice, David C. Federalism: The Politics of Intergovernmental Relations. New York: St. 
Martin’s Press, 1987. 

Peirce, Neal R., Curtis Johnson, and John Stuart Hall. Citistates: How Urban 
America Can Prosper in a Competitive World. Washington, DC: Seven Focks 
Press, 1993. 

Peterson, Paul. The Price of Federalism. Washington, DC: Brookings Institution 
1995. 

Rivlin, Alice M. Reviving the American Dream: The Economy, the States, and the 
Federal Government. Washington, DC: The Brookings Institution, 1992. 

Rosenbloom, David H. Building a Legislative-Centered Public Administration: Congress 
and the Administrative State, 1946-1999. Tuscaloosa, AT: University of Alabama 
Press, 2000. 

Rusk, David. Cities without Suburbs. Baltimore: Johns Hopkins University Press, 1993. 

S 1989°n’ M ’ ed' Bey°nd Prwatization- Washington, DC: Urban Institute Press, 

Salamon, Fester M. Partners in Public Service: Government-Nonprofit Relations in the 
Modern Welfare State. Baltimore, MD: Johns Hopkins University, 1995. 

Smith, Steven Ragbeth, and Michael Fipsky. Nonprofits for Hire: The Welfare State in 
the Age of Contracting. Cambridge: Harvard University Press, 1993. 

Wright, Deil S. Understanding Intergovernmental Relations. 3d ed. Pacific Grove CA- 
Brooks/Cole, 1988. 



Chapter 4 

The Ethics of Public Service 

So far we have focused on the context of public administration—the values, structures, 

and relationships you need to understand to act effectively and responsibly in public 

organizations. Now we begin a transition to more skill-based issues by exploring the 

ethical issues raised in public service. An ethical posture toward work in public organiza¬ 

tions requires not only knowing the right answers, but being willing and able to do what 

is right. You must be prepared to act. 

Over the last several years, there has been a surge of interest in ethical issues in public 

organizations. A recent set of Time cover stories asked the question, “What Ever 

Happened to Ethics?” The articles commented on ethical dilemmas in business, educa¬ 

tion, and even religion, but gave special attention to the ethics of those in government. 

In one article, Sissela Bok, a philosophy professor at Brandeis University, stressed that 

moral leadership must come first from those in public office. “Aristotle said that people 

in government exercise a teaching function. Among other things, we see what they do 

and think that is how we should act. Unfortunately, when they do things that are under¬ 

handed or dishonest, that teaches too” (Time, May 25, 1987). 

Certainly the concerns Bok and others expressed about the ethical behavior of public 

officials have been triggered by such dramatic public events as Watergate and the Iran- 

Contra scandal. But in fact, ethical issues permeate public organizations as they do 

all organizations. Every action of every public official—whether in the formulation or 

implementation of public policy—carries value implications. Given this situation, it is 

not surprising that both President Bush and President Clinton used their first executive 

orders to deal with ethical issues and that states and localities across the country have 

struggled mightily with ethical concerns. 

As a public manager, you will often face difficult ethical choices. These choices may 

present themselves in several ways. “Dilemmas arise for decision makers when respon¬ 

sibilities conflict, when the obligations they undertake or the rules to which they are 

subject are unclear, or when they are unsure how to weigh their responsibilities against 

personal needs or desires” (Fleishman & Payne, 1980, p. 17). Understanding the moral 

implications of your actions and resolving the dilemmas they pose is one of the most 

difficult problems you will face working in the public sector. Consequently, your ability 

to understand the context in which public problems arise and to work them out in 

a careful, reasoned, and ethical fashion will be essential to your success (and your own 

sense of personal well-being). 
In this chapter we examine a variety of ethical issues faced by public managers. Some 

involve concerns that might arise in any organization—cases of lying, cheating, or stealing, 

123 



124 Chapter 4 The Ethics of Public Service 

or questions about what to do when you feel compelled to refuse an order from your boss. 
Others are more directly connected to the special values that underlie public service, involv¬ 
ing the relationship between political leaders and career civil servants or between competing 
demands for efficiency and responsiveness. 

Approaches to Ethical Deliberation 

Ethics is, of course, a branch of philosophy and is concerned with the study of moral 
principles and moral action. To properly define ethics, therefore, we must first understand 
the meaning of morality. Morality is concerned with those practices and activities that are 
considered right or wrong; it is also concerned with the values those practices reflect and 
the rules through which they are carried out within a given setting (DeGeorge, 1982, 
p. 12). The morality of a society, a political system, or a public organization concerns 
what is considered to be right or wrong within that group. Morality expresses certain val¬ 
ues that members of the group hold to be important and is reflected in laws, rules, and 
regulations, or in policies and procedures. Moral action, in turn, is action that is consis¬ 
tent with the group’s morality—that which expresses the group’s most basic commit¬ 
ments about what is right and what is wrong. 

Ethics, on the other hand, can be defined as “a systematic attempt through the use of 
reason to make sense of our individual and social moral experience in such a way as to 
determine the rules which ought to govern human conduct” (DeGeorge, 1982, p. 12). 
Ethics is concerned with the process by which we clarify what is right and wrong and by 
which we act on what we take to be right. Ethics involves the use of reason in determin¬ 
ing a proper course of action. Ethics is the search for moral standards. 

Though we have defined ethics as the study of morality, the two terms are often used 
almost interchangeably. For example, we often call an action that is morally correct an 
ethical action. Similarly, we speak of codes of moral conduct as codes of ethics. Despite 
the overlapping uses of the terms, the distinction between morality and ethics is impor¬ 
tant not only for philosophical reasons, but because focusing on ethics emphasizes the 
individual’s active involvement in searching out morally correct positions. Ethics calls us 
into action; it requires us to reason, to analyze, and to seek guidance as to the proper 
course of action. 

This deliberative aspect of ethics is important because the issues you will face in public 
organizations are rarely black or white. Should you lie to a legislator so as to carry out 
a policy you think is correct? Should you bend the rules to benefit a client in need? Should 
you follow orders from an organizational superior even if you know you are being asked 
to do something wrong? These questions and the thousands of others you may encounter 
in public organizations do not have easy answers. To act properly, you must be able to 
sort through the many and often competing values that underlie your work, and you 
must be able to come to a reasoned conclusion that will form the basis for action. 

It is not enough to simply say, “It depends,” and go about your business, though such 
a position has gained widespread currency in our society. Ethical (or moral) relativism is 



Approaches to Ethical Deliberation 125 

the belief that actions that are immoral in some places or circumstances are moral in 
others and that one can make moral judgments only by taking into account the context 
in which an action occurs. According to this view, there are no universal rules of conduct 
that apply in all situations. A defense of the relativist position is that different cultures 
have different rules of conduct. One culture may consider it proper to leave old people 
to die alone, while another may give the elderly considerable care and attention. 

Such arguments, however, often fail to take into account larger and more unifying 
moral principles, such as respect for the elderly. Furthermore, the relativist position 
seems at odds with our moral experience. When we make the judgment that murder is 
immoral, we do not mean that it is immoral for some individuals and not others. 
We do not even mean that murder is immoral in some countries and not in others. 
We claim that murder is immoral for all people at all times — and we can defend our 
statement on both rational and emotional grounds. This position suggests that there 
is really only one right answer to moral questions (even though that answer may be 
hard to find!). Nevertheless, by understanding the context in which an action occurs, 
working through the various arguments in behalf of one position or another, and 
arriving at a set of guidelines for action, one can at least act with greater clarity 
and confidence. 

What are the steps in ethical deliberation? First, you should attempt to clarify the 
facts. Although most ethical issues involve both facts and values and the facts alone are 
not likely to resolve the issue, it is important to establish the facts as clearly as possible. 
A pollution control policy may require precise measurements of pollutants released into 
the air; knowing the exact measurements, rather than speculating about them, may 
resolve the issue. In other cases, merely becoming clearer about the facts will help resolve 
certain ethical problems. 

Second, it is easier to resolve ethical issues if those involved come to some agreement 
about basic principles. These may be broad moral standards (such as freedom or justice); 
they may be laws or other rules accepted by the society; or they may be standards of 
behavior appropriate to a particular group or organization. These ideas are, of course, 
deeply held by members of any society or organization, so disagreements may be marked. 
For example, two detectives may have dramatically different views about how to treat 
criminals, but if they clarify their agreement on the basic goal of fighting crime, they may 
be able to reconcile their differences. Generally speaking, any progress you can make in 
establishing a common ground or in bringing about agreement on basic principles will 
help resolve the issue. 

Third, one of the central aspects of ethical deliberation is the analysis of arguments 
presented in behalf of various viewpoints. The arguments may be articulated by different 
individuals or different groups, or they may simply be arguments and counterarguments 
you think through yourself. In either case, you will need to consider the evidence pre¬ 
sented, the justifications for various viewpoints, and possible fallacies of the justifications. 
Throughout the process of argumentation, dialogue is extremely helpful in clarifying 
one’s position. (If the problem is one you are considering alone, finding someone to talk 
through the issues with you is a good idea.) Ultimately, however, you will need to make 
a decision and act on it. Ethical deliberation will lead you to a decision, but acting in a 
way that is consistent with that decision is also important, though often difficult. 



i2 6 Chapter 4 The Ethics of Public Service 

Reasoning, Development, and Action 

You will be better prepared to deliberate if you become familiar with some basic 
approaches to ethical reasoning: moral philosophy, moral psychology, and moral action. 
In each case, we will present only a brief overview. You should be aware that there are 
many varying and sometimes conflicting interpretations of these issues, and you may find 
others (perhaps including your teacher) who disagree with the formulation presented 
here. Consider this material merely an invitation for further learning! 

Moral Philosophy 

Regarding moral philosophy, we can ask: given a particular set of circumstances, how 
do we determine what is right and what is wrong? In other words, how do we go about 
figuring out the proper course of action? One approach is to consider who will benefit 
and who will suffer from each of various alternative actions, then ask which course of 
action provides the greatest benefit at the least cost. Another approach is to search for 
a moral principle or rule against which to measure aspects of the particular case. In the 
first approach, one focuses on the consequences of the action; in the second, one looks 
for universal rules of conduct. 

One of the most common forms of ethical deliberation, which focuses on the conse¬ 
quences of actions, is utilitarianism. Utilitarianism holds that an action is right, compared 
to other courses of action, if it results in the greatest good for the greatest number of people 
(or at least the minimum harm). Proponents of this view contend that there are no universal 
principles that can guide action, but rather that the likely benefits and costs associated with 
any action must be calculated to judge that practice either moral or immoral. 

Obviously, this view leans toward relativism; according to a utilitarian, telling the 
truth cannot be judged a priori either right or wrong—rather, the rightness or wrong¬ 
ness of telling the truth depends on a calculation of who is helped and who is harmed by 
the act. Only then can a moral judgment be rendered. In the utilitarian view, “Actions 
themselves have no intrinsic values. They are simply means to attain things which do 
have value” (DeGeorge, 1982, p. 40). 

An administrator employing a utilitarian approach to moral reasoning in a specific situ¬ 
ation would ask what the likely outcomes of one course of action or another might be. 
If building a new highway through a particular neighborhood would inconvenience a few 
people but benefit many others, then building that highway in that location would be con¬ 
sidered a proper course of action. The administrator would not follow any predetermined 
moral principle, such as that citizens should not be arbitrarily displaced, but would calcu¬ 
late costs and benefits relative to the specific case. Moreover, the administrator would not 
generalize beyond the specific case; each act would be judged on its own merits. 

A contrasting approach to moral reasoning based on the search for general rules or 
principles of conduct is often called deontological. Deontology holds that broad princi¬ 
ples of rightness and wrongness can be established and that these principles are not 
dependent on the consequences of a particular action. Those who hold this view tend to 
focus on duties or responsibilities (deontology derives from the Greek word for “duty”). 
Quite simply, one s duty is to do what is morally correct and to avoid doing that which is 
morally wrong, regardless of the consequences of one’s actions (DeGeorge, 1982, p. 55). 



Approaches to Ethical Deliberation 127 

Deontologists thus tend to focus on broad principles of right and wrong, such as those 
embodied in concepts like “rights” or “justice.” 

Using the deontological approach, an administrator would seek to act in accord with 
generally accepted moral precepts, such as honesty or benevolence. Administrators are 
expected, for example, to tell the truth, keep their promises, and respect the dignity of 
the individual. Their doing so does not derive from laws or codes of ethics but from gen¬ 
erally accepted moral principles. In particular situations, these actions might even be 
harmful to the overall interests of the organization or the society, but, because the 
actions could be justified as consistent with a shared sense of moral order, the adminis¬ 
trator should feel strongly compelled to act in that way (Denhardt, 1988, p. 46). 

One contemporary deontological theory that has received considerable attention is 
that of philosopher John Rawls. His approach emphasizes fairness or equity in policy 
decisions (Rawls, 1971). An interesting argument that Rawls develops to explain his the¬ 
ory suggests that if decisions were made under conditions in which the decision makers 
had no knowledge of whether they would personally accrue harm or benefit by choosing 
one way or another, then fairness would likely prevail. Imagine a city council committee 
deciding where to spend $1 million on street improvements. If all members of the com¬ 
mittee acted in their own interest, they might spend the money in their own neighbor¬ 
hoods (and those would likely be the more affluent neighborhoods). On the other hand, 
if all members of the committee acted under a veil of ignorance, not knowing where they 
lived or whether or not they were affluent, they would most likely spend the money so as 
to bring the poorer streets up to some standard level (and in doing so, they would likely 
spend more in less affluent neighborhoods). If all public decisions were rendered by act¬ 
ing out of concern for fairness rather than self-interest, Rawls argues, a far different 
moral order would prevail — one that was much more consistent with the basic princi¬ 
ples of liberty and justice. 

Moral Psychology 

Psychologist Lawrence Kohlberg devised a scheme outlining three levels of moral develop¬ 
ment through which people pass: the preconventional, conventional, and postconven- 
tional stages (Kohlberg, 1971). According to Kohlberg, most people operate on one of the 
first two levels of moral development, and no one operates exclusively on the third level. 

At the preconventional level, children begin to develop certain ideas about right and 
wrong. They interpret these ideas in terms of the consequences of their actions or the phys¬ 
ical power of those around them. At an early stage, the ideas are associated with punish¬ 
ments; for example, if the child writes on the wall with a crayon, the child will be scolded. 
To avoid the negative consequences associated with writing on the wall, the child avoids 
that behavior. Later on, the child begins to behave in certain ways to receive rewards, such 
as parental praise. Whether to avoid negative consequences or to receive praise, the child 
begins to behave in ways that we characterize as right rather than wrong. Of course, from 
the child’s point of view, there is no moral code; the child is merely doing things to avoid 
punishments or to seek rewards. At this level of moral development, therefore, the conse¬ 
quences of our actions—the rewards or punishments we receive—determine whether 
we consider our actions right or wrong. The preconventional orientation is, of course, one 
that we all carry into adulthood. 



128 Chapter 4 The Ethics of Public Service 

At the conventional level of moral development,- people behave morally in terms of 
conformity to various standards or conventions of the family, group, or nation. The indi¬ 
vidual seeks to conform to given moral standards and, indeed, to actively support and 
maintain those standards. This level involves two stages. Kohlberg calls the first the 
“Good Boy/Nice Girl” stage, at which we conform to expectations of parents or teachers 
or peers and to the norms we learn at home, in church, or at school. We come to develop 
moral rules or codes and standards of right and wrong, although what we think of as 
good behavior is really just that which meets the expectations of others. 

A second stage in the conventional level of moral development is the “Law and 
Order” orientation. At this stage, we develop an orientation toward authority and the 
social order; we learn what it means to be a good citizen; and we come to accept the 
importance of living by the conventional rules of the society. Notions of duty and honor 
tend to dominate one’s moral perspective at this level. We recognize that certain behav¬ 
iors are wrong—lying, cheating, stealing — but if asked why, we can only answer, 
“Because everyone knows they are wrong” (DeGeorge, 1982, p. 25). Most adults con¬ 
tinue to operate, at least in part, at this level of moral development. 

Few adults reach the final level, the postconventional, but some do. At this level, peo¬ 
ple accept moral principles and behave according to those principles, not merely because 
someone says they should, but because they know themselves what makes these princi¬ 
ples right. The individual seeks to define moral principles for himself or herself and to 
understand how those values operate independently of any group or society. The first 
postconventional stage is called the “Social-Contract” or “Legalistic” stage, which has 
a strong utilitarian bias. The individual recognizes the rights of other individuals, includ¬ 
ing the right to one’s own beliefs and values, and how societies are constituted to sup¬ 
port those rights. The result is a legalistic viewpoint, though it recognizes the possibility 
of changing the legal order (rather than freezing it, as in the previous level). Changes of 
this sort are often supported based on the greatest good for the greatest number. 

The second stage of the postconventional level represents the highest stage of moral 
development. At this stage, the individual freely chooses to live by a particular set of 
abstract moral principles, such as justice, equality, and respect for individual dignity. 
One chooses to follow these precepts not for rewards or punishments and not to meet 
others’ expectations, but because one understands why the principle should be supported 
and freely chooses to live by that standard. The actual standards one follows may be the 
same in both level two and level three, but there is an important difference in the reason 
one holds an action to be right or wrong. 

Although we have focused on Kohlberg s work here, we should point out that there 
are several alternatives to his interpretation that have been voiced recently. One impor¬ 
tant alternative, for example, is that suggested by Carol Gilligan. Gilligan argues that, in 
contrast to the rational and impartial perspective of Rawls and Kohlberg, one may inter¬ 
pret moral theory in terms of care and relationships. According to Gilligan, a final and 
mature morality involves an interaction between the concerns of impartiality and those 
of personal relationship and care (Blum, 1988, pp. 472-491). 

As you work in and with public organizations, you will come to recognize that many 
of the ethical decisions you make are based in one or another level of moral develop¬ 
ment. We do certain things because they will lead to rewards or punishments and we 
do other things because we must adhere to laws or organizational standards of conduct. For 



Approaches to Ethical Deliberation 129 

example, you may obey an order from a superior so that you will not be fired, or you may 
purchase a new piece of equipment through a bidding process rather than from a friend 
because that is the law. But you will also encounter cases that will require you to think 
much more carefully and much more personally about the standards you are willing to live 
by. For example, purchasing a piece of equipment might be complicated by the fact that 
your supervisor ordered you to purchase the equipment from a friend without other bids. 
In cases such as these, postconventional, or principled, reasoning may be essential. Certainly 
if you recognize that not all the answers can come from the power or expectations of others 
and that careful deliberation concerning moral principles is often quite appropriate, you 
will be better positioned to make the correct ethical decisions, time after time. 

Moral Action 

Knowing the proper and correct course of action is not enough. You must indeed act in 
a way that is consistent with what you consider to be right. (After all, we describe people 
as having integrity not merely on the basis of what they believe, but on the basis of how 
they act.) This concern is especially significant for a public manager (or, for that matter, 
any other professional) who wishes to act ethically. Questions of ethics in the public 
service are not abstract; they are real. And they have immediate and sometimes serious 
human consequences. It is thus important to consider how we can ensure moral actions 
in public organizations. 

A long philosophical tradition holds that putting principles (whether utilitarian, deon- 
tological, or otherwise) into action requires the development of character on the part of 
the individual. In other words, it is necessary to apply a complex set of general principles 
to specific cases — something that requires more than abstract knowledge. Aristotle spoke 
of the importance of gaining practical wisdom so as to make morally correct judgments in 
specific situations. This practical wisdom, or virtue, requires that the individual not sim¬ 
ply know how to apply given principles, but rather why to do so. That is, to bring moral 
knowledge to bear in the real world, the individual needs a strong sense of what is ideal 
in human conduct. Terry Cooper, for example, argues that virtues are traits of character 
that are acquired through reflection and conduct. They involve an integration of both 
thought and feeling where potentially conflicting tendencies are brought under control 
(Cooper & Wright, 1992, p. 6). 

This ethics of virtue, then, is not merely another philosophical approach but a way of 
developing the skills one brings to the problem of ethical decision making. Aristotle speaks 
of developing the skills of virtue in the same way we develop other skills, that is, by prac¬ 
tice: “The virtues we get first by exercising them. ... For the things we have to learn 
before we can do them, we learn by doing them. ... We become just by doing just acts, 
temperate by doing temperate acts, brave by doing brave acts” (McKeon, 1941, p. 952). 

But what are the virtues that we must practice? Obviously, this question has chal¬ 
lenged philosophers over the centuries. Answers range from honesty, courage, and 
trustworthiness to kindness, fairness, and dependability, but most seem to center 
around concerns for benevolence and justice. If this is the case, then all persons should 
practice these virtues, while members of specific professions (such as public adminis¬ 
trators) should practice applications of these virtues in their specific situations (Tong, 

1986, pp. 91-92). 



I3° Chapter 4 The Ethics of Public Service 

How, then, does one sort out the various philosophical and psychological approaches one 
might employ to make ethical choices in the real world? First, if you set about solving diffi¬ 
cult moral problems through the application of broad moral principles in specific situations, 
you need to understand the principles and moral reasoning that underlie them. Second, you 
must engage in careful and consistent ethical deliberation, through self-reflection and 
dialogue with others. Third, you must understand how virtues such as benevolence or justice 
are played out in public organizations; that is, you must recognize the political and ethical 
context that conditions the moral priorities of the public service (Bailey, 1965, p. 285). 

President George W. Bush early in his term found himself facing such a moral ques¬ 
tion. At issue was whether his administration should allow federal funding for medical 
research on so-called stem cells from human embryos. Congress years before had 
restricted this type of research, but the Clinton administration found a way around the 
restrictions by enabling research on cells from embryos grown in self-sustaining environ¬ 
ments. (Fertility clinics around the country dispose of thousands of human embryos each 
year that have been developed in the process of in vitro fertilization.) 

The full benefits of stem-cell research are still unknown, but scientists suggest it may 
hold the key to cures for a variety of diseases, including Parkinson’s. However, oppo¬ 
nents argue that the use of embryos violates the sanctity of human life, whether that life 
begins in the womb or in a petri dish. Interestingly, the question has defied the usual 
partisan split that characterizes the abortion debate, with even some of the most ardent 
pro-life members of Congress supporting stem-cell research. President Bush, who is 
against abortions and ran on a ticket opposing stem-cell research, had to balance these 
moral considerations with his professional commitment to support medical research on 
some of the world’s most challenging diseases. 

As you approach similar questions, it may be helpful to consider first the utilitarian 
position — what are the costs and benefits, and which alternative will bring the greatest 
benefits? Next, you might ask whether the alternative you chose will infringe upon the 
rights of others and, if so, whether there are overwhelming factors that justify such an 
outcome. You might next ask whether the chosen alternative violates principles of equity 
and fairness and, if so, whether again there are overwhelming factors that would justify 
the outcome. Finally, you might ask whether the alternative is consistent with your ideals 
with respect to human conduct (especially the conduct of public affairs) and whether by 
choosing this alternative you will be acting in a way you consider to be virtuous. At any 
point, you may find that the alternative comes up short, and you must search for 
another. Remember that your ultimate goal is the development of virtue and the applica¬ 
tion of sound ethical reasoning to public problems. 

Issues of Administrative Responsibility 

People who work in or with public organizations face literally dozens of ethical 
dilemmas. Some — like lying, cheating, or stealing—are the same problems that many 
others face. But some, like the public manager’s commitment to democratic standards 



Issues of Administrative Responsibility 131 

or feelings about the political involvement of public employees, are peculiar to public 
organizations. 

One of the most troublesome issues in the field of public administration is that of admin¬ 
istrative responsibility. (In the section that follows, we focus much more specifically on 
issues where personal values, such as honesty, equity, and justice, become deeply intermin¬ 
gled with the broader values of public service.) As a public manager, you may often 
confront the potentially conflicting demands of operating as efficiently as possible while, at 
the same time, being fully responsive to administrative superiors, to the legislature, to the 
citizenry, and to the principles of democratic governance generally. This tension between 
efficiency and responsiveness characterizes many of the problems public managers face. 

As we have seen, the tension between efficiency and responsiveness grows from two 
other issues that are deeply rooted in the history of public administration — the issue of 
politics and administration and the issue of bureaucracy versus democracy. Early writers in 
the field sought a clear distinction between politics and administration, arguing that, wher¬ 
ever possible, administrative activities should be insulated from the potentially corrupting 
influence of politics. This idea was based on the assumption that policy making could be 
distinguished from policy implementing. Making such an assumption allows easy resolu¬ 
tion of questions of democratic responsibility—the legislature, charged with making pol¬ 
icy, should be responsive to the people. The administrative agencies, charged with imple¬ 
menting policy, should be responsive to the legislature. The requirements of democracy 
will be met by a neutral and competent public bureaucracy that follows the mandates of 
the legislative body; this is called the doctrine of neutral competence. Most writers and 
practitioners clearly preferred this somewhat narrow view of administrative responsibility. 
Indeed, the doctrine of neutral competence, and the politics-administration dichotomy on 
which it is based, continues to influence the field. But there were and are many who recog¬ 
nize the difficulty of maintaining a neutral public bureaucracy. Some even argue that the 
role administrative agencies play in the policy process is not only inevitable, but proper. 

Networking 

For general discussions of ethics in government, see the following: Center for 
Public Integrity, http://www.publicintegrity.org/; Institute for Philosophy and Public 
Policy, http://www.puaf.umd.edu/IPPP/; Center for the Study of Values in Public 
Life, http://www.hds.harvard.edu/csvpl/; and Josephson Institute at http://www. 
josephsoninstitute.org/. Organizations that seek to promote citizen action include 
the Center for Civic Networking at http://civic.net/ccn.html and the Center for 
Democracy and technology at http://www.cdt.org/. 

The Limits of Administrative Discretion  

We have noted that administrators take their primary cues from the actions of legisla¬ 
tures that initiate programs and from executives who are charged with carrying out the 
programs. If you are hired to manage a new agency, one of your first priorities will be to 



132 Chapter 4 The Ethics of Public Service 

familiarize yourself with the legislation that created'the agency'and with any executive 
orders or other directives outlining the agency’s responsibilities. But if your situation is 
typical, you will find that neither the legislation nor the directions you receive from the 
executive are sufficiently detailed to answer all the questions your work raises. There 
will be a need to develop policies regarding these issues; policies that are, in effect, 
merely more detailed pieces of legislation. In addition, as you get into the work, you may 
find it necessary to ask the legislature or the chief executive to make certain changes in 
the rules and regulations under which you operate. 

The problem, of course, is to make sure that your policies or recommendations for 
change are consistent with the wishes of the citizenry (see Box 4.1). In most jurisdictions, 
of course, the legislature and the chief executive are popularly elected, and their reelec¬ 
tion depends on their response to the public’s perceived needs and interests. For them, 
the electoral process assures responsiveness, at least in theory. As long as you are acting 
in a way that is clearly consistent with legislative intent, you are likely to be considered 
appropriately responsive. But because most situations are not that clear, the question 
becomes, “How can we assure that the administrator is exercising discretion in a way 
consistent with the will of the people, whether expressed in the Constitution, the laws of 
the land, or the preferences of citizens?” 

Historically, two answers have been posed to this question. In an important debate in 
the pages of the Public Administration Review and other journals some forty years ago, 
Herman Finer argued that to maintain responsiveness to the public, managers in public 
organizations should be subjected to strict and rigid controls by the legislature. His ques¬ 
tion was straightforward: “Are the servants of the public to decide their own course, or 
is their course of action to be decided by a body outside themselves?” (Finer, 1972, p. 8). 
His answer was equally direct: Only through specific and detailed legislation carefully 
limiting the work of public managers could responsiveness to the legislature be main¬ 
tained. This interpretation of how to assure responsiveness is often called objective 
responsibility, depending as it does on objective external controls. 

Carl Friedrich, on the other hand, argued that the increasing complexity of modern 
society made such detailed legislation difficult, if not impossible; consequently, Friedrich 
felt that the administrator’s own concern for the public interest was often the only real 
assurance that his or her actions would be responsive to the electorate. Fortunately, 
wrote Friedrich, the growing number of professionals in government increases the likeli¬ 
hood that a sense of democratic responsibility will be a part of the administrator’s 
makeup (Friedrich, 1972). 

Others, following Friedrich’s lead, noted the growing number of governmental offi¬ 
cials receiving training in schools of public affairs and public administration. These 
schools take quite seriously the need to expose students to the ethical issues they may 
encounter in public organizations and to ways these issues might be resolved. This way 
of assuring responsiveness is often called subjective responsibility, depending as it does 
on the subjective nature of the individual. 

Recently, Terry Cooper has argued that the notion of citizenship involves both rights 
and responsibilities and that the citizen must assume a positive role in the betterment of 
society as a whole. In doing so, he or she acts in pursuit of the common good and in accord 
with values such as political participation, political equality, and justice. When a citizen 
becomes a public administrator, he or she assumes the role of “citizen-administrator, both 



Issues of Administrative Responsibility 133 

BOX 4.1 

Putting Citizens First 

Over the past thirty to forty years, the public’s trust in government has declined dra¬ 
matically. Where only a few decades ago three out of four people said that they 
“trusted the government in Washington to do what is right” most or all of the time, 
today that percentage is less than one out of four. People see their elected officials, 
especially those at the federal level, as being dishonest, callous, and unwilling to lis¬ 
ten. They see the government as “out of control.” 

At the same time, the level of citizen interest and involvement in public affairs is 
being questioned. In a historic context, citizenship meant working for the common 
good. Yet too often today we hear people respond to public issues by saying “What’s 
in it for me” or “Not in my backyard.” Citizens are not well-educated with respect to 
the operations of government, nor are they well tuned in to public affairs. 

An interesting and important effort to address these basic concerns has been occur¬ 
ring over the past year and a half in Florida. On April 4, 1995, Linda W. Chapin, the 
first elected county chairman of Orange County, Florida (the county surrounding 
Orlando), addressed a large gathering of community leaders and volunteers. In her 
remarks, Chapin pointed out that success in any policy area—whether the environ¬ 
ment, transportation, criminal justice, or schools — ultimately depends on the pride 
and commitment of citizens. Arguing that a rekindling of the idea of civic engagement 
lies at the base of all efforts to improve community life, Chapin called for a program 
to put “Citizens First!” 

The idea of “Citizens First!” starts with the proposition that people acting as citi¬ 
zens must demonstrate their concern for the larger community, their commitment to 
matters that go beyond short-term interests, and their willingness to assume personal 
responsibility for what happens in their neighborhoods and the community. After all, 
these are among the defining elements of effective and responsible citizenship. 

But the “Citizens First!” theme cuts in another way. Chapin remarked, “To the 
extent that people are willing to assume (the role of citizens), those ... in government 
must be willing to listen — and to put the needs and values of citizens first in our deci¬ 
sions and our actions. We must reach out in new and innovative ways to understand 
what our citizens are concerned about. And we must respond to the needs that they 
believe will help make a better life for themselves and their children. In other words, 
those of us in government must put citizens first.” 

SOURCE: Robert B. Denhardt, “Local Governments Learn to Put ‘Citizens First,”’ Public Administration 
Times, Vol. 20, No. 1, 1997. Reprinted by permission. 

a citizen and someone working for the citizenry.” In this case, the administrators ultimate 
obligation is to deliver public goods and services “in ways that enhance the common good 
of community life through which character and civic virtue are formed” (Cooper, p. 161). 

One approach to assuring responsiveness that cuts across the objective/subjective 
distinction is representative bureaucracy—the idea that public agencies whose employees 



134 Chapter 4 The Ethics of Public Service 

reflect certain demographic characteristics of the population as a whole are likely to oper¬ 
ate more in line with the policy preferences of the general citizenry. According to this 
view, an agency with a substantial number of women or minority employees is more 
likely to take into account the views of women and minorities in the population than 
would an agency of white males. Experience with representative bureaucracy has pro¬ 
duced mixed results. Whereas we might indeed expect greater responsiveness with respect 
to race and gender in the example, there is no reason to think that such an agency would 
be more or less representative on other types of issues. Moreover, there is no real assur¬ 
ance that a person from one particular group would necessarily or always reflect that 
group’s policy preferences. Those preferences might well be displaced by the professional 
or bureaucratic norms that person adopts. 

Avenues for Public Participation 

Another way to assure that public managers and employees act in a way consistent with 
the desires of the public is to involve citizens directly in the decision-making process 
through membership on advisory boards, open hearings, or direct polling. Such tech¬ 
niques, which have now become widespread, took their initial impetus from passage of the 
Economic Opportunity Act of 1964, legislation that required the “maximum feasible par¬ 
ticipation” of the poor in the design and conduct of antipoverty programs. In this case, the 
question of involvement itself became quite an issue, especially as the representatives of the 
poor came into direct confrontation with those holding established positions of power in 
local communities. The movement toward widespread citizen participation was soon well 
established, however, and spread quickly to local school boards, universities, and a variety 
of other government agencies. Today, for example, the practice of holding hearings prior 
to administrative decisions is commonplace at all levels of government. 

There are questions, of course, as to whether real power is transferred to the citizens 
or whether citizen involvement is merely a device for defusing protests. Some use the 
term co-optation to describe situations in which citizens are given the feeling of involve¬ 
ment but little real power. On balance, it is probably accurate to say that there are some 
cases in which citizens have been co-opted through involvement in advisory boards or 
even public hearings, but in most cases, administrators are truly interested in receiving 
input from the public that will help them make difficult decisions. 

The complexities of public involvement in administrative decision-making are illus¬ 
trated in the following classic case, actually a continuation of one we encountered in 
Chapter 2. As we learned, the Clean Air Act required the EPA to set national emissions 
standards for hazardous air pollutants to protect the public health. But no definition was 
given as to what would be considered “an ample margin of safety.” 

The issue received national attention in 1983 when EPA was trying to decide what, 
if anything, should be done about inorganic arsenic, a cancer-causing pollutant pro¬ 
duced when arsenic-content ore is smelted into copper. The problem was particu¬ 
larly serious in the area around Tacoma, Washington, where the American Smelting 
and Refining Company (ASARCO) operated a copper smelter. The EPA had 



Issues of Administrative Responsibility 135 

concluded that, in the absence of any controls on ASARCO’s arsenic emissions, 
approximately four new cases of lung cancer would be contracted each year in the 
Tacoma area. Even after installation of the “best available” pollution-control equip¬ 
ment, there would still be one new case of cancer per year. But there was an impor¬ 
tant consideration on the other side of the issue as well. If the EPA were to impose 
any more onerous conditions on ASARCO — requiring, for example, that it use ore 
containing less arsenic or install a new and far more expensive electric smelter—the 
company could not afford to continue to operate the plant. ASARCO employed 
570 workers, with an annual payroll of approximately $23 million; the company 
bought an additional $12 million worth of goods from local suppliers. Closing the 
plant therefore would pose serious economic problems for the local economy. 

William Ruckelshaus, then administrator of the EPA, decided that the citizens of the 
Tacoma area ought to wrestle with the problem. Accordingly, Ruckelshaus flew to 
Tacoma to announce a series of three public workshops to be held during the summer of 
1983. The purpose was to acquaint residents with the details of the pollution problem, 
help them prepare for subsequent formal hearings, and enable them to deliberate about 
what should be done. 

Some questions concerned technical matters, like the reliability of the proposed con¬ 
trol equipment and the risk figures and epidemiological studies on which the EPA had 
based its estimates. Other questions revealed the inadequacy of the EPA’s explanation of 
the relative health risk posed by the smelter: One resident asked whether that risk was 
greater than the risk posed by auto emissions. 

Residents were not solely concerned, however, with the factual basis for the agency’s 
claims. Several residents wanted to discuss the effects of the arsenic emissions on their 
gardens, their animals, and on the overall quality of life. Several residents expressed hos¬ 
tility toward the EPA for involving them in this difficult decision making in the first 
place. These issues are very complex, and the public is not sophisticated enough to make 
these decisions. This is not to say that EPA does not have an obligation to inform the 
public, but information is one thing—defaulting its legal mandate is another. 

These numerous workshops, together with the national attention that Ruckelshaus 
had deliberately drawn to them by traveling to Tacoma to announce them, created con¬ 
siderable and often unfavorable press coverage. In an editorial on July 16, 1983, entitled 
“Mr. Ruckelshaus a Caesar,” the New York Times argued that “Mr. Ruckelshaus has it 
all upside down. . . . What is inexcusable is for him to impose such an impossible choice 
on Tacomans:” An article in the Los Angeles Times pointed out the difficulties “in tak¬ 
ing a community’s pulse. . . . [Should one] poll the community . . . [or] count the pros 
and cons at the massive hearing?” Ruckelshaus was not surprised by the controversy. 
He said, “Listen, I know people don’t like these kinds of decisions. . . . [W]elcome to the 
world of regulation. People have demanded to be involved and now I have involved 
them, and they say, ‘Don’t ask that question.’ What’s the alternative? Don’t involve 
them? Then you are accused of doing something nefarious.” (Reich, 1985.) 

SOURCE: Reprinted by permission of the Yale Law Journal Company and William S. Hein Company from 
The Yale Law Journal, Vol. 94, pp. 1617-1641. 



6 Chapter 4 The Ethics of Public Service 

The outcome of the case is anticlimactic: Before the EPA promulgated its regulations, 
declining copper prices led to the closing of the ASARCO smelter anyway. The case 
does, however, point out some of the difficulties in designing adequate programs for 
public participation. Certainly there is every reason to think that Ruckelshaus really 
wanted to test the pulse of the citizens before making regulations. But his attempt was 
met not only with ambivalence, as is often the case, but with outright hostility. 
Moreover, despite his efforts, there were few clear signals to the agency with respect to 
what to do. The ethical issues posed by the requirements of administrative responsibility 
are indeed complex. 

The Ethics of Privatization 

We noted in Chapter 3 the increasing involvement of for-profit and nonprofit organiza¬ 
tions in the delivery of public programs. Especially as governments have contracted for 
or otherwise sought to privatize services, private and nonprofit organizations have 
become major providers of public services. But, as we also saw, the transfer of responsi¬ 
bility may raise significant ethical questions regarding equity and accountability. The 
government might find it necessary or expedient to contract out for garbage collection, 
for example, but neither necessity nor cost savings would justify allowing contractors to 
engage in discrimination or other unethical practices. 

The issue is particularly critical for private-sector providers, who could have a tendency 
to maximize profits even at the sacrifice of some other public value. A private organization 
might be tempted to provide either more services than necessary for clients (to increase 
payments and therefore revenues) or less services than necessary (to cut costs). Actions 
such as these, clearly motivated by concern for profit, are less likely to occur in service 
delivery by nonprofit organizations, simply by virtue of their service ethos, but even they 
require mechanisms to assure equity and accountability (Rubin, 1990). 

In any privatization arrangement, the government’s responsibility is not only to 
assure quality and cost consistent with stewardship of public resources, but also to 
promote democratic ideals and assure constitutional protections. There are at least 
two different types of delegation to consider: those that involve no transfer of discre¬ 
tionary authority and those that do. Obviously, many contracts involve no transfer of 
authority; public works contracts, for example, can usually be standardized and highly 
specified so as to grant virtually no discretionary public authority to contractors 
(though even here there are exceptions). The government retains responsibility for 
exercising public authority (e.g., determining eligibility for and frequency of garbage 
collection or street repair) and for holding contractors accountable for quality, quan¬ 
tity, and cost of work. 

Other arrangements may involve the transfer of discretionary authority; for example, 
the authority to determine details of eligibility requirements for student loans or the 
authority to decide what services to provide to inmates of a privately operated prison. 
In situations such as these, appropriate accountability structures must be in place to 
assure responsiveness to the government agency that administers the contract as well as 
to the public generally. Developing contractual arrangements that fully incorporate 



Ethical Problems for the Individual I37 

appropriate concerns for the public interest presents one of the most significant chal¬ 
lenges of efforts to privatize public services. 

Ethical Problems for the Individual 

Even the most straightforward ethical problems may be problematic, especially in the 
context of work in public organizations. Think for a moment about telling the truth. 
At first glance, nothing could seem more obvious than to tell “the truth, the whole truth, 
and nothing but the truth.” But is that really the proper ethical position (outside a court¬ 
room)? Should you be prepared to he to protect matters vital to the national defense? 
Should you tell the whole truth in response to questions from the press about confiden¬ 
tial matters affecting your clients? Is it proper to stretch research findings so they better 
support a policy position you feel is in the public interest? These are just a few of the 
most pressing and difficult questions you may face that will test not only your principles 
but also your willingness to act in accord with those principles. 

Interacting with Elected Officials 

The relationship between public managers and elected officials, either chief executives 
(such as mayors or governors) or members of a legislative body, presents a unique but 
nearly pervasive set of issues for the public manager. Whether as a department head 
working with a legislative committee, a city manager working with a city council, or an 
executive director working with the board of a nonprofit organization, the relationship 
between manager and the legislative body presents special problems. 

We have examined some of the implications of this relationship for the development 
of public policy, but we should also be aware of possible ethical implications. On the 
one hand, an administrator should be accountable to the legislative body; on the other 
hand, responding blindly to legislative decree may not always be in the public interest. 

The latter situation might arise in several ways. Certainly, differing strongly with 
members of the legislature on policy questions presents great difficulties. As an adminis¬ 
trator, to what extent should you seek to persuade the legislature to your position? Is it 
proper for a manager to try to build a power base in the legislature to enable special 
consideration of legislation favorable to the agency? If the legislature acts contrary to 
your strong beliefs, should you continue in your position or should you resign? If you 
continue, is it proper to try later to shape implementation of the legislation to fall more 
closely in line with your beliefs? 

Similarly difficult questions might arise if the manager is asked to do something 
improper. For instance, what would you do if a legislator asked you to do something ille¬ 
gal, such as permitting health care payments to an ineligible client? How would your 
decision change if the legislator only asked you to bend the rules a little bit? How would 
your decision change if the legislator chaired the committee that passed on your agency’s 
appropriation? 



13 8 Chapter 4 The Ethics of Public Service 

These issues may arise in any public organization; however, they are especially well 
illustrated at the local level with the council-manager form of government, which is built 
around the distinction between policy and administration. Theoretically, the council is 
responsible for determining policy and the manager is responsible for carrying it out. 
In practice, however, the line between policy and administration is never so clear; 
inevitably, the manager becomes involved in policy matters and the council in adminis¬ 
trative matters. 

Because of this overlap, the Code of Ethics of the International City Management 
Association contains several statements that bear on the council-manager relationship. 
The code’s first item emphasizes the manager’s dedication to “effective and democratic 
local government by responsible elected officials'’'’ (ICMA, Code of Ethics) and recog¬ 
nizes the contribution professional management can make in this regard. More specifi¬ 
cally, on the manager’s policy role, the code suggests that the manager “submit policy 
proposals to elected officials; provide them with facts and advice on matters of policy as 
a basis for making decisions and setting community goals, and uphold and implement 
municipal policies adopted by elected officials.” Similarly, the manager is advised to 
“recognize that elected representatives of the people are entitled to the credit for the 
establishment of municipal policies; (while) responsibility for public execution rests with 
the members” (ICMA, Code of Ethics). 

Despite these helpful guidelines, city managers often face difficulties in relationships 
with city councils. One city manager disagreed strongly with a council move to limit 
widening a particular city street, an improvement the manager felt was essential to local 
economic development; another city manager felt that a council member was acting irre¬ 
sponsibly in proposing legislation that would help his contracting business; still another 
city manager was asked to process travel vouchers that included payment for personal 
vacation expenses. Simply figuring out how to respond effectively to these situations is 
hard enough, but the problem is even greater when you remember that the city manager 
who forces an issue of policy or ethics may be seen as attacking his or her bosses — and 
may, at any time, be summarily fired. It is no wonder that the average tenure of city 
managers in this country is only between four and five years! 

Following Orders 

Another problem has to do with limits to organizational authority. What would you do 
if your boss asked you to do something you felt was morally wrong? Suppose you are 
asked to bury a report on toxic wastes you consider potentially dangerous to the public, 
or that, under pressures of time, you are asked to give quick approval to a piece of 
equipment that might be unsafe. Imagine that you are asked to approve an expense reim¬ 
bursement for your boss, when you know the amount has been padded. 

In cases such as these, you face difficult choices—choices made even more difficult by 
the very logic that causes us to employ bureaucratic means of organizing. Bureaucratic 
organizations are attractive because they enable people to accomplish large-scale tasks 
they would not otherwise be able to undertake, but bureaucracy as a social form also 
demands a certain amount of obedience to authority. Presumably, if orders are not 



Ethical Problems for the Individual 139 

obeyed, the whole system falls apart—so there are strong pressures for individuals to 
follow orders rather than their consciences. 

The most dramatic historical example of the problem of unquestioning obedience to 
authority comes from Hitler’s attempt to exterminate the European Jews during World 
War II. Although the killings were ordered by political leaders, they were carried out 
through the German bureaucracy. The problem faced not only those at the top of the 
organization but those throughout it. Raul Hilberg, author of a classic study of the 
Holocaust, writes: 

Most bureaucrats composed memoranda, drew up blueprints, signed correspon¬ 
dence, talked on the telephone, and participated in conferences. . . . However, these 
men were not stupid; they realized the connection between their paperwork and the 
heaps of corpses in the East. And they realized, also, the shortcomings of those 
rationalizations which placed all evil on the Jew and all good on the German. That 
was why they were compelled to justify their individual activities. The first rational¬ 
ization was the oldest, the simplest, and therefore the most effective: the doctrine of 
superior orders. First and foremost there was duty. No matter what objections there 
might be, orders were given to be obeyed. A clear order was like an absolution; 
armed with such an order, a perpetrator felt that he could pass his responsibility and 
his conscience upward. (Hilberg, 1961, p. 649) 

This manner of justifying one’s actions became central to the defense of those accused at 
the Nuremberg trials. Many defendants argued, as did General Alfred Jodi, that it is “not 
the task of a soldier to act as a judge over his superior commander” (Arendt, 1963, 
p. 133). But despite the rationale of “superior orders,” for the German bureaucrats and for 
their more contemporary counterparts, the moral dilemma posed by such orders remains. 

One might argue, of course, that the German example is overdrawn—that such 
a thing could never happen in a democratic society such as ours. But perhaps it could. 
Indeed, a remarkable series of studies conducted by Yale psychologist Stanley Milgram 
many years ago suggests that Americans are often quite willing to obey, even where 
doing so causes them extreme moral discomfort. In an elaborate series of experiments, 
Milgram asked subjects to administer shocks to a person supposedly involved in a mem¬ 
ory experiment. Even though the person receiving the shocks writhed in pain (he was 
actually an actor and an accomplice), the subjects continued to follow Milgram’s orders 
to administer the painful shocks—simply because they were told to do so! Milgram con¬ 
cluded that “a substantial proportion of people do what they are told, irrespective of the 
content of the act and without limitations of conscience, so long as they perceive that the 
command comes from a legitimate authority” (Milgram, 1974, p. 189). 

Contemporary examples of problems with orders from above are perhaps less dramatic 
than the German illustration, but they present equally difficult choices for the individual. 
You may, of course, protest the action, either directly to your superiors or more indirectly, 
though in doing so, you may place yourself in jeopardy. Or you may leave the organiza¬ 
tion, resigning in protest, even though the available alternatives—such as unemploy¬ 
ment—may not be attractive. Or you may simply keep quiet and do what you are told. 
The latter alternative is certainly the easiest in most cases—by obeying orders, you feel 



140 Chapter 4 The Ethics of Public Service 

you have someone else (your superior) to blame if 'something goes wrong—and, in any 
case, there is a strong feeling that if people in large organizations fail to follow orders, 
things will not get done. Unfortunately, rationalizations such as these do not allow you to 
escape the moral consequences of your actions. 

Conflicts of Interest 

Another area of potential ethical difficulties for public officials involves conflicts of inter¬ 
est. Finding ways to avoid conflicts of interest, especially financial, has been central to 
federal, state, and local ethics legislation for the past twenty-five to thirty years. At the 
federal level, legislation proscribing the ethical behavior of public officials has deep his¬ 
torical roots; however, the tone of modern ethics legislation was set by Executive Order 
11222 issued by President Johnson in 1965. In part, the policy reads as follows: 

Where government is based on the consent of the governed, every citizen is entitled 
to have complete confidence in the integrity of his government. Each individual 
officer, employee, advisor of government must help to earn and must honor that 
trust by his own integrity and conduct in all official actions. 

The executive order then provides a set of “standards of conduct” that covers such 
topics as accepting gifts, financial conflicts of interest, misuse of federal property, and lim¬ 
itations on outside employment. The policy also bars use of public office for personal gain 
or for the gain of those with whom the individual has family, business, or financial ties. 

The Johnson policy also initiated public disclosure of financial statements, something 
that was given greater prominence in the Ethics and Government Act of 1978. This act 
codified many of the previously established standards and created the Office of Govern¬ 
ment Ethics to establish more detailed regulations to monitor the behavior of public 
servants and provide ethics training for managers and other officials. 

President George Bush Sr., in keeping with his desire to set a high moral tone for his 
administration, used his first executive order to establish a Commission on Federal 
Ethics Law Reform. In establishing the commission, the president sought four key princi¬ 
ples: “(1) ethical standards for public servants must be exacting enough to ensure that 
the officials act with the utmost integrity and live up to the public’s confidence in them; 
(2) standards must be fair, they must be objective and consistent with common sense; 
(3) the standards must be equitable across all three branches of the federal government; 
finally we cannot afford to have unreasonably restrictive requirements that discourage 
citizens who are able from entering public service” (President’s Commission, 1989, p. 2). 
Central to the Bush recommendations were provisions dealing with conflicts of interest. 

Under existing legislation, officers of the executive branch of the federal government are 
required to refrain from participating personally and financially in deciding, approving, 
recommending, or advising with respect to matters in which they or family members 
or close associates have a financial interest. An official facing a possible conflict of interest 
has a number of avenues available. First, the official can simply withdraw from participat¬ 
ing in the particular case. Second, the official may seek a waiver, especially when his or her 



Ethical Problems for the Individual 141 

interest is not considered substantial or the relationship is too remote to affect the integrity 
of the action. Third, the employee may choose to place his or her assets in a blind trust. 
Or fourth, the official can sell, give away, or otherwise divest himself or herself of the 
financial interest in question. 

Other parts of the federal ethics legislation restrict outside income and the acceptance of 
gifts or favors. For example, as a federal employee, you are prohibited from accepting any 
salary or contribution from any source other than the federal government. The law also 
limits the acceptance of meals, entertainment, and gifts; for example, meals can usually be 
accepted if offered during the course of a working meeting, but there are prohibitions on 
one-on-one meals in which you are being treated. 

There are also prohibitions on what a federal employee can do after leaving govern¬ 
ment. Sections of the Ethics and Government Act prohibit former officials from repre¬ 
senting outside parties before the federal government with respect to matters in which 
they had some personal involvement or official responsibility for a period of two years. 
There is also a one-year cooling-off period, during which you cannot represent parties 
before your agency even on matters that were not your responsibility while working for 
the government. The Bush commission recommended strengthening provisions dealing 
with activities of former federal officials by requiring a prohibition not only against per¬ 
sonally representing outside interests before government agencies but also “aiding or 
advising any other person.” The proposal would eliminate not only direct representa¬ 
tion, but “behind the scenes” advice and counsel as well. 

Legislation such as this is intended to prevent influence peddling by those who have 
recently left government and to limit the revolving door phenomenon, wherein persons 
move in and out of government to acquire knowledge and information valuable to external 
groups. This issue became particularly prominent during the Reagan administration, when 
several officials, including Michael Deaver and Lynn Nofziger, were accused of using their 
previous contacts to unduly influence the governmental decision process. Moreover, the 
defense procurement scandals of the Reagan years underlined the need for stricter controls 
on information exchange that could influence purchase of defense materials or contracts. 

Linally, the potential for conflicts of interest is decreased by requirements for financial 
disclosure on the part of executive officials. The Bush commission (of the first President 
Bush’s administration), for example, wrote “financial disclosure has been variously 
described as the linchpin of the ethical enforcement system, as the disinfectant sunlight 
which makes possible the cleaning up of abusive practices” (President’s Commission, 
1989, p. 5). Though financial reporting requirements have sometimes been criticized as 
excessively detailed and intrusive, they have been, in the view of most ethics experts, 
highly valuable in maintaining public confidence in the integrity of government. If noth¬ 
ing else, the reports have meant that individuals are forced to carefully review potential 
conflicts of interests that they may bring with them to government, and thus be more 
aware of those interests should conflicts arise. 

The recommendations of the Bush commission led in Lebruary 1993 to new standards 
creating greater uniformity across all agencies of the federal government. The rules cover 
seven areas: (1) gifts from outside sources, (2) gifts between federal employees, (3) con¬ 
flicting financial interests, (4) impartiality in performing official duties, (5) seeking other 
employment, (6) misuse of position, and (7) outside activities. In many respects, these 



142 Chapter 4 The Ethics of Public Service 

standards reflected the new president’s pledge for a return to values-based leadership. 
As a candidate, President Clinton had voiced sharp criticism against the ethical short¬ 
comings of preceding administrations. On his Inauguration Day, President Clinton used 
his first executive order to require new ethical commitments of executive branch 
appointees. It included restrictions on appointees’ lobbying or otherwise trying to influ¬ 
ence the agency where he or she worked. 

Networking 

The primary federal agency dealing with ethics issues is the Office of Government 
Ethics at http://www.usoge.gov/. 

However, despite the efforts of the Clinton administration to set a high moral tone, it 
is unlikely that the Clinton presidency will be remembered for its stance on ethics (more 
likely for its unethical behavior!). As mentioned in Chapter 2, President Clinton was 
impeached by Congress for lying under oath to a federal grand jury, and even though the 
Senate later acquitted the president of the formal charges, the fact that President Clinton 
lied to the grand jury (and to the public) to protect his political career was never disputed. 
Even as he left office, questions of ethics continued to cloud the president. Among the 
most troubling was his unprecedented number of eleventh-hour pardons, including the 
pardon issued to financier Marc Rich, which many believed to be in response for political 
support. The final chapter of the Clinton presidency brought harsh criticism from both 
sides of the political aisle (even from the soft-spoken former president, Jimmy Carter), 
and prompted yet another Congressional investigation into possible ethics violations. 

Many of the same provisions for preventing conflict of interest in federal ethics legis¬ 
lation have been also instituted at the state level. Many states have passed detailed ethics 
legislation, often using financial disclosure as a chief mechanism for preventing abuse. 
Indeed, almost all states have some form of financial disclosure provision for some state 
employees. In addition, more states have adopted ethics codes and ethics commissions. 
For example, in 1991, the state of Texas established an ethics commission to review the 
conduct of lobbyists, candidates, and elected officials. Similarly, given the influence of 
money in politics, other states have sought to establish controls on political money. 
Florida, for example, reduced the limits on campaign contributions and has created 
a fully funded public campaign finance system. Many states have adopted similar ver¬ 
sions of the federal conflict of interest legislation passed during the Bush administration. 
Across the country, many states have passed detailed ethics legislation, often using finan¬ 
cial disclosure as a chief mechanism for preventing abuse. 

Whistle Blowing 

There has been a marked increase over the last twenty years in employee disclosure of 
problems in public organizations. Public employees have exposed defense contract 
overruns; spoken out against corruption in local police departments; and revealed 



Ethical Problems for the Individual 143 

abuses of the merit system, improper enforcement of toxic waste legislation, and 
other matters. Alan Campbell, director of the Office of Personnel Management during 
the Carter administration, described these public disclosures, or whistle blowing, in 
this way: “Quite simply, I view whistle blowing as a popular short-hand label for any 
disclosure of a legal violation, mismanagement, a gross waste of funds, an abuse of 
authority, or a danger to public health or safety, whether the disclosure is made 
within or outside the chain of command” (Bowman, 1983, p. 91). In other words, 
the whistle blower reveals information about fraud, waste, or abuse in government, 
including actions that might endanger the safety or liberty of other government 
employees or citizens at large. 

Generally, employees who decide to blow the whistle move through several stages. 
First, the employees become aware of an organizational practice that is unethical or dan¬ 
gerous; second, they express concern to their immediate supervisor or those further up in 
the hierarchy; and, third, unsatisfied that anyone in the organization will take appropri¬ 
ate action, they take the issue outside, either through leaks to the press or to external 
public interest groups. (The press, of course, may independently play an important role 
in revealing instances of wrongdoing.) 

Unfortunately, whistle blowers in both government and in industry have often been 
subjected to abuse and retaliation by superiors. One study of whistle blowers shows a 
large number who were fired or forced to resign or retire, as well as others who were 
refused promotions or given less desirable work assignments. Others felt excluded from 
communication within the organization and were avoided by both supervisors and 
coworkers (Truelson, 1986, p. 9). Studies show that, as a result, many public employees 
who have knowledge of corruption do not bother to report it, and many who do report 
abuses suffer reprisals (Bowman, 1983, p. 91). 

Obviously if you discover improper actions on the part of persons in your organiza¬ 
tion, you have a strong obligation to report those actions; however, you should be 
careful that your allegations are based on fact and are properly reported. Norman 
Bowie suggests that an act of whistle blowing can be justified if the following condi¬ 
tions are met: 

1. If it is done with an appropriate moral motive 
2. If all internal channels of dissent have been exhausted 
3. If it is based on evidence that would persuade a reasonable person 
4. If analysis has been made of the seriousness, immediacy, and specificity of the problem 
5. If it is commensurate with one’s responsibility 
6. If it has some chance of success (Bowman, 1983, p. 91) 

At the federal level, codes of conduct have encouraged public servants to expose cor¬ 
ruption wherever it is discovered, and protection for whistle blowers has been provided 
through the Civil Service Reform Act. Moreover, some agencies have established formal 
dissent channels, confidential patterns of communications outside the normal chain of 
command, that allow a potential whistle blower or someone who merely disagrees with 
a proposed policy to express a dissenting opinion without fear of reprisal. Consequently, 
whistle blowing has become somewhat more common at the federal level. But wherever 



i44 Chapter 4 The Ethics of Public Service 

you work, if you decide to blow the whistle, you should be fully aware not only of 
potential dangers, but also of the protection available to you based on rights of free 
speech and of prohibitions against discriminatory actions. Encouraging greater commu¬ 
nication by providing freer and more open channels of dissent is one way to ensure more 
ethical behavior in public organizations. 

Prohibitions on Political Activities 

Political neutrality has traditionally been considered important to effective democratic 
governance. President Jefferson, for example, issued an early order against federal govern¬ 
ment employee partisanship, an order whose essence was repeated by Presidents Grant 
and Hayes. Legislative action occurred with the adoption of the Pendleton Act in 1883, 
which “prohibited political assessment, solicitations, subscriptions or contributions from 
or by any employee of the United States.” The most sweeping ban on political activity, 
however, occurred during Theodore Roosevelt’s administration. He declared that classi¬ 
fied civil service employees “shall take no active part in political management or in politi¬ 
cal campaigns” (Masters & Bierman, 1985, p. 519). Later, Congress passed the Hatch 
Political Activities Act in 1939, stating that “no officer or employee of the executive 
branch of the federal government, or any agency or department thereof, shall take any 
active part in political management or in political campaigns.” (A set of amendments 
passed in 1940 extended the ban on political management and campaigning to state and 
local employees whose programs were financed fully or in part by federal funds.) 

Under the Hatch Act, public employees can register to vote, contribute money to 
campaigns, assist in voter registration drives, and express opinions about candidates 
and issues; however, certain other activities are prohibited: 

1. endorsing partisan candidates 
2. listing or raising money for political action committees 
3. participating in partisan voter registration and get-out-the-vote drives 
4. distributing campaign material on behalf of candidates 
5. serving as a delegate to a political convention 
6. making campaign speeches 
7. seeking public office in partisan elections (Masters & Bierman, 1985, pp. 519-520) 

Although the Hatch Act seeks both to protect public employees from political harass¬ 
ment and the political process from special influence, it has been subject to various 
interpretations and has proven confusing in its application. Moreover, many have 
claimed that it unduly restricts public employees’ political freedoms by essentially 
disenfranchising them from important political activities during the time they hold 
government employment. Others have pointed out that the Hatch Act places more 
stringent restrictions on United States government employees than on those of Great 
Britain, Canada, and Australia. Lor this reason, there have been recent efforts in 
Congress to change the Hatch Act to permit a greater range of political activities by 



Managing Ethics 145 

those in government. Many support the proposed legislation, especially those in public 
employee unions, who feel that public employees should be able to run for office and 
solicit campaign funds on their own time. Others, however, have argued that the 
Hatch Act is still necessary to prevent coercion of political officials. Reform of the 
Hatch Act has been considered for a number of years, with Congress passing major 
reform legislation in 1991 (though it was vetoed by President Bush). In 1993, 
Congress changed the Hatch Act, generally strengthening those sections dealing with 
activities while on duty and expanding the off-duty activities of federal employees. 
Basically, with the exception of running for office, which is still prohibited, the 
new act permits federal workers to participate in a full range of political activities on 
their own time, though not to do so on the job (Congressional Quarterly Weekly, 
1993, p. 511). 

Managing Ethics 

How does a manager promote more ethical practices in an organization? First, there are 
a variety of formal controls, including legal, on the behavior of those in public organiza¬ 
tions. The courts may direct public officials to undertake specific actions or to cease and 
desist from certain courses of action. They may also be required, on behalf of their agen¬ 
cies, to provide individuals with damages or other compensation. And, of course, any 
public employee may be prosecuted for breaking the law. But what if you are sued as an 
individual for actions you have undertaken in the course of your official duties? 

Actually, this question has been the subject of considerable legal debate throughout 
our country’s history. Whereas early interpretations of the law generally protected public 
officials against suits, claiming they violated an individual’s rights in the course of one’s 
duties, more recent interpretations have severely limited the immunity granted to public 
officials. Speaking broadly, there are two types of immunity: absolute immunity and 
qualified (or “good faith”) immunity. Absolute immunity, which means that an official is 
not liable for damages under any circumstances, has been granted to certain legislative 
and judicial officers and, in limited cases, to members of the executive branch while per¬ 
forming their official duties. (The president has been granted absolute immunity but 
state governors have not.) 

Most other officials have only qualified immunity. They may be sued, but can defend 
themselves by showing they were acting in good faith to carry out their duties. That is, 
they must show that they were unaware of the impropriety of an act at the time they were 
carrying it out and that any reasonable person might have acted similarly. Although the 
current legal position allows most officials to be sued, relatively few suits have been suc¬ 
cessful; most public managers have been found to have acted in good faith. In any case, 
knowing something about public officials’ liability for their actions will better enable you 
and those in your organization to avoid problems in the first place, or to respond to them 
when they arise. 



146 Chapter 4 The Ethics of Public Service 

Besides legal proceedings, other formal devices protect agairist waste or fraud on the 
part of public officials or the private individuals or groups with which they interact. For 
example, most major federal agencies have an Office of the Inspector General to investi¬ 
gate possible cases of fraud, waste, and abuse in government. The inspectors general are 
charged with looking into situations in which federal employees or funds are being used 
improperly. Targets of investigations may be either public employees or private individu¬ 
als, such as contractors, who might attempt to defraud the government. 

Through their internal investigations of federal agencies, the inspectors general have 
occasionally revealed major problems. For example, the Office of the Inspector General 
of the Department of Health and Human Services recently initiated several studies 
related to excessive billings for Medicaid payments. Selling samples, billing Medicaid at 
higher prices than charged the general public, and billing for brand drugs while dispens¬ 
ing generic drugs are among the expected abuses. Similarly, the inspector general’s office 
in the Defense Department announced plans recently to probe the military fastener 
industry—makers of bolts, screws, and other hardware — to see if substandard parts 
contributed to military accidents. In a related case, two Maryland defense contractors 
pleaded guilty to a decade-long scheme to sell cheap, low-grade fasteners for military 
equipment. The contractors admitted to substituting commercial-grade bolts, screws, 
and other fasteners for more expensive military-grade hardware ordered by defense 
contractors for radar and sonar systems, satellites, Trident submarines, and armored 
earthmovers like those used in the Persian Gulf War (Washington Post, 1992). 

Establishing an Ethical Climate 

In addition to formal controls, you can help promote ethical behavior by providing strong 
ethical leadership, creating a climate in which ethical behavior is valued, and encouraging 
free and open communications throughout the organization. “Managing ethics involves 
more than making public statements espousing a particular set of values and more than 
selecting employees with good moral character. Managing ethics also involves careful 
analysis of the organizational culture, working to develop a cultural environment that 
places high value on ethical integrity and developing policies and procedures and systems 
that enable organization members to act with ethical integrity” (Denhardt, 1989, p. 1). 
Unfortunately, most organizations, including most public organizations, have not under¬ 
taken active programs to promote ethics (see Box 4.2). 

Many organizational members feel that, in the absence of an ethics program, the 
requirements of large bureaucracies tend to promote unethical, dishonest, and inhumane 
behavior. “Managers perceive that the bureaucratic environment is less ethical than their 
own values and beliefs, that they are under pressure to compromise personal standards 
to achieve organizational goals, and that their supervisors are interested only in results, 
not how they were obtained” (Bowman, 1983, p. 74). 

A first step in promoting more ethical practices in your organization is to analyze the 
basic ideas, beliefs, and attitudes that guide the behavior of the organization’s members. 



Managing Ethics 147 

BOX 4.2 

Intervention Techniques for Integrating Ethics into Agency Operations 

Do both compliance and integrity training and counseling. 
Give briefings on common ethical problems on the job for new hires. 
Give termination briefings on potential postemployment problems. 
Designate senior manager(s) for integrity issues, separate from compliance/inves¬ 
tigative unit. 
Require annual sign-off on prospective commitment and compliance. 
Attend to ethical values and character in recruitment. 
Integrate ethical performance into promotional exams and annual reviews; link 
ethical behavior to incentives. 
Publicize positive, noteworthy role models. 
Raise ethical concerns at meetings and through regular communication channels. 
Train middle managers to recognize and commend subordinates’ statements about 
ethical concerns. 
Review management practices and administrative routines at every level and in 
every type of unit in the organization. 
Get the whole team — all employees, all levels, all units to participate; ethics is not 
a spectator sport. 
Give earnest attention to ethical treatment of subordinates, clients, and others. 

SOURCE: Carol W. Lewis; The Ethics Challenge in Public Service; Copyright © 1991 by Jossey-Bass. This 
material is used by permission of John Wiley 8c Sons, Inc. 

One device for assessing the prevailing beliefs of your organization is an ethics audit, 
an assessment of the value premises that guide action in the organization. The audit 
provides a methodical review of the organization’s activities and the implicit values that 
underlie the activities. Importantly, these values may not turn out to be those contained 
in public pronouncements. One student of organizational behavior concluded that 
“the key to learning the ethics of individuals or organizations is simple: do not listen to 
what they say about ethics, observe what they do” (Pastin, 1988, p. 92). By clearly 
establishing the values that guide behavior in the organization, you and other members 
can more consciously and clearly begin to alter those that seem inappropriate. 

As an example, after numerous incidents of defense contract violations, the General 
Dynamics Corporation brought in an outside consultant to help establish an ethics 
program. The consultant conducted an ethics audit, which helped members of the organi¬ 
zation recognize that they shared a basic, though unstated, assumption that the govern¬ 
ment was their adversary and that taking advantage of an adversary was quite acceptable. 
Once this assumption was understood, it could be addressed openly and replaced with 
more appropriate assumptions about the relationships between government and its con¬ 
tractors. An example of an ethics audit conducted by a public agency is contained in 
Carol Lewis’s book, The Ethics Challenge in Public Service (1991, pp. 199-202). 



I4§ Chapter 4 The Ethics of Public Service 

Following an ethics audit, your organization may wish to develop a clearer statement 
of values to guide individual behavior. That statement should include general moral 
guidelines, but it should also articulate a vision of the organization’s mission what it 
stands for, what it seeks to achieve, and how it plans to go about its business. 
Developing such a statement should involve many members of the organization and have 
the full support of the top management team. (We will examine statements of values in 
more detail later.) 

Besides developing a statement of management philosophy for your organization alone, 
you may also wish to employ more general codes of ethics developed by other organiza¬ 
tions. The federal government, for example, has promulgated a Code of Ethics for Federal 
Service, and many state and local government organizations have developed similar codes. 
Professional organizations such as the International City Management Association (ICMA) 
also have codes of ethics related to members of their profession. Perhaps the most compre¬ 
hensive code of ethics for public-sector managers is that of the American Society for Public 
Administration (ASPA). The ASPA Code of Ethics and accompanying guidelines illustrate 
the variety of ethical concerns public managers face and provide guidance for resolving ethi¬ 
cal issues (see Appendix A later in this chapter). 

After assessing values and adopting statements to express the desired values, you might 
wish to develop training programs or other devices for communicating these ideals within 
the organization. The Office of Government Ethics, for example, conducts frequent semi¬ 
nars for federal managers on ethics in the public service. Similarly, organizations such as 
ASPA and ICMA have developed training programs that are available nationally or can 
be adapted to local circumstances. Training programs are also available for executives in 
nonprofit organizations. 

As a manager, however, you should not neglect the fact that your own actions will be 
taken as a model of appropriate behavior. The example you set will be one of the most 
important training devices to members of your organization. If you wish them to take 
the moral high road, you must demonstrate by example that ethics is a substantial con¬ 
cern and that unethical conduct will not be tolerated. 

Summary and Action Implications 

As we move from the context of public administration to the ethics of public service, we 
also move from areas where abstract knowledge is helpful to areas where the ability to 
act is important. In dealing with the many ethical dilemmas that confront public offi¬ 
cials, you must know not only what the correct action is, but be able to act in a way 
consistent with that judgment. Understanding something about how ethical choices are 
made is helpful, as is recognizing the importance of deliberation in making ethical deci¬ 
sions. But what will ultimately make the difference will be your willingness to act on the 
basis of moral principles. 



Terms and Definitions 149 

The particular ethical issues you may face range from matters of individual integrity 
to those that derive from the special value commitments associated with working in the 
public interest. Most of the latter are associated in some way with the tension between 
efficiency and responsiveness that seems to pervade public organizations. That tension, 
as well as issues of accountability and responsiveness to public demands, are especially 
intense in the relationship between administrators and the legislative branch. 

Many of the concerns you may encounter as a public manager are similar to those 
other managers face, but some are especially conditioned by the fact that you are operat¬ 
ing in the public interest. In either case, you must exhibit the virtues of benevolence and 
justice (including honesty, trustworthiness, and fairness) in your behavior. In any case, 
as you face some of the difficulties that arise, careful self-reflection and dialogue with 
others about ethical concerns will be especially helpful. 

It is within your power as an administrator to undertake programs to encourage and 
facilitate a more ethical climate within your organization. Conducting an ethics audit, 
developing a statement of organizational philosophy or a code of ethics, and establishing 
training programs to deal with ethical issues will help improve your organization’s 
ethics. As a manager, however, perhaps the most important message you can send is that 
communicated by your own actions. If you seem to attach great importance to ethical 
concerns, others in the organization will attach similar importance. The model you pro¬ 
vide can make an important difference in the ethics of your organization. 

Terms and Definitions 

Co-optation: Situations in which citizens are given the feeling of involvement while 
exercising little real power. 

Deontology: Belief that broad principles of rightness and wrongness can be estab¬ 
lished and are not dependent on particular circumstances. 

Ethical (or moral) relativism: Belief that moral judgment can be made only by taking 
into account the context in which action occurs. 

Ethics: Process by which we clarify right and wrong and act on what we take to be right. 

Ethics audit: Evaluation of the value premises that guide action within an organization. 

Morality: Practices and activities considered right or wrong and the value those prac¬ 
tices reflect. 

Neutral competence: The belief that a neutral public bureaucracy following the man¬ 
dates of a legislative body will meet the requirements of democracy. 

Objective responsibility: Assurance of responsiveness through external controls. 



I50 Chapter 4 The Ethics of Public Service 

Subjective responsibility: Assurance of responsiveness"based on an individual’s character. 

Utilitarianism: Philosophy of the greatest good for the greatest number of people. 

Study Questions 

1. Although ethics and morality are similar, what is the distinction between the terms? 
2. Discuss the steps in ethical deliberation. 
3. Compare the two approaches commonly used in moral philosophy. 
4. Discuss the three levels of moral development devised by psychologist Lawrence 

Kohlberg. 
5. What is meant by an “ethics of virtue”? 
6. Discuss the conflict between efficiency and responsiveness. 
7. Explain the limitations on administrators’ discretion with regard to responsiveness 

and efficiency. 
8. Discuss some of the ethical problems individuals who work in public organizations 

encounter and how they can deal with them properly. 
9. The Hatch Act defines prohibited activities of public employees. Explain the signifi¬ 

cance of these prohibitions with regard to an individual’s political actions. 
10. Explain ways to improve the ethical behavior of those in a public organization and 

provide examples of managing ethics. 

Cases and Exercises 

1. To illustrate various aspects of ethical deliberation, read and discuss the following case: 
There is a raging river which can be crossed only by means of a boat. The only 

boat is owned and operated by a person we shall call A (in order to protect the inno¬ 
cent as well as the guilty). On the tame side of the river, X is deeply and sincerely in 
love with a person C on the other side of the river. X goes to A asking to be taken 
across the river, offering to pay whatever the charge for the service. A declines any 
money, but agrees to take X across the river if X will sleep with A. Person X refuses, 
of course (!), but argues and then pleads with A to name some other price. A, how¬ 
ever, remains firm. 

Person X leaves, but returns a second day to seek a way across the river. A remains 
as adamant as before. In frustration, X seeks out a third person, B, who hears the sit¬ 
uation sympathetically, agreeing that A is certainly a rogue. But B says, “I have other 
matters concerning me just now and am not able to help you.” 



Cases and Exercises 151 

In desperation, X goes to A a third time, only to be met with the same offer for the 
trip across the river. X finally agrees to the price and sleeps with A, who then delivers 
X across the river as promised. 

X and C are joyously reunited, until C asks how X got across the river. X truthfully 
replies, “I had to sleep with A to earn the trip across the river.” C replies indignantly, 
“Out of my life! I will have nothing to do with one who holds honor and principle 
so lightly!” 

X, of course, is frustrated and desperate again, and appeals to Person D, who 
replies, “I understand and am deeply sympathetic. I’d do anything I can to help you.” 
(The curtain falls.) (ASPA, n.d.) 

Following your discussion of the case itself, consider to what extent the discus¬ 
sion reflected moral relativism, utilitarianism, or deontology. Then, reconsider the 
case, following the steps of ethical deliberation presented in this chapter: clarify the 
facts, find basic principles, and analyze the arguments. How could you establish 
a moral action? 

2. A random check of long distance telephone calls at the Department of Housing and 
Urban Development (HUD), in a study conducted by the agency’s inspector gen¬ 
eral, indicated that some 30 percent were personal calls (and were charged to the 
government). The cost of the calls was estimated at $73,000 for the sample and, by 
extrapolation, $290,000 for the agency as a whole. Many calls were placed to the 
homes of employees or their relatives, while others were calls to prerecorded mes¬ 
sages, such as time and temperature, horoscopes, and financial information. 
Penalties for unauthorized use of federal telephone lines include fines, suspension, 
and dismissal. 

Why do you think employees at HUD, and presumably elsewhere, misuse official 
telephone lines? What, if anything, should be done to limit such excesses? How do 
you respond to employees who argue that using agency telephone lines for personal 
business is necessary from time to time? What about those who argue that telephone 
use is an essential benefit the organization should provide? If you crack down on 
unauthorized calls, what will happen to morale in the agency? 

To put the case in a more intense, real-world setting, imagine that you are secretary 
of the Department of Housing and Urban Development. You have just finished testify¬ 
ing at a congressional hearing. On your way out the door, a senator corners you and 
waves a copy of the inspector general’s report in your face saying, “This is an outrage! 
These people are stealing from the public and you have been letting it happen! I want 
some action on this right away!” Next, a reporter, who has seen the report and heard 
the exchange with the senator, points a microphone toward your mouth and asks, 
“Well, what are you going to do?” What is your response, both immediately and over 
the next several days? 

3. Consider the following cases: 
Sidney Franklin knew that one of his most valued employees, Anderson Hayes, 

was stealing from the organization—not much, and in a way that no one but 
Sidney would ever know—but he was stealing. Sidney also knew that without 
Anderson, his unit could never complete a newly assigned task on time. He decided 
to do nothing about the stealing incident and secretly hoped that success in the new 



IJ2 Chapter 4 The Ethics of Public Service 

assignment would bring about a long-desired promotion and get him out of this 
awkward situation. 

George Cave was a former CIA station chief in Teheran. When he heard that the 
Reagan administration was working with Manucher Ghorbanifar on an “arms for 
hostages” deal, he was horrified. “But what could he do? The project had the backing 
of CIA director William J. Casey and the White House. Cave bit the bullet and trav¬ 
eled to Iran in May 1986 as the translator for former national security adviser Robert 
C. McFarlane” (Ignatius, 1987, p. 15). 

Shirley House, a recently appointed city manager in a small community in 
Tennessee, arrived at work one morning to find an envelope from the mayor filled 
with receipts from a recent trip he took to an economic development conference. 
Included were receipts from a four-day vacation the mayor and his wife took at a 
resort near the conference city. It was clear that the mayor wanted the city to reim¬ 
burse him for everything included in the envelope. 

Analyze and discuss each of these three cases in terms of the moral position that 
the individual involved should have taken. Then consider the nature of your own ethi¬ 
cal reasoning. What types of moral philosophy, moral psychology, or moral action 
have you been using? 

4. As a class, conduct an ethics audit (or survey) of your college or university and rec¬ 
ommend ways the institution might begin to develop higher standards of ethical 
conduct. 

Begin by considering in detail what might be expected from such an audit (or sur¬ 
vey) in any organization and what is practical and ethical to expect from such a proj¬ 
ect conducted by students within the institution. Recognize your available resources, 
but also the limitations on your work. (You might even want to discuss your project 
with several university officers before going too far.) 

As a practical matter, consider basing your work primarily on interviews with 
important decision makers throughout the institution, including administrators, deans 
and department chairs, members of the faculty (especially members of the faculty 
council or faculty senate), representatives of the school’s athletic programs, and staff 
support in areas such as budget and accounting and personnel or human resources. 
Also consider interviews with members of the school’s governing board. You might 
also want to collect material based on the public record — newspaper reports, maga¬ 
zine articles, editorials, and so forth. The Chronicle of Higher Education and other 
materials dealing with higher education show what kinds of efforts other schools 
have undertaken. 

Throughout your interviews and other research, you should first seek to deter¬ 
mine the major ethical concerns facing institutions of higher education. Topics you 
will likely encounter are plagiarism and other forms of academic dishonesty (on the 
part of both faculty and students), the integrity of the research process, matters of 
institutional governance, questions of equal opportunity and affirmative action, insti¬ 
tutional policies toward drugs and alcohol, the school’s position on certain political 
issues, and athletic recruiting policies — just to name a few. In going through these 
matters, you may find that your institution has taken strong moral positions in some 



For Additional Reading 153 

areas (perhaps many); you may even find parts of the institution that have under¬ 
taken serious and detailed appraisals of their ethical positions, but you may also find 
that many of these issues simply have not been considered, at least in terms of ethical 
implications. 

If you can simply develop an inventory of ethical issues that should receive greater 
attention from members of the institution, you will have done a great service. But you 
may also identify cases where actual behavior seems to imply an ethical position dif¬ 
ferent from the position espoused by those with whom you talk. If you do discover 
such cases, be prepared not only to document your findings, but also to present your 
report in such a way that will be helpful and constructive. Remember that you are 
seeking to provide a service to the institution, not an expose. 

Based on your research and analysis, prepare a written report for the school’s presi¬ 
dent or chancellor and offer to have a delegation meet with him or her (or a represen¬ 
tative) to discuss your findings. Again, your approach should be to provide preliminary 
findings that will be helpful in terms of institutional ethics. It may be helpful to think 
of yourselves as members of the president’s or chancellor’s staff, developing a report 
upon which constructive action can be taken. As in any such situation, you should be 
prepared to suggest specific action steps that will enable the school to give serious and 
sustained attention to its ethical posture. 

After you finish your work, spend some time considering as a class what you 
have learned from this exercise: what you have learned about institutional ethics 
and the administrative process, and what will make you a more effective and 
responsible administrator in the future. Try to develop specific action-oriented state¬ 
ments to guide your actions in the future. Finally, consider whether there were any 
ethical questions you faced in the course of this project. How did you resolve them? 
Or did you? 

For Additional Reading 

Bowman, James S., ed. Ethical Frontiers in Public Management: Seeking New Strategies 
for Resolving Ethical Dilemmas. San Francisco: Jossey-Bass, 1991. 

Bowman, James, ed. Public Integrity Annual. Lexington, KY: Council of State 
Governments, 1997. 

Burke, John P. Bureaucratic Responsibility. Baltimore, MD: Johns Hopkins University 
Press, 2000. 

Bruce, Willa. Classics of Administrative Ethics. Boulder, CO: Westview Press, 2001. 
Cooper, Terry L. The Responsible Administrator: An Approach to Ethics for the 

Administrative Role. 3d ed. San Francisco: Jossey-Bass, 1990. 
Cooper, Terry L. An Ethic of Citizenship for Public Administration. Englewood Cliffs, 

NJ: Prentice-Hall, 1991. 



iJ4 Chapter 4 The Ethics of Public Service 

Cooper, Terry L. Exemplary Public Administrators: "Character and Leadership in 
Government. San Francisco: Jossey-Bass, 1992. 

Cooper, Terry, ed. Handbook of Administrative Ethics. New York: Marcel Dekker, 
1994. 

Denhardt, Kathryn G. The Ethics of Public Service. New York: Greenwood Press, 
1988. 

Harmon, Michael. Responsibility as Paradox. Thousand Oaks, CA: Sage Publications, 
1995. 

Hodgkinson, Christopher. Administrative Philosophy. Pergamon Press, 1996. 
Kellar, Elizabeth, ed. Ethical Insight/Ethical Action. Washington, DC: ICMA, 1988. 
Pasquerella, Lynn, Alfred G. Killilea, and Michael Vocino. Ethical Dilemmas in Public 

Administration. Westport, CT: Praeger, 1996. 
Richardson, William D. Ethics and Character: The Pursuit of Democratic Virtues. 

Durham, NC: Carolina Academic Press, 1999. 
Rohr, John. Ethics for Bureaucrats. New York: Marcel Dekker, 1978. 
Rohr, John. To Run a Constitution. Lawrence: University Press of Kansas, 1986. 
Rohr, John. Ethics and Public Administration. Armonk, NY: M.E. Sharpe, 1993. 
Tong, Rosemarie. Ethics in Policy Analysis. Englewood Cliffs, NJ: Prentice-Hall, 

1986. 
Washington, Sally. Ethics in the Public Service. Paris: OECD, 1996. 

APPENDIX A 

Code of Ethics of the American Society for Public Administration 

The American Society for Public Administration affirms its responsibility to develop the 
spirit of professionalism within its membership, and to increase public awareness of ethical 
principles in public service by its example. To this end, we, the members of the Society, 
commit ourselves to the following principles: 

I. Serve the public interest 
Serve the public, beyond serving oneself. ASPA members are committed to: 
1. Exercise discretionary authority to promote the public interest. 
2. Oppose all forms of discrimination and harassment, and promote affirmative 

action. 
3. Recognize and support the public’s right to know the public’s business. 
4. Involve citizens in policy decision-making. 
5. Exercise compassion, benevolence, fairness, and optimism. 
6. Respond to the public in ways that are complete, clear, and easy to understand. 
7. Assist citizens in their dealings with government. 
8. Be prepared to make decisions that may not be popular. 

II. Respect the Constitution and the law 



Appendix A ijj 

Respect, support, and study government constitutions and laws that define responsi¬ 
bilities of public agencies, employees, and all citizens. ASPA members are committed 
to: 
1. Understand and apply legislation and regulations relevant to their professional role. 
2. Work to improve and change laws and policies that are counterproductive or ob¬ 

solete. 
3. Eliminate unlawful discrimination. 
4. Prevent all forms of mismanagement of public funds by establishing and maintain¬ 

ing strong fiscal and management controls, and by supporting audits and 
investigative activities. 

5. Respect and protect privileged information. 
6. Encourage and facilitate legitimate dissent activities in government and protect the 

whistle-blowing rights of public employees. 
7. Promote constitutional principles of equality, fairness, representativeness, respon¬ 

siveness, and due process in protecting citizens’ rights. 
EL Demonstrate personal integrity 

Demonstrates the highest standards in all activities to inspire public confidence and 
trust in public service. ASPA members are committed to: 
1. Maintain truthfulness and honesty and to not compromise them for advancement, 

honor, or personal gain. 
2. Ensure that others received credit for their work and contributions. 
3. Zealously guard against conflict of interest or its appearance. 
4. Respect superiors, subordinates, colleagues, and the public. 
5. Take responsibility for their own errors. 
6. Conduct official acts without partisanship. 

IV. Promote ethical organizations 
Strengthen organizational capabilities to apply ethics, efficiency, and effectiveness in 
serving the public. ASPA members are committed to: 
1. Enhance organizational capacity for open communication, creativity, and dedication. 
2. Subordinate institutional loyalties to the public good. 
3. Establish procedures that promote ethical behavior and hold individuals and 

organizations accountable for their conduct. 
4. Provide organization members with an administrative means for dissent, assurance 

of due process and safeguards against reprisal. 
5. Promote merit principles that protect against arbitrary and capricious actions. 
6. Promote organizational accountability through appropriate controls and proce¬ 

dures. 
7. Encourage organizations to adopt, distribute, and periodically review a code of 

ethics as a living document. 
V. Strive for professional excellence 

Strengthen individual capabilities and encourage the professional development of 
others. ASPA members are committed to: 
1. Provide support and encouragement to upgrade competence. 
2. Accept as a personal duty the responsibility to keep up to date on emerging issues 

and potential problems. 



ij6 Chapter 4 The Ethics of Public Service 

3. Encourage others, throughout their careers, to participate in professional activities 
and associations. 

4. Allocate time to meet with students and provide a bridge between classroom stud¬ 
ies and the realities of public service. 

SOURCE: Copyright 1994 by the American Society for Public Administration (ASPA), 1120 C Street NW, 
Suite 500, Washington, D.C. 20005. Reprinted with permission. 



Chapter S 

Budgeting and Financial Management 

Public budgeting and financial management are concerned with the allocation of limited 
resources to the problems governments and other public organizations face. Just as you 
may establish a personal budget to track your income and expenses and just as busi¬ 
nesses create budgets to aid in decisions affecting profits and losses, so do public organi¬ 
zations of all types employ budgets to help in planning and management. Beyond the 
budget process, however, public organizations must carefully and responsibly manage 
large amounts of money and other resources — taking in taxes and other revenues, pur¬ 
chasing innumerable goods and services, and investing surplus funds or managing debt 
wisely. 

From the point of view of the manager or the citizen trying to influence public policy, 
the budget is an extremely important tool for planning and control. To manage public 
programs effectively, you must be able to manage resources, both practically and polit¬ 
ically. In this chapter we focus on the budget process from the standpoint of the indi¬ 
vidual public manager, examining how budget decisions are made and how you can 
influence budgetary outcomes. Although much of the budget process is highly charged 
politically, specific technical knowledge about budgeting systems will give you a distinct 
advantage. 

The elaborate systems that public organizations have developed to manage their fiscal 
affairs are relatively recent. Prior to the turn of the century, revenues were easily suffi¬ 
cient to cover the expenses of government, and financial management was merely record 
keeping. But as the scope of government grew and new demands were placed on its 
resources, the need for more sophisticated systems of decision making became apparent. 
Moreover, repeated instances of corruption and waste made more effective control over 
the public’s resources necessary. 

In establishing its executive budget process through the Budgeting and Accounting 
Act of 1921, the federal government was actually following the lead of several local and 
state governments that had already taken similar actions. The municipal reform move¬ 
ment emphasized the budget process as a means of bringing order to public spending; 
consequently, by the 1920s, most big cities had established a formal budget process. 
Similar developments were also occurring at the state level. In 1910, Ohio became the 
first state to require an executive budget; within the next decade, similar actions took 
place in most other states. At the federal level, a special Commission on Economy and 
Efficiency, known as the Taft Commission, recommended establishing an executive bud¬ 
get in 1912; the recommendation was implemented nearly a decade later. 

157 



158 Chapters Budgeting and Financial Management 

Networking 

General information on budgeting organizations can be found at http://www.gasb.org 
and at http://www.nasbo.org/. 

Since the 1920s, the federal budget has grown in both size and complexity, as have 
budgets at the state and local levels. This growth means that budgeting and financial 
management have come to involve far more than keeping a record of income and 
expenses. Today, how government spends its money affects many other areas of the econ¬ 
omy; consequently, the budget is an instrument of fiscal policy. Moreover, the budget is a 
primary expression of government priorities; it constitutes a record of the decisions that 
are made concerning various public policies. 

The Budget as an Instrument of Fiscal Policy 

Budgets express the public policy choices of governments and others. Among these are 
choices with respect to the impact of the public sector on the economy. Fiscal policy is 
concerned with the impact of government taxation and spending on the economy gener¬ 
ally. Before the Great Depression, little attention was paid to how the federal budget 
affected the economy; the economy was presumably regulated by what is called the busi¬ 
ness cycle. Periods of economic growth, featuring inflation and high employment, were 
followed by periods of recession or depression, featuring deflation and unemployment, 
and so on. Meanwhile, the federal government sought to balance its budget each year — 
that is, to make revenues and expenditures approximately equal. 

Economists soon began to realize, however, that this pattern of government spending 
was in fact influencing the economy in a negative way. In periods of economic growth, 
government revenues naturally increased, so that, in an effort to balance the budget, 
taxes could be lowered to the level of expenditures; in periods of economic decline, the 
budget was balanced by lowering spending to meet the lower revenues. The unantici¬ 
pated result of these actions was to increase citizens’ income during good times and 
decrease their income in bad times — just the opposite of wThat would be desirable. 
Government taxation and spending had the effect of accentuating economic instability 
(Pechman, 1983, p. 8). 

Economists such as the British scholar John Maynard Keynes argued, in contrast, that 
all else being equal, positive government action could lead to greater economic stability. 
A key to Keynes’s analysis was the relationship between inflation and unemployment. 
Keynes noted that periods of rapid economic growth are typically accompanied by high 
inflation, which is harmful to individuals because it lowers their purchasing power, espe¬ 
cially if they are on fixed incomes. On the other hand, periods of economic decline are 
typically accompanied by high unemployment, which not only hurts individuals, but also 



The Budget as an Instrument of Fiscal Policy 159 

lowers revenues for government. In either case, government action aimed at achieving 
greater stability might be both possible and desirable. 

There are many ways the federal government can influence the economy, but one 
important way is simply by varying its own spending or, somewhat more indirectly, by 
raising or lowering taxes. The capacity of government spending patterns to influence 
the economy so dramatically is not hard to understand if you recognize the enormous 
role of government in the economy. The Gross National Product (GNP), the rate of 
inflation, and the rate of unemployment are the key indicators of economic health. The 
Gross National Product, a measure of total spending in the economy, comprises per¬ 
sonal consumption, private investment, and government purchases. Almost two-thirds 
of the current American GNP is private in nature, but over one-third is based on gov¬ 
ernment spending. Based on revenues, the U.S. federal government is the single largest 
organization in the world, almost ten times the size of General Motors or Exxon. 
Decisions at the federal level play an important role in the health and stability of the 
economy generally. 

The key relationships are these. If the economy is experiencing rapid growth—with 
high inflation and low unemployment—then the government might seek to cool off the 
economy through lowering spending, raising taxes, or both. These actions have the effect 
of limiting private demand and slowing economic growth. On the other hand, if the 
economy is experiencing recession or depression—with falling prices and high unem¬ 
ployment—then the government might want to stimulate the economy by putting more 
money into circulation, through increasing spending, lowering taxes, or both. These 
actions have the effect of stimulating private demand and increasing economic growth. 
Creating a surplus, as might occur in the first case, would help restrain private spending 
during prosperity; creating a deficit, as in the second case, might stimulate spending 
during a recession. 

Cumulative state and local spending also affects the economy. State and local govern¬ 
ment expenditures constitute close to 15 percent of the GNP and must be taken into 
account in discussions of fiscal policy. If the federal government seeks to cut taxes, but 
also cuts aid to states and localities, those governments may find it necessary to raise 
taxes themselves, thus offsetting any economic gains caused by lower taxes at the federal 
level (Bahl, 1984, pp. 17-30). 

Patterns of spending in many states and in major cities do have some effect on the 
local economy and, consequently, state and local officials are becoming more cognizant 
of their role in fiscal policy and especially economic development. These governments, 
however, often do not have the tools or authority to make certain kinds of decisions. For 
example, nearly all the states have either constitutional or statutory provisions requiring 
a balanced budget. (Various political leaders have called for a balanced budget amend¬ 
ment at the federal level as a way to eliminate deficit spending, although if balanced bud¬ 
gets are achieved in other ways, calls for an amendment will be undercut. In any case, 
such a proposal, though attractive in a symbolic sense, would limit the flexibility of the 
federal government in seeking to influence the economy.) In any case, it is clear that 
the budget process has important effects on the economy that must be anticipated in 
structuring overall patterns of public spending. 



160 Chapter 5 Budgeting and Financial Management 

The Budget as an Instrument of Public Policy 

Although the overall pattern of spending represented in a government budget has an im¬ 
portant effect on the economy, the many individual entries in the budget represent im¬ 
portant choices with respect to public policies of all types. The budget is, essentially, a 
measure of support (or lack of support) for specific programs. Those in favor are funded; 
those that are out of favor are not. For this reason, discussions of budgetary priorities 
are of special importance to political leaders, to government officials at all levels, and to 
representatives of various interests in society. As a manager, you will need to understand 
both where the money comes from and where the money goes. 

Where the Money Comes From 

Governments obtain the funds they need to operate the programs deemed important 
either from their own sources or through transfers from other governments. There are a 
variety of ways governments can raise their own revenues, including levying taxes and 

Receipts: $2,192 billion 

Excise Taxes 
Other 3% 
4% 

Corporate 
Income Taxes 

10% 

Individual Income 
Taxes 
49% 

Social Insurance 
Receipts 

33% 

FIGURE 5.1 

The Federal Government Dollar: Fiscal Year 2002 Estimate 

SOURCE: A Citizen’s Guide to the Federal Budget (Washington: Government Printing Office, 2001). 



The Budget as an Instrument of Public Policy 161 

charging individuals or groups for specific services. Because all public programs are 
affected by the way governments raise revenues, and because revenue administration is 
itself an important part of public administration, you will find it helpful to understand 
the way taxes are structured. 

Developing tax policies requires attention not only to the level of taxes being taken 
from individuals or groups, but also to the fairness, efficiency, and simplicity of the tax 
system. Everyone agrees that the tax system should be fair and that everyone should pay 
his or her fair share. But what exactly does that mean? Some argue that each should 
pay according to the benefits they receive; others argue that those who have a greater 
ability to pay should in fact pay more. 

One way to approach the issue is to think in terms of the relationship between one’s 
tax rate and one’s income. A tax is said to be proportional if it taxes everyone at the 
same rate. If a tax rate of 10 percent is applied to a $20,000 income (yielding $2,000) 
and the same rate is applied to a $200,000 income (yielding $20,000), even though the 
amounts differ, the tax is proportional. A tax is said to be progressive if it taxes those 
with higher incomes at a higher rate. A progressive tax might apply a 10 percent rate to 
a $20,000 income (yielding $2,000) and a 50 percent rate to a $200,000 income (yield¬ 
ing $100,000). Finally, a tax is said to be regressive if it taxes those with lower incomes 
at a proportionally higher rate than those with higher incomes. If an individual with a 
$20,000 income and one with a $200,000 income both pay a $400 tax on the same new 
car, the tax is regressive, taking 2 percent of the first individual’s income but a much 
smaller proportion of the second individual’s income (LeLoup, 1977, pp. 193-194). 

Individual Income Tax 

All methods of taxation involve application of a tax rate to a particular tax base; the 
product of the two yields tax revenue. The individual income tax, the single most impor¬ 
tant tax in our country, calls for the individual to add up all income from taxable 
sources, reduce that amount by certain deductions or exemptions, then apply a tax rate 
to that base to arrive at the individual’s income tax. The current federal income tax, for 
example, applies rates between 15 percent and 39.6 percent to five income brackets. 

All advanced industrial nations use some form of income tax. In the United States, the 
income tax is the primary source of revenue for the federal government and is used to a 
lesser extent in many states and some cities. In most cases, a higher rate is applied to 
higher incomes, making the income tax a progressive tax. For nearly thirty years after 
its passage in 1913, the federal income tax applied only to a fairly small number of high- 
income people; however, with the advent of World War II, deductions were reduced 
significantly and higher rates applied. 

Managing the task of collecting an income tax from everyone in the country is diffi¬ 
cult. Yet, the Internal Revenue Service (IRS) has developed a relatively efficient mecha¬ 
nism for collection and does so at a cost of less than one-half of 1 percent of the revenues 
produced. One key to the existing system is the requirement that each individual calculate 
his or her own tax liability. IRS auditors then select a few returns for closer inspection, 
concentrating on those with unusual features. The extent of compliance with tax regula¬ 
tions in this country, though far from complete, is considered comparatively high. 



162 Chapter 5 Budgeting and Financial Management 

However, throughout 1997, testimonies before the National Commission on 
Restructuring the IRS revealed serious concerns relating to the service’s internal and 
external operations. Witnesses indicated that some IRS officials collected tax informa¬ 
tion for their personal benefit, that unjustifiable audits were ordered against citizens, and 
that the organization had inappropriately acquired billions of dollars from taxpayers. 
Commissioners concluded that the IRS needed a major reorganization, and by year’s 
end a bipartisan effort had been launched in Congress to carry out the commission’s 
recommendations. 

Corporation Income Tax 

The corporation income tax actually predates the individual income tax by several years 
and, for most of this century, was a key source of federal revenue. Also a progressive 
tax, the corporation income tax is justified by its proponents as a way of taxing capital 
accumulation that is not specifically distributed to individuals. Moreover, the corpora¬ 
tion income tax is needed to support the individual income tax; without it, individuals 
could simply keep their income in corporations and avoid paying income taxes. Though 
most states have corporation income taxes, the tax is far more substantial at the federal 
level. Yet even here, the corporation income tax is declining in contrast to other sources 
of revenue. Where it once yielded more revenue than the individual income tax, the 
corporation income tax has declined to only about one-tenth of federal revenues. 

Payroll Taxes 

Taxes on payrolls support a variety of social security and other social insurance pro¬ 
grams, such as unemployment compensation and medical care for the aged. (These spe¬ 
cific taxes should not be confused with the general income taxes that may be deducted 
from a payroll check.) These programs are primarily financed by taxes paid either by 
the employer or by the employer and employee in equal amounts. Because there is a flat 
rate, with no deductions or exemptions, and maximum amounts above which taxes are 
not required, payroll taxes overall are regressive. Payroll taxes at the federal level now 
constitute the second largest source of federal revenue. 

Sales and Excise Taxes 

Both sales and excise taxes are applied to goods and services. Sales taxes are applied to a 
broad range of goods and services at either retail or wholesale levels and are a popular 
source of income at state and local levels. There are, however, significant variations 
in both sales tax rates and items covered by sales taxes; for example, some jurisdictions 
exempt food, clothing, and medicine from sales tax. Excise taxes, on the other hand, 
are applied to the sale of specific commodities such as gasoline, tobacco, or alcohol, and 
are the primary form of consumption tax at the federal level. Typically, excise taxes are 
applied at specific rates (e.g., 2 cents per gallon), but may also be applied to the total 
sales price. Some excise taxes are, in effect, user charges that help support particular 
activities. Gasoline taxes, for instance, are typically used to support highway construc¬ 
tion and maintenance. 



The Budget as an Instrument of Public Policy 163 

A major issue concerning sales and excise taxes is that of equity. Since the poor con¬ 
sume a greater portion of their income than the rich, the burden of consumption taxes 
tends to fall more heavily on the poor; that is, the taxes are regressive. These taxes also 
tend to penalize certain groups, such as those with large families or those just starting a 
household. On the other hand, these taxes tend to provide more stable revenues, some¬ 
thing that is especially important at state and local levels. 

Property Taxes 

Taxes on personal property are widely used at the local level and provide about half 
of local government revenues. Administration of a property tax involves assessment 
of an individual’s property, most often land and buildings, then the application of 
a tax rate. About half the revenue generated by the property tax derives from residen¬ 
tial property and half from businesses. Although the property tax is progressive in its 
effect (those who spend more on housing pay more), administration is difficult and 
has often not been highly professional. Moreover, recent tax limitations have severely 
restricted the capacity of local governments to raise additional revenue through the 
property tax. 

Other Revenue Sources 

There are, of course, a variety of other sources of government revenues. Whereas public 
organizations have often charged fees for the use of specific government services, recent 
limitations on other tax revenues have made such charges increasingly attractive, espe¬ 
cially at the local level. For example, fees for the use of parks and recreational facilities 
are becoming increasingly important. Another recent development in terms of revenues 
at the state level is the use of lotteries. Nearly half the states and several local govern¬ 
ments now conduct lotteries, which provide a highly visible, but relatively small and 
unstable, source of funds. Lotteries are also highly regressive in their effect (since poorer 
citizens tend to play the lotteries more); indeed, they are more regressive than even the 
sales tax (Mikesell & Zorn, 1986, pp. 318-319). 

Nonprofit organizations, which lack the power to tax, derive revenues from quite dif¬ 
ferent sources and, indeed, engage in a wide variety of efforts to support their programs. 
Membership organizations depend in large measure on member dues for revenue, but 
such organizations, along with many others, have recently sought to diversify revenues. 
While grant funding remains an important source of revenue for many nonprofit organi¬ 
zations, recent reductions in federal social service programs have seriously limited grant 
opportunities for many nonprofits. Additional sources of funds include donations (from 
individuals, corporations, and foundations), sales of goods and services (from books to 
coffee cups), and joint enterprises involving commercial firms (such as insurance plans or 
affinity credit cards). 

Patterns of Government Revenues 

As we have seen, different levels of government vary in their dependence on specific revenue 
sources. Figure 5.1 shows the distribution of receipts at the federal level. The president’s 



164 Chapters Budgeting and Financial Management 

budget for fiscal year 2002 estimated total revenues of $2.19 trillion, including the follow¬ 
ing major categories: 

Individual income taxes: $1,078.8 billion 

Corporate income taxes: $218.8 billion 

Social insurance and retirement receipts: $725.8 billion 

Excise taxes: $74.0 billion 

Estate and gift taxes: $28.7 billion 

Customs duties: $22.5 billion 

Miscellaneous receipts: $43.1 billion 

Although the federal government relies heavily on the income tax, state governments 
are much more dependent on sales taxes, and local governments are primarily dependent 
on property tax as a revenue source. All state and local governments combined generated 
$1,095 billion in revenues in 1998, with $227 billion coming from sales taxes of one kind 
or another and only $191 billion coming from individual and corporate income taxes. 
In addition to tax receipts, the combined governments counted as revenues $240 billion 
in intergovernmental (primarily federal) transfers. The property tax accounted for some 
$10 billion in revenues (U.S. Census Bureau, 2000, p. 316) (see Figure 5.2). 

Networking 

For the budget of the United States and how to get to the budgets of other govern¬ 
ments, see the Department of the Treasury at http://www.ustreas.gov/. Details on 
the current fiscal year federal budget and for access to historical budget data go to 
http://w3.access.gpo.gov/usbudget/index.html. 

Where the Money Goes 

These revenue figures are staggering, but they hardly match up to the demands on 
governments at all levels. There simply is not enough money to meet every need or cure 
every problem, even if money alone were the solution. Instead, difficult choices must be 
made each year about which programs will be funded and at what levels. The choices 
made through the public policy process are reflected in the government’s budget. The 
budget, therefore, stands as a record of the government’s priorities. 

But government priorities are always shifting. As new conditions arise, new programs 
are proposed and old programs are expanded or contracted. The emphasis the federal 
government gives to various areas, as one example, has reflected the condition of the 



The Budget as an Instrument of Public Policy 165 

country and the world at various times, as in the large percentage of national resources 
devoted to national defense during periods of international conflict. 

We can also trace budgetary changes over shorter time spans, thus indicating the pol¬ 
icy priorities of various presidents, governors, mayors, or other public officials. Certain 
restrictions, however, have been built into the federal budget over the years that some¬ 
what limit the choices any president or Congress can make. Over the past twenty years, 
for example, Congress has passed a variety of entitlement programs that provide speci¬ 
fied benefits to those who meet certain eligibility requirements. For example, legislation 
might provide benefits to all persons above a certain age or all persons below a certain 
income level. The implication, supported by several judicial rulings, is that individuals 
are entitled to or have a right to certain benefits (primarily social welfare benefits). 

For these programs, Congress essentially agrees to provide whatever money is neces¬ 
sary from year to year to assure a certain level of benefits to all eligible people. 
Legislation is typically written so that new action is not required each year to keep the 
program going. Only a projection of likely beneficiaries is needed to determine the level 
of expenditures for a given year. Unless Congress takes specific steps to limit benefits or 
eligibility—something that legislators are reluctant to do — funding of these programs is 
practically automatic. 

But these programs vary in size over time. In a recession, for example, unemploy¬ 
ment would be high, and spending for unemployment compensation would rise. 
Similarly, the changing character of the population — for example, a larger number of 
older Americans—would also change the amount of money required to provide bene¬ 
fits to that group. Moreover, most entitlement programs have now been indexed to 
the cost of living (or related measures), so that benefit levels automatically rise with 
inflation. (Indeed, over the past decade, Congress has passed major expansions of 
indexing in Social Security and Medicare.) Expenditures for entitlement programs thus 
increase almost every year. 

Such programs constituted just over 50 percent of the fiscal year 2001 federal budget. 
When they are combined with farm price supports (also indexed), with interest on the 
national debt (which must be paid), and with expenditures based on previous commit¬ 
ments, these so-called uncontrollable expenditures constitute almost two-thirds of the 
federal budget. 

The remainder of the federal budget might be termed discretionary spending, meaning 
the president and the Congress are open to make changes in this relatively small portion 
of the budget. This includes defense spending (about 16 percent) and domestic discre¬ 
tionary spending (only about 17 percent). These are the areas that generate the most 
difficult policy choices. 

The Bush Tax Plan 

A great deal of political debate in the 1980s and early 1990s centered on strategies 
for controlling the federal deficit. However, by 2000, a booming economy and fiscal 
measures taken by Congress in the late 1990s changed the debate from how to control 
the deficit to ways to spend a growing budget surplus! 



166 Chapters Budgeting and Financial Management 

President George W. Bush seized upon the opportunity affordfed by this emerging sur¬ 
plus to advance one of the key themes in his election platform — a reduction in federal 
taxes. And given the estimates early in the year from both the Congressional Budget 
Office and the president’s Office of Management and Budget, few could stand in the way 
of the new administration’s drive for sweeping tax reform. 

The administration’s original plan called for a $1.6 trillion cut in the federal income 
tax, but even the president’s most ardent supporters on Capitol Hill cautioned that it 
would be extremely difficult to pass such an enormous reduction plan. Recognizing the 
importance of a victory on his administration’s first key policy initiative, President Bush 
worked with lawmakers to pare down the original proposal and gain the necessary votes. 
The final measure, which was signed into law on June 7, 2001, featured a $1.3 trillion 
tax cut to be phased in over the next decade and a fundamental restructuring of federal 
income taxes. 

Supporters of the plan said that reducing the tax burden on the American public, par¬ 
ticularly with the projected federal surplus, was a way to return “an overcharge” to tax¬ 
payers and to curb federal spending. For example, House Majority Leader Dick Armey 
said, “The addicts are going to have to take the cure. We’re no longer going to get 
stoned on the other people’s money” (Stevenson, 2001, p. Al). Proponents also argued 
that the tax rebates, which the IRS began sending out in the summer of 2001, would 
help to stimulate an economy that had declined sharply in the preceding months. 

Some of the central elements of the Bush plan include reductions in personal income 
tax rates, as well as a phasing out of the estate tax, an increase in the child tax credit 
(and an expansion in the number of low-income families who are eligible for this 
credit), and an increase in the contribution limits to 401 (k) and individual retirement 
accounts. 

For nonprofits, the tax reduction plan that finally passed Congress lacked many of the 
provisions from the original Bush proposal that would have encouraged increases in char¬ 
itable giving. As the Chronicle for Philanthropy reported, the law lacked provisions that 
would have 

• Allowed people who do not itemize on their federal income-tax returns to write off 
charitable deductions. 

• Permitted people to donate to charity directly from their individual retirement 
accounts, without incurring taxes. 

• Increased the annual limit on charitable deductions taken by corporations from 
10 percent to 15 percent of a company’s taxable income. (Williams, 2001, p. 26) 

Furthermore, the phasing-out of the estate tax will increase the barriers nonprofits 
face in the area of resource development over the long-term. 

Critics of the Bush tax plan in the governmental sector say that it may prove to be too 
much, too soon. Senator Tom Daschle, who became majority leader when the Democrats 
took control of the Senate in June 2001, said, “We think this is good short-term politics. 
[But] it is disastrous long-term policy” (Stevenson, 2001, p. 26). Daschle and others sug¬ 
gested the plan would not leave enough in reserve to cover the cost of upgrading the mil¬ 
itary, much less the substantial reforms to Social Security and Medicare that remain 
on the horizon. Even the president’s own economic advisors moved away from their 



The Budget as an Instrument of Public Policy i6y 

original optimism, saying that the more cautionary estimates relating to the federal sur¬ 
plus, which were released just weeks after the tax plan became law, may require 
Congress to revisit some of its main provisions. 

Networking 

Check out the National Debt Clock at http://www.brillig.com/debt_clock/ and the 
Treasury Department’s FAQs about the budget at http://www.ustreas.gov/opc/ 
opc0037.html. For simulations of financial conditions at the federal level, go to 
http://www.thirdmil.org. 

State and Local Expenditures 

Expenditure comparisons at the state and local levels are complicated by our system of 
intergovernmental transfers. In education, for example, the federal government pro¬ 
vides some money directly to individuals (e.g., student grants and loans), but it also 
transfers large sums to state and local governments. States spend some money directly 

Receipts: $1,720 billion 

Liquor Store 
Revenues Intergovernmental 

Insurance Trust 
0.2% Revenues 

Revenues 
15% 

16% 
Utility Store 
Revenues 

4% 

Charges and 
Miscellaneous 

Revenues 
20% 

FIGURE 5/(2 ^ wawaiB> , v 

The State and Local Dollar 

SOURCE: United States State and Local Government Finances by Level of Government: 1997-1998 
(Washington, DC: U.S. Census Bureau, 2001). 



168 Chapters Budgeting and Financial Management 

(e.g., colleges and universities), but they also transfer some money received from the 
federal government and some raised at the state level to local governments, primarily to 
support education. Consequently, while local governments provide only less than 
30 percent of the money spent on education in this country, they actually are involved 
in spending 70 percent of that money. If we include intergovernmental transfers spent at 
the state and local levels in our calculations of state and local spending, the following 
patterns emerge: states spend the greatest portion of their funds on education, with 
public welfare next, and highways, health, and natural resources somewhat less. At the 
local level, the largest amount again is spent on education, with health, public works, 
and social welfare next. 

The Budget as a Managerial Tool 

As a public manager, you will find that the budget process is critical to your success and 
that of your agency, quite simply because the budget process establishes the level of 
funding for your programs and those of others. A variety of steps are required to enable 
a particular agency to spend money. Legislation must first be passed and signed by the 
chief executive to authorize the program. This authorizing legislation permits the estab¬ 
lishment or continuation of a particular program or agency. (Authorizing legislation usu¬ 
ally covers multiple years or is even open-ended, though some programs, such as the 
space program, require new authorization each year.) Next come appropriations, 
whereby the legislature sets aside funds and creates budget authority for their expendi¬ 
ture. Only after both steps have been taken can an agency spend money in pursuit of its 
stated objectives. 

In most cases, governments use a fiscal year as their basic accounting period. The 
federal fiscal year begins on October 1 and runs through September 30 of the following 
year. The fiscal year carries the name of the year in which it ends; thus, fiscal year 2002, 
or FY 02, begins October 1, 2001, and ends September 30, 2002. States and localities 
differ widely in terms of fiscal years; some follow the federal pattern and run from 
October through September, others start July 1 (as did the federal government until 
1976), and others match the fiscal year to the calendar year. Kentucky and a few other 
states actually have a two-year-long fiscal year because their legislatures meet and pass a 
budget only every other year. 

The fiscal year is the key period in which money is spent, but a variety of steps must 
be taken both before and after the fiscal year that can affect an agency’s expenditures. 
The budget must be developed, typically by the chief executive (president, governor, 
mayor), and transmitted to the legislature; it must be approved by the legislature prior to 
the beginning of the fiscal year; it must be executed during the fiscal year; and it must be 
reviewed and audited following the fiscal year. At any given point in the budget cycle, 
there are actually several budgets being worked upon. While one budget is being exe¬ 
cuted (for example, fiscal year 2001), formulation and approval of another (fiscal year 
2002) is taking place, as are audits of the previous budget (fiscal year 2000). 



The Budget as a Managerial Tool 169 

Budget Formulation 

In the federal government and in many state and local jurisdictions, the chief executive 
has primary responsibility for preparation of the budget. The budget cycle (see Figure 5.3) 
typically begins with a letter from a central budget office to the various agencies outlining 
the timetable for preparation of the budget, transmitting forms for use in the process, and 
indicating any policy concerns of special priority for the fiscal year. The agencies then pre¬ 
pare their own budget requests and forward them to the central budget office for review 
(see Box 5.1). Often a series of meetings (or sometimes hearings) are held to negotiate 
differences in the views of the central budget office (reflecting the priorities of the chief 
executive) and the agencies. Finally, the budget document is prepared by the central bud¬ 
get office and transmitted by the chief executive to the legislature for approval. 

In some jurisdictions, responsibility for preparing the budget may not lie completely 
with the chief executive, and the budget cycle may vary accordingly. In many states, for 
example, responsibility for budget formulation may be shared among the governor, other 
elected officials, and members of the legislature. Cities with a strong mayor form usually 
give responsibility to the chief executive, whereas cities that operate under other forms 
tend to disperse budget authority. The city manager usually prepares the budget in coun¬ 
cil-manager cities, though typically with substantial input from the mayor and other 
council members. 

The Office of Management and Budget is the central budget office at the federal level, 
and has evolved from an agency established in 1921. Originally called the Bureau of the 
Budget, President Nixon renamed it the Office of Management and Budget (OMB) in 1970 
to reflect an emphasis on management concerns in addition to budgetary responsibilities. 

Major Steps in the Budget Process 

I 
March January September 30 

Formulation of Congressional budget Execution of enacted budget Fiscal data 
president’s budget process, including action on available 

appropriations and revenue 
measures (beginning 9 
months before fiscal 
years)* 

•If appropriation action is not complete by September 30, Congress enacts temporary appropriations (i.e., a continuing resolution) 

FIGURE 5.3 

The Budget Cycle at the Federal Level__ 

SOURCE: The United States Budget in Brief, Fiscal Year 1990 (Washington, DC: U.S. Government Printing 
Office, 1990), p. 96. 



ijo Chapters Budgeting and Financial Management 

BOX 5.1 - 

Financial Management: The Program Manager’s Role 

Many in government think financial management is the responsibility of financial 
offices, accountants, and the like. Most program managers, in particular, feel they do 
not have to be concerned with financial management. 

WRONG. Nothing could be further from the truth. Successful program managers 
appreciate that, in government, they have the responsibility for financial manage¬ 
ment. They understand what this entails, and thus have a far better chance of success¬ 
fully delivering their programs despite reduced budgets. 

What is financial management? It is nothing more than obtaining and effectively 
using funds and other resources to accomplish the goals and objectives of the organi¬ 
zation. It typically entails: 

Defining people, materials, and services for achieving a program’s goals and objec¬ 
tives. 
Defining the sources of resources that can be used to fund the program’s costs 
Obtaining the resources 
Managing and minimizing the costs 
Obtaining results from the expenditure of the resources 
Preventing waste in the expenditure of the resources 
Reporting accountability for both the use of resources and delivery of the results. 

SOURCE: Harold I. Steinberg, “Improving Financial Management: The Program Manager’s Role,” 
PA Times, v. 20, n. 11 (November 1997): 1. 

At the outset of the budget process, OMB collects information on projected revenues for 
the coming fiscal year, as well as information on the outlook for the economy. In addition, 
OMB develops information on the progress of the current year’s budget, as well as the 
budget being considered by Congress. After a beginning consultation with the agencies to 
assess their program priorities, OMB works with the president to establish basic policy 
guidelines for developing the budget. 

Networking 

Federal organizations involved in budgeting and financial management include 
the Office of Management and Budget at http://www.omb.gov, the Congressional 
Budget Office at http://www.cbo.gov, and the General Accounting Office at 
http://www.gao.gov. 

These guidelines are communicated to the agencies, along with detailed forms for 
budget requests. In turn, managers in the various agencies assess their program priorities 



The Budget as a Managerial Tool xyi 

and decide the necessary level of funding for accomplishing objectives in the next fiscal 
year. Starting about September, a period of negotiation occurs with OMB. The central 
budget office represents the president’s policy concerns and usually takes a generalist 
perspective, in contrast to the more narrow, specialized interests of the agency represen¬ 
tatives. About November or December, the president becomes more actively involved 
in the budget process and makes final decisions with respect to both revenue and fiscal 
considerations and individual program needs. 

The final budget document, which is submitted to Congress early in the new year, 
represents the culmination of a long process of analysis and interaction among a wide 
variety of groups. 

Given the magnitude and complexity of the federal government, the process of bud¬ 
get formulation at that level is the most complex in this country. But the difficulties of 
reconciling different and competing interests in the budget process are significant at all 
levels of government. In addition, chief executives at the state and local levels face 
constraints not found at the federal level. For example, most governors are required 
by constitution or statute to submit a balanced budget to the legislature, making it 
essential that they project anticipated revenues as closely as possible. 

Budget Approval 

The budget approval phase begins with submission of the budget to the legislature and 
ends with approval of the budget. The legislature, in most cases, can approve, disap¬ 
prove, or modify the chief executive’s budget proposal; it can add programs or eliminate 
programs; and it can alter methods of raising revenues. Remember that programs must 
first be authorized, then money can be appropriated for their implementation. In some 
cases, appropriations are contained in one bill that is debated, amended, and passed by 
the legislative body. In other cases, appropriations may be divided among several differ¬ 
ent appropriations bills. 

In any case, the budget submitted to the legislative body is first sent to the commit¬ 
tee or committees responsible for appropriations. These committees review the submit¬ 
ted document and hold hearings involving agency personnel, representatives of interest 
groups, other legislators, and private citizens. After consideration by the full legislative 
body, the bill as amended is passed and sent to the chief executive for signature (where 
approval is required), or, in the case of bicameral legislatures, sent to the other legisla¬ 
tive body for similar consideration. If there are differences in the bills produced by the 
two houses of the legislature, the differences are worked out in a conference commit¬ 
tee, and the bill is passed again by the two houses and sent to the chief executive. 

Again, there are wide variations in the approval process from jurisdiction to jurisdic¬ 
tion. At the federal level, granting budget authority —the authority to obligate funds 
for immediate or future outlays (government spending)—can come about in several 
ways. Budget authority for most programs must be granted annually through passage 
of an appropriations bill. Congress has voted permanent budget authority for some 
programs, however, so that funds become available each year without further congres¬ 
sional action. In addition, within any given fiscal year, some outlays will be based 



172 Chapter 5 Budgeting and Financial Management 

on obligations made in previous years. Thus, the total budget outlays for any fiscal year 
include the total of previously granted budget authority, authority granted through 
appropriations for the current year, and money obligated in previous years for spending 
in the upcoming fiscal year, minus outlays deferred to later years. 

Under procedures established by the Congressional Budget Act of 1974, Congress 
considers budget totals before considering individual appropriations measures. Based on 
work by the Budget Committees of both houses, a first concurrent resolution (a resolution 
of both houses not requiring the president’s signature) is passed by May 15, establishing 
targets for total revenues and total spending authority within various functional areas 
for the upcoming fiscal year. Although the president is not formally involved in this part 
of the budget process, consultation frequently occurs so that all parties will be informed 
of developments in the approval process. In some cases, the various parties even agree on 
a set of budget totals to be honored by both the president in his budget submission and 
the Congress in its approval process. 

Congressional review of appropriations requests begins in the House of Represen¬ 
tatives, where the Ways and Means Committee considers revenue estimates and where 
the Appropriations Committee (through various subcommittees) reviews spending rec¬ 
ommendations. Appropriations are considered within thirteen different appropriations 
bills covering groups of departments and agencies within related functional areas. After 
initial passage by the House, all tax bills and the thirteen appropriations bills are for¬ 
warded to the Senate for consideration. Differences in the appropriations measures com¬ 
ing from the two houses are worked out in conference committee and, following 
approval by both houses, are forwarded to the president for signature. The two Budget 
Committees are charged with drawing up a second concurrent resolution, this one bind¬ 
ing in nature, setting limits on total spending. Finally, a separate reconciliation bill 
attempts to reconcile individual actions in taxes, authorizations, or appropriations with 
the totals. 

If action on appropriations for the fiscal year is not completed by the beginning of the 
fiscal year (October 1), the Congress enacts a continuing resolution, which permits the gov¬ 
ernment to keep operating until an appropriations measure is passed. (As we have seen, the 
term continuing resolution became a household phrase during the budget turmoil of 
1995-1996. The Clinton administration and Congress both refused to compromise on key 
provisions of the major appropriations bills, which fund the main federal agencies. A series 
of continuing resolutions was used to keep government offices open until an agreement 
could be reached, all to no avail. On two separate occasions, first in November and then in 
December, the government was forced to shut down as the temporary spending measures 
ran out and budget deliberations stalled in partisan gridlock. By the end of the crisis, a 
dozen continuing resolutions were signed to keep the federal government operational.) 

Throughout its consideration of the budget, the Congress is aided by the work of 
Budget Committee staff members (whose numbers have grown substantially in recent 
years) and by the Congressional Budget Office. This agency provides basic budget infor¬ 
mation and its own economic forecasts and indicates to Congress how its conclusions 
differ from those of the executive branch. Such differences have, in several years, led the 
Congressional Budget Office to predict a more substantial budget deficit than that antici¬ 
pated by the administration. 



The Budget as a Managerial Tool 173 

An increase in staff capabilities has been among the most important developments in 
the legislative approval process in most states and in some larger cities. Legislative budget 
staffs vary in structure and composition; that is, they may be partisan or nonpartisan, 
centralized or decentralized, joint (both houses) or single house, and so on. However, 
their responsibilities usually include analyzing the governor’s budget, forecasting revenues 
and expenditures, and developing alternatives to the executive budget. In all cases, greater 
staff capabilities have considerably aided the resurgence of state legislative involvement in 
the budget process. 

One important feature of the approval process at the state level is the existence in most 
states of the line-item veto. (The line-item veto allows the executive to veto specific items in 
an appropriations bill rather than decide between “all or nothing.”) Such authority has 
been sought at the federal level by recent presidents, and President Clinton became the first 
chief executive granted such capacity when the federal Line Item Veto Act (P.L. 104-130) 
took effect in January 1997. The act, though stopping short of extending full constitutional 
line-item veto power, gave the president authority to strike items from a federal appropria¬ 
tions bill without having to veto the entire piece of legislation. The Clinton administration, 
like its Republican predecessors, argued that the powers granted under the act would enable 
the president to make significant cuts in federal spending, and proponents added that a 
great deal of time and energy will be saved since the executive and legislative branches 
would not have to renegotiate an entire budget when only specific items are at issue. 

Despite the value inherent in such a measure, the Supreme Court invalidated the fed¬ 
eral act in Clinton v. City of New York (1998), stating that while there may be proce¬ 
dures for amending or repealing federal statutes, the process must be consistent with the 
constitutional powers afforded each branch of government (see Immigration and 
Naturalization Services v. Cbadba [1983]). In the case of the line-item veto, the president 
simply did not have the constitutional authority to amend or repeal a spending bill 
passed by Congress. 

Budget Execution 

The budget execution stage, generally coinciding with the fiscal year, is that part of the 
budget cycle in which the agencies of government carry out agreed-upon programs and 
policies. The execution stage involves public administrators in all aspects of the manage¬ 
ment process — planning, analysis, personnel management, communication, and other 
interpersonal skills. 

Basic financial controls are exercised during the budget execution phase through the 
mechanism of apportionment, a process by which funds are allocated to agencies for 
specific portions of the year. Typically, the central budget office asks for submission of 
spending plans indicating what money the agencies anticipate spending in each quarter 
of the year. Because the agencies may not have received all they wanted in the appropria¬ 
tions process, the apportionment mechanism also acts as the basis for required changes 
in programs and policies. As soon as there is agreement between the central budget office 
(acting on behalf of the chief executive) and the agencies on the changes embodied in the 
apportionment plan, agencies begin receiving allotments. 



174 Chapter 5 Budgeting and Financial Management 

To assure that funds are in fact expended for the purposes for which they were intended 
and that there is indeed enough money budgeted to cover a proposed expenditure, some 
sort of preaudit (a review in advance of an actual expenditure) is usually required. 
Depending on the jurisdiction, the preaudit may be conducted by an agency’s own budget 
office, by an independent agency, or even by an elected state official. Once approval has 
been given, however, the treasurer is obligated to pay for the expenditure. 

Even though budgets are not passed until just before (or even well into) the fiscal year, 
important changes may occur during the year that require changes in an agency’s bud¬ 
geted expenditures. Some changes may require greater funding. For example, when an 
unexpected natural disaster, such as a drought, places special burdens on farmers. If it is 
felt that the need must be met prior to the next budget cycle, the president and Congress 
can work together to provide a supplemental appropriation, a bill passed during the fis¬ 
cal year to add new money to an agency’s budget for that fiscal year. Such a bill may 
simply provide more money for existing programs or money for a newly authorized pro¬ 
gram. We might note that the events of September 11, 2001 required substantial changes 
in the federal budget to aid in disaster relief, help for the airlines, and new security mea¬ 
sures. (See Box 5.2.) 

There are also devices, used primarily by chief executives as a matter of administra¬ 
tive discretion, to restrict agencies’ spending below budgeted amounts. Presidents 
throughout the nation’s history have sought to limit agency spending by impound¬ 
ment, that is, by withholding, funds authorized and appropriated by law, typically in 
the case of emergencies or where the purpose of the money had been achieved and 
budgeted funds still remained. Similarly, at the state level, governors regularly with¬ 
hold agency funds when revenue projections fall below levels upon which the budget 
was based. 

At the federal level, the impoundment issue became especially intense in the early 
1970s, when President Nixon asserted his right to impound funds wherever he felt 
appropriate to achieve his fiscal goals. Especially annoying to Congress was his refusal to 
spend money for water pollution control; the money had been passed by Congress over a 
presidential veto (Pfiffner, 1979, p. 4). Many felt that Nixon’s use of impoundment 
amounted to an unconstitutional item veto. 

Consequently, the 1974 Budget Act sought to clarify matters by defining two types of 
legal impoundments. The first, a deferral, is a decision by the president to withhold funds 
for a brief period. In such circumstances, the president must inform the Congress, and 
either house of Congress may veto the action. The second, a rescission, is a presidential 
decision to withhold funds permanently; a rescission must receive the positive approval of 
both houses of Congress. Through these devices, Congress has sought to maintain its 
involvement in budget execution while at the same time allowing some administrative dis¬ 
cretion to the president. (Not surprisingly, recent presidents, including President Clinton, 
have argued for expanded rescission authority.) 

Because situations change, public managers are often accorded some flexibility in the 
use of allocated funds. Money originally allocated for salaries and wages, for example, 
might be shifted (with appropriate approvals) to an equipment and expense category. On 
a broader scale, some agencies engage in reprogramming— that is, taking money appro¬ 
priated for one program and diverting it to another that emerges as a higher priority. 



The Budget as a Managerial Tool 175 

BOX 5.2_ _ __ 

What Happens to the Budget During Emergencies 

The White House signaled last night it will seek a reordering of federal budget priori¬ 
ties, with programs not related to fighting terrorism or enhancing security under 
scrutiny for reductions or elimination. 

Mitchell E. Daniels Jr., the White House budget director, warned that permanent 
budget deficits may emerge again if lawmakers do not trim back parts of the govern¬ 
ment not dedicated to the military, law enforcement and intelligence-gathering. 

“Many lesser priorities will have to yield while we ensure that the essential func¬ 
tions of government are provided for,” Daniels told a business group in New York, 
according to a draft of the speech released by the White House. “The alternative is to 
discard discipline totally and imperil our long-term economic health.” 

In an interview, Daniels made it clear the administration was opposed to either higher 
spending or tax increases. Daniels said he rejected the notion that much of the additional 
spending in the war on terrorism—by some estimates as much as $50 billion a year— 
will need to be added on top of existing commitments. “Everything ought to be held up 
to scrutiny,” he said. “Situations like this can have a clarifying benefit. People who could 
not identify a low priority or lousy program before may now see the need.” 

Daniels said the “two new imperatives are fully affordable [but] the real danger is 
that we will layer it on top of the government we have.” He said that “what you 
don’t do in a time of emergency is hold everything else sacrosanct,” though he ruled 
out not implementing portions of the president’s tax plan because “we don’t want to 
do anything that hurts long-term growth.” 

But many Democrats charge the administration’s commitment to fiscal discipline is 
merely a convenient way to slash funding for social and health programs dear to 
Democrats while pouring dollars into the military and law enforcement agencies that 
were always slated for big increases under President Bush. They question why every¬ 
thing but the president’s desire for more tax cuts needs to be on the table. . . . 

SOURCE: Excerpted from Kessler, Glenn, “OMB Chief Signals New Spending Goals” Washington Post, 
Wednesday, October 17, 2001, Page A03, © 2001 The Washington Post Company. Reprinted with permission. 

M—MMUMWI.I IJMMWIIMWHW I MilljllillMlin.Cl Ml IIIHl'iiMPTTi'fM.ri^MWi^llWiWWIlWttHWffTWWWWWWMWlrWBWWMMWMHtilTIllirWIIIl 

This strategy must be undertaken with great care, however, not only because of legal and 
ethical implications, but because efforts to subvert the legislature’s intention are likely to 
incur retribution in the next year’s budget process. 

Audit Phase 

The final phase of the budget process is the postexecution or audit phase. Postaudits take 
place following the end of the fiscal year and are concerned with verifying the correct¬ 
ness and propriety of agency operations. These audits were originally designed to assure 



iy6 Chapter 5 Budgeting and Financial Management 

financial control; as such, they focused on accuracy of record keeping, on compliance with 
statutes, and on uncovering fraud, waste, and mismanagement. More recently, the concept 
of auditing has been broadened to include performance auditing—analyzing and evaluat¬ 
ing the effective performance of agencies in carrying out their objectives. Three purposes 
are served by postaudits: (1) financial viability, as indicated by efficient use of resources; (2) 
compliance with statutes and other limitations; and (3) program performance, including 
the results of program operations. 

Agencies themselves can carry out audits; indeed, we have already seen how the audit¬ 
ing work of inspectors general has revealed waste and fraud in some agencies. There is a 
clear trend, however, toward broader use of independent agencies. Moreover, to maintain 
detachment in their review of executive agencies, the postaudit function is increasingly 
being attached to the legislative rather than the executive branch. In 1921, for example, 
the federal government created the General Accounting Office (GAO) as a support agency 
of the Congress, although President Wilson had previously vetoed such legislation on the 
grounds that the officers of such an agency should be answerable to the executive rather 
than the legislature. As we saw, the GAO was originally concerned primarily with the 
financial auditing of selected federal agencies; however, more recently, it has extended its 
activities to include program evaluations as well. 

At the state level, organizational arrangements vary; however, the trend toward having 
postaudit agencies attached to the legislature is clear. In 1938, there were five states 
in which the audit function was part of the legislative branch; in 1960, there were fifteen; 
today, there are more than forty (Council of State Governments, 1993). A large number 
of states retain an elected state auditor, however, whose office often goes beyond detached 
analysis and becomes embroiled in political controversy. Finally, a number of large cities, 
including Dallas and Seattle, have developed legislative postaudit functions. 

Approaches to Public Budgeting 

To be an effective tool in management and decision making, the budget must present 
information about the purposes of the proposed activity and the resources to be expended. 
There are a variety of different ways to present such information. Some approaches to 
budgeting, for example, are based on the assumption that budget decisions are (and should 
be) largely incremental—policy makers start with the given situation (last year’s budget) as 
a base and make only marginal adjustments to that base. Following this approach, man¬ 
agers build budgets by asking for limited increases in spending rather than focusing on 
major programmatic concerns. Similarly, the legislature focuses on individual expenditures 
rather than the big picture. According to proponents of incrementalism, this approach is 
not only an accurate representation of the actual behavior of decision makers, it is an 
appropriate way to maintain balance among the many different interests represented in the 
budget. In contrast, other budget theorists argue for a more rational, comprehensive, and 
programmatic approach. 



Approaches to Public Budgeting 177 

Budgets can be categorized according to the purposes they serve. Allen Schick, a lead¬ 
ing scholar in the field of budgeting, has suggested that budgets can have at least three 
different purposes, all of which are reflected in any approach to budgeting. These pur¬ 
poses are planning, management, and control. Planning involves the determination of 
organizational objectives and the development of strategies to meet those objectives; 
management involves the design of organizational means by which approved goals can 
be translated into action, as well as developing the staffing and resources necessary for 
execution; control refers to “the process of binding operating officials to the policies and 
plans set by their superiors.” According to Schick, each attempt at budget reform 
changes the balance among the three purposes — sometimes inadvertently, sometimes 
deliberately. Understanding how budgets are put together will help you present an effec¬ 
tive case for program changes. 

The Line-Item Budget 

Those who established the first systematic governmental budgeting schemes were con¬ 
cerned primarily with assuring the public that expenditures were properly made and 
accounted for. Consequently, the systems they designed emphasized the control func¬ 
tion. Because all agencies purchase essentially the same kinds of goods and services, 
it was argued, account classifications could be designed that would be broadly applic¬ 
able to various agencies or departments. It would then be possible for auditors 
to apply uniform criteria to evaluate the expenditures of all (Lyden & Lindenberg, 
1983, p. 67). 

Accordingly, in what is called a line-item or objects of expenditure budget, categories 
of expenditures are listed along with amounts allocated to each. Typically, line-item 
budgets are organized by departments, so that the budget for one agency might look 
something like this: 

1998 1999 

Salaries and wages $75,300 $94,400 

Utilities 12,320 13,750 

Supplies and materials 13,500 13,950 

Travel 950 750 

Printing 1,200 1,350 

Telephone 1,550 1,900 

The cost of each object of expenditure is generally based on the agency’s past experience 
and analysis of expected changes during the budget year. Since personnel costs (salaries, 
wages, and other personal services) typically constitute over half the budget, special atten¬ 
tion is given to projected staffing changes, and such changes are often appended to the 
budget. (Our example projects, among other things, the addition of one clerical person 
during the upcoming year.) 

The line-item budget continues to be widely used, partly because it is easy to understand 
and partly because it offers political leaders the more palatable option of reducing items 



178 Chapters Budgeting and Financial Management 

(such as travel) rather than eliminating programs. Moreover, it is well suited to incremen¬ 
tal decisions, which make only minor modifications in the previous budget. However, 
because in the line-item budget the focus is on expenditures, not on their results, it is of 
little benefit to planning or management. Consequently, budget reformers have sought to 
balance the line-item budget’s advantage of effective control with attention to other pur¬ 
poses as well. 

The Performance Budget 

The 1930s proved a turning point with respect to public budgeting. The federal budget 
grew tremendously, the Bureau of the Budget became attached to the White House, and, 
in general, greater attention was paid to the executive management of government agen¬ 
cies. This interest in management was paralleled at the state and local levels, where 
efforts to relate budget presentations to programmatic activities had been under way for 
some time. The result was a new approach to budgeting, the performance budget. 

The performance budget is organized around programs or activities rather than depart¬ 
ments and includes various performance measurements to indicate the relationship 
between the work actually done and its cost. As the Hoover Commission described it, a 
performance budget “would analyze the work of government departments and agencies 
according to their functions, activities, or projects. It would concentrate attention on 
the work to be done or the service to be rendered, rather than the things to be acquired.” 
By focusing on the relationship between available resources and the work to be done, 
performance budgeting is well suited to the purposes of management. 

To construct a performance budget, the manager must first determine appropriate 
program categories, such as highway safety, then break that program down into appro¬ 
priate subprograms, such as school visitations or advertising programs. It is then neces¬ 
sary to establish detailed work measures for each activity; for example, a highway safety 
program might anticipate twenty-seven school visitations during the course of the year. 
These data would then be related to the cost of making such visits. In its most detailed 
presentation, a performance budget requires identifying the work activity, establishing 
an output unit, calculating the cost of each unit, and projecting the units required and 
the associated costs for the coming year. 

Although performance measures are helpful in making budgetary decisions, not all orga¬ 
nizations can easily develop such information. A license bureau can report the number of 
licenses issued and fairly easily calculate the cost per license issued, but a research unit or a 
group promoting civil rights would find its work much more difficult to measure. 
Performance budgeting also tends to concentrate on quantity of work rather than quality. 

Finally, performance budgeting somewhat diffuses organizational responsibility, because 
one program or function may be located in several different units. “Public information ” 
for example, may involve work in the mayor’s office, police department, fire department, 
and elsewhere. To sort out costs by department, one would need to construct a crosswalk 
or matrix of expenditures. A matrix might place various activities on one dimension and 
departments on another: 



Approaches to Public Budgeting 179 

Activities 
1 2 3 Totals 

Division A $10,000 $20,000 $15,000 $45,000 

Division B 12,000 16,000 10,000 38,000 

Division C 5,000 12,000 13,000 30,000 

Totals 27,000 48,000 38,000 

A matrix could also be constructed relating activities to traditional objects of expendi¬ 
ture; such calculations are typical in performance budgets. 

Program Budgeting  

Another approach to budgeting had its origins in the Department of Defense in the early 
1960s. Soon after taking office as Secretary of Defense, Robert McNamara discovered 
that his ability to manage the department was severely restricted by the lack of coordina¬ 
tion between planning and budgeting. Each service (army, navy, air force) prepared its 
own annual budget, reflecting its own priorities, then submitted the documents to the sec¬ 
retary. This plan failed to give proper attention to systemwide issues. But, equally impor¬ 
tant, because the budgeting system was based on a one-year time frame, it bore little, if 
any, relation to the multiyear projections of the department’s planning and analysis staff. 
The development of major weapons systems, for example, involves research and develop¬ 
ment, assembly, and operations over many years, yet this fact was not clearly reflected in 
the annual budget submissions. 

Consequently, McNamara instituted a new approach, which came to be known as the 
planning-programming-budgeting system (PPBS), an effort to connect planning, systems 
analysis, and budgeting in a single exercise. In the Defense Department, PPBS began with 
the identification of nearly one thousand program elements, each grouped under one of 
nine major programs or missions—that is, strategic retaliatory forces, continental air and 
missile defense forces, civil defense, and so on. Not only was extensive study required to 
identify the right combination of program elements to support each mission, but, once 
having established the combinations, units in the department were required to submit 
detailed analyses of proposed program changes. In addition, the new budget system was 
designed to cover a nine-year period and to show detailed projections for the first six 
years. President Johnson was so impressed with the operation of PPBS in the Defense 
Department that he ordered the new system extended to all federal agencies. Each cabinet- 
level department was asked to identify a limited number of purposes to be served by the 
agency, then to organize budget requests around those themes. The Department of Health, 
Education, and Welfare (HEW), for example, chose topics such as social and rehabilitation 
services that cut across several agencies within HEW. Costs for each program element were 
projected five years into the future, and extensive documentation justifying each element 
was required, especially in areas undergoing significant changes. Most agencies were able 
to develop their budgets using the new approach, but there was considerable confusion in 
the implementation of PPBS. As a result of this confusion and for a variety of other politi¬ 
cal reasons, PPBS was formally terminated by President Nixon in 1971. 



i So Chapters Budgeting and Financial Management 

During its relatively short tenure, PPBS attracted great attention, with many cities, 
states, and other countries embracing the new technique. PPBS not only emphasized the 
planning aspect of budgeting, but it appeared to bring greater rationality and compre¬ 
hensiveness to the budget process. These goals, however, were accomplished at great 
cost. Substantial numbers of new staff members were needed, both in the central budget 
office and in the various agencies to provide the kind of analysis PPBS required. All in 
all, the process proved extraordinarily time-consuming. Consequently, very few full¬ 
blown PPBS systems remain, although many of the principles of PPBS have been incor¬ 
porated into other approaches, often under the more general label program budgeting. 

There are important differences between performance budgeting and program budget¬ 
ing. “As a general rule, performance budgeting is concerned with the process of work 
(what methods should be used) while program budgeting is concerned with the purpose 
of work (what activities should be authorized)” (Schick, 1987, p. 53). Where a perfor¬ 
mance budget might define the operations of a city garbage department in terms of col¬ 
lecting and disposing of garbage, a program budget might focus instead on the purpose 
served by collecting the garbage—to prevent infectious disease or to protect property 
values (Lyden & Lindenberg, 1983, pp. 92-93). 

Moreover, although both systems urge measurement of work being done, performance 
budgeting is more likely to employ measures related to the work (for example, the num¬ 
ber of tons of garbage collected) and a program budget might concentrate instead on 
measures related to the purpose of the work (for example, the rate of infectious disease in 
the community). Performance data are of great interest to individual managers who seek 
to improve productivity, but legislators and other policy makers are more likely to be 
interested in the purposes of various activities. 

Zero-Base Budgeting 

One of the most recent budget reform efforts is zero-base budgeting (ZBB), a technique 
developed by Texas Instruments and first applied in government by Jimmy Carter while 
he was governor of Georgia. As president, Carter mandated the use of ZBB in all federal 
agencies. ZBB does not mean that agencies must simply start over with each budget 
cycle, building and rebuilding justifications for all their programs; rather, ZBB seeks to 
structure the budget so as to present information about the efficiency and effectiveness of 
existing piograms and also highlight possibilities for eliminating or reducing programs 
(Pyhrr, 1977, p. 1). In contrast to the program development emphasis in program bud¬ 
geting, the emphasis in ZBB is on cutting back or restricting programs. 

The ZBB process begins with identifying a decision unit, the lowest organizational 
unit at which significant program decisions are made. The manager of the decision unit 
is asked to prepare one or more decision packages, which explain each proposed pro¬ 
gram and contain the purpose, a description of the action to be undertaken, costs and 
benefits, and workload and performance measures. Top management and the legislature 
use the decision packages to compare various programs and rank the highest priorities. 

As part of developing the decision packages, managers must provide two other types 
of information. First, they must identify alternative measures for accomplishing the work 



Approaches to Public Budgeting 181 

and indicate why these alternatives were not chosen. For example, an air quality labora¬ 
tory might recommend using a centralized laboratory to conduct tests rather than con¬ 
ducting tests at regional locations or contracting with a local university (Pyhrr, 1977, 
p. 4). Second, managers must identify various funding levels: (1) a minimum level, 
(2) the level necessary to continue current operations, and (3) an improvement level. 
In each case, the manager must indicate the effects of the funding level on program per¬ 
formance. For example, a minimum level of $140,000 might permit testing 37,000 air 
samples, meeting the minimum requirements of those who use the tests, and covering 
70 percent of the state’s population. An improvement level might require $246,000, but 
add additional urban areas and cover 90 percent of the population (Pyhrr, 1977, p. 4). 

ZBB has been criticized for generating too much paperwork and for failing to provide 
effective criteria for ranking decision packages. In addition, the minimum funding level 
requirement has proven difficult to establish; many jurisdictions equate minimum fund¬ 
ing with a certain percentage of the current level (e.g., 75 percent). For these and other 
reasons, ZBB was discontinued by President Reagan, though many agencies still employ 
some of its elements in their budget process. 

Outcome-Based, Budgeting 

A recent trend in government budgeting involves increasing the level of accountability for 
public resources. Citizens, elected officials, and administrators want to be able to deter¬ 
mine how much is being spent on each program or agency and the return on the public’s 
investment—that is, the substantive impact of each policy. In practical terms, this requires 
linking budget information with some type of a performance measurement system. The 
resulting budget enables administrators to track levels of expenditures and report on the 
outcomes being achieved. 

Unlike performance budgeting mentioned previously, outcome budgeting goes 
beyond looking at mere issues of productivity and unit cost. It assesses the long-term 
impact of each policy, program, or agency within its targeted area. Though based on 
quantitative measures, outcome-based budgeting determines the qualitative results of 
government initiatives. Many government agencies have incorporated outcome-based 
budgeting within their strategic planning processes, making it possible to observe the 
level of resources needed to reach goals and objectives and then use that information 
for budget decision making. 

In Catawba County, North Carolina, local officials used outcome-based budgeting to 
enhance their government’s system of service delivery. The county in the past few years had 
experienced limited growth in revenues; yet during this time the call for human services 
continued to rise. County leadership responded by handing decision-making authority to 
agency administrators, challenging them to reduce costs while more effectively meeting 
citizen demands. Those who achieved 90 percent of their goals would be able to apply 
their savings to unrestricted needs. Catawba County administrators embarked on a citizen- 
driven, outcome-based system of budgeting to ensure that resources were targeted to meet 
specific community goals. Over time, they not only saved money but also enhanced gov¬ 
ernment responsiveness. 



182 Chapter 5 Budgeting and Financial Management 

We will see later the way in which performance or outcome measurement has affected 
the conduct of the public’s business at all levels of government. For now, we should sim¬ 
ply note that the current federal budgeting system, like most at the state and local levels, 
is a combination of elements from several of the approaches we have discussed. What is 
most important is not whether one particular system or another is being used but rather 
what political and administrative choices underlie the selection of a particular budget 
approach. That is, what are decision makers trying to emphasize by using the type of 
budget they select? 

Budgetary Strategies and Political Games 

Despite all attempts to rationalize the budget process, public budgeting is an inherently 
political activity. The changing demands on government and its programs, the shifting 
interests that are brought to bear in policy decisions, and the many different actors (and 
personalities) that are part of the budget process mean that budget decisions will always 
occur in a highly charged political environment. As one student of the budget process 
described the situation, “Budgeting in this environment is a matter of negotiation, per¬ 
suasion, bargaining, bluff and counter-bluff” (Caiden, 1985, p. 498). Because agency 
managers typically (and properly) believe in the programs they operate and would like to 
see the programs be of even greater benefit to the public, they tend to become advocates 
of an agency position, often seeking to expand the size and scope of the agency’s work. 

If you can deal effectively with the political environment in which budgeting occurs, 
you will likely be more successful in expanding, or at least maintaining, your agency’s 
programs. (There are, of course, many cases in which you will be judged on your capac¬ 
ity to hold the line on expenditures or to manage program reductions.) Whatever your 
intent, understanding the politics of the budgetary process will be helpful. 

In discussions of budgetary strategies, two basic concepts will help orient your think¬ 
ing. The first is the notion of program base. The base refers to those elements of an 
agency’s program that everyone expects will be continued from year to year. Under nor¬ 
mal circumstances, the program’s base is assumed to remain pretty much the same from 
one year to the next and is not subject to special scrutiny. Having an activity approved 
for one year is one thing; having that activity considered a part of your agency’s base 
budget is far more important. A second and related concept is that of receiving a fair 
share of the overall budget. Managers often measure success in terms of whether their 
program receives a proportionate amount of any increases or decreases that the govern¬ 
ment generally supports. Agency personnel often work for years to build a base that they 
consider a fair share of the overall budget (Wildavsky, 1988, p. 83). 

As we saw earlier, budget requests typically originate with the agencies. They are then 
reviewed and often changed by a central budget office (acting in behalf of the chief execu¬ 
tive) and submitted to the legislature for approval. In constructing a budget request, you 
need to take into account several different types of expenditures. Many departments at the 
federal level have a large budget component that is essentially uncontrollable. The 



Budgetary Strategies and Political Games 183 

Department of Health and Human Services, for example, which administers many entitle¬ 
ment programs, has a large percentage of its budget that is essentially fixed. A second part 
of an agency’s budget is likely to be devoted to adjustments for inflation. The rising cost of 
utilities, telephones, postage, and other essential services must be taken into account, either 
absorbed in the base or covered by increased expenditures. Finally, some part of the 
agency’s budget is discretionary, subject to increase or decrease according to the agency’s 
priorities. The discretionary portion of the budget allows you to decide both which new 
programs to propose and which existing activities to recommend for more (or less) fund¬ 
ing. Understanding these categories will help you argue for changes in a particular budget. 

Strategies for Program Development 

These choices lead to strategic questions you must answer in building a budget—including 
the important question of what total amount to request. Although an overall budget is 
likely to differ only incrementally from that of the previous year, some agencies are clearly 
more assertive in their requests than others. That is, they are more willing to request large 
increases rather than small ones. But how assertive to be is conditioned by several factors.-' 

Support from the chief executive (the president, governor, mayor, and so on) is highly 
important, whether the support is specific in terms of advocacy for a particular program 
or more generally an expression of interest in a particular field, such as law enforcement. 
Similarly, legislative support is also highly important. Agency personnel, in fact, work 
hard throughout the year to maintain contact with key legislative leaders and to build 
the kinds of alliances that will be helpful in supporting programs of mutual interest. 
Finally, your personality—especially your willingness to take risks and defend risky^ 
choices—will play a strong role in deciding how much to request. 

Aaron Wildavsky, who wrote a landmark study of the politics of the budgetary process, 
suggested three other strategic elements that not only affect the nature of the request, but 
also help build political support for it. The first of these is clientele support. The support 
of client groups and other associations interested in the agency’s work will be helpful in 
developing testimony and lobbying in behalf of programs. An agency that is confident of 
the testimony of “satisfied customers” or able to show support for proposed changes will 
likely fare much better than others. The most effective way to build support is to serve a 
client group well, but agencies may also try to stimulate supportive clientele to communi¬ 
cate with legislators about the agency’s good work. 

A second element of political support is the confidence of higher executives and leg¬ 
islative officials in your character and ability. The magnitude of government budgets is 
so great that higher officials or legislators simply cannot know all the details necessary 
for making a purely rational analysis. At some point, they must simply trust the man¬ 
ager. Managers who enjoy a good reputation are typically more successful, especially in 
dealings with the legislature (see Box 5.3). One administrator commented, “If you have 
the confidence of your [appropriations! subcommittee your life is much easier and you 
can do your department some good; if you don’t have confidence you can’t accomplish 
much and you are always in trouble” (Wildavsky, 1988, p. 105). There are many ways 
to build confidence, but highly successful managers seem to agree that a reputation for 



184 Chapters Budgeting and Financial Management 

Play It Straight 

Everyone agrees that the most important requirement for confidence, at least in a 
negative sense, is to be aboveboard. ... A lie, an attempt to blatantly cover up some 
misdeed, a tricky move of any kind, can lead to an irreparable loss of confidence. 
A typical comment by an administrator states, “It doesn’t pay to try to put some¬ 
thing over on them [committee members) because if you get caught, you might as 
well pack your bags and leave Washington.” And the chances of getting caught are 
considerable because interested committeemen and their staffs have much experience 
and many sources of information. 

Administrators believe that punishments for failure to establish confidence are 
greater than the rewards for achieving it. But at times they do slip up, and then the 
roof falls in. When Congress limited the amount of funds that could be spent on per¬ 
sonnel, a bureau apparently evaded this limitation in 1952 by subcontracting out a 
plan to private investors. The House Subcommittee was furious: 

Representative Jensen: It certainly is going to take a house-cleaning ... of ... all 
people who are responsible for this kind of business. 
Official: We are going to do it, Mr. Chairman. 
Representative Jensen: I do not mean “maybe.” That is the most disgraceful show¬ 
ing that I have seen of any department. 
Official: I am awfully sorry. 

SOURCE: Excerpt p. 60 from The New Politics of the Budgetary Process, 3d ed. by Aaron Wildavsky and 
Naomi Caiden. Copyright © 1997 by Addison-Wesley Educational Publishers Inc. Reprinted by permission 
of Pearson Education, Inc. 

integrity (telling the whole truth) and responsiveness (keeping in touch and responding 
completely to inquiries) are particularly important. 

Third, agency officials can take certain tactical positions to attempt to develop or 
protect their favorite programs. One approach, verging on the unethical but nonetheless 
common, is budget padding—that is, proposing a higher budget than is actually 
needed, on the assumption that after the central budget office and legislature cut it, you 
will have what you wanted in the first place. (One city manager described including 
“radio” items in his budget — a radio item was one that “makes a lot of noise but can 
be unplugged easily.” The radio item would attract controversy and deflect attention 
from other items that were actually more important to the manager.) Another strategy 
is one Wildavsky terms the camel’s nose. The manager asks for a small amount to begin 
a program, then later treats this program as part of the base and argues that it would be 
unfortunate to lose the money already invested by not finishing the job (Wildavskv 
1988, p. 115). 



Aspects of Financial Management i8j 

As we have seen, over the past couple of decades, many programs at all levels of gov¬ 
ernment have experienced lower revenues and more limited funding. In some cases, such as 
in the social services, programs have been reduced or eliminated; in other cases, changes 
such as the termination of revenue sharing at one level of government have resulted in 
lower revenues at another; in still other cases, popular efforts to limit either revenues or 
expenditures, such as Proposition 13 in California, have limited government funds. In any 
case, many public managers have had to turn their attention from developing new pro¬ 
grams to maintaining or even reducing existing ones. This effort has been variously 
referred to as managing fiscal stress or, where serious reductions have occurred, cutback 
management. 

As you would expect under retrenchment conditions, many managers have used bud¬ 
getary tactics of the sort outlined by Wildavsky to lessen the impact of fiscal stress on 
their agencies (Wildavsky, 1988, p. 113). Any attempt to resist cuts is risky, however, in 
part because it can quickly undermine the manager’s credibility. Moreover, under condi¬ 
tions of long-term fiscal limitations, resistance to cuts is simply not a realistic option for 
many managers (Levine, 1980, p. 20). Several other ways of dealing with fiscal stress 
have been tried with some success: 

• Following a multiyear plan so as to preserve the administrative capacity and the 
capital investment of the jurisdictions 

• Targeting cuts in specific programs rather than cutting across the board (all programs 
cut at the same percentage) 

• Smoothing out the impact of the cuts (lessening their immediate effect) 
(Levine, Rubin, & Wolohojian, 1981, p. 210). Smoothing out may occur either 
through improvements in productivity, so the organization can accomplish more 
with less, or by generating new revenues, through such moves as imposing new 
user charges for services. 

Aspects of Financial Management 

Although those in public organizations need to budget their resources, they must also 
attend to other aspects of managing the public’s money. They must be concerned with 
the long-term financing of buildings, roads and highways, and equipment; they must 
carefully plan and manage borrowing; they must ensure against future losses; and, in all 
cases, they must try to get the most for the money they spend. 

Networking 

For more information on financial management see http://www.financenet.gov/. 
Professional associations for budgeting and financial management can be found at 
http://www.aabpa.org; http://www.abfm.org; and http://www.gfoa.org. 



186 Chapter 5 Budgeting and Financial Management 

Capital Budgeting 

In addition to budgeting annual expenditures, public policy makers and managers need 
to invest in facilities and equipment that will be used over a period of time. For exam¬ 
ple, government is primarily responsible for developing and maintaining the country’s 
public works infrastructure—streets and highways, tunnels and bridges, sewers and 
water treatment facilities, and so on. In addition, governments invest in a variety of 
other major facilities, including schools and universities, hospitals and mental health 
centers, public housing, and correctional institutions. Finally, innumerable equipment 
purchases (especially military equipment at the federal level) are intended for long-term 
use. Expenditures on items that will be used over a period of several years are called 
capital expenditures. 

Budgeting for capital expenditures is similar to the process of budgeting for annual 
expenditures, but it also differs in some ways. In most jurisdictions, with the federal gov¬ 
ernment as the most notable exception, capital expenditures are treated in a separate 
budget called a capital budget. Most states have a separate capital budget, and nearly all 
give special treatment to capital expenditures in budget presentation; nearly all major 
cities and most other local governments use a capital budget. For many years, the federal 
government treated capital spending merely as part of the regular budget; only recently 
has it begun to provide a special analysis of capital spending. There is still not a separate 
capital budget at the federal level. 

The primary argument in favor of separate consideration of capital items is that the 
benefits of these items are spread over future generations, and it is therefore not unrea¬ 
sonable to share the burden of repaying the money borrowed. A separate capital budget 
may also encourage more long-term thinking—the lack of which is often decried in the 
annual budget process. On the other hand, the capital budget can become a political pork 
barrel, in which each legislator seeks to gain his or her share of projects (and their fund¬ 
ing). Moreover, a capital budget can become a device for avoiding fiscal responsibility, by 
pushing expenditures that should be faced immediately into an indefinite future. In any 
case, whether a separate budget is developed or not, one should keep in mind the rela¬ 
tionship between capital and operating expenditures. Building a new swimming pool, for 
example, implies that annual expenditures will be forthcoming in future years to keep it 
operating. 

Ideally, a capital budget develops in the context of a fairly comprehensive planning 
process, undertaken either for the government as a whole or by the various agencies 
within their functional areas (such as health or criminal justice). Whether or not a 
planning process is in operation, an important intermediate step (and one followed by 
nearly all governments considering capital projects) is development of a capital invest¬ 
ment program—a timetable indicating various projects to be undertaken, schedules for 
their completion, and methods of financing. A capital investment plan is usually writ¬ 
ten to cover a three- to five-year period and is moved forward each year. The state of 
Georgia, for example, has a capital budget that is mainly a gathering of capital outlays 
by agency and project category as these have been requested by the various agencies in 
their submissions to the budget office. For each category, the financing source is identi¬ 
fied (Thomassen, 1990, p. 73). 



Aspects of Financial Management i8y 

To undertake such a plan, government decision makers often solicit proposals from 
the various agencies and then try to bring order to the resulting submissions. Among the 
criteria decision makers might use would be the essentiality of the project, especially for 
health and safety; whether the project fills a gap in existing services; whether it builds 
effectively on existing services; and whether it meets an unforeseen emergency need 
(Lyden & Lindenberg, 1983, p. 185). Because financing for capital projects is usually 
spread over many years, as are the benefits, complete analysis of each project is likely to 
involve detailed consideration of both costs and benefits over time. 

Debt Management 

One part of the capital budgeting process is careful consideration of the source of funding. 
Some jurisdictions try to operate on a pay-as-you-go basis, paying in full for all projects 
during the fiscal year in which they are authorized. (One variation of this idea is the accu¬ 
mulation of money in a sinking fund, which is then used to pay for the needed improve¬ 
ment.) Other jurisdictions may be willing to borrow money for a project, either because 
waiting to accumulate funds would simply take too long or because, philosophically, it is 
felt that the costs as well as the benefits of the project should be spread over a period of 
years—a pay-as-you-use approach. 

Borrowing is often used to finance capital improvement projects; but borrowing may 
be employed to meet a variety of other needs as well. In some cases, anticipated revenues 
will simply not be available at the time spending is necessary. To solve the resulting cash¬ 
flow problem, governments undertake short-term borrowing. (In more questionable 
cases, money is borrowed from future years’ revenues to pay operating expenses within 
the current year. Such a practice was partly responsible for the financial crisis in New 
York City in the mid-1970s.) Borrowing is also used for emergency needs; for example, 
a natural disaster, such as fire or flood, might require funds far beyond the capacity of 
the annual budget. Especially when such spending will be used to reconstruct facilities 
that will have long-term benefits, borrowing may well be justified. Finally, at least at the 
federal level, borrowing is sometimes justified as a way of stimulating the economy. 

Governments may undertake various types of borrowing; however, the primary mecha¬ 
nism for financing government debt is the issuance of a bond—that is, a promise to repay 
a certain amount (the principal) at a certain time (maturity date) at a particular rate of 
interest. One of the most common bonds is the general obligation bond, which pledges 
the full faith and credit of the jurisdiction—in other words, the government provides as 
security all its revenues and resources. In contrast, revenue bonds promise as security the 
anticipated revenues that a capital project will produce. Revenue bonds might be issued 
based on the future toll receipts of a new highway or on the gross receipts of a new 
municipal sports complex. 

Both from the standpoint of a jurisdiction, and from the standpoint of potential 
investors who might purchase the bonds, it is helpful to know something about the juris¬ 
diction’s debt capacity — if a city, the value of the city’s resources combined with the 
ability of the city government to draw on the city’s resources to provide payment. As a 
service to investors, several firms provide bond ratings for cities and other jurisdictions. 



188 Chapters Budgeting and Financial Management 

The ratings are also important to the jurisdiction, because a lower rating means higher 
costs of borrowing for the government. Standard and Poor’s reference guides rate bonds 
in descending quality from AAA to AA to A to BBB to BB, and so on. Cities or other 
government units that carry high ratings will be more successful than others in selling 
their bonds. 

The capacity of a government to manage successfully its various financial obligations 
is of great importance. For example, the Clinton administration proposed altering the 
mix of securities used to finance the national debt, in order to take advantage of the 
spread between long-term and short-term debt. Without going into the details of the 
plan, some experts claimed the idea could save the government more than $16 billion 
over the next five years (Congressional Quarterly Weekly, 20 March 1993, p. 657). 
(For another example of the complexity of such issues, see Box 5.4.) 

BOX 5.4 

How to Limit Losses Due to Accidents or Injuries 

In the local government workplace every accident, claim or incident may involve unin¬ 
sured or underinsured losses and/or deductibles that can become costly for municipali¬ 
ties. Although such situations may be virtually unavoidable in the long run, loss control 
planning can limit their negative consequences. 

The costs of accidents can be viewed as the various disruptions of the normal work 
procedures that occur when the accidents take place. City or county property may be 
damaged and contractors may need to be hired—not a welcome expense in times of 
tight municipal budgets. Accidents can result in downtime, extra administrative time, 
retraining of existing workers and training of replacement workers. Downtime can 
mean delayed completion of work. 

These are just a few of the costs that are absorbed by local governments; in some 
cases, the costs can exceed the amounts covered by insurance. Effective loss control 
can help to reduce these costs. A qualified loss control professional can provide safety 
surveys of local government facilities. He or she can help implement a methodical 
approach to self inspection, training, and loss prevention. 

Developing a safety plan is perhaps the most important component of a methodi¬ 
cal approach to loss control. For the plan to be effective, top officials must be com¬ 
mitted to it, and someone must be given the responsibility, authority, and budget for 
seeing the plan through. Carrying out an accident analysis is the first step in develop¬ 
ing a successful safety plan. Staff members in charge of the analysis should review 
and categorize the local government’s past accident cases and identify the causes of 
each case, as well as the patterns and related factors among the different cases. 

The next step, communication and training, involves sharing the information com¬ 
piled through the accident analysis with those who might be affected by similar accidents 
in the future. The training element of this step can take the form of five- or ten-minute 
safety talks or more formal training. Department leaders can also supplement the safety 

(continued) 



Aspects of Financial Management 189 

training of their employees with informational posters, printed bulletins, paycheck 
stuffers or novelty gifts as reminders of safety precautions. They can motivate employees 
to heed these precautions through formal directives and work rules, as well as through 
contests and incentives. 

Supervisors play a critical role in successful safety programs. Thus, training for 
supervisors is an excellent idea, since they need to understand the goals of manage¬ 
ment concerning safety, buy into those goals, and be equipped to work with their 
employees toward the objectives. Supervisors are responsible for field implementation 
of the safety plan and directives. Supervisors should thus be held accountable for the 
safety performance of their departments or agencies, just as they are held accountable 
for their department’s general performance. 

The next step, inspection, is necessary to ensure compliance with injury control 
measures, as well as to follow up on the findings of the accident analysis. In areas 
where physical conditions can be altered to prevent reoccurrence of historical prob¬ 
lems, the city or county should issue work orders to solve the problems. If a machine 
contributed to a past accident, all similar machines should be inspected and altered 
accordingly. 

Insurance costs and uninsured costs are too high for local governments to ignore. 
Controlling these costs means looking methodically at past problems and striving to 
make sure they do not reappear. 

SOURCE: Salzman, Scott, “Cutting Your Losses in the Workplace,” American City & County, 112 
(June 1997): 6. Reprinted with permission, American City & Country. 

Risk Management 

Public organizations are subject to a variety of risks that can prove extremely costly. 
A few years ago, for example, an individual who was driving through a particular city 
lost control of his car, which bounced off a guardrail into a ditch. The driver suffered 
serious injuries, then sued the city for several million dollars, arguing that the guardrail 
had been improperly placed. Similarly, a city employee, with no previous health prob¬ 
lems, began to suffer back pains on the job. After several operations, high medical bills, 
and physical therapy, he was given disability retirement at age twenty-six (Lynch, 1985, 
p. 316). Another city was sued by residents who lived near the municipal airport, 
because the noise of aircraft landing and taking off supposedly lessened the value of their 
property. Over the years, cases such as these involving civil damages, breach of contract, 
workers’ compensation, and related legal problems have cost cities, states, and other 
jurisdictions millions of dollars. 

Risk management concerns how public organizations anticipate and cope with these 
risks. The first step in risk management is to identify potential areas of loss and then to 
attempt to reduce the probability of losses occurring. Risk reduction programs might 



190 Chapter 5 Budgeting and Financial Management 

include improved work safety, periodic inspections‘of physical'property owned by the 
city, and employee health programs. But whatever the success of risk reduction efforts, 
losses do occur. The government has a variety of options for meeting losses, including 
payment from operating funds or financial reserves, levying special taxes to cover the 
loss, or even floating bonds. 

In anticipation of losses, however, many public organizations often purchase insur¬ 
ance from private firms. In recent years, this option has become more difficult, as insur¬ 
ance rates for governments and other public organizations have risen dramatically and 
put many traditional forms of insurance beyond reach. (The difficulty of purchasing 
insurance has also led some jurisdictions to eliminate uninsured services such as some 
recreation programs.) Another possibility, however, is self-insurance, the development of 
an insurance pool by the jurisdiction itself. After all, many governments are larger than 
insurance companies, so such an undertaking is not only financially feasible, but pro¬ 
vides some administrative control and flexibility that is not present when private firms 
are used. An increasingly popular means of self-insurance involves pooling risks in a 
shared program operated by several municipalities. 

Purchasing 

A final aspect of financial management in public organizations is the purchase of goods 
and services. Because public organizations are typically not equipped to produce all the 
goods and services they require (and in most cases would not find it financially feasible 
to do so anyway), they must acquire some goods and services from the private sector. 
Like individuals and businesses, public organizations want to get the most for their 
money. But at the same time, because government purchasing involves such substantial 
sums of money and is capable of influencing the structure of the market generally, public 
purchasing must also take into account social and political goals. 

Governments have often found that centralizing purchasing in one agency, rather than 
having each agency buy what it needs, results in considerable savings. For one thing, a 
central purchasing unit can buy in sufficient volume to get better prices; for another, 
those in the purchasing unit can develop expertise with respect to pricing, business con¬ 
ditions, and market practices. Finally, experts in purchasing are likely to be more suc¬ 
cessful in the negotiating process. Although individual agencies occasionally complain 
that their specific needs are not met by the purchasing unit, most state and local jurisdic¬ 
tions use centralized purchasing operations. 

In most cases, a purchasing unit circulates and advertises the government’s needs and 
solicits bids for the required goods and services. The resulting bids are evaluated in terms of 
cost, and the lowest bid is usually, though not automatically, chosen. Consideration is also 
given to the quality of the product and to the ability of the firm to actually deliver the goods 
or services in a timely fashion. In addition, purchasers are often required to give special 
preference to certain groups, such as minority-owned firms or in-state companies. Several 
jurisdictions often join together to cooperate in purchasing activities. In some instances, sev¬ 
eral local governments may form a common purchasing unit; in other cases, prices negoti¬ 
ated by the state purchasing office are available to local governments as well. 



Accounting and Computer-Based Information Systems ipi 

Accounting and Computer-Based Information Systems 

Keeping track of the revenues and expenditures of government and other public organi¬ 
zations is an enormously complex task. Not only are there billions of dollars to record 
and report, but the presentation of financial information must serve several purposes at 
once. Certainly financial data should be developed and reported in such a way that pub¬ 
lic officials can be held accountable for the use of public funds, but at the same time, the 
accounting and reporting system should provide managers with information they can use 
to operate their organizations more efficiently and effectively. This dual requirement 
means that financial information should correlate closely with other managerially rele¬ 
vant material, such as personnel data or productivity measures. 

Government Accounting 

Accounting, whether in the public or private sector, is simply “the process of identifying, 
measuring, and communicating economic information to permit informed judgment and 
decision making by users of the information” (Berne & Schramm, 1986, p. 12). But 
because the purposes of public organizations differ from those of private organizations, 
accounting practices also differ. Those in public organizations, for example, are generally 
not concerned with making a profit; rather, they tend to focus on achieving a balance 
between revenues and expenditures—what comes in and what goes out. There are some 
exceptions, such as public corporations, hospitals, and water companies, which are 
somewhat more like profit-seeking groups; however, in nearly all public organizations, 
accountability is more important than profit maximization. 

Governmental accounting systems reflect these different purposes. The cornerstone of 
accounting in the public sector is the allocation of resources to various funds, each of 
which is designed to record transactions within a particular functional area and assure that 
funds are used in accord with the purposes sought. (Such use of funds is uncommon in the 
private sector.) The various funds typically reflect policy makers’ intent in authorizing cer¬ 
tain activities and appropriating funds for them. The legislature may decide, for example, 
that certain gasoline taxes should be used exclusively for highway maintenance, in which 
case a separate fund might be created to keep track of money produced by the tax and 
spent for highways. In all cases, a primary concern is that the accounting system show 
whether the organization’s activities have been consistent with the purposes for which it 
was created. There are several broad types of funds that are used in public organizations. 

1. General funds are used to account for most of the ordinary or routine functions of gov¬ 
ernment. Most important among the general government funds is what is called the gen¬ 
eral fund, which handles the “unrestricted” funds of government, those not restricted to 
specific purposes (and typically allocated to other funds). The general fund is the dominant 
fund in most jurisdictions, and handles most of the government’s operational activities. 
Related general government funds might include those that account for special revenues, 
such as a dedicated gasoline tax, or those that monitor expenditures for capital projects. 



192 Chapter 5 Budgeting and Financial Management 

2. Proprietary funds are used to account for government activities or enterprises that 
more closely resemble private business in their orientation toward profit. This does not 
mean that all agencies employing funds are required to make a profit; indeed, they may 
break even or perhaps require a subsidy. What is implied is that a measure of profit is 
possible and usually desirable in such operations; examples include a local transit system 
or a state printing operation. 
3. Finally, fiduciary funds are used when the government must hold assets for individuals 
(e.g., those in a pension fund) or when the government holds resources to be transmitted 
to another organization (e.g., property taxes that a county collects for a city) (Berne & 
Schramm, 1986, pp. 14-15). 

Within each fund there is an accounting of the resources available and the flow of funds 
in and out of the account. On the one hand, there are assets—what the government owns; 
on the other hand, there are liabilities—what the government owes. Assets include items 
such as cash, capital facilities, equipment, and money owed to the government; liabilities 
include items such as bills that the government has yet to pay. When the organization’s 
liabilities are subtracted from its assets, the remainder is called a fund balance (and may be 
expressed either in positive or negative terms). An organization with $2,525,000 in assets 
and $2,300,000 in liabilities has a fund balance of $225,000. Note that a fund balance 
does not mean the amount of cash on hand, but rather signifies a relationship between all 
assets (including cash) and all liabilities. Broadly, the fund balance is the key measure of 
the viability of the operation monitored by the fund and is one of many items contained in 
financial reports issued by governments and other public organizations. 

Both accounting practices and financial reporting are guided by standards referred to 
as “generally accepted accounting practices.” The Governmental Accounting Standards 
Board (GASB) was established in 1984 to develop standards for accounting and financial 
reporting at the state and local levels. In its work, the GASB has been especially attentive 
to multiple users of public financial information, including citizens, taxpayers, legislative 
bodies, upper-level executives, labor and employee groups, interest groups, contractors, 
and the press. Again, an important characteristic of governmental accounting is that it 
must serve multiple purposes, including accountability within a democratic system. 

Computer-Based Information Systems 

The emergence and widespread use of computers in tracking financial data as well as other 
program-relevant information has led to what one writer has called a “quiet revolution” in 
the analysis and use of information in public organizations. Not only do computers make 
easier the accumulation and manipulation of vast amounts of data, they also greatly facili¬ 
tate analysis of that data in terms that are meaningful to decision makers at all levels. 
Computers have also increased the probability that information can be provided when it is 
needed, not weeks later. Consequently, a great deal of attention is being given to design 
and implementation of computer-based information systems in the public sector and to the 
political and organizational implications of such changes. Applications in the area of finan¬ 
cial management have often led the way in these efforts. 



Accounting and Computer-Based Information Systems 

A distinction is often made between management information systems and decision 
support systems. Management information systems are used to collect and summarize 
routine information as a basis for structuring decision making. Relevant databases might 
include budgetary information, expenditures for salaries and wages, and personnel 
data. The system might be asked, for example, to produce a list of employees eligible 
for salary increases based on length of service in the agency (McGowan & Lombardo, 
1986, p. 581). 

Decision support systems, on the other hand, are interactive systems that can assist in 
the solution of unstructured or nonroutine problems. These systems can range in capabili¬ 
ties from one that allows the manager to manipulate data within the system to produce a 
specific analysis for a particular decision to one that provides optimization models to use 
in analyzing a particular policy recommendation. Although most public organizations are 
developing management information systems of various sorts, the development of deci¬ 
sion support systems remains somewhat behind, though we can expect increasing atten¬ 
tion to this area in the future. 

Applications of computer-based information systems are as wide-ranging as the work 
of public organizations; however, most organizations are quickly becoming familiar with 
the use of spreadsheets and statistical packages for budget analysis, financial manage¬ 
ment packages for revenue and expenditure forecasting, and accounting packages for 
fund accounting and analysis. But far more extensive applications of information tech¬ 
nology have been developed in government agencies. A recent survey indicates that fed¬ 
eral agencies vary considerably in use of computer-based information systems, but in the 
area of financial management, some agencies have developed quite sophisticated systems. 
The State Department, for example, has developed and implemented a comprehensive 
system designed to operate in the department’s financial management centers around the 
world. Other federal agencies have yet to develop agencywide financial management 
information systems, though all seem to be moving in that direction. In the meantime, all 
agencies report extensive and varied applications of information technology throughout 
their organizations. 

At the state and local levels, one of the most interesting developments in information 
technology has been the design and implementation of information systems integrating bud¬ 
geting, personnel, performance reporting, and auditing. Several states have begun this 
process of integration, including Michigan, Oregon, Texas, Wyoming, and Washington. Yet 
efforts of this nature reflect an overall shift on the part of states toward more sophisticated 
systems of accounting. State governments over the past decade have used information tech¬ 
nology to enhance their capacity to generate more detailed financial and productivity data, 
thus allowing for extensive analyses at a programmatic level and a linkage between expen¬ 
ditures and actual performance. 

To the extent that budgetary and performance data are made available to the chief 
executive and other top managers on a timely basis, more effective management deci¬ 
sions may be possible. In addition, freeing budget analysts from the more mundane 
aspects of budgetary procedures should allow more attention to planning and analysis. 

Similar developments have occurred at the local level, especially as the cost and avail¬ 
ability of computer technology has made the adoption of information systems more wide¬ 
spread. The city of Baltimore, Maryland, for example has implemented a comprehensive 



194 Chapter 5 Budgeting and Financial Management 

accounting and performance measurement system, called Citistat, to track (in real-time) 
the productivity and fiscal efficiency of city departments. In a room lined with large 
projection screens and computer terminals, Baltimore’s Mayor Martin O’Malley meets 
weekly with top aides and department heads to hear the latest reports on the city’s service 
delivery. If a department’s numbers lag behind its performance targets, the manager 
must account to his or her peers for the difference. “If we only looked at performance 
every year at budget time, I’d be old and gray before anything would change. Citistat 
brings the sense of urgency we need around here,” said O’Malley (cited in Swope, 2001, 
p. 20). Thus far, the information system has contributed to significant improvements in 
public safety and public health, as well as opened new doors for collaboration between 
city departments. 

Whether Citistat or similar IT initiatives will have the across-the-board improvements 
for public organizations remains to be seen. Some argue that change of this nature 
requires far more than increased capacity to handle information. Moreover, the imple¬ 
mentation of these types of systems may have negative consequences on the organiza¬ 
tional culture and relationships within affected agencies. Groups that are at odds with 
one another, for example, may have to adjust to new patterns of communications and 
cooperation. 

Summary and Action Implications 

Budgeting and financial management in public organizations share much in common 
with those activities elsewhere. But there are also important differences, most of which 
flow from the necessity for public organizations to be accountable to elected officials 
and, ultimately, to the people. 

The centrality of the budget to any organization can hardly be underestimated; if you 
want to know what is going on in an organization, look at where the money is going. 
Establishing budget processes that reflect the organization’s priorities, while securing 
appropriate levels of involvement from all those who will want to affect the budget, is thus 
extremely important. Finding ways to present budgetary information clearly and compre¬ 
hensibly is a great aid to decision makers and to the public. Finally, developing mechanisms 
to assure that the public’s money is being spent both efficiently and responsibly is essential. 
You will find that knowing the technical side of the budget process — being able to follow 
the budget process and clearly understanding preparation, administration, and review— 
will be extremely helpful as you try to influence the operations of your organization. 

If you work in a central budget office, you will find that the period during which 
the budget is formulated is intense, and your technical expertise will be put to the test. 
But you will also recognize that you are playing an important role in shaping public 
policies. Similarly, if you are managing an agency, you will place your imprint on the 
policies and directions of your organization through the budget process. Your skill in 
presenting and supporting requests for programs may determine whether or not they 
are undertaken. 



Terms and Definitions 195 

The budget process at the federal level, and in some state and local jurisdictions, is 
integrated with a process for long-range planning. Federal agencies are asked to provide 
certain projections for the two-year period following the year for which the budget is 
being prepared, thus adding an element of long-range planning to the process. 

Budgets and financial management systems are important tools for planning, prioritiz¬ 
ing, and operating public programs, as well as important mechanisms for accountability 
and control. Public access to budgets and financial statements allows citizens to see how 
their interests are reflected in the actual conduct of government. Budgets and other finan¬ 
cial documents that clearly show what is happening in an agency are a necessary part of 
operating in the public interest. 

Terms and Definitions 

Accounting: The process of identifying, measuring, and communicating economic 
information to permit informed judgment and decision making. 

Allotments: Amounts that agencies are authorized to spend within a given period. 

Apportionment: The process by which funds are allocated to agencies for specific 
portions of the year. 

Appropriation: Legislative action to set aside funds and create budget authority for 
their expenditures. 

Authorizing legislation: Legislative action that permits establishment or continuation 
of a particular program or agency. 

Bond: Promise to repay a certain amount (principal) at a certain time (maturity date) 
at a particular rate of interest. 

Budget padding: Proposing a higher budget than is actually needed. 

Business cycle: Periods of economic growth featuring inflation and high employment 
followed by periods of recession or depression and unemployment. 

Capital budget: A budget depicting spending for items that will be used over a period 
of several years. 

Capital investment program: A timetable indicating various projects to be undertaken, 
schedules for their completion, and methods of financing. 

Continuing resolution: Resolution permitting the government to continue operating 
until an appropriations measure is passed. 

Debt capacity: Value of a city’s resources combined with the ability of the government 
to draw on them to provide payment. 

Deferral: Decision by the president to withhold expenditure of funds for a brief 
period. 



Chapter 5 Budgeting and Financial Management 

Discretionary spending: That portion of the budget strll open to changes by the president 
and Congress. 

Entitlement programs: Programs that provide a specified set of benefits to those who 
meet certain eligibility requirements. 

Excise tax: Tax applied to the sale of specific commodities. 

Fiduciary funds: Funds used when government must hold assets for individuals or 
when government holds resources to be transmitted to another organization. 

Fiscal policy: Public policy concerned with the impact of government taxation and 
spending on the economy. 

Fiscal year (FY): Government’s basic accounting period. 

General fund: Fund that handles the “unrestricted” funds of government. 

Gross National Product (GNP): Measure of total spending in the economy; includes 
total personal consumption, private investment, and government purchases. 

Impoundment: Withholding of funds authorized and appropriated by law. 

Item veto: Allows the executive to veto specific items in an appropriations bill. 

Line-item budget: Budget format for listing categories of expenditures along with 
amounts allocated to each. 

Outcome-based budgeting: Budgeting system that takes into account long-term effects 
or outcomes. 

Performance auditing: Analysis and evaluation of the effective performance of agencies 
in carrying out their objectives. 

Performance budget: Budget format organized around programs or activities, including 
various performance measurements that indicate the relationship between work actually 
done and its cost. 

Planning-programming-budgeting system (PPBS): Effort to connect planning, systems 
analysis, and budgeting in a single exercise. 

Preaudit: Review in advance of an actual expenditure. 

Progressive tax: One that taxes those with higher incomes at a higher rate. 

Proportional tax: One that taxes everyone at the same rate. 

Proprietary funds: Used to account for government activities that more closely resemble 
private business. 

Reconciliation bill: Legislative action that attempts to reconcile individual actions in 
taxes, authorizations, or appropriations with the totals. 

Regressive tax: One that taxes those with lower incomes at a proportionally higher 
rate than those with higher incomes. 



Cases and Exercises 197 

Rescission: Decision by chief executive to permanently withhold funds. 

Risk management: Ways that public organizations anticipate and cope with risks. 

Supplemental appropriation: Bill passed during the fiscal year adding new money to 
an agency’s budget for the same fiscal year. 

Zero-base budgeting: Budget format that presents information about the efficiency 
and effectiveness of existing programs and highlights possibilities for eliminating or 
reducing programs. 

Study Questions 

1. Discuss how government uses the budget to affect fiscal policy. 
2. Describe some of the ways government obtains funds for operation. Identify the various 

types of taxes that governments use. 
3. How does the government spend the money it collects? 
4. The budget cycle consists of four major phases. Discuss government’s role in the budget 

cycle and the components of each phase. 
5. Allen Schick suggests three different purposes of the budget. Identify and define these 

purposes. 
6. Compare and contrast the different types of budgeting processes. 
7. Explain the two basic concepts of budgetary strategies. 
8. Political influence has a major impact on the budgetary process. What are some of 

the strategies managers use to influence the budget process? 
9. Financial management is also an important part of fiscal activities. Discuss some of the 

concerns fiscal managers deal with, including capital budgeting, debt management, risk 
management, and purchasing. 

10. Discuss the broad types of funds that public organizations use. 

Cases and Exercises 

1. Revenues, especially at the state and local levels, can vary dramatically from year 
to year or even month to month, depending on both public actions and economic 
fluctuations. 

Assume that you are director of Motor Vehicle Registration for your state. Your 
agency, with offices scattered all across the state, is responsible for registration and 
licensing of cars, trucks, and other vehicles. About six months into the fiscal year, the 
governor announces that all state agencies will have to finish the fiscal year with expen¬ 
ditures 5 percent less than originally budgeted. You have already spent half your yearly 
allocation, so the reduction means you actually have to cut spending by 10 percent over 
the next six months. How would you go about complying with the governor’s order? 



198 Chapter 5 Budgeting and Financial Management 

2. On December 1, 1988, Larry Rice, the City Ma-nager of Lakewood, Colorado, sub¬ 
mitted the 1989 budget to the mayor and city council of Lakewood. Part of that bud¬ 
get dealing with activities in the public works area is shown in Figure 5.4. A public 
works summary page shows the 1987 actual, 1988 budgeted and estimated, and 1989 
proposed expenditures, first by program, then by category of expenditure, then by 
source of funds. 

PROGRAM 1987 1988 1988 1989 
ACTUAL BUDGET ESTIMATED BUDGET 

Public Works Administration $ 251,388 $ 212,983 $ 199,369 $ 196,298 
Traffic Signals 788,913 957,404 1,182,739 934,777 
Traffic Control 592,166 648,585 594,926 661,744 
Street Lighting 808,501 945,752 901,500 920,652 
Design Inspections and Survey 813,850 929,998 816,879 838,401 
Development Review 342,080 366,324 354,618 368,022 
Street Maintenance 1,604,400 1,561,003 1,607,462 1,592,208 
Street Cleaning 423,154 484,322 483,094 497,097 
Snow and Ice Removal 417,428 285,397 283,322 409,817 
Street Resurfacing/Concrete Rehab. 2,611,102 2,000,342 2,720,000 2,003,384 
Drainage Maintenance 379,232 351,007 315,382 304,545 
Drainage Improvements 621,173 1,317,500 252,500 600,000 
Capital Improvements: 

Street Construction 3,085,010 4,580,205 2,898,500 505,000 
Fleet Management (1,093,554) (1,169,483) (1,140,596) (1,149,398) 
Water Utility 400,086 — 558,154 500,333 
Sewer Utility 1,385,950 2,852,892 2,165,168 2,731,163 

TOTAL $ 14,524,433 $ 17,493,714 $ 15,333,613 $ 13,063,441 

CATEGORY 1987 1988 1988 1989 
ACTUAL BUDGET ESTIMATED BUDGET 

Personal Services $ 3,503,068 $ 3,552,303 $ 3,435,311 $ 3,512,808 
Operating and Maintenance Supplies 665,666 644,114 655,276 656,050 
Charges and Services 3,802,154 4,136,768 4,397,995 5,051,861 
Capital Outlay 6,553,545 9,160,529 6,845,031 3,842,722 

TOTAL$ 14,524,433 $ 17,493,714$ 15,333,613 $ 13,063,441 

FUNDS 1987 1988 1988 1989 
ACTUAL BUDGET ESTIMATED BUDGET 

General $ 6,141,818 $ 6,325,775 $ 6,160,866 $ 6,323,561 
Capital Improvement Fund 4,173,076 4,654,592 4,743,738 3,508,384 
Grant Capital Fund 845,269 — 390,000 _ 
Central Garage Revolving (1,093,554) (1,169,483) (1,140,596) (1,149,398) 
Street Bond 1,578,234 — 1,315,687 _ 
Nonrevenue Intergovernmental 
Resource — 3,660,455 _ _ 
Water and Sewer Funds 1,786,036 2,852,892 2,723,322 3,231,496 

TOTAL $ 14,524,433 $ 17,493,714 $ 15,333,613 $ 13,063,441 

FIGURE 5.4 

City of Lakewood: Department of Public Works Budget Summary 



Cases and Exercises i99 

DEPARTMENT: Public Works PROGRAM: SNOW AND ICE REMOVAL 

FUNCTIONAL DESCRIPTION: 

This program provides for the removal of snow and ice from the City street system (not including State Highways) and selected bikeways and 
sidewalks by plowing and sanding. 

SERVICE STANDARDS: Services are standard when: 

1. All plows and sanders are hooked up within 90 minutes after notification of a coming storm and before every weekend and holiday 
through winter for faster deployment. 

2. 75% of crews are on their routes within 1 -1/2 hours of being called. 

3. Flowing begins on priority #1 and #2 streets when snow depth reaches 2". Plowing/sanding continues until all priority streets are 
cleared within 48 hours after the end of the storm. 

4. All residential streets (not priority 1 or 2) are plowed when snow depths reach 6". Plowing is completed within 48 hours after the end of 
the storm. 

5. Plowing or sanding requests received from citizens are written up for completion by snow removal crews and completed within 72 hours 
after the end of the storm, except during extremely heavy snowfalls and when this time is increased. 

CURRENT SERVICE EVALUATION: 

1. Met. 

2. Met and exceeded. 

3. Met. Plowing starts at 2". Priority 1 and 2 streets are cleared within 48 hours after the end of a storm. 

4. Not met. Non-priority residential streets are currently not plowed except in storms of over 18“-24''. 

5. Met. 

PROGRAM OBJECTIVES FOR THE COMING YEAR: 

1. Meet service standard #4 to plow all residential streets when snow depth reaches 6 inches, at an annual cost of about $38,000 and 
$28,000 in initial start up costs. 

2. Computerize record keeping. 

3. Replace worn out sanders and plows in kind. 

STATISTICS 1983 1984 1985 1SS6 1987 1988 1989 
Estimated Estimated 

Number of deployments 24 19 21 17 19 15 15 
Tons of sand/salt used 7905 3816 8493 4186 11,542 5,000 5,000 
Inches of snow 151 118 76 78 107 75 75 
Number of complaints 2385 249 528 583 1,648 500 500 
Man hours 13,836 7178 10,363 7053 13,900 8,000 8,000 

FIGURE 5.4 continued 

Following the summary page, there are two pages detailing public works activities in 
the area of snow and ice removal (line 9 of the summary page). Information is provided 
about performance standards, current services, and program objectives. Although 
the 1989 budget assumes a relatively flat revenue projection, several new budget initia¬ 
tives are included, one of which is removal of snow from all residential streets when 
snow depth reaches six inches. (Note the increase in start-up and annual costs this item 
involves.) 



200 Chapters Budgeting and Financial Management 

DEPARTMENT: Public Works PROGRAM: SNOW AND ICE REMOVAL 

PROGRAM EXPENDITURE SUMMARY: 
1987 1988 1989 

ACTUAL ESTIMATED BUDGET 

PERSONNEL $ 133,491 $ 119,727 $ 136,709 
SUPPLIES 103,970 50,298 52,298 
SERVICES 153,904 113,297 167,310 
CAPITAL OUTLAY 26J3S3 — 53.500 

TOTAL $ 417,428 $ 283,322 $ 409,817 

PROGRAM FUND SOURCES: 

GENERAL FUND $ 417,428 $ 283,322 $ 409,817 

PERSONNEL ASSIGNED: 

Maintenance Operations Manager .10 _ .10 
Maintenance Supervisor .40 .30 .30 
Maintenance Crew Leader .40 .40 .40 
Clerk III .25 .25 .25 
Maintenance Specialist III .50 .50 .50 
Maintenance Specialist II 1.00 1.00 1.00 
Maintenance Specialist 1 .70 .60 .60 
Maintenance Worker II .80 .70 .70 

TOTAL 4.15 3.75 3.85 

Part Time — — 3,652 hr. 

GENERAL COMMENTS: 

The Snow and Ice Control Program has two shifts that are on rotation for 12 hours. There are ten priority #1 routes consisting of 247 lane 
miles and 6 zones of priority #2 routes with 265 lane miles. 

In 1989 smaller units throughout various City Departments will be equipped with plows and used to clear residential streets when snow depth 
reaches 6 inches. Existing City employees will be utilitzed to operate the plow units. 

FIGURE 5.4 continued 

Analyze these budget pages from the perspective of (1) a city council member who 
will have to make decisions about which city services to fund; (2) the public works 
department director who wants to improve services to the community; and (3) an aver¬ 
age citizen interested in seeing whether the city’s tax dollars are being put to good use. 
For the purposes of each viewpoint, how complete and clear is the information? Does 
the budget tell you what you want to know in order to act? Does it present a convinc¬ 
ing case for the initiative it contains? How might the budget presentation be improved? 

3. Consider the following case: 
You are Mike Smith, chief procurement officer for a major university. Work gener¬ 

ated by your staff of twenty procurement specialists includes writing proposals to 
vendors and evaluating the vendors’ bids. To write those bids, the procurement spe¬ 
cialist works with someone from the university agency who is knowledgeable about 
the project. Tom Drake, a procurement specialist, is currently working with Kathy 



Cases and Exercises zoi 

Kline of the Communications Department to develop a bid proposal to purchase a 
new campuswide telephone system that includes a quick-dial feature. The university’s 
current telephone system was installed fifteen years ago by Regional Telephone, and 
over the last few years Regional and one other vendor have sold add-on equipment 
to five of the university’s fifteen departments. This add-on equipment is expensive 
and represents a major investment to the five departments, one of which is the 
Communications Department. Departments that have the quick-dial equipment are 
pleased with the results; departments that do not have quick-dial cannot afford it 
and are unhappy with Regional. 

Tom has updated you on the status of the proposal. The Communications 
Department has insisted throughout the proposal process that the new phone system 
must be capable of using the existing quick-dial equipment. Tom tells you that if that is 
the case, only Regional and two or three other vendors would be able to bid on the 
system. Six other vendors with their own quick-dial equipment would not be able to 
respond to the bid. Tom explains that in some cases, a whole new system was less 
expensive than hooking up one of Regional’s systems to existing quick-dial equipment. 
Tom also tells you he has heard that several staff members from the Communications 
Department have threatened to quit if the bid goes to a company other than Regional. 
After fifteen years, they feel Regional is the best and only qualified vendor. Tom wants 
to know how he should proceed to satisfy both the university’s needs and the vendors’ 
rights to a fair bidding process. 

SOURCE: The preceding case was provided by Bill Carney. 

a. How should Tom proceed to ensure that all bidders have an equal chance to partici¬ 
pate in the bid process? 

b. How can the procurement office avoid the practice of vendors helping buyers to write 
a bid proposal? 

c. What about Tom’s responsibility to taxpayers? (Several thousands of dollars would be 
wasted if the quick-dial equipment already purchased was scrapped.) 

4. The following is an exercise in zero-base budgeting: 
As superintendent of the Highway Patrol, you have been advised by your depart¬ 

ment head that only $13,950,000 will be available the next fiscal year for expenditure 
by the Highway Patrol. You have four decision units that could each achieve several 
performance levels with different funding levels. Rank your decision packages in 
order of decreasing benefit. 

5. The following simulation reenacts a series of budget discussions held at the 
University of Southern Anonymous (USA) during a time of significant budget reduc¬ 
tions. To conduct the simulation, divide the class into five groups, each of which will 
represent one character in the simulation. All students in the class should read the 
following general description of the situation facing USA. Then members of each 
group should read only the character description assigned to their group. (It is im¬ 
portant that you read only the description assigned to you.) The role descriptions of 
the following characters can be found after the general description of the situation in 
the following pages. 



20 2 Chapters Budgeting and Financial Management 

Function: Enforcement Activities, Highway Patrol 

Decision Units 

A. Traffic patrol 

B. Criminal investigations 

C. Checking of trucks 

D. Citizen education 

Decision Cost per 
Packages Increments Increment 

A-l 1,000,000 miles $8,000,000 
A-2 500,000 miles 4,000,000 
A-3 500,000 miles 4,000,000 
B-l 3,000 investigations 600,000 
B-2 1,000 investigations 200,000 
B-3 1,000 investigations 200,000 
C-l 10,000 truck checks 500,000 
C-2 5,000 truck checks 250,000 
C-3 5,000 truck checks 250,000 
D-l 500 seminars 100,000 
D-2 250 seminars 50,000 
D-3 250 seminars 50,000 

SOURCE: The preceding case was provided by Stanley Botner of the University of Missouri at Columbia. 

Vice President Cooper 

Dean Berryderry, College of Liberal Arts 

Dean Stevens, Dean of Science 

Dean Dudley, Dean of Education 

Dean Dollar, Dean of Business 

After everyone has had a chance to read the general description of the situation 
and the specific information pertaining to their character, each character group should 
meet separately for fifteen to twenty minutes. During this period, the group should 
(1) select a representative to play the character at a meeting to be held in Vice 
President Cooper’s office, and (2) develop detailed strategies and information for that 
person to use in representing your group’s interests in the meeting. 

Following the individual group meetings, the five individuals selected to play the five 
characters should meet around a table near the middle of the room. Vice President 
Cooper will call the meeting to order, present any opening remarks he or she wishes to 
make, then preside over the remainder of the discussion. All other students should 
remain quiet during this part of the simulation. During the course of the meeting, any 



Cases and Exercises 203 

member may request a recess to consult with his or her group (for no longer than five 
minutes). When the meeting in Vice President Cooper’s office reconvenes, the person 
who called the recess will have the floor. The meeting should continue until a consensus 
is reached concerning the reductions or until Vice President Cooper feels the meeting is 
stalled and he or she will have to make a decision independently. Enjoy the discussion! 

General Description of the Situation 

The University of Southern Anonymous (USA) has been informed by the state administra¬ 
tion that its budget for the current year will be reduced by several million dollars. The presi¬ 
dent of the University, I. M. Fearless, has informed Vice President for Academic Affairs 
Cooper that the various colleges in the university will be required to reduce their budgets by 
an average of 8 percent. In turn, Vice President Cooper has chosen not to implement across- 
the-board cuts of 8 percent for all colleges, but has discussed different target percentage 
reductions with each of the deans of the four colleges—Liberal Arts, Science, Education, 
and Business. In response to a request from several of the deans, Vice President Cooper has 
called a meeting of the four deans to get their reactions to his targeted amounts for each 
college and to find out how each college plans to implement the required reduction. 

By way of background, USA is a medium-sized Midwestern university with the mis¬ 
sion of providing students with a broad-based liberal arts education as well as limited 
graduate programs, primarily in business and education. The school serves a regional 
constituency in the southern part of the state, though it draws students from around the 
country, many of whom first heard of USA because of its reputation as a leader in inter¬ 
collegiate billiards. (In fact, some cynics refer to USA as “Cue U.”) 

Though the university has traditionally enjoyed a good relationship with the governor 
and members of the legislature, President Fearless has antagonized many in the state cap¬ 
ital with his rough and abrasive manner. Similarly, many on campus see the president as 
bringing the university the same administrative style he employed as a colonel in the 
Marine Corps. Despite these difficulties, most academic programs at the university are 
considered sound, with some exceptions. Similarly, many feel some programs are not 
suited to the mission of a regional Midwestern university, notably the school’s long¬ 
standing program in oceanography, which some feel is out of place because the univer¬ 
sity is seven hundred miles from the nearest ocean. 

Character Descriptions 

Vice President Cooper 

In your five years as vice president at USA, you have never faced such a difficult situa¬ 
tion. You recognize that the university’s president is in some political trouble and may be 
asked to resign soon. As a ploy to reduce the heat on his office, he has passed on the 
largest part of the budgetary reductions to you. If you can come through this situation in 
good shape, you will receive considerable notoriety and be a likely candidate for the 



204 Chapter 5 Budgeting and Financial Management 

presidency should the president be forced to resign; You will, however, need to be sure 
that you maintain the support of all the deans of the colleges, for their support is essen¬ 
tial for your promotion. On the other hand, a major disruption at the university, in 
which you might lose support of the deans, would end any chances of your attaining 
your ambition. In fact, you might be fired along with the president! 

Given the instructions from the president, there seems to be little you can do other than 
to assign reductions to the colleges. After reviewing the various programs within the col¬ 
leges, however, you have decided that across-the-board cuts would be inappropriate and 
that some colleges could indeed stand to be cut more than others. You have, therefore, 
assigned differential reductions to each college, with Education receiving the greatest 
reduction (20 percent), Liberal Arts receiving the second-greatest reduction (10 percent), 
Science next (7 percent), and Business last (2 percent). You have chosen these figures based 
on your assessment of the quality of programs, the quantity of students (faculty/student 
ratios), the nature of the programs, and their suitability to the mission of your university. 

The total reductions you have assigned to the deans exceeds the total the president 
has required you to complete. Your reasons for this strategy are twofold: (1) if any of the 
deans complain too loudly, you can fall back to the figure you actually need as a com¬ 
promise, and (2) if you persuade all the deans to accept the assigned reduction, then you 
will have some money available for internal reallocations, which you would like to 
achieve anyway. 

For the most part, you are willing to let the various deans assign reductions within 
their colleges as they see fit, so long as each seems to be doing a thorough job in the 
assignment. Later, if there is money available, you can make other needed reallocations 
to add needed new programs or strengthen others. 

However, you are personally interested in a couple of particular areas. First, your 
favorite uncle chairs the oceanography program. Second, your own degree is in higher 
education administration, and you have enjoyed periodic classroom visits to that 
department. Third, the governor has expressed a strong interest in the integrity of the 
public administration program. 

Dean Berryderry 

College of Liberal Arts (target reduction—10 percent). You approach the meeting with 
the vice president with some trepidation, for you realize that your college is likely to be 
high on the list of cuts. You would prefer across-the-board cuts that would not place a 
special burden on your college. Several of your programs, however, are of minimal qual¬ 
ity and simply have not been attracting students over the years. For example, your pro¬ 
gram in German has graduated an average of two majors per year over the past several 
years, while having a faculty of three. Several other programs, such as anthropology and 
geography, are showing similar results. These programs, however, are important to a 
broad-based liberal arts education. You feel that students should at least have the oppor¬ 
tunity to enroll in such programs if they see fit. 

On the other hand, there are some programs currently housed in your college you 
would just as soon see ended. For example, the graduate program in public adminis¬ 
tration is a professional program that you feel is inconsistent with the liberal arts 



Cases and Exercises 20 j 

perspective of the college. The total faculty salaries in this department would just 
about equal the total by which you need to reduce your budget. This is an obvious 
area to eliminate. 

Next, it has occurred to you that your staff of professional advisors could be elimi¬ 
nated and all academic advising performed by members of your faculty. This could be 
accomplished with no faculty or program reductions. 

You feel a natural alliance with the College of Science and would prefer to see reduc¬ 
tions occur in either Education or Business rather than in Liberal Arts or Science. 
However, Dean Stevens of the College of Science has always been somewhat antagonistic 
toward you, perhaps because of your critical remarks about the oceanography program, 
which you think should be eliminated. 

Finally, several personal considerations enter into your thinking. First, if the vice pres¬ 
ident were to become president, you would probably be the leading candidate for the 
vice presidency. You would find that very attractive. Second, though you don’t want to 
appear to favor any department, your home department, the Department of Political 
Science, is putting strong pressure on you to support expansion of the program. Across- 
the-board cuts within your college would make that impossible. Third, a member of 
your faculty was recently offended by sexual advances from the dean of the School of 
Business, Dean Dollar. 

Dean Stevens 

Dean of the College of Science (target reduction — 7 percent). You have conducted a 
thorough analysis of the possibilities for reduction within your college. You feel that by 
eliminating one visiting professorship, four graduate teaching assistantship positions, 
and two staff positions, you will be able to accommodate the reductions. You are quite 
aware, however, that others see your Department of Oceanography as a primary target 
for elimination. This is, however, one of your oldest and strongest programs, certainly 
one of the leading oceanography programs in the Midwest. You want to protect the pro¬ 
gram as it is; however, even if you are required to reduce that program, you wish to 
do so only by eliminating several faculty positions rather than the entire department. 
You also feel this program will be protected because the chair of that department is the 
vice president’s uncle. 

Several other personal considerations affect your thinking. First, you feel that the 
entire College of Education could be eliminated with no real loss to the university. Other 
programs within the state clearly produce enough graduates in that field. Eliminating the 
entire college would mean no reductions would be needed in any other college. Second, 
you think Dean Berryderry is an idiot. You were especially incensed by Berryderry’s com¬ 
ments about oceanography. If Berryderry can’t run his own college, why try to run 
yours? Third, one of your faculty members recently was offended by sexual advances 
from the dean of the School of Business, Dean Dollar. 

Dean Dudley 

Dean of the College of Education (target reduction — 20 percent). You know you are in 
trouble! Over the past several years, enrollments have been dropping in Education to the 



2 o6 CHAPTER 5 Budgeting and Financial Management 

point that you are considerably overstaffed. At the same time,' other programs in the 
state have developed and now have better reputations. This is especially true for your 
Department of Higher Education Administration. The main campus of the university 
boasts one of the country’s leading programs in this area. Your best hope is to argue for 
across-the-board cuts that would affect all colleges equally. Your suspicion is that the 
College of Business will receive the lowest reduction and the College of Liberal Arts and 
the College of Science will be somewhere above. One of them would probably benefit 
from across-the-board cuts as opposed to targeted reductions; the other would probably 
lose—but you do not know which one. 

In addition, several personal considerations guide your thinking. First, nearly all the 
athletes who are part of the school’s winning billiards program are students in your 
college. You doubt if they could pass their coursework elsewhere. Second, the chair of 
the Department of Higher Education Administration has been one of your strongest 
critics over the years, and eliminating that department would eliminate one of your 
biggest problems. Third, a member of your faculty was recently offended by sexual 
advances from the dean of the School of Business, Dean Dollar. 

Dean Dollar 

Dean of the School of Business (target reduction—2 percent). Though you realize that 
your college will have to take a token reduction, you are certain that your reduction is far 
less than that required from other schools. Consequently, you are highly supportive of the 
vice president’s selective reduction and opposed to across-the-board cuts. Your college has 
grown by leaps and bounds in the past several years, and you are in desperate need of 
more faculty, not less. At the same time, salaries have increased dramatically in your field, 
and retention of capable faculty is a problem. You can probably accommodate the reduc¬ 
tions assigned to you through minimal staff changes and will not have to fire faculty. 

You see all this as a possibility for considerable reorganization of programs. One pro¬ 
gram that you would particularly be interested in bringing into the college is that in public 
administration. This program is viewed with great favor by the governor and, conse¬ 
quently, by those higher in the university’s administration. Moreover, the program would 
seem to be consistent with the interest of your college in management. You wonder if per¬ 
haps somewhere in all of this redistribution of money you might be able to acquire a new 
program. If you can discredit Dean Berryderry’s interest in public administration and 
champion that field, you should stand a good chance of receiving support from the higher 
administration. All in all, you see this process as opening the possibility of adding to your 
college rather than reducing it. This result, however, depends on selective reductions rather 
than across-the-board cuts and upon reallocations beyond the amount required for the 
president’s stated budget reduction. 

You also have several personal concerns. First, you think both the College of 
Education and the Department of Oceanography (in the College of Science) could 
be eliminated outright . . . and you could use the money. Second, you have heard that 
the chair of the Department of Oceanography is the vice president’s cousin. Third, you 
have just met a very attractive person who is an advisor in the College of Liberal Arts. 
You think you are falling in love, again! 



For Additional Reading 207 

Do Not Read This Paragraph Until After the Simulation 

Following the simulation, the entire class should discuss each group’s strategies and tac¬ 
tics. Sometimes it is helpful to ask first what others thought each dean was trying to do, 
then ask that group to describe its strategy. Pay particular attention to strategies of coop¬ 
eration and competition, as well as to strategies that have little to do with actual budget 
reductions. (For example, shifting a program from one location to another does not save 
the university any money.) Note also the inevitable lack of information, as well as the 
roles of rumor and false impressions in the budget process. Both these features are more 
typical of budget decisions than you might imagine! Finally, just for fun, have Dean 
Berryderry read the last line of his or her description; then have Dean Stevens do the 
same; then Dean Dudley; then Dean Dollar. 

For Additional Reading 

Axelrod, Donald. Budgeting for Modern Government. New York: St. Martin’s Press, 
1988. 

Briffault, Richard. Balancing Acts. Washington: Brookings Institution, 1996. 
Clynch, Edward J., and Thomas P. Lauth, eds. Governors, Legislatures, and Budgets: 

Diversity across the American States. Westport, CT: Greenwood Press, 1991. 
Frank, Howard A. Forecasting in Local Government: Near Tools and Techniques. 

New York: Quorum Books, 1993. 
Garner, C. William. Accounting and Budgeting in Public and Non-Profit Organizations: 

A Manager’s Guide. San Francisco: Jossey-Bass, 1991. 
Gross, Malvern, and Richard Larkin, eds. Financial and Accounting Guide for 

Non-Profit Organizations. New York: John Wiley & Sons, 1999. 
Gosling, James J. Budgeting Politics in American Governments. White Plains, NY: 

Longman Publishing Group, 1992. 
Jones, Vernon Dale. Downsizing the Federal Government. Armonk, NY: M. E. Sharpe, 

1997. 
Kettl, Donald F., and John Dilulio, Jr. Cutting Government. Washington: Brookings 

Institution, 1995. 
Light, Paul. Thickening Government. Washington: Brookings Institution, 1995. 
Maddox, David. Budgeting for Not-for-Profit Organizations. New York: John Wiley & 

Sons, 1999. 
Mikesell, John L. Fiscal Administration. 2d ed. Pacific Grove, CA: Brooks/Cole, 1986. 
Miller, Gerald J. Government Financial Management Theory. New York: Marcel 

Dekker 1991. 
Reed, B. J., and John Swain. Public Finance Administration. Englewood Cliffs, NJ: 

Prentice Hall, 1990. 
Reischauer, Robert D. Setting National Priorities. Washington: Brookings Institution, 

1997. 



io8 Chapters Budgeting and Financial Management 

Rubin, Irene S., ed. New Directions in Budget Tbeofy. Albany: State University of 
New York Press, 1988. 

Rubin, Irene S. The Politics of Public Budgeting. Chatham, NJ: Chatham House, 1990. 
Scott, David, John D. Martin, and Arthur J. Keown. Basic Financial Management. 

Upper Saddle River, NJ: Prentice-Hall, 1999. 
Shick, Allen. The Federal Budget. Washington: Brookings Institution, 1995. 
Wildavsky, Aaron, and Naomi Caiden. The New Politics of the Budgetary Process. 3d 

ed. New York: Longman, 1997. 



Chapter 6 

The Management of Human Resources 

Nothing is more critical for an administrator than to effectively manage the people who 
work in his or her organization. Yet the hiring and treatment of public employees often 
seem so bound up in rules, regulations, and red tape that effective management is 
extremely difficult. Many managers feel that civil service systems (and central personnel 
offices), originally designed to attract and retain competent personnel, exist merely to 
complicate the manager’s life and make it more difficult to manage. Instead of simply 
hiring someone for a job, the manager must advise an applicant to take a competitive 
examination and join many other candidates on a register for the position (some of 
whom may be given special preferences in the hiring process) and then to wait until all 
the paperwork clears. After someone has been hired, the manager finds there are limits 
to the rewards and punishments that can be offered to encourage improved job perfor¬ 
mance; and, should the person fail to perform adequately, the paperwork and justifica¬ 
tions required to terminate his or her employment seem endless. You may wonder how 
anything else gets done! 

But there are good reasons for the way human resources or personnel management in 
government has developed. Even though it is true that some civil service systems have 
become overly rigid, even fossilized, most of the requirements relating to government 
employment are deeply rooted in important political and ethical principles. So an under¬ 
standing of how government personnel systems operate not only includes knowledge of 
personnel techniques, but also a sensitivity to the values that underlie human resources 
management in public organizations. 

Networking 

For general information on personnel issues, see the International Personnel 
Management Association at http://www.ipma-hr.org. For jobs and recruiting, see 
the following: http://www.aspanet.org/careers/index.html; http://www.fedworld. 
gov; http://www.usajobs.opm.gov; http://www.careersingovernment.com; and 
http://www.govtjobs.com. 

Nowhere is the contest between the competing values of efficiency and responsiveness 
played out more clearly than in the area of human resources or personnel. On the one 
hand, it is obvious that staffing government agencies with the most competent people 
available is essential to effective management. On the other hand, it is equally clear that 

209 



210 Chapter 6 The Management of Human Resources 

those who staff the offices of government should be- responsive 'to the citizenry. In any 
case, the human resources or personnel system for any public organization ultimately 
reflects the political priorities of the particular public involved. In some cases or in some 
periods, managerial concern for efficiency may receive preference; in others, the demo¬ 
cratic concern for responsiveness may be uppermost. 

Merit Systems in Public Employment 

Because the Constitution made little mention of either administrative structures of 
government or how they would be staffed, early leaders at the federal, state, and local 
levels experimented with many different approaches to hiring, treatment of employees, 
and firing. In the late 1800s, however, growing concern about the composition of the 
civil service led to a new focus on competence and professionalism and, in turn, to leg¬ 
islation establishing the merit principle in public employment. The merit principle, 
though widely varied in its application, generally means that selection and treatment of 
government employees should be based on merit or competence rather than on personal 
or political favoritism. Despite the apparent simplicity and appeal of this notion, the 
development of public personnel systems has been infused with controversy. 

Spoils versus Merit 

Most of the early American presidents followed George Washington’s lead in seeking 
persons of high competence and integrity—what he called “fitness of character”—to hold 
governmental positions. This approach resulted in a stable and fairly skilled government 
workforce, but is not without several problems. Because there were few well-educated 
persons in society and because those with education tended to be from the wealthier 
classes, the newly formed civil service soon took on a somewhat elitist character. 
Moreover, partisan considerations began to enter into the process as well. Presidents and 
members of Congress began to recognize not only that government employees needed to 
be loyal to the new government (and presumably the party in power) but also that public 
offices (and salaries) could be rewards to the party faithful. Finally, there was the question 
of tenure—should civil servants hold office for life, thus providing experience and conti¬ 
nuity, or should they change with each administration, providing loyalty (and jobs) to the 
incoming party? 

All these concerns were dramatically illustrated in the administration of Andrew 
Jackson. Jackson was swept into office on a strong wave of democratic sentiment and 
was especially concerned with making government more accessible to those previously 
excluded, that is, the common people. Though Jackson was not the first to employ the 
spoils system (the notion that “to the victor belongs the spoils”—in this case, the ability 
to give government jobs to the party faithful), his administration was notable for its 
expansion of the system and for his elaborate justification of it. Jackson not only argued 



Merit Systems in Public Employment in 

that the common people had as much right to government jobs as the wealthy, but that 
most government jobs could be done without special training. 

Jackson is sometimes portrayed as something of a villain for his defense of the spoils 
system, though far greater abuses occurred later at all levels of government. At the same 
time, however, Jackson made several rather positive contributions to democratic govern¬ 
ment; for example, there is no question that he democratized the civil service of his era and 
set a tone for greater representativeness within government agencies for decades to come. 

Even Jackson could not have foreseen the corruption and abuse that would soon 
become associated with the spoils system (see Box 6.1). Succeeding presidents went far 
beyond Jackson in applying the system, as did political bosses at the state and local 
levels. The quality of the civil service rapidly declined, and even those who found jobs in 
government became disenchanted with the financial contributions exacted from them 
each election year. The system also became a problem for each new president, as thou¬ 
sands of office-seekers came to press their claims for patronage positions, and presidents 
soon grew weary of the long lines of people seeking jobs. 

These factors began to set the stage for reform, but even more important in eventu¬ 
ally bringing about change was the increasing corruption in government. There were 

BOX 6.1 

The Early Spoils System 

By the late 1800s, the spoils system was firmly a part of political life in most jurisdic¬ 
tions. One aspect of the system was collecting funds from appointees to help sustain 
the party in power. Although such practices persisted in some jurisdictions well into 
the 1950s and even 1960s, they were hardly as blatant as the tribute requested in the 
letter from a state party committee in 1870. 

Dear Sir: 
(We) have great and imperative need of funds at once, to carry the campaign to 
successful issue. An assessment of one percent on the annual gross receipts of your 
office is therefore called for, and you will please inclose that amount, without delay, 
to the treasurer, E. S. Rowse, in the envelope inclosed. This assessment is made after 
conference with our friends at Washington, where it is confidently expected that 
those who receive the benefits of Federal appointments will support the machinery 
that sustains the party which gives them pecuniary benefit and honor. The exigen¬ 
cies are great, and delay or neglect will rightly be construed into unfriendliness to 
the Administration. We do not look for such a record from you, and you will at 
once see the propriety and wisdom of the earliest attention to the matter. 

Isaac Sheppard 

Chairman of Committee 

SOURCE: Reprinted with the permission of The Free Press, a Division of Simon & Schuster, Inc., from 
The Republican Era: 1869-1901, A Study in Administrative History by Leonard D. White. Copyright 
© 1958 by The Macmillan Company. 



Chapter 6 The Management of Human Resources 

kickbacks from contractors, private sales of surplus public property, skimming of tax 
receipts, and many other abuses. Corruption was becoming a normal way of doing 
government business. 

The various ills that grew from the spoils system eventually led to a strong and active 
reform movement, spearheaded by such groups as the National Civil Service Reform 
League. The reformers made both vigorous and eloquent appeals, but their eventual suc¬ 
cess was assured more by a historical accident, the assassination of President Garfield, 
than by eloquence. Though Garfield had hardly been a proponent of civil service reform 
and had indeed drawn criticism from the reform groups for his failure to support 
a reform bill, the fact that he was killed by a disappointed office-seeker made him a mar¬ 
tyr for the reform cause. 

A man named Charles Guiteau had hoped to be consul to Paris. After weeks of mak¬ 
ing his case and after repeatedly being turned away from Garfield’s office, he followed 
Garfield into a train station and shot him twice in the back. As he did so, he shouted 
that now Chester Arthur, a noted advocate of the spoils system, would be president. 
The reformers capitalized on this comment, portraying the situation as the obvious result 
of the evil spoils system and, in a sudden change of heart (and reality), they described 
Garfield as a proponent of reform. After two more years of pressure, the Republican 
Congress finally acknowledged the rising sentiment for reform and passed the Pendleton 
Act, which was signed into law in January 1883. 

The Pendleton Act is one of two landmark pieces of legislation in federal personnel 
administration (the other being the Civil Service Reform Act of 1978). The Pendleton 
Act was primarily an effort to eliminate political influence from administrative agencies 
and, secondarily, an effort to assure more competent government employees. It pursued 
these aims through the following major provisions: 

1. A bipartisan commission, the U.S. Civil Service Commission, was created within 
the executive branch to establish and implement personnel rules and procedures for the 
federal government. 
2. Open and competitive examinations to test job-related skills were developed wherever 
practical within the agencies covered by the law and were to become the primary basis 
upon which to make hiring decisions. 
3. Employees were given protection against political pressures, such as assessments 
(mandatory contributions) or “required” participation in campaign activities. 
4. Lateral entry into government positions (that is, entry at any level as opposed to entry 
only at the beginning level) was encouraged, thus maintaining an important element of 
Jacksonian openness. 
5. Positions in Washington offices were to be apportioned among the various states, in 
an effort to provide geographical representation in the civil service. 
6. The president was given the authority to extend coverage to other groups of government 
employees beyond the approximately 10 percent of federal employees covered by the act. 

These provisions, especially the last, provided the basis for the gradual extension of 
the idea of a merit system throughout most of the federal government as well as state 
and local governments. A respected writer on public personnel provides the following 



Merit Systems in Public Employment 213 

definition of the civil service system that emerged: “Throughout its history, the civil 
service idea has rested on three basic principles: (1) that the selection of subordinate 
government officials should be based on merit—the ability to perform the work rather 
than any form of personal or political favoritism; (2) that since jobs are to be filled by 
weighing the merits of applicants, those hired should have tenure regardless of political 
changes at the top of organizations; and (3) that the price of job security should be a 
willing responsiveness to the legitimate political leaders of the day” (Helco, 1977, p. 20). 
The concept of merit is so central to the American approach to public personnel admin¬ 
istration that the terms “merit system” and “civil service system” have become almost 
synonymous. 

The Pendleton Act, although it was important in establishing the notion of a merit 
system of public employment, merely provided a framework within which a more full¬ 
blown system might develop. Unfortunately, the development of the system was not well 
coordinated. Although the merit system was gradually extended to more and more gov¬ 
ernment employees, the values of the system were not always the primary motivation for 
extension. For example, one unlikely set of agents for the extension of personnel reforms 
turned out to be out-going presidents, many of whom sought to “blanket in” those they 
had appointed to patronage positions by making their positions subject to the merit sys¬ 
tem. In this way, merit coverage was extended from its original 10 percent of all federal 
employees in 1883 to approximately 70 percent by the end of World War I and some 
90 percent today. 

Other changes in the system also occurred slowly. The Pendleton Act contained provi¬ 
sions for examinations, but other devices for improving the quality of the workforce, such 
as position classification, standard pay schedules, and objective performance appraisals, 
had not yet been developed. Over the next decades, however, these ideas too became 
a part of the federal system of civil service. The Classification Act of 1923, for example, 
established a system for classifying jobs according to qualifications needed to carry 
them out and tying them to various pay grades, thus providing uniformity throughout 
the system. 

Changes were also required to respond to a newly professionalized workforce and 
a larger and more activist government. In the early days, the main jobs in government were 
essentially clerkships, but as government grew and entered new fields, there was a need for 
more professional and more highly specialized people. Similarly, especially through the 
Roosevelt years, a multitude of new agencies were created, each placing different demands 
on the personnel system. Prior to this time, the Civil Service Commission had assumed the 
role of the government’s central personnel agency; now it was necessary to decentralize 
personnel responsibilities to the various agencies, with the commission setting regulations 
and monitoring implementation. 

In any case, the merit system has now become firmly established at the federal level. 
Nine out of ten federal employees are covered by either the general merit system or by 
one of several special systems created by law to pursue merit principles within specific 
agencies — the Postal Service, the Federal Bureau of Investigation, the Foreign Service, 
and so on. The remaining positions are exempt because they are not amenable to com¬ 
petitive selection or to regular personnel procedures; they include seasonal workers, 
those in intelligence, and a limited number of policy-making/confidential positions. 



214 Chapter 6 The Management of Human Resources 

Any incoming president now has only about 2,400 -positions to' fill on a purely politi¬ 
cal basis — a number that many think is still too high. 

Many questions have been raised in recent years about whether there are too many 
political appointees in the federal government or, in other words, whether the federal 
bureaucracy has become too highly politicized. This concern has been intensified as the 
growth in numbers of political appointees was accompanied by increasing centralization 
of the appointment process in the White House. At present, nearly all the several thou¬ 
sand political appointments that occur at the federal level—executives, as well as mem¬ 
bers of boards and commissions, ambassadorships, and judgeships—are cleared through 
the White House personnel office. 

The Civil Service Reform Act and Its Aftermath 

For nearly one hundred years, the Pendleton Act provided the primary statutory basis 
for federal civil service. That changed with the passage and implementation of the Civil 
Service Reform Act of 1978. During the 1960s and 1970s, it became increasingly clear 
that there were serious problems in the federal personnel management system. The prob¬ 
lems were in large part a result of the fairly haphazard pattern through which the system 
had been established. Responsibilities for various aspects of personnel management were 
spread among the president, the Congress, the courts, the Civil Service Commission, and 
the various agencies; but there was often disagreement on the basic principles that 
should guide the development of the system. 

Even within the Civil Service Commission itself, there was confusion about the direction 
of personnel policy. On the one hand, the commission existed to execute the president’s 
personnel directives; on the other hand, it was also responsible for protecting employees 
from political abuse. At times, the two objectives came into conflict. As a result, the num¬ 
bers of federal personnel rules and regulations were not only excessive, they often directly 
conflicted with one another. 

President Carter made reform of the personnel system one of the central themes of his 
administration and targeted at least five problem areas. 

1. Technical overkill: Critics charged that those in charge of the personnel function had, in 
their drive to achieve political neutrality, created overly detailed regulations for recruiting, 
testing, selecting, classifying, and releasing employees. In many cases, these technical rules 
became a maze that prevented rather than aided action, and sorting through the proce¬ 
dures to replace a key manager could take as long as two years. Firing one $8,000-per-year 
Commerce Department employee who consistently failed to show up for work without 
valid reasons took twenty-one months! 
2. Excessive protection of employees: Similarly, many felt that the drive to achieve 
political neutrality created excessive protections for employees. Although these protec¬ 
tions were initiated for the best of reasons — so that employees would not be unduly or 
arbitrarily punished or dismissed — they sometimes resulted in incredible outcomes, 
such as an award of almost $5,000 in back pay to a postal employee who had been 
fired for shooting a coworker in the stomach! On the other hand, protections were 



Merit Systems in Public Employment 215 

needed in other areas; for example, employees who pointed out cases of waste, fraud, 
and abuse in public agencies — whistle blowers—were often subjected to harassment 
or even dismissal. 
3. Lack of management flexibility: Managers, especially political appointees, claimed that 
civil service regulations were so inflexible that they could not manage effectively. In an 
effort to counter this tendency, one official in the Nixon administration prepared a docu¬ 
ment suggesting 130 ways that managers could subvert the intent of the merit system and 
do what they wanted to do. One entry described how to get rid of someone who does not 
enjoy traveling: “[He] is given extensive travel orders crisscrossing the country to towns 
(hopefully with the worst accommodations possible) of a population of 20,000 or under. 
Until his wife threatens him with divorce, unless he quits, you have him out of town and 
out of the way. When he finally asks for relief you tearfully reiterate the importance of the 
project and state that he must continue to obey travel orders or resign.” 
4. Inadequate incentives to eliminate inefficiencies: It was also charged that a system that 
seemed to grant raises according to longevity rather than performance and that made raises 
and promotion appear almost automatic encouraged inefficiency. Over 99 percent of the 
nearly three million federal employees regularly received satisfactory performance ratings 
that entitled them to raises. Alan Campbell a leading advocate of reform, wrote: “The cur¬ 
rent system provides few incentives for managers to manage or for employees to perform.” 
5. Discrimination: Many—notably women and minorities — felt the federal personnel 
system was not adequately promoting their representation within the bureaucratic ranks. 
They wanted to make sure that any new system would be more attentive to their interests 
and better able to cope with the increasing number of complaints in this area. 

The Civil Service Reform Act was proposed to “restore the merit principle to a system 
which has grown into a bureaucratic maze” (Carter, 1978). (See Box 6.2.) The act sought 
to deal with the often contradictory roles of the Civil Service Commission by creating a 
new office of Personnel Management responsible for policy leadership and a Merit 
Systems Protection Board to handle investigations and appeals. OPM is “the President’s 
principal agent for managing the federal workforce”; it has responsibility for human 
resource management and enforcement of personnel regulations (Campbell, 1978, 
p. 100). The Merit System Protection Board, on the other hand, is the watchdog of the 
personnel system, hearing and resolving complaints, as well as protecting whistle blowers 
from reprisals. The previously conflicting responsibilities of the Civil Service Commission 
were split between the two new agencies. 

Beyond establishing the two new agencies, perhaps the most striking feature of the Civil 
Service Reform Act was the creation of the Senior Executive Service (SES). Following ideas 
that had been discussed for nearly forty years and specifically proposed but not adopted in 
the Nixon years, the SES created a separate personnel system for the highest-ranking civil 
service officials, permitting greater flexibility in assignments and establishing a new system 
of incentives for top-level managers. Basically, eligible managers would apply for positions 
in the SES and, if accepted, would hold SES rank as individuals, rather than being limited 
to the rank of a particular position. This meant that, within certain limitations, SES man¬ 
agers could be moved from agency to agency depending on their talents and the needs of 
the agencies. A new system of performance evaluations and pay increases closely tied to 



2i 6 Chapter 6 The Management of Human Resources 

BOX 6.2 _ ... tm-it-t_-_— .. 

Reinventing Human Resource Management 

1. Create a flexible and responsive hiring system. 
Authorize agencies to establish their own recruitment and examining pro¬ 

grams. Abolish centralized registers and standard application forms. Allow 
federal departments and agencies to determine that recruitment shortages exist 
and directly hire candidates without ranking. Reduce the types of competitive 
service appointments to three. Abolish the time-in-grade requirement. 

2. Reform the general schedule classification and basic pay scheme. 
Remove all grade-level classification criteria from the law. Provide agencies 

with flexibility to establish broadbanding systems built upon the General 
Schedule framework. 

3. Authorize agencies to develop programs for improvement of individual and 
organization performance. 

Authorize agencies to design their own performance management programs 
which define and measure success based on each agency’s unique needs. 

4. Authorize agencies to develop incentive award and bonus systems to improve 
individual and organization performance. 

Authorize agencies to develop their own incentive award and bonus systems. 
Encourage agencies to establish productivity gainsharing programs to support 
their reinvention and change efforts. 

5. Strengthen systems to support management in dealing with poor performers. 
Develop a culture of performance which provides supervisors with the skills, 

knowledge, and support they need to deal with poor performers, and holds 
supervisors accountable for effectively managing their human resources. 
Reduce by half the time needed to terminate federal employees for cause. 

SOURCE: From From Red Tape to Results by A1 Gore, copyright © 1993 by A1 Gore. Used by permission 
of Times Books, a division of Random House, Inc. 

performance was also developed, along with an elaborate system of bonuses for excep¬ 
tional executives. A 1991 deal involving pay plans and performance measures required 
SES members to be recertified every three years. 

Networking 

The Office of Personnel Management is located at http://www.opm.gov/. 

In addition to these major features, the Civil Service Reform Act made several other 
changes: giving agencies greater flexibility to administer their own personnel systems, 



Merit Systems in Public Employment 217 

establishing a new and more sophisticated performance appraisal system, creating 
a merit pay system for managers just below the SES range, providing protection for 
whistle blowers, assigning the federal Equal Employment Opportunity program (previ¬ 
ously with the Civil Service Commission) to the Equal Employment Opportunity 
Commission, and creating a more independent Federal Labor Relations Authority. 

After more than two decades, the Civil Service Reform Act is still receiving mixed 
reviews. The most favorable opinion is that there is little wrong with the act itself, but 
that implementation has been flawed by lack of funding and administration pressures 
to increase the number of political appointees. Others continue to suggest that the act 
was based on questionable assumptions about the nature of the federal workforce and 
was doomed from the beginning. In any case, the Civil Service Reform Act represented 
the first major change in personnel policy at the federal level since the Pendleton Act. 
Its confirmation of the principle of merit, its effort to sort out the multiple responsibili¬ 
ties of the personnel system, and its attempt to produce greater managerial flexibility 
have been significant. 

Reinvention and the National Performance Review 

During the 1990s, Vice President Gore’s National Performance Review (NPR), and the 
reinventing government movement generally, has had a dramatic impact on personnel sys¬ 
tems within the federal government. The goal of NPR was to enhance government produc¬ 
tivity by streamlining processes, increasing accountability, and decentralizing authority to 
encourage entrepreneurial behavior. Federal administrators searched for innovative ways 
of conducting the business of government while cutting costs. An immediate consequence 
of NPR was a substantial reduction in the federal workforce. Within two years of NPR’s 
release, more than 160,000 jobs had been cut and more than 2,000 federal field offices 
closed across the country. 

A second consequence of NPR was an overall shift in the culture of federal organiza¬ 
tions. Decentralization and the focus on results have instituted a fundamental change in 
the way government agencies, and thus personnel systems, work. Public employees are 
now held accountable for customer service and productivity. And, they are rewarded 
based on their agency’s efficiency and performance. (For some of the human resources 
recommendations from the National Performance Review, see Box 6.2.) The long-term 
impact of the NPR, and the reinventing movement, remains to be seen. Some laud the 
approach as a key step in improving public service and restoring the public’s trust, while 
others suggest that reinvention serves purely as a way of downsizing big government. 
At the very least, the reinventing government movement has significantly changed the 
systems of management and human resources that underlie public organizations at all 
levels (Kellough, 1999). 

Even more recently, and especially after the September 11 attacks, the federal gov¬ 
ernment has become aware of the need to maintain its core capabilities and to refocus 
its human resources policies to attract people who can perform new types of tasks. 
(See Box 6.3.) In part, the concern is that the retirement of many “baby boomers” at 



2i8 Chapter 6 The Management of Human Resources 

BOX 6.3 .__J_;_ 

Mass Retirement Could Hinder Anti-Terror War 

WASHINGTON (AP)—A wave of retirements set to spread across the federal govern¬ 
ment in the next few years could seriously hamper the war on terrorism. Some of the 
agencies most crucial in fighting terrorism—the Defense, State and Transportation 
departments, and the Federal Emergency Management Agency—could lose up to 45% 
of their workers through retirements in the next five years, according to the General 
Accounting Office. “If we are going to win the war, we have got to have the people,” 
said Sen. George Voinovich, R-Ohio. He’s the ranking member of the House 
Subcommittee on Oversight of Government Management and has taken a lead role in 
trying to draw attention to the “human capital crisis.” 

Voinovich said the federal government must find ways to keep its best workers 
while recruiting new staff with the skills to address new missions. It’s the difference, 
for example, between having a Defense Department loaded with Russian-speaking 
workers when today’s war against terrorism requires people who speak Arabic, Farsi 
and Pashto. 

“It’s not just how many, but what kinds,” said Frank Cipolla, senior consultant 
to the National Academy of Public Administration’s Center for Human Resources 
Management. 

The terrorist attacks have helped focus attention on the problem, but the looming 
shortage was identified long before Sept. 11. 

Last winter, the GAO, the investigative arm on Congress, placed “strategic 
human capital management”—identifying key jobs and filling them — on its list of 
federal programs and operations identified as “high risk.” And last March, former 
Defense Secretary James Schlesinger and retired Adm. Harry D. Train told Congress 
that national security is “on the brink of an unprecedented crisis of competence 
in government.” 

“The maintenance of American power in the world depends on the quality of U.S. 
government personnel—civil and military—at all levels,” they said in a statement. 
“We must take immediate action in the personnel area to ensure that the United 
States can meet future challenges.” 

SOURCE: From USA Today.com, November 1, 2001. Copyright 2001. Reprinted with permission of The 
Associated Press. 

about the same time will place a strain on the capabilities of federal agencies, that will 
be particularly intense if the government can not attract new employees to take their 
places. Also, it is clear that the government will need people with new and different 
skills to fill emerging needs. The General Accounting Office already has suggested 
three ways of improving the system: better pay and benefits; more active recruitment 
of young people; and reform of antiquated management practices that complicate hir¬ 
ing and fail to address needed skill areas. 



State and Local Personnel Systems 119 

State and Local Personnel Systems 

Many of the same problems that led to institution of the federal civil service system in 
the late 1800s also existed at the state and local levels—indeed, the problems were often 
even more severe. Although the federal government was certainly influenced by politi¬ 
cians interested in maintaining power through patronage, it was never so completely 
dominated by political bosses and machines as were the states and, especially, the cities. 

Even after the federal government created its civil service system, states and localities 
were slow to follow. New York adopted the first state civil service law in 1883, followed 
by Massachusetts the next year. It was twenty years, however, before another state 
joined these two. By 1935, only twenty states had adopted merit systems. While, today, 
nearly all states have relatively sophisticated civil service merit systems, those systems do 
not cover everyone. Even today, only about 60 percent of state government employees 
are covered by merit systems. 

The story is much the same at the local level: Albany, New York, was the first city to 
adopt a civil service system (1884), and a few other cities and counties followed prior 
to the turn of the century, but reform came slowly at the local level. Moreover, even 
where formal systems were adopted, patronage practices and political manipulation of 
the government workforce continued. Chicago and Cook County were among the first 
to adopt civil service systems; yet even today, mayoral candidates often run on a plat¬ 
form of reducing the power of political “machines” in Chicago. In any case, today 
almost 90 percent of local jurisdictions with populations of over 50,000 have some type 
of merit system on the books. 

Over the years, a primary motivator for adopting merit systems at state and local 
levels has been the number of federal laws requiring such systems in order for states 
and localities to receive federal funds. By 1980, every state and thousands of local gov¬ 
ernments had federal grants that required personnel systems that met a set of federal 
standards. The result has been that most state agencies receiving large amounts of fed¬ 
eral funding are now covered by merit systems; those that receive limited or no federal 
funds are much less likely to have a merit system. In addition to these requirements, the 
courts have extended due process protections to many public employees and have sup¬ 
ported affirmative action and other personnel-related actions that place greater burdens 
on state and local governments for detailed testing, classification, and reporting. Many 
states have thus found it advisable to establish or to extend merit concepts for their 
own protection. 

Though these regulations have been somewhat relaxed in recent years, it seems unlikely 
that state and local governments will return to massive use of the spoils system. Indeed, 
there is some evidence that governments are pursuing many of the same reforms pursued 
at the federal level in the late 1970s, which some charge have led to greater politicization 
of the public workforce. For example, states and localities are experimenting with decen¬ 
tralization of personnel functions, greater responsiveness of managerial and political 
authority, and closer ties between performance appraisals and merit pay. Whether elected 
officials at state and local levels will be subject to the same temptation as were those at the 



220 Chapter 6 The Management of Human Resources 

federal level to employ the new devices in a more politicized approach to public personnel 
remains to be seen. 

Hiring, Firing, and Things In-Between 

Most provisions of public personnel systems exist to protect public employees from exces¬ 
sive political interference; however, in some cases, they appear to make public personnel 
actions unduly complicated. Knowing the rules of the game will be a considerable help in 
your administrative work and will also be of help if you are looking for a job in a govern¬ 
ment agency. 

Classification Systems 

The key to most public personnel systems is the notion of position classification, the 
arrangement of jobs on the basis of duties and responsibilities and the skills required 
to perform them. A position classification system usually begins with a set of job 
descriptions, each based on a thorough analysis of the work and the required capabili¬ 
ties. A job description typically contains the following elements: job title, duties 
required, responsibilities associated with the position, and qualifications needed to 
carry out the job. A clerk-typist position, for example, might be described as including 
duties such as typing reports, maintaining correspondence records, answering tele¬ 
phone and walk-in inquiries, arranging for meetings and conferences on behalf of the 
supervisor, and other duties as assigned. Qualifications might include such things as a 
high school degree or the equivalent, typing speed of forty words per minute, and two 
years’ secretarial experience. 

Typically, sets of jobs that are closely related are then grouped together in classes that 
indicate increasing levels of difficulty—Clerk-Typist I, Clerk-Typist II, Clerk-Typist III, 
and so forth. In larger jurisdictions, such as the federal government, various classes may 
also be grouped into grade schedules that group jobs of varying levels of difficulty. For 
example, the federal General Schedule, which covers clerical and professional positions, 
lists within one grade, GS-11, a variety of different occupations. 

Organizations use personnel classification systems for several reasons: to maintain an 
objective inventory of positions, to provide equity across similar jobs, to connect tasks 
and the skills required to perform them, and to provide standards for judging the work 
of specific employees. Historically, such systems developed out of a concern for objectiv¬ 
ity and equity consistent with the idea of protecting employees from political abuse. The 
Position Classification Act of 1923, for example, required grouping jobs into classes on 
the basis of duties and responsibilities and, in language sounding much more contempo¬ 
rary, committed the federal government to providing “equal compensation for equal 
work, irrespective of sex.” With this early impetus, most public organizations have 
developed rather sophisticated classification systems that are usually more advanced 
than their private-sector counterparts. 



Hiring, Firing, Things In-Between 221 

While most people agree that the objective of current classification systems—equal pay 
for substantially equal work — is basically sound, many have argued that classification 
systems have become burdensome, inflexible, and unfair. Specifically, many argue that the 
complexity of the system creates excessive requirements that interfere with agency perfor¬ 
mance. Consequently, the National Academy of Public Administration has developed an 
alternative classification scheme that groups the existing 459 federal job categories into 
occupational “families” based on similarities in career progression, basic skills, recruit¬ 
ment training, and performance measurement. Families might include such areas as gen¬ 
eral support, office services, technical, engineering, health, or law enforcement. 

Likewise, the National Performance Review (NPR), which we mentioned previously, 
identified existing classification systems as a primary target for reinvention. Key recom¬ 
mendations of NPR, for example, involved adopting “a broader system of classification, 
reducing the number of occupational families and using grade and pay banding” (Risher, 
Fay et al., 1997, p. 38). Proponents of NPR say that the traditional system relies on rigid 
job descriptions, which tend to constrict employee performance to a limited set of tasks. 
Instead, more flexible parameters should be used that allow for innovation and more 
businesslike performance on the part of public employees. Administrators should be 
given greater authority to establish classification systems that contribute to each agency’s 
overall productivity and accountability. 

The Recruitment Process 

Having objective statements of duties, responsibilities, and qualifications makes it possi¬ 
ble to recruit personnel based not on who one knows, but on what one knows and what 
one can do. Recruitment efforts in the public sector must also be concerned with assur¬ 
ing fairness, openness, and representativeness. Typically, the recruitment process involves 
the following steps: 

1. Advertising or giving notice of a vacancy to be filled 
2. Testing or otherwise screening applicants 
3. Preparing a list of qualified candidates 
4. Selecting someone to fill the position 

In most jurisdictions, a personnel officer within a particular agency or someone from 
a central personnel department is significantly involved in the first three steps. 

Testing or screening processes have been subject to special scrutiny in recent years. 
Screening can occur through a review of written applications and recommendations, apti¬ 
tude or ability testing, performance examinations, interviews, or assessment centers. Of the 
various aptitude or ability tests that public organizations use, some measure general knowl¬ 
edge, others measure personality characteristics, and still others measure specific job-related 
knowledge or abilities. Performance examinations, such as typing tests, measure specific job 
capabilities. 

The method of testing should relate to the job to be filled. Though individual interviews 
are a common part of the hiring process, for example, they tend to be poor predictors of 



222 Chapter 6 The Management of Human Resources 

eventual job performance. Generally speaking, structured interviews, in which a previously 
developed set of questions is used with each applicant, and panel interviews involving 
more than one interviewer are preferable. Similarly, carefully constructed assessment cen¬ 
ters using several independent raters may be used. (An assessment center involves putting 
several job applicants through a series of job-related simulations to observe their perfor¬ 
mance under nearly real-life conditions.) 

For almost a decade, the primary examination for entry-level administrative and pro¬ 
fessional positions in the federal government was the Professional and Administrative 
Career Examination (PACE). In 1982, however, the Reagan administration bowed to 
repeated challenges from groups charging that the test unfairly discriminated against 
minority applicants and discontinued use of the test. (Over the years, only 5 percent of 
African Americans and 13 percent of Hispanics who took the PACE exam passed it.) 

Through most of the 1980s, the federal Office of Personnel Management (OPM) advised 
agencies to promote from within, to use noncompetitive appointments, or to use temporary 
appointments to fill vacancies—an approach that has obvious limitations in attracting and 
retaining the best and the brightest for government service. 

In 1990, OPM implemented a hiring plan with two alternative recruitment possibili¬ 
ties. The first featured the use of a series of tests, which it called the Administrative 
Careers with America (ACWA) test; the second, known as the Outstanding Scholar 
Program (OSP), enabled agencies to select college graduates with a GPA of 3.5 or higher 
on a 4.0 scale. Both have been challenged. Critics of the ACWA argue that the tests pose 
a similar problem as other standardized assessments, limiting the number of minority 
candidates in the hiring pool. Likewise, they state that while OSP leveled the playing 
field somewhat, particularly when compared to the ACWA, the result was the same: 
more nonminority than minority candidates being considered by federal agencies. 

In any case, after testing or screening, a small number of eligible applicants are certi¬ 
fied and forwarded to the hiring agency, often with rankings based on the candidates’ 
qualifications. Most merit systems require that at least the top three names be forwarded 
to the agency, so that the manager has some flexibility to consider personal or subjective 
characteristics in the final selection. This rule of three provision has proven controver¬ 
sial, however; many claim that it has been used as a device to discriminate against 
women and minorities. (Under this provision, for instance, a sexist employer could hire a 
male even if a woman candidate were objectively more capable.) An equally controver¬ 
sial provision of many merit systems requires that veterans (or sometimes even relatives 
of veterans) receive extra points in the ranking system. Such a provision works against 
the interests of nonveterans, most of whom are women; as you might imagine, however, 
it is strongly supported by veterans’ groups. 

The centralized process of recruitment traditionally underlying public personnel systems 
itself has come under fire in recent years, with many suggesting that it places decision¬ 
making authority in the hands of human resources staff as opposed to public managers. 
For example, NPR recommended that federal agencies be given the power to establish 
their own recruitment and examining programs. The report concluded that managers in 
each policy area can be more effective in recognizing the type of skills and abilities needed 
to make the agency more productive, and that they are in the best position to determine 
when to increase hiring levels. 



Hiring, Firing, and Things In-Between 223 

As a result, the trend toward decentralized recruitment has gained in popularity even 
in larger, more diverse agencies within the federal government. Decentralized processes 
may rely on similar selection criteria as a centralized system, but the primary difference 
is that agency heads, rather than personnel managers, select the viable candidates. Those 
with the greatest knowledge of the policy field, therefore, choose the individuals they 
believe will enhance the organization. Moreover, by not having to engage in the selection 
process, personnel staff members are free to concentrate on broader concerns, such as 
diversity, affirmative action and others affecting the organization. 

For those interested in applying for positions in the federal government, or in other 
levels of government and the nonprofit sector, the Internet has become a vital resource. 
Applicants can complete the necessary forms and submit their materials online, and in 
some cases the entire recruitment process can occur without the candidate ever visiting 
in the hiring organization. Whether it is done in person or online, be sure to submit the 
appropriate application materials. In some cases this may be as simple as sending in a 
current resume, which states the vacancy number and level. But most often even resumes 
should be accompanied by the proper application forms. Many recruiters will not con¬ 
sider application materials unless they are submitted in a style and format consistent 
with those called for in the vacancy announcement. (In the federal government, candi¬ 
dates may submit their information using forms that can be downloaded from the Office 
of Personnel Management Web site.) 

Networking 

For employment opportunities in the federal government, go to the Office of 
Personnel Management at http://www.opm.gov, America’s Job Bank at 
http://www.ajb.org, or Careers in Government at http://www.careersingovernment. 
com, or visit any of the federal agencies online. Those interested in employment 
at other levels of government can go to http://www.aspanet.org or http:// 
www.govtjobs.com, and for nonprofit-sector jobs go to 
http://www.philanthropy.com or http://www.opportunitynocs.org. 

Pay Systems 

Naturally, both the recruiting process and the individual’s performance on the job are 
affected by compensation patterns, including both wages and benefits. Generally speak¬ 
ing, pay is determined by the nature of the work and the quality of performance in the 
job. But pay plans in the public sector are difficult to construct, for they must embody 
two often contradictory principles. On the one hand, to be fair and equitable, they must 
be highly structured; on the other hand, to be competitive, they must be responsive to 
changing political and economic conditions. 

Most large personnel systems in government (including states and big cities) base their 
pay plans on their classification systems, which usually define a series of grades, each con¬ 
taining a set of jobs that are generally comparable in terms of difficulty, and a number of 



224 Chapter 6 The Management of Human Resources 

steps within each grade. These steps represent approximately equal increments of pay, 
with the highest generally about 20 percent to 30 percent above the lowest. In most cases, 
the grades are slightly overlapping, so that the first step in one grade is equal to one of 
the higher steps in the grade below. Individuals are assigned to a particular grade and step 
depending on how the position is described and on their individual qualifications for 
the position. 

Employees in this type of system may receive pay increases in several ways. One way is 
to change grades; however, for an employee to change grades, either the particular position 
would have to be reclassified or all equivalent positions would have to be moved to a 
higher range. For an employee to receive increases within grade, either the entire pay plan 
can be adjusted upward, for example, through a legislative action to improve overall pay 
(e.g., through cost of living increases), or the individual can receive a raise. Raises can be 
based on several factors, ranging from seniority to merit pay, or pay for performance. 

The idea of merit pay is simply that increases in salaries and wages should be tied to 
the actual quality of the work being done, so that those who perform better or more 
productively receive greater rewards. Although governments have used various merit pay 
systems, such systems have not always worked well. In many cases, the money available 
for merit raises for a few is spread so thinly that meritorious employees are not differen¬ 
tiated from others. Part of the reason for this development is the difficulty of objectively 
measuring an individual’s performance and the fact that many managers find it awkward 
to evaluate their employees’ work. 

As noted, the Civil Service Reform Act of 1978 sought to remedy this situation by 
requiring merit pay based on formal performance appraisal systems. Although agencies 
have been given considerable flexibility as to what systems they adopt, efforts have been 
made to base evaluations on critical elements of the individual’s job or to develop results- 
oriented systems that tie evaluation to specific job outcomes. Any system of performance 
appraisal must be both accurate and fair: 

Performance-appraisal systems must be based on the real requirements of the task. 
They must reflect realistic levels of performance, and be couched in terms that the 
workers understand, while at the same time providing workers with some insights 
on where and how performance improvements need to be made. (Siegel & Myrtle, 
1985, p.337) 

One aspect of compensation policy that has received substantial attention over the years 
is the comparability of wages and salaries in the public and private sectors. Though nearly 
all efforts to make such comparisons have been plagued by the difficulty of comparing 
apples and oranges, early studies tended to show public-sector salaries considerably below 
those in the private sector, today ranging between 22 percent and 38 percent below, depend¬ 
ing on grade level. (Incidentally, the greatest differences are at the top-level positions.) 

Under these conditions, the federal Pay Comparability Act of 1990 required the federal 
government to close the gap between the public and private sectors, beginning by closing 
the gap 20 percent in 1993 and then 10 percent in following years. While both Presidents 
Reagan and Bush cited the country’s economic problems as a reason to impose lower 
wages than those suggested by comparability studies, President Clinton, while proposing 



Hiring, Firing, and Things In-Between 225 

some increases, rejected the comparability targets, arguing that the law’s formulas were 
based on flawed methodology. 

Conditions of Employment and Related Matters 

There are several contemporary issues in personnel management that relate either to the 
conditions under which employees are hired or the conditions under which they must 
work. For example, increasing numbers of employers in both the public and private sectors 
are recognizing that substance abuse is responsible for greater absenteeism, higher accident 
rates, and generally lower productivity. Consequently, programs have been established to 
identify and to aid or dismiss employees who have problems with drugs or alcohol. 

Testing for drugs, primarily through urinalysis, has become quite common. Despite the 
fact that such programs violate personal dignity and have a variety of technical problems, 
a substantial number of private companies now use drug testing. Whereas in 1983 only 
about 3 percent of private firms used drug testing, today over three-quarters do so. 
Employees in private firms have little protection from testing and, in the absence of col¬ 
lective bargaining agreements to the contrary, may be tested at management discretion. 
Because public employees (at least civilian employees) are more clearly protected against 
illegal search and seizure and are guaranteed equal protection and due process, programs 
to test public employees have frequently been challenged in the courts. For the most part, 
the courts have held that random mandatory testing is a violation of employee rights, but 
that testing may be required where there is reasonable suspicion of abuse or where testing 
is made a part of the hiring process. But questions continue to be debated; for example, 
what type of testing is appropriate for those in sensitive positions, such as air traffic con¬ 
trollers or those in contact with nuclear or chemical weapons? 

Networking 

The following sites track contemporary issues in personnel management. 
Many others are available—just conduct your own search. 
http://www.shrm.org/hrlinks/comp.htm (sources on benefits) 
http://aad.english.ucsb.edu (information on affirmative action and diversity) 
http://www.feminist.com/fairpay/ (National Committee on Pay Equity) 
http://www.cdc.gov/hiv/pubs/facts/htm (AIDS links from CDC) 
http://www.hr.com (general information relating to human resource management) 
http://www.hr-guide.com (index of subjects relating to personnel management) 
http://lawinfo.com/forum/sex-discrimination/edics-2.html (overview of sex 
discrimination) 
http://www.faa.gov/acr/mwe/index.htm (work environment diversity) 
http://www.backgroundbriefing.com/jobdiscr.html (how to hire and fire) 
http://www.careermag.com (Career magazine) 
http://www.unions.org (unions listed by state and country) 
http://www.shrm.org/docs/FIRmagazine.html {HR Magazine) 



226 Chapter 6 The Management of Human Resources 

Sexual Harassment 

Another contemporary concern is establishing a work environment that is supportive of all 
persons and sensitive to their needs, regardless of gender. One aspect of this concern is sex¬ 
ual harassment, a topic that has received considerable national attention in the wake of 
several highly publicized cases, including the Clarence Thomas confirmation hearings in 
1991, the inquiry into the behavior of Senator Bob Packwood in 1994, and the suit 
brought against President Clinton in 1994 for allegedly harassing a state employee while 
serving as governor of Arkansas. Sexual harassment may be defined as any unwanted and 
nonreciprocal verbal or physical sexual advances or derogatory remarks that the recipient 
finds offensive or that interfere with job performance. Sexual harassment especially 
includes (though is not limited to) situations in which one person in a position of power or 
influence uses his or her position to encourage or coerce a subordinate or coworker into 
undesired sexual activity, even to the point of withholding or taking away job advance¬ 
ments or promotions. The courts consider sexual harassment a type of inequality that 
employers must deal with, both in terms of eliminating offensive behaviors and creating a 
less hostile or intimidating work environment for both men and women. (See Box 6.4.) 

Networking 

Two sites dealing with sexual harassment are http://www.employment-law.freeadvice. 
com/sexual_harassment/ and http://www.feminist.org/911/sexharlinks.html. 

BOX 6.4 

What Can Agencies Do about Sexual Harassment? 

1. Agencies should find ways to capitalize on what is already known about the 
most effective actions that can be taken to prevent and eliminate sexual harass¬ 
ment; that is, they should publicize penalties and encourage assertive actions 
on the part of employees who are targets of unwanted sexual attention. 

2. Managers and supervisors should be firm and consistent in penalizing proven 
harassers. 

3. Agencies should diagnose the extent and seriousness of sexual harassment 
within their own organizations so that they know what kinds of solutions 
are appropriate and where resources should be concentrated. 

4. Agencies should evaluate the effectiveness of the sexual harassment training they 
provide to ensure it addresses identified problems. Agencies should pay particular 
attention in the training efforts to the problem of sexual harassment by coworkers. 

SOURCE: Sexual Harassment in the Federal Workplace: Trends, Progress, Continuing Challenges. 
(U.S. Merit Systems Protection Board, 1995). 



Hiring, Firing, and Things In-Between 227 

Despite attention to sexual harassment in many public organizations, a survey by the 
Merit Systems Protection Board found that 44 percent of all women working for the 
federal government said they had been sexually harassed in the past two years. Incidents 
cited included actual or attempted rape, pressure for sexual favors, deliberate touching, 
suggestive looks, and sexual remarks. The board estimated that the practice cost the 
federal government $327 million over two years in lost productivity and turnover 
(Havemann, 1988b, p. 31). 

Although there appear to be many instances of sexual harassment, many remain 
unreported. (The number of reported incidents has risen dramatically during the 
1990s with the increase in public awareness.) One reason for this situation may be 
the complex and often ambiguous procedures many organizations have for dealing 
with complaints. Most tend to be lengthy, expensive, and psychologically draining. 
For this reason, public organizations are currently reviewing their policies on sexual 
harassment, establishing more clearly the seriousness of the offense, and develop¬ 
ing strong enforcement and disciplinary measures, including dismissal. The goal is 
not only to eliminate specific instances of harassment, but also to create a work envi¬ 
ronment that is fully supportive of the potential of all employees, both men and 
women. 

Aids Policy 

Related issues having to do with creating a positive work environment arise as public 
organizations, like others, work to protect the rights of individuals with HIV/AIDS. 
The Office of Personnel Management provided one of the first directives for federal agen¬ 
cies, setting a policy that prohibits the discrimination against employees with AIDS and 
that allows managers to take disciplinary action against anyone who refuses to work with 
an employee who has AIDS. Among other things, the guidelines said that employees with 
AIDS “should be allowed to continue working as long as they are able to maintain 
acceptable performance and do not pose a safety or health threat to themselves or others 
in the workplace.” Moreover, because there is no medical basis for someone to refuse to 
work with employees with AIDS, where managers feel that employees’ refusal is “imped¬ 
ing or disrupting the organization’s work, [the manager] should consider appropriate cor¬ 
rective or disciplinary action against the threatening or disruptive employees” (Flavemann, 
1988a, p. 34). 

These considerations have become even more important with the passage of the 1990 
Americans with Disabilities Act (ADA), which considers those infected with HIV/AIDS 
as disabled individuals. (The ADA will be discussed in more detail later in this chapter.) 
Consequently, many agencies are developing HIV/AIDS plans for the workplace. Despite 
this attention, though, a recent survey of local government officials suggested that much 
work remains to be done to create a positive work environment for this protected group. 
Most municipalities have yet to comply fully with HIV/AIDS-related provisions of the 
ADA. And the survey concluded that the public workplace offers little protection from 
discrimination for those with HIV/AIDS. 



22 8 Chapter 6 The Management of Human Resources 

Workplace Violence  

In recent years, the incidence and the threat of violence in the workplace has had a dramatic 
effect on work environments. While multiple murders and acts of terrorism, such as the 
1995 Oklahoma City bombing, tend to capture the public’s attention, other forms of vio¬ 
lence pose an equally significant threat to workplace safety and quality. Of course, violent 
crime affects a variety of organizations in all sectors; however, the government remains 
a primary target. For example, the U.S. Justice Department reported that nearly one-third 
of the 1 million victims of workplace violence in 1994 were government employees. And, 
in a separate report, researchers found that in the U.S. Postal Service alone, twenty-nine 
employees were killed and sixteen wounded from August 1983 to May 1993. 

The increase in violence over the past decade has prompted administrators to imple¬ 
ment strategies for reducing the risk of workplace crime. Some preventive measures 
include improving the physical environment, adding security and related staff, and 
reducing hours of operation during high-risk periods. However, many public adminis¬ 
trators have yet to realize the actual threat of violence that affects their organization. 
Some continue to view occupational violence as someone else’s problem. Recent 
research on violent crime, though, suggests otherwise. The political nature of govern¬ 
ment, the deterioration in public perception of government workers, and the increase in 
stress loads among public employees combine to make public organizations likely tar¬ 
gets for workplace violence. 

Removing Employees 

For whatever reason, things occasionally do not work out on the job. An employee may 
not live up to expectations or may become unproductive. In cases such as these, your 
first step as a manager is to try to improve the individual’s work (a strategy that is, of 
course, far easier than recruiting and training a replacement). You may encourage or 
counsel the employee, either personally or, better, through an employee assistance pro¬ 
gram. Or, in a surprising number of cases, you may be able to restructure the job so as 
to better motivate the employee. Concerns about an employee’s work can often be 
addressed in positive and productive ways that are helpful to both the individual and the 
organization. 

But if your efforts to help the employee fail, you may have to resort to disciplinary 
action, which might include formal reprimands, reduction of pay, suspension without 
pay, or outright dismissal. In all cases, it is important to be able to demonstrate that 
there is adequate cause for disciplinary action. Simply firing someone for personal rea¬ 
sons unrelated to the job opens both you and the organization to possible lawsuits; and, 
of course, firing someone for political reasons is contrary to the whole concept of merit 
employment in the public sector. 

There is a strong presumption that public-sector employees are entitled to notice and an 
opportunity to be heard before disciplinary action or before dismissal. This does not mean 
that a person cannot be demoted, suspended, or terminated but rather that the employer 
cannot take such action in an arbitrary way. 



The Changing Character of Labor-Management Relations 229 

At the federal level, the Civil Service Reform Act encourages development of perfor¬ 
mance appraisal systems that make it easier for managers to document employee incompe¬ 
tence and remove them from the organization. At the state and local levels, various court 
cases have indicated that employees being terminated have certain due process rights, such 
as advance notice and the opportunity for a hearing. In any case, if you decide to pursue 
disciplinary action, you should build a clear case to demonstrate the underlying reasons for 
your action. 

The Changing Character of Labor-Management Relations 

An interesting issue that cuts across the field of public personnel management is the 
rise and decline of public-sector unions. At the federal level, many rather narrow 
issues, having to do primarily with working conditions, are resolved through collec¬ 
tive bargaining, though more controversial issues, such as compensation and hiring 
practices, are rarely considered. At state and local levels, there is a patchwork of 
labor relations practices, ranging from highly restrictive to extremely permissive labor 
legislation. 

The early development of public-sector unions was tied to the reform of the patron¬ 
age system. With the establishment of merit principles in public employment, employees 
had greater protection from political intrusions, but they also had fewer direct ways to 
get the attention of political leaders. To combat the possibility that they might simply be 
ignored, public employees began organizing in the late 1800s and early 1900s. At first, 
political leaders strenuously opposed these efforts; at least two presidents issued gag 
orders to prevent federal workers from pursuing wage demands except through depart¬ 
mental channels. In response, the newly organized employees, led by the postal workers, 
pressed Congress for recognition, which they finally received in the Lloyd-LaFollette Act 
of 1912. The only statutory basis for public-sector unionization for more than half a 
century, this act permitted federal employees to join unions (that did not advocate the 
right to strike) and to appeal directly to Congress. 

With the early emergence of unions at the federal level, a few agencies, such as the 
Tennessee Valley Authority, developed rather advanced patterns of labor-management 
relations; elsewhere, however, public unions emerged relatively slowly, especially in com¬ 
parison to their counterparts in the private sector. The slow development of public 
unions can be explained in part by the several difficult questions that public-sector 
unionization raised for those in public organizations. 

First, there was the issue of sovereignty, the notion that the ultimate power to decide 
issues of public policy in a democracy lies with the people or their elected representa¬ 
tives and cannot properly be delegated, even partially, to some nongovernmental group 
such as a union. Illustrating this position, President Franklin Roosevelt wrote, “The 
process of collective bargaining, as usually understood, cannot be transplanted into the 
public service. . . . The very nature and purpose of Government makes it impossible for 
administrative officials to represent fully or bind the employer in mutual discussions. 



230 Chapter 6 The Management of Human Resources 

The employer is the whole people who speak by means of laws enacted by their repre¬ 
sentatives in Congress” (Klingner & Nalbandian, 1985, p. 292). 

A second set of factors restricting the growth of public unions concerns the nature of 
governmental services, which are often considered either essential to the community (po¬ 
lice, fire, national defense) or relatively unprofitable (systems of mass transportation). In 
the case of essential services, the ultimate union weapon — the strike — may be seen as 
holding the public interest hostage and can backfire; in the case of low-profit undertak¬ 
ings, the balancing factor of the market—the fact that a company may go out of busi¬ 
ness if pressed too far—does not appear to operate. In either case, the private-sector 
model of collective bargaining seems to apply only loosely. 

Networking 

For information on labor-management issues, see http://www.labornet.org 
and http://www.dol.gov. On specific unions, see http://www.afge.org and 
http://www.afscme.org. 

A third factor limiting the growth of public-sector unions through much of this 
century is the varied nature of government employment and the difficulties this 
presents for unionizing. Traditionally, unions have organized around occupational 
groups, such as truck drivers or garment workers. But government employs people in 
thousands of occupational groups; to have a union for each group would lead to end¬ 
less and unsuccessful bargaining for both sides. The federal government is also char¬ 
acterized by geographic dispersion (only about 10 percent of the federal workforce is 
located in the Washington area), and the fact that there are so many white-collar 
workers in government, who have been historically reluctant to organize. Thus, the 
question of finding an appropriate focus for union activity has been especially diffi¬ 
cult at the federal level. 

Yet unions have been able to organize. Sparked at least partly by the success of unions 
in the private sector, where the right to bargain collectively was never seriously questioned 
after passage of the Wagner Act in 1935, public employees continued to press for recogni¬ 
tion of their right to negotiate labor-management disputes. Soon even the sovereignty argu¬ 
ment was eroded. Secretary of Labor Willard Wirtz commented, “This doctrine is wrong 
in theory; what’s more, it doesn’t work” (Levitan, 1983, p. 6). Bills providing recognition 
for unions in the public sector were introduced (although unsuccessfully) in every session 
of Congress from 1949 to 1961. 

Just as another such bill seemed stalled in Congress, President Kennedy took the ini¬ 
tiative in reforming public labor-management relations by issuing Executive Order 
10988 in 1962. Kennedy’s order affirmed the right of federal employees to form and 
join unions, set up conditions under which unions would be recognized for purposes of 
“meeting and conferring” (discussing, not necessarily negotiating) with management on 
certain issues, and established limits on the kinds of issues that could be discussed. 
Though the order placed a great deal of administrative authority in the hands of the 



The Changing Character of Labor-Management Relations 231 

various agencies, it did seek some uniformity in application through the Civil Service 
Commission. 

The Kennedy order was expanded somewhat by several executive orders during the 
Nixon and Ford administrations. Principally, Executive Order 11491, issued in 1969, 
sought a more coherent labor policy at the federal level through establishment of the 
Federal Labor Relations Council and slightly expanded the scope of bargaining. 
The essential items of wages and benefits, however, remained outside the bargaining 
process. 

The next landmark in federal employee unions was the Civil Service Reform Act 
(CSRA) of 1978. Though the CSRA did little to expand areas of bargaining or to alter 
administration of federal labor practices (other than replacing the Federal Labor Relations 
Council with a Federal Labor Relations Authority separate from the Office of Personnel 
Management), the act was important in that it based federal labor relations on a single, 
comprehensive statute rather than a series of executive orders. 

Currently, some three out of every five federal workers are represented by unions, 
the largest of which is the American Federation of Government Employees (AFGE). 
But because Congress has refused to permit a “union shop” among federal workers, 
though it exists in the private sector, the actual membership of federal unions is signifi¬ 
cantly less than it might otherwise be. (A union shop is an arrangement under which 
all members of an agency are required to join the union that represents them.) The 
AFGE, for instance, negotiates agreements that apply to three times its actual member¬ 
ship. Despite that fact, however, the percentage of federal workers who pay dues to 
unions compares quite favorably to that among workers in the private sector; public 
unions have done quite well in terms of membership (Levitan, 1983, pp. 14-20). 
Indeed, overall, public-sector union membership is higher than that in the private 
sector. 

At state and local levels, there is incredible variety in the kinds of labor-management 
relations permitted by law. Though there has been occasional talk of uniform federal 
statutes to govern state and local practices, the case of National League of Cities v. 
Usery (1976) seemed to indicate that states have considerable sovereignty over public 
employees. More recently, however, the case of Garcia v. San Antonio Metropolitan 
Transit Authority (1985) again opened the possibility of further federal intervention. 
But until federal legislation is passed, states will continue to exercise control over labor 
relations in widely varying ways. At present, some states follow the meet-and-confer 
model of the Kennedy program, while others establish a negotiations process similar to 
the private-sector model. Some states differentiate between state and local employees, 
while others differentiate among various occupational groups as well. Some states 
require enforced arbitration of one kind or another, and eight states permit strikes by 
public employees. 

In all, forty-three states have comprehensive labor-relations laws, most of which are 
more favorable to unions than the existing federal legislation. Between 1960 and 1990, in 
fact, the two most rapidly growing unions in this country were the American Federation 
of State, County, and Municipal Employees and the American Federation of Teachers, 
both of which operate exclusively at the state and local levels. 



232 Chapter 6 The Management of Human Resources 

Steps in the Bargaining Process  

The first and major steps in the bargaining process are recognizing the union’s right to 
exist, determining the type of bargaining permitted, and determining the scope of bar¬ 
gaining. The scope of bargaining is a source of continuing debate in many jurisdictions. 
Legislation may prescribe areas where negotiation is permitted, areas where it is prohib¬ 
ited, and areas where it is required. But the applicable legislation may range from a pro¬ 
hibition on negotiating wages and salaries (as exists at the federal level) to situations in 
which wages and salaries are at the heart of the process (as in many states and localities). 
Even beyond these questions, many other issues are less clear. For example, does inclu¬ 
sion of work methods and procedures in a bargaining arrangement for public schools 
mean that teachers can negotiate class sizes? 

The typical procedure requires that organizers who wish to represent employees peti¬ 
tion the administrative authority to establish a bargaining unit that will represent the 
employees in conferring or negotiating various issues. (The decision to include or 
exclude certain groups in the bargaining unit is called unit determination.) Whereas the 
traditional standard for setting unit boundaries has been to establish a “community of 
interests,” governments have loosely applied this concept, in some cases recognizing 
agency-based units (the Department of Social Services or the Department of Mental 
Health) and in others recognizing units based on occupational classes (nurses, custodi¬ 
ans, or security officers). After deciding on the bargaining unit, some mechanism must 
be established to ensure coordination among the various groups and to prevent whip¬ 
saw tactics (arguing that pay or benefits negotiated by one group should apply to others 
as well). 

A similar concern is where to draw the line between managers and workers; for exam¬ 
ple, are first-line supervisors part of the bargaining unit or part of management? The 
importance of this issue was illustrated in the case of NLRB v. Yeshiva University (1980), 
in which it was determined that faculty at Yeshiva University, a private university, are 
management personnel, participating in decisions such as curricula and scheduling, and 
therefore outside the coverage of federal labor laws. Similar questions are raised in almost 
any unit determination; inclusion or exclusion of supervisors in the bargaining process 
varies greatly from place to place. 

After appropriate bargaining units have been established, the administrative authority 
may either voluntarily recognize a particular union, essentially by petition, as represent¬ 
ing a group of employees, or it may conduct an election to determine which, if any, 
union will represent the employees in that area. Once a union has been recognized, it is 
usually granted exclusive representation of employees in the unit, including the ability to 
bargain on all issues required or permitted by law. (The reverse of this process, decertifi¬ 
cation, is rare, though it can occur.) 

Bargaining may then begin, typically with both sides bargaining in good faith— 
attempting to resolve the issues at hand even while following the strategy they feel will 
be most advantageous to them. In most cases, the bargaining process results in an agree¬ 
ment; occasionally it does not. Where an impasse occurs, there are several possibilities 
for resolving the issue: mediation, fact-finding, and arbitration. 



The Changing Character of Labor-Management Relations 233 

1. Mediation involves the use of a neutral third party to attempt to work out a settlement. 
The work of the mediator is to assist the parties in communicating and clarifying their posi¬ 
tions, but not to impose solutions. Though the mediator’s recommendations are not bind¬ 
ing, professional mediators are remarkably successful in helping parties reach agreements. 
2. Fact finding employs the third party in a somewhat more investigative and judicial role, 
to examine evidence on both sides of the issue, present the evidence, and, in most cases, 
make specific recommendations with respect to a settlement. Some jurisdictions require 
making the recommendations public, on the assumption that public pressure will then 
lead toward an agreement. 
3. Arbitration is a form of impasse resolution involving fact-finding followed by specific 
recommendations that are usually binding on the parties. One form of arbitration that 
has received attention recently is final-offer arbitration, a technique in which both parties 
must present their best offer with the understanding that the arbitrator will choose one or 
the other without modification. Presumably, since both parties know that unreasonable 
proposals will lead to the arbitrator’s choosing the opposing proposal, it is in the interest 
of both parties to submit their most reasonable position. 

To Strike or Not to Strike 

If impasse resolution fails, the employee organization may consider a strike. Although 
most governmental jurisdictions prohibit strikes by public employees, they do occur. 
There are usually several hundred work stoppages in public agencies each year. These 
strikes raise difficult questions for public-sector, labor-management relations. Certainly 
public employees have the right to form associations, and one might argue that they 
should have the right to withhold services just as employees in the private sector do. On 
the other hand, the importance of public services, especially those such as fire or police 
protection, may justify different standards in the public sector. 

Experts make the following arguments against public employee strikes: 

1. Strikes violate sovereignty (conceding authority to any special interest group contra¬ 
venes the public interest). 
2. Public services are essential and cannot be interrupted. In effect, all government ser¬ 
vices are vital. 
3. Traditional channels of influence on public policy exist for unions: lobbying and voting. 
4. Whereas strikes in the private sector are usually of an economic nature, those in the 
public service are political. They are strategies that use the leverage of public inconvenience 
to cause a redirection of budgetary priorities (Siegel & Myrtle, 1985, pp. 377-378). 

On the other hand, advocates of public employees’ right to strike make these points: 

1. Public employee strikes occur whether or not they are illegal and regardless of heavy 
penalties prescribed by law. 



234 Chapter 6 The Management of Human Resources 

2. In strike situations, labor-management conflict bŁcomes channeled and socially con¬ 
structive— both labor and management gain greater understanding of each other and of 
the consequences of work stoppages. 
3. The right to strike enhances a union’s strength as a bargaining agent. Lack of the ulti¬ 
mate ability to withdraw services weakens labor’s position at the bargaining table. 
4. Many private workers doing the same work that public employees do (for example, in 
transit, health care, garbage collection, and communications) have the right to strike, 
and for many other public employees (clerks, for instance), the public consequences of 
striking would be little different from what they are when private-sector clerks strike. 

Though strikes at the state and especially at the local level are more frequent, two 
landmark strikes at the federal level were especially dramatic. The postal workers’ strike 
of 1970 occurred when members of the Manhattan-Bronx Branch of the National 
Association of Letter Carriers voted to strike against the U.S. Postal Service. The imme¬ 
diate issue was the low wage scale for carriers—a scale that left a substantial number 
of postal workers on welfare. Beyond this concern, the postal workers desired the right 
to negotiate wages and benefits, especially if the Nixon administration followed its plans 
to make the post office a government corporation. The strike began with about 25,000 
postal workers in New York City, but soon spread up and down the East Coast and to 
several major cities around the country, ultimately involving some 200,000 union mem¬ 
bers. As the situation became more intolerable, President Nixon sent 27,500 National 
Guardsmen into New York to sort and deliver the mail. He also broke a long-standing 
precedent, however, and agreed to permit postal workers to bargain for wages. 
Following this agreement, the postal workers returned to work, most claiming victory in 
the strike. Eventually, the Postal Reorganization Act was passed, setting up the govern¬ 
ment corporation Nixon sought, and also providing for a bargaining pattern similar to 
that in the private sector. 

A quite different result occurred when members of the Professional Air Traffic Control¬ 
lers Organization (PATCO) went on strike in August 1981. PATCO had earlier established 
itself as one of the most powerful and most militant of the public unions, boasting 90 per¬ 
cent of the FAA’s air traffic controllers as members (probably the highest percentage 
among federal-level unions at the time). Early in the year, the FAA was pressured into 
negotiating with the union concerning issues of wages and working conditions, even 
though it had no statutory power to do so and could only recommend wage increases to 
Congress. The union, arguing that the controllers were underpaid and subject to severe job 
stress, presented several demands, including a $10,000 across-the-board annual salary 
increase for the controllers and a four-day, thirty-two-hour workweek. Although the FAA 
did not meet these demands, then-Secretary of Transportation Drew Lewis agreed to sup¬ 
port a $40 million package of improvements, including a $4,000 wage increase. However, 
95 percent of the union membership rejected this proposal. 

After a final round of negotiations was unsuccessful, the union decided to strike. 
Union leader Robert Poli declared, “The only illegal strike is one that fails” (Steele, 1982, 
p. 38). As it turned out, this strike was to fail. What had begun as a confrontation 
between the union and the FAA now became a confrontation between the union and 
the White House. President Reagan acted decisively, fining the union and firing nearly 



The Changing Character of Labor-Management Relations 235 

11,500 striking controllers for participating in an illegal strike. Although there was severe 
disruption in the air transportation system for several days, new controllers were hired, 
airline schedules were altered, and training programs were accelerated. The situation soon 
gave at least the appearance of a return to normalcy. Beaten in the strike and decertified 
by the Federal Labor Relations Authority (FLRA), less than a year later PATCO filed for 
bankruptcy. 

Unions Redefined 

The character and role of organized labor has undergone a fundamental change during the 
1990s, as efforts to reinvent government and reform personnel processes have redefined the 
ties between labor and management. In some respects, the influence of unions has been 
diminished by the more businesslike approach taken by government agencies. Contracting 
out and privatization, too, have contributed to labor’s troubles, due to more and more ser¬ 
vices being delivered by private or nongovernmental organizations. The net result has been 
a drop not only in the power of unions, but in some cases in the level of union membership. 
For instance, while AFGE still represents more than 640,000 employees, its roster of mem¬ 
bers nearly was cut in half during the last two decades. And, though a few public employee 
unions grew during this period, the overall trend has been a decline in union representation. 

What remains the same, however, is the highly confrontational nature of the labor- 
management relationship, with many identifying collective bargaining as a key contrib¬ 
utor to the problem. Though collective bargaining has been useful in private-sector 
contract negotiations, its application by public agencies often results in bitter contests 
between management and staff personnel. As a consequence, the National Commission 
on State and Local Government reported that an “adversarial climate . . . has predomi¬ 
nated. It is a climate that can stifle innovation and government’s ability to get the job 
done.” Public organizations often spend months, or sometimes years, trying to reach 
agreements or attempting to effectively manage existing contracts. Meanwhile, the 
relationship between managers and union employees becomes bogged down over what 
amounts to minuscule matters. 

During the past decade, both labor and management have sought more peaceful, less 
adversarial alternatives to bargaining and dispute resolution (see Box 6.5 for an example). 
A major step toward this goal came in 1993, when President Clinton issued Executive 
Order 12871, which encouraged the two sides to form partnerships and take a cooperative 
approach to labor issues. To carry out these objectives, the order created the National 
Partnership Council, with representatives from public unions, management, and the Public 
Employee Department of the AFL-CIO. 

Change in labor-management relations also has been targeted in the culture and lead¬ 
ership styles that characterize public organizations. Many public agencies have opted for 
a more participatory form of management, thus precluding the legalistic, not to mention 
lengthy, process of collective bargaining. Administrators work to dismantle bureaucratic 
hierarchies and distribute power throughout the organization. Public employees enjoy a 
more meaningful form of empowerment than could ever have been facilitated through 
traditional channels. The result is a more effective, productive organization. 



236 Chapter 6 The Management of Human Resources 

B°X 6.5 \ ... 

Labor-Management Cooperation 

To strengthen relations between labor and management at Wisconsin’s Department of 
Industry, Labor and Human Relations (DILHR), Secretary Carol Skornicka two years 
ago established a twelve-member Labor Management Advisory Council. 

The council includes six management and six union representatives, including rep¬ 
resentatives from the department’s six divisions. The group meets monthly with the 
following groundrules: 

1. Decisions are by consensus. 
2. Employees are surveyed on all major issues affecting them. 
3. Communication with all employees is a priority. 

The council is advisory, but operates under a strong presumption that the Secretary 
will act upon consensus recommendations on non-contractual issues. 

The council’s goal is to build labor-management policies that foster harmony, trust 
and cooperation. “We’ve got good relations at the top,” says Tom Lonsdorf, a board 
member of the Wisconsin State Employees Union, Council 24, AFSCME. “Now we’ve 
got to move it down through the organization to get that team concept throughout” 
the department. 

SOURCE: Copyright 1994 by the National Academy of Public Administration Foundation, 1120 G Street, 
N.W., Suite 850, Washington, D.C. 20005. 

Of course, such an alternative does not completely resolve the issue. The structural 
factors that pit the two sides against each other, for the most part, remain in place. Public 
unions still hold a level of power in government personnel administration, and the gains 
made on behalf of workers through lobbying and court decisions continue to influence 
the administrative process. However, the relationship is changing. Though the direction of 
this change remains to be seen, reform of the system and the search for alternative forms 
of communication between labor and management appears necessary. 

Correcting Patterns of Discrimination in Public Employment 

Whereas civil service systems have traditionally emphasized the concept of merit in public 
employment, other values have become increasingly important. Most prominent is a con¬ 
cern for correcting patterns of discrimination in hiring and treatment of workers in public 
agencies. The two terms that have been central to that debate are equal employment 
opportunity and affirmative action. Equal employment opportunity refers to efforts to elim¬ 
inate employment discrimination on the basis of race, ethnic background, sex, age, or phys¬ 
ical handicap; it simply seeks to ensure that all persons have an equal chance to compete for 



Correcting Patterns of Discrimination in Public Employment 23 7 

and hold positions of employment based on their job qualifications. Affirmative action, on 
the other hand, involves the use of “positive, results-oriented practices to ensure that 
women, minorities, handicapped persons, and other protected classes of people will be equi¬ 
tably represented in the organization” (Hall & Albrecht, 1979, p. 26). 

The concept of equal opportunity has a firm basis in constitutional and legal history, 
but the primary piece of federal legislation guiding current practices is the Civil Rights 
Act of 1964. (Many states had passed equal employment legislation in advance of the 
federal act.) Title VII of the Civil Rights Act banned employment discrimination in areas 
such as selection, promotion, and training based on race, national origin, sex, or religion 
and created the Equal Employment Opportunity Commission to investigate complaints 
of discrimination in the private sector. In 1972 the act was amended through the Equal 
Employment Opportunity Act to extend coverage to all public-sector employees (at the 
federal, state, and local levels) and to provide for stronger actions, including filing suits, 
against those who did not comply with the act. 

The original Civil Rights Act did not require affirmative action to correct past patterns 
of discrimination; this requirement was included in an executive order issued by President 
Johnson. Executive Order 11246 sought to secure compliance with the Civil Rights Act by 
requiring that federal contractors not discriminate on the basis of race, creed, or national 
origin and that they develop affirmative action programs leading to equal employment 
practices. President Johnson’s Executive Order 11375 later added women to the list of 
protected groups and specified requirements for affirmative action plans. 

These requirements were first applied to federal contractors, but were soon adopted 
elsewhere in government and the private sector. The Civil Rights Act of 1964 had 
declared “that it shall be the policy of the United States to ensure equal employment 
opportunities for federal employees,” but it was an executive order issued by President 
Nixon in 1969 that required agency heads to create “affirmative programs” in eliminat¬ 
ing patterns of discrimination (Shafritz, Hyde, & Rosenbloom, 1981, pp. 185-186). 
Similarly, state and local governments were brought under the provisions of the Civil 
Rights Act in 1972 and were threatened with loss of federal funds in the event of non- 
compliance. Title IX of the Higher Education Act of 1972 was interpreted to require uni¬ 
versities to provide equal athletic opportunities for both sexes in intercollegiate sports; 
the penalty was withdrawal of federal funds from universities found not in compliance. 

During the past two decades, however, there has been a waning of support for equal 
employment opportunity programs. Beginning in 1984, with the Supreme Court’s ruling 
in Grove City v. Bell (1984), limits on the applicability of civil rights legislation have been 
the source of considerable controversy. In Grove, the Court narrowly interpreted the law 
as it regarded sex discrimination to mean that federal funds were to be restricted from the 
particular program receiving funds rather than from an educational institution as a 
whole. This meant that if an English department was found guilty of discrimination, its 
federal funds would be cut off, but funds to other parts of the institution would not be. 

The effect of the Grove case was to severely limit enforcement power of the federal 
legislation dealing with sex discrimination, and, by implication, similar legislation dealing 
with discrimination based on race, age, or handicap. Barely a week after the Grove rul¬ 
ing, for example, the Department of Education dropped charges against the University of 
Maryland’s athletic programs because they did not receive federal aid — although the 



23 8 Chapter 6 The Management of Human Resources 

institution as a whole received substantial federal funding in scholarships, research 
money, and so on. Not surprisingly, legislation was soon introduced in Congress to put 
teeth back into the various civil rights laws. The Civil Rights Restoration Act, passed by 
an overwhelming bipartisan majority, applies not only to educational institutions, but to 
a wide range of other public and private organizations receiving federal funds. 

The Civil Rights Restoration Act, in many respects, proved to be the last of Congress’ 
progressive stances on civil rights. Since then, equal opportunity legislation has come 
under fire from a conservative judiciary (for example, Kimel v. Florida Board of Regents 
[2000] and University of Alabama v. Garrett [2001], which will be discussed in more 
detail), as well as from a conservative trend in legislatures at all levels of government. 
The result has been a shift in the balance of power toward employers and away from 
those petitioning on the grounds of discrimination. 

ADA 

In 1990, the Americans with Disabilities Act was passed. The purpose of the ADA is to 
prohibit discrimination against 43 million Americans who live with some type of disabil¬ 
ity. Beginning in 1992, the ADA prohibited employers of twenty-five or more persons 
from discriminating against people with disabilities who can satisfactorily meet the 
expectations of the job they hold or seek, with or without reasonable accommodation. 
A disabled person must be qualified, meet educational and skill requirements, and be 
able to perform the essential functions of the position. However, the employer is 
required to make reasonable accommodations to the work environment so the disabled 
person can perform to the best of his or her ability (Bishop & Jones, 1993, p. 122). 

With respect to public services, the ADA prohibits excluding a person from participat¬ 
ing in programs or activities of a public entity or denying an individual benefits of its ser¬ 
vices. A public entity is defined to include not only the federal government but any part 
of state or local government. Other sections of the act deal with transportation, public 
accommodations, and telecommunications. 

Although the ADA has substantially changed both employment patterns and the 
design of public facilities, a recent Supreme Court decision dealt a major blow to the 
enforceability of the law. In University of Alabama v. Garrett (2001), the Court reviewed 
a petition brought by employees of the state who claimed to have been discriminated 
against under the ADA. The Court ruled against the plaintiffs, stating that suits of this 
nature abrogate states’ immunity under the Eleventh Amendment. In doing so, the Court 
effectively blocked the rights of state employees to file suit for monetary damages in 
federal court for discrimination under the ADA. 

Questions of Compliance 

Early efforts to prove discrimination against an employer required proof of evil inten¬ 
tion—evidence that the employer was knowingly discriminating. The difficulty of proving 
intent led to a new focus on unequal treatment—proof that an employer used different 



Correcting Patterns of Discrimination in Public Employment 23 9 

selection procedures for different groups or used the same procedure in different ways. 
Still, under this definition, minorities made little progress entering the workforce. 

In 1971, however, the Supreme Court, in Griggs v. Duke Power Company, settled on 
a new definition, adverse or disparate impact. The Griggs decision held that it was no 
longer necessary to prove discriminatory motive or differential treatment; it was simply 
necessary to show that employment practices affect one group more harshly than 
another. The Court stated, “Practices, procedures, or tests neutral on their face, and even 
neutral in terms of intent cannot be maintained if they operate to ‘freeze’ the status quo 
of prior discriminatory practices” (Hays & Reeves, 1984, p. 354). 

The notion of adverse impact has been articulated more fully in a set of Uniform 
Guidelines agreed upon by federal agencies. Under the Uniform Guidelines, employers are 
required to keep records indicating the relationship between those hired and minorities, 
including women, available in the community and the comparative success of various 
groups in selection for a position. If, for example, women constitute 50 percent of the 
labor market, yet only 20 percent of the workforce are women, there is evidence of adverse 
impact. (Actual figures show that about 41 percent of employees in local government are 
women, 41 percent of employees in state government are women, and 43 percent of 
employees in federal government are women. And, of course, women are disproportion¬ 
ately represented in lower-paying positions, such as secretarial or clerical jobs.) 

The guidelines also follow another aspect of the Griggs case in requiring employers 
whose practices are found to have adverse impact to demonstrate the job relatedness of 
tests or procedures used in hiring or promotion decisions. That is, if a screening test can¬ 
not be shown to relate specifically to job performance, then it cannot be used as a criterion 
in making employment decisions. Elimination of the Professional and Administrative 
Career Examination (PACE), which we noted earlier, is a classic case of the job-relatedness 
issue. In a court challenge, it was ruled that the PACE exam, at that time the primary test 
given to applicants for federal managerial positions, was not related to the eventual jobs 
these persons would hold and had an adverse impact on African Americans and Hispanics. 
For this reason, the exam was shelved. 

A conservative shift in the Supreme Court, however, led to an end in these protective 
standards. In Wards Cove v. San Antonio (1989), the court reversed the Griggs interpreta¬ 
tion of Title VII and ruled that plaintiffs, not employers, must substantiate their position 
in discrimination cases. In particular, the court deemed unconstitutional the earlier ruling 
that allowed the establishment of a prima facie case based on the so-called four-fifths 
rule—that is, when minority hires constitute less than 80 percent of the nonminority 
hires. While the Wards Cove packing plant paid minority employees less and segregated 
their living and dining quarters, justices said that the workers would have to prove that 
such practices created a gap between the percentage of minorities actually employed and 
the percentage in the workforce. 

Federal lawmakers tried repeatedly to counter the Wards Cove ruling and restore 
the more progressive provisions of Griggs, finally adopting the Civil Rights Act of 1991. 
In many respects, though, the act only confused the issue of Title VII protection. 
Progressive critics argued that too much had to be sacrificed in order to gain the act’s 
approval. While it contained several important provisions, such as extending the defini¬ 
tion of discrimination to personnel decisions other than hiring and promotion, the act 



240 Chapter 6 The Management of Human Resources 

still placed in the court’s hands the final decision on what can be considered discrimina¬ 
tion in the workplace. 

Consequently, the courts have continued to narrow the bounds on what constitutes dis¬ 
crimination. The Supreme Court’s decision in University of Alabama v. Garrett (2001) was 
discussed previously, but another example of this trend can be seen in Kimel v. Florida 
Board of Regents (2000). In Kimel, the Court considered a challenge to the Age Discri¬ 
mination in Employment Act (ADEA) that allows suits to be filed against state governments 
for monetary damages on the grounds of discrimination in employment decisions. The case 
was filed by three sets of petitioners in Florida, who claimed to have experienced discrimi¬ 
nation on the basis of age during the employment process. However, the Court not only 
ruled against the plaintiffs, but also criticized Congress for passing the ADEA in the first 
place. The Court held that (1) “age is not a suspect classification under the Equal Protection 
Clause, and so states may discriminate on the basis of age without offending the Fourteenth 
Amendment, if the age classification in question is rationally related to a legitimate state in¬ 
terest” and (2) Congress had “failed to identify a widespread pattern of age discrimination 
by states, and it concluded this failure confirms that Congress had no reason to believe that 
broad prophylactic legislation was necessary in this field” (Wise, 2001, p. 348). 

The long-term impact of the University of Alabama v. Garrett and Kimel decisions 
remains to be seen, but the immediate effect is that the burden of proof now lies with the 
plaintiff on matters of discrimination. Moreover, given the underlying message in the 
Court’s rulings, it appears that even the statutory foundation of equal opportunity 
employment has come under scrutiny, leaving us to wonder if our days of formal protec¬ 
tion against discrimination may be numbered. 

Affirmative Action and Reverse Discrimination 

Another area of intense controversy involves attempts to correct past patterns of dis¬ 
crimination against minorities and women, namely the use of affirmative action pro¬ 
grams. Such plans typically include (1) a statement of policy indicating a commitment to 
correct discrimination with respect to employment practices; (2) an analysis of existing 
practices and their results; and (3) a statement of goals to improve those practices. 

Unfortunately, a great deal of popular and legal confusion has developed around the 
notion of goals and quotas, often resulting in charges of reverse discrimination against 
white males. Although quotas require hiring specific numbers of people from specific 
groups (and are rarely used in actual practice), goals or timetables are intended to be 
flexible and are to be established internally by the employer. Both goals and quotas may 
involve numbers (and this causes some of the confusion), but the goals are merely 
intended to show a direction in which an employer wishes to move; generally, a good 
faith effort in that direction will be viewed as satisfactory in terms of providing opportu¬ 
nities for equal employment. 

Even the Supreme Court has found it difficult to clarify exactly what is acceptable and 
what constitutes reverse discrimination. In Bakke v. The Regents of the University of 
California (1978), the Supreme Court ruled that it was illegal for a university to reserve a 
specific number of slots in its medical school for minority applicants who were less qualified 
than other students who were rejected. The Court agreed that race could be considered one 
factor in an admissions decision, but only one among several. 



Correcting Patterns of Discrimination in Public Employment 241 

On a slightly different issue, the Court held in United Steel Workers of America v. Weber 
(1979) that a training program that admitted black workers before white workers with 
more seniority was acceptable. The key here seemed to be that the company initiated 
the program voluntarily to eliminate obvious patterns of discrimination and that it did 
not necessitate the discharge of white workers (Stewart, 1983). On the other hand, in 
Firefighters Local Union #1784 v. Stotts (1984), the Court held that a lower court could not 
order an employer to lay off more senior employees in favor of less senior employees on the 
basis of race to preserve a specific percentage of minority employees. The emerging consen¬ 
sus, reflected in such recent cases as United States v. Paradise (1987) and Johnson v. 
Transportation Agency (1987), seems to be that affirmative action programs will be limited 
to specific needs and circumstances. Broad-scale programs are not likely to be accepted. 

More recently, the federal courts also have begun to hear challenges to affirmative 
action programs used by universities to increase student diversity. Following a federal 
appellate court’s decision in Hopwood v. University of Texas Law School (1996), in 
which the school was barred from using race as a factor in admissions decisions, several 
suits were filed against institutions across the country, including the University of 
Michigan, University of Maryland, University of Georgia and others. 

Given this trend, as well as the increasingly conservative view in Washington and in 
many states, as evident in California’s Proposition 209 (1996) that ended affirmative 
action programs, the future of affirmative action seems questionable. Some suggest that 
while preferences and so-called set asides leveled the playing field, they no longer offer 
what the nation needs to ensure a diverse workforce. Unfortunately, though, the dis¬ 
course on the issue often degenerates into political rhetoric with both sides losing sight 
of an important principle—that is, not only must all persons have an equal opportunity 
to serve but also that the distinct contribution made by each person must be appreciated. 
By pursuing an agenda to enhance diversity, organizations may gain important contribu¬ 
tions from a broader range of viewpoints. 

A few alternatives have been offered for promoting and sustaining such diversity, 
including several strategies that target the underlying culture of organizations. The process 
begins with creating a shared sense of purpose toward diversity, then empowering those at 
all levels to contribute action steps for achieving this goal. Periodic assessments can be 
used to determine how successful the organizational change has been and to identify any 
future barriers the group may need to overcome. The U.S. Forest Service, for example, has 
been working on the issue of diversity for a number of years. The Forest Service takes the 
position that since the character of the nation’s workforce is changing, the character of the 
Forest Service must also change. “To be competitive in the business sense, the Forest 
Service must have a multicultural workforce that is representative of our multicultural 
society. Such a workforce will increase the productivity and quality of the organization” 
(Denhardt, 1993, p. 118). 

The Glass Ceiling 

Unfortunately, extending diversity throughout the organization, especially at the highest 
levels of management, has proven difficult. While the representation of women and 
minorities in the federal workforce has generally improved along with their representation 
in the middle- and upper-management levels, certain groups remain underrepresented in 



242 Chapter 6 The Management of Human Resources 

the overall workforce, and white women and all minorities remain underrepresented in the 
key jobs that lead to middle- and upper-management positions. Similarly, at the state and 
local level, about 41 percent of government employees are women, but they still fill only 
27 percent of the management positions. 

The “glass ceiling” encountered by many women and minorities has been recognized 
in several recent studies. Data from OPM revealed that “women were promoted less than 
men who had comparable amounts of formal education and experience and who entered 
government at the same grade levels as the women; and women face obstacles to advance¬ 
ment at lower levels in the pipeline. For those women who have advanced, it usually 
meant staying late, relocating, or working longer hours” (Desky, 1992, p. 1). Recognizing 
these concerns, the Civil Rights Act of 1991 set up a glass ceiling commission to study the 
barriers to the advancement of women and minorities in the private sector. 

However, efforts to remove the glass ceiling have been thwarted by similar trends 
affecting affirmative action, and only rarely does the issue of equitable treatment for 
women in the workplace receive its share of the national spotlight. Congress in 2000 
addressed the issue by passing the Equity Contracting for Women Act, which encourages 
contractors to do business with women-owned businesses in industries where women are 
underrepresented. The downside of the legislation is that it relies mainly on market 
forces to achieve parity, meaning that firms are not obligated to contract with women 
contractors. 

The result of these trends is that despite some gains made by women to achieve equal 
treatment, they still experience a significant gap in pay, job status and overall employ¬ 
ment opportunity. Recent figures suggest that more women are becoming entrepreneurs 
now than a decade ago, with about 37 percent of American firms owned by women 
compared to 22 percent, and that the pay gap has closed to 76 cents from 61 cents on 
each dollar of a man’s salary. The divide has even closed for minority women, who now 
earn 61 cents to each dollar earned by a white male. But supporters of women’s rights 
argue that these figures, rather than marking a significant improvement for women, tend 
to be used more as ammunition for lawmakers who want to end affirmative action and 
other civil rights programs. 

The political debate in Washington, and in communities across the country, has shifted 
so far away from any type of set-asides or preferential treatment that even advocates for 
women find themselves side-stepping the labels outright in their efforts to lobby for new leg¬ 
islation. In fact, even some advocates for protection on the basis of race, sexual preference 
and other factors have turned away from protection of women, arguing that women have 
achieved equal opportunity and that continuation of affirmative action not only would give 
an undue advantage but that it will begin to negatively affect women’s self-perception. 

The Debate over Comparable Worth 

One more aspect of the affirmative action question focuses on what has come to be 
called comparable worth. The idea of comparable worth is that men and women in jobs 
that are not identical but require similar levels of skill and training should be paid 
equally. To understand this distinction, consider two questions: 



Correcting Patterns of Discrimination in Public Employment 143 

1. Studies have shown that female electricians make less money on the average than male 
electricians doing the same work. In situations like this, should employers be required by 
law to increase women’s pay to equal that of men? 
2. Studies have shown that nurses, who have greater job skills and more extensive 
responsibilities than electricians, make less money on the average than electricians. 
Most nurses are women and most electricians are men. In situations like this, should 
employers be required by law to increase nurses’ pay to match their job skills and 
responsibilities? 

The first question raises the familiar issue of equal pay for equal work; the second 
rests on the concept of equal pay for comparable work. The comparable worth issue has 
its roots in Title VII of the Civil Rights Act of 1964, which prohibited discrimination 
based on sex, and in the Equal Pay Act of 1963, which provided for equal pay “on jobs 
the performance of which requires equal skills, effort, and responsibility, and which are 
performed under similar working conditions.” These two pieces of legislation (primarily 
the former) provide the basis upon which action can be taken to redress past patterns of 
discrimination. 

Here is how it works. Persons in a female-dominated field seeking to prove discrim¬ 
ination would have to convince a court that their work requires equal skills, effort, 
and responsibility, and is performed under working conditions similar to those in a 
comparable male-dominated field. If these matters could be proven, the defendant 
company or agency would then have to convince the court that the reason for the dif¬ 
ference was not sex discrimination but rather something that occurred under one of 
the Equal Pay Act’s exceptions. These exceptions permit paying workers of different 
sexes different wages where there is (1) a seniority system, (2) a merit system, (3) a sys¬ 
tem that measures earnings by quantity and quality of production, or where the differ¬ 
ential is based on a factor other than sex; for example, where there is a scarcity of peo¬ 
ple to fill a particular job. 

The issue of comparable worth became a hot topic recently in the nonprofit sector, 
when a report revealed sharp disparities in management positions and pay scales at char¬ 
itable organizations. According to a GuideStar survey of 75,000 charities nationwide, 
women are less likely than men to serve in executive roles at larger (and better paying) 
organizations, but even when they do act as top managers they are paid anywhere from 
21 percent to 47 percent less than their male counterparts (Lipman, 2001, p. 33). The 
purpose of the study was to provide a benchmark for nonprofits to use when setting 
pay scales, as a way of staying in line with federal guidelines. However, the report’s 
sponsors said they hoped the study would do more to level the playing field for women 
in philanthropy. 

Those who argue against the concept of comparable worth hold that even the best 
available job analyses cannot properly compare apples and oranges and that, even if they 
could, it would be improper (as well as excessively costly) to intervene in wage setting. 
It is much better, they contend, to let the market decide prevailing wages in various occu¬ 
pations and for women who desire higher pay to train for different jobs. On the other 
hand, those who favor the notion of comparable worth point out that the full-time earn¬ 
ing power of women has consistently been about 60 percent of that of men over the past 



244 Chapter 6 The Management of Human Resources 

decade and that where pay differentials are clearly the result of'patterns of sex discrimi¬ 
nation, corrective action should be taken. 

Again, regardless of the outcome of specific cases, it is clear that managers in public 
and private organizations need to be attentive to shaping employment policies so as to 
eliminate discrimination from the workplace. Whether in the area of affirmative action 
generally or in the area of comparable worth, a manager is well advised to understand 
the issues clearly and to take positive measures to create more equitable circumstances in 
the public workplace. 

Political Appointee-Career Executive Relations 

The tension between political responsiveness and managerial effectiveness that character¬ 
izes public management is especially well illustrated in the relationship between political 
appointees and career executives. Each newly elected administration, whether at the fed¬ 
eral, state, or local level, has a certain number of top-level managerial positions to fill 
with persons of its choosing. These appointees become the bosses of career civil servants 
who staff the various agencies of government. As you might imagine, there is occasion¬ 
ally some tension between the two groups. Incoming presidents are usually elected on a 
platform of change and view career employees as representing opposition to change 
(Colvard, 1992, p. 17). The political executive wants to move in new policy directions, 
but often has little experience in government operations; the career executive, on the 
other hand, has both knowledge and expertise, but, aware of potential problems, may 
appear reluctant to change. 

The inevitable tension between political executives and careerists has become even 
more pronounced in recent years. Many argue that both the Carter and Reagan admin¬ 
istrations came into office with a serious misunderstanding of the role of civil servants 
and, consequently, encountered difficulties in their relationships with the career service. 
Both presidents had, in a sense, run against the bureaucracy, pledging to clean up the 
mess in Washington. Consequently, during the early days of their administrations, both 
presidents seemed mistrustful of career bureaucrats and felt that civil servants were 
inflexible and tied to the policies and programs of previous administrations. Both the 
first President Bush and President Clinton were more tempered in their criticism of the 
federal bureaucracy and indeed sought to establish more positive relations with career 
civil servants. 

In any case, sorting out the relationship between politically appointed executives and 
career executives returns us to the old question of politics and administration. One in¬ 
terpretation suggests that the role of the career executive is solely to execute orders 
given by superior authorities—elected officials and their appointees. In the most ex¬ 
treme formulation of this view, the career executive should be isolated from any in¬ 
volvement in policy development and should concentrate on implementing policies 
handed down from above. 



Political Appointee-Career Executive Relations 245 

BOX 6.6 

Education of Political Appointees 

I recall an instance in which I was instructed by a new cabinet secretary to award a 
sole source contract of substantial dollar value to an individual who had been active 
in the presidential campaign which had just ended. The contract would have provided 
a service for which many other firms were qualified, and one clearly could not make 
a reasonable ease of unique capability, which would justify a sole source procure¬ 
ment. I indicated to the secretary that while a sole source procurement in this instance 
violated federal procurement regulations, he possessed the authority to approve it. 
I further advised, however, that to award the proposed contract would be a serious 
error since it would be perceived as political favoritism which would only embarrass 
him and undermine his credibility, 

[In another case], I had pointed out to an assistant secretary, who had been an J 
executive with a major bank, the advisability of consulting with, or at least providing 
advance notice to, the chairman of the appropriate congressional committees on 
action to be taken. In rejecting my advice, I was told “at the bank when we decided 
to change minimum deposit requirements, we merely posted an announcement. We’ll 
decide and then tell them what we’ve done.” Needless to say, throughout the assistant 
secretary’s tenure, he never had good relations with the Congress. 

SOURCE: Excerpted from Alfred M. Zuck, “Education of Political Appointees,” The Bureaucrat 13 
(Fall 1984): 17. Reprinted by permission. 

In contrast to this extreme position, career executives and many others find another 
interpretation of the politics-administration issue more appealing. This view holds that 
there are important reasons for career executives’ involvement in policy development 
(see Box 6.6). Certainly, career executives have the background and expertise to con¬ 
tribute substantially to developing practical and effective public policies. In addition, 
these executives are likely to be more effective in implementing policy if they have been 
involved in developing it, if they understand the need for policy changes, and if they feel 
some sense of ownership of the new policies. 

Political appointees, on the other hand, generally come to government with relatively 
little knowledge about their subject matter (at least compared to career bureaucrats) and 
certainly with little understanding of how policies are developed in a governmental set¬ 
ting. While the average tenure of career civil servants is over thirteen years, political ex¬ 
ecutives last an average of only eighteen to twenty-two months. If the stereotype of the 
bureaucrat is one of hostility to any change, the stereotype of the political appointee is 
someone brash, inexperienced, and intent on “quick and flashy change” (Lorentzen, 
1985, p. 411). 



246 Chapter 6 The Management of Human Resources 

The Relationship between Political and Career Executives 

Assuming that political appointees and career executives are going to work side by side, 
how might their relationship be improved and their work together be made more effec¬ 
tive and more responsible? Paul Lorentzen, a former federal executive, summarizes the 
major problems in the relationship: 

1. the new political appointee’s lack of knowledge of and prior experience in the public 
sector 
2. the need of career staffs to learn about the new leadership’s policy goals and directions 
3. the joint need of the political appointees and executives to understand each other’s 
perceptions, attitudes, role perspectives, and values (Lorentzen, 1984, p. 8) 

There have been several efforts to define a more effective relationship between political 
appointees and career executives. A1 Zuck, a former career official in the Department of 
Labor and elsewhere emphasizes the responsibility of the career executive. Zuck writes, 
“Career executives have a distinct advantage and, therefore, a distinct educational respon¬ 
sibility, as it relates to the substantive knowledge of program content and history, as well 
as the knowledge of government processes to get things done. They possess invaluable 
institutional knowledge which can be of great assistance to political executives” (Zuck, 
1984, p. 18). Based on this perspective, Zuck makes the following suggestions as to how 
the career executive can relate most effectively to the political appointee: 

1. A successful relationship between career executives and political appointees must begin 
with the career person’s recognition that policy changes can and will occur and that the 
career staff will be used as an instrument of change. 
2. Career executives need to act professionally; the career executive should offer the best 
advice, information, and insight that his or her experience has provided. 
3. The career executive must be careful not to be too bureaucratic — so bound by proce¬ 
dures and processes that nothing gets done. 
4. Options or alternative courses of action should be provided to political officials so 
they have full and complete information about their various choices. 
5. The career executive should expect to have one’s advice ignored or rejected. “Not only 
is it likely that one’s advice is not always sound, but also each administration and politi¬ 
cal appointee has the right to fail” (Zuck, 1984, p. 18). 

There appear to be at least three areas in which further improvements might be made in 
the relationship between political appointees and career executives. First, political 
appointees must receive the training and orientation they need to effectively manage public 
organizations and to work with career executives both in developing and implementing 
policies. Second, an exchange of views between political leaders and careerists, including 
team-building sessions between politically appointed executives and career executives, may 
help to develop greater understanding between the groups and forge more effective work¬ 
ing relationships. Third, Congress should reassess the structure of executive management 
in government and make whatever structural changes are needed to establish a more 
balanced political-career interface. But the basic dilemma continues: the political appointee 



Summary and Action Implications 247 

must make sure that the bureaucracy is responsive to the policy directives of the current 
president; the career executive must maintain high standards of professionalism so that the 
work of the organization is carried out in the best way possible. 

Summary and Action Implications 

Personnel systems in the public sector have evolved in response to a variety of competing 
demands. Much of the earliest personnel legislation at the federal level was directed 
toward assuring a neutral and competent bureaucracy protected from the potentially 
corrupting influences of politics. More recent efforts have sought greater responsiveness 
on the part of the bureaucracy to political leadership. Personnel systems in the public 
sector—like systems of budgeting and financial management — reflect important, though 
sometimes changing, values. 

The development of merit systems of public employment reflects such concerns. 
At the root, policies governing recruitment and classification in the public sector reflect 
the fact that public organizations must, by definition, operate in the public interest. 
Similar concerns significantly affect the way contemporary issues such as conditions of 
employment (for example, drug testing), labor-management relations, and comparable 
worth are played out in the public sector. 

As a manager, you must be concerned with recruitment, training, and retention of the 
best possible people to work in your organization. You may often feel that public per¬ 
sonnel systems and the people who monitor them are simply roadblocks to effective 
management. Fortunately, in many jurisdictions, the relationship between manager and 
personnel officer is shifting in a more positive direction. 

Personnel managers have been given the responsibility of protecting the merit system 
from abuse by maintaining detailed records of personnel transactions and enforcing per¬ 
sonnel rules and procedures. Personnel officers have thus often been placed in the posi¬ 
tion of exercising control over the activities of program managers. But public personnel 
officers, like their private-sector counterparts, have always had another role as well — 
helping managers employ and utilize personnel effectively. 

Although this service aspect of the personnel officer’s role has often been treated as a sec¬ 
ondary function, there is every reason to believe that the more progressive personnel systems 
will increasingly emphasize this aspect. Increasingly, personnel officers are shifting from the 
traditional emphasis on compliance to a new emphasis on consultation. In this role, those in 
personnel will be available to help with human resource management questions of all kinds; 
for example, a personnel specialist might be called in to help develop a productivity improve¬ 
ment program or to advise on legal questions. As this new orientation becomes established, 
line managers will tend to view the personnel officer more as an ally than as a protagonist. 

Consequently, you are likely to be more effective as a public manager if you are able 
to develop a good understanding of the technical details of personnel transactions and 
an effective working relationship with the personnel professionals in your agency. The 
support of trained experts in the field of personnel management can help improve your 
organization’s performance and, in turn, its service to the public. 



248 Chapter 6 The Management of Human Resources 

Terms and Definitions 

Adverse or disparate impact: Criterion for showing that employment practices affect 
one group more harshly than another. 

Affirmative action: Use of positive, results-oriented practices to ensure that women, 
minorities, handicapped persons, and other protected classes of people will be equi¬ 
tably represented in an organization. 

Bargaining unit: The organization that will represent employees in conferring and 
negotiating various issues. 

Comparable worth: Notion that men and women in jobs that are not identical but 
require similar levels of skill and training should be paid equally. 

Equal employment opportunity: Refers to efforts to eliminate employment discrimi¬ 
nation on the basis of race, ethnic background, sex, age, or physical handicap; ensures 
that all persons have an equal chance to compete for employment and promotions 
based on job qualifications. 

Final-offer arbitration: Technique in which both parties must present their best 
offer with the understanding that an arbitrator will choose one or the other with¬ 
out modification. 

Job description: A thorough analysis of the work to be done and the capabilities for a 
job; typically contains these elements: job title, duties required, responsibilities, and 
job qualifications. 

Lateral entry: Entry into government positions at any level. 

Merit pay: Increases in salary and wages that are tied to actual quality of work 
performed. 

Merit principle: Concept that selection and treatment of government employees 
should be based on merit or competence rather than personal or political favoritism. 

Position classification: Analyzing and organizing jobs on the basis of duties, responsi¬ 
bilities, and knowledge and skills required to perform them. 

Rule of three: Provision of most merit systems that requires at least the top three appli¬ 
cants’ names to be forwarded to the hiring official to allow some flexibility in selection. 

Sexual harassment: Any unwarranted and nonreciprocal verbal or physical sexual 
advances or derogatory remarks that the recipient finds offensive or that interfere 
with his or her job performance. 

Spoils system: The ability to give government jobs to the party faithful; “to the victor 
belongs the spoils.” 

Structured interviews: Those in which a previously developed set of questions is used 
with each applicant. 



Cases and Exercises 249 

Unit determination: Decision to include or exclude certain groups in a bargaining unit. 

Whipsaw tactics: Argument that pay or benefits negotiated by one group should be 
applied to others. 

Study Questions 

1. “To the victor belongs the spoils” was a phrase used to define the spoils system for 
filling vacancies of government jobs. Discuss the historical use of this system and its 
contemporary manifestations. 

2. What was the Pendleton Act, and how did it help to reform federal personnel 
procedures? 

3. Explain the basic principles of the civil service system. 
4. Discuss some of the basic problems President Carter faced regarding personnel/civil 

service reform. 
5. The Civil Service Reform Act provided for various changes in personnel procedures. 

Explain the importance of this legislation and discuss the impact of major provisions 
on the civil service system. 

6. What are some of the criticisms of the Civil Service Reform Act? 
7. List the steps in recruiting for a government position. 
8. Identify various methods of testing and screening applicants. 
9. Discuss government methods to combat discrimination in employment activities. 

10. What are some of the tools governments use to ensure compliance with equal 
employment opportunity regulations? 

11. Discuss the pros and cons of comparable worth in pay systems. 
12. With changing labor-management relations, public unionization has become an issue. 

Explain the factors public managers must recognize to unionize the public sector. 
13. Discuss the major components of the bargaining process. 
14. Identify arguments against strikes by public employees and give a few examples of 

strikes that have occurred. 
15. Discuss the relationship between political appointees and career executives and how 

it might be improved. 

Cases and Exercises 

1. Consider the following case: You are Steve Style, a programming director in a large 
city’s data-processing department. You manage five sections of computer program¬ 
mers, each made up of a senior programmer and three to four trainees. The depart¬ 
ment generates computer systems for the other city departments, thus requiring you 
and your staff to spend a lot of time with the users of the systems. Your staff has a 
reputation throughout the city for being highly professional. For some time, your 



250 Chapter 6 The Management of Human Resources 

boss, Tom Traffic, has been talking about the need to expand the programming staff 
by adding a database administrator. 

A few months ago, a new police chief was hired, brought in from another city. In 
the past, when a new department head came in, if he or she were married, the spouse 
also found a job somewhere in city government. You had heard that the police chief’s 
wife has a degree in computer science. On Monday, Tom calls to tell you he has just 
hired Muffy Mann as the database administrator in your area. Tom is happy to get 
someone with Muffy’s education and background, which includes working for several 
software companies. Tom also tells you that Muffy is the police chief’s wife and that 
she will be making more money than any of your current senior programmers. 

Excited about the addition of a database administrator, you go to tell the staff about 
the program expansion. Rather than the positive reaction you had expected, they are 
quite negative. David Denman, the most experienced programmer, is upset for two rea¬ 
sons. First, is she not the police chief’s wife? It sounds to him like a deal was made. 
And, second, why did not any of the current staff have a chance to interview for the 
new position? Another staff member leaves the meeting grumbling about how much 
money Muffy will be making in comparison to the other senior programmers. 

You go back to your office trying to figure out how to deal with this problem. You 
are looking forward to having a database administrator, and from what Tom tells you, 
Muffy is well qualified. You are concerned about the staff’s reaction. You know you will 
face an uphill battle to convince the users that Muffy is qualified for the position. 
• As a practical matter, how does an administration deal with the problem of a 

“qualified spouse”? 
• How do you justify to your staff the fact that Muffy is making a higher salary than 

any of them and that they did not have the chance to interview for the position? 
• How does the personnel office handle this problem in light of the city’s civil service 

system? 

SOURCE: The preceding case was provided by Perri Lampe. 

2. Through contacts with the U.S. Office of Personnel Management, the state’s personnel 
office, and the city’s personnel office, learn as much as you can about finding employ¬ 
ment in a government agency in your area. Address such questions as 
• What kinds of positions are typically available? 
• What should you expect in terms of the salary range for entry at the bachelor’s or 

master’s level? 
• What benefits and salary increments are associated with these positions? 
• What is the hiring process (how do you apply; what types of tests or interviews are 

required; who makes the final decision)? 
In addition, contact a variety of nonprofit organizations in your community or a 

representative of the American Society of Association Executives to discuss career 
possibilities in the nonprofit sector. Make your report available to students on campus 
through your academic department and through your school’s placement center. 

3. Obtain a copy of your schools policy (or policies) on sexual harassment regarding 
administrators, faculty, staff, and students. Based on conversations with knowledgeable 



Cases and Exercises 2J1 

faculty and other school officials, as well as your own reading and research, analyze the 
policy in terms of the following questions: 
• Does the policy define sexual harassment in terms that are generally understandable? 
• Does the policy specify particular types of actions that will be considered harassment? 
• Are there clearly defined procedures through which charges of harassment can be 

brought and heard? 
• Are there specific penalties, including dismissal from the school, for prohibited actions? 
• Has the policy been employed in actual cases with success? 
• Does the policy act as a deterrent to sexual harassment? 
• Are there training programs or other educational materials available to help admin¬ 

istrators, faculty, and students understand the issue of sexual harassment specifically 
and gender sensitivity more generally? 

• What would you suggest to strengthen, to clarify, or to more easily enforce the policy? 

SOURCE: The preceding exercise was adapted from material provided by Charles Sampson of the 
University of Missouri-Columbia. 

4. Form small groups to complete the following exercise. 
You have just accepted membership on the Energy Resources Commission 

Recruitment (ERC) Task Force. This task force was recently created by the newly 
elected governor. The purpose of the task force is to develop recruitment strategies to 
staff the ERC, which has just been established to fulfill the following functions: 
• Determine the future energy needs for the state. 
• Develop strategies to meet these needs. 
• Provide technical assistance to the public utilities and agencies involved in meeting 

these needs. 
Special recruitment problems are anticipated because this is a completely new 

agency that will require a significant number of professional and technical personnel. 
The task force has been charged with the responsibility for developing specific action 
plans to recruit the required personnel over the next three years. The ERC will require 
approximately 250 employees by the end of this three-year period, in the following 
categories: 

1. management and management staff (50 employees) 
2. clerical support staff (65 employees) 
3. professional/technical personnel (100 employees) 
4. blue-collar/maintenance-type personnel (35 employees) 

Factors that may or may not complicate the recruitment effort include the following: 
1. The primary sources of employment in the state are in agriculture, mining, and 

transportation. 
2. The population of the state totals 10 million, but almost 40 percent of the popu¬ 

lation resides in a single upstate metropolitan district. 
3. The political environment has traditionally been characterized by conflict 

between upstate Democrats and downstate Republicans. 
4. This political competition has produced extensive reliance on patronage as the 

means for staffing most public agencies. 



2J2 Chapter 6 The Management of Human Resources 

5. Control of state government has just shifted to the Republicans after twelve years 
of Democratic control, but one of the new governor’s major campaign promises 
was to professionalize the personnel system and expand civil service coverage to 
most state employees. 

6. During the campaign, the governor also committed himself to hiring within the 
state whenever possible. 

7. The state is currently involved in two employment discrimination lawsuits: one 
brought by the National Organization for Women, and the other by the NAACR 

8. Racial minorities compose 15 percent of the population, but most of these indi¬ 
viduals reside in the upstate metropolitan area. 

9. Of the total state workforce, 22 percent are women and 4 percent are classified 
minority. 

10. The unemployment rate for the state is 12 percent, but most of the unemployed 
reside in the upstate area. 

11. The unemployment rate by occupational class is as follows: 18 percent blue-col¬ 
lar, 7 percent white-collar, and 3 percent professional/technical. 

12. The unemployment rate for minorities is 21 percent, and the rate for women is 
16 percent. 

13. Public-sector unionization is in its early stages of development in the state. 
Unions are competing for membership and becoming more and more militant. 
A key demand, which is currently before the legislature, is to establish an “union 
shop” for public utility employees. 

14. Citizens’ groups and professional associations actively lobbied for the creation of 
the ERC. 

15. The ERC is being partially funded by a federal grant-in-aid program that, in ad¬ 
dition to requiring 50 percent matching funds from the state, also requires estab¬ 
lishment of a merit system to ensure nondiscrimination in employment. 

The task force is to design a specific recruitment strategy to meet all the staffing 
needs of the new Energy Resources Commission. Besides paying particular interest 
to the characteristics delineated above, you might also consider the following in your 
deliberations: 

1. Need and approach for determining the commission’s specific staffing requirements 
2. Characteristics of the labor market geographically and by occupational field 
3. Level and availability of the state’s labor resources 
4. Extent of search process for candidates geographically and occupationally; type 

of institutions/organizations/agencies to be covered in recruitment process 
5. Qualification standards (education, training, work experience, residency, physical 

characteristics, and so on) that should be required for each occupational category 
in the commission 

6. Implications of these standards for the recruitment effort 
7. Selection devices (tests, practical or aptitude type; credentials examination; 

interviews, and so on) and their effect on recruitment 
8. Whether recruitment should be for specific jobs, or for a career (and the 

implication of this decision for qualification standards, selection devices, and 
so on) 



For Additional Reading 253 

9. Recruitment approaches for each occupational category; for example, job announce¬ 
ments, written brochures and materials, recruitment visits (and institutions that will 
be covered, if any), use of professional/collegial contacts (whose?), and so on 

10. Consideration of the factors to emphasize to prospective candidates (that is, what 
would be the attractive aspects of a job/career in this agency in this locale) 

For Additional Reading 

Beaumont, P. B. Human Resource Management: Key Concepts and Skills. Newbury 
Park, CA: Sage Publications, 1993. 

Capozzoli, Thomas, and R. Steven McVey. Managing Violence in the Workplace. 
Delray Beach, FL: St. Lucie Press, 1996. 

Cayer, N. Joseph. Public Personnel Administration in the United States. 2d ed. 
New York: St. Martin’s Press, 1986. 

Coleman, Charles J. Managing Labor Relations in the Public Sector. San Francisco: 
Jossey-Bass, 1990. 

Cooper, Phillip J., Linda P. Brady, Olivia Hidalgo-Lardeman, Albert Hyde, Katherine C. 
Naff, Steven Ott, and Harvey White. Public Administration for the Twenty-First 
Century. Fort Worth, TX: Harcourt Brace College Publishers, 1998. 

Dresang, Dennis L. Public Personnel Management and Public Policy. Dallas, TX: 
Pearson Publications, 1999. 

Farnham, David. Managing People in the Public Service. Basingstoke: Macmillan 
Business, 1996. 

Goldstein, Irwin L. Training in Organizations: Seeds Assessment, Development, and 
Evaluation. 3d ed. Pacific Grove, CA: Brooks/Cole, 1993. 

Guy, Mary E., ed. Women and Men of the States. Armonk, NY: M. E. Sharpe, 1992. 
Huddleston, Mark, and William Boyer. The Higher Civil Service in the United States. 

Pittsburgh: University of Pittsburgh Press, 1996. 
Ingraham, Patricia, and Ban, Carolyn, eds. Legislating Bureaucratic Change: The Civil 

Service Reform Act of 1978. Albany: State University of New York Press, 1984. 
Jackson, Susan E., ed. Diversity in the Workplace: Human Resource Initiatives. 

New York Guilford Press, 1992. 
Kearney, Richard C. Public Sector Performance Management, Motivation and 

Measurement. Boulder, CO: Westview Press, 2000. 
Klingner, Donald E., and John Nalbandian. Public Personnel Management. 4th ed. 

Englewood Cliffs, NJ: Prentice-Hall, 1997. 
Lane, Larry M., and James F. Wolf. The Human Resource Crisis in the Public Sector: 

Rebuilding the Capacity to Govern. New York: Quorum Books, 1990. 
Maranto, Robert, and David Shultz. A Short History of the United States Civil Service. 

Lanham, MD: University Press of America, 1991. 
National Academy of Public Administration. Modernizing Federal Classification: 

An Opportunity for Excellence. Washington, DC: National Academy, 1991. 



Chapter 6 The Management of Human Resources 

Nigro, Lloyd G., and Felix A. Nigro. The New Public Personnel'Administration. 4th ed. 
Itasca, IL: F. E. Peacock Publishers, 1993. 

Risher, Howard, Charles H. Fay et al. New Strategies for Public Pay. San Francisco: 
Jossey-Bass Publishers, 1997. 

Robinson, Dana Gaines, and James C. Robinson. Performance Consulting. San Francisco: 
Berrett Koehler Publishers, 1995. 

Selden, Sally Coleman. The Promise of Representative Bureaucracy. Armonk, NY: M. E. 
Sharpe, 1997. 

Shafritz, Jay M., Albert C. Hyde, and David H. Rosenbloom. Personnel Management in 
Government: Politics and Process. 4th ed. New York: Marcel Dekker, 1991. 

Sloane, Arthur A., and Fred Witney. Labor Relations. 8th ed. Englewood Cliffs, NJ: 
Prentice-Hall, 1994. 

Sylvia, Ronald D. Critical Issues in Public Personnel Policy. Pacific Grove, CA: 
Brooks/Cole, 1989. 

Thompson, Frank J. Classics of Public Personnel Policy. Pacific Grove, CA: Brooks/Cole, 
1991. 



Chapter 7 

Planning, Implementation, 
and Evaluation 

Developing policies and programs, putting them into operation, and measuring their 
success or failure constitute an important and recurring cycle for public and nonprofit 
managers. A new monitoring program is initiated in the Balkans. To support that policy 
the U.S. Navy organizes a fleet of vessels to patrol those waters, while political and 
military leaders assess the operation and decide what to do next. Similarly, a new policy 
involves sending literature on AIDS to all households in the United States. A group in 
the surgeon general’s office is convened to monitor the operation. Both the efficiency of 
getting the mailing out and its effectiveness as an educational device are discussed. 
Meanwhile, a local parks and recreation department joins with nonprofit organizations 
to develop a program for handicapped athletes. After staff and money are acquired to 
support the program and it begins operations, the department director asks whether the 
program is worth the time and energy it seems to be taking from other tasks. Repeatedly, 
plans are made, policies and programs are implemented, and the work of the organiza¬ 
tion is evaluated. 

Recently these issues have taken on increased importance as managers in the public 
and nonprofit sectors have been asked to do more with less, while at the same time pro¬ 
viding more and better services. This has led many to call for managing for results, that 
is, clearly stating goals and objectives in terms of public outcomes, designing and imple¬ 
menting programs, then measuring the performance of the government or other agency 
against established standards. The idea of managing for results or performance manage¬ 
ment suggests the importance of bringing together careful planning, implementation, and 
evaluation. 

While planning, implementation, and evaluation all require knowledge of the political 
and ethical context of public administration and certain personal and interpersonal 
skills, various technical aids have been developed during the past decade to assist the 
manager in each of the three areas. These techniques range from strategic planning 
to specific quantitative methods for measuring performance. Moreover, these techniques 
reflect a change in the way public and nonprofit organizations account for their actions. 
Citizens, lawmakers, and other advocacy groups increasingly hold agencies accountable 
not only for their efficiency in expending public and charitable resources but also their 
effectiveness in achieving public outcomes. Techniques such as strategic planning, reengi¬ 
neering, and performance measurement link the actions of public and nonprofit orga¬ 
nizations with specific, measurable results. Through the use of such techniques, public 

*5 5 



256 Chapter 7 Planning, Implementation, and Evaluation 

administrators may account both for their efforts arrd for the impact their efforts have in 
each given policy area. 

Networking 

The General Accounting Office Web site at http://www.gao.gov provides resources 
relating to managing for results. For additional resources on productivity and 
performance management, see the Center for Accountability and Performance at 
http://www.aspanet.org/cap/index.html or the American Productivity and Quality 
Center at http://www.apqc.org/. 

Planning 

On a daily basis, all managers engage in planning. But organizations, and indeed entire 
governments, engage in more formal planning processes, often involving a wide range of 
participants and the development of considerable data and other information. Planning 
typically leads to the development of alternative courses of action that must each be 
examined to decide which way to go. Depending on the level of the problem, the process 
of examining and choosing from among alternatives may involve the manager in either 
policy analysis or program design. 

Strategic Planning 

Strategic planning is one approach that has been increasingly employed in the public and 
nonprofit sectors. A number of writers have commented on the rapidity of the social and 
technological changes we are now experiencing and on the turbulence and complexity 
that such changes generate. In an effort to recognize and respond to such changes many 
private corporations began programs in the 1960s and 1970s to systematically plan for 
future development. The success of these programs is now confirmed by the fact that 
more than half of publicly traded companies use strategic planning in some form. 

Strategic planning helps an organization match its objectives and capabilities to the 
anticipated demands of the environment to produce a plan of action that will ensure 
achievement of objectives. William Glucek (1980, p. 9) points out that a strategy is a plan 
that is unified (ties all the parts of the enterprise together), comprehensive (covers all 
aspects of the enterprise), and integrated (all parts are compatible with one another and 
fit together well). Similarly, Robert Shirley (1982, p. 262) writes that “strategy (1) defines 
the relationship of the total organization to its environment and (2) gives guidance to 
administrative and operational activities on an ongoing basis.” 



Strategic Planning 257 

We can differentiate strategic planning from more familiar long-range planning activi¬ 
ties in several ways. Long-range planning primarily concerns establishing goals or perfor¬ 
mance objectives over a period of time; it is less concerned with specific steps that must be 
undertaken to achieve those goals. Strategic planning, on the other hand, implies that a 
series of action steps will be developed as part of the planning process and that these steps 
will guide the organization’s activities in the immediate future. Strategic planning takes 
the future into account, but in such a way as to improve present decisions. 

A second way that strategic planning differs from long-range planning is its special 
attention to environmental complexity. The organization is not assumed to exist in a vac¬ 
uum; rather, both the organization’s objectives and the steps to achieve them are seen in 
the context of the resources and constraints presented by the organization’s environment. 

A final distinction between the two types of planning is that strategic planning, espe¬ 
cially in the public sector, is a process that must involve many individuals at many levels. 
As most managers know quite well, effective changes in organizational practices are most 
readily accomplished by involving all those who will be affected by the change. This 
general rule is especially applicable to changes generated through a process of strategic 
planning. 

Public organizations undertake strategic planning efforts for many reasons: (1) to give 
clarity and direction to the organization, (2) to choose from among competing goals and 
activities, (3) to cope with expected shifts in the environment, and (4) to bring together 
the thoughts and ideas of all participants in the work of the organization. Most impor¬ 
tantly, planning activities provide an opportunity for the widespread involvement of 
leaders and citizens in defining the direction of the community or the agency as it moves 
into the future, thus building trust and commitment. 

Planning for Planning 

As a manager, you may wonder whether such activities are appropriate for your jurisdic¬ 
tion or agency. Whatever your work—at any level of government or in a nonprofit organi¬ 
zation— you will find precedents for planning. Many federal, state, and local agencies 
have begun strategic planning programs over the past several years, as have voluntary 
associations, human service organizations, and job training programs. The key seems to be 
that any organization is a candidate for strategic planning if, by allocation of resources, it 
can significantly influence either formulation or implementation of public policy. 

You may, of course, question whether strategic planning is worth the costs in terms of 
consultant fees, research and data analysis, and time away from other duties. The best 
gauges for assessing costs are (1) is it likely that careful planning will lead to reduced 
operating costs or increased productivity over the long run? and (2) what might the 
organization lose in the absence of a more comprehensive and integrated approach to 
the future? 

The latter question has become increasingly important to those in local governments, 
who now realize that they must compete with other communities in attracting industry, 
providing amenities, and maintaining the population base. The issue, however, must be 
treated differently when an administrative agency such as a state government department 



25 8 Chapter 7 Planning, Implementation, and Evaluation 

is considering planning. Although strategic planning might make the agency more com¬ 
petitive in attracting resources from the executive or legislature, this clearly should not 
be the purpose of planning. Rather, the agency should use strategic planning to involve 
key stakeholders in assessing the unit’s work and the possibilities for improving its ser¬ 
vices (Ackoff, 1981). The process may indeed lead to requests for further funding, but 
it may also suggest ways to more effectively utilize existing resources or even ways to 
reduce the scope of activities. 

You may also question, because of budgetary uncertainties, whether the time is right 
for planning activities. Some say that planning can not take place without solid informa¬ 
tion about funding levels. But the opposite argument is compelling—that planning is 
most essential in times of uncertainty, for these are exactly the times when you most 
need to be in control of your own destiny. Times of uncertainty do not mitigate the need 
for planning; they intensify it. 

Managers in the public sector voice a related argument—that periodic changes in 
political leadership make planning more difficult than in private industry. Again, the 
opposite argument is compelling: in times of transition, planning can provide continuity. 
Even when the new leadership wishes to change the directions specified in an earlier 
planning effort, changes can be made with greater clarity and aimed more readily toward 
critical concerns if a plan is in place. 

Finally, you may wonder whether strategic planning efforts are consistent with your 
organization’s commitment to democratic or participatory processes. Here lies the most 
significant difference between strategic planning in the public and private sectors. 
Whereas planning in the private sector may involve many people throughout an organi¬ 
zation, it remains centered and directed at the top, because that is where the private 
interests of the firm are most clearly articulated. In the public sector, however, every 
effort must be made to significantly involve all those who play an important role in the 
jurisdiction or the agency. For example, a local government planning effort should 
involve not only elected leadership and city staff, but also many others with a stake in 
the outcome — unions, neighborhood associations, chambers of commerce, civic orga¬ 
nizations, and so forth. Similarly, a state government agency’s planning effort should 
involve persons from all levels of the organization, members of constituent groups, 
elected officials, persons from other agencies and other levels of government, and repre¬ 
sentatives of the general citizenry. 

Strategic planning in the public sector must be a highly participatory process, but this 
participation opens the possibility of building new understanding among various groups. 
Many communities that have engaged in strategic planning have found that the process 
brought together various groups in a way not previously possible. Strategic planning 
may therefore be undertaken to achieve both direction and commitment. 

Organizing for Planning 

The planning process can proceed in a number of different ways, but the most common 
approach is to form a central planning group to work closely with an outside consul¬ 
tant to obtain information and make commitments to various new directions. In a local 
community, the group might include the city’s political leadership; representatives of city 



Strategic Planning 259 

administration (for example, the city manager); representatives of business, industry, and 
labor; members of neighborhood associations; and so on. For a federal or state agency, 
on the other hand, the major planning group might comprise the agency director, man¬ 
agers from the next organizational level below, and selected program directors. The 
planning group in a nonprofit organization might include the executive director, mem¬ 
bers of the board, staff members, and representatives of constituent groups. 

Steps in Planning 

Once it has been brought together, the planning group will want to give its attention to 
four primary concerns: (1) the organization’s mission or objectives, (2) an assessment of 
the environment in terms of both opportunities and constraints, (3) an examination of 
the organization’s existing strengths and weaknesses, and (4) the values, interests, and 
aspirations of those important to the organization’s future (see Box 7.1). Consideration 
of these issues will lead to several strategic alternatives, perhaps stated as scenarios for 
the future, and to the choice of a particular direction in which the organization should 
move. Finally, a set of action steps or implementation items will be developed to indicate 
what must be done immediately to put the organization in the proper position to face 
the future most effectively. 

Mission or Objectives 

Arriving at a concise, yet inclusive, statement of the mission of the organization is a dif¬ 
ficult step in the planning process. Although most organizations have a general sense of 
their mission, questions often arise that cannot be readily answered in terms of stated 
objectives. Having a specific mission statement, however, provides an identity for the 
organization, as well as a guideline for future decisions and a standard against which to 
measure specific actions. 

Because arriving at a mission statement may imply certain strategies, care should 
be taken to consider alternative approaches to the organization’s goals. A statement of 
mission might indicate, for instance, whether a city wishes to seek a broad industrial 
base or focus on particular types of businesses, such as tourism or high-tech industries. 
Similarly, a university mission statement might indicate whether the institution seeks a 
broad range of programs in all areas or a limited number of exceedingly high-quality 

BOX 7.1 

Steps in Strategic Planning 

1. Statement of mission 
2. Environmental analysis 
3. Strengths and weaknesses 
4. Values of organizational leaders 
5. Development of alternative strategies 



i6o Chapter 7 Planning, Implementation, and Evaluation 

programs. The mission statement of a state agency might comment on the desired range 
of clientele, responsiveness to changes in the environment, or quality of service. If there 
is doubt or debate about items, they should be carried forward as elements of strategy 
for later consideration. 

Environmental Analysis 

After developing a mission statement, the planning group should move to an analysis of 
the environment within which the organization operates. This assessment should include 
legal and political considerations, social and cultural trends, economic circumstances, 
technological developments, and, where appropriate, the organization’s competitive or 
market position. Each area should be examined in terms of the present environment and 
how it is likely to change in the future. This assessment leads the group toward identify¬ 
ing possibilities for reducing constraints and extending opportunities. 

Strengths and Weaknesses 

At this point, the planning group can turn its attention toward assessing the organi¬ 
zation’s existing capabilities—its strengths and weaknesses. The analysis should be as 
forthright and inclusive as possible, taking into account financial resources (including 
changing patterns of funding), human resources (including political and managerial 
strengths and weaknesses), the operation of both technical and organizational systems, 
and quality of work. This assessment of capabilities should relate as directly as possible 
to the stated mission of the organization. For example, an agency involved in facilities 
design and construction might want to consider the age and condition of facilities, the 
number and abilities of architects and engineers, the number and frequency of design 
projects, and the unit’s standing among other similar organizations. Examining strengths 
and weaknesses should be accompanied by some attention to programs that might sig¬ 
nificantly improve capabilities in one or more areas. 

Values of Organizational Leaders 

A final step in preparing to develop strategic alternatives is to take into account the val¬ 
ues, interests, and aspirations of those who will guide the organization into the future. 
People will respond to the same environmental and organizational analysis in different 
ways. In business, for example, some will be perfectly satisfied with the security of a sta¬ 
ble market share, while others will be willing to take greater risks in the hope of greater 
payoffs. Leaders vary in terms of creativity, energy, and commitment. Yet to effectively 
implement a plan, it must reflect the concerns and interests of those who will play major 
roles in shaping the future of the organization. 

Development of Alternative Strategies 

At this point, the planning group can move to formulate alternative strategies. These 
strategies can take several forms; however, one useful way to proceed is to draw up alter¬ 
native scenarios of the future, indicating what the organization might look like five, ten, 



Strategic Planning z6i 

or twenty years into the future. The scenarios should indicate new directions the orga¬ 
nization might take; pessimistic, realistic, and optimistic interpretations of its future; and 
factors likely to influence these future patterns. It is helpful to develop more than one 
scenario, then use them as competing viewpoints from which to debate the merits of 
various alternatives. From a thorough discussion of the scenarios, one or more strategies 
will emerge. The strategy should be chosen that most effectively moves the organization 
toward its mission, given environmental opportunities and constraints, organizational 
strengths and weaknesses, and the values, interests, and aspirations of the leadership. 
After developing the strategic orientation, the planning group should be pressed to iden¬ 
tify specific action steps for implementing the strategy. A local job-training program, 
for example, went through an extensive planning exercise involving thorough analysis 
of environmental opportunities and constraints as well as organizational strengths 
and weaknesses. Based on the information developed, and especially on expectations of 
future funding patterns, the program’s directors chose to de-emphasize subsidies for 
local businesses to employ those without work and to try for longer-term benefits 
through skills training and job preparation. 

The Logic of Policy Analysis 

One possible outcome of a formal planning process is that the need for new policies will 
be identified. (The need for new policies can be generated in other ways as well, many of 
which we discussed in Chapter 2.) A local group considering economic development 
issues might recognize the need for new tax incentives for industries interested in locat¬ 
ing in the community. A state welfare department planning group might focus on the 
relationship between providing day care and job training. Or a nonprofit organization 
might decide there is a need for a new publications program. In each case, a problem is 
identified and the question arises as to whether a new approach to the problem—a new 
policy—might help. 

Many issues may come up. Exactly what is the nature of the problem? What would 
we be trying to achieve with the new policy? What might be alternative approaches? 
What might we expect from each alternative? What criteria would we use to evaluate 
alternatives? Which alternative would best meet our criteria? Answering questions like 
these is the basis of analysis of public policies. We can therefore define policy analysis 
as the process of researching or analyzing public problems to give policy makers specific 
information about the range of available policy options and the advantages and dis¬ 
advantages of various approaches. There are several ways you might become involved 
in policy analysis. All managers engage almost daily in a sort of informal analysis of 
public policies; they encounter new problems and consider alternative policies. But often 
a more formal review of policy options is called for. Sometimes staff members can do the 
analysis; many public organizations employ policy analysts to work on just such prob¬ 
lems. In other cases, another governmental agency may be able to help; for example, the 
Office of Management and Budget, as well as its counterparts in many states, develops 
policy reports. Policy analysis might also be performed by legislative staff or legis¬ 
lative research groups. Finally, many analyses are performed by consultants, including 



z6z Chapter 7 Planning, Implementation, and Evaluation 

university consultants, where the public manager acts as a client, issues the contract, 
monitors the work, and receives the final report. Even though, as a manager, you may 
perform the analysis yourself, you must be able to distinguish between high-quality 
analysis and work of limited usefulness. 

Broadly speaking, most policy analyses attempt to follow a rational model of decision 
making, involving five major steps: formulating the problem, establishing criteria for 
evaluation, developing policy alternatives, considering the expected impact of the vari¬ 
ous alternatives, and ranking the alternatives according to the established criteria (see 
Box 7.2). As a simple illustration, think about how you might decide what would be the 
best route from home to work (Quade, 1989, pp. 33-34). If we assume at the outset that 
the best route is the shortest, then we could simply lay out the alternative routes on a 
map and select the shortest. (Using a map would in effect create a model that would help 
in our analysis.) As in almost all policy analyses, however, there may be more than one 
criterion involved. For example, the shortest route might involve more traffic and take 
longer to drive. The shortest travel time might then constitute a second criterion, but 
would require a more sophisticated model than a map, taking into account traffic con¬ 
gestion and perhaps other variables. Just thinking through the various complications 
that might arise in this simple example, you can get some sense of the difficulties you 
might encounter in moving through the five stages of a more comprehensive policy 
analysis. 

Problem Definition 

There are many problems facing any public organization and, correspondingly, many 
opportunities to analyze policy alternatives. Someone, however, must decide about the 
problem to be analyzed and about how the analysis will proceed. This someone—the 
sponsor of the analysis—may be a legislator, an elected chief executive, or an agency 
manager. But, in any case, the one who will perform the analysis — the analyst—should 
seek as clear a statement of the problem as possible and as much information about the 
nature of the problem and the range of solutions. Why has the problem surfaced? Who 
is affected? How does this problem relate to similar problems? What policy options have 
already been tried? What is the range of policies that would be feasible, both economi¬ 
cally and politically? What resources are available to support the analysis? 

BOX 7.2 

Steps in Policy Analysis 

1. Problem definition 
2. Setting objectives and criteria 
3. Developing alternatives 
4. Analyzing various policies 
5. Ranking and choice 



Strategic Planning 263 

How the question is initially formulated will guide the analyst toward certain pos¬ 
sibilities and away from others, so it is important at the outset to be as clear as possi¬ 
ble, without unnecessarily cutting off alternatives. The sponsor might ask, for example, 
“How can we provide adequate shelter for the homeless in our community this winter?” 
This statement of the issue permits exploring alternatives ranging from subsidizing exist¬ 
ing shelters to building new shelters. If, however, certain options, such as building new 
shelters, are clearly out of the question by reason of time or money, then the analyst 
should be advised of these limitations. 

Sometimes the problem is only vaguely understood at the outset, and part of the ana¬ 
lyst’s job is to develop a background statement or issue paper formulating the problem. 
In some cases, gathering information at the library will be helpful, especially in laying 
out the history of the problem, discovering approaches used in other jurisdictions, and 
in becoming aware of technical developments in the field. Additionally, the analyst may 
want to talk with other people, perhaps in other jurisdictions, to see what their expe¬ 
rience has taught them. People in other governments, other levels of government, and 
other agencies at the same level can be helpful. The analyst can also gather information 
from those involved. In our example, the analyst would probably want to talk with 
those already involved in providing shelter. A statistical survey might even be possible. 
Finally, agency records and statistics might be helpful. Throughout these initial informa¬ 
tion-gathering efforts, the analyst wants to develop an idea of how different people and 
different groups perceive the problem and possible solutions. 

Setting Objectives and Criteria 

As we have seen, establishing objectives for a new policy or criteria for judging alternatives 
is often quite difficult. In some rare agencies, the existing values and preferences are clear 
enough to guide choices. The manager might be able to say, “It’s worth much more to 
our agency to achieve result A than result B, C, or D. Therefore, whenever the choice pre¬ 
sents itself, choose A.” But in most policy areas, there are likely to be multiple and often 
conflicting objectives. To route a highway through an urban area, for example, one must 
consider factors such as the cost of the project, how many and who might use the highway, 
the number of houses and other properties that might be displaced, and the impact of 
noise and pollution on adjacent neighborhoods. How does one begin to rank all the 
factors? 

There are other problems in selecting criteria. For example, criteria may differ among 
different levels of the organization. A constant problem for decision makers is to be sure 
that criteria used at one level are consistent with those at another level. A particular 
course of action might fit the criteria developed at one level, but so distort the use of 
resources at the next higher level as to make the choice inappropriate. Criteria must 
also be stated as completely as possible. An analyst might be told to seek a solution that 
maximizes output at minimum cost, then discover that no single alternative can meet 
both criteria. Which is more important? 

Finally, choosing criteria depends on individual perspective. Most policy areas have 
many different stakeholders—many different people who are involved in the policy deci¬ 
sion and affected by the result. These may include legislators, agency personnel, client 



Chapter 7 Planning, Implementation, and Evaluation 

groups, and other interest groups, and each group may feel quite differently about what 
is most important. In the design of a new highway, for example, a neighborhood associa¬ 
tion might place highest value on environmental concerns, while someone who lives in 
the suburbs might be most concerned with finding the shortest, quickest route to work. 
Many different criteria are likely to compete for prominence in any policy analysis. And, 
often, which criteria receive greatest prominence is a political decision of legislators or 
high-ranking administrators. 

Developing Alternatives 

Developing alternative policies is without question the most creative phase of policy 
analysis, for it is here that the analyst must move beyond easy solutions and develop 
innovative approaches to public problems. Different alternatives often derive from differ¬ 
ent assumptions about the problem. For example, should the welfare system be oriented 
toward providing support at home for impoverished mothers or should it enable mothers 
to work by providing day care? Should day care be addressed by building new centers or 
by providing tax credits or vouchers to subsidize attendance at existing centers? Answers 
to questions about alternative approaches to child support depend on interpretation of 
both the causes of poverty and the motivations of the mothers. To develop a complete 
range of alternatives, the analyst must assume the perspectives of many different stake¬ 
holders. 

Another way to develop far-ranging alternatives is to consider the relationship 
between the particular problem and other similar issues. For example, adequate care for 
the homeless ties to issues of health care, financial support for housing, welfare policy, 
and perhaps such areas as mental health and Social Security. Again, alternatives that 
take the various interrelated concerns into account are likely to be generated if the ana¬ 
lyst takes into account the views of many different stakeholders. Rather than saying, 
“How can my organization solve this problem?” the analyst should ask, “How can this 
problem be solved?” 

Analyzing Various Policies 

Having generated a number of realistic policy alternatives, the analyst must now assess 
the likely impact each alternative will have. How one analyzes impacts will vary accord¬ 
ing to the particular type of policy. In some policy areas, including some of major impor¬ 
tance, only limited information about possible impacts will be available. The analyst 
can only make intuitive judgments based on his or her experience and the experience of 
others. In other cases, however, one can gather specific data and analyze it by means 
of quantitative techniques. In the urban highway example, data could be gathered and 
analyzed to determine cost per mile, load-bearing capabilities, travel time for users, and 
a variety of other factors. 

Occasionally, actual experiments with several policy options may be possible, some¬ 
times with an experimental design similar to that used in the natural sciences. That is, 
the behavior of a particular target population may be compared to that of a control 
group when only one variable (the policy) is changed. Applied to large-scale social prob¬ 
lems, such experiments may be quite costly, but they may also save considerable time 



Strategic Planning 2 65 

and money in the long run. Sometimes it is appropriate to spend millions to save bil¬ 
lions. (We should also note the ethical problems associated with providing a treatment 
expected to be beneficial to one group, but intentionally denying it to another control 
group. Is it ethical to deny some persons a treatment you think will be beneficial?) 

A less formal means of policy experimentation occurs when one state or locality tries 
a particular policy approach and makes the results available to other communities. 
Sometimes this form of experimentation is simply the result of different groups trying 
different programs, but sometimes it is conscious. When state and local groups pressured 
the Carter administration to move the administration of the small cities portion of the 
Community Development Block Grant program to the states, two states—Wisconsin 
and Kentucky—were asked to run the program on an experimental basis. Their success 
in tailoring programs to local needs led to legislation allowing all other states to assume 
administration of the program (Jennings, Krane, Pattakos, & Reed, 1986). 

Ranking and Choice 

The final step in the analytic process is to compare the impacts associated with various 
alternatives and the criteria for evaluation established earlier. (We will discuss policy 
and organizational decision making in Chapter 8.) Alternatives can then be ranked in 
terms of their respective impacts. When both the criteria and the impact levels are fairly 
straightforward, a simple comparison of possible effects may readily show which choice 
should be made; other cases may be more complex. The highway construction example, 
for instance, might yield three or four alternative proposals and as many as twenty crite¬ 
ria by which to evaluate the alternatives. One way to treat such cases is to simply lay out 
the expected results of each alternative in terms of the various criteria, leaving the task 
of comparing the data and ranking the alternatives to the decision maker. Sometimes 
more sophisticated quantitative techniques are available to the analyst. 

Costs and Benefits 

One of the most straightforward quantitative techniques is the cost-effectiveness 
approach, which “permits analysts to compare and advocate policies by quantifying 
their total costs and effects” (Dunn, 1981, p. 250). Costs are usually measured in mone¬ 
tary terms, but effects may be measured in units of any type. 

Typically, the cost-effectiveness approach takes one of two forms. First, the level of 
effectiveness can be fixed, and one can search for the alternative that achieves this level 
at the least cost. If, for example, we want to increase the number of houses in a commu¬ 
nity tested for radon by 25 percent, would it be cheaper to hire inspectors or to spend 
money on advertising so that homeowners would do the inspection themselves? A sec¬ 
ond approach fixes the budget amount, then asks which alternative will provide the 
highest level of effectiveness for that amount. If we want to spend no more than $50,000 
a year on radon inspections, which of our two approaches will result in a higher number 
of inspections? 

The cost-effectiveness model is widely used because it is quite flexible and does not 
demand the same degree of precision as other approaches. Cost-effectiveness is especially 



i66 Chapter 7 Planning, Implementation, and Evaluation 

useful when the relative merits of competing proposals, such as different child-care deliv¬ 
ery mechanisms, are being debated. It is not as useful in comparing questions of absolute 
merits, however, such as whether to allocate resources to early childhood programs or 
to radon testing. Moreover, the cost-effectiveness approach may be somewhat limited 
where criteria and impacts are more complex. 

A closely related approach is cost-benefit analysis. Essentially, the cost-benefit approach 
involves identifying and quantifying both negative impacts (costs) and positive impacts 
(benefits) of a proposal, then subtracting one from the other to arrive at a measure of 
net benefit. In contrast to cost-effectiveness analysis, the cost-benefit approach seeks 
to establish both the total monetary costs and total monetary benefits of a proposal 
(Dunn, 1981, p. 244). The logic of cost-benefit analysis is obvious, but applying it to policy 
proposals that involve large expenditures and produce difficult-to-measure results can be 
quite complicated. 

There are several advantages to cost-benefit analysis (Sylvia, Meier, & Gunn, 1985, 
pp. 48-49). If programs can be evaluated in terms of costs and benefits, the approach 
can result in rather precise recommendations. But even if it is difficult to calculate costs 
or benefits, focusing on the two areas may help clarify the manager’s thinking about a 
proposal. Legislation often requires that cost-benefit analysis precede particular policy 
changes, especially in environmental or regulatory policy. 

Several factors make it difficult to assess the costs and benefits of a particular pro¬ 
gram. First, the analyst will be asked to come up with measures of both costs and bene¬ 
fits and reduce them to a common unit of measure (usually money). But in analyzing a 
proposed new highway, can we accurately portray the fatality rate for similar highway 
segments as a measure of safety? And, if so, how can we translate the rate of fatalities 
into dollars? Second, we should always remember that the final calculated cost-benefit 
ratio is not the only basis for choosing one alternative over another. Despite the ratio of 
costs and benefits in our highway example, a particular level of fatalities may simply be 
considered too high, either politically or ethically. 

Typically, costs are thought of as inputs and benefits as outputs. Costs might include 
one-time items such as research and development, buildings and facilities, land acqui¬ 
sition, equipment purchases, and so on, and recurring budgetary items such as person¬ 
nel, rent, maintenance, administrative overhead, insurance, and so forth. Because these 
expenditures take place over time, calculations usually take into account the time value 
of money—the fact that people generally are not as willing to pay for something in 
the future as in the present. Although the particular calculations are beyond the scope of 
this text, taking time into account enables us to answer questions such as whether 
Project A with low initial cost but high maintenance is better than Project B with high 
initial cost but low maintenance. 

Benefits, based on outputs, include both positive and negative effects. (The nega¬ 
tive effects of a program might be calculated either as increases in cost or decreases 
in benefits. They are usually the latter.) Positive benefits might include reduction in 
disease or improved drinking water or increased highway safety; negative benefits 
might include increased noise and pollution from constructing a new airport. Again, 
some effort to translate positive or negative benefits into monetary terms would have 
to be made. 



Strategic Planning 267 

Measuring outputs and translating them into dollars are exceedingly difficult tasks. For 
example, eliminating a disease might increase productivity, which could be measured, but 
also reduce pain and suffering, which would be more difficult to measure. Omitting these 
factors because they are hard to measure biases the analysis, but assigning a dollar value 
to them might do the same. Consequently, the quantitative presentation of costs and ben¬ 
efits is often accompanied by an explanation of additional qualitative considerations. 

Other Quantitative Techniques 

In addition to cost-effectiveness and cost-benefit analyses, there are many other tech¬ 
niques to aid policy analysis. It is not necessary to examine the mathematical formulas, 
but it is helpful to understand the logic they depend on. Let us examine the following 
payoff matrices with that goal in mind. Assume a simple example: hiring an office worker 
who will need proficiency in computer operation and budgeting. After interviewing two 
applicants, A and B, you feel that A is stronger than B in both areas. Your thoughts might 
be modeled like this: 

Value Measures 

Possible actions Computers Budgeting 

Choose A 1 1 
Choose B 2 2 

Your choice here is simple, because one candidate is clearly superior in both respects. 
But what if your decision appears to be structured like this: 

Value Measures 

Possible actions Computers Budgeting 

Choose A 1 2 
Choose B 2 1 

Now there is no clear choice. Even if you thought computer skills were more impor¬ 
tant than budgeting skills, you could not choose, because candidate A might be a little 
better with computers, but candidate B may be much better in budgeting. To decide, you 
need either more sophisticated measures of ability or a way to weight the two factors, as 
we do in our next example: 

Computers Budgeting Combination 

Choose A .9 .3 .8 
Choose B .5 .8 .6 
Weight .7 .3 



268 Chapter 7 Planning, Implementation, and Evaluation 

Here we are assuming that we can measure ability in the two areas on a ten-point 
scale and that we have established that computer skills are more important than budget¬ 
ing skills. By multiplying the scores by the weights, we obtain a combined value measure 
for the two candidates, thus enabling us to choose the better candidate. (This example is 
adapted from Latane, 1963.) 

We could extend the logic of the payoff matrix even further. One way is to combine 
scores under differing working conditions. Indeed, following the logic of the payoff 
matrix, we could accommodate large numbers of weighted variables, as might be invol¬ 
ved in a large-scale policy analysis; the logic remains much the same. Remember that one 
can adopt different decision rules and that the choice of criteria is subjective. 

Another tool of policy analysis is decision analysis, a technique for use where deci¬ 
sions are likely to be made sequentially and with some degree of uncertainty. Decision 
analysis is applicable to a variety of complex problems, such as choosing airport sites 
or developing plans for commercial breeder reactors, but the underlying logic is fairly 
straightforward and often quite helpful. Consider the following case: 

The officer in charge of a United States Embassy recreation program has decided to 
replenish the employees’ club funds by arranging a dinner. It rains nine days out of 
ten at the post, and he must decide whether to hold the dinner indoors or out. An 
enclosed pavilion is available but uncomfortable, and past experience has shown 
turnout to be low at indoor functions, resulting in a 60 percent chance of gaining 
$100 from a dinner held in the pavilion and a 40 percent chance of losing $20. On 
the other hand, an outdoor dinner could be expected to earn $500 unless it rains, in 
which case the dinner would lose about $10. (Stokey & Zechauser, 1978, p. 202) 

Using decision analysis to structure the officer’s dilemma involves first constructing a 
decision tree to show the various possible outcomes, given the risks associated with each 
(see Figure 7.1). 

The decision tree drawn here merely lays out the options, the probabilities of various 
occurrences, and the anticipated outcomes in much the same way as a payoff matrix. It is 
easy to imagine how much more complicated the situation could become, however, with 
the addition of other variables or other decision options. Even in this simple case, matters 
might be complicated by other variables, such as whether the weather will be hot or cold, 
whether there are other ways to increase attendance (advertising, and so on), and whether 

.6 
Attendance fair 

A. +$100 
Indoors .4 

Attendance very poor -$20 
.1 

No rain; attendance excellent +$500 
Outdoors .9 

Rain; attendance poor -$10 

FIGURE 7.1 

Decision Tree 



Strategic Planning 269 

the commanding officer prefers indoors or outdoors. You can imagine the sequences and 
variables involved in a decision concerning location of a nuclear facility. 

And, as if this were not enough, consider what happens when you take into account 
competition from others. Let us imagine a chess match in which we have decided upon 
some evaluation criterion, such as king safety or center control, that we can measure (see 
Figure 7.2). That is, we have identified a way to place a value on each outcome that 
might result from a given set of moves. Let us say that White is ready to move and has 
two options, W1 and W2, leading to the following decision tree. (If we move Wl, then 
Black can move either B1 or B2; if we move W2, then Black can move either B3 or B4; 
and so on. We will take the values across the bottom to be the outcomes.) We would 
prefer to choose W2, then have Black choose B4, so that we could choose W9, the alter¬ 
native with the highest value for us. But taking into account what Black is likely to do, 
we recognize that if we take W2, then Black will take B3, leading us to the two lowest 
payoffs. Recognizing this probability, we will instead take Wl, expecting that Black will 
take Bl, and we will have a satisfactory outcome. 

Although our examples have been quite simple, their logic can support far more 
sophisticated applications of policy analysis. Moreover, the discipline these techniques 
imposes makes them useful for even relatively simple applications. The models force us 
to examine our assumptions, structure the problem clearly and logically, and consider 
the full range of available options. The models also allow us to more effectively commu¬ 
nicate our analysis to others. 

That brings us to one final point. No matter how sophisticated the analysis and how 
rational its conclusions, a policy analysis must be effectively communicated to the actual 
decision makers. Communication is often quite difficult, because decision makers are 
extremely busy and have a variety of conflicting demands on their time and interests. 
Sometimes even those who are invited to do a policy analysis find themselves and the 
analysis swept aside by political or other considerations and, indeed, that is the preroga¬ 
tive of major decision makers. A noted sociologist, Amitai Etzioni, spent several years 
as a senior advisor to the White House during the Carter administration. After trying 
unsuccessfully to interest the administration in a reindustrialization program, he wrote 
with some frustration: “Outsiders who seek to promote policy ideas uninvited, especially 
without the backing of an organized societal group, lobby, or pressure group, will usually 

x 

W3 W4 W5 W6 W7 W8 W9 W10 

10 20 30 15 5 7 50 10 

FIGURE 7.2 

Chess Match Decision Tree 



270 Chapter 7 Planning, Implementation, and Evaluation 

find the process tortuous. Those who choose to travel this road should understand that as 
a rule they are in for a long haul” (Majchrzak, 1984, p. 92). A rational analysis is helpful 
in the decision process, but political considerations, in the positive sense, must also be 
taken into account before actions are taken. 

Implementation 

In the cycle of planning, implementation, and evaluation, implementation is the action 
phase. Once plans have been made and policies decided upon, you must put them into 
operation. Financial and human resources must be allocated and mobilized, organiza¬ 
tional structures and systems must be devised, and internal policies and procedures must 
be developed. During implementation, you may be involved in issuing and enforcing 
directives, disbursing funds, awarding grants and contracts, analyzing programmatic and 
operational problems, taking corrective action, and negotiating with citizens, business, 
and those in other public and nonprofit organizations. 

Recently, a body of literature dealing with the implementation process has emerged. 
Some of the literature merely uses new terms to talk about the general processes of admin¬ 
istration in the public sector, whereas other parts of the literature focus on the relationship 
between policy development and program implementation, specifically alerting us to the 
difficulty of effective implementation and to how implementation of programs may distort 
or even subvert the intent of policy makers. Most pointedly, one commentator has written, 
“It is hard enough to design public policies and programs that look good on paper. It is 
harder still to formulate them in words and slogans that resonate pleasingly in the ears of 
political leaders and the constituencies to which they are responsive. And it is excruciat¬ 
ingly hard to implement them in a way that pleases anyone at all, including the supposed 
beneficiaries or clients” (Bardach, 1977, p. 3). 

A classic study of the relationship between policy and implementation was suggestively 
titled Implementation: How Great Expectations in Washington Are Dashed in Oakland; 
or Why It’s Amazing That Federal Programs Work at All (Pressman & Wildavsky, 1973). 
Implementation described a particular economic development program in the Oakland, 
California, area that was less than successful. Pressman and Wildavsky conclude that 
“what seemed to be a simple program turned out to be a very complex one, involving 
many participants, a host of different perspectives, and a long and tortuous path of deci¬ 
sion points that had to be cleared” (p. 94). Implementation was characterized by multiple 
and conflicting interests, each trying to influence the program’s direction to suit their 
many and divergent needs. The major recommendation of the study seemed to be that 
persons involved in designing public policies “pay as much attention to the creation of 
organizational machinery for executing a program as for launching one” (pp. 144-145). 

This lesson has been clearly recognized in the literature of strategic planning. Plans 
remain sterile without implementation, so there has always been a close connection 
between planning and execution. As noted, planning is most beneficial where it can help 
make immediate decisions in light of future impact. Thus, a final step in any planning 



Implementation z 71 

process is to arrive at a series of specific actions to take in the near future — the next six 
months, or the next year or two years—who does what, when and to what effect. These 
steps, which may detail new policy positions or new organizational processes, will form 
a new action agenda for the community or the agency. 

Organizational Design 

Some of the classic approaches to implementation, or what was formerly called simply 
organization and management, focused on the structure and design of new organizations 
and their work processes or flows. The traditional organization chart expresses both the 
division of labor within an organization and the structure of command or control. 

In the late 1930s, Luther Gulick advised managers developing new organizations that 
there were several ways they could divide work (Gulick, 1937, pp. 21-29). Among these 
were (1) purpose, (2) process, (3) persons or things, or (4) place. Dividing work accord¬ 
ing to purpose might result in distinctions such as that between providing education 
or controlling crime, while dividing it according to process might lead to a legal unit, a 
medical unit, or an engineering unit. One could also divide work according to the per¬ 
sons served or the things being dealt with; for example, the Veterans Administration 
deals with all problems that veterans face, whether legal, medical, and so on. Finally, one 
may organize according to geographic area, as would a state welfare department that 
has regional or county offices. 

Networking 

Online resources and case studies relating to the planning and implementation of pro¬ 
ductivity initiatives can be found at http://www.alliance.napawash.org/ALLIANCE/ 
and at the U.S. Conference of Mayors site at http://www.usmayors.org/uscm/ 
best_practices/. For information on scenario planning, go to the Global Business 
Network at http://www.gbn.org. 

Gulick and his contemporaries also talked about the number of levels that would 
be appropriate to an organization. Many organizations are fairly tall—they have many 
levels; others are flat—they have relatively few levels. The number of levels is guided 
to a degree by the type of work and by the number of people who report to any one 
manager. The term span of control signifies the number of people that one individual 
supervises; though there are significant variations depending on type of work, it is gener¬ 
ally considered difficult to supervise more than six to ten people. 

In addition to developing organizational structures, early writers urged charting work 
processes as an aid to organizational design. Process charting or flowcharting can pro¬ 
vide a graphic demonstration of the various steps in an operation, the people performing 
each step, and the relationships among these elements. Figure 7.3 shows a simple illus¬ 
tration of process charting, though charts can become far more sophisticated in actual 
applications. This process chart uses a variety of symbols to indicate different activities. 



272 Chapter 7 Planning, Implementation, and Evaluation 

The vertical lines set the basic framework of the chart. The columns show the flow of 
work from one unit or person to another and vary depending on the complexity of the 
process and the degree of analysis desired. The column headings indicate the elements 
under study. In this example, the larger circles on the chart refer to a specific task (filling 
out a form, testing a sample, and so on); the smaller circles indicate transportation of the 
work from one unit or person to another. The triangles indicate storage, a period in 
which the item or operation is stationary. Finally, the square indicates an inspection of 
the work item, usually to check for quality or quantity. As illustrated here, one can make 
notations on the chart to indicate the nature of particular steps in the process. 

Process charting is most useful where a considerable number of clerical or nonprofes¬ 
sional employees perform the same general classes of work and follow the same general 
sequence of operating steps. Although process charting is less useful in analyzing the 
work of professionals, there are possible applications here as well. For example, charting 
a professional operation may reveal bottlenecks, excessive periods of review, or excessive 
check points that inhibit the flow of work. As with other techniques, process charting 
can become quite complex, but its logic is both simple and compelling. Process charting 
simplifies analysis because it sharply points out backtracking, excessive detail, unneces¬ 
sary repetition, poor distribution of functions, and other administrative defects. For this 
reason process charting has enjoyed a revival of interest by those implementing total 
quality management programs. 

Classification 

Mail Clerk Analyst Section Chief 
Date- 
stamps 
mail 

Sorts 
for 
analysts 

By clerk' 
Examines 

Legend y requests 

I Conducts 
|f desk 

Operations 1 T audit 

Transportation i Confers with 
• ¦ administrative 

T officer 
Inspection 1 Ł Prepares 

Urough draft 
Storage ? 

By analyst |§1 

Awaits 
handling 

FIGURE 7.3 

Process Charting 



Implementation 273 

Systems Analysis 

There are many other sophisticated devices that have been developed for analyzing the 
design and operations of both public and private organizations. Many of the approaches 
are based in systems theory, an effort to identify, in logical fashion, the interactions 
of various internal and external elements that impinge on an organization’s operations. 
The systems approach has been used in a variety of fields, including physics, biology, 
economics, sociology, and information science, but the basic concepts are much the same 
regardless of discipline. Generally speaking, a system is a set of regularized interactions 
configured or hounded in a way that differentiates and separates them from other 
actions that constitute the systems environment; thus, we can speak of a biological sys¬ 
tem, a physical system, an economic system, or a political system. Any such system 
receives inputs from its environment, then translates these through some sort of conver¬ 
sion process into outputs that are returned to the environment. These outputs in turn 
affect future inputs to the system through a feedback loop. Presumably, if the outputs of 
a system are valued by the environment, new inputs will be forthcoming and the organi¬ 
zation will survive. (A basic systems model is illustrated in Figure 7.4.) 

Following this model, consider the operation of a thermostat. The thermostat takes 
in information about the heat in a room, then measures the heat against some standard. 
If the level of heat is below the standard, the thermostat causes more heat to be put 
out into the room. The additional heat becomes part of the environment and creates new 
information (feedback), which becomes part of the next input into the system. 

The systems concept works similarly in human organizations. A business might receive 
input from its environment that customers are demanding more red shoes. A decision might 
be made to produce more red shoes, and those shoes would be part of the organization’s 

Environment 

FIGURET^^^ 

A Basic Systems Model 



Chapter 7 Planning, Implementation, and Evaluation 

output. The new red shoes become part of the environment and affect new inputs into the 
system, which might range from comments about the quality of the shoes or information 
that the demand has not yet been met. This new information guides the operation of the 
system in the future. 

Like many of the other models we have discussed in this chapter, the systems approach 
has been used in highly sophisticated applications ranging from analysis of organizational 
design and processes to creation and modification of major weapons systems. Indeed, 
the first major applications of systems analysis occurred in the military during and soon 
after World War II. For some time thereafter, the Department of Defense was the major 
user of systems analysis, depending on a variety of contractors, most notably the Rand 
Corporation. This is why techniques such as PPBS (discussed in Chapter 5) found their 
earliest and warmest reception in the Department of Defense. Yet it is possible to 
apply systems logic to a variety of problems public organizations face, and, as with other 
techniques, the systematic discipline that the approach brings to problem solving is 
perhaps its greatest strength. 

Systems analysis emphasizes the relationship between the organization and its envi¬ 
ronment, suggesting that public managers carefully consider factors in the environment 
that impinge on their operations. These factors include legal and political matters, sup¬ 
port and opposition generated by interest groups and client organizations, human and 
financial resources, and applicable technology. Naturally, the environment also includes 
a large number of other organizations with which the agency interacts, such as the chief 
executive’s office, the legislature, the budget office, related agencies at the same level of 
government, parallel agencies at other levels of government, and a variety of private and 
nonprofit groups and associations. 

Many systems analysts tend to ignore what occurs within the system itself, preferring 
to think of it as a black box into which inputs go and from which outputs come. Others 
speak of several different subsystems that carry forward the organization’s work. In a 
classic formulation, the institutional subsystem is responsible for adapting the organiza¬ 
tion to its environment and for anticipating and planning for the future. People involved 
in this activity generally constitute the organization’s leadership cadre. The technical sub¬ 
system, on the other hand, is concerned with the effective performance of the organi¬ 
zation’s actual work. If the work of the organization is building rockets, the technical 
subsystem is the people who actually build the rockets. Finally, the managerial subsystem 
is concerned with providing the necessary resources for accomplishing the technical task, 
as well as mediating between the technical and institutional subsystems (Thompson, 
1967, pp. 10-11). 

Outputs of public organizations range from goods (such as highways or buildings) to 
services (such as student loans or employment counseling), but also include regulations, 
adjudication, and support for other programs. To know the effect of their efforts, man¬ 
agers need some sort of feedback mechanism. Feedback often occurs naturally: clients 
write letters of appreciation; legislators inquire about program operations; a program 
may even become an issue during an election campaign. Sometimes, however, you will 
want to secure more systematic and accurate feedback, for which you can use devices 
such as questionnaire surveys, field testing, or spot checks of service provision. Recall 
that systems analysis helps focus on how an organization interacts with its environment; 
developing effective feedback mechanisms helps the manager in that process. 



Implementation 275 

PERT/CPM 

Another technique for guiding implementation of public programs is the Program 
Evaluation Review Technique (PERT) or the Critical Path Method (CPM). (The two 
techniques were developed separately and have minor differences, but we can treat them 
as one, using the title PERT.) PERT is a system for organizing and monitoring projects 
that have a specific beginning point and a specific ending point. NASA used the system 
extensively in developing the manned spacecraft program; it can accommodate quite 
substantial projects. We will focus on the basic logic underlying the system. 

A PERT chart uses a series of circles, designating events, and arrows, designating 
time or costs, to indicate various activities for completing a project and the necessary 
sequence. One circle might show the beginning of a particular effort and be connected 
by an arrow to another circle, which might show the end of the first activity and the 
beginning of a second. Any activity that must be completed before the start of another 
activity should appear to the left of that activity. Thus, the key elements in a PERT chart 
might look like this: 

Put on socks : Put on shoes 

Activities that are independent of one another are shown in separate sequences; for 
example, if you could put on your shirt while you are putting on your shoes, that activity 
could be parallel to putting on your shoes. 

A more complex PERT chart appears in Figure 7.5, showing a variety of activities 
that might be undertaken to hold a conference. As in all PERT charts, no activity can 
take place until all events logically prior to that event occur. For instance, to print and 
mail the brochures (I), it is necessary to develop a budget (H), contract for the space (D), 
and identify the conference speakers (K). Each event is necessarily preceded by others. 
Time estimates for each activity are entered above each line. (Some PERT charts give 
a normal, an optimistic, and a pessimistic time projection, but we give one figure—the 
expected time in days. PERT charts can also be constructed with cost estimates substi¬ 
tuted for time estimates.) 

Various paths lead from the decision to hold the conference (A) to the opening session 
(G). If you add the times required to complete all the steps along any particular path, 
you arrive at an expected time to complete that path—ABCDEFG requires twenty-two 
days; ABJKIFG requires forty-two days. The path that takes the most time is the critical 
path (in this case, path ABHKIFG) and is usually highlighted in some way. Any delay in 
the critical path will delay the entire project. Other paths may have built-in slack times, 
where small delays will not cause that path to exceed the time required for the critical 
path. The critical path in this example tells us that the conference organizers have forty- 
three days to complete their project. If for some reason the conference must be held 
sooner, they must find some way to decrease the time required to complete the critical 
path. 

In summary, program implementation involves the full range of administrative skills 
and concepts, but implementation can occasionally be facilitated by using certain tech¬ 
niques. Our examples are simplified to illustrate the logic of the technique. All the tech¬ 
niques, however, can be applied to projects of much greater magnitude and complexity. 



zj6 Chapter 7 Planning, Implementation, and Evaluation 

4 * ' ... 

«/ „ / • 
<5)/ (4) 

/ / \ 

(5) © 
(7)\ (12\ (3)/ 

\ \ / / 0) 
©--(1-5)-® J» 

Critical path 
— 

(12)''VX X (4) <> Expected time in days 

Key to Action Steps 

(A) Decide to hold conference. 

(B) Organize planning group. (fi) Develop budget. 

(C) Assess possible locations. (T) Print and mail brochures. 

(6) Contract for space. (j) Establish conference theme. 

(E) Set up rooms. (R) Contact and confirm speakers. 

(F) Conduct registration. (C) Develop conference materials. 

(G) Hold opening session. (Q) Deliver materials to site. 

FIGURE 7.5 

Chart for Organizing a Conference 

Regardless of the complexity of the application, the result should be the same—a more 
disciplined and precise view of the implementation of one’s program. 

Reengineering 

Recently, some public administrators have adopted a more comprehensive, even radical 
technique for enhancing organizational performance, called reengineering. The core tenet 
of reengineering centers on redesigning work processes and organizational structures to 
be in line with agency outcomes. Proponents of the technique view existing bureaucracies 
as relics from the industrial age and seek to restructure public organizations. Through 
this technique, they attempt to make public organizations more flexible and capable of 
responding to the dynamic conditions in contemporary society. 

In some respects, reengineering builds upon systems theory, PERT/CPM and other 
techniques in that it involves the recognition of core processes and the systemic con¬ 
text of staff behavior. However, the outcome of reengineering goes well beyond simply 
making alterations within the existing bureaucratic structure. Its goal is to overhaul 
rigid government agencies into what one author calls seamless organizations: “In con¬ 
trast to the fragmented bureaucracies of the past, seamless organizations provide a 
smooth, transparent, almost effortless experience for their customers. Staff in seamless 
organizations perform the full job, in direct contact with their end users” (Linden 
1994, p. xii). 



Evaluation 277 

Implementation of a reengineering process begins with an identification of the organi¬ 
zation’s desired outcomes. These include the short- and long-term impacts the agency 
wants to achieve. Then, the organization is redesigned around the core and support 
processes that will produce these outcomes. Given the hierarchical, inflexible nature of 
many public organizations, though, this is not as simple as it may seem. 

Reengineering requires that public administrators change their current assumptions, 
those equating organization with traditional bureaucracy. Such a reorientation helps to 
transform work processes and agency structures to those driven by meaningful out¬ 
comes— a shift from segmentation to integration, from division of labor to seamless 
work (Linden, 1994). 

Reengineering involves enhancing those activities that may be considered value- 
added— that is, activities that give customers more of what they are willing to pay for 
and cutting functions that merely stand in the way. Of course, some of the functions 
in this latter category remain crucial for the organization’s success. Central administra¬ 
tion activities such as budgeting, accounting, and quality inspections cannot simply be 
removed from the picture. On the other hand, these functions often hinder the comple¬ 
tion of the more value-added activities. The key to successful reengineering is to separate 
the core processes from the other tasks, enabling the critical activities to be carried out 
more effectively. 

While management plays a central role in any reengineering effort, the technique’s 
success depends upon the capacity of key teams engaged in project design and imple¬ 
mentation. The first team is responsible for identifying organizational processes in need 
of change. Next, the second group leads the change initiative. Individuals from 
throughout the organization, as well as members of the organization’s stakeholder 
groups, are brought in to inform the process and to develop indicators that will help 
keep the initiative on track. Leaders emerge from each of these teams—individuals 
who guide the reengineering process by ensuring that it has adequate resources, admin¬ 
istrative support, and overall organizational commitment (Hammer & Champy, 1993; 
Linden, 1994). 

Evaluation 

The sequence of planning, implementation, and evaluation is completed by asking 
whether the goals and objectives of the program have been achieved in a way that was 
both efficient and effective. Such evaluations may, however, operate at a variety of differ¬ 
ent levels. Some may respond to the interest of the legislature in knowing whether the 
intended benefits of legislation were achieved; others may be designed to communicate to 
the public what is happening in areas of broad citizen interest; still others may be oriented 
toward improvements either in the design of the policy being implemented or in the way 
it was conducted. An understanding of the contemporary approaches to evaluation 
requires attention to both the performance measurement movement mentioned earlier 
and more traditional program evaluation approaches. 



278 Chapter 7 Planning, Implementation, and Evaluation 

While program evaluation offers insight into each'policy or program’s direction, effec¬ 
tiveness, and sustainability, performance measurement generates information concerning 
the organization or network as a whole. When combined within the framework of eval¬ 
uation research, these strategies not only assist" in the decision-making process, they 
improve the overall accountability of public organizations. In turn, evaluation research 
enhances legislative oversight and administrative control. 

Several legislative groups conduct or sponsor evaluation research at the federal level. 
These include the General Accounting Office (GAO), the Congressional Budget Office, 
the Congressional Research Service, and the Office of Technology Assessment, as well as 
various legislative committees, primarily those concerned with the budget and with over¬ 
sight of specific programs. Executive agencies, such as the Office of Management and 
Budget and the Executive Office of the President, also conduct evaluation research. 
Much of this research, however, is sponsored by the various agencies themselves, as 
managers seek to determine how they can better manage or generate greater productivity 
from their organizations. 

There is also great interest in performance measurement and program evaluation at 
the state and local levels, although resources to support such activities have often been 
limited. State governments have developed analytic capabilities within the executive 
branch, often through the budget office. In recent years, many states have restructured 
their budgets to be in line with predetermined performance standards. This has enabled 
state governments to link fiscal resources to the desired results targeted by each agency. 
Evaluation research is then used to help the state government determine how successful 
it has been in achieving its performance goals. Consequently, state legislatures and citi¬ 
zens can now see what services and impacts were gained with public resources. 

Again, at the state and local levels and in most nongovernmental organizations, as 
at the federal level, a great deal of evaluation research is done as part of the agency or 
program manager’s ongoing responsibility. Particularly in the era of reinvention and 
the National Performance Review, public administrators increasingly must show not 
only the efficiency of their actions but also the results of their actions within the broader 
stakeholder community. Examples of performance measurement and program evaluation 
range from complex, detailed, one-time studies to the ongoing, integrated monitoring of 
performance goals. Regardless of the level of sophistication, evaluation research offers 
important details in support of the organization’s overall strategic planning and to assist 
the organization in determining the direction of individual programs. 

Performance Measurement 

The most recent addition to the field of evaluation research, performance measurement, 
emerged during the late 1980s, as citizens, legislators, and advocacy groups started to 
demand more value from public organizations. Government was pressured not only 
to show its efficiency in expending public resources but also to prove that substantive 
results, or outcomes directly related to the effect a program has on the public, had been 
generated by its activities. As the call for reinventing government gained in strength in 
the early 1990s, the move toward performance measurement occurred at all levels of 
government. Federal agencies developed performance standards at the program level and 



Evaluation 279 

in their management and administrative functions. State and local governments followed 
suit, both as a means of assessing their activities and of enhancing their reporting under 
federal programs (Wholey, Hatry, & Newcomer, 1994). 

Networking 

The federal government provides updates and related information concerning 
evaluation strategies under its Government Performance and Results Act (GPRA) 
at the GPRA Report site (http://www.ombwatch.org/gpra) and the Congressional 
Institute (http://www.conginst.org). For information concerning evaluation 
activities by state and local governments, visit these sites: http://policyworks.gov 
and http://www.auditor.leg.state.mn.us/info.htm. 

In 1993, performance measurement became the law under the Government Perfor¬ 
mance and Results Act (GPRA). The act mandated that federal agencies undergo a strate¬ 
gic planning process to identify five-year performance outcomes. Organizational activities 
toward these outcomes, then, would be measurable through annual performance reviews. 
The performance review plans were required starting in fiscal year 1999. Within these 
plans, federal agencies identified performance indicators — specific, quantifiable goals that 
the agency strives for in pursuit of its more substantive objectives. These indicators reflect 
each agency’s outputs and outcomes. 

A distinction should be made here between inputs, outputs, and outcomes: inputs are 
those resources — financial, human, and otherwise — available to the organization; out¬ 
puts are the actual goods or services produced by an organization; and outcomes, as we 
have mentioned, are the long-term objectives that the organization wants to achieve. As 
an illustration, the Federal Aviation Administration issues regulations, which constitute 
one type of its outputs. But someone measuring the performance of this organization 
would be only moderately interested in the number of regulations it issues. More impor¬ 
tant would be the effect of the regulations on desired goals, such as improved air safety. 
Improved air safety would be an outcome. (Generally speaking, objectives are likely 
to be narrow and specific, directly tied to each organization’s particular activities; out¬ 
comes, on the other hand, are related to the larger purposes to be served by the organi¬ 
zation’s work.) 

The long-term impact of GPRA remains to be seen; however, in a recent symposium, 
representatives from federal agencies and the academic community had a chance to reflect 
on some of the reactions to federally mandated performance measurement. Kathryn 
Newcomer, one of the scholarly participants, wrote, “[T]he message given at the confer¬ 
ence was certainly mixed. There are benefits in the form of improved dialogue about 
Federal government performance in this GPRA era, but there is still much progress to be 
made in improving dialogue across agencies and across congressional committees. And 
the report cards on performance reporting in the federal government [based on reporting 
standards for federal agencies] are not out yet. The criteria to be used by Congress in 
grading performance reports are still big—and significant—unknowns in the perfor¬ 
mance rating game” (Newcomer, 1999, p. 10). All else aside, GPRA certainly has helped 



2 So Chapter 7 Planning, Implementation, and Evaluation 

to broaden the dialogue to include issues of government effectiveness and the capacity of 
federal agencies to achieve public objectives. 

Of course, the move toward performance measurement goes well beyond GPRA and 
its requirements for federal agencies. Public organizations at all levels, as well as organi¬ 
zations in the nonprofit sector, have begun to tie evaluation research to their planning and 
implementation functions. Most state governments, for instance, now use performance 
measurement as a means of assessing their activities in terms of both outputs and out¬ 
comes. Accordingly, these states can associate budget decisions and program directives 
with specific performance standards set by each agency. And, as a result, the states enjoy a 
more effective system of accounting for their efficiency and effectiveness to citizens and 
other stakeholders. 

Several years ago, for example, the state of Texas instituted a performance budgeting 
system as a means of enhancing agency accountability and productivity. Under the new 
system, state agencies must determine the resources necessary to accomplish perfor¬ 
mance goals, then negotiate the goals and resources with the state legislature. Once the 
outcomes and allocations have been established, lawmakers grant spending authority 
based on the performance goals. The move away from program categories and line 
items, thus, gives administrators in Texas greater flexibility in meeting their performance 
objectives. And, the budget system ensures that evaluation and measurement is based 
on productivity rather than on agency processes (Carter, 1994). However, as we see in 
Box 7.3, the task of identifying measures is not always easy. 

Altering the Outcomes 

These days, discussions of welfare reform invariably turn to outcomes. Historically, 
welfare programs used measurements that assessed process efficiencies. In an entitle¬ 
ment system, the measurement of error rates and the number of cases per caseworker 
were appropriate, since the business was focused — as its primary driver — on deter¬ 
mining eligibility. 

In the new world of welfare reform, with time-limited benefits and workfare pro¬ 
grams, the objectives are more complex than getting the applicant a check. 

The new paradigm involves helping recipients develop enough self-sufficiency so 
that they do not need state-provided financial supports. It is no longer acceptable that 
welfare programs are just efficient; they must also be effective. The only way to con¬ 
firm that they are effective is to measure their effectiveness against some agreed-upon 
criteria. Therefore, the discussion of outcome measures is critical to welfare reform. 

William Kilmartin, comptroller for Massachusetts, who is a strong advocate of 
management accountability in the public sector, said: 

Clarifying the outcomes we desire is important. Let me give an example of a 
situation that makes outcome measurement so tricky in the field of human service. 

(continued) 



Evaluation 281 

Take an example of a hypothetical mother and child that were getting assistance 
under the old Aid to Families with Dependent Children (AFDC) program; the 
child was removed from the home and put into the care and protection of the 
state in its foster care program. The child welfare worker that removed the child 
from the mother’s care was supposed to inform the welfare caseworker that the 
child was out of the household, so that the benefit to the mother was reduced. 
The assumed measure of program success for welfare was to reduce the caseload 
level; we went one case down in AFDC and one up in child welfare. But a positive 
outcome measure for the child welfare program was to get the children in foster 
care back to their mothers. Working toward that outcome, the child welfare case¬ 
worker would not have informed the AFDC program of the foster care placement, 
because doing so would have reduced the mother’s income level. The child welfare 
caseworker worried that the reduced resources available to the mother would 
reduce the likelihood that she could create the conditions necessary for the return 
of the child. The finance people went nuts when this type of situation occurred, 
but from the perspective of the child welfare worker it was a rational decision 
because of the assumed outcome of reunification. From the welfare agency’s per¬ 
spective it was a poor outcome—fraud! ... I think that you would find that every 
public servant is in vociferous agreement with the concept of performance mea¬ 
surement. . . . The difficulty is converting policy objectives into metrics for 
accountability. A lot of people have tried to use the budget process as a tool for 
holding agencies accountable for outcomes, but I do not know if that works. 
In the private sector, goals and objectives can be converted to financial terms 
easily. In the public sector, it is a stretch beyond reason to think that all things 
can be measured in terms of budgetary outcomes. 

SOURCE: Larry Singer, “Altering the Outcomes: Assessing Welfare Program Effectiveness Requires More 
Than Just Caseload Count.” Government Technology 10 (December 1997): 143. Copyright © 1997, 
Government Technology magazine. Reprinted with permission. 

Similarly, the United Way of America has implemented a comprehensive outcome 
measurement program, to foster a consistent, effective system of performance man¬ 
agement across United Way-funded agencies (Hatry et ah, 1996). The United Way 
approach concentrates on a logical chain — linking program inputs, activities, outputs 
and outcomes — with outcomes measured by specific points of information referred to 
as indicators. The goal for the United Way is to encourage agencies to move away from 
traditional, efficiency-related measures to more meaningful assessments of program 
impact, based on the number and percentage of clients to achieve the program out¬ 
comes (Hatry et ah, 1996, pp. 1-2). 

In identifying performance standards, public and nonprofit organizations may pull 
from a variety of sources. This is usually done in what is called a process of bench¬ 
marking. Benchmarking features the targeting of specific goals based on previous per¬ 
formance levels, standards set by similar organizations, objectives created through a 
strategic planning process, or any combination of these and other relevant sources. 



2 82 Chapter 7 Planning, Implementation, and Evaluation 

Public administrators then assess agency performance, using comparisons with these 
predetermined indicators. Through benchmarking, administrators are able to connect 
their evaluation research directly with the agency’s planning and implementation 
strategies. 

The most effective application of performance measurement integrates evaluation 
and measurement within the broader context of performance management. A recent 
report on one successful performance management exercise was developed by Jay 
Hakes, administrator of the Energy Information Administration (EIA) of the U.S. 
Department of Energy, based on his work with the agency. Specifically, based on the 
EIA experience, Hakes suggests that organizations that attempt to pattern assessment 
strategies, without first sequencing these strategies in the overall process of organiza¬ 
tional change, may lose sight of important organizational barriers both to perfor¬ 
mance measurement and to the change itself. These groups may fall into the trap 
of monitoring activities without linking them to the targeted goals and outcomes of 
the organization. 

To prevent this, Hakes suggests several action steps that lay a foundation for success¬ 
ful performance measurement, which include: 

• analyzing goals deriving from statutes and historic practices 
• discussing desired outputs and outcomes with major customers in and out of 

government 
• writing a strategic plan 
• drawing an input/output map of the organization (Hakes, 1997, p. 10) 

However, it is important to note that these steps represent merely the beginning of 
successful performance management. Commitments from top leadership, organizational 
members, stakeholders and those overseeing agency resources must be gained in order 
for the change strategy to be effective. The performance measures themselves must 
be linked with the organization’s budget allocations and reward systems. In this regard, 
creating an effective measurement strategy means transforming the organization into a 
performance-based organization. 

The next steps in the process involve integrating the measures throughout the organi¬ 
zation. This can be done, according to Hakes, by involving organizational members in 
the process and by gaining feedback to enhance the measures. Data sources, complete 
with baseline indicators, should be established and a benchmarking process initiated to 
ensure that the goals will be measurable and the activities geared toward predetermined 
performance standards. 

Finally, clear decisions must be reached on how the performance measurement system 
will be used. Some may opt for a more punitive application of assessment, choosing to 
use the techniques to play a watchdog role. Hakes encourages public administrators to 
employ measurement strategies in a more constructive way: “If workers can use mea¬ 
sures for self correction and continuous improvement without risk of punishment or 
with some prospect for reward, progress on providing value for dollar (maximum out¬ 
puts and outcomes for minimal inputs) will surpass the expectations of most observers” 
(1997, p. 17). 



Evaluation 283 

As with any successful approach to organizational change, Hakes reveals that the 
most meaningful attempt at performance management will occur when leadership 
engages members from throughout the organization and, in turn, connects the assess¬ 
ment strategy to the organization’s long-term outcomes. More important, Hakes 
suggests that public administrators must become less concerned with strictly the quan¬ 
titative indicators and more concerned with creating a culture of success within their 
organizations. (The challenges of applying performance management in practice are 
discussed in Box 7.4) 

BOX 7.4 
iH!¦¦¦ 

Performance Management: Theory and Practice 

In theory, measures of performance are thought to be answers to questions. In prac¬ 
tice, performance measures are often themselves questions, or at least they raise as 
many questions as they answer. Performance measures are exactly that, quantitative 
representations of some reality. Because performance measures are represented quan¬ 
titatively, they have the appearance of fact and convey impressions of objectivity and 
neutrality. In practice, such measures are quantitative interpretations of reality in 
exactly the same way words are narrative interpretations of reality. In practice, very 
little is judged to be neutral and objective; all performance measures may be used as 
arguments and weapons in policy debates. 

Measuring Performance 

In Theory In Practice 

Measures of performance answers facts 
are . . . objective evidence 

neutral questions 
interpretations slanted 
arguments weapons 

Results are . . . aggregated for everyone for some but not others 
Performance is . . . long term short term 
Policy is moved by . . . data and analysis rhetoric 
What to measure . . . the important the measurable 
Program domain . . . comparable particular 

Casual assertions demonstrated unclear 
can be . . . 
“This program ...” performs poorly performs poorly, but things 

would be worse without it 

SOURCE: H. George Frederickson, “Measuring Performance in Theory and Practice.” Public 
Administration Times, Vol. 23, No. 8, 2000, pp. 8-10. 



Chapter 7 Planning, Implementation, and Evaluation 

An interesting approach to performance measurement that has begun making its way 
into the public and nonprofit sectors is Kaplan and Norton’s (1996) “Balanced 
Scorecard.” The Balanced Scorecard balances concerns for financial performance and 
internal business processes with customer service and organizational learning, enabling 
decision makers to track various dimensions of an organization’s performance and com¬ 
municated more effectively with stakeholders. Kaplan and Norton point out, however, 
that the Balanced Scorecard is not a just technique to control behavior or evaluate past 
performance. Rather it should be used to communicate, to inform, and to enable learn¬ 
ing and growth. Through the use of this technique managers should be able to monitor 
and adjust the implementation of their strategies and make fundamental changes in the 
way the organization operates (Kaplan & Norton, 1996, pp. 18-24). 

Not only those in the United States, but government agencies around the world have 
begun to develop strategies to help them evaluate their efforts and assume more client- 
centered approaches to meeting public outcomes. A recent study examined reform efforts 
in member states of the Organization for Economic Cooperation and Development 
(OECD) and selected nonmember nations. Nations such as Canada, Spain, and Sweden 
were targeted for their efforts to develop and implement performance measurement tech¬ 
niques on a nationwide basis. Other countries, like the United States, Germany, Korea, 
Mexico, and the Netherlands, were cited for implementing performance monitoring in 
specific policy areas. The areas sampled included health care, police and public safety, and 
policy advice. 

The findings from this research suggested that several requirements influence the suc¬ 
cess of performance monitoring by public organizations, including the need for “strategic 
leadership from central units,” “the establishment of the proper organizational incentives 
which support and encourage results-based management,” and “the use of program 
evaluation as a complement to ongoing performance measurement systems to address 
performance issues that performance measurement cannot well deal with so as to make 
the best use of these two measurement tools” (Mayne, 1997, p. 16). 

The research showed that the dynamic environments in which the organizations 
functioned had a significant impact on each agency’s capacity for performance and its 
measurement. In fact, the study found that the ability of an organization to adapt to 
changing conditions exceeded raw performance as the primary indicator of organiza¬ 
tional success. Mayne (1997) wrote, “Maximizing flexibility may be more important 
than maximizing short-term utility” (p. 16). The study concluded that organizational 
survival depended on each group’s ability to integrate performance measurement with 
the organization’s overall capacity for problem solving and strategic management. 

Of course, such a capacity depends on each agency’s ability to monitor both the 
broader organizational performance as well as the effectiveness of individual programs. 
We have noted the significance of the first of these evaluation strategies in our discussion 
of performance measurement. However, additional attention should be given to program 
evaluation, which generates valuable insight into organizational processes and the pro¬ 
grammatic impacts produced by policies and initiatives. If performance measurement 
connects the organization as a whole to specific results and outcomes, then program 
evaluation reveals how actions by an organization contribute to the objectives within 
each policy area. 



Program Evaluation 285 

Program Evaluation 

There are a variety of ways to classify the approaches to program evaluation. These are, 
for example, outcome evaluations and process evaluations. Outcome evaluations, which 
are closely tied to the type of assessment in performance measurement, focus on the results 
of program activity—that is, the extent to which a program meets its objectives in terms 
of impact on the environment (for example, the previous discussion relating to the United 
Way of America). If the work of an organization is to improve adult literacy, then an eval¬ 
uation might measure the number of individuals who learned to read. That information 
would likely then be related to program inputs to show, in a cost-benefit ratio (in this case, 
based on allocative efficiency), the number of individuals learning to read per thousand 
dollars spent. In general, an outcome evaluation seeks to determine whether X causes Y, 
where X is the activity of the program and Y is the desired outcome or goal. As you can 
imagine, outcome evaluations are particularly valuable to legislators, grant-makers and 
others concerned with performance of various programs. 

In contrast to outcome evaluations, process evaluations focus on ways program 
implementation might be improved to better meet the program’s objectives. The ques¬ 
tion here is what can be done to X, the program’s management, to improve Y, the 
desired outcome. Where an evaluator interested in outcomes might spend a great deal 
of time developing systematic measures of program results, someone interested in 
process evaluation would analyze the organization and management of the agency’s 
activities, including distribution of financial and human resources and design of service 
delivery mechanisms (Sylvia, Meier, &c Gunn, 1985, p. 136). Process evaluations also 
determine if legally prescribed processes are being followed and assure that individual 
rights are not violated. 

Relevant measures here would fall more on the input side, and might include such items 
as workload measures or data on resource allocation. In such studies it may be important 
to distinguish between efficiency and effectiveness. Efficiency is concerned with the rela¬ 
tionship between inputs and outputs, usually expressed in a ratio per unit of input. For 
example, a measure of streets paved per thousand dollars spent would be a measure of effi¬ 
ciency. Effectiveness, on the other hand, is concerned with the extent to which a program 
is achieving or failing to achieve its stated objectives (Poister, McDavid, & Magoun, 1979, 
p. 3). Effectiveness measures are outcome-oriented; they focus on the real changes the pro¬ 
gram produces, such as a decrease in airline deaths. 

Sometimes process evaluations occur after the fact, that is, upon completion of the 
program; but often they occur during program operation. Indeed, some process evalua¬ 
tions are almost continuous in their ongoing review of program operations (Poister, 
1983). In either case, the information that emerges in the course of a process evaluation 
is likely to be of greatest interest to the program manager who hopes to improve his or 
her organization’s performance. 

Program evaluations may therefore be directed toward many different audiences and 
serve many different purposes. The specific kinds of information required vary from eval¬ 
uation to evaluation. Eleanor Chelimsky, former head of the General Accounting Office’s 



2 86 Chapter 7 Planning, Implementation, and Evaluation 

Program Evaluation and Methodology Division, lists the following types of information 
that may be developed retrospectively: 

• information on program implementation (such as the degree to which the program 
is operational, how similar it is across sites, whether it conforms to the policies 
and expectations formulated, how much it costs, how stakeholders feel about it, 
whether there are major problems of service delivery or of error, fraud, and abuse, 
and so on) 

• ongoing information on the current state of the problem or threat addressed by 
the program (Is the problem growing? Is it diminishing? Is it diminishing enough 
so that the program is no longer needed? Is it changing in terms of its significant 
characteristics?) 

• information on program outcomes (What happened as a result of program imple¬ 
mentation?) 

• information on the degree to which the program made, or is making, a difference 
(That is, what change in the problem or threat occurred that can be directly attrib¬ 
uted to the program?) 

• information on the unexpected (as well as the expected) effects of the programs 
(For instance, was a program of drug education accompanied by an increase in the 
use of drugs?) (Chelimsky, 1985, pp. 8-9) 

Evaluation Designs and Techniques 

Approaches to the evaluation of public programs range from historical analysis to 
sophisticated experimental designs. Indeed, over the years, there has been a recurring 
debate over the proper approach to evaluation. Some argue that such research should be 
primarily qualitative, concerned with tracking program development and indicating 
forces that helped shape the program. Advocates of this approach tend to be most inter¬ 
ested in process questions, such as reasons for success or failure and unanticipated con¬ 
sequences of the program. They ask, “What happened?” Others argue that program 
evaluations should, wherever possible, employ the most rigorous scientific methods 
appropriate to the subject matter, including the design and execution of formal experi¬ 
ments. These analysts tend to be more interested in program outcomes. They ask, 
“Does it work?” (Chelimsky, 1985, p. 14). 

Whatever the approach, those involved in program evaluation must confront two 
challenges to the validity of their work. The first question, concerning internal validity, 
asks whether the approach measured what was intended. Was the design consistent with 
the goals of the program and the needs of the sponsor? Were the methods most appro¬ 
priate for answering the questions that needed to be asked? Were the results as free from 
bias as possible? A second question, concerning external validity, asks to what extent the 
findings may be applicable to more general circumstances. What does the study say 
about similarly situated programs? Can the study be replicated and expected to produce 
similar results? These and other questions can be directed toward the various techniques 
employed in evaluation research. 



Program Evaluation 2 87 

Qualitative Techniques 

Many program evaluations depend on qualitative information derived from reading 
about the program, from interviewing important actors (including agency personnel, 
clients, and others), and sometimes from actually participating in the work of the pro¬ 
gram. The initial step in a qualitative evaluation project is usually to read everything 
available about the program and the subject matter, including background material on 
the subject of the program (flu vaccines, child nutrition, rapid transit systems, and so 
on), agency documents, operating procedures, internal memoranda, newspaper and mag¬ 
azine articles, articles on similar programs elsewhere, and reports issued by various con¬ 
cerned groups. The researcher would also likely make a few phone calls to identify the 
significant actors in the program and determine where the most important activities are 
taking place. 

Following an initial reconnaissance, the analyst settles on a limited number of sites 
(schools, hospitals, highway systems, and so on) as the focus of the investigation. Most 
qualitative evaluations are largely exploratory, designed to explore a variety of hunches 
or intuitions about the program’s operation. For these cases, the analyst will probably 
try to select sites that vary widely along several crucial dimensions. Some evaluations, 
however, are hypothesis-guided, designed to demonstrate the plausibility of a particular 
hypothesis, so the analyst might choose a limited number of crucial sites that are espe¬ 
cially illustrative of the issue under investigation (Murphy, 1980, pp. 38-47). 

Once the research sites have been chosen, the analyst may choose to gather most of his 
or her information through intensive interviews, detailed information-gathering sessions 
involving major actors both inside and outside the agency responsible for the program. 
Interviewing skills include establishing the interviewer’s credentials, setting the proper cli¬ 
mate, arranging questions effectively, asking reasonable but challenging questions, and 
keeping a good record of all that is said. Perhaps most important, the interviewer must 
keep the discussion on the subject, in a way that is neither obvious nor embarrassing 
to either party. Immediately following the interview, the interviewer should review and 
expand upon the notes taken during the interview session. These notes will form an 
important basis for drawing conclusions about the program. 

An alternative means of gathering qualitative information is the use of a participant- 
observer, someone involved in either the target population or the agency itself, who 
makes observations and draws conclusions based on firsthand data. For example, an 
evaluation of an antipoverty program in eastern Kentucky some years ago employed a 
participant-observer who lived in the community, talked daily with others in the commu¬ 
nity about the program, and reported back to the overall evaluation staff. 

Either technique can be questioned with respect to both internal and external validity. 
Biased information and questions about internal validity can arise if the wrong people 
are chosen to interview or if those interviewed provide misleading information, inten¬ 
tionally or unintentionally. Participant-observers can affect the program’s operation 
through their own presence, leading to outcomes far different from what would other¬ 
wise have happened. Questions concerning external validity (or generalizability) might 
be raised with either technique based on the choice of only a limited number of sites for 
investigation. 



2 88 Chapter 7 Planning, Implementation, and Evaluation 

Quantitative Techniques 

Policy evaluations often endeavor to approximate the scientific methods of the physical 
sciences, though such efforts are extremely difficult. In its classic formulation, an experi¬ 
mental design involves examination of two or more groups under carefully controlled 
conditions. One group, the experimental group, receives a treatment or intervention; in 
the case of program evaluation, members of the experimental group receive the benefits 
of the program being evaluated. Another group, the control group, consists of individu¬ 
als who are as similar as possible to those in the experimental group and who act under 
the same general conditions, yet do not receive the intervention. Members of both 
groups are tested before and after the experimental intervention (pretest and posttest 
measures) and the results are compared. If the program has had either a positive or nega¬ 
tive effect, the differences should show up in the data. 

We can illustrate the difficulties in designing a rigorous experimental design with 
respect to social programs by imagining that we are interested in analyzing the effective¬ 
ness of a new approach to mathematics education in the fourth grade. One classroom 
might be designated an experimental group and be taught using the new approach; 
another classroom might be designated the control group and be taught using traditional 
methods. The mathematical abilities of all students would be measured both before and 
after the period in which the new program was being taught. If the new technique is 
indeed more effective in educating children in mathematics, the posttest scores of the 
children in the experimental group should be higher than those of the children in the 
control group. 

Very generally, this is an application of an experimental design to a social program, 
and you can easily imagine how similar designs might be used to measure other pro¬ 
grams, ranging from immunizations to welfare incentives to highway designs. But we 
can readily observe the difficulties in such designs, some of which relate to questions of 
internal validity. One might respond to the study by saying that the students in the 
experimental group were smarter to begin with, or that the absence rate was higher 
among those in the control group. Or you might suggest that one teacher was better 
than the other, and that made the difference. Or, even if the same teacher taught both 
groups, you might speculate that he or she taught the new material with more enthusi¬ 
asm. Similar questions might be raised about external validity. For instance, if the results 
were obtained in a rural school, would they apply as well to an urban setting? 

Some, if not all, of these questions could be anticipated by slightly altering the research 
design. For example, students could be randomly assigned to the two groups, thus elimi¬ 
nating any possibility of bias in the group’s composition. But questions such as these show 
the difficulty of achieving true experimental conditions in measuring social programs. For 
this reason, most evaluations of social programs are called quasi-experimental. 

Quasi-experimental designs retain the requirement for systematic data gathering that 
should be part of any quantitative approach, but free the researcher from some of the dif¬ 
ficulties of developing experimental designs, such as the need for random assignment of 
subjects to various groups. Flere again, different groups may be compared, but an essen¬ 
tial task for the researcher is to separate the effects of a treatment from effects of other 
factors. Only the effects caused by the treatment are of interest. 



Terms and Definitions 289 

Quasi-experimental approaches are not only more adaptable to social situations; they 
also better fit the situation in which program evaluators often find themselves — assigned 
to the evaluation long after the program has begun and having little way to influence 
patterns of intervention. In such a case, a historical approach may be of special value. 
For example, one quasi-experimental design, time series analysis, involves making a 
number of observations about the target population both before and after the program 
intervention. (These observations may even be made retrospectively, by gathering histori¬ 
cal data.) In one case, basic information about neighborhood crime was developed for 
a period of years prior to the introduction of a new patrol pattern, then similar data 
followed after the new approach was introduced. 

Summary and Action Implications 

As a public manager, you will become quite familiar with the cycle of planning, imple¬ 
mentation, and evaluation. In practice, the phases of the cycle will rarely appear as dis¬ 
tinct as in our discussion, but you will still find that you must devote a portion of your 
time to each phase. In middle and upper management, the planning, implementation, and 
evaluation cycle will become especially complex, because you will find yourself engaged 
in all three phases almost simultaneously. That is, you will be planning for one project 
at the same time that you are implementing a second and evaluating a third, and so on. 
Maintaining a good sense of the timing of the various projects and knowing when and 
how to shift from one to the next will be extremely important. 

As we have seen, techniques have been developed to help you work through the typical 
problems you will encounter in each phase of the cycle. Although many of the techniques 
can be elaborated in highly complex ways, the logic upon which they are based can be 
helpful in dealing even with fairly simple and immediate problems. 

Throughout the planning, implementation, and evaluation cycle, you should remember 
that, whereas we have focused on technical aids to your administrative work, each of the 
three areas will be strongly affected by how you interact with the people in your organi¬ 
zation (and elsewhere). Planning, implementation, and evaluation are human processes, 
and are thus subject to people’s shifting values, attitudes, and behaviors. In planning, 
implementation, and evaluation, as with budgeting, financial management, and person¬ 
nel, techniques are only successful when you use them with full regard for democratic 
values, clear leadership, and humane management. 

Terms and Definitions 

Benchmarking: Targeting of specific goals based on previous performance levels, stan¬ 
dards set by similar organizations, objectives created through a strategic planning 
process, or any combination of these and other relevant sources. 



290 Chapter 7 Planning, Implementation, and Evaluation 

Cost-benefit: Identifying and quantifying both negative impacts (costs) and positive 
impacts (benefits) of a proposal, then subtracting one from the other to arrive at a net 
benefit. 

Decision analysis: Technique wherein decisions are likely to be made sequentially and 
under some degree of uncertainty. 

Decision tree: Technique that identifies various possible outcomes, given the risk asso¬ 
ciated with each. 

Effectiveness: Extent to which a program is achieving or failing to achieve its stated 
objectives. 

Efficiency: Relationship between inputs and outputs. 

Institutional subsystem: Responsible for adapting the organization to its environment 
and for anticipating and planning for the future. 

Managerial subsystem: Concerned with providing necessary resources for accomplish¬ 
ing a technical task and mediating between the technical and institutional subsystems. 

Outcome evaluations: Evaluations that focus on the results of program activity, 
the extent to which a program meets its objectives in terms of impact on the 
environment. 

Participant-observer: Someone in either the target population or the agency who makes 
observations and draws conclusions based on firsthand experience. 

Performance indicators: Specific, quantifiable goals that the agency strives for in pursuit 
of its more substantive objectives. 

Performance measurement: Careful and detailed measurement of the achievement of 
program objectives and outcomes by a program or agency. 

PERT: A way to monitor the time or costs of various activities required to complete a 
project, showing the sequence in which the activities must be completed. 

Policy analysis: Process of researching or analyzing public problems to provide policy 
makers with specific information about the range of available policy options and advan¬ 
tages and disadvantages of different approaches. 

Process charting or flowcharting: Graphically demonstrating the various steps in 
an operation, the people who perform each step, and relationships among those 
elements. 

Process evaluations: Seeking ways to improve program implementation so as to better 
meet program objectives. 

Reengineering: Radically redesigning work processes and organizational structures to 
be in line with agency outcomes. 

Stakeholders: The many different persons who are involved in policy decisions and 
are affected by the results. 



Cases and Exercises 291 

Strategic planning: Matching organizational objectives and capabilities to the antici¬ 
pated demands of the environment to produce a plan of action that will ensure achieve¬ 
ment of objectives. 

System: Set of regularized interactions configured or “bounded” in a way that differenti¬ 
ates and separates them from other actions that constitute the system’s environment. 

Systems theory: Effort to identify the interactions of various internal and external ele¬ 
ments that impinge on an organization’s operations. 

Technical subsystem: Concerned with effective performance of an organization’s 
actual work. 

Time series analysis: Making a number of observations about the target population 
both before and after program intervention. 

Study Questions 

1. Planning is one aspect of the policy process. Discuss the various types of planning and 
their objectives. 

2. In organizing a planning process, what are the primary concerns of the planning group? 
3. Discuss the necessary steps for comprehensive policy analysis. 
4. Identify some of the quantitative techniques used for policy analysis. 
5. The second phase of the policy process is implementation of plans. Discuss some of 

the techniques available to help in the beginning stages of the implementation process. 
6. Compare and contrast the several different subsystems that carry forward an organi¬ 

zation’s work. 
7. What does the phrase “managing for results” mean? How might such a program be 

implemented? 
8. What are the different types of evaluation approaches? Discuss the distinctions among 

them. 

Cases and Exercises 

1. As a class or working in small groups, assume the role of a task force that the 
governor has asked to develop plans for a new university the legislature has cre¬ 
ated in a rapidly expanding area in the corner of your state. Your plan should be 
based on whatever assumptions you wish to make by explicitly stating them in 
writing; however, all your assumptions should be consistent with the following 
guidelines: 
a. Assume that you have full legal authority to develop the university, including the 

power to develop a full range of undergraduate programs and a limited number of 



292 Chapter 7 Planning, Implementation, and Evaluation 

graduate programs in areas of special interest ro the state. 'Assume a high degree of 
political support within the corner of the state where the university will be built, 
and general support throughout the state, but assume major opposition from the 
state’s leading public university. 

b. Assume that the area where the new university is to be located already houses a 
community college, which the university will take over, and a couple of small, 
private liberal arts colleges. Assume that the community college has two thou¬ 
sand freshmen and sophomores and operates in two large buildings on a large 
tract of otherwise undeveloped land, which will be sufficient to accommodate the 
new university. 

c. Assume that the area in which the university will be built has traditionally had an 
agricultural and tourist-based economy, but is experiencing rapid growth in high- 
tech industry, primarily because companies are attracted to the area’s natural beauty 
and comfortable climate. 

d. Assume that you can anticipate a budget starting at $12 million for the first year of 
operations (this is inclusive of the community college budget), but rising at a rate 
of $7 million a year for the next nine years. Assume also that, in addition, there is 
adequate financing available for whatever new construction will be required during 
the first ten years of the university’s existence. 

e. Assume that you have full control over the curriculum of the university and author¬ 
ity to propose to the Coordinating Board on Higher Education any new program 
offerings. Assume, however, that the major university in the state will fight hard to 
protect its engineering and computer science programs from competition. 
You should create a plan for development of the new university over the next ten 

years. You should take into account all aspects of development, including all academic 
programs, student services, administrative support (including the physical plant, per¬ 
sonnel, and financial and accounting systems), capital construction, and intercolle¬ 
giate athletics. You may wish to establish subcommittees or task forces to work on 
particular areas; however, all reports should be combined into one single planning 
document to be submitted to the governor’s office. 

2. Imagine that your city council is considering a proposed ordinance to require a 5-cent 
deposit on each beverage container sold in the city. Each beer can, soft drink bottle, 
or other container would carry a city sticker or imprint. Retailers would collect the 
deposit on each container sold and would be required to pay 5 cents for each empty 
container returned to the store. Proponents of the bill argue that it would help clean 
up the city and provide better recycling of containers. Opponents argue that the bill 
would be difficult for stores to adhere to and a nightmare for the city to enforce. 
Develop a research design—that is, a plan for conducting research—that would 
enable you to report to the city council on the potential costs and benefits of the pro¬ 
posed ordinance. 

3. Complete the following exercise: The newly elected governor of a large Middle 
Atlantic state has asked you to assist in developing a plan to revise the method of 
patrolling the highways. The problem stems from a report by the federal Department 
of Transportation showing that an independent sampling of traffic in the state indicates 



Cases and Exercises 293 

far too many motorists are exceeding the federally mandated speed limit. The report 
goes on to threaten a cutoff of all federal highway funds to the state if something is not 
done. Perhaps of greater urgency, however, is the finding that the number of accidents 
per 1,000 miles driven is rising dramatically. 

The governor’s office has provided you with a set of alternative strategies for 
patrolling the highways and the associated costs and probable reductions in both acci¬ 
dents and speeders. Also included ifi the materials is a study of the revenue generated 
by the issuance of citations. You are asked to write a report indicating the various 
payoffs associated with each strategy. The types of patrols are: 

stationary radar trap patrol 

cruising car patrol 

airplane/chase car patrol 

The costs per shift for each patrol type are: 

stationary = $600 per patrol 

cruising = $800 per patrol 

airplane = $1,500 per patrol 

The cost of servicing each accident that occurs during a patrol is $250. The likeli¬ 
hood of accidents, however, differs depending on the type of patrol: the stationary 
patrol results in a .50 probability of two accidents; the cruising patrol results in a .30 
probability of two accidents; and the airplane patrol results in a .25 probability of 
two accidents. Finally, the number of citations issued varies by type of patrol: sta¬ 
tionary patrols issue eight citations on average; cruising patrols issue five citations on 
average; and airplane patrols issue three citations on average. 

A previous study indicated that accident rates of less than an average of one per 
patrol were typical of states where the Department of Transportation found accept¬ 
able levels of speeding. 

In a concluding paragraph, the governor indicates that it costs the state $50 to 
process a citation (which averages a fine of $85), but the governor goes on to say 
that may not be relevant to the choice of patrol type since the whole idea is to pre¬ 
vent accidents by slowing traffic to the legal speed limit (and preventing a cutoff of 
federal money). 

How would you go about developing the report to the governor? 

SOURCE: The preceding case was adapted from material provided by Barry Hammond of Slippery Rock 
University. 

4. Complete the following exercise: You have been hired by Expert Analysis consulting 
firm to work on a project for New York City. The city has hired the firm to analyze 
the advisability of contracting out garbage collection,' expanding city garbage collec¬ 
tion capacity, or going to a twenty-four-hour collection system. 

The city currently operates a sanitation department of 2,538 people using 781 
garbage trucks of two different sizes. The large trucks carry 35 tons per trip and 



294 Chapter 7 Planning, Implementation, and Evaluation 

make two trips per day. The small trucks carry 15 tons and make three trips per day. 
There are 537 small trucks and 244 large trucks. The cost of one day for a large 
truck is $720 in wages for three people (eight-hour shift) and $200 for maintenance. 
The cost of one day for a small truck is $480 for wages for two people (eight-hour 
shift) and $150 for maintenance. The collective bargaining contract calls for a shift 
differential of 15 percent above the standard $30 per hour for the truck crews, if the 
crews work other than 6:00 A.M. to 3:00 P.M. The contract has three years to go 
before it expires. A recent study indicates that the amount of garbage to be collected 
in the city will increase 14 percent in the next year and 18 percent in the following 
year. The study also shows that many of the larger firms in the city are contemplating 
using a private garbage service (We-Haul, Inc.), which has recently begun competing 
with the city. The study concludes that, although the amount of garbage to be 
collected will rise, the amount the city will be required to collect might fall slightly or 
remain steady. 

A quick check of the maintenance records for the large trucks indicates that you 
can expect a 20 percent increase in maintenance costs if you operate the trucks 
twenty-four hours a day and a 30 percent increase for the small trucks. You call the 
Tidy-Truck manufacturer and get a quote of $82,000 for a new large truck and 
$59,000 for a new small truck if you order this year. They expect a 6 percent price 
increase next year. 

Just as you put down the phone, your liaison with the city calls to tell you that the 
private contractor (We-Haul, Inc.) has offered to collect the additional garbage at a 
special rate for the city of $18 per ton for the first year and $20 per ton for the second 
year. 

Making reasonable assumptions about information you may need, develop a 
recommendation as to whether the city should expand its service by buying more 
trucks and hiring more people, operate its service twenty-four hours a day, or contract 
with the private service to pick up the increase. 

SOURCE: The preceding case was adapted from material provided by Barry Hammond of Slippery Rock 
University. 

5. The governor of a large Midwestern state has recently introduced a performance 
management initiative to enhance the activities of state agencies and, more specifi¬ 
cally, to reverse downward trends in educational achievement and increases in juve¬ 
nile crime. The governor, responding to increasing public outcry, has encouraged her 
cabinet to develop ten outcomes in the area of human and social services, then iden¬ 
tify performance indicators that can be used in monitoring the state’s progress in 
achieving these outcomes. As a senior cabinet member, you have been called upon to 
play a leadership role in this process. What are the primary outcomes that the state 
would need to accomplish in order to reverse the downward trends? What perfor¬ 
mance indicators could be used to help keep the statewide initiative on track? How 
would you ensure that these performance measurement strategies are implemented 
throughout the state and that the necessary organizational change has occurred to 
ensure their effectiveness? 



For Additional Reading 295 

For Additional Reading 

Allison, Michael, and Jude Kaye. Strategic Planning for Nonprofit Organizations. 
New York: John Wiley & Sons, 1997. 

Bingham, Richard D., and Claire L. Felbinger. Evaluation in Practice: A Methodological 
Approach. 2d ed. New York: Chatham House, 2001. 

Bryson, John M., ed. Strategic Planning for Public Service and Non-Profit 
Organizations. New York: Pergamon Press, 1993. 

Bryson, John, and Farnum Alston. Creating and Implementing Your Strategic Plan. 
San Francisco: Jossey-Bass, 1995. 

Bryson, John M., and Robert C. Einsweiler, eds. Strategic Planning Threats and 
Opportunities for Planners. Chicago, IL: Planners Press, 1988. 

Chambers, Donald E. Social Policy and Social Programs: A Method for Practical Public 
Policy Analysis. Boston, MA: Allyn & Bacon, 1999. 

Forester, John. Planning in the Face of Power. Berkeley, CA: University of California 
Press, 1989. 

Greene, Jennifer C., and Valerie J. Caracelli. Advances in Mixed Method Evaluation. 
San Francisco: Jossey-Bass, 1997. 

Goggin, Malcolm L., Ann O. Bowman, James P. Lester, and Laurence O’Toole, Jr. 
Implementation Theory and Practice: Toward a Third Generation. New York: 
HarperCollins, 1990. 

Hatry, Harry, Therese van Houten, Margaret C. Plantz, and Martha Taylor Greenway. 
Measuring Program Outcomes: A Practical Approach. Alexandria, VA: United Way of 
America, 1996. 

Kaufman, Roger. Strategic Planning Plus: An Organizational Guide. 2d ed. Newbury 
Park, CA: Sage Publications, 1992. 

Kearns, Kevin. Managing for Accountability. San Francisco: Jossey-Bass, 1996. 
Keehley, Patricia, et al. Benchmarking for Best Practices. San Francisco: Jossey-Bass, 

1996. 
Koteen, Jack. Strategic Management in Public and Nonprofit Organizations. 2d ed. 

Westport, CT: Praeger Publishers, 1997. 
Linden, Russell. Seamless Government. San Francisco: Jossey-Bass, 1994. 
Meehan, Eugene. Assessing Governmental Performance. Westport, CT: Greenwood 

Press, 1993. 
Meier, Kenneth J., and Jeffrey L. Brudney. Applied Statistics for Public Administration. 

3d ed. Belmont, CA: Wadsworth, 1993. 
Mercer, James L. Strategic Planning for Public Managers. New York: Quorum Books, 

1991. 
Nutt, Paul C., and Robert W. Backoff. Strategic Management of Public and Third Sector 

Organizations: A Handbook for Leaders. San Francisco: Jossey-Bass, 1992. 
Peters, Guy B. American Public Policy: Promise and Performance. New York: Chatham 

House, 1999. 
Quade, E. S. Analysis for Public Decisions. 2d ed. New York: North-Holland, 1989. 



Chapter 7 Planning, Implementation, and Evaluation 

Rabin, Jack, W. Bartley Hidreth, and Gerald J. Miller, eds. Handbook of Strategic 
Management. New York: Marcel Dekker, 1989. 

Starling, Grover. Strategies for Policy Making. Pacific Grove, CA: Brooks/Cole, 1988. 
Sylvia, Ronald, et al. Program Planning and Evaluation for the Public Manager. 2d ed 

Prospect Heights, IL: Waveland Press, 1997. 
Vines, David. Information Strategy and Public Policy. Cambridge, MA: B. Blackwell, 

1991. 
Wholey, Joseph, Harry P. Hatry, and Kathryn Newcomer, eds. Handbook of Practical 

Program Evaluation. San Francisco: Jossey-Bass, 1994. 
Wye, Christopher G., and Harry P. Hatry, eds. Timely Low-Cost Evaluation in the 

Public Sector. San Francisco: Jossey-Bass, 1988. 
Zey, Mary, ed. Decision Making: Alternatives to Rational Choice Models. Newbury 

Park, CA: Sage Publications, 1992. 



Chapter 8 

Managing Organizational Dynamics 

A public administrator needs a good understanding of the values and principles underly¬ 
ing work in the public and nonprofit sectors, knowledge of how public policy is devel¬ 
oped and executed, and familiarity with a number of administrative techniques peculiar 
to public and nonprofit organizations. But the real key to managerial success is not what 
you know, but what you can do. How effectively and how responsibly can you deal with 
the seemingly endless series of problems and opportunities that confront you in an orga¬ 
nizational setting? A legislator or foundation program officer calls to ask for an immedi¬ 
ate report on a matter you know will require a week to examine properly; a subordinate 
confesses that he has grown dependent on drugs and needs your help; someone in a 
meeting becomes outraged over what you perceive as a minor matter and threatens to 
have you fired; your boss asks your assistance in designing a completely new program 
and asks if you would be interested in running it. These situations and many more like 
them constitute the real challenges of public administration. 

Your response to each event, of course, is spontaneous; yet your actions will soon add 
up to a pattern that reflects your knowledge, values, and most of all, skills in dealing 
with other people. If, time after time, you can act effectively and responsibly in situa¬ 
tions that arise unexpectedly and require immediate answers with little time to think 
through the theoretical possibilities, you will likely be considered a highly successful 
manager. 

Fortunately, the skills required for managerial effectiveness can be developed over time. 
In this and the following chapters, we will examine how your knowledge and values can 
be brought to bear in real-world situations. We will focus on the specific personal and 
interpersonal skills a manager requires and on some ways you might further develop 
those skills. In this chapter, we will look at several broad approaches to understanding the 
structure and design of public and nonprofit organizations, as well as people’s behavior in 
those organizations. 

Images of Organizing in the Public and Nonprofit Sectors 

All managers carry around in their heads ideas or images of how public and nonprofit 
organizations should operate and how individual managers should act. These images, 
built up through experience, reading and discussion, and reflection, include notions about 
the most effective structures for public agencies, the best way to manage employees, and 

297 



29# Chapter 8 Managing Organizational Dynamics 

the proper relationship between elected and appointed officials'. Depending on your par¬ 
ticular view, you will tend to look for and emphasize certain things and ignore others. 
The images you carry in your head will lead you to emphasize certain aspects of organiza¬ 
tional life and de-emphasize others. 

Some of these images derive from our experiences in our families; others derive from 
school experiences; still others derive from our work in other organizations. Some are 
general lessons we learned about topics such as power and authority, communications 
and cooperation, and so forth. Others are more specific to the world of work or the 
world of public service. Some are fairly conscious; others lie far beneath the surface. 

Whatever their form, these images direct our actions in specific ways. They cause us to 
see the world in a particular way and, correspondingly, to act in a particular way. So it is 
important to carefully consider how each of us thinks about public and nonprofit organi¬ 
zations. What images do we have, and how do they direct us to think? Which images 
allow us to be most successful? Which images hold us back or get in our way? 

As you begin to think more carefully about the images that shape your work, and 
especially as you begin to accumulate experiences, you will begin to identify areas where 
your insight (and consequently your actions) might be improved. One way to sharpen 
your images of public and nonprofit organizations is to consider what scholars and prac¬ 
titioners in the field of management generally and public and nonprofit management in 
particular have said and written. Fortunately, there is a considerable and growing body 
of material to draw upon that offers many categories and approaches you might use in 
thinking about your involvement. 

For the most part, this literature has developed out of the experiences of practicing 
managers. (Since the literature on nonprofit management is still in its developmental 
states, much of the following discussion will relate to public-sector management.) 
Reflective practitioners and thoughtful academics have asked over and over how public 
and nonprofit managers can be helped to select those features of organizational life that 
will be most helpful to them. Many students and practitioners of public administration 
have contributed to our understanding of the management of public agencies. They have 
developed “word pictures” (often simply called theories) to suggest what will be most 
helpful when you approach similar problems. 

Each theoretical approach directs attention toward certain topics or ideas and away 
from others. It is up to you to select the most relevant and most helpful approaches to 
your particular situation. In this chapter, we will review some of the most influential 
ways of thinking about management in the public sector. Some early approaches focused 
on fairly obvious points; more recent approaches seem more complex and sophisticated. 

The Functions of Management 

Writing early in the twentieth century, French management theorist and practitioner FFenri 
Fayol (1949) identified five general functions managers should perform: planning, organiz¬ 
ing, commanding, coordinating, and controlling. Several years later, Luther Gulick arrived 



The Functions of Management 299 

at a similar list. Gulick, at the time an advisor on federal government reorganization, 
described the functions of public management in terms of an acronym, POSDCORB: 
Planning, Organizing, Staffing, Directing, Coordinating, Reporting, and Budgeting (Gulick, 
1937). To Fayol and Gulick, these activities were the essence of management and identified 
functions that had to be performed if organizations were to be managed effectively. They 
constituted advice to managers about what they should be doing. 

Planning involves preparing yourself and your organization to move effectively into 
the future. All managers engage in planning at least to some extent, and for some man¬ 
agers, such as those on strategic planning staffs, planning is almost a full-time activity. 
Some managers make plans for the entire organization, others make plans for the units 
they directly supervise, and all managers plan for their own activities. Unfortunately, as 
we noted earlier, planning is one managerial function that is often easy to overlook. 
Managers get caught up in the hectic pace of conversations, meetings, and deadlines and 
often neglect planning. Yet the most effective managers are aware that time taken out for 
planning, whether for the organization or for oneself, pays rich dividends. 

Planning is closely related to decision making, an aspect of managerial work that 
cuts across many of the other areas. The ability to make thoughtful decisions seems to 
distinguish the more successful managers. Because decision making is so fundamental to 
managerial work, it has been studied intensively for many years. In most organizations, 
decision making is a central activity. (We will discuss decision making in more detail 
later in this chapter.) 

Organizing refers to many different activities, including division of the organization 
into different departments, creating levels in the organization’s hierarchy, and deciding 
who reports to whom. In a specific department or division, organizing also includes 
the task of defining specific positions and jobs. Note that organizing includes job design, 
but the assignment of individuals to specific jobs involves the staffing rather than the 
organizing function. 

Staffing is the process of acquiring, training, and developing the personnel to conduct 
the organization’s activities. Staffing is today more generally described as personnel man¬ 
agement or sometimes as human resources management. As we saw in Chapter 6, specific 
tasks such as hiring, training, firing, and so forth are examples of the staffing or personnel 
function. Dealing with people involves important skills in communication and motivation, 
as well as the ability to make sound decisions about whom you hire to work with you. 

Directing is often the most dynamic and most visible management function. It includes 
three critical management activities: leading, motivating, and changing things when neces¬ 
sary. Providing direction to an organization is a subtle and complex task that involves the 
full range of personal and interpersonal skills. 

Coordinating the work of many different people in many different places is also a 
central managerial function. The complexity and diversity of most modern organizations 
means that a great deal of time must be spent making sure that all the pieces fall into 
place at the right time. Coordinating involves special skills in problem solving—how to 
make things work — but also involves skills in communicating and negotiating. 

Budgeting involves managing the organization’s resources, especially financial. 
Budgeting involves securing, planning for, and managing the organization’s funds. As we 
saw in Chapter 5, budgeting is a technical field, but it also involves considerable human 



300 Chapters Managing Organizational Dynamics 

skills, especially those of developing funding for one’s programs' and allocating scarce 
resources among many different competing programs and people. 

In addition to these standard management functions, there are also a number of miscel¬ 
laneous tasks that are usually considered managerial work. One of the most important is 
dealing with people from outside the organization. Skills in presenting your organization 
and point of view to others are becoming increasingly important as the relationships 
among organizations at many different levels become more intense. Representing your 
organization before outside groups and organizations has come to be known in the litera¬ 
ture on management as boundary spanning. 

The Early Writers: A Concern for Structure 

The question of how managers might be guided in their work has occupied theorists and 
practitioners for many years. Early writers on public administration thought of manage¬ 
ment in highly mechanical terms and considered questions of organizational structure 
and design of paramount importance. Recall that the birth of public administration as a 
separate field of study occurred during a time of impressive gains in science and industry; 
new ideas and new products were changing society almost overnight, as were the indus¬ 
trial and organizational processes that made them possible. It was a time of rigid control 
by the captains of industry; it was also a time of fostering the birth of the assembly line. 

In such an era, the machine became the leading image for how to organize technical 
and human processes. Just as the machine was precise, mechanical, and efficient, so 
should the organizations that built machines show the same characteristics. The result 
was a highly mechanical approach to organization that valued the idea of developing 
proper structures and operating them with great efficiency. 

This orientation was epitomized in the influential work of Frederick W. Taylor, who 
developed what he termed scientific management, an approach based on carefully defined 
“laws, rules, and principles” (1923, p. 7). Taylor focused first on the individual worker, 
designing detailed measurements of time and motion to discover how the worker might 
become more efficient. For example, one might measure the distance from where a partic¬ 
ular piece of equipment was stored to where it was used, then try to reduce that distance 
and the time and motion required to use the equipment. (In one example, Taylor sought 
to develop a “science of shoveling” based on the premise that the size of each individual 
shovel load would affect the daily output of “first-class shovelers.” After careful and 
detailed experiments, it was determined that the greatest tonnage per day would be 
achieved with an average shovel load of about twenty-one pounds!) 

Taylor’s approach could be applied to a wide variety of work-process problems, from 
the design of assembly lines to the arrangement of items on one’s desk. But beyond these 
efforts to turn workers into highly tuned machines, Taylor’s work provided guidance for 
managers throughout the organization. The manager’s role became that of making the 
organization more efficient through the application of detailed so-called scientific infor¬ 
mation. The smooth-running organization was to be highly mechanical, with the human 



The Early Writers: A Concern for Structure 301 

elements strictly controlled to contribute to overall efficiency. The manager’s job was to 
ensure the efficient operation of the system. 

Networking 

The Academy of Management Online (http://www.aom.pace.edu), the Society for 
Industrial and Organizational Psychology (http://www.siop.org), and the Institute 
for Operations Research and the Management Sciences (http://www.informs.org) 
offer research and information sources concerning the general principles of organi¬ 
zation theory and behavior. For an alternative, visit the Electronic Journal of 
Radical Organisation Theory at http://www.mngt.waikato.ac.nz/depts/sml/journal/ 
ejrot.htm. This site is published by the University of Waikato School of Manage¬ 
ment Studies in New Zealand. 

Just as Taylor and others emphasized the efficient operation of industrial systems, others 
soon applied this emphasis in public administration. Leonard White wrote, “The objective 
of public administration is the most efficient utilization of the resources at the disposal of 
officials and employees” (1926, p. 2). “In the science of administration, whether public or 
private, the basic ‘good’ is efficiency,” Luther Gulick concurred (1937b, p. 192). Though 
several writers objected, pointing out that other values, such as responsiveness, need to 
come into play in public organizations and that mechanical efficiency is “coldly calculating 
and inhuman” (Dimock, 1936, p. 120), efficiency was clearly the primary interest of most 
early public administrationists. 

From the field of business, the early writers in public administration transferred other 
lessons about the design and structure of organizations, specifically the importance of 
establishing single centers of power controlling basically top-down structures. At the top 
of the organization there was to be one single authority to whom all subordinate person¬ 
nel ultimately reported. Though the organization would be characterized by many man¬ 
agers and perhaps many organizational units, the ultimate responsibility and authority lay 
at the top. 

To reconcile this view with the democratic requirement that public organizations 
should be responsive to the popular will, the early writers suggested that the organiza¬ 
tion’s head, the single source of power and authority, should simply be accountable to the 
legislative body in much the same way a corporate chief executive officer is accountable 
to a board of directors. (In Chapter 4 this idea was mentioned as “the doctrine of neutral 
competence.”) In describing the role of an agency chief executive, the advice of the early 
writers was to vest all administrative authority in a single executive, who would be given 
appropriate powers to carry out the work and responsibility for seeing that it was done. 
According to W. F. Willoughby, this was the first step in making the executive branch a 
“single, integrated piece of administrative machinery” (1927, p. 37). (This advice was at 
odds with the standard political practice of that period, the election of many administra¬ 
tive officers and the use of many large executive boards. As we saw earlier, even today, 
most states elect officers such as secretary of state or treasurer rather than having such 
officers report to a single chief executive, in this case the governor.) 



302 Chapters Managing Organizational Dynamics 

The early writers who put forth the administrative-management viewpoint were prac¬ 
tical people who drew on their experience in managing public agencies. Consequently, 
when they described their work, they tended to emphasize how organizational structures 
might be built. Luther Gulick, for example, wrote extensively about the formation of 
agencies. After the agency was created and an executive chosen, Gulick saw the next 
question as one of dividing the work necessary to the organization, then establishing 
proper means of coordination and control. In other words, the new organization would 
move through four phases in which the legislature or chief executive would (1) define the 
job, (2) select a director, who would (3) determine the nature and number of required 
unit and (4) establish a structure of authority through which he or she would coordinate 
and control activities of the units (1937a, p. 7). 

The division of labor, which amounted to creation of an organizational structure, was a 
critical element. The logic was compelling: since people differ in knowledge and skills and 
since the amount of time any one person can contribute to solution of large-scale problems 
is limited, it is necessary to divide the work of the organization into manageable portions. 
As we saw earlier, division of labor could be accomplished in a limited number of ways. 
Recall that Gulick suggested organizing on the basis of (1) the major purpose served 
(education, welfare, and so forth), (2) the process (engineering, medicine, and so forth), 
(3) the persons or things being dealt with by the unit (veterans, convicts, and so forth), or 
(4) the place or geographic location where the work is done (1937a, pp. 21-29). 

Having established a division of labor, the next problem facing the new director or 
manager was to create a structure of authority to coordinate and control the various 
parts of the organization. Gulick’s answer to this question, like others during this 
period, was again drawn from orthodox practice in business — the organization should 
feature unity of command exercised through a hierarchical structure of authority. 
By the turn of the century, hierarchical organizations, like those symbolized in the stan¬ 
dard organization chart (see Figure 8.1), had become models for industry (as they had 

FIGURE 8.1 

Typical Organization Chart Showing Line and Staff 



The Early Writers: A Concern for Structure 3 03 

previously been in the military and the Catholic Church). Gulick and many other early 
scholars and practitioners in public administration suggested a similar approach in the 
public sector. 

Guidance for creating such structures was given by two former General Motors exec¬ 
utives, James Mooney and Alan Reiley (1939). Mooney and Reiley described four main 
principles for structuring large organizations. The first, coordination through unity of 
command, emphasized the importance of strong executive leadership exercised through 
a specific and formal chain of command. In this structure, each person would have only 
one boss, and each boss would have a limited span of control—that is, a limited number 
of people reporting to him or her. Mooney and Reiley argued that there should be 
no question about whose orders to obey. The second principle was the scalar principle 
which described the vertical division of labor among various organizational levels. 
(In military terms, the difference between a general and a private reflects the scalar prin¬ 
ciple.) Third was the functional principle, describing a horizontal division of labor. 
(Again, in military terms, the difference between Infantry and Air Force would be a func¬ 
tional difference.) Finally, Mooney and Reiley discussed the relationship between line 
and staff, with line offices representing the direct flow of authority, and staff offices 
(such as personnel or finance) available to advise the chief executive, but not exercising 
direct authority over line offices. 

The language of hierarchical structures became somewhat standard. And, just as dis¬ 
tinctions were often drawn between line and staff, managers were (and are today) often 
classified as top, middle, or supervisory. Supervisory managers are at the bottom of the 
hierarchy, top managers at the peak, and middle managers in between. A supervisory 
manager directly manages the people involved in producing the organization’s output. 
The supervisory level is the first level of management, so supervisors are sometimes 
called first-line managers. There are normally no managers below the supervisory level. 
An example of a supervisory manager is the person to whom your mail carrier reports at 
the post office. 

Supervisors report to middle managers, and are usually defined as managers who 
manage other managers! If the organization is small, there may be only one level of mid¬ 
dle managers; large organizations usually have more than one middle-management level. 
The highest level of management, the top level, usually has the fewest managers of the 
three levels. Top managers, often called executives, are responsible for entire organiza¬ 
tions, whereas middle- and supervisory-level managers focus on increasingly smaller sec¬ 
tions of it at each level. Top managers are usually the most involved in relationships with 
other groups and agencies. 

It is easy to distinguish supervisory-level from middle-level managers, but it is often 
ambiguous as to where middle management stops and top management begins. Titles 
often confuse things more than they help. The title of vice president, for example, indi¬ 
cates a top manager in some organizations; in others, the vice president is only a middle 
manager. Banks are particularly well known for having many vice presidents, most of 
whom are obviously not part of top management. Similarly, titles in public organiza¬ 
tions, such as division director, branch chief, and department head, are used in many 
different ways and are usually only meaningful if you understand the conventions of the 
particular organization. 



3 04 Chapter 8 Managing Organizational Dynamics 

Independently of the American writers we have mentioned, German sociologist Max 
Weber examined the concept of bureaucracy early in this century, though Weber’s work 
was not well known to the earlier public administrationists. Weber used the term bureau¬ 
cracy to refer to any large organization, public or private, characterized by a clearly 
defined hierarchy of impersonal offices to which persons are appointed based on technical 
qualifications and through which they are subject to strict discipline and control (Weber, 
1947, p. 328). Though we now often use bureaucracy pejoratively, Weber’s more techni¬ 
cal use carries no negative connotation. Indeed, Weber argued that bureaucracy is an 
attractive way to organize because it is so efficient: “Experience tends to universally show 
that the purely bureaucratic type of administration [is] capable of attaining the highest 
degree of efficiency and is in the sense formally the most rational known means of carry¬ 
ing out imperative control over human beings” (p. 337). 

In any case, early writers on public administration generally sought to apply what 
they saw as the correct principles of administrative management to the conduct of 
public organizations. In doing so they implied that the problems facing government 
and their solutions were much the same as those in industry: centralization of author¬ 
ity and the development of hierarchical structures. But this assumption sidestepped 
several important issues essential to the operations of public agencies. Is the criterion 
of efficiency the only criterion by which the work of public organizations should be 
evaluated? Is it incompatible to create highly authoritarian structures to carry out the 
work of a democracy? 

There were also questions about whether approaches to organization based on struc¬ 
tural analyses alone were even the most efficient. In both the public and private sectors, for 
example, managers and researchers began to ask whether the rigid structures described in 
the principles of administrative management could effectively adapt to change. And, per¬ 
haps most important, where does the individual enter into the equation, other than as a 
potential machine? The structural lens through which many early scholars and practition¬ 
ers viewed the world proved to be somewhat limiting; something else was needed. 

Recognizing Human Behavior 

In the mid-1920s, an impetus to further investigation of the informal or human factors in 
organizational life came from studies conducted by a group of Harvard researchers at the 
Hawthorne Works of the Western Electric Company. The studies, which began in a way 
largely consistent with the scientific management tradition, were designed to measure the 
relationship between working conditions (such as lighting, temperature, and humidity) and 
worker productivity (including monotony and fatigue). In the experiment, certain groups 
were isolated from their coworkers and placed in carefully controlled environments where 
conditions could be varied systematically. But, as the experiment developed, regardless 
of the changes in environmental conditions—lighter or darker, hotter or colder, more 
or less humid—the productivity of the experimental group tended to increase. Can you 
guess why? 



Recognizing Human Behavior 305 

The researchers’ answer was that the experimental group was responding not to the 
conditions around them, but to the fact that they had been singled out for special atten¬ 
tion. As a result, the researchers developed a new interest in the human aspects of orga¬ 
nizational life. Those involved in the Hawthorne study began to see organizations as not 
only meeting the stated goals of producing goods or services but as being concerned also, 
even if implicitly, with the distribution of “satisfactions” — some monetary, others social 
and psychological—to the members of the organization. The informal organization, the 
human interactions that paralleled those prescribed by the organizational structure, was 
viewed as important or even more important than the formal organization. If this were 
the case, then it made sense that the manager’s role involved attention to both the formal 
structure of the work process and the pattern of informal relationships among the work¬ 
ers. Either one could affect efficiency and effectiveness. 

There was, of course, abundant advice on how to manage the formal structure, but 
only speculation about how to manage the informal or the human side of organizations. 
Consequently, a number of studies were undertaken that dealt with the critical human 
relationship between manager and worker. Many of the studies suggested that changes in 
one’s approach to managing, or management style, could lead to important differences 
in productivity. By treating workers differently, you could affect the work they did. 

An example of this orientation was Douglas MacGregor’s discussion of Theory X and 
Theory Y. After reviewing other work on management, MacGregor suggested that a bet¬ 
ter theory of human behavior might make it possible to more effectively control workers 
in organizations. Specifically, MacGregor contrasted a set of assumptions about human 
behavior that appeared to form the basis for traditional management techniques (Theory 
X) with a set of assumptions he felt would underlie a new and more enlightened approach 
(Theory Y). Traditionally, MacGregor argued, managers seemed to assume that human 
beings are lazy and dislike work, that they must therefore be coerced to produce, and that 
most in fact want such direction. MacGregor suggested in contrast that work is quite nat¬ 
ural, that people do not need to be coerced, that they will devote energy to objectives to 
which they are committed, and that they will make commitments to objectives that, when 
completed, will lead to rewards. As a consequence, MacGregor suggested that most 
workers were not being utilized to their full potential. The lesson was straightforward: 
managers must take care to determine the needs and desires of their employees, then help 
orient the individual’s objectives so that they are met by work toward the organization’s 
objectives (MacGregor, 1960). 

Two Classic Works 

Two writers on organizational behavior, both stimulated by the new attention to human 
factors in organizational life, wrote classics on the subject during the forties and fifties. 
One author, Herbert Simon, came from the field of public administration; the other, 
Chris Argyris, began his work in the field of industrial psychology. Both have influenced 
all fields of management even to the present. 

Simon began by suggesting that the reason we have large organizations in the first place 
is that individual human beings are limited or “bounded” in their rationality or capacity to 



Chapter 8 Managing Organizational Dynamics 

solve the complex problems we face in the modern world. “The'capacity of the human 
mind for formulating and solving complex problems is very small in comparison with the 
size of the problems whose solution is required for objectively rational behavior in the real 
world or even for a reasonable approximation to such objective rationality” (1957, 
p. 198). Organizations are seen as devices for molding our sometimes erratic behavior to 
rational patterns of obtaining our objectives. 

In the abstract, it is really not difficult to design a rational system for reaching organiza¬ 
tional objectives. The difficulty comes when human beings, with all their emotions and 
interests, are inserted into the system. Because they are human, they often appear irrational 
in terms of the system, even though what they are doing, from their point of view, may be 
perfectly rational. The chief problem for Simon, therefore, became how to understand and 
direct human behavior in such a way that it aids in pursuit of the organization’s objectives 
in a rational (that is, efficient) way. 

Simon described the organization as a decision-making system involving two pri¬ 
mary sets of decisions on the part of the individual: the decision to be a part of an 
organization and the decision to contribute desired behaviors to the organization. 
Simon approaches each problem through a rational calculation of costs and benefits. 
For example, a person may be expected to remain a member of an organization as 
long as the benefits provided by the organization appear to exceed those that might be 
obtained elsewhere. 

The same approach is used with respect to the individual’s contributions to the organi¬ 
zation, an issue closely tied to the question of authority. Simon argued that each individ¬ 
ual establishes an area of acceptance within which the subordinate is willing to accept the 
decisions made for him by his superior” (Simon, 1957, pp. 74-75). But since it is in the 
interest of the organization to have the “zone” as wide as possible, the organization, 
through its managers, offers certain “inducements” designed to increase the individual’s 
“contributions.” Inducements include money and status, but they also involve creating a 
state of mind in which individuals will tend to obey rather than disobey. 

In establishing this state of mind, Simon argues that you cannot expect people 
to make perfectly rational decisions. Indeed, most human beings act with bounded 
rationality; they seek the best possible solution, though not necessarily the one that is 
most rational from a purely economic standpoint. The member can be made to fall in 
line with the organization’s expectations by means of inducements that are just good 
enough to elicit the desired contributions. In this way, what Simon terms “administrative 
man” (in contrast to “economic man”) becomes a part of a rationally behaving system. 

Chris Argyris, rather than focusing on the design of rational systems, focused on the 
interaction of the individual and the organization, and suggested, much like MacGregor, 
that formal organizational structures and traditional management practices were inconsis¬ 
tent with a natural human striving for growth and development. Individuals in our soci- 
ety, Argyris concluded, develop from infancy through adulthood along several important 
dimensions: from passivity to activity, from dependence to independence, from a limited 
to a greater range of behaviors, from shallow to deeper interests, from a shorter to a 
longer time perspective, from a position of subordination to a position of equality or 
superordination, and from lack of awareness to greater awareness. Movement along each 
dimension contributes to what we know as the healthy adult personality. 



The Organization and Its Environment 307 

Yet, argued Argyris, these goals are exactly those that traditional management prac¬ 
tices prevent. For example, standard patterns of management give the individual little 
control over his or her work. Workers are expected to be passive, submissive, and lim¬ 
ited in the range of their responses. They are basically expected to behave like children. 
Moreover, if individuals express frustration at such a situation, managers often see their 
behavior as hostile and dysfunctional. The typical managerial response is to crack down, 
to assert even more severe methods of control. 

A healthier approach, suggests Argyris, would be to understand the basic tendencies 
of the human personality for growth and development, then to fuse these tendencies 
with the objectives of the organization. Achieving this congruence or fusion is the task of 
the manager. This requires that the manager develop “skill in self-awareness, in effective 
diagnosing, in helping individuals grow and become more creative, in coping with 
dependent-oriented . . . employees, and in surviving in a competitive world of manage¬ 
ment” (1962, p. 213). 

In the work of both Simon and Argyris, there is a dramatic shift from concerns with 
structure to concerns with human behavior. Each offers a new way of looking at organi¬ 
zations and the people in them. The manager, according to this new view, needs to take 
structure into account (for that will affect human behavior), but the bottom line is how 
people behave. And, of course, the behavior of human beings is affected by much more 
than the structures in which they reside. In these works, the attention of the manager is 
redirected from structure to behavior. In this new view, the job of the manager is to mold 
human behavior toward the purposes of the organization. 

The Organization and Its Environment 

Both the early emphasis on structure and the later emphasis on human behavior proved 
helpful in focusing attention on important aspects of life in complex organizations. But 
neither viewpoint even considered the relationship between the organization and its envi¬ 
ronment. This missing element began to appear, however, as writers in the field of public 
administration returned to issues of structure, though they viewed it in a quite different 
way. The new concern for structure was stimulated by two emerging approaches to public 
organizations: systems theory and the political economy approach. The systems approach 
suggested that public (or other) organizations could be viewed in the same general way as 
biological or physical systems as whole organisms, independent of their parts and pursu¬ 
ing specific purposes within a complex environment; the political economy approach 
focused on politics and economics as categories for analyzing organizational behavior. 

Systems Theory 

We will discuss the basic ideas associated with systems theory in more detail later. For the 
time being, you should know that the systems model suggests that the organization 
receives from its environment the human and material resources it requires to function, 



308 Chapters Managing Organizational Dynamics 

as well as requests and directives about how it should operate. These resources, requests, 
and directives are processed through the organization and transformed by it, and the 
resulting outputs (products, services, and so on) are transmitted back into the environ¬ 
ment. In turn, these outputs are taken into account as new inputs are developed, and, over 
time, a balancing point is reached that makes possible the survival of the organization. 

While we will discuss applications of systems theory of organizational design later, we 
should note here that the systems approach led those in public administration to think 
more carefully about the environment in which they worked and to begin to consider what 
influences were most important. A classic study of the relationship between an agency and 
its environment was Selznick’s analysis of the Tennessee Valley Authority (TVA) in the 
1940s. Selznick (1949) argued that, in contrast to the closed, mechanical systems implied 
in many approaches to public organizations, those organizations are in fact open systems. 
That is, they exist within an institutional framework, which includes political parties, pres¬ 
sure groups, and special interests, and, though the groups’ demands may appear irrational 
from the perspective of the organization, they simply cannot be ignored. 

The Tennessee Valley Authority sought to involve already existing local agencies in 
planning power distribution systems and other programs. One reason was to enable the 
TVA to anticipate potential demands and be prepared to respond. A second reason was 
to try to get local groups committed to the TVA program by making them feel part 
of the organization. By bringing outside groups into the structure of the organization 
(by placing persons on advisory groups or negotiating service contracts with them), TVA 
sought support for its own programs. You will recall this idea as co-optation, a term 
Selznick defined as “the process of absorbing new elements into the leadership or policy- 
determining structure of the organization as a means of averting threats to its stability or 
existence” (Selznick, 1949, p. 13). 

Another study examining the influence of environmental factors on the operations of 
public agencies was Herbert Kaufman’s analysis of the U.S. Forest Service (Kaufman, 
1960). The Forest Service faced the problem of how to secure compliance and consistency 
from forest rangers scattered across the country and subject to all kinds of pressures from 
their local communities. Rangers often served, of course, in isolated locations. While they 
sought to carry out the policies of the Forest Service, they also developed loyalties to their 
local communities. They often had to carry out regulations that would adversely affect 
their friends and neighbors in the local areas and, in such cases, might be tempted to devi¬ 
ate from central office directives. The agency’s response was to devise a series of training 
programs, procedural devices, inspections, and sanctions as efforts to reduce the influence 
of the local environment and to ensure that central office orders were actually carried out 
in the field. 

Looking at how environmental factors influence public organizations led other writers 
to characterize public agencies as interdependent systems operating in a complex envi¬ 
ronment. No longer could one agency’s work be viewed in isolation from other public 
and private agencies; one would simply not be able to understand how an agency oper¬ 
ated without understanding the myriad external influences on the agency. Imagine, for 
example, the difficulty of implementing a new set of standards for water quality in a city 
such as Cincinnati, located on a state boundary. Think of all the agencies, public and 
private, that would have to be notified and would wish to express their views. Think of 



The Organization and Its Environment 309 

the various political jurisdictions — states, cities, counties, and possibly many special dis¬ 
tricts. Think of the various bodies within each jurisdiction that might want input—the 
mayor, legislature, and administrative agencies. 

The complexity of administrative activities (as in this example) have led some scholars 
to suggest that it is no longer even meaningful to focus on a specific agency’s contribu¬ 
tion to implementing a particular policy, but to think instead in terms of programs. We 
have already noted that many federal programs operate through a pattern of funding in 
which money, rules, and guidelines are established for programs that are actually deliv¬ 
ered at the state and local levels through both public and private agencies. For example, 
in the delivery of social services, such as drug prevention efforts, state and local govern¬ 
ments use federal money to fund private or nonprofit providers of the services. In many 
cases, the money goes to fund programs, not specific agencies, so that these programs 
operate through rather diffuse networks of loosely joined groups rather than through 
traditional hierarchical structures. In such groups, older notions of organizational con¬ 
trol necessarily give way to new emphasis on bargaining and negotiation, in which the 
systems perspective has much to offer. 

From Political Economy to Organization Development 

Interest in interorganizational policy networks was further stimulated by the emergence 
of the political economy approach to understanding public organizations. Wamsley and 
Zald (1973) suggest that public organizations can best be understood in terms of the 
conjunction of political and economic factors influencing their operation. These factors 
affect the organization both internally and externally, leading to four categories 
through which we might view organizations. First, the external political environment 
involves the interplay of various interest groups and other organizations that affect the 
organization’s political climate. Second, the external economic environment consists of 
market exchanges that influence the available supply of resources. Third, the internal 
political category focuses on the distribution of power and authority; and fourth, the 
internal economy concerns the allocation of resources and how they are used. 

The Wamsley-Zald approach is related to a more sophisticated and complex approach 
most often associated with Vincent Ostrom. Ostrom’s public choice approach begins 
with examining how individuals might make choices if they were free to act rationally 
and in their own self-interest. Under some circumstances, people might be expected to 
engage in collective action, especially where public goods are involved, or where situa¬ 
tions are neither purely public nor purely private. (Public goods are distinguished from 
private goods — those that can be measured, marketed, and maintained — by the fact 
that they are highly indivisible; a public good such as the national defense is available to 
all once it is provided for one.) 

Following this logic, Ostrom sees public organizations as “a means for allocating deci¬ 
sion-making capabilities in order to provide public goods and services responsive to the 
preferences of individuals in different social contexts” (Ostrom & Ostrom, 1971, p. 207). 
Ostrom argues that the best structures for satisfying individual preferences are not central¬ 
ized bureaucratic agencies, but rather more fragmented, multiorganizational arrangements. 



3io Chapter 8 Managing Organizational Dynamics 

Although earlier behavioral studies like Simon’s and Argyris’s were important in coun¬ 
tering the field’s dependence on a structural interpretation of organizational life, they 
were limited in certain ways. First, most of the behavioral literature failed to question the 
top-down pattern of organizational authority, so many thought it merely provided more 
sophisticated mechanisms for managerial control. Second, there seemed to be little inter¬ 
est in organization change processes at a time that rapid social change was becoming a 
dominant feature of the landscape. Third, the perspective failed to comprehend the com¬ 
plexity of interorganizational bargaining and negotiation. Similarly, the political economy 
approach seemed to unnecessarily limit the creativity and communications possibilities of 
those in public organizations, and seemed, at least to some, to place values in a secondary 
position. 

Among major critics of earlier approaches were a group of scholars in the early 1970s 
whose collective work came to be known (and, despite the passage of time, is still known) 
as “the New Public Administration.” In contrast to older approaches that emphasized 
efficiency and control, the New Public Administration heralded openness and change, 
equity, and involvement. In a rapidly changing society populated by diverse groups, the 
New Public Administrationists felt that the key element in the survival of organizations — 
indeed, of the society—was the capacity to adapt to rapid social change. Organizations 
would have to find ways to deal with an increasingly turbulent environment. 

Doing so would require stimulating the creativity of everyone involved in any pub¬ 
lic program, both within the agency and in the environment. Involving the organiza¬ 
tion’s members and its clients in the decision-making process would, the New Public 
Administrationists felt, foster creativity. Moreover, such an approach seemed far more 
consistent with democratic norms and practices than operating through top-down 
structures of control. The key words in the New Public Administration were equity 
and involvement. 

Many of those associated with the New Public Administration became students of 
organizational change processes and sought ways to help organizations implement 
needed changes. One of the most important approaches they employed was organization 
development, a process-oriented approach to planned change. Organization develop¬ 
ment suggests many techniques for change that we will examine later, but it also offers 
another approach through which to view the work of organizations. 

Robert Golembiewski, a leader in the application of organization development strate¬ 
gies and techniques to the public sector, points out that organization development repre¬ 
sents a particular philosophy of management that is considerably at odds with traditional 
top-down tendencies. It values: 

1. mutual accessibility and open communications 
2. a willingness to experiment with new behaviors and to choose those that seem most 
effective 
3. a collaborative concept of authority that emphasizes cooperation and willingness to 
examine conflicts openly 
4. creating mutual helping relationships involving a sense of community and acceptance 
of responsibility for others 
5. authenticity in interpersonal relationships (Golembiewski, 1972, pp. 60-66) 



The Organization and Its Environment 311 

Decision Making in Organizations 

As we suggested in our discussion of the public policy process, decision making represents 
one of the most critical functions of public and nonprofit organizations. While the scope 
and nature of decision making varies from issue to issue, the process itself is a daily activity. 
Some have even suggested that organizations can be viewed as living histories of their deci¬ 
sion-making processes. To better appreciate this important function, it may be helpful to 
examine some of the core concepts of organizational decision making and to understand 
how leaders use these concepts in their management practice (Hatch, 1997, pp. 270-281). 

Scholars of organizations traditionally followed an economic view of decision mak¬ 
ing, which assumed that decisions were the result of rational, well-informed selection 
procedures. (Much of our discussion to this point reflects this traditional viewpoint.) 
In the rational model, management recognizes the problem, identifies alternatives, selects 
and implements the most efficient alternative, and monitors the results. 

However, a series of works, beginning with March and Simon (1958) and Cyert and 
March (1963), challenged this rational viewpoint, arguing that decision making can be 
viewed as rational only in certain circumstances. Most often, organizations lack the infor¬ 
mation and capacity needed for making rational decisions. Simon, who received a Nobel 
Prize for his work in artificial intelligence, referred to this phenomenon as a “bounded 
rationality.” He identified five of the most common constraints: 

1. imperfect and incomplete information 
2. the complexity of the problem 
3. human information-processing capacity 
4. the time available for decision-making processes 
5. the conflicting preferences decision makers have for organizational goals. (Hatch, 
1997, p.274) 

Despite attempts on the part of managers to use more rational processes, these factors 
pose insurmountable barriers to rational decision making. The implications are two-fold. 
First, managers will never have enough data to adequately inform decision-making 
processes. Second, even if they did, they would face conflicting goals on the part of stake¬ 
holders, to the point that they would be unable to make a truly rational selection of the 
most efficient alternatives. For Simon, the best that managers can do involves, what he 
called, “satisficing”—that is, making do with the most information possible at the time 
and attempting to balance between competing demands. 

But what happens when the goals of a particular decision point are relatively clear and 
the only true variable lies in the uncertainty of the policy direction or the outcome? Henry 
Mintzberg and his colleagues (1976) referred to this as the trial-and-error model of deci¬ 
sion making. Managers take an incremental approach to implementing policy alterna¬ 
tives, assess the impact, then move to the next decision point. Over time, the belief is that 
a comprehensive solution to the issue will be attained, but the process will allow decision 
makers to proceed with caution. 

Often the opposite may also be true. Decision makers may (and will!) face a variety 
of competing demands on the part of stakeholders, which they must balance before even 



3i2 Chapters Managing Organizational Dynamics 

moving to the decision stage. Handling the complexity of these situations requires 
what organization theorists refer to as the coalition model of decision making. The coali¬ 
tion model involves a search for interest-accommodating alternatives as opposed to the 
problem-solving information in the rational model. Policy leaders recognize that what 
may be the most efficient alternative will not be acceptable to the different interest 
groups. The best option is the one they can sell to their key constituencies. While some 
believe that the coalition model implies some sort of a breakdown in normal decision 
making, in today’s dynamic, multicultural world (particularly in the public and nonprofit 
sectors) it tends to be the rule more than the exception. 

Of course, both the trial-and-error and coalition models of decision making assume 
that either the certainty of approach or the goals of the process has been determined. 
Anyone who has served in a public or nonprofit organization will tell you that many 
times both sets of questions need to be answered. In these situations, which are character¬ 
ized by a continuous ebb and flow of leadership, ongoing change in the policy environ¬ 
ment, and shifting sets of coalitions among stakeholder groups, leaders find themselves 
using the garbage can model of decision making. (Sound familiar? If not, it will very 
soon!) Randomness replaces rationality. Indeed, Cohen, March and Olsen (1972) used 
the term “organized anarchies” to describe organizations that practice the garbage can 
model as normal policy. 

The approaches to organizational decision making described here should not be taken 
as mutually exclusive. Leaders in public and nonprofit organizations should explore a vari¬ 
ety of methods, depending on the changing conditions in the policy environment. In fact, 
the most effective managers will be able to read the shifting conditions and balance their 
desire for rationality with a sensitivity to their internal barometers. 

Organizational Culture, Organizational Learning, 

and Strategic Management 

During the past generation, many discussions of management and organizations, espe¬ 
cially in the private sector, have emphasized the importance of understanding the culture 
of the organization. Most writers refer to organizational culture as the basic pattern of 
attitudes, beliefs and values that underlie the organization’s operations. An organization’s 
culture consists of the shared assumptions that members of the organization hold. Edgar 
H. Schein (1997, pp. 8-10) notes that culture can be manifested in many ways, including 
the following: 

1. Observed behavioral regularities when people interact: The language they use, the cus¬ 
toms and traditions that evolve, and the rituals they employ in a wide variety of situations. 
2. Group norms: The implicit standards and values that evolve in working groups, such 

as the particular norm of a “fair day’s work for a fair day’s pay” that evolved among 
workers in the Hawthorne studies. 



Organizational Culture, Organizational Learning, and Strategic Management 

3. Espoused values: The articulated, publicly announced principles and values that the 
group claims to be trying to achieve. 
4. Formal philosophy: The broad policies and ideological principles that guide a group’s 
actions toward stockholders, employees, customers, and other stakeholders. 
5. Rules of the game: Implicit rules for getting along in the organizations and the ropes that 

a newcomer must learn to be an accepted member—“the way we do things around here.” 
6. Climate: The feeling that is conveyed in a group by the physical layout and the way 

in which members of the organization interact with each other, with customers, or with 
other outsiders. 
7. Embedded skills: The special competencies group members display in accomplishing 

certain tasks, the ability to make certain things that gets passed on from generation to 
generation without necessarily being articulated in writing. 
8. Habits of thinking, mental models, and/or linguistic paradigms: The shared cognitive 

frames that guide the perceptions, thought, and language used by the members of a 
group and are taught to new members in the early socialization process. 
9. Shared meanings: The emergent understandings that are created by group members 

as they interact with each other. 
10. Root metaphors or integrating symbols: The ideas, feelings, and images groups develop 
to characterize themselves that may or may not be appreciated consciously but that 
become embodied in buildings, office layout, and other material artifacts of the group. 

As these manifestations suggest, some of the most important aspects of an organiza¬ 
tion lie outside of the explicit characteristics shared in normal group interaction. The 
unique ways in which an organization communicates internally and externally, its system 
of reward and punishment, and the way group members perceive themselves and the 
outside world all stem from the deeper, mostly undiscussed system of values and beliefs 
that define the group as a whole (Schein, 1997). 

These layers of culture represent key concerns in their own right, in that they yield 
insight in very different ways about the nature of the group. However, organizational 
culture becomes even more critical as it relates to planned organizational change. 
Organizations face dynamic conditions in their internal and external environments, a 
variety of social, economic, and political factors that impact group performance. The 
successful organization is one that remains flexible to meet these changing conditions. 
Yet given the multiple levels of organizational culture, change within the group cannot 
simply occur on the surface level. The organization’s underlying system of beliefs and val¬ 
ues must be transformed in order for change to be sustainable (Schein, 1997; Senge 1990). 

In this context, the notion of organizational culture becomes closely related to another 
important management concept, what is called organizational learning. Learning organiza¬ 
tions recognize that the primary contributors to error, or the disparity between what the 
group intends to happen and what actually occurs (Argyris, 1993) and thus the barriers to 
organizational change, are embedded deep within the organization’s collective conscious¬ 
ness. They are not talked about, nor even immediately acknowledged by group members. 
Therefore, groups that succeed in becoming learning organizations, those which are able to 
correct error and overcome their barriers, can much more successfully bring about change 
both in surface behavior and in the underlying levels of culture in the organization. 



314 Chapter 8 Managing Organizational Dynamics 

For example, say an organization’s performance'has started to suffer because of a 
decline in employee satisfaction and a rise in infighting among staff members. An imme¬ 
diate response may be to alter the group’s behavior in a way that reduces the infighting 
and, in some ways, improves the quality of work life. This type of surface-level change 
would be a form of single-loop learning. However, such behavioral change more than 
likely would not resolve the deeper problem that produced the infighting in the first 
place. To resolve this more tacit concern, double-loop learning, or a change in the under¬ 
lying system of beliefs, would need to occur. Both the actions and the values of the group 
would need to be affected. 

Peter Senge, writing in The Fifth Discipline, suggests five elements that contribute to 
building a learning organization. These are: 

Personal mastery: A discipline that connects individual learning, personal skills, and 
spiritual growth with organizational learning. It involves one’s inherent capacity to 
continuously focus on what is most important, while ensuring that the view of reality 
remains clear and truthful (Senge, 1990, p. 141). 

Mental models: A discipline that links the way in which we view the world—our 
assumptions about “how things work”—with innovation and learning. Our mental 
models may pose substantial barriers to new ideas, those that conflict with our cur¬ 
rent understanding of reality, or they may become a source of new knowledge and 
creative learning (Senge, 1990, pp. 174-178). 

Shared vision: A discipline in which an image or idea becomes transformed into a 
powerful force that is shared throughout the organization or group. The organization 
that has a shared vision is “connected, bound together by a common aspiration” 
(Senge, 1990, p. 206). 

Team learning: A discipline that reflects the capacity of a group of individuals to coa¬ 
lesce, to engage their respective energies into an integrated team. The team remains 
connected through its shared vision, thus ensuring that the individual learning that 
occurs becomes translated into a group — indeed, a shared — experience (Senge, 1990, 
pp. 234-235). 

Systems thinking: A discipline that shows how human action—whether in business, 
government or other pursuits — represents a systemic, interrelated set of events. Thus, 
we may understand and effect change by recognizing the interconnectedness of our 
actions and their consequences in the broader system. Those who are able to achieve 
this type of systems thinking—what Senge calls the fifth discipline —have embodied 
the concept of individual and organizational learning (Senge, 1990, p. 7). 

The convergence of the concepts of organizational culture and organizational learning 
provide an important foundation for understanding organizational change. Yet they also 
relate to an older concept, but one which remains crucial in contemporary society: 
strategic management. Several years ago, Peters and Waterman’s In Search of Excellence 
(1982) introduced this concept in its analysis of implicit philosophies that guide most 



Organizational Culture, Organizational Learning, and Strategic Management 313 

successful American companies. Much of the work remains just as valuable today as it 
did nearly two decades ago. In particular, Peters and Waterman state the importance of 
establishing a core set of values that comprise the mission of the organization and shape 
decisions throughout the structure. They suggest the importance of constant interchange 
between managers and workers, the organization and its clients. Though terms like 
“MBWA,” or Management by Walking Around, may seem dated, the supporting princi¬ 
ple of leadership remaining in close contact with members of the organization has per¬ 
haps even grown in significance. 

Networking 

For a less formal introduction to organizational culture, begin with a Web site 
developed by graduate students at the University of Toronto at http://www.oise. 
utoronto.ca/~vsvede/culture.htm. Next, visit MIT’s Society for Organizational 
Learning at http://www.sol-ne.org/. This site discusses research about organiza¬ 
tional culture and change. 

Some of the specific features of successful companies cited by Peters and Waterman 
(1982, pp. 13-16) include: 

1. A bias for action: A willingness to experiment and to take risks 
2. Close to the customer: A near obsession with service and quality 
3. Autonomy and entrepreneurship: Allowing a freedom to develop new ideas and to 
compete with other parts of the company 
4. Productivity through people: Treating people as adults, and giving them trust and respect 
5. Hands on, value driven: Paying attention to their values and managers working hard 
to express those values 
6. Sticking to the knitting: Doing what you know best; do not diversify excessively 
7. Simple form, lean staff: Avoiding top-heavy and complex organizational structures 
8. Simultaneous loose-tight properties: The coexistence of firm central direction and 
maximum individual autonomy 

These criteria for excellence can be translated into a public-sector context without 
great difficulty. For example, the International City Management Association and the 
Center for Excellence in Local Government adapted the Peters and Waterman criteria to 
define “excellence in local government”: 

1. Action orientation: Excellent local governments identify problems and deal with them 
quickly, fighting through structural, political, legal, and environmental constraints that 
make action more difficult than in the private sector. 
2. Closeness to citizens: This criterion includes establishing and maintaining a variety of 
close links with citizens who are served by the local government, including those who 
are regulated against their will. Excellent local governments listen and are sensitive and 
responsive to public input. 



Chapter 8 Managing Organizational Dynamics 

3. Autonomy and entrepreneurship: Excellent local governments have developed cli¬ 
mates conducive to conceiving ideas and doing new things to solve problems. They have 
track records for implementing creative solutions, even in the face of declining resources. 
4. Employee orientation: This criterion demands more than lip service to employees and 
their needs. Excellent local governments insist on intensive, pervasive treatment of employ¬ 
ees as human beings and adults. 
5. Values: Excellent local governments have a defined set of values. Their overall focus is 
on being the best by providing superior quality service to the public. Their values are 
communicated clearly and demonstrated regularly to employees. Those values also pro¬ 
vide the source of enthusiasm and pride among employees. 
6. Mission, goals, and competence: Mission is the underlying premise of the organization. 
Excellent local governments have evaluated their missions based on changing resource 
levels and citizen demands, and have used mission statements as the foundation for estab¬ 
lishing community and organizational goals. Within their defined mission, excellent local 
governments provide consistent, uniform service levels. 
7. Structure: In excellent local governments, the potential negative effects of antiquated, 
bureaucratic structures have been minimized. These organizations have fewer manage¬ 
ment levels and fewer centralized support staffs. They provide firm central direction 
while giving maximum autonomy to employees. 
8. Political relationships: Political relationships refer to more than how the elected govern¬ 
ing body and management staff work together. In excellent local governments, managers 
and policy makers are tuned in to the political environment; have established positive, 
open, and respectful relationships with each other; and have established political stability 
(Barbour et al., 1984). 

Most recently, Robert B. Denhardt (1993) has elaborated several approaches to public 
management based on interviews with highly successful public managers in Australia, 
Canada, Great Britain, and the United States. Denhardt’s research has shown that these 
managers, highly regarded by their peers for improvements in quality and productivity in 
their organizations, have a distinctive style from the traditional rule-driven bureaucratic 
mode of operations, yet they have much in common. Among the approaches used by 
these revolutionary public managers are the following: 

1. A commitment to values: The manager seeks organizational change less by attention to 
structure than by developing a pervasive commitment to the mission and values of the orga¬ 
nization, especially the values of professionalism and integrity, service and quality. Values 
are clearly articulated by the chief executive and shared throughout the organization. 
2. Serving the public: The manager gives priority to service to both clients and citizens. That 
priority is supported by high standards of performance and accountability and by a con¬ 
stant emphasis on quality. Most important, the manager recognizes that technical efforts 
alone will fail unless equal or even greater attention is given to the human side, especially to 
building a sense of community within the organization and a sense of cooperation outside. 
3. Empowerment and shared leadership: The manager encourages a high level of participa¬ 
tion and involvement on the part of all members of the organization in efforts to improve 
the quality and productivity of the organization (see Box 8.1). Leadership from the top is 



Organizational Culture, Organizational Learning, and Strategic Management 317 

BOX 8.1 

Empowering an Organization 

Because I like to think I have learned a few things in 25 years (in the field of urban 
management), hopefully there are also some things I now do differently. At the 
front end of my career, for example, my concern was in making sure everybody in 
the organization knew I was in charge. Reorganization, replacement of key person¬ 
nel, and formal control mechanisms were the hallmarks of my early days. They 
were meant to define me as a “take charge” person and to signal that change had 
occurred.. . . 

In reflecting on my earlier approach, I have now come full circle. The kinds of 
changes I made back then were clearly visible and so probably satisfied those who 
wanted to see change. I have learned, however, that it is relatively simple to bring about 
physical, visible change but that to cause actual improvement in the way an organiza¬ 
tion functions is a far more difficult trick. . . . Obedience as the basis for organizational 
success has given way in my mind to the need for trust. A successful relationship is 
based upon mutual give and take rather than on “you give and I take. . . .” 

What impresses me as more productive now is to figure out how you get those in 
the organization to feel confident about what they do, to move the organization 
where it needs to go. The values that permeate an organization have the power to 
override, at least in the long run, any other changes that may be made. What is new 
for me now in the second half of my career is an understanding that if dysfunctional 
and counterproductive values do not change, not much else of importance will either. 
And if management is not trying to improve the organizational culture’s value system, 
no one else will. 

A related lesson I have learned is that management cannot “order” values to 
change. This kind of change takes place relatively slowly, and it occurs only if man¬ 
agement talks a lot about what is expected, sets the right example, creates the right 
kind of organizational climate, and uses the personnel and compensation system to 
support the right behavior. 

So I am preaching. I am talking about organizational values important to success — 
customer responsiveness, treating people right, supporting city policies, being a good 
source of information, getting and giving “more bang for the buck,” and providing 
anticipative rather than reactive management. . . . 

The point of all this is to empower the people in the organization to exert them¬ 
selves by their own volition, in the right direction. A manager can indicate the proper 
direction. A manager can encourage needed values and can create the climate in which 
employees will choose to make the organization’s success their goal. Managers used 
to see success as a function of the assertion of their own power. Now they see the 
empowerment of others as a more likely avenue to success. 

SOURCE: Excerpted from Roy R. Pederson, “Empowering an Organization.” Reprinted from the August 
1989 issue Public Management (PM) magazine published by the International City/County Management 
Association, Washington, D.C. 



3i8 Chapter 8 Managing Organizational Dynamics 

complemented by empowering individuals throughout the organization to assume leader¬ 
ship within their own realms. 
4. Pragmatic incrementalism: Change occurs through a free-flowing process in which the 
manager pursues a wide variety of often unexpected opportunities to move the organiza¬ 
tion in the desired direction. The manager views change as a natural and appropriate 
feature of organizational life and employs a creative and humane approach to change, 
taking into account the personal concerns and interests of members, clients, and others. 
5. A dedication to public service: Individuals throughout the organization understand 
and appreciate the special character of public service, especially the role of public organi¬ 
zations in the process of democratic governments. The manager insists that members of 
the organizations maintain high levels of standards and encourages them to make their 
organization a model of integrity for similarly situated groups. 

Denhardt argues that these approaches to public management are not merely tech¬ 
niques to be used in pursuit of the organization’s interest, but are ideas consistent with 
the history and tradition of public service. For many public managers and many public 
employees the driving motive behind their best efforts is not the pursuit of self-interest, 
but rather the pursuit of the sense of meaning or significance in their work. As managers 
become more aware of this factor and take it into account in the way they manage, pub¬ 
lic organizations can become more flexible, more creative, and more responsive to both 
clients and citizens. 

Total Quality Management 

Many of the themes in the organizational culture literature and the literature dealing with 
strategic management are coming together under the heading of Total Quality Management 
(TQM). While some consider TQM merely another set of techniques to be used in improv¬ 
ing quality and in turn productivity, others consider TQM as embracing a variety of the 
most contemporary approaches to public management. They would say that TQM is a 
broad-scale approach to changing an organization’s entire culture to focus it on establishing 
and maintaining high standards of quality, especially with respect to meeting customer 
expectations. The key of TQM is to serve the customer, whether the customer is internal to 
the organization or someone outside. In this chapter we will consider the broad thematics 
of TQM; in the next we will note particular applications of TQM techniques. 

The OMB circular describing TQM for federal executives calls it “a comprehensive 
management approach for meeting customer needs and expectations that involves all 
employees in improving continuously the organization’s processes, products, and ser¬ 
vices.” Specifically, TQM involves bringing together everyone in the organization in a 
manner that creates a new culture of excellence that emphasizes: 

top management leadership and support 

strategic planning and implementation geared to long-term success 

focus on the customer 



Organizational Culture, Organizational Learning, and Strategic Management 319 

commitment to training and recognition 

employee empowerment and teamwork 

reliance on measurement and analysis of process and outputs 

quality assurance (OMB Draft Circular A-132, 1990) 

The emphasis in TQM is first on improving quality, not productivity. Indeed, the 
assumption is that if the quality of the organization’s work is improved, its productivity will 
also improve. Improvements in quality are sought through a variety of tools or techniques, 
each tailored to the specific work of the organization. One organization might develop a 
series of quality control teams to oversee and control quality throughout its delivery of ser¬ 
vices; another organization might choose to develop a more detailed measurement system to 
pinpoint errors in its production processes. In all cases, however, the commitment to quality 
must be strongly expressed by top management and throughout the organization. It should 
also be long-term; TQM is not seen as a quick fix but as a never-ending process of improve¬ 
ment. 

TQM Beginnings 

The idea of quality management began in the late 1920s with Walter Shewart’s develop¬ 
ment of a method for measuring variance in production systems, called statistical process 
control. During World War II, quality control methods were critical and the War 
Department incorporated Shewart’s methods, hiring W. Edward Deming, who was actu¬ 
ally a student of Shewart’s, to teach the statistical process control method. 

After World War II, American industry and government, blessed with a rapidly 
expanding economy, became very powerful yet eventually complacent. The Japanese 
faced a very different situation after the war. While they had never been blessed with 
abundant natural resources, they were quick to adopt progressive industrial management 
techniques. Deming traveled to Japan to help rebuild industry and taught the statistical 
control method to the Japanese, as did another important figure in the development of 
TQM, Joseph Juran. Juran taught that quality should be defined as “fit for customer 
use.” He also developed the concept of “cost of quality,” a type of cost-benefit analysis. 
Under the guidance of Deming and Juran, the Japanese extended quality control methods 
to production and inspection. Eventually, the Japanese learned how to increase their com¬ 
petitiveness by improving the quality of the goods and services they produced. 

Throughout this period, American industrial leaders felt no need to learn a new way 
of thinking. However, a remarkable renaissance occurred during the second half of the 
twentieth century. In the 1950s, Japanese products were considered very shoddy, while 
“Made in America” meant strength and competence. By the 1970s, the image had been 
reversed; Japanese products were now considered of higher quality and consequently 
fared better on world markets. Today, American industry (and American government), 
guided by such contemporary leaders in quality improvement as Philip Crosby, is taking 
a long, and at times skeptical, look at the quality management methods used by Japanese 
industry. The TQM movement represents a major initiative in this reassessment. 



320 Chapter 8 Managing Organizational Dynamics 

Networking 

The Center for Quality and Productivity Improvement (http://www.engr.wisc.edu/ 
centers/cqpi/) and the Government Division of the American Society for Quality 
(http://deming.eng.clemson.edu/pub/psci/psn/) provide resources and other infor¬ 
mation concerning TQM and quality improvement activities in the governmental 
and nongovernmental sectors. 

TQM stresses customer satisfaction, examines relationships between existing manage¬ 
ment processes, improves internal communications, and responds to the valid demands of 
all customers, internal and external (Milakovich, 1991). Among the questions advocates of 
TQM seek to address are the following: 

1. How can an organization assess and improve its basic services and product quality in 
the eyes of its clients and customers? 
2. How should it plan process redesign, organizational restructuring, participative manage¬ 
ment, and employee development to aid in this effort? 
3. What coordination and evaluation mechanisms need to be put in place to facilitate 
quality management? 
4. What measurement systems must the organization develop and how should the infor¬ 
mation generated be used in its pursuit of quality? 

Guidelines for Public Management 

What lessons can you draw from these various perspectives that might guide your actions 
as a public manager? One way to begin to answer that question is to summarize some of 
the thinking about management in terms of guidelines for practice. The recent literature 
on strategic management seems to suggest the following guidelines: 

1. Maintain clarity about organizational priorities, goals, and objectives. Although some 
ambiguity is often unavoidable in stating organization priorities, goals, and objectives, 
most organizations are far too confused on these issues. This confusion leaves people 
throughout the organization, including people who are required to make frequent deci¬ 
sions about organizational direction, without an appropriate basis for making such deci¬ 
sions. The direction of the organization should be stated as clearly as possible and 
widely communicated to all members. 
2. Make decisions today in terms of the most likely future circumstances. Strategic man¬ 
agement implies making all organizational decisions in terms of “futurity”—that is, how 
they will meet expected changes in the environment. It suggests taking every action in 
light of anticipated conditions, thus putting the organization in the best position to take 
advantage of future opportunities. 
3. Be attentive to the context in which you operate, especially relationships with other 
actors in the governmental system. There is a natural but unfortunate tendency toward 



Organizational Culture, Organizational Learning, and Strategic Management 321 

tunnel vision in most organizations. Actions are viewed in immediate terms, without 
duly considering who will be affected by the action. Acknowledging the importance of 
the environment is essential to strategic thinking. 
4. Understand clearly the organization’s capacities and limitations. New programs and 
policies can be effectively implemented only if they fall within the existing capacity of 
the organization or provide sufficient opportunity to build capacity. There are dangers in 
both underutilization of resources and becoming overextended. 
5. Balance program goals with attention to organizational values and processes. It is 
important to state programmatic objectives clearly; however, the organization’s cul¬ 
ture and the prevailing norms, beliefs, and values of its members are equally impor¬ 
tant. Organizational processes, such as leadership, communications, motivation, 
group dynamics, and so forth, need constant attention, because they are essential to 
goal accomplishment. 
6. Create diverse mechanisms, both temporary and permanent, for constantly renegotiat¬ 
ing programs and processes. Both programmatic concerns and organizational processes are 
constantly changing in ways that affect persons throughout the organization. Thus, clarity 
with respect to priorities, goals, and objectives must not lead to rigidity. Mechanisms must 
permit and, in fact, encourage the entire membership of the organization to contribute reg¬ 
ularly to refining programs and processes. 
7. Build trust and commitment through open communications and genuine participa¬ 
tion. Guidelines by which we might measure the degree of participation the organiza¬ 
tion encourages include members’ access to information and to forums of decision 
making, their ability to open any issue without fear of retaliation, and their feeling 
that their ideas will at least be considered by major decision makers (Redford, 1969, 
p. 8). 

Much of the work reviewed here applies equally to management in the public and 
private sectors. But it is interesting to note that some of the most recent general trends 
in management have been anticipated in public-sector management. Public organiza¬ 
tions’ dependence on pluralistic decision processes — that is, processes through which 
many different people and groups are likely to be involved in any particular decision — 
makes the process of managing change in the public sector quite complicated. Ip also 
means that a high degree of ambiguity and uncertainty is likely to surround most 
efforts to implement or alter programs, and that managers must be especially skillful 
in negotiating across organizational boundaries rather than expecting to control cir¬ 
cumstances from the top. In addition, public organizations must have a service orien¬ 
tation— specifically, an understanding of and an attempt to act in accord with the 
public interest. We noted that organizations seeking public purposes must operate 
openly, be cognizant of client interests, and understand the political context within 
which they operate. 

Under these circumstances, it is not at all surprising that the values and perspectives 
that now seem so much a part of modern management, such as those associated with 
strategic management or Total Quality Management, have always been central (if not 
dominant) in public administration theory. Thus, for example, Marshall Dimock’s 
(1936, p. 120) comment that “successful administration is warm and vibrant. It is 



3^2 Chapter 8 Managing Organizational Dynamics 

human. . . sounds very much like a quotation from Peters and Waterman. One might 
thus argue that, in contrast to Woodrow Wilson’s admonition that public agencies 
should operate like businesses, it seems that public organizations and the values and 
interests they represent today should be and are becoming models for organizations of 
all types. 

However, in this age of reinvention and managerialist government, there are reasons 
to be concerned that business values have overshadowed the ethic of citizenship that 
accompanies our theory of democracy. Public administration sometimes seems to be 
more concerned with promoting the entrepreneurial spirit than fostering meaningful 
engagement and sustaining citizen participation in civil society. There is a danger of 
devoting ourselves to satisfying the customer while neglecting to ensure equity, justice, 
and equality for citizens. 

We will note later, in discussing recent critiques of the reinvention movement, that cit¬ 
izens are more than mere customers of government, that they are its owners, and that 
placing this relationship in economic terms reduces the role (and responsibility) of the 
citizen in the governance process. This critique carries important implications for our 
notions of public management. Specifically, in the current framework, public administra¬ 
tors can afford to view citizens in instrumental terms, and thus believe that by achieving 
an efficient, market-oriented system of service delivery that citizen trust and participa¬ 
tion will be maintained. Citizen engagement, in this context, may be limited to a source 
of legitimation for public decisions that have already been made in more rational forms 
(for different perspectives, see Bryson & Crosby, 1992; Chrislip & Larson, 1994; 
Thomas, 1995). 

Such a limited concept of engagement not only weakens our systems of public man¬ 
agement and administration, in that it removes decision-making processes from the pub¬ 
lic realm, but also threatens to destroy the remaining level of citizen trust we as public 
servants enjoy. Citizens have expressed that their confidence is less contingent on man¬ 
agerial pursuits, such as efficiency and performance, and more on the values of respon¬ 
siveness and equity. Yet sometimes it is tempting to forget this important message and to 
continue to strive simply for greater productivity. 

The question we encounter once again is, “How can we balance efficiency and 
responsiveness in the operation of public programs?” The field of public administra¬ 
tion has generally leaned toward the efficiency side of the equation. Now, however, 
there is growing evidence that emphasizing responsiveness is not only consistent with 
democratic principles, but, in the long run, may also be the most effective way of 
operating. Whereas a structural view of organizations tends to emphasize internal 
efficiency, it is apparent th"at greater attention to external relationships and the ability 
to negotiate across organizational boundaries will become more and more necessary 
in our increasingly complex society, as will an organizational environment that fosters 
creativity. 

Developing a democratic approach to management has often been attractive to public 
administration theorists because it seems only proper that government institutions in a 
democracy should operate democratically. What we are finding more and more is that 
such an approach is not only appealing but necessary for organizations of all types — not 
only those in the public sector—to survive. 



Postmodern Narratives on Management 323 

Postmodern Narratives on Management 

In recent years, the images of organizations discussed above have come under criti¬ 
cism from a variety of standpoints. Some challenge the notion of a single, unifying 
notion of management and organizations. Others bring into question the overly 
functionalistic nature of management theory. And still others attempt to counter the 
political context of traditional theory, particularly the use of power by elites to mar¬ 
ginalize the powerless. We will discuss these contrary perspectives on organizations 
under the heading of postmodernism. But as we will see even this term is problematic, 
since postmodernism defies our tendency for categorizing diverse viewpoints into 
a single, definitive theory. 

Postmodernism 

The philosophical roots of what we call postmodernism can be traced to the late 1960s 
and a school of French philosophy known as poststructuralism. Poststructuralists took 
issue with many of the core assumptions underlying modernist philosophy. For exam¬ 
ple, highlighting modernity’s debt to the Enlightenment, the poststructuralists opposed 
modernity’s primacy of rationality, objectivity, and the application of scientific princi¬ 
ples in the development of a universal explanation of the social world. They argued 
for more diverse readings of society—that is, for new ways of knowing, based on 
semiotics and linguistics, to help explore the symbolic content of social phenomena. 
Such influences helped to bring about what has been called the linguistic turn in social 
theory. 

In management theory, a key theme underlying the postmodernist critique centers 
on the multiple sources of knowledge that confront us in our organizational experi¬ 
ence, what we may refer to as fragmentation. As Hatch explained, “Postmodernists 
challenge the modernist desire for unifying views with their belief that knowledge 
is fundamentally fragmented, that is, knowledge is produced in so many different 
bits and pieces that there can be no reasonable expectation that it will ever add up to 
an integrated and singular view” (Hatch, 1997, p. 44). Consequently, we are faced 
with the question: Given the increasingly global, networked nature of public and 
nonprofit organizations, how can we cling to a belief in a central, complete theory of 
management? 

A second important theme involves a postmodernist challenge to what is called the 
progress myth. This stems from modernity’s premise that our scientific knowledge is 
the result of a cumulative process, with one theory building uniformly upon previous 
theories, toward a shared end of advancing the human condition. Rather than some 
altruistic enterprise, postmodernists argue that the Enlightenment, and its offspring of 
modernity, proved to be a wholesale abuse of scientific knowledge by the powerful for 
the purpose of maintaining the status quo. Indeed, even the notion of a common 
human goal reveals the power-saturated, neocolonial character of modernism. So, how 
can we presume to be in a position to determine what is in the best interest of societies 



324 Chapter 8 Managing Organizational Dynamics 

around the world, much less to impose a particular'form of knowledge to identify and 
evaluate policy alternatives? 

To counter these tendencies, postmodern theorists employ a narrative device known as 
discourse analysis. It begins by viewing presentations of organizational inquiry—such as 
oral, textual or visual narratives — as forms of discourse, then using discourse analysis to 
deconstruct the narratives to reveal modernist assumptions underlying the content. One 
of the purposes of discourse analysis is to expose (and challenge) any attempt to provide 
some type of grand narrative, in the modernist tradition, of organizations or society. 
However, another purpose, one with more of an action orientation, involves the use of 
discourse analysis to reverse the power-saturated state of language in the organizational 
context, thereby opening the door for more diverse voices in organizational narratives— 
that is, the inclusion of traditionally dispossessed participants in social experiences of 
management. 

Issues of Gender and Power 

Feminist scholars have used elements of discourse analysis, as well as the liberating expe¬ 
rience of postmodernism generally, to launch a sustained critique against traditional 
organization and management theory. At the heart of their critique is the segmentation 
of power along gender lines in organizational hierarchies, what the feminist scholar Jane 
Flax refers to as a “sexual division of labor” in modern management (Flax, quoted in 
Hatch, 1997, p. 293). 

In Chapter 6, we discussed the glass ceiling that limits the advancement of women in 
the work place. However, Flax points out that the corollary to such structural barriers is 
that women tend to be employed in occupational areas that consist overwhelmingly of 
other women, jobs that are paid less and subject women workers to gender-stereotyped 
roles, like childcare (school teachers), housecleaning (secretaries), and other forms of 
“women’s work” (Flax, quoted in Hatch, 1997, p. 293). Besides these practical implica¬ 
tions, modern management theory has relegated women to the role of subjects in other¬ 
wise male-dominated power structures. 

It is this concern for the powerless that provides perhaps the most compelling argument 
of feminist theories. From a foundation in neo-Marxian critical theory, feminist scholars 
draw into question the very legitimacy of our ways of organizing in the post-industrial era. 
To them, studies of organization and management theory have become little more than 
sources of intellectual justification for an abuse of power by elites. Their only purpose is to 
maintain the social, political, and economic order. Even postmodernism itself has come un¬ 
der attack from feminist critics, who see these theories as shifting the concern away from 
substantive issues of power and inequality in daily work life. 

Moreover, contrary to what advocates depict as a democratization of economic and 
political space in the global marketplace, feminist critics argue globalization and the 
imposition of new forms of governance by industrialized nations has done nothing but 
to take the northern, western drive for power and economic supremacy to new frontiers. 
The result has been a further marginalization of women, especially in what the develop¬ 
ment community refers to, in its colonialistic way, as third world societies. 



Terms and Definitions 3 23 

Summary and Action Implications 

As we have seen, your behavior is guided by the images you carry around in your head. 
Some of these images will have to do with the role of public agencies in a democratic soci¬ 
ety, others will have to do with the most effective and responsible way to run a complex 
public organization, and still others will have to do with the relationships you establish 
with other actors, both within and outside the governmental system. Over your career, 
you will develop and refine your images based on experience and on careful reflection and 
self-critique. You will also benefit from comparing your images (and approaches) to those 
that others recommend. 

Through the years, students and practitioners of public administration have spent 
considerable time reflecting on the nature of their work and sorting out the many factors 
that make for successful public management. Each resulting theory represents an attempt 
to suggest where you should cast your attention. Because you can not attend to all things 
at once, a certain amount of selectivity goes into theory building. Each theory implies 
evaluating what is most important to be aware of and to do to manage successfully. 

Early writers thought that issues of organizational structure were most important, 
so they spent considerable time detailing concerns for structure. Later theorists (some of 
them also practitioners) felt that structural issues should be balanced, if not outweighed, 
by a concern for the behavior of individuals in the organization. Still others sought further 
refinements, moving from behavior to structure and back again. More recent approaches 
have emphasized the organization’s culture or value structure, but others have challenged 
the very notion of our ways of organizing in contemporary society. 

For the time being, however, we should note the special sensitivity that those in public 
organizations have always shown for value questions. We have seen time and again how 
the values of public service — the pursuit of the public interest—affect the work of those 
in public organizations. The concern of contemporary writers in business and related 
fields for service and human values is something that those in public administration have 
always had to contend with, especially as they have been challenged to find a form of 
management compatible with the requirements of a democratic society. 

Terms and Definitions 

Area of acceptance: Area within which the subordinate is willing to accept the deci¬ 
sions made by the supervisor. 

Boundary spanning: Representing an organization to outside groups and organizations. 

Bounded rationality: Seeking the best possible solution, but not necessarily the most 
rational from a purely economic standpoint. 

Organization development: Process-oriented approach to planned change. 



326 Chapter 8 Managing Organizational Dynamics 

Organizational culture: Basic patterns of attitudes, beliefs, and values that underlie 
an organization’s operation. 

Organizational learning: The process of correcting error through recognizing the dis¬ 
parity between what the group intends to happen and what actually occurs and then 
drawing appropriate lessons for the future from this fact. 

Political economy approach: Focusing on politics and economies as categories for 
analyzing organizational behavior. 

Scientific management: Approach to management based on carefully defined laws, 
rules, and principles. 

Strategic management: A systems-based approach to management that seeks clarity 
with respect to goals and objectives, strategies to achieve those goals and objectives, 
and processes of evaluation to measure accomplishments. 

Systems theory: Suggestion that public (or other) organizations can be viewed in the 
same general way as biological or physical systems. 

Study Questions 

1. Discuss the approaches to public management espoused by early writers in the field. 
2. Explain Douglas MacGregor’s Theory X and Theory Y management concepts. 
3. Compare the management approaches of Herbert Simon and Chris Argyris. 
4. Two management approaches combine the human element with the structural aspect 

of the organization. Discuss the differences between the systems approach and the 
political economy approach. 

5. What shared assumptions, as outlined by Edgar H. Schein, seem consistent in organi¬ 
zational cultures? What features do Peters and Waterman contribute to the list? 

6. What basic philosophies underlie recent work in organizational culture and strategic 
management? 

Cases and Exercises 

1. Divide the class into four small groups (or multiples of four). Have each group analyze 
your class as an organization, taking into account questions of power and authority, 
communications, motivation, group dynamics, and so on. One group should employ 
only a structural perspective; the second group should employ only a behavioral per¬ 
spective; and the third group should employ only a systems perspective. The fourth 
group should employ whatever perspective (or combination of perspectives) that its 
members consider most modern and most complete. 



Cases and Exercises 327 

Have each group (or a representative of each type of group, depending on the num¬ 
bers) report their conclusions to the entire class. Think of each perspective as allowing 
you to see certain things and preventing you from seeing others. What do you see 
from the structural perspective? What about the behavioral perspective? The systems 
perspective? The combination perspective is likely to seem most complete, but con¬ 
sider the possibility that this modern viewpoint also overlooks a great deal, and that, 
though we think it is complete (as those using earlier perspectives considered them 
complete), there may be much left to understand about organizations, even small 
ones. What other questions might we encounter in the future? 

2. As a class, study the interorganizational relationships of one small organization. The 
organization might be a unit at the university (either an academic or a staff unit); 
a unit in city, state, or federal government; or a local nonprofit organization. Pick an 
organization that is clearly identifiable and, if possible, that appears to have consider¬ 
able autonomy. Based on interviews with its top administrators and top staff people, 
develop a chart showing the organization’s relationships with others in its environ¬ 
ment. (A model something like one of a molecular structure might be appropriate.) 
Indicate the importance of each relationship, the degree to which that relationship is 
considered positive or negative, and the degree to which it is considered essential. Try 
to develop some sense for how much time administrators and staff members spend on 
external relations versus internal organizational work. 

3. The following statement was included as part of a statement of management philoso¬ 
phy for the Greensboro, NC, District of the Internal Revenue Service approximately 
a decade ago: 

Our first priority as managers will be to identify and focus on eliminating the 
barriers to our employees doing their work with the highest degree of quality. 
We will communicate in such ways as to provide information which will enhance 
understanding and involvement by our employees in the district decision-making 
process. We will encourage our employees to speak out and we will be receptive 
to their questions and/or criticisms of management directions. We will support, 
guide, and develop our employees to assist them in reaching maximum potential. 
We will promote positive feelings among our employees toward each other and 
their work. We will do everything possible to enhance the professional image of 
the IRS. 

First, this statement deals with internal operations of the district; it is primarily 
concerned with the relationship between managers and employees. What elements 
would you wish to add to the statement? How has time and politics changed what 
you might want to include today? 

Second, think about the relationship between a tax collection agency and its clients. 
What statements of philosophy dealing with the relationship between agency and 
clients would be appropriate to add? 

Third, given the statement and your modifications, what specific steps would you 
recommend to the managers of the agency for putting their commitments (and yours) 
into practice? 



jz8 Chapter 8 Managing Organizational Dynamics 

For Additional Reading 

Ban, Carolyn. How Do Public Managers Manage? San Francisco: Jossey-Bass, 1995. 
Baum, Howell S. The Organization of Hope. Albany: State University of New York 

Press, 1997. 
Bennis, Warren, Jagdesh Parikh, and Ronnie Lessem. Beyond Leadership. Cambridge, 

MA: Basil Blackwell, 1994. 
Block, Peter. Stewardship. San Francisco: Berrett Koehler Publishers, 1993. 
Boje, David M., Robert P. Gephart, Jr., and Tojo Joseph Thatchenkery, eds. 

Postmodern Management and Organization Theory. Thousand Oaks, CA: 
Sage Publications, 1996. 

Bryson, John M., and Barbara C. Crosby. Leadership for the Common Good: Tackling 
Public Problems in a Shared-Poiver World. San Francisco: Jossey-Bass, 1992. 

Caiden, Gerald. Administrative Reform Comes of Age. Berlin: W. de Gruyter, 1991. 
Carnavale, David G. Trustworthy Government. San Francisco: Jossey-Bass, 1995. 
Cohen, Steven, and Ronald Brand. Total Quality Management in Government. 

San Francisco: Jossey-Bass, 1993. 
Davis, Charles R. Organization Theories and Public Administration. Westport, CT: 

Praeger, 1996. 
Denhardt, Robert B. The Pursuit of Significance. Belmont, CA: Wadsworth, 1993. 
Denhardt, Robert B. Theories of Public Organization. 2d ed. Belmont, CA: Wadsworth, 

1993. 
Diamond, Michael A. The Unconscious Life of Organizations: Interpreting 

Organizational Identity. Westport, CT: Quorum Books, 1993. 
Dunn, Delmer. Politics and Administration at the Top. Pittsburgh: University of Pittsburgh 

Press, 1997. 
Farmer, John David. The Language of Public Administration. Tuscaloosa, AL: 

University of Alabama Press, 1995. 
Fox, Charles, and Hugh Miller. Postmodern Public Administration. Thousand Oaks, 

CA: Sage Publications, 1995. 
Fredrickson, H. George. Hew Public Administration. Tuscaloosa: University of Alabama 

Press, 1980. 
Frost, Peter J., Arie Y. Lewin, and Richard T. Daft, eds. Talking About Organization 

Science: Debates and Dialogue from Crossroads. Thousand Oaks, CA: Sage 
Publications, 2000. 

Golembiewski, Robert T. Humanizing Organizations. Mt. Airy, MD: Lomond 
Publications, 1985. 

Grubbs, Joseph W. “Cultural Imperialism: A Critical Theory of Interorganizational 
Change.” Journal of Organizational Change Management 13, no. 3 (2000): 221-234. 

Harmon, Michael M., and Richard T. Meyer. Organization Theory for Public 
Administration. Boston: Little, Brown, 1986. 

Kass, Henry D., and Bayard L. Catron, eds. Images and Identities in Public 
Administration. Newbury Park: CA: Sage Publications, 1990. 

Kettl, Donald, et al. Cutting Government. Washington: Brookings Institution, 1995. 



Appendix A 329 

Koehler, Jerry W. Continual Improvement in Government. St. Lucie, FL: St. Lucie Press, 
1996. 

Koehler, Jerry W. Quality Government. St. Lucie, FL: St. Lucie Press, 1996. 
Lee, Dalton M. The Basis of Management in Public Organizations. New York: R. Long, 

1990. 
Milakovich, Michael. Improving Service Quality. Delray Beach, FL: St. Lucie Press, 1995. 
Morgan, Gareth. Images of Organization. 2d ed. Thousand Oaks, CA: Sage 

Publications, 1997. 
Omar, Ray. Management Analysis in Public Organizations: History, Concepts, and 

Techniques. New York: Quorum Books, 1992. 
Peters, B. Guy. The Future of Governing. Lawrence, KS: University Press of Kansas, 

1996. 
Peters, Guy, and Bert Rockman. Agenda for Excellence 2. Chatham, NJ: Chatham 

House, 1996. 
Rainey, Hal G. Understanding and Managing Public Organizations. San Francisco: 

Jossey-Bass, 1997. 
Schein, Edgar H. Organizational Culture and Leadership. San Francisco: Jossey-Bass 

1987. 
Senge, Peter M. The Fifth Discipline. New York: Currency Doubleday Dell Publishing, 

1990. 
Senge, Peter M., et al. The Fifth Discipline Fieldbook. New York: Currency Doubleday 

Dell Publishing, 1994. 
Shafritz, Jay M. Classics of Organization Theory. Pacific Grove, CA: Brooks/Cole, 

1992. 
Stever, James A. The End of Public Administration: Problems of the Profession in the 

Post-Progressive Era. Dobbs Ferry, NY: Transnational Publishers, 1988. 
Stivers, Camilla. Gender Images in Public Administration: Legitimacy and the 

Administrative State. Newbury Park, CA: Sage Publications, 1993. 
Terry, Larry D. Leadership of Public Bureaucracies. Thousand Oaks, CA: Sage 

Publications, 1995. 
Wamsley, Gary, et al., Refounding Democratic Public Administration. Thousand Oaks, 

CA: Sage Publications, 1996. 
White, Jay D. Taking Language Seriously: The Narrative Foundations of Public 

Administration Research. Washington, DC: Georgetown University Press, 1999. 

APPENDIX A 

Description of Total Quality Management (TQM) 

Total Quality Management is a total, integrated organizational approach for meeting cus¬ 
tomer needs and expectations that involves all managers and employees and uses quanti¬ 
tative methods and employee involvement to improve continuously the organization’s 



330 Chapter 8 Managing Organizational Dynamics 

processes, products, and services. The description provided below presents TQM as it 
would exist in an advanced phase in an organization. 

Top Management Leadership and Support 

Top managers are directly and actively involved in the TQM process. They take the lead 
in establishing an environment and culture that encourage change, innovation, risk tak¬ 
ing, pride in work, and continuous improvement on behalf of all customers. They exhibit 
a highly visible, personal leadership and communicate the organization’s quality vision, 
goals, and values to all members. Managers provide the resources, time, and training nec¬ 
essary for the organization to improve quality and productivity. They show by example 
that open communication (vertically and horizontally) and information sharing are the 
organizational norm. They understand that quality improvement is a long-term process, 
not to be compromised by short-term considerations. Managers remove barriers to 
improvement; that is, they delegate authority to the lowest feasible level, deregulate work, 
and discourage the quick-fix mentality that seeks short-term results at the expense of 
long-term goals. Managers establish trust, encourage cooperation among organizational 
units to achieve better service, and reward behavior that reflects the organizations TQM 
goals. They establish an organization structure that fosters effective implementation of 
the quality improvement process. 

Strategic Planning 

Strategic planning drives the organization’s improvement efforts. Short- and long-term goals 
for quality improvement are established across the organization and are integrated into the 
strategic plan. Customer needs and expectations as well as issues relating to improved sup¬ 
plier relationships are considered and incorporated into the strategic plan. Resources are 
allocated to support the quality improvement objectives the organization wants to achieve. 

Focus on the Customer 

Management actively seeks ways to make all employees aware of customers and their 
need. Employees can identify both the internal and external customers of all their products 
and services. They understand that their primary task is to satisfy customer requirements 
and expectations. Communication with customers, as with suppliers, is open, continual, 
and two-way to ensure that clear definitions of needs and expectations are received and 
problems and concerns are understood. Customer perceptions of performance are continu¬ 
ally measured, evaluated, and reported to responsible managers and employees. Feedback 
data are used to improve processes and services and provide input for strategic planning. 
Access by customers to information about the organization’s products or services is easy 
and trouble-free. Complaints about aspects of the organization’s services are solicited and 
corrected. Trends in customer satisfaction indicators are positive. The validity and objec¬ 
tivity of monitoring methods is ensured. Where expectations, desires, and perceptions of 
different customer groups are in conflict with each other, the organization strives to 
achieve a balance among them that best fulfills the organization’s mission. 



Appendix A 331 

Commitment to Training and Recognition 

Managers and employees receive ongoing training to enable them to keep abreast of 
changing job requirements and prepare for greater responsibilities. A key element of train¬ 
ing for all managers and employees is quality awareness and the use of tools, technologies, 
and techniques to support continuous improvement. 

Employees are motivated to achieve total quality through trust, respect, and recogni¬ 
tion. Managers believe that employees want to do a good job; they personally, regularly, 
and fairly recognize individuals and teams for measurable contributions to quality 
improvement. Rewards and recognition are broad-based and innovative, encompass all 
levels of the organization, are centered on team quality and productivity improvement, 
and include peer recognition as a part of the reward structure. Celebration of small suc¬ 
cesses is common. Performance plans for managers include measurable quality improve¬ 
ment objectives. Evaluations focus on the degree to which the objectives are met. 

Employee Empowerment and Teamwork 

Management provides an environment that supports employee involvement, contribu¬ 
tion, and teamwork. Where unions exist, union leaders are involved in high-level policy 
and decision-making groups, such as Quality Councils or Policy Boards. Teamwork is 
the vehicle for cooperation and communication among managers, supervisors, unions, 
and employees in addressing quality improvement issues. The demands of quality, cost, 
schedule, and mission that cross organizational units are met through cross-functional 
team cooperation. Employees have clear avenues for participation and involvement; for 
example, as members of self-regulating work teams responsible for an entire process or 
group of customers, contributors to developing and implementing improvement plans, 
suggestors of ideas for improvement, participators in establishing work unit performance 
measures and goals, evaluators of processes, and decision makers in many aspects of 
their work and work environment. Hierarchies are reduced in favor of cooperative teams 
and networks. Employees have a strong feeling of empowerment and team ownership of 
work processes because sufficient power, rewards, information, and knowledge are 
moved to the lowest levels of the organization to enable everyone to accomplish their 
work with excellence. As a result, everyone feels ownership of quality improvement and 
exhibits personal pride in the quality of their work. 

Measurement and Analysis of Processes and Outputs 

All information required to support total quality of processes and products/services is com¬ 
plete, timely, accurate, useful, and clearly communicated to those who need it. The scope 
of the data includes: customers and suppliers (both internal and external), internal opera¬ 
tions, products and services, employees, comparisons or benchmarks of other organiza¬ 
tions, and safety/environmental considerations (if appropriate). This information is the 
basis for developing quality measures that cover all aspects of work processes and all prod¬ 
ucts and services provided a customer. Customer satisfaction measures are used exten¬ 
sively. These measures are used by employees to identify problems, determine root causes, 
identify solutions, and verify that proposed remedies produce the expected results. 



332 Chapter 8 Managing Organizational Dynamics 

Quality Assurance 

Products, services, and processes are designed and verified to meet customer needs and 
expectations. Processes that produce the organization’s products and services are con¬ 
trolled, optimized, and maintained. There is sufficient standardization within the organiza¬ 
tion to ensure compatibility. Comprehensive assessments of the quality assurance system as 
well as of products and services are performed at appropriate intervals. An approach exists 
for translating assessment findings into quality documentation supporting quality assur¬ 
ance. Quality assurance systems are updated to keep pace with changes in technology, 
practice, and quality improvement. Product and service performance standards are set for 
internal support functions such as finance and accounting, personnel, and administrative 
support. There is an established method to verify that the organization’s quality require¬ 
ments are being met by suppliers and other providers of goods and services. The organiza¬ 
tion compares (benchmarks) its products, services, and internal operations with the best in 
the private or public sectors (e.g., other federal agencies, state and local governments, and 
the governments of other countries). 

SOURCE: Excerpted from office of Management and Budget, Draft Circular A-132, 1990. 



Chapter 9 

The New Public Management, 
Reinvention, and the Reform of 
Public and Nonprofit Organizations 

Over the past few years, you probably have heard the expression the “New Public 
Management,” or “reinventing government,” or perhaps even read Osborne and Gaebler’s 
(1992) important work that popularized the concept of reform in American public admin¬ 
istration. The book voices a belief that public organizations or, more accurately, the 
systems underlying public organizations, lack the capacity to meet the challenges and 
opportunities of the twenty-first century. Thus, the concept of reinvention, and the broader 
effort known as the New Public Management (NPM), in many ways can be considered 
new approaches to a rather old question: How to improve government performance and 
accountability? 

However, the reform movement in the public and nonprofit sectors should not be 
equated simply with a call for increased productivity. Proponents of reform recognize 
that public and nonprofit agencies, particularly in America, constitute some of the most 
productive institutions in the world, even more so than private institutions. (For example, 
over the past generation, government productivity has increased at double the national 
average.) Instead, NPM and other reformist themes suggest that government should 
not account merely for its own activities but should be assessed on its capacity to achieve 
substantial public outcomes. 

NPM and reinvention are, however, closely related to issues of quality and productivity 
in government. The two stem from similar sources. Concern about government produc¬ 
tivity centers around issues of efficiency and accountability. These issues have, of course, 
been debated throughout U. S. history; their modern expression is typically dated back to 
the passage of Proposition 13, a tax limitation initiative passed by California voters in the 
late 1970s. Following the California example, other states and localities also began efforts 
to limit what voters perceived as the excessive cost of government services. 

At the federal level, the desire to avoid new taxes meant reduction or elimination 
of numerous domestic programs, especially during the Reagan years. Many of these 
programs provided aid to state and local governments. When the reductions were com¬ 
bined with the desire to limit state and local taxation, many governments were severely 
constrained in trying to provide sufficient revenues to support important, even basic, 
services. But despite these limitations, these governments were often asked to do more, to 
provide increased services, with the same or even with reduced funding. 

333 



334 Chapter 9 The New Public Management, Reinvention, and the Reform of Public and Nonprofit Organizations 

We examined some of the implications of this situation in Chapter 5 with respect to 
budgeting and financial management, as many governments were forced to search for 
alternate funding methods, including privatization and so forth. But the same govern¬ 
ments also sought new ways to improve both the quality and quantity of work without 
extra cost. Many governments and agencies at all levels began new or at least intensified 
efforts to innovate new solutions, to break from the traditional assumptions and find 
more effective means of meeting their objectives. 

Success stories emerging from this innovation had a weakening effect on the traditional 
assumptions in public administration, as even those in the mainstream started to question 
core principles that had defined the field since the Progressive Era. Around the world, 
management in the governmental and nongovernmental sectors began to take a new 
shape. Public organizations started to lose their traditional bureaucratic structure, becom¬ 
ing instead more lateral systems of shared power and teamwork. Systems of management, 
too, were transformed into more equitable, less controlling forms of leadership. And, 
government agencies began to form meaningful partnerships with other institutions and 
citizens in response to public problems. 

Nongovernmental organizations (NGOs) also underwent a transformation of sorts. 
During the 1990s, NGOs became drivers of policy issues in a variety of areas, such as 
human rights, economic development, urban revitalization, even governmental reform. 

Advances in information technology (IT) played an integral role in transforming public 
and nonprofit organizations worldwide. The impact was twofold. First, increased capacity 
for communication and information sharing redefined the distribution of authority within 
institutions. Every member of the organization had access to the latest news and informa¬ 
tion, thus shared in one of the more important sources of power. Second, IT enabled public 
and nonprofit organizations to engage more effectively with their counterparts in other sec¬ 
tors and around the world, as well as citizens. Such change restructured the ways in which 
governments and other public service agencies responded to opportunities and challenges. 

So, whether we call it an effect of NPM, reinvention, or efforts to improve quality 
and productivity, the public and nonprofit administration we have at the beginning 
of the twenty-first century is quite different from that of merely a generation ago. The 
ways in which we organize ourselves, engage with others, and respond to public con¬ 
cerns have undergone a transformation, or to use Don Kettl’s phrase, “a transformation 
in governance” (Kettl, 2000, p. 488). Yet, as we explore the various aspects of reform, 
keep asking yourself: Have we improved service to the public? Is the work we are doing 
today consistent with our expectations for a system of democratic governance? Are we 
truly acting in the interest of citizens? 

NPM, Reinvention, and Nonprofit Management Reform 

The current reform agenda in public administration can be traced to several worldwide 
trends. First, and perhaps most significant, the social, political, and economic dialogue 
in industrialized countries underwent a rightward shift during the late 1970s and early 



NPM, Reinvention, and Nonprofit Management Reform 335 

1980s, as political leaders recognized the unsustainable nature of comprehensive, central¬ 
ized systems of public service delivery. Leaders in Europe, Asia and North America 
started to examine more cost-efficient, effective ways of providing public services, 
including public welfare, transportation, health care, and others. Second, fiscal challenges 
brought on by the oil crisis of the late 1970s and the changing nature of the global 
economy prompted scholars and practitioners to explore new ways of thinking about 
public administration. By the mid-1980s many public managers around the world, using 
slogans like NPM and reinvention, had embarked on a journey to restructure bureau¬ 
cratic agencies, streamline agency processes, and decentralize policy decision making 
(Kamensky, 1996). 

The New Public Management 

The New Public Management, or NPM, is a term used to describe a set of principles and 
practices in the public service, which has emerged during the past several decades in 
a variety of countries around the world (Barzelay, 2001, p. xi). While the application of 
NPM has varied country by country, the reform agenda has remained consistent in its 
drive to create organizations that are mission-driven, decentralized, and incentive-based. 
Reformers strive for more flexible public organizations and more responsive interorgani- 
zational networks, guided by the key principles of accountability, responsiveness, and a 
commitment to outcome-based governance (Boston, 1996; Peters, 1994). 

Perhaps the best example of the NPM principles at work can be seen in New Zealand’s 
administrative reforms. Beginning in 1985, New Zealand’s national government took 
several bold steps aimed at transforming its system of public administration. Among the 
most significant reforms, the government redeveloped its personnel system, as an attempt 
to make top executives more performance-oriented; instituted a comprehensive per¬ 
formance measurement system, based on a new process of measuring the productivity 
and effectiveness of government agencies; and streamlined its departmental systems, to 
reflect the Labour administration’s commitment to governmental accountability (Boston, 
1991,1996). 

The effectiveness of New Zealand’s reform agenda, as well as parallel activities in 
Canada, Great Britain and the United States, prompted public administration reformers 
around the world to adopt many of the principles from NPM, as well as to use NPM 
principles as a new framework for public policy and governance (Barzelay, 2001, 
pp. xi-xv; also, Kettl, 1997). For example, reports from the United Nations’ Commission 
on Global Governance and other international bodies reinforced this international 
movement, advocating decentralized decision making, civil society, empowerment, and 
a reliance on third-sector organizations for achieving public outcomes (Commission on 
Global Governance, 1995). 

Reinventing Government 

In the early 1990s, Osborne and Gaebler’s (1992) landmark work, Reinventing 
Government, brought many of the NPM principles to American shores. For Osborne 



Chapter 9 The New Public Management, Reinvention, and the Reform of Public and Nonprofit Organizations 

and Gaebler, the reform agenda represented a response to what they call the bankruptcy 
of bureaucracy — that is, the ineffectiveness of government organizations. The authors 
believed that public agencies had failed to keep pace with changing conditions in the 
postindustrial society, with government still attempting to respond to public issues with 
a one-size-fits-all approach. As a result, the systems in which public administrators 
function had become the problem, not the solution, and consequently citizens had begun 
to lose faith in the capacity of government to serve their needs. 

A central theme in reinvention is that only more entrepreneurial forms of govern¬ 
ment will enable public administrators to effectively deal with problems and capitalize 
on opportunities in contemporary society. Yet, in contrast to most interpretations, 
Osborne and Gaebler (1992) actually avoided the more traditional view that govern¬ 
ment should be run like a business: “Government and business are fundamentally dif¬ 
ferent institutions. Business leaders are driven by the profit motive; government leaders 
are driven by the desire to get reelected . . . Differences such as these create fundamen¬ 
tally different incentives in the public sector” (p. 20). While encouraging public admin¬ 
istrators to derive insights from successful experiences in all sectors, Osborne and 
Gaebler maintain that public and private sector organizations face a distinct array of 
challenges. 

Entrepreneurial government, then, refers to more streamlined, flexible, and responsive 
systems of public policy and administration. Osborne and Gaebler cite example after 
example of public organizations that had chosen innovative strategies for using more- 
with-less strategies for increasing the value of public services without raising costs for 
public consumers, from privatization efforts in Phoenix, Arizona (which enhanced com¬ 
petition among service providers and thus raised significantly performance standards) to 
public school initiatives in East Harlem, New York (which empowered residents with 
greater choice for students’ learning opportunities). The authors suggest that these com¬ 
mon themes—competition and empowerment—combined with more attention to public 
outcomes and action based on customer priorities rather than on bureaucratic impera¬ 
tives, represent the future of successful government. 

To carry out the reform agenda, Osborne and Gaebler (1992) provide ten principles 
underlying reinvention and public entrepreneurship: 

1. Catalytic government: steering rather than rowing 
2. Community-owned government: empowering rather than serving 
3. Competitive government: injecting competition into service delivery 
4. Mission-driven government: transforming rule-driven organizations 
5. Results-oriented government: funding outcomes, not inputs 
6. Customer-driven government: meeting the needs of the customer, not the bureaucracy 
7. Enterprising government: earning rather than spending 
8. Anticipatory government: prevention rather than cure 
9. Decentralized government: from hierarchy to participation and teamwork 

10. Market-oriented government: leveraging change through the market 

Osborne and Gaebler intended these ten principles to serve as a new conceptual 
framework for public administration — an analytical checklist to transform the actions 



NPM, Reinvention, and Nonprofit Management Reform 337 

of government. “What we are describing is nothing less than a shift in the basic model of 
governance used in America. This shift is under way all around us, but because we are 
not looking for it — because we assume that all governments have to be big, centralized, 
and bureaucratic—we seldom see it. We are blind to the new realities, because they do 
not fit our preconceptions” (Osborne and Gaebler, 1992, p. 321). By applying the ten 
reinvention principles in the context of any given policy area, a new universe of opportu¬ 
nity, an altogether different system of governance, would evolve. 

Networking 

Global perspectives on the NPM are available from the Canadian Centre for 
Management Development (http://www.ccmd-ccg.gc.ca/index.html), the OECD 
Public Management and Governance Service (http://www.oecd.org/puma/), and 
the Australian Public Service Innovations (http://www.innovations.gov.au). 
Specific information about the New Zealand government can be found at 
http://www.govt.nz/ or through the government’s Management Development 
Centre at http://www.mdcentre.govt.nz/public/. 

Nonprofit Management Reform 

Since the 1990s, the reform agenda in government has had a substantial impact on 
the nonprofit sector. We have discussed the interconnected nature of public-nonprofit 
relations, but as governments use contracts, grants, and other strategies to devolve pub¬ 
lic services to nonprofits they also have begun to hold their not-for-profit counterparts 
accountable to many of the same performance and outcome objectives. Consequently, 
nonprofit organizations in today’s world find themselves buoyed by the tides of reform 
affecting the public sector (Light, 2000). 

The factors precipitating reform in the nonprofit sector, of course, go beyond those 
imposed by the government. In fact, Paul Light (2000, pp. 17-43) has identified several 
important trends influencing the nonprofit reform movement, including nationalizing 
trends relating to productivity, recruitment, resource development and technology, com¬ 
bined with local realities of ensuring consistency, building patterns of shared responsibil¬ 
ity, and enhancing nonprofit capacity for public service-delivery. 

Unfortunately, nonprofit organizations have experienced less of the tides of reform 
and more of a tidal wave! “The nonprofit sector has never been under greater pressure 
to improve. Despite two decades of phenomenal growth, the sector suffers from a gen¬ 
eral impression that it is less efficient and more wasteful than its government and 
private competitors. Even if the sector could prove that it has achieved ordinary excel¬ 
lence, spending money wisely and producing measurable results as a natural by-product 
of organizational design, it faces a serious public relations problem among clients and 
funders alike” (Light, 2000, p. 1). The result is that nonprofits have been flooded with 
demands to reform systems of administration, service-delivery and accountability, with 
each set of demands often reflecting divergent philosophies. 



Chapter 9 The New Public Management, Reinvention, and the Reform of Public and Nonprofit Organizations 

As Light (2000) explains, the movement to enhance productivity and accountability 
in nonprofit organizations can be categorized into the following four sets of reformist 
principles: 

• Scientific management: Management should be based on the “one best way,” with 
individual organizations seeking to implement codes of internal conduct and basic 
best practices of administration. 

• War on waste: Management should be based on a drive for external efficiency, with 
organizations and alliances reengineering to achieve efficient, streamlined systems 
for administration and service-delivery. 

• Watchful eye: Management should be based on creating more transparent patterns 
of administration, with organizational stakeholders holding agencies accountable 
for openness and compliance. 

• Liberation management: Management should be based on achieving positive 
outcomes, with agencies working together in the public interest. (Light, 2000, 
pp. 46-71) 

While on a theoretical level these philosophies may not seem incompatible, the strug¬ 
gle to apply such principles in management practice has taken a toll on nonprofits. 
Indeed, when faced with competing demands by funders and donors, a single nonprofit 
may find itself swept away in attempts to implement multiple reform strategies at the 
same time. Foundations, government grantmakers, and other institutions that provide 
financial support to nonprofit organizations, even at the local level, have a poor track 
record for engaging in a substantive dialogue concerning policies and procedures, and 
have an even poorer track record for coordinating funding programs and reporting 
standards. As a result, nonprofits must be prepared to structure their administrative 
practices and reporting systems to be in-line with each funder’s demands. 

The problem here, though, is that few can agree on what constitutes a good non¬ 
profit, this despite an emerging trend for foundations and government grantmakers 
to fund capacity-building activities (for discussion, see Greene, 2001, pp. 1-12). While 
scholars, management consultants and program officers have attempted to bring order 
out of chaos the results have amounted to little more than platitudes. The Chronicle for 
Philanthropy, for example, offered the following expert tips: 

Management challenges are normal for nonprofit organizations. 

There are no quick fixes. 

Ideas are nothing, thinking is everything. 

Proffer the pole, not the fish. 

In times of great change, our support can reap great dividends. 

Don’t redesign the kitchen while the house is on fire. 

Speak the truth. 

Change demands a champion. 



NPM, Reinvention, and Nonprofit Management Reform 339 

Building a nonprofit organization is a long, hard haul. 

We don’t know enough yet. (Kibbe, 2001, p. 10) 

Even the application of a particular reformist agenda may be carried out in different 
ways, depending upon those implementing the strategy and on what level the implemen¬ 
tation occurs. For example, a United Way-based outcome measurement system in one 
community may vary significantly from another just miles away. Another example is the 
definition of impact as interpreted at the state level, which may be off the mark with 
agencies at the grassroots. 

The challenge for nonprofit management in the future will be to balance the drive to 
adopt sound management practices from the private sector with a dedication to public 
service. Such a balance will be difficult, though, as demands for reform seem to be 
increasing and the tides appear to be toward the former rather than the latter. Perhaps 
even more important, greater attention needs to be placed on those activities that fall 
outside of the individual nonprofit. Foundations, government agencies, and other fun¬ 
ders, in conjunction with the nonprofits they support, must begin a more substantive 
dialogue around ways to coordinate grant-making and reporting requirements. This 
might be a way to bring a level of consistency and coordination to an increasingly frag¬ 
mented public policy process, and ease the administrative burden on nonprofit organi¬ 
zations. Indeed, reforming the nonprofit sector will be as much about improving the 
dialogue among leaders in philanthropy, business, and government as it is building the 
capacity of nonprofit organizations. 

The Results of Reform 

It will be some time before we can assess the impact of NPM, reinvention, and the drive 
to improve nonprofit organizations. However, many have begun to question the lessons 
learned from the reform movements. Proponents point out that some of the key reform- 
oriented initiatives, such as the Government Performance and Results Act (GPRA), have 
helped improve the public service. Kathryn Newcomer and Aaron Otto (2000) recently 
summarized the some of GPRA’s benefits at the federal level: 

• Amplifying conflicting/polarizing expectations —GPRA has raised consciousness 
over some of the terms and concepts underlying management reform, (p. 1) 

• Strengthening programmatic communities — Federal agencies have started working 
more collaboratively on achieving shared objectives, (p. 2) 

• Asking the right questions about program performance — GPRA has helped to 
enhance the quality of the discourse around performance measurement. 

• Effectively reporting performance — Federal officials have improved their agencies’ 
capacity for accurately and appropriately measuring program impacts, (pp. 2, 6) 

On the other hand, critics of NPM and reinvention suggest that while certain aspects 
of the reform agenda have contributed to meaningful improvements in public service, the 
application of these principles have produced a variety of negative externalities not envi¬ 
sioned by early reformers. In practice, the adoption of business practices and the reliance 



34° Chapter 9 The New Public Management, Reinvention, and the Reform of Public and Nonprofit Organizations 

on market forces by public organizations degenerated into a sense of managerialism — 
a belief that government could and should be run like a business based on strictly eco¬ 
nomic principles. As public managers began to apply their reform agendas, many focused 
on the pursuit of administrative efficiency more than maintaining the democratic princi¬ 
ples of effective governance. 

Another point of concern, the reform movement has centered on the customer- 
centered, as opposed to citizen-centered, public administration. Critics argue that “citi¬ 
zens are not the customers of government; they are its owners who elect leaders to 
represent their interests. A customer-centered model puts citizens in a reactive role lim¬ 
ited to liking or disliking services and hoping that administrators will change delivery 
if enough customers object” (Schachter, 1995, p. 530, citing Frederickson, 1994). In 
contrast, citizen-centered public administration restores the public to an ownership 
position — a proactive relationship in which citizens engage with the institutions of gov¬ 
ernance to achieve public outcomes. 

Despite this criticism, however, the NPM and reinvention movements have had a 
pervasive impact on public administration in this country and around the world. As 
we will discuss later in the chapter, the principles underlying these reform efforts have 
contributed to major initiatives to enhance government performance and accountability. 
Public organizations at all levels have employed a variety of strategies to streamline 
work processes and enhance the public service. 

IT, the Internet, and Management Reform 

Advances in information technology (IT) have played a key role in the move toward a 
more entrepreneurial public and nonprofit organizations. Beginning with the personal 
computer revolution in the early 1980s, when personal computers started to appear 
in every office (not to mention every home), IT has been a central part in the drive 
to increase public and nonprofit performance. Yet in the age of reform, IT was 
transformed from being a tool for enhancing productivity to a metaphor for the very 
way in which we organize. We began to view ourselves as actors in “wired organiza¬ 
tions,” members of “virtual communities,” and citizens in a growing web of “e-public 
administration.” 

By the beginning of the twenty-first century, the transformation of the Internet, which 
began as an electronic network of researchers and scholars, into a global, online commu¬ 
nity supported our change in perspective. We could, in real-time, have a virtual chat 
with colleagues around the world on matters of public policy (or anything else for that 
matter), exchange insights on common challenges, or swap information relating to man¬ 
agement innovations. Governments and nonprofit agencies soon turned to online 
resources for many of their core functions, including economic development, human and 
social service delivery, healthcare and engagement with citizens. So, we can say that 
in less than a generation, the Internet and improvements in IT generally have helped to 
reshape our notions of governance and public space. 



IT, the Internet, and Management Reform 341 

Wired Organizations 

From a management perspective, the most immediate impact of IT has been to redefine 
our concept of organization. Intranets, e-mail, and other networking resources have 
allowed or in some cases forced agencies to transform work processes and integrate 
strategies for meeting public objectives. In fact, some even consider IT and integrated 
forms of organizing, such as team-based approaches, to be at the heart of management in 
today’s society. Mankin, Cohen, and Bikson (1996), for example, suggested that “infor¬ 
mation technology can make teams more effective, and teams can help fulfill the promise 
of information technology. Together, teams and new information technology can catalyze 
dramatic improvements in organizational performance” (p. ix). The connection between 
teamwork and IT provides a gateway for organizational performance. 

Accordingly, IT became a key theme in Vice President A1 Gore’s National Performance 
Review (NPR) of the 1990s. The NPR plan, as well as the Information Technology 
Management Reform Act of 1996, focused on the use of IT in the reengineering process 
of federal agencies. Specific NPR recommendations included the creation of an infor¬ 
mation infrastructure that would allow for a more effective use of government resources, 
as well as facilitate the modernization of processing and customer service centers; the 
development of an efficient electronic mail service, improving federal agencies with 
messaging and communications capabilities; and the implementation of an incentive 
system to reward innovation, a system that would enable agencies to reinvest dollars 
saved into information technology (Gore, 1993). 

The NPR recommendations have translated into important innovations relating to 
the use of IT in the reinvention process. At a recent conference organized by the 
International Quality and Productivity Center, administrators from a variety of federal 
agencies shared their experiences and insights on one of the crucial advancements: the 
use of government intranets or internal Web sites for public organizations. Noted one 
participant, “An intranet is much more than a glorified e-mail or groupware solution . . . 
(it) can be customized and tailored to a specific work environment, enabling employees 
to not just communicate internally, but collaborate, interact, and become part of a team 
connected through their desktop computers” (Kerwood, 1997, p. 1). 

Of course, the application of IT has not been limited to the federal government. 
State and local authorities around the country have forged relationships with private 
service providers to expand their IT infrastructure and take the business of govern¬ 
ment online. State governments in Pennsylvania, Virginia, Washington, and elsewhere 
are capitalizing on IT innovations to create seamless systems of service delivery in 
the areas of health care, education, public safety, and corrections. Many states are 
also viewing high-tech companies as key drivers of economic development, and some 
have adopted incentive programs to support IT-related industries (Stoneman, 2000, 
pp. 34-50). 

At the local level, public agencies are using IT and online networks to manage the 
regulatory process, interact with citizens, and increase the efficiency of public services. 
We mentioned the city of Baltimore’s use of Citistat in Chapter 5 in our discussion of 
financial management systems. But another role of Baltimore’s Citistat has been to track 
the effectiveness of interagency partnerships in addressing important health and human 



342 Chapter 9 The New Public Management, Reinvention, and the Reform of Public and Nonprofit Organizations 

service concerns. For example, as part of its Leadsfat initiative', city officials use geo¬ 
graphic information system (GIS) technology to pinpoint actual cases of lead poisoning, 
using a red dot on a GIS map. They then assess the effectiveness of their abatement 
strategies by monitoring the number of dots to change from red to green, with a green 
dot marking a successful abatement (Swope, 2001, p. 23). 

Networking 

Information on civic network and electronic democracy can be found at 
http://www.civicnet.org, http://www.civic.net, http://www.arsportalis.org, or 
http://www.neighborhoodsonline.net/index.html. For information relating to the 
use of technology in government, go to http://www.govtech.net. 

Technology and the rise of the IT sector also have made a significant impact in the 
philanthropic sector, opening new doors for resource development and performance mea¬ 
surement. But the process has come with its share of challenges. During the late 1990s, 
the boom in high-tech firms created what seemed to be a new generation of philan¬ 
thropists. The Bill and Melinda Gates Foundation of Seattle, for example, which was 
started by the family of Microsoft’s multibillion-dollar chairman, became the nation’s 
largest foundation, with assets in 2000 exceeding $21 billion (an increase of more than 
25 percent over 1999). Flowever, the halcyon days of the dot-coms quickly vanished, and 
by mid 2001 the Chronicle of Philanthropy was reporting a “sober view the Internet’s 
future” on charitable giving (Marchetti, 2001, p. 1). 

Rather than give up on technology, many nonprofits began using the new landscape 
as a way of expanding their strategies for IT-based fundraising. Some charities are now 
using their Web sites to receive direct contributions, and many more are turning to 
e-mail and other forms of electronic engagement to solicit gifts from the more e-savvy 
philanthropists. Goodwill Industries has taken this to new ends, using an eBay-type 
online auction house to raise more than $2 million since 1999. There has even been 
a growth in the number of online fundraising collaboratives, such as Helping.org, which 
raises money on behalf of several philanthropic organizations (Hruby, 2001, p. 10). 

ePublic Administration 

The pervasiveness of IT in public and nonprofit management has many talking about 
a new era of electronic governance. Dean and Stage outlined some of the artifacts of 
e-government, including “government Web sites, pages, e-mails, and service delivery over 
the Internet. It can also mean digital access to government information or electronic licens¬ 
ing or payments.” But the most significant aspect of the public service in this information 
age involves what they call a “revolution” in governance, a “dramatic shift in the methods 
by which political and social power are organized and used today” (2000, p. 3). 

This revolution began well before the dot-com craze of the late 1990s. Its origins can 
be traced to the utopian forms of governance conceived during the early part of the 



The Human Side of Technological Innovation 343 

twentieth century. But the actual emergence of what is called cyber-democracy dates 
from the early 1990s and the growth in community networks (for discussion, see Bryan 
et al, 1998; Browning, 1996). Alexander and Grubbs (1998) define community networks 
as “as a low cost, easy-to-use computer network that provides citizens with access 
to electronic mail, public bulletin boards, and electronic information relevant to their 
locality.” These networks are usually used to enhance local community organizations, 
facilitate neighborhood capacity-building programs, and foster citizen participation in 
public decision making. In recent years, these networks have gained in complexity and 
strength, with some even branching into providing Internet access, GIS technology, and 
computer-based civic and educational courses. 

Community networks serve as models for what Grossman (1995) calls a key-pad 
democracy — an electronic republic in which public participation occurs in virtual 
settings: 

• Greater communication with public officials and administrators is possible through 
electronic mail, faxing, and audio-video conferencing. 

• Information necessary for rational decision making can be disseminated to the 
public via the Web and advanced multimedia presentations. 

• Elections and public referenda may be conducted more accurately through 
electronic voting mechanisms (in Alexander & Grubbs, 1998). 

Thousands of local authorities across the United States, and an increasing number 
in Europe and elsewhere, have begun to use community networks to connect with 
citizens. In addition, there are even more grassroots efforts being initiated by private 
citizens to reach out to governmental and nongovernmental leaders (Bryan et al., 
1998, pp. 1-2). So while we may have to wait a few years until we can vote online 
(although after the 2000 presidential elections it may be sooner than we think!), our 
capacity for interacting with public officials and building a virtual civil society has 
never been greater. 

The Human Side of Technological Innovation 

Whether in designing new vehicles for collecting garbage, developing new techniques for 
space exploration, or creating broad-based management information systems, the techni¬ 
cal questions are always accompanied by a related set of human concerns, most having 
to do with how human beings work together to solve technical problems. For example, 
what is the proper relationship between government and industry in supporting research 
and development activities? How can technological innovations be transferred from one 
jurisdiction or organization to another? What are the human consequences for a particu¬ 
lar organization in adopting particular approaches? How can people in the organization 
be helped in adapting to the new technology? 

One group that has been deeply involved in responding to questions such as these 
is Public Technology, Inc. (PTI). PTI began in 1969 when a group of local government 



344 Chapter 9 The New Public Management, Reinvention, and the Reform of Pilblic and Nonprofit Organizations 

managers joined together to establish a way to apply technologies developed by NASA to 
problems encountered by local governments (Mercer & Philips, 1981). (Throughout most 
of its history, NASA has had a special mandate to support civilian applications of space 
technology.) For example, local officials were concerned about inadequate or bulky air 
supply for fire fighters. As a result of conversations with NASA people who designed life 
support systems, the local officials gained access to high-pressure, lightweight air tanks, 
devices that see through smoke, and other similar tools (Toregas, 1988, p. 3). 

In addition to specific technical contributions, Public Technology, Inc. focused on the 
human element of technology transfer. PTI felt that what came to be called orgware, that 
combination of human and interpersonal skills needed to cope with the frustration and 
fear associated with new technologies, was more important than the technical hardware 
or software (Toregas, 1988, p. 3). Emotional issues can often get in the way of applying 
improved technology; for example, firefighters viewed a new, automated, radio-controlled 
nozzle for fire trucks as such a threat to their jobs and their normal way of fighting fires 
that it was abandoned almost immediately. 

Experiences such as this led Public Technology Inc. to adopt a formula for technology 
management: for every $5 spent on hardware, $15 must be spent on software, and $80 
must be spent on orgware training, organization development, and so on. People’s con¬ 
cerns about introduction of new technologies can be dealt with effectively, but imple¬ 
menting a change to new technologies is time-consuming and costly. In any application 
of new technology, you must keep the human element very much in mind. For this 
reason, many agencies establish joint technology design committees to analyze how 
employees will respond to the changes brought about by new technology (Government 
Productivity News, September 1992, p. 4). 

Other dimensions of the human side of advanced technology, especially advanced 
information technology, are also important. The first has to do with the impact of infor¬ 
mation technology on day-to-day work patterns. As we will see in later chapters, man¬ 
agers’ work is not only information-based, but highly interpersonal as well. There is no 
question that computer networking, for example, will increase the information available 
to managers and decrease the time spent waiting for it. Moreover, extensive networking 
should improve managers’ capacity to more effectively integrate the work of various 
groups within the organization. On the other hand, managers with access to computer 
networks may spend much less time, in face-to-face conversations or in visits to various 
locations where the work is done, and these interpersonal tasks are essential. 

Second, we should expect greater dependence on advanced information technology to 
raise several very personal concerns for those who work in or deal with public organiza¬ 
tions. The depersonalized nature of computerized control and evaluation systems may 
prove highly stressful for either employees or clients. In the private sector, for instance, 
there have already been experiments with automated systems of accountability measur¬ 
ing the number of keystrokes a typist generates or the number of calls a salesperson 
makes. Similar applications in the public sector could well lead to the same negative 
reactions that have often occurred in the private sector applications. 

Third, the use of advanced information technology raises questions about how organi¬ 
zations of the future are likely to be structured. Networking can simultaneously allow for 
greater centralized control or for greater decentralization. Some argue that knowledge is 



Human Resources, Innovation and Performance 345 

power, and that making more information available to top officials on a timely basis will 
permit them to accumulate even greater power (perhaps to the detriment of others). Some 
argue instead that new technology will spread information throughout the organization 
and, consequently, power will be decentralized. The latest studies take a different posi¬ 
tion—that information technology in and of itself does not necessarily lead an organiza¬ 
tion toward either more or less central control. Rather, the organization’s initial structure, 
history and culture, and the behavior of its managers are the determinants. Information 
systems, it seems, can be designed to either centralize or decentralize an organization. 

Human Resources, Innovation and Performance 

Whereas advanced technology can improve productivity and performance, far greater 
improvements are possible through more effective use of human and organizational 
resources. Many approaches for improving the commitment, motivation, and creativity 
of employees (including managers) have been developed over the years. Most today are 
considered merely good management practice, but many specific techniques are more 
often used in formal productivity improvement programs than as ongoing managerial 
processes. We will provide an historical review of four techniques—management by 
objectives (MBO), quality of work-life programs (especially job enrichment), quality 
circles (or similar group approaches), and incentive programs, as well as more recent 
efforts to encourage innovation. 

Management by Objectives 

One of the oldest productivity improvement techniques to be used systematically in busi¬ 
ness and government is management by objectives (MBO). Management by objectives 
became especially popular in the late 1960s and through the 1970s. President Nixon 
extended MBO concepts throughout many federal agencies, a pattern that was soon 
followed in a large number of state and local organizations. Although MBO has fallen 
into some disfavor in government agencies, many of its key elements, such as objective 
setting and performance appraisal, remain in place in many agencies. 

Essentially, management by objectives is a highly participatory approach to establish¬ 
ing clear and measurable objectives throughout an organization. First, MBO assumes 
that the organization as a whole will benefit by clarifying its broad-range goals and by 
targeting the work of all organizational units and all individuals in pursuit of those 
goals. Second, MBO assumes that all elements of the organization, from top to bottom, 
will benefit from establishing realistic objectives each year and measuring progress 
toward the objectives as the year goes by. Third, MBO assumes that the process of estab¬ 
lishing goals and objectives should involve a broad spectrum of organizational members, 
both to solicit the fullest range of ideas and to build patterns of effective communica¬ 
tions and commitment. 



Chapter 9 The New Public Management, Reinvention, and the Reform of Public and Nonprofit Organizations 

Management by objectives is based on an image of the organization as a hierarchy of 
linked goals and objectives. The organization’s broad goals are developed at the top 
of the hierarchy and become the basis for negotiating more specific objectives at the next 
level down. These objectives in turn become the basis for negotiating objectives at 
the next level and so on down through the organization, even to the level of setting 
objectives for each individual employee. In a fully developed MBO system, the broad 
agency goals theoretically provide a framework within which everyone in the orga¬ 
nization, including both managers and other employees, has before him or her a set of 
performance objectives to guide his or her work during the course of the year (June 
1976, pp. 15-16). 

Note that the objective-setting process is not one in which objectives decided from 
above are merely handed down to each successive level. Rather, MBO involves a highly 
decentralized objective-setting process, in which each supervisor works with each sub¬ 
ordinate manager or employee to arrive at a reasonable set of objectives. Ideally, this 
process of negotiation involves face-to-face conversations in which objectives at various 
levels are worked out; however, in many applications of MBO, the objective-setting 
process occurs through an exchange of memos and written forms. 

For objectives to most effectively guide the work of those throughout the organiza¬ 
tion, you must pay special attention to the type of objectives being developed (Morley, 
1986, p. 186). The most useful objectives are those that are: 

Clear and specific: The objectives should state exactly what is to be done (e.g., to reduce 
response time to three minutes), rather than vague and subjective (e.g., to respond in the 
shortest possible time). 

Realistic: The objectives should be challenging to the unit or the individual, but not 
beyond reach. It also should be clear that the resources and support necessary to meet 
the objectives will be available. 

Measurable (or otherwise verifiable): There must be some way for both the supervisor 
and subordinate to know when the objective has been met. 

Prioritized: Both the superior and subordinate should agree on which objective is 
most important, which is next most important, and so on. 

The resulting objectives may be stated in several ways: in terms of amount of work 
(cases processed per week), effectiveness of work (applicants placed each month), quality 
of work (a minimum error rate), completion dates and target costs, or some combination 
of these (Morley, 1986, p. 186). You should follow the objective-setting process with 
a more detailed examination of what must be done to meet the objective. Usually an 
action plan is developed, indicating how, when, and by whom the actual work will be 
done to meet the objectives. (At this point, of course, it is important to agree on the 
resources and support necessary to attain the objective.) Finally, managers must assign 
specific responsibility to those in their units for completing the necessary task. 

As mentioned, MBO has been tried in many different government and nonprofit 
organizations here and abroad. Recently, MBO has been widely criticized, largely 



Human Resources, Innovation and Performance 347 

because of the extremely detailed paperwork that many organizations required as part 
of their MBO system, but many places still use important features of MBO. For exam¬ 
ple, setting goals and objectives and developing accompanying action plans are central 
to more contemporary strategic management efforts. Similarly, one of the most impor¬ 
tant features of MBO systems, which has been retained in many organizations long 
after the demise of a full-blown MBO system, is the frequent review and revision of 
objectives, accompanied by detailed performance appraisal; that is, a specific evaluation 
with respect to an individual’s progress in completing specified tasks. By setting a stan¬ 
dard against which to measure performance (which is often especially difficult at the 
professional or managerial level), MBO-based performance appraisal systems provide a 
base against which results can be measured. Finally, the emphasis in MBO on frequent 
communications up and down the organizational ladder has clearly been maintained in 
other approaches to productivity improvement, as well as in management practice more 
generally. 

Quality of Work-Life/Job Enrichment 

For a period, management by objectives took on the aura of a movement, complete with 
classic texts, disciples and other advocates, and strong commitment to the cause. Much 
the same is true of the recent concern for Quality of Work-Life (QWL). The quality of 
work-life (see Box 9.1) movement traces its ancestry back to the development of child 
labor laws, passage of workers’ compensation legislation, and more general concerns 
for human relations arising in the 1930s. Its more recent impetus, however, has come 
primarily from a group of European scholars and practitioners associated with the 
Tavistock Institute for Human Relations in London. 

The Tavistock group was initially concerned with how organizations might become 
more adaptive to a society engaged in a shift from a production base to a service base, 
one expected to exhibit a high degree of social change and turbulence. According to the 
Tavistock researchers, most organizations reflect their technological bases; that is, their 
organizational structure models their technology. Unfortunately, such a structure limits 
adaptability. The Tavistock group urged attention to the interaction of social and tech¬ 
nical systems. 

For at least some QWL advocates, creating a work environment of high quality was 
even more important than improving productivity. The most important question to ask, 
they argued, is whether a particular organization is doing all it can to contribute to a 
more humane and progressive work environment. Others, however, felt that one did not 
have to trade productivity for quality. Rather, by improving the quality of work-life, 
the productivity would rise as well. Indeed, studies seemed to show that improving the 
quality of work-life led to decreased absenteeism and turnover, greater job satisfaction, 
and greater commitment to the organization and its goals—all features that should 
improve an organization’s productivity as a whole. 

Any movement directed toward concerns as broad as these may lack some focus, and 
that has been a problem with efforts to improve the quality of work-life; the term 
has become so embracing as to be unclear. Some scholars, however, have focused on 



34# Chapter 9 The New Public Management, Reinvention, and the Reform of Public and Nonprofit Organizations 

BOX 9.1 

Judging the Quality of Work-Life 

Adequate and fair compensation: Compensation for one’s work should meet 
general standards for the work involved and should bear an appropriate relation¬ 
ship to the pay provided for other work. 
Safe and healthy working conditions: The conditions of work should include rea¬ 
sonable hours and should not be detrimental to the health of the worker. 
Immediate opportunity to use and develop human capacities: The job should allow 
for substantial autonomy and self-control, it should permit use of a wide range of 
capacities, and it should be meaningful to the worker. 
Opportunity for continued growth and security: The job should allow for and in¬ 
deed encourage personal growth and development on the part of the employee, as 
well as opportunities for meaningful advancement in a career. 
Social integration in the work organization: The personal side of one’s organiza¬ 
tional involvement, one’s interaction with others on the job, should be a source of 
satisfaction. 
Constitutionalism in the work organization: The rights of the individual, including 
rights to privacy, free speech, equal treatment, and due process, should be protected. 
Work and the total life space: One’s work life should be adequately balanced with 
the other spheres of one’s life, especially one’s family life. 
The social relevance of work life: If the organization is not seen as being socially 
responsible (for example, in its employment policies or approaches to energy 
conservation or waste disposal), workers will think less of their work and their 
careers. 

SOURCE: Reprinted with the permission of The Free Press, a Division of Simon & Schuster, Inc., from 
The Quality of Working Life, Volume I: Problems, Prospects and the State of the Art, edited by Louis E. 
Davis and Albert B. Cherns. Copyright © 1975 by Louis E. Davis and Albert B. Cherns. 

three paramount concerns—the autonomy, the responsibility, and the authority granted 
to individual workers. “The general objective is to arrange organizations, management 
procedures, and jobs for the maximum utilization of individual talents and skills, in 
order to create more challenging and satisfying work and to improve organizational 
effectiveness” (Jenkins, 1983, p. 2). Another writer puts the objective of QWL efforts in 
this question: “How can jobs be designed so that effective performance is linked with 
meaningful, interesting, and challenging work?” (Suttle, 1977, p. 1). 

This question leads to a specific productivity improvement effort—job enrichment— 
which is concerned with designing or redesigning particular jobs so that workers experience 
greater meaning and satisfaction from the work and, consequently, can be more productive. 
Job enrichment efforts usually assume that people will perform better (1) where they per¬ 
form a diverse array of tasks; (2) where they have a high degree of autonomy in their work; 
and (3) where they get clear feedback on the quality of their work. 



Human Resources, Innovation and Performance 349 

Diversity, autonomy, and feedback in a particular job can be enhanced through a vari¬ 
ety of mechanisms. For example, you might combine tasks so that instead of a series 
of individuals each involved in only one part of an assembly process, each individual 
would be responsible for the entire product. Jobs might also be enriched through verti¬ 
cal loading — that is, giving individual workers responsibilities and controls previously 
reserved for management, such as responsibility for deciding on work methods or for 
training new workers (Hackman, 1983, p. 249). Presumably, workers in enriched jobs 
not only find the quality of work-life improved, but also become more productive. 

Quality Circles and Related Ideas 

The quality-circles concept has been widely used over the past two decades, and hun¬ 
dreds of reports of documented savings and solutions to work-process problems — some 
involving public-sector organizations — have appeared in the popular and business press. 
More important, while the term quality circles seems to be fading from use, some of the 
principles underlying quality circles have reemerged under the concept of self-managed 
teams and through the application of the techniques of Total Quality management. 

A quality circle is a small group of people who do similar or connected work and 
meet regularly (usually an hour a week) to identify, analyze, and solve work-process 
problems. Quality circles involve six to twelve employees, who are led by their first-line 
supervisor (often called a team leader) and assisted by a trained facilitator, usually from 
outside the work unit. The circle chooses its own problems to work on and approaches 
them through a structured, problem-solving process. Resulting recommendations are 
usually presented to the team leader’s immediate supervisor, who in turn may carry the 
recommendations further up the hierarchy. 

Since quality circles offer frontline employees the opportunity to get involved in deci¬ 
sions affecting their work, circles have proven popular among employees (as well as 
employers) in many organizations. In some places, employees have never been asked how 
they think work processes might be improved, yet they are the experts in providing patient 
care, processing tax returns, or developing procedures to remove hazardous wastes. The 
benefits for these employees are thus twofold: first, they are given time to solve problems 
that cause frustrations and that keep them from completing their jobs; and second, by 
taking greater responsibility for work-process problems, they gain a greater awareness of 
solutions and may have greater interest in the success of those solutions. 

The team leaders, facilitators, and circle members receive training in quality-circle 
operations and in group dynamics and problem solving. An open atmosphere concerning 
circle activities helps managers to feel comfortable with the circle concept, a natural step 
toward acceptance and institutionalization of the entire program. 

A key ingredient in the success of a quality-circle program is the support of top man¬ 
agement. This factor needs careful attention at the beginning stages of a quality circle 
program. Without active support from the top, quality-circle members may feel their rec¬ 
ommendations will not be taken seriously, and managers elsewhere in the organization 
may see no incentive to start quality circles in their work areas. Although quality circles 
are a bottom-up approach to problem solving, the implementation process is very much 



35° Chapter 9 The New Public Management, Reinvention, and the Reform of Public and Nonprofit Organizations 

top-down; information about the concept must be presented to those at all levels of the 
organization. 

Although managerial support is necessary for long-term success, the real core of any 
circle program is the participants themselves. Without a large proportion of highly moti¬ 
vated and properly trained circle leaders and members, the circle program cannot suc¬ 
ceed. Members of the organization must be introduced to the notion of quality circles, 
and team leaders, facilitators, and group members must be trained. Then the real work 
of the quality circles begins. Normally, circles meet regularly, perhaps once a week, for a 
specified time, usually an hour. The first task is choosing a problem to solve. Generally, 
circles choose a problem by brainstorming—generating long lists of topics without eval¬ 
uation or comment. The group reviews the list and selects one problem to focus on. 
(This same process is used when the cycle is completed and a new topic is chosen.) 

The circle members then analyze the problem and develop solutions. Analysis typically 
involves some data collection or information gathering, followed by efforts to identify 
both the causes of the problem and potential solutions. Each solution is examined with 
respect to its effectiveness in dealing with the problem and feasibility of implementation. 
Some solutions may be considered ineffective, others too costly, and others inconsistent 
with agency policies. When a solution has been settled on, the circle members prepare and 
make a formal presentation of the problem and their recommended solution to manage¬ 
ment. In most cases, management finds the solution acceptable and works with the circle 
members to implement it. 

Although quality circles are usually employed to solve specific work-process problems, 
and are more frequently used in units where such problems are found, the basic quality- 
circle principles of widespread participation and group problem solving are applicable 
elsewhere. For example, task forces (groups brought together to work on specific organi¬ 
zational problems) may consist of members from different parts of the organization. They 
may address work-process problems or issues of organizational policies or broader public 
policies; however, the approach to problem solving may be much like that modeled by 
quality circles. 

Incentive Programs 

Many if not most personnel systems in public agencies emphasize merit considerations in 
deciding which employees receive larger and smaller raises. This is an effort to build into 
the system a reward or incentive for high-level performance. In addition to pay increases, 
there are several other types of incentive plans that reward extraordinary performance. 
The rewards are usually money, but may sometimes be nonmonetary incentives such 
as merchandise or time off. The incentives seek to reward increased output (measured 
quantitatively), improved performance (measured qualitatively), or improved behavior 
(such as reduced absenteeism or fewer accidents) (Morley, 1986, p. 118). 

A variety of incentive plans are currently used in public agencies (Greiner et al., 1981, 
pp. 28-29). Among the most common are performance bonuses, piecework bonuses, 
gainsharing plans, suggestion awards, behavioral awards, and employee recognition 
programs. 



Human Resources, Innovation and Performance 351 

Performance bonuses are one-time monetary awards based on superior performance 
on the job generally or in a particular task. Often used to reward professional or man¬ 
agerial employees, bonuses may be presented annually or upon completion of a specific 
task. There are, however, several difficulties with bonus systems in the public sector. 
Many people, including many legislators, seem to feel that performance evaluation is 
so difficult to manage that there is no fair basis for deciding which employees receive 
bonuses and which do not. Consequently, bonus systems may become mechanisms for 
rewarding friends and favorites in the organization. Although these concerns can be 
addressed in several ways, they have led, in many jurisdictions, to legislation prohibiting 
bonus systems. 

Piecework bonuses are performance incentives that tie the worker’s productivity in 
a given task to monetary rewards. These systems may either tie the monetary reward 
directly to the number of units produced or use some formula to determine which work¬ 
ers are exceeding a standard level of performance. For example, keypunch operators in 
many jurisdictions are paid according to number of entries. Similarly, painters and elec¬ 
tricians in some areas are paid according to what degree they meet or exceed a standard 
of performance set in advance. The effectiveness of piecework bonuses depends on arriv¬ 
ing at specific measures of performance that will be clear to all concerned. 

Gainsharing plans provide a monetary award for a group of employees based on sav¬ 
ings the group generates. Based simply on the idea of rewarding those who produce more, 
this kind of plan is easy for both employees and citizens to understand. Washington, for 
example, has operated such a program for nearly a decade; through the state’s Teamwork 
Incentive Program, employees in groups that develop significant savings can receive up to 
25 percent of the documented savings. State employees have received as much as $6,273 
per employee (Government Productivity News, April 1989, p. 1). 

Gainsharing can also be combined with a quality-circles program. If, for example, a 
quality circle designed a new computer program that saved a state government $6,000 
a year, it might split as much as $600 among the circle members. Again, this system 
depends on careful documentation of the savings generated by the work of the group. 

Suggestion award programs provide incentives for employees who make specific 
suggestions that result in savings for the organization. Such systems are widely used in 
American industry; firms such as General Motors have major suggestion contests that 
result in thousands of dollars, even hundreds of thousands, in awards to individuals 
and, of course, even greater savings for the companies. Suggestion programs have only 
recently become widespread in public agencies and are still less well established than in 
the private sector. 

Behavioral awards reward specific behaviors that management wishes to encourage. 
If absenteeism is a problem, a system might be designed to reward good attendance; 
if workplace accidents are a problem, a system might be designed to reward excellent 
safety records. Again, it is important to establish clear standards for performance and 
relate them to specific benefits. 

Employee recognition programs, although they do not provide monetary incentives, 
are often an effective way to acknowledge special contributions of certain employees 
or groups. An employee-of-the-month program, for example, allows top management 
(the governor, a department head, or a city manager) to recognize individuals who have 



352- Chapter 9 The New Public Management, Reinvention, and the Reform of Public and Nonprofit Organizations 

done work above and beyond the call of duty. Similarly, special recognition of groups of 
employees involved in quality circles or interdepartmental task forces is a good way to 
highlight work of exceptional quality. At little or no real cost, such programs provide 
a surprisingly good incentive for employees and emphasize the high-quality work that 
most employees of public organizations do. As one productivity leader pointed out, 
“You always hear about the bad things that happen in government. An employee-of-the- 
month program gives us an opportunity to talk about the good things that happen!” 

All in all, incentive programs are effective mechanisms for encouraging employees to 
make more significant or more appropriate contributions to the organization. You must 
be careful, however, to identify specific behaviors that will lead to improved productiv¬ 
ity, devise specific measures so you know when the objective has been met, and provide 
an appropriate and meaningful incentive. As the success of employee recognition pro¬ 
grams testifies, incentive programs do not work merely because employees need more 
money. Employees also respond because they take pride in their work and in their con¬ 
tributions to the organization’s success. 

Innovation 

A more recent strategy for improving productivity in public and nonprofit organizations 
involves encouraging innovation by public servants (see Box 9.2). Unfortunately, while 
many managers and consultants search for ways to innovate, the concept of innovation 
tends to be one of the least understood in management. Some view it simply as imple¬ 
menting some new system or process within an organization, or as improving the busi¬ 
ness of government. Others appreciate innovation as a way of adding public value, or 
serving more effectively in the public interest. Most will agree, however, that at its core 
innovation involves challenging the “prevailing wisdom” in management theory and 
practice (Light, 1998, p. xvi). 

H. George Frederickson (2000, p. 8) recently attempted to sort out some of the different 
ways of thinking about innovation, contrasting between “managed innovation” and “sus¬ 
taining innovation.” First, in managed innovation the primary driver of change tends to be 
the visionary, with the main objectives being productivity, efficiency and the improving 
government’s bottom-line. This type of innovation becomes communicated through best- 
practices research for other organizations to diffuse into their administrative practices. 

The managing innovation approach begins with the core mission of the organization, 
often as articulated by the visionary leader. Staff roles involve setting objectives for 
accomplishing the mission and implementing the innovative practices set out by manage¬ 
ment. It is a linear process, at the end of which the organization is able to achieve a new 
level of productivity. But, as critics point out, it also results in a much shallower form of 
innovation, one that fails to take account of the underlying values of the organization or 
provide for managing through rapidly changing conditions. 

Sustaining innovation, on the other hand, builds from Paul Light’s work by the same 
name (Light, 1998) and depends less on the visionary hero and more on leaders inside 
and outside of organization. Unlike its more linear counterpart, the sustaining innovation 
approach involves as much of a process of searching for questions as it does searching for 



Human Resources, Innovation and Performance 

BOX 9.2 

Awarding Innovation in Public and Nonprofit Organizations 

In 1985, the Ford Foundation launched an award program in conjunction with 
Harvard University’s Kennedy School of Government to celebrate innovations by 
public-sector organizations. Since then the Innovations in American Government 
Program has recognized 280 programs with more than $17.2 million in Ford 
Foundation grants. The Ford Foundation also became the principal sponsor of the 
Kennedy School’s Institute for Government Innovation, which provides support to 
scholars and practitioners in the form of research forums, conferences, case studies 
and other resources. 

The Peter F. Drucker Foundation offers a similar award program for innovations 
by nonprofits. Each year the Foundation recognizes a nonprofit organization that 
finds new ways of touching the lives of those it serves, based on Peter Drucker’s defin¬ 
ition of innovation: Change that creates a new dimension of performance. To be eli¬ 
gible, the nonprofit must show how the innovation (1) advances the organization’s 
mission, (2) helps the organization achieve clear, meaningful outcomes, (3) features 
a new dimension of performance, (4) makes a difference in the lives of clients, and 
(5) serves as a model that may be replicated by other nonprofits. The award includes 
a $25,000 prize and a short documentary video. 

SOURCE: The Innovations in American Government Home Page (http://ksgwww.harvard.edu/innovat/ 
home.html) and the Peter F. Drucker Foundation Innovation Award Information Page (http://www.pfdf.org/ 
award/about.html) (August, 2001). 

answers. Frederickson wrote, “Under conditions of sustained innovation it is far better to 
approximate an answer to the right question, which is often vague, than to search for the 
exact answer to the wrong question. Such answers can always be made more precise; they 
are still answers to the wrong question” (Frederickson, 2000, p. 8). The underlying belief 
is that each organization faces competing goals, based on each group of stakeholders, and 
often must work harder to identify the problems not just the solutions. 

According to Light (1998), sustaining innovation begins with removing barriers to 
excellence and what he calls “debunking the myths” (such as innovation is limited to just a 
few, perfect organizations) that tend to block natural forms of creativity in public and non¬ 
profit agencies. Light challenges managers give up the quest for absolute efficiency and 
search instead for “preferred states of being” — that is, “an ecosystem in which an organi¬ 
zation’s innovativeness depends upon four factors that ignite and sustain new ideas: (1) the 
external environment in which a given organization exists, (2) its internal structure, (3) its 
leadership, and (4) its internal management systems” (Light, 1998, pp. 12-13). 

The sustaining innovation approach provides greater flexibility and places the opportu¬ 
nity for innovation into the hands of those at all levels. As a result, this approach allows 
organizations to deal more effectively with ambiguity—both in goal-setting and in rela¬ 
tions in the external environment. Given its open engagement with external stakeholders, 



354 Chapter 9 The New Public Management, Reinvention, and the Reform of Public and Nonprofit Organizations 

the sustaining innovation approach also enables organizations to anticipate change and 
maintain effective, meaningful relationships for the long term. 

Recent Examples of Performance Management 

Public and nonprofit organizations at all levels have experimented with formal efforts to 
improve quality, productivity, and overall performance. Generally speaking, public produc¬ 
tivity is concerned with how organizations can achieve their objectives as efficiently and 
effectively as possible—how they can improve their performance. Some emphasize techno¬ 
logical innovation, while others emphasize human resources management; some operate 
through centralized productivity improvement staffs, while others are more decentralized. 
Most have successfully demonstrated the value of managing for results. 

Networking 

Now that the NPR site has closed, information on examples of reinventing 
government have been archived at http://govinfo.library.unt.edu/npr/default.html. 
Additional sites about NPR, reinvention, and reengineering include (1) http:// 
policyworks.gov and (2) http://www.reengineering.com/. 

GAO Cites Best Practices for Performance Management 

The Government Accounting Office (GAO) recently completed a comprehensive survey 
of twenty-three federal and state regulatory agencies to determine best practices for 
performance-based management and measurement. Agencies selected for participation 
had been identified either by the GAO or other sources as leaders in designing and 
implementing performance management systems. The GAO study provided twelve rec¬ 
ommendations, based on best practices shared across the various sites: 

1. Focus on building effective performance management strategies by making man¬ 
aging for results a top priority and dedicate resources to enhance core organizational 
competencies. 
2. Ensure ownership of the performance management and measurement activities 

throughout the agency. 
3. Redesign work processes, internal structures, and lines of responsibility to be consis¬ 

tent with the new performance measurement systems. 
4. Forge solid alliances, in this particular case with regulated agencies, as well as with 

partners in service delivery. 
5. Develop ties with counterparts, which in the case of regulatory agencies are other 

organizations in programs with cross-cutting jurisdictions. 
6. Adopt a systems approach to understand the influences and impacts of individual 

programs. 
7. Establish clear, measurable performance goals and objectives that are in-line with the 

new performance measurement rationale. 



Human Resources, Innovation and Performance 

8. Identify appropriate performance targets for each of the goals and objectives in the 
system. 

9. Select appropriate, reliable data sources to support the performance goals and 
objectives. 
10. Focus analysis on specific functions, in this case regulatory interventions, with an 
emphasis on maximizing results. 
11. Integrate consideration of internal and external factors affecting the agency and its 
interventions. 
12. Engage in a process of continuous improvement to ensure ongoing appropriateness 
in performance measurement systems. (Government Accounting Office, 1999) 

Although the study focused on regulatory agencies, the GAO anticipates that its findings 
can be used by nonregulatory organizations at all levels to enhance productivity and per¬ 
formance (for discussion, see the CAP Corner, PA Times, December 1999, p. 10). 

Measuring Performance in the State of Arizona 

The state of Arizona recently transformed its productivity and accountability system to 
concentrate on “what matters” in public service. Arizona initiated the transformation in 
1993, when the state legislature passed a bill requiring state agencies to engage in strate¬ 
gic planning and to tie their strategic goals and objectives to measurable performance 
targets (similar to those outlined in the GPRA). While the new system was designed to 
provide a management tool for management and staff of executive agencies, the legisla¬ 
ture also will begin tracking productivity in the 2000/2001 fiscal cycle. 

Although it may be too soon to assess the impact of Arizona’s system, some of the 
early signs suggest a definite cost savings as a result of the state’s dedication to perfor¬ 
mance management. The general consensus among state officials is that the new system 
has contributed to slower growth in the amount of state government expenditures and a 
corresponding decline in the level of taxation, but without a negative impact on govern¬ 
ment productivity. 

Most importantly, the performance management system has enabled state agencies 
to become more effective in achieving desired public outcomes and in targeting more 
effectively its service delivery to be in-line with the performance objectives. The Depart¬ 
ment of Economic Security, for example, in the past was able to report only on isolated 
cases of support to children and their families. Under the new performance measurement 
system, the department has been successful in identifying systemswide service targets 
and now can track its delivery to make sure it remains focused toward accomplishing 
the agency’s strategic objectives. State officials thus have removed the guesswork from 
decision making, relying instead on knowledge-driven management. 

A key contributor to the success of Arizona’s performance management system has 
been its integration throughout the state hierarchy. Department heads take a leading 
role in designing the system’s framework, but the ownership and sustainability of the 
system has been with staff. Many state employees have come to recognize the usefulness 
of the performance measures for improving internal operations. The state’s report on 
the system stated, “This has helped institutionalize the use of performance measures 



Chapter 9 The New Public Management, Reinvention, and the Reform of Fublic and Nonprofit Organizations 

and contributed to the continued evolution of using measures of performance within 
the executive branch ... [It should also] aid in their use by the legislative branch” 
(Governmental Accounting Standards Board, 2000a, p. 2). As with the sustaining inno¬ 
vation approach discussed previously, the sense of shared ownership should enable the 
state to maintain a flexible, effective management system well into the future. (For a dis¬ 
cussion, see Governmental Accounting Standards Board, 2000a.) 

Benchmarking and Performance Improvement in the City of Portland 

In the City of Portland, public officials have implemented several performance measure¬ 
ment tracking systems aimed at enhancing productivity and effectiveness of government 
programs. Underlying Portland’s system is the use of benchmarks, which provide perfor¬ 
mance standards and points of comparison for the city’s leadership and staff. The city 
also has integrated productivity and outcome targets in its strategic planning and budget 
decision-making processes. 

City officials at all levels have a key role to play in Portland’s performance manage¬ 
ment system. Due to the decentralized nature of the city government, this means that 
department heads, middle managers and staff share responsibility for setting strategic 
objectives, tracking effectiveness, and reporting to key stakeholders on the performance 
results. Moreover, the city uses its community outreach to bring citizens into the perfor¬ 
mance management process. Portland relies on both formal mechanisms of public partic¬ 
ipation, with citizens serving on the Portland-Multnomah Progress Board, and informal 
approaches to citizen engagement. 

Besides the benefits for productivity, Portland’s performance measurement system 
has given the city government exciting new forums for sharing progress and facilitating 
organizational learning. The city’s report stated, “Communicating results is seen as a 
driving force behind the intent and expectations of Portland’s performance measurement 
efforts, involving both communication within the government as well as communication 
to stakeholders and the public” (Governmental Accounting Standards Board, 2000b, 
pp. 2-3). City officials use a variety of messaging strategies to inform their colleagues 
internally on performance issues and to connect with the public on citizen priorities. 

However, the Portland experience has not come without its share of obstacles. Among 
the most significant roadblocks have been (1) setting solid, measurable performance 
targets, (2) ensuring the quality and reliability of performance data, and (3) covering 
the time and cost required to maintain the reporting and tracking under the new system. 
The result has been concerns relating to the consistency of the system agency-by-agency 
and the capacity of city departments to continue tracking performance over time. 

The principal strength of the Portland initiative is, like the Arizona example cited 
above, that there seems to be a high degree of ownership for the system throughout the 
city government. If this was seen by staff as something imposed by department heads or 
elected officials, there may be a higher level of resistance. Under such conditions it would 
be questionable if the performance management approach would be sustainable in the 
future. But in Portland the city government as a whole appears to have embraced this new 
system as a way of serving more effectively in the public interest, and as a result perfor¬ 
mance management seems to be a key part of the city’s policy and administrative decision 
making. (For discussion, see Governmental Accounting Standards Board, 2000b.) 



Implementation Issues in Quality and Productivity 

Implementation Issues in Quality and Productivity 

Whatever approach to improving quality, productivity, and performance you undertake, 
the design of your intervention will be important to its success. 

Productivity in public organizations, as in others, can often be improved through tech¬ 
nological innovations. Many areas of federal, state, and local governmental activity rest 
on a strong technical base. In areas such as the design and construction of waste-to- 
energy plants, development of pollution control devices (including hazardous waste treat¬ 
ment centers) or building of public housing, new technologies may help governments to 
be not only more effective in meeting their objectives, but also to be more cost efficient. 

Networking 

Several organizations offer resources, case studies, and links to other sites on the 
issue of productivity, including the NPR archives (http://govinfo.library.unt. 
edu/npr/default.html), the Alliance for Redesigning Government 
(http://www.alliance.napawash.org), the National Center for Public Productivity 
(http://newark.rutgers.edu/~ncpp/ncpp.html), and the American Productivity 
and Quality Center (http://www.apqc.org/). The Benchmarking Exchange 
(http://www.benchnet.com/) also features information on benchmarking and 
performance measurement. 

Think for a moment about the changes that are likely to occur in the country’s trans¬ 
portation system over the next twenty years. In the not-too-distant future, high-speed 
intercity rail systems or vehicles that move on cushions of air may well displace planes, 
cars, and trains as the primary means of transportation between major urban areas. 
Designing the systems, regulating them, coordinating among various systems, providing 
communications and control — all these and many more functions will fall at least in 
part to government, and all will benefit from advanced technology. 

Other efforts — such as many associated with the reinventing government movement— 
are more concerned with changing the culture and practices of the organizations, but 
these can vary in scope. Some programs simply require you to undertake new efforts 
to motivate your employees. Others are more programmatic; for example, you might 
emphasize greater responsibility on the part of lower-level personnel through a job enrich¬ 
ment strategy or you might develop a recognition program within the unit. 

You might also work with a broader program, such as undertaking a reinvention 
effort throughout a local government or establishing a governmentwide employee sug¬ 
gestion award system. 

Steps to Productivity Improvement 

Whatever the level or organization of the quality and productivity effort, there are cer¬ 
tain basic issues to consider (Holzer, Rosen, & Zalk, 1986, pp. 9-15). 



Chapter 9 The New Public Management, Reinvention, and the Reform of Public and Nonprofit Organizations 

1. Identify ripe areas. 
Identify areas that are ripe for productivity improvement. Any program, however great 
its ambitions, must start small. It makes sense to start where you are most likely 
to achieve immediate gains, because you will identify savings most quickly here, and 
because a few early successes will encourage productivity improvement efforts elsewhere. 
To identify areas, managers should be particularly attentive to: 

functions continually faced with large backlogs of work or slipping deadlines 

operations where visible problems have already been hinted at (citizen complaints, 
high employee turnover) 

operations that appear to be using an unusually large percentage of resources 

operations where large numbers of employees perform essentially repetitive tasks 
(payoffs will be especially evident here because of the effect of multiplying any 
increase by the number of employees) 

availability of new techniques or technology already proven workable elsewhere 
(e.g., computer installation to improve police response time) 

receptivity of managers and supervisors to new ideas coupled with an ability to 
follow through (Holzer et ah, 1986, p. 10) 

2. Locate models in other jurisdictions. 
Whatever your organization, it is likely that there are others like it and that others have 
experienced similar problems. Having some idea of how others approached the issues 
you are now confronting is especially helpful. Fortunately, such information is readily 
available, either through publications such as the Governmental Productivity News or 
through professional organizations such as the American Society for Public Administration 
or the International City Management Association. From these sources, you may discover 
new approaches to productivity improvement or you may find that approaches you are 
considering have either been successful or have failed elsewhere. 
3. Define roles. 
Define the roles of those who will be involved in planning and implementing the pro¬ 
gram. Some programs are oriented to a particular department, while others cut across 
several departments within a jurisdiction; in either case, some staffing for the productiv¬ 
ity effort will be necessary. Staffing at the department level will provide a specific focus 
to the productivity program and will allow you to build technical expertise (e.g., in fire 
or police work). A centralized productivity staff will enable you to give broad impetus to 
the program and to build general expertise in productivity techniques. Presumably, this 
general knowledge can then be applied in various departments. 
4. Set realistic goals and objectives. 
As noted, productivity programs in public organizations have been stimulated by public 
demand for “doing more with less.” You may thus be tempted to set high expectations 
for a new productivity improvement effort: resist the temptation. Setting realistic goals 



Implementation Issues in Quality and Productivity 9 

and objectives and actually meeting them is more helpful in the long run than setting 
expectations too high and falling short. 
5. Choose among alternative programs. 
Different approaches range from changes in management style to technological inno¬ 
vations to specific productivity efforts, such as quality circles or incentive programs. In 
implementing a productivity program, it is advisable to fit the solution to the problem 
rather than the other way around. Though this advice seems obvious, you may find 
yourself tempted to pursue an immediate opportunity rather than engage in more careful 
planning. For example, a vendor might herald a new telecommunications system as the 
solution to all your problems. Even though you may not view communications issues 
as your highest priorities in terms of productivity improvement, you may be tempted 
to adopt the new technology “just because it is there.” A more reasonable approach, of 
course, is to establish a prioritized list of problems, then seek to develop solutions that 
match your most important concerns. 
6. Anticipate problems. 
Many problems can arise in implementing a productivity improvement program, espe¬ 
cially one of high visibility. Many of the problems are based on misconceptions about 
what productivity improvement is all about and can be anticipated and dealt with early in 
the program. Employees might feel that a quality circles program will lead to elimination 
of jobs, or they may feel that safety standards will be lowered. In fact, neither outcome is 
likely. These are serious concerns that should be thoroughly discussed at the beginning of 
the program. To the extent possible, all participants and all persons likely to be affected 
by the program should have a chance to learn about and comment on the proposed pro¬ 
gram. Dealing with questions up front minimizes confusion and disruption later. 
7. Implement the program. 
After carefully analyzing the need for a productivity improvement program and decid¬ 
ing upon a course of action that will address the identified needs, you will face the 
difficult task of implementation. Implementation may, in fact, be the most difficult 
phase. Expectations may be too high; needed legislation may be difficult to pass; orga¬ 
nization turf issues may interfere; and there may not be enough money to invest in the 
program. 

You can avoid some of the difficulties by starting the program on a modest basis, then 
expanding to other areas. Limiting objectives at the outset can help keep expectations 
from rising too high and will make it easier to demonstrate the viability of the effort. 
Beginning the program in an area where you might reasonably expect quick and identifi¬ 
able gains will enable you to claim early success and in turn make the program more 
likely to be adopted elsewhere. Similarly, keeping a low profile for the program in its 
early days will make it less threatening to labor and management. Whatever publicity is 
accorded to the program (and many political leaders will want high-profile efforts), you 
should monitor the program carefully in its early days to avoid misconceptions. 

The most serious limitations, however, are the difficulties in institutionalizing the pro¬ 
gram. Implementation is not merely a short-term concern; you should be concerned from 
the beginning about how durable the program is likely to be. Several factors work against 
institutionalization of productivity improvement programs. Programs may be dependent 
on a particular individual, such as a governor or mayor or a particular department head, 



Chapter 9 The New Public Management, Reinvention, and the Reform of Public and Nonprofit Organizations 

and may be discontinued when that person leaves office. Many programs lack an organi¬ 
zational home and thus find it difficult to sustain support over a period of years (Bailey, 
1987, pp. 19-20). 
8. Evaluate the program. 
Most productivity improvement programs require an initial investment of money and 
time; you have to spend money to save money, and many people may be skeptical of the 
program’s value. Skeptics are likely to be unconvinced by general statements of program 
advocates; they will want to see specific, objective data. Types of information you should 
collect from the beginning are documented cost savings, increased output that has been 
achieved at a similar or reduced cost, or increased citizen satisfaction with the agency’s 
services. This information can be made public through periodic reports to legislators or 
other decision makers or through press conferences or news releases. 

An aspect of evaluation that needs special attention is the development of an appropriate 
measurement system to ensure that the proper information is being acquired at an appro¬ 
priate time. You must be sure that information is gathered on a timely basis and that it 
is accurate. The information must also be fully relevant to measuring the improvement 
effort. It is difficult to develop a measurement system, but it may be critical to sustaining 
your program over time. 

We have already discussed ways to measure objectives. For example, a social service 
agency might measure the number of clients served, a police department might measure 
response time, or a public works department might measure numbers of miles of streets 
and highways paved. Matters are complicated, of course, by the fact that most organiza¬ 
tions seek several objectives simultaneously. The social services agency is not concerned 
only with screening clients, but may also make referrals to other agencies or distribute 
money to certain clients. Each of these multiple objectives, and each of the activities that 
contribute to the objectives, may require its own separate measure. 

Even more important, those who measure the effects of productivity improvement 
programs need to be attentive to what properly reflects the quality of work per¬ 
formed. Obtaining an increase in cost savings at the expense of courtesy or prompt¬ 
ness is questionable at best; responding to requests for information or help when it is 
convenient to the agency may be less costly, but will probably not be acceptable in 
terms of quality. You may wish to consider either a separate measure of quality or 
implementation of a quality control system. You might also be able to develop com¬ 
posite measures that combine considerations for output and quality. For example, the 
streets department might measure repairs made within a certain number of working 
days, or the revenue department might measure the number of tax returns processed 
without error. 

Three conditions appear to be required for productivity improvements to occur: “(a) the 
performance of individuals or groups must be assessed in a valid, objective manner, 
emphasizing the public purposes of the services provided by those employees, (b) such 
assessment should be closely linked to some type of reward or penalty, whether monetary 
or nonmonetary, and (c) there should be both early meaningful involvement by employee 
organizations as well as adequate advance participation and training for those affected, 
including supervisory as well as nonsupervisory employees” (Greiner et ah, 1981, p. 411). 



Summary and Action Implications 361 

Developing programs with these considerations in mind will help ensure not only early 
successes in productivity improvement, but will also help sustain the program through 
the years. 

Summary and Action Implications 

Technical innovations are often dramatic in their impact, sometimes saving thousands, 
even millions, of dollars. But technological innovations do not occur independently 
of the skills and attitudes of those who work in an organization. Innovations seem to 
flourish in a climate where human creativity is encouraged and usually require human 
changes—what one group calls “orgware”—to be successfully implemented. 

Improved productivity appears to depend at least in part on a shift from the traditional 
authoritarian approach to management to a more open and participatory approach. This 
shift has been especially apparent in implementing productivity improvement programs at 
all levels of government. In many cases, we find a shifting orientation toward manage¬ 
ment that places greater emphasis on the involvement of all employees. (The resulting 
orientation was perhaps best expressed by the head of a state productivity council, who 
described his philosophy this way: “Those who do the work know the work best and 
know best how to improve the work.”) The result is an approach to management that 
seems not only more human in scale and perspective, but that many authorities are com¬ 
ing to believe is far more productive as well. 

A recent study by the Canadian government of “well-performing” governmental 
organizations in that country outlines some of the basics of this new approach. That 
study identified five factors leading to organizational success, which we may take as 
recommended patterns of action for managers to seek in trying to improve productivity: 

Emphasis on people. People are challenged, encouraged, and developed. They are 
given power to act and to use their judgment. There is a belief that high performance 
is a product of people who care rather than systems that constrain. People do not 
preoccupy themselves with the risk of failure, but are confident they can tackle virtu¬ 
ally any challenge. 

Participative leadership. Teadership is not authoritarian or coercive, but participative 
whenever possible. The leaders envision an ideal organization, define purpose and 
goals, then articulate these and foster commitment. Staff communicate easily. They 
feel comfortable consulting peers as well as those above and below them. Although 
formal levels exist for administrative purposes, there are no boundaries that inhibit 
collaboration in achieving goals. 

Innovative work styles. Staff reflect on their performance. They learn from the effects 
of their actions. They seek to solve problems creatively. They maintain strong moni¬ 
toring, feedback, and control systems as useful tools. They are self-reliant, rather than 
dependent on control from an outside authority. 



362 Chapter 9 The New Public Management, Reinvention, and the Reform of Public and Nonprofit Organizations 

Strong client orientation. These organizations focus strongly on their clients, deriving 
satisfaction from serving the client rather than the bureaucracy. There is an alignment 
of values and purpose between the well-performing agency and their political and 
central agency masters. 

A mindset that seeks optimum performance. People hold values that drive them to 
always seek improvement in their organization’s performance. When conditions 
change, they adjust their methods, not their values. Because of this orientation toward 
performance and adaptability, the organization performs well even in a changing envi¬ 
ronment. This mindset may be the most important feature of all (Government 
Productivity News, December 1989, p. 4). 

As a manager, one of the primary technical concerns you will face is improving your 
organization’s productivity. Whereas you may be able to accomplish great gains through 
technological innovations, the most significant long-term gains will come from a proper 
emphasis on the human factors in organizational effectiveness. To be judged successful, 
you will always have to balance your concern for the technical side of your agency’s 
work and your attention to the human side of the organization, a topic to which we will 
turn in the next several chapters. 

Terms and Definitions 

Behavioral award: Used to reward specific behaviors that management wishes to 
encourage. 

Employee recognition program: Effective way to acknowledge special contributions 
of certain employees or groups to the organization. 

Gainsharing plan: Monetary award for a group of employees based on savings gen¬ 
erated by the group. 

Management by objectives: Participatory approach to establishing clear and measur¬ 
able objectives throughout the entire organization. 

Performance appraisal: Specific evaluation with respect to an individual’s progress in 
completing specified tasks. 

Performance bonus: One-time monetary award based on superior performance on the 
job or in a particular task. 

Piecework bonus: Incentive that ties the worker’s productivity in a given task to the 
monetary rewards he or she receives. 

Quality circle: Small group of people who do similar or connected work and meet 
regularly to identify, analyze, and solve work-process problems. 



Cases and Exercises 3 63 

Suggestion award program: Incentive for employees who make specific suggestions 
that result in savings for the organization. 

Task forces: Groups brought together to work on specific organizational problems. 

Study Questions 

1. Discuss the relationship between the growing use of computer-based systems and the 
human element involved in technology transfer. 

2. What is management by objectives, and how can this approach benefit an organization? 
3. Identify the eight categories for judging the quality of work-life. 
4. Discuss the variety of incentive plans currently used in public agencies. Explain the 

usefulness of each approach. 
5. Productivity improvement has become a major concern of public managers. What basic 

issues should one consider when undertaking a quality of productivity program? 
6. Explain the basic ideas associated with President Clinton’s National Performance 

Review. 

Cases and Exercises 

1. Review the criteria in Box 9.1 for evaluating the quality of work-life. Working in 
groups of five to seven, choose two or three jobs that members of the group have previ¬ 
ously held and analyze the quality of work-life in those jobs. In each case, members of 
the group should interview the person who held the job, asking questions about each 
category in the chart. When everyone has a complete understanding of the nature 
of the job, the group as a whole should draw conclusions with respect to the quality of 
work-life for someone holding that job. 

Following this activity, choose two or three jobs to which members of the group 
might reasonably aspire in ten to fifteen years. Have one individual imagine in detail 
what the job would be like from day to day, then follow the same procedure to inter¬ 
view the job holder and draw conclusions about the quality of work-life. In what 
ways do you expect that future jobs will be of higher quality than those in the past? 
Why should there be any differences? 

Finally, choose one job from the “jobs already held” and one from those “to which 
you aspire.” Then consider these jobs from the standpoint of the person to whom the 
individual job holder would report. How could the manager improve or enrich the 
particular job? Specifically, could adjustments in authority or responsibility improve 
the quality of work life for the job holder? How would those changes affect the indi¬ 
vidual’s productivity? Report your conclusions to the class. 

2. Divide the class into groups ranging from seven to ten members each. Have each 
group select a reasonably small public agency—federal, state, local, or nonprofit. 



364 Chapter 9 The New Public Management, Reinvention, and the Reform of Public and Nonprofit Organizations 

Based on interviews with several top managers and a sampling of employees through¬ 
out the organization, analyze the organization’s existing system of incentives. Design a 
new incentive program you think would result in improved quality and productivity. 
(If you have difficulty locating or gaining access to a particular organization, simply 
develop a research design through which you might test an incentive system. Assume 
an organization of two hundred people engaged in manual processing of tax receipts 
for a state government. What kinds of questions would you ask of which individuals 
in the organization?) 

3. Academic departments, like other organizations, can benefit from information and 
advice from employees and clients (faculty, staff, students, alumni, potential employers, 
and so on). Consider the department of your major. How would you design a compre¬ 
hensive program of employee and client involvement that would help the department 
improve the quality of its offerings? (After designing a program, you might interview 
the department chair to find out what mechanisms are already in place.) 

For Additional Reading 

Altshuler, Alan A, and Robert D. Behn, eds. Innovation in American Government: 
Challenge, Opportunities and Dilemmas. Washington, DC: Brookings Institute, 1997. 

Anderson, David E, and Sharon S. Dawes. Government Information Management: 
A Primer and Casebook. Englewood Cliffs, NJ: Prentice Hall, 1991. 

Barzelay, Michael. Breaking through Bureaucracy. Berkeley: University of California 
Press, 1992. 

Barzelay, Michael. The New Public Management: Improving Research and Policy 
Dialogue. Berkeley, CA/New York: University of California Press/Russell Sage 
Foundation, 2001. 

Cohen, Steven, and Ronald Brand. Total Quality Management in Government: 
A Practical Guide for the Real World. San Francisco: Jossey-Bass, 1993. 

Dilulio, John, Jr., Gerald Garvey, and Donald Kettl. Improving Government 
Performance. Washington, DC: The Brookings Institution, 1993. 

Gore, Albert. Common Sense Government. New York: Random House, 1995. 
Gore, Albert. Businesslike Government. Washington, DC: Government Printing Office 

1997. 
Gore, Albert. Serving the American Public. Washington, DC: Government Printing 

Office, 1997. 
Holzer, Marc, ed. Public Productivity Handbook. New York: Marcel Dekker, 1992. 

• Holzer, Marc, and Arie Halachmi. Strategic Issues in Public Sector Productivity. San 
Francisco: Jossey-Bass, 1986. 

Lane, Jan-Erik. New Public Management. London: Routledge, 2000. 
Light, Paul C. The Tides of Reform. New Haven, CT: Yale University Press, 1997. 
Matzer, John, Jr., ed. Productivity Improvement Techniques. Washington, DC: 

International City Management Association, 1986. 



For Additional Reading j6j 

Morley, Elaine. A Practitioner’s Guide to Public Sector Productivity Improvement. 
New York: Van Nostrand Reinhold, 1986. 

National Performance Review. From Red Tape to Results: Creating a Government That 
Works Better and Costs Less. Washington, DC: U.S. Government Printing Office, 
1993. 

Osborne, David, and Ted Gaebler. Reinventing Government. Reading, MA: 
Addison-Wesley, 1992. 

Osborne, David, and Peter Plastrik. Banishing Bureaucracy. Reading, MA: 
Addison-Wesley, 1997. 

Pollitt, Christopher, and Geert Bouckaert. Public Management Reform: A Comparative 
Analysis. New York: Oxford University Press, 2000. 

Reynolds, George W. Information Systems for Managers. 2d ed. St. Paul, MN: West 
Publishing, 1992. 

Rosen, Ellen Doree. Improving Public Sector Productivity. Thousand Oaks, CA: Sage 
Publications, 1993. 

Sacco, John F., and John W. Ostrowski. Microcomputers and Government Management. 
Pacific Grove, CA: Brooks/Cole, 1991. 

Schachter, Hindy L. Reinventing Government or Reinventing Ourselves. Albany: State 
University of New York Press, 1997. 

Swiss, James. Public Management Systems: Monitoring and Managing Government 
Performance. Englewood Cliffs, NJ: Prentice-Hall, 1990. 

Wholey, Joseph S., Mark A. Abramson, and Christopher Bellavita. Performance and 
Credibility: Developing Excellence in Public and Nonprofit Organizations. Lexington, 
MA: DC Heath, 1986. 

Wholey, Joseph S., and Kathryn E. Newcomer. Improving Government Performance: 
Evaluation Strategies for Strengthening Public Agencies and Programs. San Francisco: 
Jossey-Bass, 1989. 



Chapter 10 

Personal Skills in 
Public Management 

All the ideas and approaches we have examined are helpful in understanding what is 
going on in public and nonprofit management. But those perspectives are sterile without 
the personal and interpersonal skills to put theory into practice. A manager must be 
able to size up a situation and take appropriate action, often within a matter of seconds. 
A division director to whom you report calls to tell you that the president is getting 
ready to announce a new breakthrough in a disease treatment your unit has been work¬ 
ing on unsuccessfully for years. Or you hear on the radio that asbestos has been found in 
a building your organization recently pronounced clean. Or your boss, the head of the 
state mental health department, calls to tell you he has just resigned in protest over 
the legislature’s failure to support a new appropriation and you are in charge. In all these 
cases, you will necessarily and appropriately analyze and understand the situation in 
terms of your own approach or theory. But you will also have to act. You may have to 
talk with certain people; you may have to motivate others to act; you may have to judi¬ 
ciously exercise the power of your office. 

All these examples test your skills as a manager. If you can communicate well, and 
if you can make decisions and motivate others to follow your lead, you will quite 
likely be judged effective. If you lack these skills, you will be judged ineffective. 
Managerial success is based largely on managers’ ability to exercise various interper¬ 
sonal skills. 

Interestingly, however, effectively exercising interpersonal skills depends on several 
essential personal skills that are a part of one’s social and psychological makeup. 
Some of these personal skills reflect your approach to the world, others have to do 
with your capacity for creativity or effective decision making, still others have to 
do with how you deal with ambiguity or lack of clarity. For example, the manager 
suddenly promoted to the directorship of the mental health department will certainly 
have important (and immediate) decisions to make, perhaps involving creative solu¬ 
tions to organizational problems left by the departing director. The new manager 
will also have to be able to operate, perhaps for months, in a highly ambiguous 
situation. 

In this chapter and Chapter 11, we will examine the personal and interpersonal skills 
that underlie managerial effectiveness. Personal skills include management of stress and 
time, creativity and problem solving, individual decision making, and issues of power 
and leadership. 

366 



The Manager’s Day 367 

The Manager’s Day 

What, specifically, do public managers do? Most important, how would you spend your 
time as a public manager? The answer depends on your job and level in the orga¬ 
nization. Nevertheless, several studies give us some idea of a typical manager’s day. 
We will discuss five aspects of managerial work: (1) the elements of managerial work, 
(2) distribution of managers’ time between work elements, (3) interactions with other 
people, (4) the informal elements of managerial work, and (5) the themes of managerial 
work (Hales, 1986). 

Elements of Managerial Work 

Hales’s review of what managers actually do at work closely parallels the classic descrip¬ 
tions of what managers should do, with some contemporary variations. Hales identifies 
nine elements as common, nearly universal, activities of managers: 

1. Playing the role of figurehead and leader of an organizational unit: The manager 
symbolizes the organization to the outside world. 
2. Acting as liaison: Liaison or boundary spanning is performed with individuals outside 
of the organization as well as with other organizational units and with managers of units 
higher and lower in the hierarchy. 
3. Monitoring: Managers monitor affairs both internal and external to the unit, includ¬ 
ing the tasks of filtering and disseminating information. 
4. Allocating resources: Managers make decisions with respect to appropriate distribu¬ 
tion and use of human, financial, and physical resources. 
5. Handling disturbances: Managers are frequently called upon to deal with disruptions 
in the flow of work in the organization. 
6. Negotiating: Reaching agreement with a variety of parties, both inside and outside the 
organization, is an important part of the manager’s work. 
7. Innovating: Where there is the need to change, the manager often acts as a creative 
center or catalyst for change. 
8. Planning: Managers must always be attentive to the future, especially as probable 
future conditions affect the work of the organization today. 
9. Directing subordinates: The manager must spend considerable time developing a 
direction for the organization and securing the support and activities of the many indi¬ 
viduals required to move the organization in that direction. 

Like the classic descriptions noted earlier, these elements of managerial work identify 
a variety of activities. Nearly all the classic functions are included in the list (depending 
on how one classifies the elements), but several aspects deserve emphasis. First, note the 
wide diversity of activities in managerial work. Second, note the number of activities that 
involve other people. And, third, note the emphasis on change and innovation. Indeed, one 
might even say that the ability to handle change is a hallmark of modern management. 



j68 Chapter 10 Personal Skills in Public Management 

Distribution of Time among Work Elements 

Studies of how managers spend their time often use terms such as tactical, frenetic, reac¬ 
tive, troubleshooting, and constant interruptions. They describe the frequency of short, 
face-to-face meetings that move constantly from topic to topic. These findings, however, 
do not necessarily mean that the image of the manager as one who plans, thinks, and 
formulates strategy is a myth. To the contrary, effective managers have general agendas 
that enable them to quickly gather large amounts of information and make the correct 
decisions to further those agendas. Furthermore, managers work within networks that 
must be both developed and activated. These tasks require many interactions with peo¬ 
ple in the networks, and the interactions must of necessity be sporadic and informal 
(Kotter, 1982, p. 166). 

What appears to be an absence of planning may sometimes be illusory; for some man¬ 
agers, planning is something that happens constantly. The seemingly disjointed nature of 
managerial interactions with others does not so much indicate disorganization, but rather 
the wide range of problems that must be handled. General agendas allow managers to 
deal with many situations opportunistically within the context of a larger framework or 
agenda that provides guidance for specific decisions. 

Managerial Interaction and Communication 

Descriptions of managerial time usage have identified the importance of interactions with 
other people, which typically involve some sort of communication. Hales found that 
between two-thirds and four-fifths of a manager’s day is spent giving or receiving infor¬ 
mation, and that most of this giving and receiving takes place in face-to-face interactions. 
Communication is clearly a dominant activity in a manager’s day. 

Interestingly, and again despite appearances to the contrary, patterns of communica¬ 
tion are not random. A majority of managerial communication is with managers of the 
same rank (lateral communication), though how much is vertical (i.e., up and down the 
hierarchy) varies widely with the manager’s position. 

Since much of their day is spent responding to requests for information, managers are 
often described as reactive. They spend more time responding to information requests 
than to initiating requests. To the casual observer, these interactions would appear 
extremely diverse, and often informal rather than official, but there is more to informal 
communication than meets the eye. 

Informal Aspects of Managerial Work 

Unfortunately, it is difficult to provide universal descriptions of the informal aspects 
of management. There is, for example, considerable debate over whether the informal 
aspects of the manager’s role are good or bad—that is, whether they contribute to or 
detract from the organization’s goals. As in many such debates, it is probable that the 
informal work sometimes enhances and at other times detracts from the organization’s 
goal achievement. For example, informal activities are often political in nature and 



Stress Management 369 

involve negotiation; as such, these activities are extremely relevant. In any case, what is 
formal and what is informal is often a specific manager’s perception as to what is actu¬ 
ally part of his or her job; that which is really considered a part of the job is defined as 
formal, and that which is not is defined as informal. 

Themes of Managerial Work 

We can draw a number of general conclusions about managerial work, one of which is 
that managerial work is extremely diverse and variable in terms of the different activities 
managers perform in a typical day. A manager may work on literally dozens of distinct 
topics during the course of the day and bring to bear a wide range of skills in dealing with 
those topics. A second conclusion is that managerial jobs are loosely enough defined to 
allow significant variation and choice by the specific manager in regard to both job con¬ 
tent and style of performance. Two jobs that appear identical on an organizational chart 
are not necessarily composed of exactly the same tasks, nor will they necessarily be car¬ 
ried out in the same way. A central part of the work of managers is “the management of 
their work” (Hales, 1986, p. 101). 

Another conclusion is that managerial work is pressured and conflicted. There are many 
demands on the manager, and these demands are often contradictory. Consequently, there 
may be competing claims on the same resources of time, energy, personnel, and equipment. 
Moreover, competing claims often occur simultaneously or within a short period, creating 
even more pressure and conflict. Fourth and finally, Hales (1986) reports that managerial 
work tends to be action-oriented, with emphasis on action rather than on reflective con¬ 
templation. So many problems arise so quickly that managers often develop a preference 
for concrete action to address problems and opportunities. 

We can conclude that the manager’s job is one of life’s more challenging in the world 
of work. It is diverse, and that diversity implies the need for diverse skills. The need for 
many skills is compounded by the pace of managerial work and its unending stream of 
conflicting demands for action. (See Box 10.1 for a review of the diversity and complex¬ 
ity of a local government manager’s job.) Fortunately, managers often have considerable 
latitude in building their positions and in developing their working styles. 

Stress Management 

We have noted the importance of the skills, especially interpersonal skills, which are 
required to manage successfully. But effective use of interpersonal skills is predicated on 
a number of personal qualities and characteristics that form the basis for action. 

Although not all managerial positions in public organizations are stress-filled, pressure- 
cooker jobs, there are certainly moments of tension, just as in management jobs else¬ 
where. The pressure of deadlines, questions about who is responsible for a particular 
problem, an angry flare-up at a staff meeting—these and other stressful situations arise in 
the course of the manager’s job. 



370 Chapter 10 Personal Skills in Public Management 

BOX 10.1 

A Typical (?) Manager's Day 

A typical local public manager’s daily agenda might look something like this: 
8:00 A.M. Arrives at work to polish off leftover paperwork/dictation from 

yesterday. 
9:15 A.M. Meets with mayor to review next week’s council agenda prior to its 

publication. 
10:00 A.M. Local business group offers ideas on newly proposed industrial park 

on east side. 
10:45 A.M. City engineer and city treasurer join group to brief them on construc¬ 

tion/financial details of site development. 
11:30 A.M. Police chief and personnel officer review a pending grievance against 

the department by a member of the city employees’ union. 
12:15 P.M. Leaves ten minutes late for luncheon speech at League of Women Voters’ 

monthly meeting to urge their help with the water bond campaign. 
1:30 P.M. Back again for more discussion with the police chief on the same topic 

discussed in the morning. 
2:15 P.M. Rides with public works director to inspect north side residents’ com¬ 

plaints of smells from nearby city dump; mentally drafts responses to 
their council members and neighborhood group on return to office. 

3:15 P.M. Returns stacked-up phone calls at office. 
3:45 P.M. Talks with local newspaper reporter about the importance to the city 

of next month’s special water bond vote. 
4:10 P.M. Free time that was scheduled to review several pending budget items is 

interrupted by visit from two council members. 
5:20 P.M. Goes home for dinner. 
7:10 P.M. Leaves to attend meeting of south side citizen association, a pre¬ 

dominantly poor black group that the manager wants to involve 
more closely in community public housing planning. 

11:00 P.M. Home to bed at last! 

NOTE: Several managers from all levels of government, upon reviewing this schedule, commented that this 
particular day appeared rather light! 

SOURCE: Excerpted from Wayne F. Anderson, Chester A. Newland, and Richard J. Stillman, II, The 
Effective Local Government Manager (Washington, DC: International City Management Association, 
1983), 35. Reprinted with permission. 

A variety of organizational factors can contribute to stress (see Box 10.2). In public 
and nonprofit organizations, stress is especially likely in situations of role conflict or role 
ambiguity. Role conflict occurs when there are two different and incompatible sets of 
demands on the individual; for example, if one is asked to complete two different projects 
simultaneously. Role ambiguity occurs when one does not clearly understand the rights 
and responsibilities of one’s job. These two conditions seem to be especially prominent in 
public organizations. 



Stress Management 37 r 

BOX 10.2 

Organizational Factors That Promote Burnout 

Continuously high stress levels 
A norm of constantly giving to others 
Discouragement of hierarchical staff interaction 
Constant demands for perfection 
Expectations of extra effort with minimal rewards 
No reinforcement for suggestions on improving morale 
Repetitive work activities 
Minimal additional resources available for extra-effort tasks 
Lack of encouragement for professional development 
Discouragement of mutual participation 
Evangelistic leadership styles 
Policy changes unrelated to problem priority 
Policy changes too frequent to be evaluated 
Rigid role-typing for workers 
A belief that playfulness is unprofessional 
Pervasive “isms” (ageism, sexism, nepotism, etc.) 
Emphasis on past success 
Constant shifting of ground rules for policy 
Minimal emphasis on positive feedback 
Minimal emphasis on comfort of environment 
High instance of work overload 
High number of dead-end jobs 
Poor communication and feedback 

SOURCE: Excerpted from Linda Hopper, “Unstressing Work.” Reprinted with permission from the 
November 1988 issue of Public Management (PM) magazine published by the International City/County 
Management Association, Washington, D.C. 

.,.'iW|jM"l.[Mj ‘ ' jHIW 

Stress of any type, or continued stress over time, can be quite damaging to both the 
individual (mental or physical ill health can result) and the organization (managers oper¬ 
ating under excessive stress are typically less competent in interpersonal relations and less 
productive generally). To prevent these problems and to have a happier, more satisfying 
work experience, public managers are finding it increasingly helpful to understand the 
nature of job-related stress and develop programs for reducing its negative consequences. 

Hans Selye, the father of stress research, defines stress as the “nonspecific response of the 
body to any demand made upon it” (Selye, 1974, p. 27). Selye points out that stress can 
be good or bad, depending on the situation and the individual. Stress can produce positive 
responses, such as joy and excitement, as well as harmful effects such as depression or ill 
health. Our concern is with excessive or continued stress leading to psychological or phys¬ 
iological impairment. Note, however, that people respond differently to sources of stress 
(or stressors)—a situation that one person may react to calmly may be a crisis for another. 



372 Chapter 10 Personal Skills in Public Management 

Selye suggests that individuals respond to stress through a set of defense reactions that 
occur as a general syndrome. The first response phase is alarm, marked by increases in 
anxiety, fear, or depression (depending on the nature of the stressor). Muscles tense and 
heart rate and blood pressure increase. There is usually also a marked increase in psycho¬ 
logical defensiveness. If the stressor is only momentary, the body soon returns to normal. 
But if the stressor continues, the individual may move to the next stage, resistance, 
wherein one engages in a variety of defense mechanisms to counter the stressor. Psycho¬ 
logically, these may range from attacking the stressor itself to attacking oneself or others, 
denying the stressor, or withdrawing either actually or symbolically from the situation 
(Whetten and Cameron, 1984, pp. 92-93). These mechanisms may reduce the level of 
stress, but where the stressor overwhelms the individual’s defenses, a pathological state 
which Selye terms exhaustion may result. Exhaustion can lead to physical or mental diffi¬ 
culties, such as depression, alcoholism, and heart problems, or to interpersonal problems 
such as trouble with one’s superiors, subordinates or family. 

Fortunately, there are signals to help you recognize patterns of behavior that lead to 
excessive stress and specific techniques to reduce stress levels. 

Stress Signals and Responses 

Type A/Type B Behaviors 

During the past twenty-five years, there has been growing interest in the relationship 
between various patterns of human behavior and the health problems that may result. 
A substantial part of medical and psychological research on this issue has focused on car¬ 
diovascular disease, the leading cause of death in the United States. Coronary heart disease 
(CHD), a form of cardiovascular disease characterized by an inadequate supply of oxygen 
to the heart, has been shown to be related to certain patterns of behavior often exhibited 
by managers in public and private organizations. Researchers have labeled these behav¬ 
iors Type A. 

In the 1950s, cardiologists Meyer Friedman and Rav Rosenman became aware that 
many of their patients’ illnesses could not be explained by the traditional factors related to 
CHD: heredity, high blood pressure, and high levels of cholesterol. Other factors seemed to 
be playing a major role in contributing to CHD. They began to describe this set of factors 
as the Type A behavior pattern, which included (1) an intense, sustained desire to achieve; 
(2) a profound eagerness to compete; (3) a persistent drive for recognition; (4) seemingly 
continuous involvement in many activities that were subject to deadlines; (5) a habitual 
propensity to accelerate the rate of execution of all mental and physical functions; and 
(6) an extraordinary mental and physical alertness (Price, 1982, p. 7). 

In contrast, people who exhibit more relaxed, easygoing patterns are referred to as 
having Type B behavior. Studies indicate that Type A individuals are two to three times 
more likely to suffer CHD than Type B individuals. 

Fifestyle Changes 

Type A personalities, who are also known as workaholics, or others especially vulnerable 
to stress-related problems should be attentive to ways of altering their behavior patterns 



Stress Management 3 73 

to reduce the possibility of impairment (either illness or reduced effectiveness). Research 
shows that even those who are less vulnerable can improve the quality of their lives and 
the effectiveness of their work through sustained programs designed to reduce stress. 
Some efforts involve merely recognizing and eliminating undesirable characteristics, such 
as Type A behaviors; other efforts involve more specific efforts to alter one’s lifestyle. For 
example, greater self-awareness — understanding oneself and how one reacts to different 
situations — allows one to anticipate and moderate reactions. One study showed that 
receptive managers, those concerned with detail, are most affected by time pressures or 
information overload, whereas preceptive managers, those who concern themselves with 
the big picture or the whole, are most stressed by role conflict or role ambiguity. Similarly, 
systematic managers, who prefer logical solutions, are most affected by problems requir¬ 
ing creativity, whereas intuitive managers are most stressed by problems requiring logic 
and objectivity (Whetten and Cameron, 1984, p. 102). If you can anticipate what prob¬ 
lems will cause you the most difficulty, you can marshal your psychic resources to deal 
with them, enlist the help of someone better attuned to the particular type of problem, or 
simply avoid the issue. 

Understanding the context of your work and how your work life relates to the rest of 
your life is also helpful in reducing the negative effects of stress. Having a sense of the 
meaning of your work, as opposed to just doing a job, provides a helpful way to assess 
what is really important and what is merely irritating. Similarly, exploring the relation¬ 
ship between your work life and family life will provide a clearer grounding for work 
activities. Life-work planning activities, offered either in groups or in one-on-one rela¬ 
tionships with career counselors, give you an opportunity to step back from your work 
and develop an improved picture of where your career and your life may generally lead. 
Finally, developing a support system, a network of people with whom you can talk 
about problems you face, can be a great help. 

Relaxation Techniques 

Specific relaxation techniques can help moderate either immediate or long-term stress. 
Deep-breathing exercises, visualizing and rehearsing upcoming situations, or diverting 
your attention to more pleasant times are primarily techniques to deal with fairly imme¬ 
diate stressors. More long-term stress reduction can be accomplished through techniques 
such as meditation. 

Psychologist Herbert Benson suggests that, just as the fight-flight syndrome is associated 
with overactivity of the nervous system, another response—the relaxation response— 
brings about a quieting of the nervous system. The relaxation response can be brought 
about through traditional techniques of religious meditation or more secular means, but 
the essentials are much the same. Four essential elements elicit the relaxation response: 

1. A quiet environment 
2. A mental device such as a word or phrase that should be repeated in a specific way 
over and over 
3. Adoption of a passive attitude (perhaps the most important of the elements) 
4. A comfortable position 



374 Chapter 10 Personal Skills in Public Management 

Practicing these four elements for ten to twenty minutes once or twice daily should 
markedly enhance one’s well-being (Benson, 1975, p. 19). Regular use of any relax¬ 
ation technique will help reduce tension and improve one’s ability to handle stressful 
circumstances. 

Exercise 

The benefits of exercise to physical health are well known; researchers have found 
that individuals who exercise regularly are less tense and more self-confident as 
well. Cardiovascular conditioning, which strengthens the heart and lungs, is espe¬ 
cially important in reducing stress and increasing one’s sense of well-being (Cooper, 
1978, p. 77). 

Stress and the Organization 

Many public organizations, like their counterparts in the private sector, recognize the 
tremendous drain on resources that stress can cause. Stress not only causes managers and 
employees to perform poorly because of distraction, poor concentration, and exhaustion, 
but can lead to more severe mental and physical problems and addictions. Consider the 
following facts: 

Studies have shown that it costs companies $100,000 per year more to employ a 
smoker than a nonsmoker due to increased sickness and absence. 

Over 1 million workers call in sick each day, resulting in over 330 million lost workdays. 

Losing an executive at 41 years of age to death or disability can cost between $600,000 
and $1 million. (Hopper, 1988, p. 4). 

In addition to the direct costs of illnesses, through diminished productivity or having to 
replace workers, organizations suffer in other ways. For example, temporary workers or 
replacement personnel are not likely to be as effective as full-time permanent employees, 
thus limiting service delivery. 

Many organizations have developed employee assistance programs to help employees 
through difficult times. The programs may deal directly with mental or physical prob¬ 
lems through drug and alcohol counseling, smoking cessation sessions, hypertension 
control, and so on, or they may use a preventive approach, seeking to promote a health¬ 
ier workforce through exercise and fitness programs, health screening, or nutrition and 
weight control. Many smaller organizations are not able to afford employee assistance 
efforts on their own, but there are abundant resources in most communities to provide 
needed help. The point is that if you or one of your employees could benefit from such 
a program, you should not hesitate to become involved; both you and your organization 
will benefit. 



Time Management 3 75 

Time Management 

Your ability to use time effectively will be one determinant of your success as a manager. 
It will be difficult to manage others’ affairs if you cannot manage your own, especially 
because your activities will directly affect the people you will manage. It is not surprising 
that strategies and techniques for more effective time management have evolved and that 
time management training programs are popular today. (The techniques taught in such 
programs are as helpful to students facing the many demands of college life as they are 
to managers in public or private organizations.) 

Time management begins with establishing goals. Goals are the heart of time manage¬ 
ment; everything else is just a tactic or a technique. Most approaches to time management 
tell you to set your own goals (though in some organizations, supervisors are involved 
in setting goals). Although your own goals may or may not equate with the goals of the 
organization, they will probably overlap at least to some extent. 

Remember also that you do not necessarily set a goal for a lifetime. Goals change. 
They are modified or abandoned, and this is normal, even desirable. One should con¬ 
sciously set goals, but reevaluate them periodically. New goals can replace old goals or 
goals that have been accomplished. Most people have more than one goal, which creates 
a potential problem if they are not managed properly. Not all goals are equally impor¬ 
tant; we constantly have to choose which goals to give priority. Many choices favor one 
goal at the expense of others, so if one’s goals are not ranked, at least roughly, it will be 
difficult to use them to make choices. 

Once you have established goals and your priorities among them, you can genuinely 
begin to manage your time better, which means you will be managing your work better. 
You can even answer the constant question, “What am I going to do today?” Part of 
your day is primarily under your control, but part of it is not. Effective time manage¬ 
ment can help you manage both parts. 

You can manage the part of your day that is primarily under your control by using a “to 
do” list, one of the older time management technologies. Even as a student, you may cur¬ 
rently be using some version of it. One of the best examples of an earlier manifestation of a 
“to do” list involves Charles Schwab, the president of Bethlehem Steel early in the twentieth 
century (LeBoeuf, 1979, pp. 52-54). Schwab evaluated his work performance as president 
of the company and decided he was not doing as good a job as he should be. He hired Ivy 
Lee as a consultant to advise him on how to do a better job, and the two struck a rather 
unique agreement on how they would proceed. Lee was to observe Schwab at work and 
recommend ways Schwab could improve. Schwab would do whatever Lee told him, and he 
would pay Lee whatever he thought the recommendations were worth after trying them. 

Lee’s major recommendation was for Schwab to begin each workday by writing a list of 
everything he could think of that he might do that day. Schwab was then to examine the 
list and identify the most important thing he might do and begin work on that item imme¬ 
diately. If he completed the task during the day, he was to pick the second most important 
task to work on, and so forth. The next day, Schwab was to write out a completely new 
list, pick out the most important task on it, go to work on it, and proceed as he had on the 



376 Chapter 10 Personal Skills in Public Management 

preceding day. Schwab tried this recommendation for a few weeks, and he must have 
thought it was valuable, because he sent Lee a check for $20,000 (and that $20,000 was in 
1910 dollars!). Lee’s advice was basically what we know today as the “to do” list. 

The “to do” list is simply a list of the things you intend to do during the day, usually 
ranked in some order of importance. Since Schwab and Lee’s time, a number of systems 
have been developed to rank activities. One popular system is the ABC system (Lakein, 
1973). Each activity is placed into one of three categories on the basis of how important 
it is (this is where your overall goals come into play). “A” activities are essential to com¬ 
plete; “B” activities, less so; and “C” activities are those that can wait. Another popular 
system is a five-category scale in which participants assign scores to activities as follows: 
1 = important and urgent, 2 = important but not urgent, 3 = urgent but not important, 
4 = busywork, and 5 = wasted time. 

Whatever system you use, the important thing is to prioritize your activities to iden¬ 
tify which are most important. You should then plan to devote more time and energy 
to the important activities. Prioritized goals can serve as criteria for placing a particular 
activity in one category or another. Without prioritized goals, you will have to create 
a new criteria system for each “to do” list you write. 

We have described the “to do” list as a daily time management system. It is actually 
very flexible, and some people create weekly or monthly “to do” lists in addition to or in 
place of a daily list. Charles Schwab wrote his list at the beginning of each day, but many 
people write theirs at the end of one day for the next, and some people write a tentative 
one at the end of the day and revise it when they get to work the next morning. Regardless 
of when you write the list, it is crucial that it be written down and the activities prioritized 
in some way. In this way, you are really managing your work as you manage your time. 

We said earlier that a prioritized set of goals will help you manage the parts of your 
time that are not primarily under your control, just as they will help you deal with the 
parts of the day that are under your control. This is because the goals will help you 
determine how to respond to the uncontrolled parts of the day. They will help you decide 
how to react in terms of energy and concern about events beyond your control, and in 
this way manage some important internal resources. 

Creativity and Problem Solving 

One of the most important personal skills for managers is the capacity for creative prob¬ 
lem solving. There are many approaches to problem solving; indeed, if a random sam¬ 
ple of people is given an identical problem or situation, individuals in the sample will 
approach the problem differently and often arrive at very different decisions about what 
to do. A psychological model developed by Carl Jung provides a compelling explanation 
for this phenomenon and for why the differences will be systematic. Jung’s model of psy¬ 
chological types is a way to classify people according to differences in their psychological 
makeup. The model describes various psychic functions based on how we take in and 
process information. 



Creativity and Problem Solving 3 77 

Jung identified two fundamental ways in which people acquire information or perceive 
things and labeled the two modes intuition and sensation. Perception by sensing is infor¬ 
mation acquired directly by means of the senses (seeing, hearing, touching, and so on); 
sensing is a conscious form of information acquisition. Information acquisition through 
intuition is mainly an unconscious process, in which ideas are added indirectly to per¬ 
ceptions made through the senses and associations are made between elements perceived 
by the senses. A genuine hunch or insight (not a guess) is an example of an intuitive per¬ 
ception. Emphasis on one mode of perception or the other may lead the individual to 
different ways of approaching the world; some approaches may help in some situations, 
and other approaches may help in other situations. The sensing individual tends to see 
the details of a situation, whereas the intuitive person tends to see the whole, but not the 
parts. Similarly, the sensing person will be clear about what is actually occurring at the 
moment, while the intuitive person will look more creatively at the possibilities that 
lie ahead. 

Networking 

An exploration into the works of Jungian psychology can begin at the C. G. Jung 
Page (http://www.cgjungpage.org). This site provides information on the Swiss 
psychologist’s work and has links to other resources, including research institutes. 
Next, a lexicon (http://www.cgjungpage.org/jplexicon.html) may help clarify some 
of the concepts in the research. Finally, the search may take you to the abstracts 
page (http://www.cgjungpage.org/abcwpage.html), where you can access samples 
of Jung’s work. 

After information is acquired, it must be processed; decisions must be made about 
what to do. Jung’s model identifies two major modes of information processing and 
evaluation. Making choices based on thinking is the rational and logical way of dealing 
with information; one attempts to develop logical, objective conclusions. Feeling, on the 
other hand, emphasizes making a value judgment, deciding according to what is right 
or wrong, or based on a preference about what is better or worse. The evaluation is not 
necessarily illogical, but its basis is always a human value and thus ultimately subjec¬ 
tive. There are advantages in each approach. An individual who relies on thinking will 
be careful and objective, though he or she may appear cold and uncaring. The per¬ 
son who relies on feeling will appear friendly and engaging, but may not be as exact or 
objective as some might want. 

Jung argued that all people employ all four psychic functions from time to time, but over 
the years, each person comes to rely on some functions more than others. Some people tend 
to emphasize sensing, others emphasize intuition; some people emphasize thinking, others 
emphasize feeling. (Although we are discussing categories, when the dimensions are actually 
measured, people seem to differ more in degree than categorically.) Based on the combi¬ 
nation of preferences, we can arrive at four different psychological “types,” illustrated in 
Figure 10.1. Certain personal characteristics or predispositions have been found to be asso¬ 
ciated with each of the four types of information acquisition/evaluation. 



378 Chapter 10 Personal Skills in Public Management 

FIGURE 10.1 

Jungian Psychological Types 

The upper left-hand cell in our illustration is the sensing/thinking combination, which 
combines the realistic view of the sensing function with the logical and objective capaci¬ 
ties of the thinking function. The sensing/thinking person is likely to be good at handling 
data and solving problems logically. People like this tend to gravitate toward occupa¬ 
tions such as accounting, computer programming, and engineering. 

In many ways, the lower right-hand corner is the opposite of the sensing/thinking combi¬ 
nation, as it combines intuition and feeling. The intuition/feeling combination draws on the 
creativity of the intuitive function and the strong emotional sense of the feeling function. 
The intuitive/feeling person is likely to be concerned with the future and with creativity, but, 
at the same time, be sensitive to and caring about the needs of individuals. Characteristic 
occupations here are art, advertising, public relations, and personnel management. 

The lower left-hand cell combines intuition and thinking. The intuitive/thinking combi¬ 
nation brings together the creativity of the intuitive function with the logical, problem¬ 
solving ability of the thinking function. The intuitive/thinking person is likely to be creative 
with respect to problem solving but is also likely to work out the details of a particular 
solution logically and objectively. Many scientists and architects share these preferences, 
and, indeed, many middle and upper managers are found here. Top managers must be 
careful and objective, but are also relied upon to plan the work of the organization, a task 
that requires the future orientation that comes with intuition. 

The upper right-hand cell combines sensing with feeling. The sensing/feeling combina¬ 
tion brings together the preference of the sensing function for immediate data and the feel¬ 
ing preference for values and emotions. A sensing/feeling person sees the world in terms of 
immediate sense data, but is also concerned about the human implications of action based 
on that data. Teaching, counseling, and sales are associated with this combination, as are, 
again, significant numbers of managers. 



Models of Individual Decision Making 379 

The point is not that one or the other of these combinations is better than the other, but 
that they are different. Consequently, we would expect an individual’s approach to solving 
problems to differ according to how the individual acquires and processes information. 
Presenting so-called identical situations to a random sample would not seem at all identical 
to the people in the sample. Because the subjects would tend to use different modes of 
acquisition and evaluation, they would see very different things and reach very different 
conclusions. At least one result of the differences would be different decisions. How one 
sees things makes all the difference in the world when it comes to solving problems. 

The implications of these differences for management are profound. We have already 
emphasized the diversity of situations in which managers find themselves. We can now 
say that different situations may require the use of different psychic functions. As an illus¬ 
tration, imagine two individuals who are about to buy a house looking in the window of 
that house. One, emphasizing the sensing function, might say, “This house is a wreck— 
the carpet is torn up; the ceiling is falling down; the walls are dirty.” On the other hand, 
an intuitive person looking in the same window at the same time might say, “We could do 
great things with this room; if we fixed the carpet and the ceiling and if we painted the 
walls, this could be a real showcase.” The two people see things quite differently. 

Translating these differences in viewpoint into daily activity, you would surely acknowl¬ 
edge that the activity of balancing one’s checkbook is not one where you want a great deal 
of creativity; instead you want to be careful about the immediate data and work with 
those data in the most logical and objective way possible. On the other hand, there are sit¬ 
uations where you will need especially creative solutions to problems. In those situations, 
the intuitive capacity is very helpful. (Remember that we all have all the functions at our 
disposal, but we may have to work a little harder at those we do not ordinarily rely upon.) 

Similarly, different management activities draw on different psychic functions. For 
example, monitoring work and performance is likely to be facilitated by carefully 
observing performance data. On the other hand, the planning function is likely to be 
aided by the creative potential of the initiative function. Depending on the situation, 
you may be required to emphasize one psychic function or another. If your normal pref¬ 
erence is to emphasize the sensing function, you may wish to call more consciously on 
your intuitive capacities where long-term planning is required. You may sometimes 
want to bring together different people who typically rely on different functions to help 
solve various problems. You may, for example, want to bring in people you recognize 
as having strong sensing and thinking capacities to help solve accounting problems. 
Or, you may wish to bring in individuals noted for strong intuitive and feeling capabili¬ 
ties to help solve human resource planning issues. 

Models of Individual Decision Making 

One could argue that decision making is the most universal managerial activity because it 
is involved in all the other functions of management. It is impossible to plan, control, staff, 
direct, organize, or perform any of the miscellaneous management functions without 



Chapter 10 Personal Skills in Public Management 

making decisions. All management involves either explicit or implicit decisions. We will 
examine decision making at the individual level and explore several models of how deci¬ 
sions should be made and how decisions are actually made. 

A great deal of research has been conducted concerning rational processes for decision 
making, some of which we discussed in terms of rational policy analysis. In its purest 
form, the rational model of decision making suggests the following steps: 

1. Find an occasion for decision making (decide to decide) and then formulate the prob¬ 
lem in the best way possible. 
2. Develop as many alternative solutions as possible. 
3. Choose the alternative that maximizes the possibility that we will attain our goals or 
standards. 

In other words, analyze the problem, generate alternative solutions, and choose from 
among the solutions. For our purposes, the most important lesson of the rational decision 
model lies at the beginning—becoming aware that a problem exists and correctly defin¬ 
ing the problem. If you are not aware of a problem, you will not go through the rest of 
the process to solve it. Your chances of solving the problem are low. (The probabilities are 
not zero, however, since problems are sometimes solved by accident.) Even if you are 
aware that a problem exists, your chances of solving it do not increase much if you do 
not identify it correctly. 

Definition of the situation is one’s perception of reality. Human beings need to make 
sense of things. We do not tolerate chaos well, and thus are continually defining and 
redefining situations we find ourselves in. Aside from our need to make sense of things, 
defining the situation is important because it is the basis upon which we act and make 
decisions to act. All mentally healthy individuals behave in a way consistent with their 
definitions of situations. 

When it comes to problem solving, incorrect diagnosis of the problem (that is, an 
incorrect definition of the situation) can be disastrous; the correct definition is half the 
battle. An example from the Cold War days of the early 1960s illustrates this point. 
During this period, the United States and its allies had installed long-range radar systems 
to monitor the Soviet Union and to give warning of any Soviet attack by either missile or 
bomber. Soon after the radar systems were installed, the commander of an installation in 
England was made aware of a set of images on the station’s screens that looked as if the 
Soviet Union were launching a massive missile assault against the United States. It was 
the commander’s job to evaluate the information, report it to Washington, and include a 
recommendation and evaluation of the accuracy of the information. 

Since missiles travel pretty fast, the commander did not have a great deal of time to 
contemplate the situation. But, being a calm and collected individual, the commander 
thought things over a few moments before he made his report. He remembered that 
Nikita Khrushchev, then premier of the Soviet Union, was in New York City addressing 
the United Nations that day and thought it would be an unlikely time for the Soviets to 
attack. He also took into consideration the fact that the radar system was new, and that 
new systems sometimes have bugs in them. Putting all this together, he made his report, 
including in it his relatively low confidence in the information on his screens. He stated 



Models of Individual Decision Making $8i 

that he believed there was a malfunction somewhere in the system and recommended 
that the radar images not be interpreted as an attack on the United States. He was cor¬ 
rect; there was no major attack by the Soviet Union. But what was actually happening? 

It turned out that the radars were so powerful that some of the radiation they broad¬ 
cast traveled far out into space. The system operated smoothly for about a week, but then 
the moon orbited into position to be hit by some of the radiation, which was reflected 
back to the radar antennas, in turn creating images on the screens that looked much like 
a flight of missiles heading toward the United States. The computers in the radar system 
had not been programmed to disregard the radiation coming back from the moon. 

The commander was presented with a problem: the decision of interpreting the images 
and making his report. He had two interpretations. One was that the Soviet Union had 
started World War III, the other, that he had a malfunctioning system. One definition of 
the situation might have actually started World War III; the other avoided that catastro¬ 
phe. You can easily see why correct definition of the problem is so critical in a problem¬ 
solving situation. 

The rational decision model is often presented as the way people actually go about 
making decisions (or at least the way they should), and this is probably true to a certain 
extent. It is also clear that, in many cases, solutions to problems are arrived at in a far 
different way. The basis of the rational problem-solving process is the economic assump¬ 
tion that people attempt to maximize their outcomes when they make choices (i.e., deci¬ 
sions). Theoretically, people select a criterion, such as income or profit, then evaluate 
all decision alternatives in terms of that criterion, and select the alternative that will pro¬ 
duce the best results. 

As we discussed in Chapter 8, Herbert Simon, in his studies of organizational decision 
making, found that the rational model rarely describes human problem-solving or decision¬ 
making behavior in real life. He argued that maximizing outcomes is simply not possible 
in most situations and identified several reasons that it is usually impossible (Simon, 1957, 
p. xxvi). All the reasons Simon offers add up to constraints on human beings’ abilities 
to acquire and process information. There are time limits for making most decisions, and 
there are only so many resources available to gather information. Moreover, because we 
care more about some problems than others, our motivation to solve problems varies. We 
are willing to spend more mental and physical energy on some problems than on others. 

Even if we had access to unlimited information about any problem, there are cogni¬ 
tive limits to how much information we can process at any given time. Furthermore, par¬ 
ticularly in managerial situations, we seldom have the luxury of being able to deal with 
just one problem at a time. Other problems compete for our attention, time, and energy, 
which further taxes our cognitive limits. 

Putting all these constraints together, Simon argues that human beings attempt to be 
rational, but they can be rational only within certain limits or bounds. What Simon calls 
bounded rationality (see Chapter 8) suggests that choices will be evaluated, but only 
within the bounds of these constraints. This results in a satisficing criterion for evaluating 
alternatives, rather than in a maximizing one. 

A satisficing decision is one that is just good enough in terms of some criterion. 
Bounded rationality leads to satisficing decisions, and the process, in its pure form, oper¬ 
ates as follows: When an individual faces a choice situation in which a decision must be 



3 <§2 Chapter 10 Personal Skills in Public Management 

made, rather than attempting to gather all possible -information, generate all possible 
alternatives, and choose the alternative likely to produce the best results, the decision 
maker decides what level of outcome (in terms of some criterion) will be satisfactory or 
good enough. The individual then examines choice alternatives one at a time and selects 
the first one that equals or exceeds the minimal (good enough) criterion level. The process 
stops at this point, and the choice becomes the decision. No attempt will be made to 
examine other, potentially better, options. 

That human beings vary in attempts to maximize suggests something of a continuum 
between satisficing and maximizing. But Simon’s work suggests that most decisions, 
most of the time, fall much closer to the satisficing end of the continuum than the maxi¬ 
mizing end, even where we are making important (and potentially costly) decisions. 
Marketing research shows, for example, that people tend to seek out most of the infor¬ 
mation they acquire about new cars after they purchase a new car rather than before. 

Thus, the rational decision-making process can be considered a prescriptive model that 
tells us what we should do to make better decisions, but it does not give us an accurate 
picture of how human beings actually make decisions. Because we tend to satisfice rather 
than maximize, a modified and more limited version of this process, the satisficing model, 
provides the more accurate description. Hence, we can call it a descriptive model, which 
attempts to describe how things actually happen without regard to how they should hap¬ 
pen. Given the nature of managerial work, satisficing may be the only way a manager can 
deal with the constant stream of problems and choice situations that arise daily. 

Interestingly, one alternative model of decision making in the public sector claims to be 
both prescriptive and descriptive. Charles Lindblom’s incremental model of decision mak¬ 
ing assumes that most governmental decisions (and others) usually begin by analyzing the 
existing situation and then move marginally or incrementally away from that position. 
In making a case for new programs, for example, managers often talk about how a new 
idea builds on existing strengths. This descriptive aspect of the model has a familiar ring. 
But, in a curious twist, Lindblom also suggests that the incremental model may even 
make sense normatively: because incremental proposals focus on well-known experiences, 
they reduce the number of alternatives to be considered and thus reduce the complexity of 
the problem at hand (Lindblom, 1968, p. 27). 

Power and Leadership 

The capacity to understand power, especially the capacity to recognize and use the resources 
one has available to influence others, is essential in modern organizations of all types. 
However, power is a far narrower term than leadership. We will consider power as one 
aspect of the larger question of how one might develop greater skills in public leadership. 

Many commentators have argued that improved leadership is essential for us to suc¬ 
cessfully meet the challenges of the coming century. Public opinion data reveal wide¬ 
spread loss of faith in the leadership of business, government, labor, and other private 
and public institutions. But many argue that the problem relates not merely to formal 



Power and Leadership 3 83 

positions of power; rather the failure of leadership is pervasive throughout society. John 
Gardner, the former cabinet secretary and founder of Common Cause, stated, “In this 
country leadership is dispersed among all the segments of society and down through all 
levels, and the system simply won’t work as it should unless large numbers of people 
throughout society are prepared to take leaderlike action to make things work at their 
level” (Gardner, 1987). 

Networking 

For different perspectives on leadership, visit the James MacGregor Burns Academy of 
Leadership (http://www.academy.umd.edu), the Civic Leadership Education Program 
(http://bush.tamu.edu/programs/CLEP), the National Initiative for Leadership and 
Institutional Effectiveness (http://www2.ncsu.edu/ncsu/cep/acce/nilie/), or the Centre 
for Advanced Studies in Leadership (http://www.caslnet.org). 

In this view, leadership is a pervasive phenomenon occurring in families, work groups, 
businesses, and at all levels of government, society, and culture. Leadership, then, should 
be seen not merely as a position someone holds, but rather as something that happens 
in a group or organization, something that comes and goes, something that ebbs 
and flows as the group or organization does its work. Anyone can be a leader, no matter 
how briefly. 

As we have seen, modern society can be described as (1) highly turbulent, subject to 
sudden and dramatic shifts; (2) highly interdependent, requiring cooperation across 
many sectors; and (3) greatly in need of creative and integrative solutions to problems. 
Under such circumstances, ambiguity is increasingly a hallmark of decision making, and 
the involvement (rather than the control) of many individuals in group decisions will be 
necessary. “Leadership . . . will become an increasingly intricate process of multilateral 
brokerage, including constituencies both within and without the organization. More and 
more decisions will be public decisions; that is, the people they affect will insist on being 
heard” (Bennis, 1983, p. 16). Leadership for the future cannot be equated merely with 
the exercise of control by those in formal positions of power. 

What do we know about leadership, especially shared or public leadership? What do 
we know about leadership in the increasingly common situations where no one is really in 
charge such as student organizations, churches, political groups, and so on? Often, much 
of their work is done through committees or other even less formal groups. And those 
committees seem to waste a lot of time and energy, partly because of lack of leadership. 
Even though one person may be designated the leader, rarely does he or she exercise much 
control. Usually, things drift for a while—maybe a long while — until someone finally 
puts forth a suggestion that people pick up on and begin to get excited about. At that 
point, we can say that someone has exercised leadership. 

Somewhat more formally, then, we can define leadership as “the character of the rela¬ 
tionship between the individual and a group or organization that stimulates or releases 
some latent energy within the group so that those involved more clearly understand their 
own needs, desires, interests, and potentialities and begin to work toward their fulfillment” 



Chapter 10 Personal Skills in Public Management 

(Denhardt and Prelgovisk, 1992, pp. 33-44). Where leadership'is present, something 
occurs in the dynamics of the group or organization that leads to change. What is central 
to leadership is the capacity of the leader—whether or not called a leader—to energize the 
group. 

Leadership involves helping the group become aware of a new direction in which to 
move. The leader merely taps and reshapes the consciousness of the group. Acts of lead¬ 
ership express a new direction, but one that is determined by the emerging interests of all 
members of a group. We can say that one exercises public leadership who (1) helps the 
group or organization understand its needs and potential; (2) integrates and articulates 
the group’s vision; and (3) acts as a trigger or stimulus for group action. 

The essence of leadership, therefore, is its energizing effect. But often the people we 
formally refer to as leaders do not really lead; at best, they manage things successfully by 
keeping the group running more or less smoothly. 

Although power may be an important resource to the leader, one need not exercise 
power to bring about change (see Box 10.3). Efforts to control a group are often ulti¬ 
mately destructive of leadership. On the other hand, when the direction of the group or 
organization is selected through a developmental process that gives priority to group 
members’ needs and desires, leadership is much more likely to be enduring. Leadership 
for the future will require much more than a formal position. 

What skills will you need to be successful as a leader? They begin with those we ordi¬ 
narily associate with effective management—the ability to use power and influence 
effectively, the ability to communicate with and motivate others, and the ability to work 
in and among diverse groups of people. (We will discuss most of these skills in the next 
chapter.) But leadership builds on these skills in some interesting ways. 

To energize the group for example, the leader must know how to sense its underlying 
desires, sometimes even before those desires are clear even to the group members. The 
leader must also be able to act in ambiguous situations and to take risks; leadership 
involves change, and change is often difficult for both group and leader. Developing the 
personal strength to face change is important. 

Leadership has often been viewed in terms of the exercise of power by one person or 
group over another—getting people to do what one wants them to do by manipulating 
power and influence. Leadership in the future will be more and more independent of 
power, and the most critical leadership skills will be the personal (rather than interper¬ 
sonal) skills associated with correctly empathizing with and reading a group, acting with 
a sense of direction in the presence of ambiguity, and having the courage to take risks 
when change is warranted. 

Helgesen (1996) calls this new approach grassroots leadership. She argues that 
today’s organizations differ dramatically from those created in past generations. Power 
becomes shared throughout the group and, in turn, leaders “are to be found not only 
among those at the top, the ‘lead horses,’ but also among those who constitute what in 
the industrial era we called the rank and file” (Helgesen, 1996, p. 21). Accordingly, each 
individual plays a key role in shaping the organization; each helps the group deal with 
issues of organizational change. 

Leadership, in this context, relates more to sharing power among the group rather than 
using power for the purpose of control. Such a change in power and leadership stems from 



Power and Leadership 3 85 

BOX 10.3 

Bases of Social Power 

Power is really much more complex than we often think. For example, the power 
we exercise is based on a number of different factors that operate in social situations. 
A classic research article describes the following “bases of social power.” 

1. Reward power: the ability to meet the needs of another, or control the other by 
rewarding the desired behavior. Pay, promotions, or bonuses may be ways that 
organizations exert reward power over employees. 

2. Punishment power: coercive power, or the ability to deliver a painful or punish¬ 
ing outcome to others, and hence control them by their desire to escape the 
punishment. Firing, ridiculing, or disciplining an individual are common tech¬ 
niques of punishment. 

3. Expert power: power based on the ability to understand, use, and deliver infor¬ 
mation that others need. Engineers or scientists may exert great influence in an 
organization based on their knowledge of scientific techniques for manufactur¬ 
ing a product, etc. 

4. Legitimate power: control or influence exerted by virtue of one’s holding a par¬ 
ticular position in the organizational structure. The power is vested in the 
rights and responsibilities of the position, not the person. Thus, a company 
president or chairman of the board has power by virtue of the rights and 
responsibility given to whoever holds the office. Compliance with legitimate 
power occurs because other individuals in the organization respect the organi¬ 
zational structure and the rights and responsibility that accompany particular 
positions. 

5. Referent power: liking, charisma, or the desire to comply with someone’s wishes 
because you are attracted to him or her are examples of referent power. Control 
based on referent power depends upon the power-holder’s ability to have others 
like and be attracted to him or her, and to follow his or her leadership because 
of this attraction. 

SOURCE: Adapted from John R. R French, Jr., and Bertram Raven, “The Bases of Social Power,” 
in Dorwin Cartwright and Alvin F. Zander, eds., Group Dynamics, 2nd ed., FlarperCollins Publishers, 
1962. Copyright © 1962 by Dorwin Cartwright and Alvin F. Zander. Reprinted by permission. 

the fact that most individuals within an organization, though not serving in traditional 
positions of power, represent the principal link between the group and its environment. 
Those referred to as the rank and file are those who ensure that the organization achieves 
its primary objectives. 

So, in order for the new knowledge-based organizations of today to be successful, 
greater autonomy and decision-making capacity should be distributed to the front line, 
with those closest to the situation serving as the leaders of change. 



3 86 Chapter 10 Personal Skills in Public Management 

Summary and Action Implications 

Public management is a complex and diverse career. One moment you may be develop¬ 
ing a budget for your agency; the next moment you may be leading a meeting on sick 
leave policy; and the next, you may be counseling an employee who is feeling burned 
out. The diversity of the work and its occasional intensity mean that you not only need 
to understand the ethical and political context of your work, but also to develop the per¬ 
sonal and interpersonal skills to bring about action. 

Each of these skills is deeply rooted in your own identity and character. Because they 
are so personal, these skills underlie nearly everything you do. Thus, understanding 
yourself is an essential prerequisite to acting effectively and responsibly in public organi¬ 
zations. The more you are able to learn about yourself—that is, know your strengths 
and weaknesses, your desires and frustrations—the more effective you will be in your 
work with others. If you are able to reflect on your experiences and share them with oth¬ 
ers, and to learn from others’ experiences as well, you will be a much more effective 
learner and a much more effective manager. 

Nowhere is this admonition more appropriate than in the area of leadership. To lead 
others, you must first know yourself. Leadership involves more than power or control. 
Whereas power may be a resource, leadership capabilities are more likely to arise from the 
ability to understand the emerging desires of a group, to articulate the vision or direction 
the group wishes to follow, and to stimulate the group to action. Leadership unquestion¬ 
ably requires social or interpersonal skills, but it is based in empathetic understanding, the 
ability to express the aspirations of the group, and the confidence to undertake the risks 
associated with change. Nowhere is this more true than in the realm of public leadership. 

Terms and Definitions 

Role ambiguity: Occurs when the rights and responsibilities of the job are not clearly 
understood. 

Role conflict: Occurs when one faces two different and incompatible sets of demands. 

Satisficing decision: One that is just good enough’’ in terms of some criterion. 

Support system: Network of people with whom one can talk about problems. 

Study Questions 

1. Discuss the activities involved in a typical managerial day. 
2. Discuss the concept of stress management. What are some specific techniques for 

reducing stress levels? 



Cases and Exercises 387 

3. The ability to effectively use the time available is one determinant of a successful 
manager. How do time management practices help improve success? 

4. Explain how individuals vary in terms of creativity and problem-solving skills. 
5. What features are present in rational decision making? 

Cases and Exercises 

1. Chapter 1 listed management skills developed by the U.S. Office of Personnel 
Management. Part of that list is reproduced here. Go through the list and assess your 
level of development in each of the skills. You might want to verify your evaluations 
by talking with others who know you well and have seen you operate in groups and 
organizations. After you have a sense of your own level of skill development, try to 
identify the activities (classes, workshops, readings, and so on) that would help you 
improve your skills in areas that need some work. 

The “How” of Management Effectiveness Characteristics 

Broad perspectives: Broad, long-term view; balancing short- and long-term consid¬ 
erations. 

Strategic view: Collecting, assessing, analyzing information; diagnosis; anticipation; 
judgment. 

Environmental sensitivity: Tuned into agency and its environment; awareness of impor¬ 
tance of nontechnical factors. 

Leadership: Individual; group; willingness to lead, manage, and accept responsibility. 

Flexibility: Openness to new information; behavioral flexibility; tolerance for stress, 
ambiguity, change; innovativeness. 

Action orientation: Independence, proactivity; calculated risk taking; problem solv¬ 
ing; decisiveness. 

Results focus: Concern with goal achievement; follow-through, tenacity. 

Communication: Speaking; writing; listening. 

Interpersonal sensitivity: Self-knowledge and awareness of impact on others; sensitiv¬ 
ity to needs, strengths, and weaknesses of others; negotiation; conflict resolution; 
persuasion. 

Technical competence: Specialized expertise (e.g., engineering, physical science, law, 
accounting, social science). 

2. The following classic exercise in group problem solving will illustrate several impor¬ 
tant aspects of the decision-making process. 

Your spaceship has just crash-landed on the moon. You were scheduled to ren¬ 
dezvous with the mothership 200 miles away on the lighted surface of the moon, but 



Chapter 10 Personal Skills in Public Management 

the rough landing has ruined your ship and destroyed all the'equipment on board, 
except for the fifteen items listed below. 

You and four to seven other people should take this test individually, without 
knowing one another’s answers, then take the test as a group. Share your individual 
solutions and reach a consensus — one ranking for each item that best satisfies all group 
members. 

Your crew’s survival depends on reaching the mothership, so you must choose the 
most critical items available for the 200-mile trip. Your task is to rank the fifteen 
items in terms of their importance for survival. Place a 1 by the most important item, 
a 2 by the second most important, and so on through fifteen, the least important. 

box of matches 

food concentrate 

50 feet of nylon rope 

parachute silk 

solar-powered portable heating unit 

two .45-caliber pistols 

one case of dehydrated evaporated milk 

two 100-pound tanks of oxygen 

stellar map (of the moon’s constellation) 

self-inflating life raft 

magnetic compass 

5 gallons of water 

signal flares 

first-aid kit containing injection needles 

solar-powered FM receiver-transmitter 

NASA experts have determined the best solution to this task. Their answers appear in 
Appendix A. 

SOURCE: Jay Hall, “Decisions, Decisions, Decisions,” Psychology Today 5 (November 1971): 51-88. 
Reprinted with permission from Psychology Today Magazine. Copyright ©1971 by Sussex Publishers, Inc. 

3. Stress profile: Place your answer to each of the following questions in the space provided 
before each number. Answer with: (a) almost always true; (b) often true; (c) seldom true; 
(d) almost never true. 

1. I hate to wait in lines. 
2. I often find myself racing against the clock to save time. 
3. I become upset if I think something is taking too long. 
4. When under pressure I tend to lose my temper. 
5. My friends tell me that I tend to get irritated easily. 
6. I seldom like to do anything unless I can make it competitive. 
7. When something needs to be done, I am the first to begin even though the details 

may still need to be worked out. 



For Additional Reading 389 

8. When I make a mistake, it is usually because I have rushed into something with¬ 
out giving it enough thought and planning. 

9. Whenever possible I will try to do two things at once, like eating while working 
or planning while driving or bathing. 

10.1 find myself feeling guilty when I am not actively working on something. 
Scoring: a = 4, b = 3, c = 2, d = 1. Score: 
This exercise tests Type A behavior, characterized by impatience with delays, urgency, 

competitiveness and stress-related illness. A total score of 26 or above indicates that you 
tend toward this type. 

SOURCE: Self-Assessment Exercise from Controlling Stress and Tension by Daniel Girdano and George 
Everly. Copyright © 1979 by Prentice-Hall, Inc. Reprinted by permission of Pearson Education, Inc. 

4. Although power should not be equated with leadership, it can certainly be an impor¬ 
tant resource to public managers. To illustrate some of these types of power, think 
back over the past week or two as you attended class and worked in various groups 
and organizations, and answer the following questions: 
a. Who were the two or three people during this period who exercised the greatest 

power over you? 
b. Who were the people during this period over whom you exercised the most power? 
Now return to the “Bases of Social Power” in Box 10.43. What was the basis for the 

power that others exercised over you? What was the basis for the power that you exercised 
over others? How might you most effectively build up your power base in groups and 
organizations to which you belong? 

For Additional Reading 

Allison, Graham, and Philip Zelikow. Essence of Decision: Explaining the Cuban Missile 
Crisis. 2d ed. New York: Longman, 1999. 

Bingham, Richard D., et al. Managing Local Government: Public Administration in 
Practice. Newbury Park, CA: Sage Publications, 1991. 

Bozeman, Barry, and Jeffrey D. Straussman. Public Management Strategies: Guidelines 
for Managerial Effectiveness. San Francisco: Jossey-Bass, 1990. 

Cohen, Stephen R. Principle-Centered Leadership. New York: Simon and Schuster, 1991. 
Conger, Jay A. Learning to Lead: The Art of Transforming Managers into Leaders. 

San Francisco: Jossey-Bass, 1992. 
Covey, Stephen R. The Seven Habits of Highly Effective People: Restoring the 

Character Ethic. New York: Simon and Schuster, 1990. 
Frederickson, H. George. The Spirit of Public Administration. San Francisco: 

Jossey-Bass, 1996. 
Garnett, James L. Communicating for Results in Government: A Strategic Approach for 

Public Managers. San Francisco: Jossey-Bass, 1992. 



39° Chapter 10 Personal Skills in Public Management 

Holzer, Marc, ed. Public Service: Callings, Commitments and Contributions. Boulder, 
CO: Westview Press, 1999. 

Murray, Nancy. An Inner Voice for Public Administration. Westport, CT: Praeger 
Publishers, 1997. 

Whetten, David A., and Kim S. Cameron. Developing Management Skills. 2d ed. 
New York: HarperCollins, 1991. 

APPENDIX A 

“Lost on the Moon " Exercise: Answers from NASA Experts 

1. Two 100-pound tanks of oxygen: most pressing survival need 
2. Five gallons of water: replacement for tremendous liquid loss on the sunlit side of 

the moon 
3. Stellar map of the moon’s constellation: primary means of navigation 
4. Food concentrate: efficient means of supplying energy requirements 
5. Solar-powered FM receiver-transmitter: for communication with mothership; but 

FM requires line-of-sight transmission and short ranges 
6. Fifty feet of nylon rope: useful in scaling cliffs, tying injured together 
7. First-aid kit containing injection needles: needles for vitamins; medicines, etc.; will 

fit special aperture in NASA spacesuits 
8. Parachute silk: protection from sun’s rays 
9. Self-inflating life raft: carbon monoxide bottle in military raft may be used for 

propulsion 
10. Signal flares: distress signal when mothership is sighted 
11. Two .45-caliber pistols: possible means of self-propulsion 
12. One case of dehydrated evaporated milk: bulkier duplication of food concentrate 
13. Solar-powered portable heating unit: not needed unless on dark side 
14. Magnetic compass: magnetic field on moon is not polarized; worthless for navigation 
15. Box of matches: no oxygen on moon to sustain flame; virtually worthless 



Chapter 11 

Interpersonal Skills and 
Group Dynamics 

The ability to work effectively with other people is absolutely central for the public 
manager. To persuade people on issues, to encourage and motivate your employees, to 
represent your organization well before external groups — these and many other inter¬ 
personal skills contribute to your success as a public manager. Whereas it was once 
thought that managers were born, not made, we now know that the skills managers 
need can be learned and improved. By carefully considering and constantly practicing 
good management skills, you can become more effective. 

Communications 

As we saw in Chapter 10, most of a manager’s typical day is spent in some form of 
communication activity; some days are devoted almost exclusively to communications. 
The ability to communicate well is necessary for any adult to function successfully in 
American society. Indeed, research has shown that, on the average, adult Americans 
spend 70 percent of the waking day in some form of communication activity (Rankin, 
1929). He classified how people spent their communication time, and found that 
9 percent of the time was spent writing, 16 percent reading, 30 percent speaking, and 
45 percent listening. 

We will discuss the communication modes of listening, speaking, and writing. (We 
will not address reading, except to note that the special skill known as speed reading is 
probably one a manager would find useful.) 

Listening 

We do more listening than we do any other form of communication. Recent research 
focusing exclusively on managers reveals that managers spend a greater than average 
portion of their time listening—about 63 percent of the day. Recall that the studies 
of managerial activities we discussed in the last chapter indicate that a majority of a 
manager’s communication interactions are initiated by others. Because most are in the 
form of face-to-face interactions, this finding implies a lot of listening. 

391 



392 Chapter 11 Interpersonal Skills and Group Dynamics 

BOX 11.1 

Principles of Effective Listening 

1. Have a reason or purpose. 
2. Suspend judgment initially. 
3. Resist distractions. 
4. Wait before responding. 
5. Rephrase what you listen to in your own words. 
6. Seek the important themes. 
7. Use the thinking-speaking differential to reflect and find meaning. 

But doing a lot of listening does not mean that managers listen well. Listening is 
not the same as hearing, and, although hearing cannot be altered without medical or 
technical intervention, one can substantially improve the quality of one’s listening with 
proper motivation and training. Let us first review some basics of effective listening 
(see Box 11.1). 

Have a Reason or Purpose 

This is the most important principle of those we will discuss. Having a purpose or 
a reason to listen provides the motivation to listen, and, generally speaking, anything 
you are motivated to do, you will do better than if you are not motivated. Listening is 
no exception. One must be motivated to listen well; it does not just happen. Without 
motivation, you will not use the other six principles, or you will not use them as well as 
you could. 

But, you ask, what if I don’t have a reason to listen? Then find one. Actively search 
for a reason to listen to what is being said. Ask yourself, “How can this information 
help me do my job better?” Or, “How can I use this information in some way, on the job 
or elsewhere?” Finding a reason to listen will provide the motivation to use all the other 
principles and techniques. 

Suspend Judgment Initially 

The key word in this phrase is “initially.” You will need to evaluate the material you 
listen to, but you should wait until you hear the entire message before you begin the eval¬ 
uation. This can be difficult. In an election year, for example, if we know a particular 
candidate’s party, we are likely to evaluate what the candidate is going to say before he or 
she even begins speaking. It is not coincidental that television and radio advertising for 
many candidates does not prominently identify the candidate’s party. The advertisers 
want to increase the chances of having the message heard rather than losing half the 
audience immediately by identifying the speaker as a Democrat or Republican. To make 
a judgment before listening carefully to what someone is saying is the opposite of the 
“suspension” principle. 



Communications 393 

Resist Distractions 

Many things can distract us when we are trying to listen. The distraction principle tells 
us to fight back, to actively resist whatever may be distracting us. Among the many 
things that distract us, various sounds are usually the most powerful. The sound may be 
a nonverbal noise, such as the siren from a passing fire engine or ambulance, or the 
voices of several people speaking at once, or something about the way the speaker talks. 
Regardless of what type of sound is creating the distraction, the remedy is to resist, to 
try harder. 

In this case, trying harder means that you should increase your concentration. If you 
are in a face-to-face situation with a speaker, make sure you maintain constant eye 
contact. You can also lean a little bit in the direction of the speaker. By increasing your 
level of concentration, you can resist distractions you would have thought impossible to 
overcome. And that is the problem with distractions—they become an excuse for not 
even trying to listen, because “It is impossible to hear what she is saying.” 

A common classroom demonstration in listening skills illustrates the distraction princi¬ 
ple (as well as others). Two volunteers read a short paragraph to the class. The volunteers 
are positioned in front of the class, about fifteen feet away from each other. Each has 
a sheet of paper containing a short paragraph (which takes no more than thirty to forty 
seconds to read). Each student in the class is assigned to listen to one or the other of the 
two volunteers, but not to both. The students are instructed not to take notes while the 
paragraphs are being read, but, at the end of the reading, to write down something about 
each of the major points their speaker has read. 

The trick is that each volunteer has a different paragraph and they read the para¬ 
graphs simultaneously! After the first round of the exercise, checking usually reveals that 
only a small number and sometimes none of the students in the class are able to write 
down something about every major point their speaker read. The instructor then reviews 
the eye-contact and learning points, picks two new volunteers, gives them two new para¬ 
graphs, and repeats the exercise. The second time around it is not unusual to find that 20 
percent to 25 percent of the class has written down something about each major point. 

This exercise demonstrates that there is variability in the quality of listening, both 
between and within individuals. It also demonstrates that it is possible to resist even a 
major distraction. The effectiveness of the demonstration lies in the fact that it shows 
that our ability to resist distractions is much higher than we realize, and that we can 
overcome a great deal to improve the quality of our listening. 

Some distractions are less obvious, and are perceived only semiconsciously. One such 
distraction for many Americans is English spoken with a foreign accent or with a differ¬ 
ent regional accent. Professor Allen Bluedorn recalls learning this lesson while he was in 
the U.S. Army, taking part in a listening course. The course made the same point about 
distractions that we have made, and he wondered if he had been allowing the fact that 
people spoke with different accents to become excuses not to listen. (He was stationed 
at Fort Bliss in El Paso, Texas, and had ample opportunities to hear English spoken with 
a Spanish accent.) 

The approach he used to test the principle was to simply concentrate harder the 
next time he encountered someone who spoke with a Spanish accent. To his surprise, by 



Chapter 11 Interpersonal Skills and Group Dynamics 

concentrating harder, he was able to understand completely what the person said. He 
concluded that he had indeed been succumbing to the distraction of the accent, and 
it had become an excuse not to listen well. This lesson is important in today’s increas¬ 
ingly multicultural organizations, where English is often spoken with a wide variety of 
accents. But the larger and more important lesson is that even substantial distractions 
can be overcome. 

Wait before Responding 

The response principle suggests that one relax and wait for natural opportunities to speak, 
instead of jumping into the conversation immediately. When we are burning to contribute 
to a discussion or conversation, we become too excited about getting into the conver¬ 
sation; we concentrate on whatever it is we want to say and stop concentrating on and 
listening to what the speaker is saying. The response principle suggests that one wait for 
a natural opportunity to contribute; try to flow with the conversation as an event rather 
than disrupting it by speaking at the wrong time. 

Rephrase What You Listen to in Your Own Words 

The rephrasing principle suggests an incredibly simple, yet powerful, way to check one’s 
understanding. The idea is merely to take something you hear (an idea, instructions, and 
so on) and put it into your own words. You then repeat it to the person who gave you the 
information and ask if that is what was meant. As easy as it seems, this is an excellent 
way to check understanding and avoid mistakes. When you give instructions, you can ask 
the person who is receiving them to do the same thing. You can say, for example, “I am 
not sure I explained that very well. Please tell me what you got out of that.” 

Seek the Important Themes 

The thematic principle indicates that the main ideas are more important than facts — so 
important that they are the general keys to understanding and retaining what is said. 
Understanding the main ideas provides a framework for organizing the facts, which 
makes the facts themselves easier to remember. 

The man usually credited with starting the listening movement over thirty years ago, 
Ralph Nichols, demonstrated this point in his research. He discovered that A and B stu¬ 
dents reported different listening habits than C and D students. In surveys of hundreds 
of students, he discovered that the A and B students gave a much different response to 
the question, “What do you listen for first when you attend a lecture?” than did the C 
and D students. The A and B students predominantly gave a response such as “I listen for 
the main ideas first,” whereas C and D students said, “I listen for the facts.” (This finding 
probably does not entirely explain the differences in these students’ GPAs, but it is 
undoubtedly part of it.) 

Use the Thinking-Speaking Differential to Reflect and Find Meaning 

The meaning principle reflects the fact that people think faster than they speak. Although 
it varies by region, people in the United States speak at a rate of about 150 words per 



Communications 395 

minute, but in terms of language, they think at a rate of about 500 words per minute. 
Thus, we normally think more than three times faster than we speak. This differential 
creates an opportunity to listen more effectively, but the opportunity can also be a temp¬ 
tation to do things that interfere with our listening. The extra time can also be used for 
things that distract from the listening process—concentration lapses, daydreaming, think¬ 
ing about something other than what the speaker is saying, and so forth. All these things 
interfere with good listening, so the extra time is a two-edged sword — both opportunity 
and temptation. 

Listening is both the most widely used and the most widely misused communication 
skill. It is also the skill least often taught in the American education system, from kinder¬ 
garten through graduate school (Steil, Barker, & Watson, 1983). 

Speaking 

Most of the speaking managers do is informal, one-on-one or small group communica¬ 
tions in their offices, on the phone, and in meetings. To show how we can improve our 
speaking, we will focus on giving instructions because a significant amount of manager- 
initiated communication consists of giving instructions to others. The managerial activity 
of delegation in fact, would be virtually impossible without instruction giving. The 
key to giving instructions successfully is the ability to put yourself in the position of the 
person who will receive the instructions. Ideally, you want to give exactly the right 
amount of information — neither too much nor too little; however, if one must depart 
from the ideal, it is usually better to give too much rather than too little. 

Two questions help you put yourself in the position of the individual who will receive 
the instructions: 

1. What does the person need to know to carry out the instructions? 
2. What does the person want to know to carry out the instructions? 

The ability to decide what information is really needed is, incidentally, a justification 
for promotion from within—making managers out of the people who have done the 
jobs they will be managing. People who have done the job should be able to determine 
more accurately what their subordinates need to know when they receive instructions. 
Unfortunately, not everyone who is promoted to the management level takes full advan¬ 
tage of this knowledge. 

To demonstrate how difficult it is to identify what information to transmit, let us 
consider another classroom exercise to illustrate how you can put yourself in the position 
of the person who will be receiving the instructions. Students form pairs, and one member 
of each pair is given a diagram. The students are seated back-to-back, and the one with the 
diagram gives the other one instructions for drawing the diagram on a piece of paper. Only 
the instruction giver is allowed to speak, and he or she is not allowed to look at the copy 
as it is drawn. After the copy is completed, the diagram is evaluated according to a set 
of scoring rules. Roles are then exchanged in the pairs, a new diagram is distributed, and 
instructions are again given to produce copies of the diagram, all rules remaining the same. 



3S>6 Chapter 11 Interpersonal Skills and Group Dynamics 

It is common for the scores in the second round to be higher than those in the first, 
even if the second diagram is more complex. Why? The answer seems to be that the 
instruction giver in the second round has been in the position of the instruction receiver 
during the first round and, thus, has a better idea of what information is really needed. 
Furthermore, the instruction givers during the second round know the scoring rules and 
can focus on what elements of the diagrams will be scored when the copies are evalu¬ 
ated. Most important, however, the instruction giver who understands what information 
someone needs is better able to provide that information. 

Writing 

Writing is a less common form of managerial communication than speaking and listening, 
but it is important nevertheless. Most managerial writing is brief, often one or two pages. 
The memo is the most common type of written communication for many managers. 
Sussman and Deep (1984) offer six rules for effective managerial writing that they call the 
“Six Cs”: 

Clarity: To be clear, one must put oneself in the reader’s position — much as the 
instruction giver must put himself or herself in the receiver’s position. Write in the 
active voice (i.e., Dave painted the house) rather than the passive (i.e., The house was 
painted by Dave); avoid jargon; and try to use the simple format of introduction, 
body, and conclusion. 

Courtesy: Courtesy involves knowing your readers, adapting to their moods, and 
writing at their level, providing neither too much nor too little information. Again, 
there are clear parallels with instruction giving. 

Conciseness: This is the rule of brevity; be short and to the point. Sometimes you may 
want to repeat something for emphasis, but the general rule is the shorter the better. 
Think of it this way: which are you more likely to read, a fifty-word memo or a ten- 
page report? You are likely to read the fifty-word memo on the spot; the ten-page 
report goes into the pile you will “get to when I can.” 

Confidence: Always write with confidence. Confidence is really a matter of judgment 
on the writer’s part, based on one’s knowledge of one’s readers. Judgment is especially 
important in avoiding two extremes: overbearing (too confident) and wishy-washy 
(not confident enough). 

Correctness: You must be correct in grammar and composition, the technical rules 
of writing which include spelling and punctuation. Inaccurate spelling is especially 
conspicuous. 

Conversational tone: To achieve a conversational tone, try to write in about the same 
way you talk, and try to imagine one specific person to whom you are writing. 
Thinking of a specific individual rather than an abstract category makes it much 
easier to write. It is much easier to write to John Jones than to “all economics pro¬ 
fessors.” Occasionally, conversational writing calls for violating some formal rules 



Delegation and Motivation 397 

BOX 11.2 

Secret Weapons for Organizational Communication 

Here are several methods for dealing with difficult situations in the work setting. 
(1) Remember that people do things for their own reasons, not yours. Someone’s anger 
may mean he or she actually sees the situation from a completely different perspective, 
so try to understand that view. (2) When under attack, use a calm, even tone of voice 
and low-key body language. The content of what you say can be the same, just modify 
your delivery; in face-to-face communication, words carry 7 percent of your message, 
tone of voice 38 percent, and body language 55 percent. (3) Use conversational fantasy 
to anticipate a really sticky situation by saying exactly what you want to say. Then 
tone it down to what you know you should say. (4) Remember to rehearse so that you 
are prepared to cope with the situation when it arises. Practice receiving and returning 
“verbal hardballs.” (5) If necessary, use emotional jujitsu. The principle of jujitsu is to 
flow with your opponent’s strength, to turn his own force against him by redirecting 
it rather than resisting it. Rather than defending yourself, agree. Your critic will be 
instantly disarmed, and then you can begin to deal with the causes of the emotion 
rather than the emotion itself. 

SOURCE: Excerpted from “Personal Productivity: Organizational Communication,” Government 
Productivity News 3 (September 1989): 4. 

—b—wiirnwt1' ^h— 

of grammar, but this breach often makes things smoother, and thus more understand¬ 
able and easier to follow. 

Communications will affect nearly every aspect of your work as a public manager. 
Your ability to persuade others of your position, your clarity in sharing ideas, and your 
ability to deal effectively with difficult people will shape your image as an adminis¬ 
trator (see Box 11.2). Fortunately, you can improve your ability to listen, to speak, and 
to write. So, practicing your communication skills whenever possible will pay dividends 
whatever your career. 

Delegation and Motivation 

Management can be defined as “the process of getting things done through others.” To 
get things done through others, it is necessary to communicate with others and, often, to 
motivate them as well. Much of the time, those others are the people you supervise. 
After all, if you can do all the work yourself, you should just go ahead and do it. As a 
manager, however, you are not there to do the actual work but to do the managerial 
work, as illustrated in this case study: 



CHAPTER 11 Interpersonal Skills and Group Dynamics 

After a long and distinguished career as a research scientist, Fraser Parks became 
manager of a well-known research and development laboratory. Soon after his 
appointment, a major new project was assigned to the lab. The task was clear in 
Fraser’s mind: as a good scientist he knew how to do the work and how to ensure a 
high-quality, technically flawless piece of equipment. With a couple of years alone 
in the lab, he knew he could do the whole project by himself and do it well. The 
problem was that the equipment was needed in less than three months. Fraser 
knew that most of the work would have to be delegated to newly hired and reas¬ 
signed staff, but he knew these people would never be able to do the high-quality 
job that he alone would have done. After two and a half months of trying to get 
the job done right, Fraser collapsed in his office one night and was immediately 
hospitalized. 

Delegation is the process of assigning tasks to others. Like so many other managerial 
tasks, it may be done poorly or it may be done well. As Fraser Parks discovered, poor 
delegation can be nearly fatal. To delegate well, you need to try to delegate an equal 
amount of authority and responsibility for a job. Authority is the legitimate power to 
do the job, and responsibility is the accountability the individual has to you for getting 
the job done. The idea that an individual should have equal amounts of both is the 
parity principle. Managers often complain that they will be held responsible for some¬ 
thing, but have not been given enough authority to get the job done. Less frequent, but 
equally troublesome, is an individual who has authority but is not held responsible 
for its use. 

Generally speaking, you should delegate jobs with complete and clear instructions, and 
you should delegate tasks to the appropriate level. Holding everything else equal, the 
appropriate level is the lowest level in the hierarchy where the task can be accomplished 
competently. You should also provide support for the delegated tasks. This support can 
take many forms, including delegation of authority in a public statement (such as saying 
at a meeting, “Betty is in charge of inspections in the northern district now”). 

It is often helpful to involve subordinates in the process of delegation, encouraging them 
to make suggestions about the kind of work they can or should be doing. Delegation 
should be a two-way process. On the other hand, do not fall victim to the upward delega¬ 
tion phenomenon. Upward delegation occurs when subordinates bring problems to their 
managers that the subordinates should be solving themselves. This is the opposite of effec¬ 
tive delegation. You should refuse to accept these problems. An effective technique is to 
insist that any subordinate who wants advice about a problem (the way the upward dele¬ 
gation attempt is often presented) should first think of at least one potential solution 
before coming to you to discuss the problem. To allow for creativity and motivation in 
the delegation process, it is best to hold subordinates accountable for results and leave 
the “how” up to them. This principle assumes, of course, that the “how” will be within 
the constraints of legal and ethical behavior as well as the constraints of public or organi¬ 
zational policies. Finally, tasks should be delegated consistently when the work load is light 
as well as heavy and when the jobs are fun as well as nasty. 

Besides getting things done through others, delegation helps to develop employ¬ 
ees, thereby making them more valuable to you and to the organization. Some man¬ 
agers are threatened by the idea that they may be developing possible replacements 



Delegation and Motivation 399 

(i.e., competitors). But there is another way to look at this situation. Unless you are at 
the very top of the organization, you probably want to be promoted. But you cannot 
be promoted if you cannot be replaced. Developing your subordinates through delega¬ 
tion is a way of providing, to your advantage, your own potential replacements! 

Motivation 

Whether members of an organization perform well depends partly on ability and partly 
on motivation. A person must have or be able to call upon the right mix of skills and 
abilities to do a job and must be motivated to do the job well. When you can help 
develop your employees’ skills through instruction, training programs, and so forth, you 
are likely to have a significantly greater impact on their motivation. 

Pay and Job Satisfaction 

When one thinks of motivation in a managerial context, pay is a subject that naturally 
comes to mind. Frederick Taylor based the entire incentive system of his scientific man¬ 
agement program on economic factors. Contemporary thinking about motivation is 
more sophisticated than Taylor’s, however, as pay is seen to interact with other motiva¬ 
tors in complex ways. 

Even as early as the 1950s, Frederick Herzberg developed a model of motivation 
known as the two-factor theory. Herzberg (1959) argued that two sets of variables were 
relevant to the question of motivation. One set, hygiene factors, related to job dissatis¬ 
faction; the other set, motivators, related to job satisfaction. 

Hygiene factors included variables such as pay and working conditions; motivators 
were factors such as chances for achievement, recognition, and advancement. Herzberg 
argued that improvements in hygiene factors such as pay would not increase job satisfac¬ 
tion; instead, any improvements would simply reduce dissatisfaction. If an individual’s 
pay got worse or did not increase fast enough, dissatisfaction would increase. Conversely, 
motivators such as achievement or advancement would not affect dissatisfaction, but 
would increase or decrease job satisfaction. The lesson for managers was that motivating 
employees is a far more complex task than simply changing salary levels. 

Other approaches to motivation were based on psychologist Abraham Maslow’s 
theory of human development; that is, the assumption that everyone has a need to grow 
and develop and to establish a sense of meaning in their lives. Maslow (1954) suggested a 
hierarchy of needs that all human beings must fulfill. At the first level, we must meet our 
physiological needs for food, clothing, and shelter. Next we have a need for safety and 
security. Beyond these basic needs, we have social needs, which we meet by being a 
part of a group. Next, we have a need for ego satisfaction and self-esteem. Finally, at the 
highest level, we have a need for development or self-actualization. This final level, which 
can only be reached after the other four levels have been achieved, describes that state of 
psychological development through which we reach our greatest human potential. 

Controversy about the effect of job satisfaction goes back at least as far as the 
Hawthorne studies conducted during the mid-1920s and early 1930s. Recall that 
these studies began as a research project to investigate the effects of physical working 



400 CHAPTER 11 Interpersonal Skills and Group Dynamics 

conditions such as lighting on workers’ productivity. Given some unexpected findings 
early in the studies, the investigators changed the focus of the research to investigate the 
impacts of social and supervisory variables on performance. 

Some authors interpreted the results of the later studies as indicating that higher levels 
of job satisfaction led to higher levels of worker performance, a conclusion that some 
argue was never present in the original research reports and is thus a misinterpretation 
(Organ, 1986). But misinterpretation or not, the Hawthorne studies are usually credited 
for the discovery that a happy worker is a productive worker. Other studies of the job 
satisfaction-performance relationship produced mixed results. Some theorists argued that 
the job-satisfaction-leads-to-better-performance thesis was wrong in terms of the causal 
ordering—that it was actually the other way around, with higher levels of performance 
causing higher levels of job satisfaction. 

Although there is still not complete agreement on this issue, support is accumulating 
for a third interpretation of the job satisfaction-performance relationship—that there will 
only be a relationship between job satisfaction and performance if the rewards one 
receives are based on one’s performance. If rewards are based on performance, there 
should be a positive correlation between job satisfaction and performance (the higher the 
performance, the higher the job satisfaction) because higher performance will lead to 
higher rewards, which will produce higher job satisfaction. If this is true, one part of the 
manager’s job will be to make sure that performance is directly linked to rewards—pay 
as well as others. One method to achieve this linkage is reinforcement theory. 

Reinforcement Theory 

Reinforcement theory and related approaches have been given various labels, including 
behaviorism, operant conditioning, stimulus-response psychology, and Skinnerian psy¬ 
chology. The labels all refer to more or less the same thing, an approach to explaining 
behavior based on Thorndike’s law of effect: “Of several responses made to the same 
situation, those which are accompanied or closely followed by satisfaction (reinforce¬ 
ment) . . . will be more likely to occur; those which are accompanied or closely followed 
by discomfort (punishment) . . . will be less likely to occur” (Daft & Steers, 1986, p. 51). 

The law of effect has been studied for over a century, as it relates to learning in both 
animals and human beings. Results of this research have produced a number of general¬ 
izations about the specifics of reinforcement. There are four basic scenarios or results 
that may follow a specific behavior. If a reward follows the behavior, the individual is 
more likely to repeat the behavior; this is called positive reinforcement. Reinforcement 
will also occur when behavior is followed by the removal of something unpleasant, 
called negative reinforcement. 

On the other hand, if an unpleasant event or punishment follows the behavior, the 
individual is less likely to repeat it. Note that negative reinforcement is not the same 
as punishment, even though the terms have become synonymous in ordinary usage. 
From the standpoint of the recipient, punishment would be considered a bad outcome, 
whereas negative reinforcement would be considered a good outcome. The final possi¬ 
bility is that nothing will happen following a behavior, or at least no reinforcement will 
occur in connection with it. When this is the case, the individual is less likely to repeat 



Delegation and Motivation 401 

the behavior and will eventually stop repeating it altogether. This cessation of behavior is 
called extinction. 

Regardless of which of the four possibilities one is considering, a common theme, and 
one of the key principles of the reinforcement approach, is that whatever response is 
given to the behavior, the response should follow the behavior as soon as possible. 
If there is too long a delay following the behavior, the response (reward, removal of an 
unpleasant situation, and so on) may be misinterpreted and associated with other behav¬ 
iors that have occurred in the interval. 

Other important considerations of the reinforcement approach are the patterns, fre¬ 
quency, and basis for providing the response. In terms of frequency, responses can be 
given every time the behavior occurs (continuous reinforcement schedule) or for only a 
certain proportion of occurrences (partial reinforcement schedule). The basis for making 
the responses can be either the number of times an event occurs (ratio schedules) or the 
passage of time (interval schedules). The pattern of responses can be either consistent 
(fixed schedules) or random (variable schedules). Research indicates that fixed schedules 
lead to faster learning, but to quicker unlearning or forgetting when the schedule is aban¬ 
doned. Conversely, variable schedules lead to slower learning, but once the behavior is 
learned, the unlearning or forgetting is much slower when the schedule is abandoned. 

This description of reinforcement approaches probably conjures up images of labora¬ 
tory animals running through a maze to earn food pellets or to avoid electric shocks, 
and these are indeed how reinforcement has been studied in the laboratory. An obvious 
and natural parallel applying reinforcement theory in a managerial context is to link 
pay in some way to an individual’s performance. This can be done, but pay (wages or 
salaries) tends to be set only once a year, and, since organizational policies often dictate 
pay levels, many managers have only a partial impact on establishing their subordi¬ 
nates’ pay levels. This limits the extent to which the manager can use pay as a motiva¬ 
tional tool. 

A recent article in PA Times identified several assumptions underlying pay-for-perfor- 
mance forms of motivation: 

1. An individual’s performance could be accurately or reasonably measured according to 
some criteria. 
2. This system could affect an employee’s decision to leave or remain with his or her 
organization and influence an employee’s willingness to work harder for his or her orga¬ 
nization than those who are not under the system. 
3. An employee will place high value on monetary rewards in the workplace. (Lee, 
2001, p. 3) 

Beginning with the first assumption, though, we can see the challenges faced by public 
and nonprofit managers in employing such a system in practice. As the author found, “It 
[a performance-based system] may work in private companies, since they have a clear 
goal (maximization of profit) that can be measured in quantitative ways. However, this 
does not seem to be working in most public agencies” (Lee, 2001, p. 3). Unclear goals, 
combined with the need to balance between competing interest groups, tends to make 
establishing such clear-cut objectives impossible in the delivery of public services. 



402 Chapter 11 Interpersonal Skills and Group Dynamics 

Moreover, the author found in his study of public employees In New Jersey that peo¬ 
ple working in public and nonprofit organizations seek more than financial incentives: 
“[I]f a public-sector employee is committed to his or her supervisor, he or she is more 
likely to remain with the agency and make an extra effort on behalf of the organization. 
In other words, a major motivating factor is not monetary reward, but an affective per¬ 
sonal relationship among employees” (Lee, 2001, p. 3). Pay-for-performance may boost 
some forms of productivity, but it should not be viewed as a building block for a truly 
high-impact organization. 

Goal Setting 

Goal setting is another method of motivating that can be used by itself or in conjunction 
with reinforcement techniques. In fact, you can use it to motivate yourself as well as other 
people. A goal is a desired state of affairs one attempts to realize, and, as research has 
shown, merely setting goals seems to increase the probability of attaining them. But some 
ways of setting goals are better than others in terms of motivational impact. Research 
indicates at least eight necessary characteristics for a goal to have maximum motivational 
impact. 

1. It is best to write down a goal rather than to just keep it in mind. In a technical sense, 
one does not “do” a goal — one achieves a goal; therefore, the proper way to write a goal 
statement is with the word to followed by an action verb for example, “To finish this 
chapter by 5 o’clock today.” Something about writing down a goal creates greater com¬ 
mitment on the part of the writer. It is harder to ignore, and seeing it on your desk or 
in your notebook constantly makes the goal harder to forget. Writing down a goal can 
also facilitate planning, as you consciously identify the actions you must take to achieve 
the goal. 
2. Because specific goals are much better motivators than general goals, a properly stated 
goal should be as specific as possible. 

A field experiment on goal setting at the Weyerhauser Lumber Company several years 
ago tested the relative impacts of general and specific goals. The objects of the experi¬ 
ment were truck drivers who hauled logs from one location to another in Oklahoma for 
processing. 

The federal government established safety standards for how much weight the truck¬ 
ers could carry, and this amount was taken to be the maximum capacity of the trucks, 
100 percent. The researchers and managers at Weyerhauser noted that the truckers nor¬ 
mally only hauled about 62 percent of capacity. The first part of the experiment consisted 
of management informing the truckers that they wanted more weight to be carried on 
each load and that the truckers were to do their best to achieve this goal. 

The truckers’ performance was tracked for the next three months and there was little 
or no improvement (1 or 2 percent at most). The truckers were then informed that 
a goal had been set for them; the goal was to haul 94 percent of capacity on each load— 
a much more specific goal than “Do your best.” After three months, the truckers were 
averaging over 90 percent of capacity per load, very close to the 94 percent goal the 
managers had set for them. 



Delegation and Motivation 403 

No pay increases were given for the increase in weight hauled, although the truckers 
were told they would not be asked to make any more runs than they normally did as 
a result of hauling more weight. This remarkable change in behavior saved Weyerhauser 
over $250,000 annually, and subsequent checks on the truckers have found this level 
of performance to have been maintained for many years. A specific goal indeed makes 
a difference. 

Networking 

Information on organization development and management is available online 
through the OD Network (http://www.odnetwork.org). Also, check out ASPA’s 
Community Learning and Governance Network (http://www.aspanet.org/solutions/ 
clgn.html). For specific information on conflict resolution, visit the Conflict 
Resolution Center (http://www.ConflictRes.Org/), the National Association for 
Community Mediation (http://www.igc.org/nafcm/), or Illinois’ Center for Analysis 
of Alternative Dispute Resolutions Systems (http://www.caadrs.org), which offers 
insight into specific examples of ADR at the state level. 

3. The means for verifying whether a goal has been achieved should be specified. In the 
study at Weyerhauser, the truckers weighed in at the delivery location for the logs, which 
provided a precise way to measure the amount of weight they were hauling and, in turn, 
how close they were to the goal. (Incidentally, the weigh-in procedure was not added by 
the experiment; the truckers had been following it for many years as part of their job.) 
4. A date or time by which the goal is to be accomplished should be specified. The pres¬ 
ence or absence of a deadline is a critical attribute of any goal-setting exercise. Deadlines 
stimulate action, and the closer the deadline, the more motivation to act. The absence of 
a deadline makes the urgency of the goal indefinite and hence less motivating. 

For example, there are a disproportionately large number of plays during the last few 
minutes of a football game because the team that is behind faces a deadline for scoring 
more points or losing the game. Similar increases in activity occur toward the end of the 
trading period each day on the New York Stock Exchange. Think of your own behavior 
as a test date approaches and you begin to increase your preparation activities. These 
examples illustrate the motivational force of a deadline, a crucial ingredient in any goal 
statement. 
5. A goal should be perceived as attainable. Impossible goals often are unmotivating 
because there is no reason to try if they cannot, by definition, be attained. (Problems 
may occur, however, if the goal is too attainable.) 
6. Although a goal should be attainable, it should also be challenging. There is little or 
no satisfaction in achieving a goal that presents too little challenge. The best goal in 
terms of motivation is one that is perceived as attainable yet challenging — as one that 
can be achieved, but only with significant effort. 

Psychologist David McClelland demonstrated this phenomenon many years ago. 
Children were asked to throw bean bags into a box from various distances, including 
a position located right next to the box. After they had thrown from various distances, 



404 Chapter 11 Interpersonal Skills and Group Dynamics 

they were asked from which position they preferred‘to throw. Very few picked the loca¬ 
tion next to the box; most picked a position farther away, a decision consistent with the 
properties of attainability and challenge. In effect, the children were setting their own 
goals, and the goals they set were challenging but attainable. 
7. When setting a goal for someone else, the goal must be understandable to the people 
for whom you are setting them. If they cannot understand the goals, how can you expect 
them to achieve them? As in so many areas, clarity is highly important. 
8. It was originally thought that if the people did not take part in setting goals, they 
would reject them. Subsequent research, such as the Weyerhauser study in which the 
truck drivers did not take part in establishing the goals, has shown that people are quite 
willing to accept goals that others set for them. This does not mean, however, that involv¬ 
ing people in establishing goals is a waste of time. Among other things, if the people 
who will actually be trying to accomplish the goals take part in formulating them, there 
is a greater chance that they will more completely and accurately understand the goals. 
And although people may be willing to accept goals established by others, there may be 
greater motivation if they participate. 

Managers often worry about involving subordinates in decision making, including 
decisions about goals and goal levels. A study comparing goals that managers set for 
their subordinates to goals for the same activities set by the subordinates themselves 
revealed that the subordinates set the more difficult goals (Hitt, Middlemist, & Mathis, 
1983, p. 289). Although this may not happen all the time, it is an intriguing finding that 
supports the notion of including subordinates in the goal-setting process. 

Conflict, Bargaining, and Negotiation 

Differences and conflicts inevitably arise in public and nonprofit organizations. But as 
Richard Box explains, finding a way to equitably resolve differences is a key interper¬ 
sonal skill, opening the door to more citizen-oriented governance. “For elected leaders 
and public service practitioners, this means a flexible attitude toward change, shedding 
of protective feelings about personal turf, and a willingness to engage in open dialogue 
on issues facing the community” (Box, 1998, p. 12). 

Roger Fischer and William Ury of the Harvard Negotiation Project have suggested 
that negotiation is a natural process that occurs where two parties share certain interests 
but are opposed with respect to others. Negotiations often move quickly to positions 
that are held by one party or another. For example, a union representative requests a 
10 percent raise, while the city negotiator takes the position that only a 2 percent raise is 
possible. Moving quickly to a position and allowing it to become hard and fast tends not 
only to produce undesirable results, but to damage the continuing relationship between 
the parties. Positional bargaining seems to move participants to one of two postures: 
a soft posture that tends to emphasize the ongoing relationship and seeks agreement 
among participants, or a hard posture that assumes an adversarial relationship and in 
which each party seeks victory over the other. 



Group Dynamics 40J 

BOX 11.3 

Guidelines for Successful Negotiations 

1. Separate the people from the problem. 
2. Focus on interests, not positions. 
3. Generate a variety of possibilities before deciding what to do. 
4. Insist that the result will be based on some objective standard. 

SOURCE: From Getting to Yes, lie by Roger Fischer and William Ury and Bruce Patton. Copyright © 
1981, 1991 by Roger Fischer and William Ury. Reprinted with permission of Floughton Mifflin Company. 
All rights reserved. 

Fischer and Ury suggest an alternative method called “principled negotiation.” Principled 
negotiation is based around four elements of negotiation: people, interests, options, and the 
criteria for solution. Four guidelines emerge from these elements (see Box 11.3). 

According to Fischer and Ury, following these guidelines leads to negotiated settlements 
that are more equitable and more likely to lead to continued effective working relation¬ 
ships than are more traditional modes of bargaining. Remember that negotiations occur 
in all kinds of situations, from deciding which movie to see to resolving matters of war and 
peace; however, the same general guidelines may be employed in all negotiations to gener¬ 
ate more effective and responsible solutions. 

More recently, managers of public and nonprofit organizations have adopted systems 
for Alternative Dispute Resolution (ADR). ADR can be thought of as any conflict man¬ 
agement strategy outside of formal adjudication. Approaches range from preventative 
measures, which include consensus building and setting clear parameters on interpersonal 
(and interorganizational) relationships, to more formal approaches, such as court-based 
mediation and arbitration (Constantino & Sickles-Merchant, 1996). 

Group Dynamics 

Individuals acting alone make a majority of organizational decisions, but sometimes two 
or more people combine efforts to solve a problem or make a decision. Research has 
shown that sometimes a group should make a decision and that certain advantages come 
from group decision making, but there are also disadvantages. Similarly, studies of group 
dynamics have established fairly predictable patterns of interactions. 

Advantages of Group Decision Making 

An old cliche has it that two heads are better than one — probably because two heads hold 
more information than one. Put any two people together, and each one will know some¬ 
thing the other does not. Create a group of five or six, and there is even more information 
available. We have already seen that generating alternatives is one of the fundamental steps 



406 Chapter 11 Interpersonal Skills and Group Dynamics 

in the rational decision-making process, even under satisficing c6nditions. Because there 
is more information in a group, there is greater potential for generating more alternative 
solutions to a problem than could be generated by a single decision maker. But these 
advantages will surface only if the group is managed properly. 

Groups may also benefit from synergy, the notion that the whole is greater than the 
sum of the parts. Synergy can occur in a group, but it is a precious commodity that is 
not easy to create. Consider the following case: 

Three people get together to solve a problem. Bob proposes a solution, then Allen 
proposes a different solution. Betty has been listening to the proposals, which stim¬ 
ulates an idea to solve the problem in a completely new way. The idea represents 
something new that was not present before in the group. If it were possible to 
quantify the information in the group at the beginning of the discussion, the total 
information would equal the sum of the information held by the individual mem¬ 
bers. With Betty’s new idea, an idea stimulated by the group discussion, the sum is 
now greater than the sum of the individual parts. 

How much and how often synergy occurs in a group is often a function of the nature 
of the group’s communications. In small groups (ten or fewer), a number of characteristic 
communication patterns or networks tend to develop, some of which promote synergy 
more than others. A fundamental way communication networks differ from one another 
is in terms of how centralized the networks tend to be. The more centralized a communi¬ 
cation network, the more one or a few people are at or near its center. In such a group, 
the people near the center of the network are involved in receiving and transmitting all 
or most of the messages that are communicated within the network. The less centralized 
or more decentralized a network is, the more everyone can communicate with everyone 
else without having to transmit the message through intermediaries. 

As shown in Figure 11.1, the wheel is the most centralized of the networks, the all¬ 
channel is the least centralized, and the circle and the chain fall between the two extremes. 
Research has shown that decisions are made more quickly in centralized networks when 
a simple problem is being handled, and that groups with centralized networks also tend to 
produce more accurate solutions to simple problems than do decentralized groups. 

Wheel All-Channel 

Centralized Decentralized 

FIGURE 11.1 

Communication Networks 



Group Dynamics 407 

Decentralized networks, however, are both faster and more accurate in reaching deci¬ 
sions about complex problems, and they will also produce more accurate solutions. 
Complex problems, by their nature, involve more information, and the decentralized 
networks make it easier to tap and process the information held by each member. 
Complex problems also tend to benefit more from synergy in developing solutions, and 
the ability of everyone to be involved in the discussion and to listen to the discussions of 
others promotes synergy. Thus, decentralized communication networks tend to promote 
synergy more than do centralized networks. 

There is also evidence that centralized, one-way communication also tends to promote 
information loss. A well-known study followed messages sent from the boards of direc¬ 
tors in one hundred companies to see what happened to them as they worked their way 
down the hierarchy in each company. The messages passed from the board of directors, 
to vice presidents, to division managers, to plant managers, to supervisors, and finally to 
the operating managers. By the time the messages reached the operating managers, only 
20 percent of the original content was left! 

We want to do more than just make a good decision. The final step in the decision¬ 
making process is always implementation. If the people who make the decision are the 
ones who will be implementing it, the commitment to the decision should help with its 
implementation. Research also reveals that satisfaction with the group and its processes 
increases as the networks become more decentralized. Satisfaction is not exactly the 
same thing as commitment, but the two are closely related. In most cases, then, as partic¬ 
ipation in making the decision increases, so should commitment to the final decision. 

An interesting property of group decision making, the risky shift, can be either an 
advantage or a disadvantage. The risky shift refers to how daring the decisions would be 
if made as a group compared to the average risk of the same decision if each member 
made it alone. It was originally thought that groups would always make riskier decisions 
than would individual members. As more research was conducted, however, it was dis¬ 
covered that sometimes the shift will be in the opposite direction—that groups some¬ 
times make decisions that are less risky than those made by members working alone. 

Sometimes a daring decision produces better results, but sometimes it makes things 
worse. Since the same can be said about more conservative decisions, the dilemma is that 
it is often impossible to predict whether a more conservative or more daring decision 
will yield better results. The most we can say is that a group decision will normally be 
either more daring or more conservative than the average riskiness of a decision made by 
each member acting individually. 

Disadvantages of Group Decision Making 

In addition to the several advantages that are possible with group decision making, there 
are potential problems too. One of the obvious constraints on human beings that results 
in our “bounded rationality” is the constraint of time. Time not only limits the efforts of 
individual decision makers to acquire and process information, but it also limits the possi¬ 
bilities for groups to make decisions. Normally, it takes a group much longer to make a 
decision than it takes an individual to make a decision about the same problem. Time thus 
becomes an important constraint on a manager’s ability to use group decision making. 



408 Chapter 11 Interpersonal Skills and Group Dynamics 

Another constraint may be cost. Even if group decision making and individual decision 
making were equally fast, the group is still more expensive. Compare a single decision 
maker, whose pay amounts to $100 per hour, taking one hour to reach a decision to 
a committee of five managers, each of whose salaries amount to $100 per hour. The cost 
to the organization for the single decision maker is $100, whereas the cost of the commit¬ 
tee is $500. 

Another property of groups, which is the opposite of synergy, is groupthink. If syn¬ 
ergy is the notion that the whole is greater than the sum of the parts, groupthink makes 
the whole (the group) less than the sum of the parts. Groupthink was first defined and 
analyzed by Irving Janis as “a mode of thinking that people engage in when they are 
deeply involved in a cohesive in-group, when the members’ strivings for unanimity over¬ 
ride their motivation to realistically appraise alternative courses of action” (Janis, 1983). 
Because the group is so cohesive, greater emphasis is given to conformity than to making 
good decisions. 

Janis identified characteristics of groups victimized by groupthink and cautioned man¬ 
agers to interpret the presence of these characteristics in a group carefully. For example, 
groups experiencing groupthink have an illusion of morality, a belief that the group’s 
position, whatever it may be, is inherently ethical and moral in comparison to positions 
held by other individuals and groups. Such groups also engage in negative stereotyping 
of other people and groups, often viewing outsiders as the enemy and as being too dif¬ 
ferent to negotiate with. Groupthink tends to produce an illusion of invulnerability, 
which makes decisions seem less risky than they really are. Rationalization is commonly 
employed as a way to discredit information critical of the group or its decisions, and 
there is frequent self-censorship of dissenting views, which minimizes the amount of crit¬ 
ical or contrary information to which the group is exposed. A strong conformity pres¬ 
sure permeates the group and puts further pressure on group members to agree with the 
dominant position. Finally, an illusion of unanimity results in the belief that everyone in 
the group believes in the group’s decision and judgment. Groups that are victimized by 
groupthink are limited in their constructive abilities. 

Interpersonal Dynamics in Groups 

Interpersonal relationships affect the work of groups or teams. To illustrate the problems 
that can arise, imagine that two people who despise each other are assigned to the same 
committee. These two individuals will not work as well together as two people who are 
neutral toward each other or who like or respect each other. Even if the conflict is not 
manifested, personal animosity may contribute to building a hidden agenda, where pri¬ 
vately held goals and priorities motivate actions more directly than the overt and publicly 
stated reasons. The operation of hidden agendas disrupts the group and diminishes its 
effectiveness. 

But the interpersonal dynamics of groups in action are much more subtle and com¬ 
plex than these examples suggest (Gardner, 1974, pp. 8-11). For example, groups often 
follow a fairly predictable pattern of development. Typically, at the outset of the group’s 
work, its members are highly dependent on the leader of the group. They ask for direc¬ 
tion and become quite frustrated if specific direction is not given. If the leader allows 



Group Dynamics 409 

the group to become overly dependent, however, its effectiveness will suffer in the long 
term. The leader can resist dependency by referring questions back to the group’s mem¬ 
bers for input. 

Often, however, a period of counterdependence will follow, in which members may 
show hostility toward the leader. Still wanting some direction, the group’s members are 
now also experiencing a need for independence, just as an adolescent may simultaneously 
love and hate his or her parents. Counterdependency seems especially likely to occur in 
authoritarian work environments, where members’ actions are too closely regulated. 

On the other hand, in a group where members feel they can openly express themselves 
and their ideas without fear of retaliation, feelings of interdependence may develop. At 
this stage, group members recognize the purposes they hold in common and come to have 
greater trust and respect for one another. The group will probably be most effective when 
it reaches this stage. 

As the group moves through these stages of development, certain patterns of behavior 
are likely to occur. Early in the group’s development, some members may seek flight, 
through actual withdrawal from the work of the group or through silence, irrelevant 
comments, or self-serving remarks. Most flight behavior is an implicit attempt to say 
that nothing significant will happen unless the leader gives in to the group’s desire for 
explicit direction. In the counterdependent stage, members may engage in fight behavior 
or in pairing. Fighting the group’s leader in some symbolic fashion is, of course, a fairly 
straightforward act of rebellion; pairing or breaking off into small groups or alliances is 
somewhat more subtle, yet expresses the same emotion. Finally, as the group reaches the 
stage of interdependence, the actual work of the group can be accomplished in reason¬ 
able and satisfying ways. 

At this stage, a variety of leadership functions must occur for the group to maintain 
its effectiveness (see Box 11.4). These functions can all be performed by a single person, 
typically the group’s formal leader, but they can also be performed by a variety of differ¬ 
ent people active at different times in the group’s development. In either case, if you wish 
to help the group meet its objectives, you should be attentive both to the stages of group 
development and to the extent to which the various leadership functions are being 
fulfilled. 

Changing the Composition of the Group 

An open group is one that experiences a great deal of turnover among its membership, 
whereas a closed group has a stable membership (Ziller, 1965). Because of their stability, 
closed groups tend to become very cohesive, but this feature often makes it difficult 
for a newcomer to become integrated with the group. Whereas lack of acceptance of a 
newcomer is a group property, it may be perceived as the result of unsatisfactory inter¬ 
personal relationships between the newcomer and individual group members. 

American organizations are becoming more multicultural in composition at both the 
managerial and nonmanagerial levels. As more and more women and members of minor¬ 
ity groups come to be included in what were previously relatively homogeneous groups, 
other types of problems, often interpersonal, will tend to occur, and the people involved 



4io Chapter 11 Interpersonal Skills and Group Dynamics 

BOX 11.4 .^ ^ ' 

Leadership Roles in Group Dynamics 

1. The coordinator role: Communicate to all members about meetings, schedules, 
tasks, procedures, and similar matters; act as an information clearinghouse for 
all group members and as a contact person with other groups or outsiders. 

2. The facilitator role: Set up procedures and a structure for group work; assist 
members in identifying problems, defining issues, summarizing progress, and 
working together. (This role involves minimal direct influence on the group task. 
It concentrates on establishing an interpersonal network that helps members 
work together to solve problems.) 

3. The trainer role: Teach group members ways of approaching problems; provide 
the group with methods of learning from their own experiences; arrange for 
outside consultants to train the group. 

4. The observer role: Be alert to how the group is functioning and particularly 
to which functions are not being met; describe to members what is happening 
in terms of the group process; show the group areas in which change might 
facilitate their work. 

5. The gap filler role: Fulfill those functions that are not being handled by anyone 
else, particularly the functions of summarizing, clarifying, synthesizing, or 
facilitating compromise. 

6. The monitor role: Once the group has determined a procedure to follow or a 
solution to a problem, see to it that the group is reminded of responsibilities, 
functions, and assignments necessary for implementation of the decision; provide 
copies of budgets, schedules, assignment sheets, and agendas to members so they 
can complete their work on schedule. 

SOURCE: Excerpted from Ernest Stech and Sharon Ratliffe, Working in Groups (Lincolnwood, IL: 
National Textbook Company, 1976), 220-221. Reprinted by permission of the McGraw-Hill Companies. 

will often not consciously know the reasons for them. Rosabeth Kanter (1977) explains 
what happens when a previously homogeneous group is joined by a newcomer who 
differs in some socially salient way from the group members as the “theory of relative 
numbers.” The insights it provides can be useful to managers working in multicultural 
environments. 

The theory of relative numbers is proposed as a universal explanation for the phe¬ 
nomena that occur when a homogeneous group is joined by someone who differs from 
the existing group members. Groups defined by occupation, age, religion, political pref¬ 
erence, marital status, and many other characteristics all fit the theory and its explana¬ 
tion. The theory then presumably applies to many situations other than groups defined 
by race or gender, although these are the characteristics with which we are concerned. 
The theory begins by asking what happens when an all-white group is joined by a black 
member, or when an all-male group is joined by a female member. 



Group Dynamics 411 

When a group is homogeneous in terms of a characteristic such as race or sex, mem¬ 
bers may differ in terms of individual personalities, but they will not stand out, by defini¬ 
tion, because of race or gender differences. Kanter illustrates such a group with the letter 
“X” and calls all of the group members Xs (members of a single race). 

XXXXXXXXXX (1) 

Kanter represents a member of a different race with the letter “O”; when an individ¬ 
ual of this race joins the group, the group is diagrammed as follows: 

XXXXXOXXXX (2) 

This new group, new in terms of composition, will experience different dynamics now 
that O is present. Diagram (2) illustrates what happens in this situation. Which letter 
sticks out in row (2)? It is the O, who experiences extra visibility as a result of the racial 
difference. The extra visibility itself, to say nothing of prejudicial attitudes that may pre¬ 
vail in the group, will create problems for O. Because always standing out is inherently 
stressful, O faces more personal stress. Moreover, O will also have problems with infor¬ 
mal aspects of the organization because Xs tend to become involved with other Xs 
rather than Os. This makes it harder for Os to become part of the informal networks 
that exist in organizations. It also means that Os tend to be unsponsored or unmentored, 
since Xs tend to mentor other Xs. 

One of the more intriguing things that happens to O is a form of stereotyping. As 
we have mentioned, human beings do not tolerate chaos well and create order by 
defining and redefining situations to explain what is happening. This is especially true 
in trying to understand human behavior, as we all tend to develop explanations 
for why other people behave as they do. Explanations for O’s behavior will tend to 
take the form “O is behaving that way because that is the way all Os behave.” 
Explanations for O’s behavior will often be based on O’s status as an O. These attribu¬ 
tions are often detrimental to O’s standing because, among other things, they tend to 
depersonalize O. 

In terms of solutions or remedies, adding more Os to the group may be helpful. 
Kanter suggests that the extra visibility and its attendant effects tend to diminish as the 
proportion of Os in the group increases to about 15 percent, but she believes they do not 
become inconsequential until the group is composed of about 40 percent Os. The key is 
the proportion of Xs and Os in the group, not absolute numbers; for example, two Os 
in a group with ten members will experience the same visibility as four Os in a twenty- 
member group. 

It is not always possible to solve or significantly reduce many of these problems 
by increasing the proportion of Os. African Americans, for example, compose about 
15 percent of the American population, which means that, on the average, only enough 
blacks could be added to a predominantly white group to begin to reduce the visibility- 
created problems. Thus, having managers become aware of the visibility phenomenon 
and acting appropriately in their own behaviors toward Os will become particularly 
important as more diverse types of people become part of organizations. 



4i2 Chapter 11 Interpersonal Skills and Group Dynamics 

Managing Groups in Action 
__ ... - —-- 

After examining the pros and cons of group decision making, the manager’s strategy 
should be obvious. If a group is to make a decision, it should be managed so as to 
enhance the advantages of the group technique and minimize the disadvantages. How, 
exactly, does one manage the group to accomplish this? Because most group decision 
making takes place in meetings, one answer would seem to be in good meeting manage¬ 
ment (see Box 11.5). 

The meeting has nearly the worst reputation of any managerial tool, and much of this 
reputation is probably justified. Most of the blame should not be on the meeting as a 
technique, however, but on the way meetings are usually managed (or mismanaged). The 
first point in improving the effectiveness of meetings is that they are activities that require 
active management: a successful meeting does not just happen, it requires a lot of work. 

Not surprisingly, the fundamentals of managing a meeting are similar to the funda¬ 
mentals of management generally. For example, a meeting must be planned. When will we 
have it? Where? What do we intend to accomplish? These questions should be answered 
well before the meeting begins. 

A meeting must also be staffed. Who do we want to attend? Who will we invite? 
These questions often depend upon the reasons for meeting, which further emphasizes 
the importance of planning, but there are other factors in selecting participants. Are 

BOX 11.5 

How to Be an Effective Group Leader 

Effective group leadership requires: 

1. A solid knowledge of and dedication to the history, goals, values, achievements, 
and current directions of the organization. 

2. An ability to keep issues in focus and matters in perspective; to demonstrate 
emotional stability in times of stress and conflict. 

3. To value the opinions of each member, to judge each on its merits alone and not 
be persuaded or intimidated by displays of emotion or aggressiveness. 

4. A willingness to give credit to others and to accept the blame for failures without 
being overly dramatic or obvious. 

5. A good sense of humor, the ability to keep meetings lively and interesting, will 
contribute as much as anything to good attendance, morale, and overall 
achievement. 

6. To find enjoyment in the meeting and be able to infect others with enthusiasm. 
7. To be responsive to the individual members but to be firm when necessary in 

order that the members know where they stand. 

SOURCE: Excerpted from Bill D. Schul, How to Be an Effective Group Leader (Chicago: Nelson-Hall, 
1975). Reprinted by permission. 



Group Dynamics 413 

there people who might have hidden agendas, or who might not work well together? 
How well did the people you are considering work together last time? How productive 
were they? 

An effective meeting manager must organize the meeting, which also involves a sub¬ 
stantial amount of planning. What roles will you create at the meeting? Will you have 
anyone serve as parliamentarian? In what order will topics and problems be discussed? 
Will you divide the group into subcommittees to work on special projects? If so, should 
they work on them before, during, or after the meeting? 

Directing the meeting—providing the actual leadership of the ongoing meeting—is 
itself complex. Some necessary skills are obvious, such as starting the meeting on time; 
others are subtle, such as the ability to inhibit a too-vociferous participant. If you have 
planned well, you will have a good general idea of what the meeting is intended to 
accomplish and will try to move the meeting in that direction. 

As meetings often produce decisions, the manager must also see that the decisions are 
implemented. This is often achieved through a form of delegation at the meeting, when 
assignments for future action are made. Indeed, it is often a good idea to review assign¬ 
ments as part of the meeting’s conclusion. Finally, conducting a critique of the meeting 
after it is over, perhaps introspectively, may prove helpful in moving the manager closer 
to the goal of better meeting management. 

Specialized Techniques for Group Decision Making 

Brainstorming is a technique that was developed to enhance the alternative-generation 
portion of the decision-making process. The goal is to generate as many ideas about 
some problem as possible, while suspending judgment about each idea. The task before 
the group is to develop ideas about a problem, or even solutions to the problem, and the 
more generated, the better. 

Once the assignment is announced, group members begin to generate ideas. The ideas 
are described orally, and someone records each idea on a blackboard or flipchart for 
everyone to see. No evaluations of ideas are permitted during brainstorming, and the 
session continues until everyone is out of ideas or the leader feels the session has lasted 
long enough. The purpose is to bring out the information held by different group mem¬ 
bers and to encourage synergy by stimulating new ideas. 

While brainstorming helps enrich the alternative-generation portion of the decision¬ 
making process, the nominal group technique generates both alternatives and solutions. 
A major purpose of the design is to avoid groupthink. A nominal group is a face-to-face 
meeting that allows only very limited interaction among participants. A problem is pre¬ 
sented, but unlike brainstorming, the group is expected to make a decision about how to 
solve the problem. After the problem has been presented, each member, working alone, 
writes down as many solutions to the problem as he or she can formulate. When every¬ 
one is finished writing, the leader calls for the solutions. Each person in the room presents 
one solution until all the possible solutions have been heard. 

The solutions are recorded publicly as they are presented, again usually on a black¬ 
board or a flipchart. Other members may ask questions for clarification if they do not 



4i4 Chapter 11 Interpersonal Skills and Group Dynamics 

understand a solution, but only clarifying questions are allowed. Members may not 
debate the merits of particular solutions. After every solution has been presented and all 
questions answered, the group makes a decision by means of a written poll, taken as 
a secret ballot. Each member ranks the different solutions from best to worst. The rank¬ 
ings are submitted to the meeting leader without any identifying material on the ballot. 
The leader or someone assisting the leader tabulates the ballots, and the solution that 
receives the highest average preference becomes the group’s decision. 

In many ways, quality circles are the most comprehensive specialized technique for group 
decision making in that they are explicitly concerned with every step in the decision-making 
process, from recognition that a problem exists through implementation of solutions. 
Quality circles also incorporate other specialized techniques such as brainstorming. 

Now that we have examined the advantages and disadvantages of group decision 
making, how do we know when to use group decision making rather than an individual 
decision maker? 

Participation in Group Decision Making 

The Vroom-Yetton model of participation in decision making focuses on the manager’s 
decision concerning the extent to which subordinates should participate in making a spe¬ 
cific decision (Vroom & Yetton, 1973; Vroom & Jago, 1988). The most impressive study 
supporting the model was an investigation of two hundred actual managerial decisions. 
Managers made these decisions as part of their jobs without the aid of the model; the 
model was then applied, after the fact, to determine the effectiveness of various patterns 
of involvement in decision making. 

Vroom and his associates identified the two hundred decisions and gathered data 
about how much subordinate participation was involved in making each decision. The 
researchers were also able to gather information about the consequences of each deci¬ 
sion specifically, whether each decision produced successful results. When decisions were 
made using a level of subordinate participation consistent with levels that would have 
been recommended by the Vroom-Yetton model (remember, none of the managers knew 
anything about the model at the time they made the decisions), 68 percent of the results 
or outcomes were judged to have been successful. When the amount of participation 
by subordinates was not at a level consistent with the model’s recommendations, only 
22 percent of the outcomes were judged to have been successful. 

This is a remarkable difference. In both relative and absolute terms, the managers 
who involved subordinates to a degree consistent with the model’s recommendations had 
extremely good results. In relative terms, the outcomes were more than three times better 
than the decisions whose level of subordinate participation was inconsistent with the 
model. In absolute terms, 68 percent success is excellent, because factors other than how 
a decision is made determine whether it produces good results. We would not expect any 
decision-making method to produce successful outcomes 100 percent of the time, so the 
results in the study were quite impressive. 

The Vroom-Yetton model involves the choice of various levels of involvement in deci¬ 
sion making; the choice is not merely between a single individual and an entire group. 



Group Dynamics 41 j 

BOX 11.6 

Types of Management Decision Methods 

Symbol_Definition 

AI You solve the problem or make the decision yourself using the 
information available to you at the present time. 

All You obtain any necessary information from subordinates, then 
decide on a solution to the problem yourself. You may or may not 
tell subordinates the purpose of your questions or give information 
about the problem or decision on which you are working. The input 
provided by them is clearly in response to your request for specific 
information. They do not play a role in the definition of the problem 
or in generating or evaluating alternative solutions. 

Cl You share the problem with the relevant subordinates individually, 
getting their ideas and suggestions without bringing them together as 
a group. Then you make the decision. This decision may or may not 
reflect your subordinates’ influence. 

CII You share the problem with your subordinates in a group meeting. 
In this meeting you obtain their ideas and suggestions. Then you 
make the decision, which may or may not reflect your subordinates’ 
influence. 

GII You share the problem with your subordinates as a group. Together 
you generate and evaluate alternatives and attempt to reach agree¬ 
ment (consensus) on a solution. Your role is much like that of 
chairperson, coordinating the discussion, keeping it focused on the 
problem, and making sure that the critical issues are discussed. You 
can provide the group with information or ideas that you have, but 
you do not try to “press” them to adopt “your” solutions and you 
are willing to accept and implement any solution that has the 
support of the entire group. 

SOURCE: Reprinted from Leadership and Decision-Making, by Victor H. Vroom and Philip W. Yetton, 
by permission of the University of Pittsburgh Press. © 1973 by University of Pittsburgh Press. 

These are two alternatives that frame a continuum with several other levels of partici¬ 
pation in-between. As Vroom and Yetton conceptualized them, there are five levels of 
participation along this continuum (see Box 11.6). The Vroom-Yetton model indicates 
which level of participation is appropriate in a particular situation. (Note that for some 
situations, two or more participation levels are equally likely to produce decisions that 
will generate successful results.) 

To use the model, you must understand (1) how to identify the different situations, 
and (2) how to match different situations with the appropriate levels of participation. 

Both issues are resolved by the use of two tools in combination: (1) the set of alterna¬ 
tive courses of action listed in Box 11.6 and (2) the decision tree shown in Figure 11.2. 



416 Chapter 11 Interpersonal Skills and Group Dynamics 

A. Does the problem possess a quality requirement?' 
B. Do you have sufficient information to make a high-quality decision? 
C. Is the problem structured? 
D. Is acceptance of the decision by subordinates important to effective implementation? 
E. If you were to make the decision by yourself, is it reasonably certain that it would be 

accepted by your subordinates? 
F. Do subordinates share the organizational goals to be attained in solving this problem? 
G. Is there likely to be conflict among subordinates over preferred solutions? 

® ® © ® © © © 

FIGURE 11.2 
mmmmm 

Decision Tree Governing Group Problems 

SOURCE: Reprinted from Leadership and Decision-Making, by Victor H. Vroom and Philip W. Yetton, by 
permission of the University of Pittsburgh Press. © 1973 by University of Pittsburgh Press. 

The decision tree initially appears complex but is simple to use. One begins under 
point A by answering question A (all questions must be answered either “yes” or “no”; 
“maybe” or “sometimes” is not allowed). Depending on the answer, you proceed to 
either question D (for a “no” response to A) or to question B (for a “yes” response to 
A). One continues answering the questions as indicated by the decision tree until you 
reach an end point. 

Each end point is numbered, with a set of participation levels listed after each end 
point. These are feasible sets; all the participation levels listed in a feasible set are equally 
likely to result in a successful outcome. This does not mean, however, that there is no 
reason to pick one style over another within the feasible set. The decision styles are 
arranged in the order of the amount of time it will take to reach a decision using the 
styles. The style listed first is the fastest, followed by the second fastest, and so on. In 
most situations, one should choose the fastest style in the feasible set. 

Again, the answers to the questions along the path reaching the particular end point 
define the situation, and the participation levels indicated in the feasible sets provide 
guidance concerning the appropriate level of involvement. Although the model, even 
as presented here in simplified form, may initially seem cumbersome and complex, 



Organization Change and Development 417 

managers who practice it for several days seem to be able to utilize it without notes 
thereafter. 

Organization Change and Development 

The capacity to bring about needed changes effectively and responsibly may be the key 
determinant of success or failure as a public manager. Change is ubiquitous in public 
organizations; some changes are small and little noticed, others are major and widely pub¬ 
licized. New programs and procedures must be developed, new organizational arrange¬ 
ments are required, and new attitudes and behaviors must be encouraged. Especially as 
the pace and complexity of modern life impinges on those in public organizations, a high 
degree of flexibility, creativity, and adaptability on the part of the organization and its 
members is increasingly required. 

But change does not come easily in modern organizations, so it is important to under¬ 
stand the nature of the change process and the reasons that people sometimes accept and 
support changes and sometimes resist. Some people are simply more open to change 
than others. The intuitive person, for example, is attracted by the future and is eager to 
embrace new ideas and concepts; the sensing person, on the other hand, lives more in the 
here and now and may need more convincing that a proposed change is a good idea. But 
regardless of personal differences, there are things managers can do to increase the like¬ 
lihood that organization members will agree to a particular change (see Box 11.7). If 
people trust the person who is proposing the change, either based on his or her skill 
and expertise or his or her record in past change efforts, then they will be more likely to 
accept the change. Similarly, if people fully understand the implications of the change, 
and if they have been involved in developing the new idea, they will be more likely to 
accept the change. Finally, if the manager is sensitive to the implications of the change 
for individuals in the organization and for their relationships with one another, people 
will be more likely to accept the change. 

Unfortunately, these basic guidelines for implementing change are regularly violated, 
often leading to confusion and turmoil. Take the following case as an example: 

Jane Sanford knew the work of the health services agency better than anyone else; 
she also knew the importance of employee involvement in organizational changes. As 
she listened to proposals from her staff for ways to implement a new immunization 
program, however, she knew that the plan she had formulated earlier in her office 
was far superior. Just as consensus seemed to be building around one particular sug¬ 
gestion, Jane jumped in and announced her plan, asking for quick implementation. 
To Jane’s surprise, the members of her staff were furious. 

As Jane Sanford discovered, if a change is ordered abruptly and dictatorially with 
little advance notice or preparation, the chances of its ready adoption are severely 
reduced. Moreover, if some perceive a proposed change as threatening, its chances of 



418 Chapter 11 Interpersonal Skills and Group Dynamics 

BOX 11.7 

Major Objectives of Typical Organizational Development Programs 

To create an open, problem-solving climate throughout the organization so that 
members can confront problems rather than fight about or flee from them. 
To build trust among individuals and groups through out the organization, whether 
through vertical linkages between superiors and subordinates, horizontal linkages 
among peers, or diagonal linkages among individuals of different ranks in different 
units. 
To supplement the authority of role or status with the authority of knowledge and 
competence. 
To locate decision making and problem-solving responsibilities as close as possible to 
the information sources. 
To make competition, where it exists, contribute to meeting work goals 
(organization units compete to produce a good or service more efficiently and ef¬ 
fectively) as opposed to win/lose competition. 
To maximize collaboration between individuals and units whose work is 
interdependent. 
To develop a reward system that recognizes both achievement of the organization’s 
mission (profits or service) and human development (growth of people). 
To increase the sense of ownership of organization objectives throughout the work 
force. 
To help managers manage according to relevant objectives rather than according to 
“past practices” or to objectives that do not make sense for one’s area of 
responsibility. 
To increase self-control and self-direction for people within the organization. 
To create conditions where conflict is brought out and managed. 
To increase awareness of group “process” and its consequences for performance 
that is, to help people become aware of what is happening between and to group 
members while the group is working on the task (e.g., communication, influence, 
feelings, leadership styles and struggles, relationships between groups, how conflict 
is managed, and so on). 

success are lessened. These outcomes are especially likely when the organization is 
already marked by poor working relationships; the proposed change may become a tar¬ 
get for other real or imagined frustrations and will not be considered on its merits at all. 

Diagnosing the Need for Change 

Ideas for change often occur in response to a feeling that something is wrong with the 
existing situation. As a manager, you will often scan the organization for blips or trouble 
spots that need attention; from these reviews, you may recognize symptoms of underlying 



Organization Change and Development 41:9 

problems. Sometimes you may wish to undertake a more thorough and detailed analysis 
that could possibly lead to a major change activity. These are standard topics to consider: 

Networking 

Resources on organizational learning and change are available from MIT’s 
Society for Organizational Learning (http://www.sol-ne.org/) or the Stanford 
Learning Organization (http://www.stanford.edu/group/SLOW/). Additional 
information can be found at the Academy of Management Online 
(http://www.aom.pace.edu/). 

1. Context: What is the purpose and history of the organization? What have been major 
strengths and weaknesses over the years? What are the political and economic constraints 
on operations? 
2. Outputs: At the organizational level, what are the levels of citizen satisfaction, effi¬ 
ciency, and productivity? At the group and individual levels, what is the satisfaction level 
of the employees and their commitment to the organization? 
3. Organizational culture: What are the dominant beliefs, attitudes, and values in the 
organization? Are there different values in different parts of the organization? Are some 
sets of values in conflict with others? 
4. Task requirements: What are the principal tasks that members of the organization 
must perform? Do employees clearly understand organization goals? How highly devel¬ 
oped (or overdeveloped) are organizational rules and procedures? 
5. Formal organization: How is the work organized? What is the organization structure? 
How many levels of management are there? How is work planned and coordinated? 
What are the formal modes of communication through the organization? 
6. People: How many employees does the organization have and where do they work? 
What is the mix of skills and abilities among employees? How many managers are there, 
and how do they relate to other employees? 
7. Physical setting and technology: What is the condition of the organization’s buildings 
and equipment? How does the physical environment affect the work being done? What 
is the level of technology, and how effectively is it employed? (Lippitt, Langseth, & 
Mossop, 1985, pp. 6-13). 

Strategies for Organizational Change 

Having diagnosed the need for changes, the manager may wish to undertake a fairly 
broad-scale effort to revitalize the organization. As we saw earlier, one set of approaches 
to change efforts is generally termed organization development. Those involved in 
organization development (OD) tend to focus on the human side of the organization, 
though their work may lead to recommendations about physical or programmatic 
matters as well. OD practitioners see the primary problem in most organizations as 
restrictive patterns of behavior, often based on misunderstanding and mistrust, that limit 



42.0 Chapter 11 Interpersonal Skills and Group Dynamics 

the capacity of the organization and its members to deal effectively with a complex 
and changing environment. The problem then becomes one of unfreezing past patterns 
of behavior, replacing them with more open and trusting relationships, and freezing 
these in place. Because these behavior patterns are largely based on the implicit images 
or theories of organization that guide our eventual behaviors, it is important not 
only that behaviors change, but that real learning—that is, adjustment of one’s theo¬ 
ries— occur. 

Most students of organizational development find that efforts to change established 
patterns of behavior are easier with the help of an outside educator or interventionist, 
an external consultant brought in to work with members to reveal dysfunctional behav¬ 
iors and to try to develop more effective working relationships. It is important to have 
changes develop internally rather than be imposed from outside. Chris Argyris suggests 
that the interventionist’s role involves three efforts: “(1) to help generate valid and use¬ 
ful information; (2) to create conditions in which clients can make informed and free 
choices; and (3) to help clients develop an internal commitment to their choice” (Argyris, 
1970, pp. 12-13; also, Argyris, 1993). 

A variety of techniques are available to the interventionist, including the following: 

Team building: Much of an organization’s work is done in groups; a program of team 
development may help improve group effectiveness. Usually, one begins with a careful 
review of how team members communicate and work together. Following a diagnosis 
of interpersonal group problems, the facilitator leads the group in designing an action 
plan to overcome those difficulties. Many of these interventions can be accomplished 
without an outside facilitator. 

Intergroup problem solving: Occasionally conflict or competition arises among 
groups; for example, two divisions of a small organization may fight over resources 
and prestige, overlapping responsibilities, or confusion about allocation of responsi¬ 
bilities. An interventionist might bring the groups (or representatives) together to 
identify problem areas and begin to devise ways to deal with the problems. As you 
might expect, confrontations are often difficult—sometimes even tumultuous—but 
a trained group facilitator can help keep the group focused on resolving the real issues 
that divide them. 

Goal setting and planning: In goal-setting efforts, superior-subordinate pairs or 
groups throughout the organization are asked to systematically assess their capa¬ 
bilities and set specific targets for future performance. After a specific period, the 
individuals or groups meet again to evaluate their work and establish goals for 
the next period. (As we have seen, one broad approach to organizationwide efforts 
to engage in formal planning and goal setting is described as management by 
objectives, or MBO.) 

Sensitivity training: As we saw in Chapter 9, the values heralded by students of 
organization development emphasize openness and trust among people at all levels 
of the organization. One way to significantly improve openness and trust is to help 
individuals and groups identify and explore their deep-seated feelings about their 



Terms and Definitions 421 

work and, perhaps, about one another. A trained facilitator is almost essential here, 
for serious personal and interpersonal issues often emerge and must be handled 
with great care. 

Summary and Action Implications 

All the knowledge, values, and skills you possess are expressed in the moment of 
action. Whether you are a manager or a policy analyst, or hold some other position in 
a public organization, your ability to act effectively and responsibly in the real world 
will determine your success. Your actions will usually occur in social settings and 
require working with others. Especially in a managerial position, you will engage in 
almost constant interaction with other people. So, no matter how much you know or 
how proper your values, your effectiveness will be limited if you cannot work well 
with others. 

Today we recognize that interpersonal skills, like other skills, can be developed and 
improved over time. Just as artists or athletes can improve proficiency, so can you improve 
your skills in areas of communications, delegation, negotiation, and group dynamics. 
The key to improving your skills in public management, as in other areas, is practice and 
repetition, accompanied by self-reflection and self-critique. 

If you want to be a better communicator, for example, you should seek opportunities 
to practice communicating with others. Find opportunities to make presentations; prac¬ 
tice listening with special concentration and sensitivity; try to develop your writing skills. 
As you practice, be conscious of your own and others’ reactions. Reflect upon your 
successes and failures and try to learn from both. Over time, you will improve your 
skills and find yourself far more effective. 

Throughout this book, we have described public management as involving cognitive, 
conceptual, technical, and human skills. In the moment of action, however, the areas 
cannot be separated. Indeed, your capacity to bring together knowledge, technique, and 
interactive skills at the moment of action will determine success or failure in most situa¬ 
tions. Public management can be studied in the abstract, but it must be lived in the real 
world — a world of stress, complexity, and uncertainty. In few other fields do so many 
aspects of the human personality have to come together. But it is this very difficulty that 
makes public service so challenging and rewarding. 

Terms and Definitions 

Brainstorming: Technique for enhancing the alternative-generation portion of the 
decision-making process. 

Delegation: Assigning tasks to others. 



422 Chapter 11 Interpersonal Skills and Group Dynamics 

Hidden agenda: Privately held goals and priorities. 

Interventionist: External consultant brought in to reveal dysfunctional patterns of 
behavior and to try to develop more effective working relationships. 

Nominal group: Face-to-face meeting that allows only limited interaction among 
participants. 

Parity principle: Idea that an individual should have equal amounts of authority and 
responsibility. 

Risky shift: Difference in the daringness of decisions group members make as 
a group compared to the average risk of the same decision if each member made 
it alone. 

Two-factor theory: Model of motivation involving two variables: job satisfaction and 
job dissatisfaction. 

Study Questions 

1. What are the seven basics of effective listening? 
2. Why is speaking an important interpersonal skill? 
3. Discuss the “Six Cs” for effective written communication. 
4. Management can be defined as “the process of getting things done through 

others.” Discuss how delegation and motivation enable the work of management 
to occur. 

5. Explain reinforcement theory and its four basic scenarios or results. 
6. Goal setting is another motivation technique. Discuss what characteristics a goal 

should have for maximum motivational impact. 
7. What are the elements of “principled negotiation”? 
8. Discuss advantages and disadvantages associated with group decision making. 
9. Explain the fundamentals of managing group dynamics. 

10. Identify and discuss various techniques for group decision making. 
11. Change is an important aspect of administrative work. Discuss the necessary steps 

for organizational change and development. 
12. Define the techniques available to interventionists involved in organizational change 

and development. 

Cases and Exercises 

1. Divide your class into groups of three. Taking turns, have one person choose a topic 
from the list that follows and begin a conversation with the group. Try to follow the 
rules of effective communication. 



Cases and Exercises 423 

a. You are short of cash and want to take a winter vacation to an island off the coast 
of Mexico. You need to borrow at least $300 for the trip. You are pretty sure you 
can pay it back in three months. 

b. The two classmates you are talking with have been working with you on a class 
project. Actually, the problem is that they have not been working! You have to do 
something to get them busy, or your grade will suffer. You need at least a “B” in 
the course to graduate. 

c. You have been working in behalf of the homeless in your community for the past 
two years. A march on Washington has been scheduled for next week, and a bus 
has been chartered to take people from your community to Washington, at a cost 
of $83 each. The problem is that unless you can find two more people to make the 
trip, the bus will not go. You want to convince your two friends to go with you. 

2. Imagine that you are an administrative assistant to the director of the Department of 
Social Services in your state government. The director is interested in starting a new 
quality-circles program and wants to send a letter to all the managers and employees 
in the department describing the new program and enlisting their support. You have 
been asked to draft the letter. Using the information about quality circles in Chapter 
8, draft an appropriate letter. 

After everyone in the class has drafted a letter, each draft should be shared with 
and analyzed by at least one other student. Your analysis should take into account the 
specifics of the situation (what should be said, how much should be said, how it 
should be said) as well as the more general Six Cs of effective communications listed 
in this chapter. 

3. Divide the class into task groups of five persons each, with three observers assigned to 
each group. The task groups should complete the following task: 

List what you consider the five most important guidelines for effectively managing 
a large organization. After the task group completes its work, the observers should 
lead a discussion of the group dynamics they observed in the work of the task group. 

For observers only: During the discussion, you should silently watch the discussion 
and take notes about the operation of the group. Try to identify patterns of group 
development such as those presented in the chapter. Pay special attention to shifting 
patterns of leadership and communications. If this same group were to perform a sim¬ 
ilar task, what would you suggest to improve its effectiveness? 

4. Divide the class into groups of three. Have one person in each group play the role of 
Chris, the supervisor, and another play the role of Lynn, the employee. (Each person 
should read only his or her own role description and not that of the other person.) 
The third person in each group should observe the discussion between Chris and 
Lynn, then comment on the motivation strategies employed. The scene begins as Lynn 
walks into Chris’s office and says, “Someone said you wanted to see me.” 

Chris: You are twenty-eight years old and recently received your MPA from a 
fairly prestigious school in the East. You have worked for the federal government 
for four years, moving rapidly from a presidential management internship to your 
current position supervising a small unit that produces health and safety brochures 
for industry. Lynn has worked with the agency for twenty-three years as a design 
specialist. Throughout this period, from what you understand, Lynn has done an 



424 Chapter 11 Interpersonal Skills and Group Dynamics 

excellent job. In the few months you have been with the agency, however, you 
have noticed a decided drop in both the amount and quality of Lynn’s work. With a 
heavy workload anticipated over the next several months, you decide that you have 
to do something to improve Lynn’s performance. You have asked that Lynn come in 
to visit. 

Lynn: You have worked for twenty-three years as a design specialist for a small 
federal government unit that produces health and safety brochures for industry. 
Throughout your career, you have taken great pride in your work and have done an 
excellent job. Over the last few months, however, you have been increasingly troubled 
by painful back spasms, the source of which you have not been able to identify. The 
problem with your back has triggered a lot of concerns about your health, your age, 
your work. Although you have not shared these concerns with anyone, you find that 
you spend long periods daydreaming about them. Even drinking a few martinis each 
evening has not calmed your fears. You still enjoy your design work, but somehow the 
projects you have had recently just do not seem all that exciting. What is worse, your 
supervisor, a kid probably half your age, has been hinting that your work may not be 
up to par. 

5. Consider the following case. You have recently been appointed head of a new agency 
established to monitor pollution emissions from coal-based power plants throughout 
the Midwest. The data you collect will have a direct impact on an anticipated presi¬ 
dential decision concerning acid rain in the U.S. Northeast and Canada. You must try 
to develop the most comprehensive and precise measures possible, then monitor as 
many plants as you reasonably can during the relatively short period prior to the pres¬ 
idential decision. 

Your staff, most of whom have been in the pollution control field much longer 
than you and are highly committed to the goals of your agency, have been arguing 
that a new piece of equipment, an Emission Systems Monitoring Instrument (ESMI), 
is the only device that is capable of precise measurements of the particular pollutants 
with which you are concerned. The problem is that the ESMI is both extremely 
costly and would require nearly half the time you have available just to be delivered. 
You are skeptical about whether the ESMI is worth the cost, but even more con¬ 
cerned that its limited availability will mean that you will fail to meet your deadline. 
You also think though you are not sure that the rough estimates generated by the 
existing equipment will be sufficient for the purposes of your report to the president. 
Do you go ahead with the existing equipment, or do you buy the ESMI? 

Using the Vroom-Yetton model for decisions about delegation, work through the 
various aspects of this problem to determine the appropriate level and pattern of 
delegation. 

For Additional Reading 

Bass, Bernard M., and Bruce J. Avolio, eds. Improving Organizational Effectiveness 
through Transformational Leadership. Thousand Oaks, CA: Sage Publications, 1993. 



For Additional Reading 425 

Bechard, Richard. Changing the Essence: The Art of Creating and Leading Fundamental 
Change in Organizations. San Francisco: Jossey-Bass, 1992. 

Denhardt, Robert B. The Pursuit of Significance: Strategies for Managerial Success in 
Public Organizations. Belmont, CA: Wadsworth, 1993. 

Denhardt, Robert B., Janet Vinzant Denhardt, and Maria Pilar Aristigueta. Managing 
Human Behavior in Public and Nonprofit Organizations. Thousand Oaks, CA: Sage 
Publications, 2001. 

Fischer, Roger, and William Ury. Getting to Yes. 2d ed. New York: Penguin Books, 1991. 
Gortner, Harold F., Julianne Mahler, and Jeanne Bell Nicholson. Organization Theory: A 

Public Perspective. Pacific Grove, CA: Brooks/Cole, 1987. 
Holzer, Mark, ed. Public Service: Callings, Commitments, and Contributions. Boulder, 

CO: Westview Press, 2000. 
King, Cheryl Simrell, and Camilla Stivers, eds. Government is Us: Public Administration 

in an Anti-Government Era. Thousand Oaks, CA: Sage Publications, 1998. 
National Academy of Public Administration. Leading People in Change: Empowerment, 

Commitment, Accountability. Washington, DC: National Academy, 1993. 
Stewart, Debra W, and G. David Garson. Organizational Behavior and Public 

Management. New York: Marcel Dekker, 1983. 
Vroom, Victor H., and Arthur G. Jago. The New Leadership. Englewood Cliffs, NJ: 

Prentice Hall, 1988. 



Chapter 12 

The Future of the Public Service 

For those considering work in the public service, whether for a relatively short period or 
for an entire career, several considerations may shape your thinking. As we have noted, 
the rewards of public service are not likely to be primarily financial. Salaries in most pub¬ 
lic organizations lag somewhat behind comparable salaries in business or industry. At the 
same time, however, those in public organizations are likely to be given a broader range 
of responsibilities earlier in their careers than their counterparts in business or industry. 
Moreover, the challenges and complexities of public service provide a special excitement 
that comes from being a part of unfolding major events — local, state, national, or even 
international. 

If you want to be a part of what’s happening in a changing society,, then the public 
service is the place for you. Think about the incredible variety of work in the public 
sector. Public managers are key actors in foreign affairs, the human services, environ¬ 
mental policy, educational reform, the space program, and an endless variety of other 
important areas. Indeed, it is fair to say that every major local, state, national, or inter¬ 
national issue now being discussed will provide challenges and opportunities for public 
managers in the future. If you are interested in meaningful work — work that makes 
a difference in people’s lives—then you should find involvement in the public service 
quite appealing. 

The New Public Service 

Throughout most of our country’s history, public service has been recognized as an 
important undertaking that contributes to the betterment of society, supported by 
citizens and politicians alike. Unfortunately, for the past 25 years or so, support has 
wavered. From the late 1960s through the middle 1980s, the public service seemed to be 
under fairly constant attack. Through the candidacies of both Jimmy Carter and Ronald 
Reagan, national politicians of both parties organized their campaigns at least in part 
around attacks on Washington and the bureaucracy. Public administrators were crit¬ 
icized as both unresponsive and overly responsive — unresponsive to the common citizen 
and overly responsive to special interests. Public organizations were accused of 
being highly ineffective and inefficient, failing to achieve their objectives and wasting 
enormous sums of public funds. 



The New Public Service 427 

Fortunately, the environment of the public service has changed considerably over the 
past several years, leading us to be somewhat more optimistic about its future image. 
Bush and Clinton were more supportive of the federal public service, and thus 
far George W. Bush appears to be continuing this trend. In addition, part of the more 
positive perspective on government was brought about as the result of policy and pro¬ 
gram shifts in response to questions about government activism; part reflects a grow¬ 
ing acceptance of the initiatives that gave rise to dissent; and part is the reemergence 
of a positive view of government. In addition, the emergence of state and local govern¬ 
ments as both significant and professional in their dealings with the public has had a 
positive effect. 

In policy areas, over the past decade Americans have seen tax reductions and tax 
reform at the federal level, as well as tax limitations at the state and local levels. These 
actions have helped to mitigate the view that the government tax machine is running 
wild. In addition, after years of soaring budget deficits, the Bush administration came 
into office in 2000 with a projected budget surplus. Similarly, throughout the last 
five presidential administrations, there has been a move to deregulate certain activities. 
Some areas (such as transportation) were significantly deregulated, while others were 
put under special scrutiny by the Office of Management and Budget. In general, an 
impression developed that excessive government intervention was being brought under 
control. 

Finally, the political climate has been changing, even to the point that we might 
suggest the reemergence of a positive view of government. Such a view has been most 
evident at the state and local levels. In several important areas — notably education, 
economic development, and environmental concerns — the states were taking positive 
actions. And, at the same time, public confidence in state and local governments was 
growing. 

Moreover, with growing national concern about such problems as AIDS, hazardous 
waste, ocean dumping, the greenhouse effect, drugs, foreign competition, the homeless, 
and child care for working families, we might even speculate that a new era of national 
action is on the horizon. Indeed, the success of the Clinton administration in reducing 
the size of government and contributing to a projected federal surplus, while at the same 
time encouraging substantial economic growth may permit the beginning of a more 
activist era, as well as one in which the men and women who constitute the public 
service will be treated with greater dignity and respect. 

These efforts in support of the public service return our country to a long-standing 
tradition. At other periods — and even today in other countries—the public service has 
been considered a proud and honorable profession. John F. Kennedy’s inaugural state¬ 
ment continues to have relevance today. Recall that Kennedy said, “Ask not what your 
country can do for you, ask what you can do for your country.” In another speech, 
Kennedy amplified the point: “Let the public service be a proud and lively career. And let 
every man and woman who works in any area of our national government, in any 
branch at any level, be able to say with pride and honor in future years: I served the 
United States Government in that hour of our nation’s need.” Those who work in the 
field of public administration at all levels of government carry forward that long and 
proud tradition. 



42.8 Chapter 12 The Future of the Public Service 

Efforts to Support the Public Service 

Despite recent attacks on the public service, more and more people are coming to recog¬ 
nize its tradition of excellence. Recognition of the importance of public service has been 
fostered by several groups and organizations, among them the American Society for 
Public Administration (ASPA). Always an advocate of public service, a decade ago, ASPA 
developed a “National Campaign for the Public Service,” to promote the dignity and 
worth of the public service. Activities of ASPA’s National Campaign for the Public Service 
have included joining with other groups, such as the Public Employees Roundtable, in 
publicizing the benefits and contributions of public servants, developing award programs 
and other forms of recognition for outstanding public officials, and developing curricu¬ 
lum projects at elementary and secondary school levels to introduce young people to the 
public service and the benefits of public-service careers. 

One particularly prestigious body that actively supported the public service was the 
National Commission on the Public Service, chaired by former Federal Reserve Board 
Chairman Paul A. Volcker. The commission was formed in 1987 following a symposium 
in Washington, D.C., that was titled “A National Public Service for the Year 2000.” Those 
at the symposium concluded that a private, nonprofit organization should be assembled 
to prepare action recommendations to the president and Congress on what many saw as 
a “quiet crisis in government.” The group felt that “too many of the best of the nation’s 
senior executives are ready to leave government, and not enough of its most talented 
young people are willing to join.” Moreover, conferees felt that “this erosion in the attrac¬ 
tiveness of the public service at all levels—most specifically in the federal civil service— 
undermines the ability of government to respond effectively to the needs and aspirations of 
the American people, and ultimately damages the democratic process itself” (National 
Commission on the Public Service, 1989). Following a period of study and deliberation, 
the commission made the following general recommendations (see also Box 12.1): 

First, the president and Congress must provide the essential environment for effective 
leadership and public support. 

Second, educational institutions and the agencies of government must work to enlarge 
the base of talent available for, and committed to, public service. 

Third, the American people should demand first-class performance and the highest 
ethical standards, and, by the same token, must be willing to provide what is neces¬ 
sary to attract and retain needed talent. 

Specifically, the commission called upon the president and the Congress to: 

Take action now by word and deed to rebuild public trust in government. 

Clear away obstacles to the ability of the president to attract talented appointees from 
all parts of the society. 



Efforts to Support the Public Service 429 

BOX 12.1 

Main Conclusions of the Volcker Commission 

The central message of this report of the Commission on the Public Service is both 
simple and profound, both urgent and timeless. In essence, we call for a renewed sense 
of commitment by all Americans to the highest traditions of the public service—to 
a public service responsive to the political will of the people and also protective of our 
constitutional values; to a public service able to cope with complexity and conflict and 
also able to maintain the highest ethical standards; to a public service attractive to 
the young and talented from all parts of our society and also capable of earning the 
respect of all our citizens. 

A great nation must demand no less. The multiple challenges thrust upon the 
Government of the United States as we approach the twenty-first century can only 
reinforce the point. Yet, there is evidence on all sides of an erosion of performance 
and morale across government in America. Too many of our most talented pub¬ 
lic servants — those with the skills and dedication that are the hallmarks of an 
effective career service — are ready to leave. Too few of our brightest young peo¬ 
ple— those with the imagination and energy that are essential for the future — are 
willing to join. 

Meanwhile, the need for a strong public service is growing, not lessening. Americans 
have always expected their national government to guarantee their basic freedoms and 
provide for the common defense. We continue to expect our government to keep the 
peace with other nations, resolve differences among our people, pay the bills for needed 
services, and honor the people’s trust by providing the highest levels of integrity and 
performance. 

At the same time, Americans now live in a stronger, more populous nation, a nation 
with unprecedented opportunity But they also live in a world of enormous complexity 
and awesome risks. Our economy is infinitely more open to international competition, 
our currency floats in a worldwide market, and we live with complex technologies 
beyond the understanding of any single human mind. Our diplomacy is much more 
complicated, and the wise use of our unparalleled military power more difficult. And 
for all our scientific achievements, we are assaulted daily by new social, environmen¬ 
tal, and health issues almost incomprehensible in scope and impact issues like drugs, 
AIDS, and global warming. 

Faced with these challenges, the simple idea that Americans must draw upon tal¬ 
ented and dedicated individuals to serve us in government is uncontestable. America 
must have a public service that can both value the lessons of experience and appreciate 
the requirements for change; a public service that both responds to political leadership 
and respects the law; a public service with the professional skills and the ethical sensi¬ 
tivity America deserves. 

SOURCE: Excerpted from The National Commission on the Public Service, Leadership for America: 
Rebuilding the Public Service (Washington, DC, 1989), 1-2. 



43° Chapter 12 The Future of the Public Service 

Make more room at senior levels of departments and agencies for career executives. 

Provide a framework within which those federal departments and agencies can exer¬ 
cise greater flexibility in managing programs and personnel. 

Encourage a stronger partnership between presidential appointees and career executives. 

Develop more student awareness of, and educational training for, the challenges of 
government and public service. 

Develop new channels for spreading the word about government jobs and the 
rewards of public service. 

Enhance the efforts to recruit top college graduates and those with specific profes¬ 
sional skills for government jobs. 

Simplify the hiring process. 

Increase the representation of minorities in public service. 

Build a pay system that is both fair and competitive. 

Rebuild the government’s chief personnel agency to give it the strength and mandate 
it needs. 

Set higher goals for government performance and productivity. 

Provide more effective training and executive development. 

Improve government working conditions. 

While the Volcker Commission focused on the federal government, a more recent 
National Commission on the State and Local Public Service examined other levels of 
government and came to similar conclusions. The commission, chaired by former 
Mississippi Governor William F. Winter, pointed out that the 15 million people who 
work at the state and local level do much of the real work of domestic governance. 
Members of the commission agreed that some important institutional changes were nec¬ 
essary in order for these people to meet the challenges of the future. Their proposals call 
for movement away from the old rule-bound bureaucratic governments of the past to 
a new, more responsive system. Among the recommendations of the commission were 
the following: 

Strengthen executive authority to act by reducing the number of independently elected 
cabinet-level officials. 

Temper the fragmentation of government by consolidating or eliminating as many 
overlapping or underperforming units as possible though a base-closure approach. 

Use the executive budget approach and give state and local executives more opportu¬ 
nity to have their program considered as a whole in the legislative process. 



Trends in the Public Service 43i 

Flatten the bureaucracy by reducing the number of management layers between the 
top and bottom of agencies and thinning the ranks of the managers who remain. 

Deregulate government by (1) reforming the civil service, including reducing use 
of veterans’ preference and seniority; (2) streamlining the procurement process; and 
(3) making the budgeting process more flexible. 

Create a learning government by (1) restoring employee training and education bud¬ 
gets; (2) creating a new skills package for all employees; (3) basing pay increases on 
skills, not time in position; (4) insisting on a new kind of problem-solving manager, 
not merely a paper passer; and (5) encouraging a new style of labor-management 
communication. 

Open the books on government by providing detailed information on campaign 
financing and lobbying. 

Limit the political fund-raising season to six months before an election, and limit the 
use of carryover campaign funds. 

Encourage citizen problem solving by experimenting with citizen liaison offices and 
setting up a national service corps. 

Begin to deal with the financing crisis in health care, with the federal government 
leading, following, or getting out of the way (Thompson, 1993). 

With the efforts of groups such as ASPA, the Volcker Commission, and the Winter 
Commission, and with renewed support of political leaders at the national, state, and 
local levels, we can expect the reemergence of a greater sense of respect and apprecia¬ 
tion for the work of those engaged in public service at all levels. The work of the public 
service, the work of building a better world, requires the best possible talent and 
deserves both commitment and support. As the Volcker Commission puts it, “A great 
nation must demand no less” (National Commission on the Public Service, 1989, p. 1). 

Trends in the Public Service 

The challenges that will face those in the public service over the coming years are sub¬ 
stantial, for they not only require resolving important public-policy problems, but 
they also require resolving them in a way that restores and maintains public confi¬ 
dence. The efforts to restore meaning and integrity to the public service are much 
needed in our society, and in societies around the world, but they should be accompa¬ 
nied by a clear understanding of several important trends in our field that are reshap¬ 
ing the values and commitments of public service itself. What are the major trends 
worldwide that those entering the public service in the next decades are likely to 
experience? (See Box 12.2) 



432 Chapter 12 The Future of the Public Service 

BOX 12.2 ^——— 
Challenges for the Future 

The OECD’s Public Management and Governance Service (or PUMA) recently released 
its prediction of “the government of the future,” citing the following questions facing 
public officials in the twenty-first century: 

How can governments best prepare themselves for reform challenges? 
How can the public sector develop a culture responsive to change? 
What types of leaders are needed? 
How can governments better communicate with citizens? 
How can governments avoid “reform fatigue”? 

While the OECD recognized the need for reform in some cases, it also cautioned 
reformers to take stock of the scope of change and make sure the reform agendas 
remained in-line with citizen-oriented outcomes. Moreover, the OECD challenged 
reformers to make this a shared process. “Public management reform has important 
stakes for all members of society, but too often people are forced into opposite sides 
in discussions on reform: by dividing people into winners and losers, the stage is set 
for conflict rather than success” (OECD, 2001, p. 1). The key challenge will be to use 
the opportunity created by the improving image of government to build a consensus 
around the goals, as well as the underlying values, of the reforms. 

SOURCE: OECD. Government of the Future. PUMA Policy Brief No. 9. Paris: OECD, June 2001. 

Economic Changes and Redefining Government 

First, remember that a significant redefinition of the public service is now taking place. 
Note specifically that changing economic conditions are affecting both the mission and 
structure of the public enterprise. Our economy has been transformed in several ways 
from a production base to a service base, from a national base to a global base, and 
from a growing public commitment to a limited commitment. In each case, there are 
direct implications for those in the public service: 

Challenges face public managers in areas where traditional industries, such as steel or 
timber, have suddenly declined, as “high tech and high touch” has become a banner 
for economic growth. 

Challenges face those at the state and local levels who must play new and important 
roles in economic development, including international economic development, which 
may require them to know as much about business decisions in Japan as in their own 
state capital. 



Trends in the Public Service 433 

Challenges face those operating public programs, especially in the human services, 
who have found government spending severely restricted at a time when the need for 
the services seems ever increasing. 

Our economy is presenting important challenges to government, but in responding to these 
challenges, government is not alone. The challenges have led to new ways of thinking 
about public/private relationships in the provision of public services. As a result, public- 
service work is no longer the work only of government, but an effort in which governmen¬ 
tal agencies, nonprofit and third-sector organizations, and corporate and business interests 
participate. Consider these examples: 

In many states, the number of persons employed by private security forces exceeds the 
number employed by local police departments. 

In some cities, the chamber of commerce is so involved in public programs that it 
receives more funding from government than it receives from private business. 

In major urban areas, less than half of human services are delivered by government; 
the majority are delivered by nonprofit and private agencies. 

Some of these trends, such as privatization and contracting for specific goods and 
services, are becoming familiar; others are quite distinctive, as they involve third parties’ 
discretion in the use of public authority and in spending of public funds. This develop¬ 
ment suggests a significant reshaping of the public service and raises serious questions 
about equity and accountability in the management of public programs. 

Trends associated with the reform agendas in the public and nonprofit sectors reflect 
more recent responses to our changing social and economic condition. We have noted 
that the reform agenda stems from the belief that government has failed to keep pace 
with the dynamic environment in the postindustrial world. Consequently, the reform 
movement already has had a dramatic impact on the character and processes of gov¬ 
ernment organizations at all levels. And, given the attention this reform movement has 
received, such trends promise to continue into the future. 

An important consideration with respect to the reform movements relates to the 
application of entrepreneurial practices and business values in the public service. While 
transforming the government-citizen relationship to economic terms—that is, viewing 
the citizen as a customer—may generate cost savings and lead to more streamlined pub¬ 
lic organizations, the question remains as to what the long-term impact will be for issues 
of citizenship and public participation. For although creating a government that does 
more with less may produce a stronger bottom line, it could have harmful effects for 
issues of citizen engagement with the institutions of governance. 

On the other hand, the OECD cautions would-be reformers to avoid what it calls 
“reform fatigue,” or “the condition in which public servants become cynical and tired of 
reform” (OECD, 2001, p. 5). In its study of thirty countries that have implemented some 



434 Chapter 12 The Future of the Public Service 

type of reform agenda, the OECD found that the most successful reforms were not 
imposed from the executive leadership level but were embraced (and in most cases initi¬ 
ated) by those at all levels. Most importantly, successful reforms resulted not from change 
simply for change’s sake, rather from attempts to build more adaptive, responsive organi¬ 
zational systems. 

Globalization 

Second, changing economic conditions have combined with technological developments 
to make the international dimensions of public administration more important than ever. 
Understanding the activities of political and administrative officials in other countries 
is important not only for those who will spend part of their careers outside the United 
States, but also for those who will work at home. Increasingly, city managers, for exam¬ 
ple, find that to be effective in local economic development activities, they must be 
experts in international business. But global interdependencies will affect us in other 
ways as well; for example, the deforestation in Brazil, Africa, and the Philippines will 
directly affect the quality of our own environment. And, of course, we cannot overlook 
our obligation to help reduce poverty and hunger throughout the world. 

Several diverse—indeed, competing—views have emerged relating to this global¬ 
ization trend. They range from a critical perspective, in which the trend is seen as an 
attempt by developed nations to introduce Western values into other regions, to what 
supporters believe to be a chance to extend employment opportunities and wealth cre¬ 
ation into impoverished nations. This latter view suggests that, over time, all of us in the 
global village will benefit from the forces of globalization and the internationalization 
of economic markets. 

Networking 

For information concerning international perspectives on governance and public 
administration, visit the OECD (http://www.oecd.org) or the United Nations 
(http://www.un.org/esa/). Local issues on a global scale, including decentralization 
and sustainable development, can be researched online at the ICMA 
(http://www.icma.org/resources/index.htm) or at the International City 
Government Resource Centre (http://www.geocities.com/Paris/9925). 

The impact of globalization on public administration should not be underestimated. 
However, relating to the internationalization process is a pattern that carries perhaps even 
greater implications: decentralization. Central governments increasingly are handing over 
new powers and responsibilities to local and regional authorities. Whether triggered by 
declining revenues at the national level, or the nation-state’s diminished power-base, the 
result has been growing demand for services and decision making by subnational admin¬ 
istrations. And, in many cases, these administrations lack the capacity and resources to 
deal effectively with their newfound authority. 



Trends in the Public Service 435 

For example, the Mexican government in 1995 implemented what President Zedillo 
referred to as the “New Federalism,” a comprehensive effort to redistribute power from 
the national to subnational levels. The plan includes extending more responsibility to 
state and local authorities, opening new doors for local governments to play a larger role 
in development planning, and creating new opportunities for indigenous communities to 
be represented and to participate in government decision making. However, many of the 
provisions have yet to be implemented, and those which have been put into effect have 
struggled to achieve the broad objectives laid out by the Zedillo administration. 

To better understand these trends, and what they mean for public administration, the 
development of more globalized, comparative forms of analysis will be critical. Such 
analysis serves both as a source of understanding international issues, as well as enhanc¬ 
ing the way we deal with issues in our own communities. So, as we continue to live in 
our global village, we will be challenged to deal with opportunities and threats that defy 
national boundaries. Our systems of governance, consequently, will need to reflect our 
concern for the public interest — both at home and abroad. 

Technology and the Work Environment 

A third area of concern is the changing environment in which public servants work. New 
people and new values are entering the public workplace. Greater diversity in public 
agencies has had important and positive impacts on the values of those agencies. Public 
organizations have taken on entirely new shapes, a feat that would have been impossi¬ 
ble with the established, more traditional views of organizing that characterized public 
bureaucracies in the past. In turn, this diversity has contributed to important changes in 
the way we understand leadership, as diverse cultural and organizational views become 
translated into more equitable, power-sharing systems of authority (see Box 12.3). One 
hopes that present trends toward equity and involvement will continue. 

Similarly, we have experienced a transformation in the public workplace brought on 
by new forms of technology. The influence of information technology, in particular, 
on how we conduct the public’s business has been remarkable, and there is no reason to 
expect that the technological revolution is over. Pressure to integrate work processes and 
create more flexible, networked organizations will continue to fuel the drive for more 
effective forms of communicating and sharing information. We will, more and more, 
work in virtual groups, with much of our interaction being transferred into cyberspace. 

The Norwegian government has begun to use information and communications tech¬ 
nology for more than enhancing internal systems; its Electronic Government Action Plan 
lays out guidelines on ways public officials can use technology to engage with citizens. As 
part of the plan, the government has implemented a strategy to achieve high levels of pub¬ 
lic access to the Internet in schools, libraries, homes and places of employment. A primary 
purpose is to expand Norway’s tradition of civic engagement into the electronic age. 

Of course, the most prevalent argument for technology involves the use of technology 
to enhance government performance. The changing character of government organiza¬ 
tions reflects this purpose, as virtually all systems and work processes feature some form 
of automation. However, we should not lose sight of the fact that technology may also 



436 Chapter 12 The Future of the Public Service 

BOX 12.3 

Global Perspectives on the Future of Public Administration 

The UN General Assembly recently opened a dialogue on the importance of public 
administration in building civil society and ensuring sustainable development world¬ 
wide. The following statements by discussion participants, which appeared in the UN 
press release, “Good Government Cited as Positive Stimulus to Progress, as Assembly 
Continues Public Administration Debate” (April 17, 1996), give a snapshot of the 
global dimensions of public administration: 

S. R. Insanally (Guyana) said that in recent years there had been a marked tendency 
to diminish the importance of public administration. That accompanied the belief 
that more things could be left to the “magic hand of the market.” In some coun¬ 
tries, he added, “it even became fashionable to see government as a problem, to 
denounce ‘big’ government.” Economic progress was due, however, both to good 
public administration and to individual initiative, which good governments have 
actively facilitated and fostered, he said. 
Soliman Awaad (Egypt) said public administration was one of the main means 
through which governments could respond to the wishes of their people. State 
administrative organs were faced with the burden of seeking to promote social and 
economic development, preserve the environment, control overpopulation, and 
provide employment for increasing numbers of young people. 
Joseph Chiteyeye (Malawi) said that his country had implemented a number of 
development programs that were aimed at raising the standard of living of its peo¬ 
ple. He said one of the government’s roles in that respect was to mobilize 
resources, both locally and in the donor community, which could be provided 
directly to local communities for the construction of such things as schools, water 
schemes, and health centers. 
Gerhard Walter Henze (Germany) said public administration had to be based on the 
rule of law and democracy. Transparency and accountability for all public 
institutions were essential to combat all forms of mismanagement and corruption. 
Mehmet Atalay (Turkey) said that public administration and development were 
inseparable. Since 1980, Turkey had applied an outward-oriented and private sec¬ 
tor-based development strategy, parallel to the major trends in global conditions. 
The succeeding Turkish governments recognized the need for privatization, devel¬ 
opment of new markets, decentralization, and accountability, among other 
measures. All of those had now become pivotal issues in the field of public admin¬ 
istration in the world today. 
Ascar Aitmatov (Kyrgyzstan) said that evidently, as demonstrated by the General 
Assembly’s dedicating a resumed session to the theme of public administration, “we 
have come to the stage where the need for a fundamental review of that role is 
urgent” and more apparent than ever. Training was one of the most urgent needs; 
the government’s administration and management system had not kept pace with the 

(continued) 



Trends in the Public Service 437 

changes in modern society. The earlier predominance of central planning meant that 
many public servants had technical skills, but almost no training on policy analysis, 
evaluation, or modern implementation methods. “New management methods and 
techniques are almost unknown,” he said. 
Ramtane Lamamra (Algeria) said that, since independence, Algeria had sought to 
establish solid institutions which could lay the groundwork for an economic and 
social progress. In that process, a web of industries had been set up and 
the needs of a deprived population had been addressed. Free enterprise and pri¬ 
vate initiative had been encouraged. The challenges facing public administration 
today called for a refocusing towards promoting the well-being of all society. 
Attention was being devoted to preserving macroeconomic stability, achieving 
national consensus in an open society, and restructuring the state’s presence in 
the economic arena. 
Alyaksandr M. Sychou (Belarus) said his country had set itself a series of tasks to 
effect the move from a planned to a market economy. The effectiveness of public 
administration had been a key factor in the success of that transition effort in 
Belarus. Reform of the public administration currently involved focusing on lead¬ 
ing-edge technology, while stimulating long-term capital investment and direct for¬ 
eign investment. 
Diallo Amadou Ousmane (Mauritania) said that after independence, his coun¬ 
try found itself confronted with the urgent need to build a nation state. This 
required the rapid organization of civil society and the building of the appropriate 
state structures; it then had to take over the key sectors of the economy. The state 
thus found itself as chief employer and chief driving force in the economy at all 
levels, and in development, he continued. The government set up a broad program 
of structural adjustment, in the context of the economic policies of the time. To 
achieve the decentralization and institutional development, the government 
focused on modernizing its administration and strove for the establishment of 
a pluralistic democracy. 
Vianney Shumbusho (Rwanda) said the recent war and catastrophic genocide of 
1994 had resulted in destruction of approximately one-seventh of the population, 
most of whom were in the productive labor force. It had also involved destruction 
of infrastructure and equipment, the collapse of institutions, a severe setback in 
agricultural and industrial activities, an exodus of between 1 million and 2 million 
people, a demanding inflow of former refugees for voluntary repatriation, and a 
traumatized surviving population. 
Imre Verebelyi (Hungary) said that Hungary was a European country in transition 
from the previous totalitarian, centralized, one-party system. It was currently 
undergoing “an administrative revolution, rather than a simple reform.” This 
administrative revolution focused on the changes of basic functions, role, and 
structure of public administration. The institutional side of change was underlined 
and emphasized, while the operational side had been “rather pushed into the back¬ 
ground.” 

(continued) 



43 8 Chapter 12 The Future of the Public Service 

Joseph Cassar (Malta) stressed the important role played by public administrations 
in promoting economic growth and sustainable development. There had been 
unprecedented political, economic, and technological changes in recent years, which 
also impacted on public administrations. The United Nations played a pivotal role 
as a clearinghouse and service-oriented catalyst for governments to improve their 
public management capacities. 

SOURCE: United Nations. “Good Government Cited as Positive Stimulus to Progress, as Assembly 
Continues Public Administration Debate.” Press release issued by the United Nations General Assembly, 
Press Release #GA/9062, 17 April 1996. 

help us achieve more value-oriented goals of public service. Technology in the form of 
civic networks and other resources may help us shift the orientation of our public 
organizations to be more external in nature. We may, through our emerging technology, 
be able to enjoy more meaningful forms of engagement with citizens. 

Still, as this trend develops, it raises important concerns for the human consequences 
of advanced technology. How technology affects the relationship between government 
workers and their clients, how to cope with the seemingly inevitable impersonality of the 
information age, and how to resolve the difficult ethical questions relating to privacy and 
abuse — these and many other issues will continue to confound us over the coming 
decades as the technological society pursues its present course. 

The Role of Citizens in the Governance Process 

The fourth issue involves the participation of citizens in the governance process and the 
notion of civil society. More and more, public decisions are being made through mean¬ 
ingful interaction with citizens. This means that citizens are playing an important role 
not as recipients of government services but as contributors to the policies and programs 
that affect their lives. In many ways, this emerging form of citizen participation repre¬ 
sents a return to important principles that underlie our system of democracy. It appears 
that we are becoming more concerned with equity and justice, as opposed to merely effi¬ 
ciency and performance. Yet the change from the more traditional representative democ¬ 
racy to a direct form poses unique challenges for elected and administrative officials. 

As it stands, many public administrators view citizen participation as a source of ten¬ 
sion. That is, they associate civic engagement with public hearings, legal and administra¬ 
tive arbitration, and other formal mechanisms that tend to be time consuming and highly 
confrontational. Public involvement, accordingly, comes to represent a hindrance to effi¬ 
cient management. In turn, public involvement is limited to being a source of legitimacy, 
through hearings and similar forums, of decisions that have already been made through 
more rational approaches. However, such limited forms of civic engagement not only 
result in policies which are detached from the actual needs of affected populations, but 
over time create barriers between the local institutions of governance and citizens. 



Trends in the Public Service 439 

Many public officials have started to open governance processes to more substantive 
forms of engagement. In the Netherlands, for example, public officials at the national and 
local level have initiated more interactive forms of decision making, where government 
decisions result not just from consultation with citizens but with direct involvement of the 
public in the decision-making process. The government also has opened doors for legal 
resistance to governmental actions, giving citizens the opportunity to challenge the gov¬ 
ernment on policies believed to run counter to the public interest. 

The move to more direct forms of civic participation opens the door for effective and 
responsible citizenship. But the theme also cuts in another way, suggesting that those in 
government must be willing to listen and act in a responsive manner. Only by pursuing 
this two-way street between citizens and government will the most healthy relationship 
between government and citizens be brought about. For those in public administration, 
the challenge will be to sustain these meaningful forms of engagement and civil society. 

To guide public administrators in this capacity, Janet and Robert Denhardt (2000) 
offer seven principles of what they call “the New Public Service”: 

1. The primary role of the public servant is to help citizens articulate and meet their 
mutual interests rather than to attempt to control or steer society in new directions. 
2. Public administrators must make the creation of a collective, shared notion of the 
public interest paramount. 
3. Policies and programs to meet public needs can be most effectively and responsibly 
achieved through collective efforts and collaborative processes. 
4. The public interest is the result of a dialogue about shared values rather than the 
aggregation of individual self-interests. 
5. Public servants must be attentive to more than the market; they must also attend to 
statutory and constitutional law, community values, political norms, professional stan¬ 
dards, and citizen interests. 
6. Public organizations and the networks in which they participate are more likely to be 
successful in the long run if they are operated through processes of collaboration and 
shared leadership based on a respect for all people. 
7. The public interest is better advanced by public servants and citizens committed to 
making a meaningful contributions to society rather than by entrepreneurial managers 
acting as if public money were their own. 

The Ethical Challenges Facing the Public Service 

Establishing a proper ethical basis for public action is itself one of the most important 
challenges facing the public service. If your generation has one significant contribution to 
make to the development of the public service, it may be to identify and elaborate the 
moral and ethical dimensions of public administration and to assert moral leadership. 

As we have seen, early writers in the field portrayed public administration primarily 
as a managerial concern with the technical processes of implementing public policy. Over 
the years, public administrators have developed considerable skill in managing public 
programs—probably more than they are usually given credit for. 



44° Chapter 12 The Future of the Public Service 

Others soon came to recognize that public administration is also a political concern — 
that administrators at all levels are deeply involved in shaping public policy. Despite 
recent rhetoric in Washington, there is every reason to expect that those in public organi¬ 
zations will increasingly be called upon to do more than simply respond to legislative 
mandate; they will be asked to identify and to articulate important public interests. 

Beyond a view of public administration as a managerial or a political concern, public 
administration today is increasingly an ethical concern. Everything, including the smallest 
actions or tasks you will take as an administrator will carry important value implications. 
At the root of every act of every public servant, whether in developing or executing public 
policy, lies a moral or ethical question. 

What does it mean, then, to recognize public service as not only a managerial and 
political concern but also as a moral and ethical concern? For one thing, it means that 
public administrators must demonstrate in their own actions the highest standards of 
behavior. Beyond that, to see the public service as a moral and ethical concern requires 
recognition that every action an administrator takes involves an effort to discover or to 
clarify the public interest. 

The future public servant will likely be both active in policy development and respon¬ 
sive to the public interest. Our constitutional structure not only permits but encourages an 
active executive and administrative role. Even more important is the implicit philosophical 
directive of the Constitution that public service is a special calling in a democracy and that 
those who participate in the public service, regardless of background or occupation, are 
guardians of a public trust. 

This point is most critical at a time when our definition of public service is shifting. 
As we have noted, the public service is no longer merely that group of political and 
administrative officials employed by government agencies. Public service today involves 
a wide range of private and nonprofit organizations in the delivery of public goods and 
services. This development raises managerial concerns, political concerns, and most of 
all, moral and ethical concerns. Under these conditions, public administrators must 
assume leadership in establishing a high moral tone for the public service generally. In 
contrast to the often-heard advice that public administrators should follow the model of 
business, we might propose just the opposite—that public organizations and the values 
and commitments they represent should become models for all organizations, at least 
those involved in the management of public programs. 

Ethical considerations have become a central theme in public administration around 
the world. In Japan, for example, lawmakers at the national level recently passed com¬ 
prehensive legislation to ensure ethical practices by governmental officials. Among other 
provisions, the National Public Service Ethics Act, which took effect in April 2000, 
established a national ethics board to continuously monitor compliance of government 
officials and to oversee investigations and punishment for violations of ethical standards. 

For the public service to regain its proper role in our society, we will have to establish 
and maintain throughout government and the public service a true commitment to the 
values of democracy. Trust in the public service and the public willingness to participate 
in the work of government will occur only if the public is convinced that those in office, 
whether political or administrative, seek the public interest (not merely their own), and 
that they do so with skill and responsibility. Only when our commitment to democratic 



Cases and Exercises 441 

practices and ideals is clear to all will we once again be able to establish public service as 
the highest calling in our society. 

Commitment to democratic ideals involves concerns such as responsiveness and 
involvement, but also commitment to equity and justice. Think for a moment of the rea¬ 
sons that bring people to the public service. No doubt high on the list would be the con¬ 
cern for the well-being of others. At one point in our history, we seemed to feel that the 
primary measure of success of the public service was the elimination of human suffering. 
Public officials are still at the forefront of dealing with the complex and difficult issues of 
homelessness, poverty, and drug addiction. Perhaps more than any other group, public 
administrators are uniquely situated to see and understand these concerns. They cer¬ 
tainly should be able to pinpoint the failures of past policies, to suggest alternatives, and 
to work actively toward implementation with elected leaders. Indeed, they have a moral 
responsibility to do so. 

A Final Note 

The challenges to the public service are substantial and pose managerial, political, and eth¬ 
ical questions for all who participate in public programs. They will require careful analysis 
and effective action on the part of academics and practitioners in the field of public admin¬ 
istration and beyond. Most of all, they are challenges that will require responsibility both 
in the sense of acting responsibly and in the sense of accepting responsibility for our ideas 
and actions. The frontiers of public service will present quite difficult personal and profes¬ 
sional choices. But responsible public servants will find their solution very rewarding. 
Albert Schweitzer once said, “I don’t know where you will go or what you will do, but the 
ones among you that will be most happy will be those who serve.” We would only add 
that especially happy will be those who serve the public, well and faithfully. 

Study Questions 

1. Discuss some of the changes in the image of public service over the last thirty years. 
2. What are some recommendations of the National Commission on the Public Service 

for attracting and retaining the “best and the brightest” in the public service? 
3. Discuss future trends in the field of public administration. 

Cases and Exercises 

1. By most objective measures, public agencies are, on the average, highly productive — 
at least in comparison to their private-sector counterparts. (There are wide variations 



44z Chapter 12 The Future of the Public Service 

in both sectors, but the general conclusion seems valid.) The general public, however, 
seems to have exactly the opposite impression—that government agencies are hope¬ 
lessly inefficient and unproductive. Part of the problem seems to be that people are 
more critical of government in the abstract than where it directly touches their lives. 
In fact, one study found most people highly critical of the coldness and inefficiency of 
government in general, but highly complimentary of specific government employees 
with whom they had dealt most recently. 

In any case, there seems to be some disparity between image and reality—a dispar¬ 
ity that is often quite damaging to the morale of the public workforce. Write an essay 
explaining why you think governments are considered less productive and less efficient 
than they really are. Consider the issue from several viewpoints. How would the issue 
appear from the perspective of a legislator? A public manager? A citizen? On the basis 
of your analysis, what should be done to improve the image of the public service? 

2. In this chapter, we have considered a number of trends that are likely to affect the pub¬ 
lic service over the next decade or more. What do these trends mean in terms of the 
skills that individual public managers will require? Review once more the set of public 
management skills in Chapter 1, then, in small groups, discuss the following questions: 
What specific skills will public managers likely utilize more frequently in the future 
than in the past? What, if any, will be de-emphasized? To what extent will the demands 
of the future public service change the mix of conceptual, technical, and human skills 
needed for effective public management? Finally, how will the values that underlie the 
work of public managers shift as we move through the coming years? 

For Additional Reading 

Chandler, Ralph Clark. A Centennial History of the American Administrative State. 
New York: The Free Press, 1987. 

Chrislip, David D., and Carl E. Larson. Collaborative Leadership. San Francisco: Jossey- 
Bass, 1994. 

Denhardt, Robert B., and Edward T. Jennings, Jr. The Revitalization of the Public 
Service. Columbia: University of Missouri, 1987. 

Goodsell, Charles T. The Case for Bureaucracy. 3d ed. Chatham, NJ: Chatham House 
1994. 

Ingraham, Patricia W., and Donald F. Kettl. Agenda for Excellence: Public Service in 
America. Chatham, NJ: Chatham House, 1992. 

Ingraham, Patricia W., and Barbara Romzek. Governance and the Public Service: 
Rethinking the Research Agenda for Public Sector Change. San Francisco: Jossey-Bass 
1994. 

Kettl, Donald F. The Global Public Management Revolution: A Report on the 
Transformation of Governance. Washington, DC: Brookings Institute, 2000. 

Lappe, Frances Moore, and Paul M. Du Bois, The Quickening of America. 
San Francisco: Jossey-Bass, 1994. 



For Additional Reading 443 

Lerner, Allan W., and John Wanat. Public Administration: A Realistic Reinterpretation 
of Contemporary Public Management. Englewood Cliffs, NJ: Prentice-Hall, 1991. 

Mills, Claudia. Values and Public Policy. Fort Worth: Harcourt Brace, 1992. 
National Commission on the Public Service. Leadership for America. Washington, DC: 

National Commission, 1989. 
Nye, Philip D. Zelikow, and David C. King, eds. Why People Don’t Trust Government. 

Cambridge, MA: Harvard University Press, 1997. 
OECD. Government of the Future. PUMA Policy Brief No. 9. Paris: OECD, June 2001. 
Thomas, John C. Public Participation in Public Decisions. San Francisco: Jossey-Bass, 

1995. 
Thompson, Frank J., ed. Revitalizing State and Local Public Service: Strengthening 

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Appendix 

Journals 

Academy of Management Review Canadian Public Administration 
Ohio Northern University Institute of Public Administration 
P.O. Box 209 of Canada 
300 South Union Street Revue de l’Institut de l’Administration 
Ada, OH 45810 Publique du Canada 

Eglington Ave. East, Suite 305 
Administration and Society Toronto, Ontario, M4P IE8 
Virginia Polytechnic Institute and Canada 
State University 
Center for Public Administration and The Executive 
Public Affairs Ohio Northern University 
Blacksburg, VA 24061 Academy of Management Executive 

Academy Office 
Administrative Science Quarterly P.O. Box 39 
Cornell University 300 South Union Street 
Johnson Graduate School of Management Ada, OH 45810-0039 
425 Caldwell Hall 
Ithaca, NY 14853-2602 

G.A.O. Journal 
U.S. General Accounting Office 

American Review of Public Administration 
Office of Public Affairs 

University of Missouri-Kansas City 
Room 6901 

Cookingham Institute of Public Affairs 
Washington, DC 20548 

Bloch School of Business and Public 
Administration 
Kansas City, MO 64110 Governance 

Blackwell Publishers 

Australian Journal of Public Administration 238 Main St. 

University of Queensland Cambridge, MA 02142 

Royal Institute of Public Administration 
Department of Government Governing 
St. Lucia, Queensland 4067 Congressional Quarterly Inc. 
Australia 2300 N. St., NW, Suite 760 

Washington, DC 20037 
California Management Review 
University of California, Berkeley Government Executive 
Haas School of Business National Journal Inc. 
350 Barrows Hall 1730 M St., NW, 11th Floor 
Berkeley, CA 94720 Washington, DC 20036 

464 



Appendix 

Government Productivity News 1445 Market St., Suite 300 
P.O. Box 17433 Denver, CO 80202-1728 
Austin, TX 78755-0435 

New Directions in Public Administration 
Harvard Business Review Research 
P.O. Box 52622 Florida Atlantic University 
Boulder, CO 80321-2622 School of Public Administration 

220 E. Second Ave. 
International Journal of Public Administration Fort Lauderdale, FL 33301 
Pennsylvania State University 
Institute of State and Regional Affairs Organizational Dynamics 
Harrisburg, PA 17057 American Management Association 

P.O. Box 408 
Journal of Management Saranac Lake, NY 12983 
Indiana University 
Graduate School of Business Organization Studies 
Bloomington, IN 47405 University of Cambridge 

The Judge Institute of Management Studies 
Journal of Policy Analysis and Management Fitwilliam House, 32 Trumpington Street 
University of California Cambridge, CB2 IQY 
Association for Public Policy Analysis and England 
Management 
Graduate School of Public Policy Policy Studies 
Berkeley, CA 94720 Policy Studies Institute 

100 Park Village East 
Journal of Public Administration Research and London, NWI 3SR 
Theory England 
Rutgers University 
J-PART Policy Studies Review 
Department 4010 Arizona State University 
Transaction Periodicals Consortium Policy Studies Organization 
New Brunswick, NJ 08903 School of Justice Studies 

Tempe, AZ 85287 
Journal of State Government 
The Council of State Governments Public Administration 
P.O. Box 11910 Royal Institute of Public Administration 
Lexington, KY 40578 P.O. Box 87 

Oxford, OX2 ODT 
Journal of Urban Analysis and Management England 
State University of New York 
Harriman College for Urban and Policy Studies Public Administration and Development 
Stony Brook, NY 11790 RIPA International Ltd. 

22 Bedford Square 
National Civic Review London WC1 B3H 
National Civic League Press England 



466 Appendix 

Public Administration Review Carl Vinson Institute of Government 
American Society for Public Administration Athens, GA 30602-4582 
1120 G St., NW, Suite 700 
Washington, DC 20005-2885 

Organizations 

Public Budgeting and Financial Management Academy for State and Local Government 
Pennsylvania State University 444 N. Capitol St., NW, Suite 349 
Institute of State and Regional Affairs Washington, DC 20001 
Middleton, PA 17057 

American Consortium for International Public 
Public Finance Quarterly Administration 
University of New Orleans 1120 G St., NW, Suite 225 
College of Business Administration Washington, DC 20005 
New Orleans, LA 70148 

American Planning Association 
Public Management 1776 Massachusetts Ave., NW, Suite 800 
International City Management Association Washington, DC 20036 
777 N. Capitol St., NE 
Washington, DC 20002-4201 American Public Health Association 

1015 15 St., NW, 3rd Floor 
The Public Manager Washington, DC 20005 
The Bureaucrat Inc. 
12007 Titian Way American Public Power Association 
Potomac, MD 20854 2301 M St., NW, 3rd Floor 

Washington, DC 20037 
Public Personnel Management 
International Personnel Management American Public Welfare Association 
Association 810 First St., NW, Suite 500 
1617 Duke St. Washington, DC 20002 
Alexandria, VA 22314 

American Public Works Association 
Public Productivity and Management Review 1313 E. 60th St. 
Jossey-Bass Publishers Chicago, IL 60637 
350 Sansome St. 
San Francisco, CA 94104 American Society for Public Administration 

1120GSt.,NW, Suite 500 
Public Productivity Review Washington, DC 20005 
National Center for Public Productivity 
John Jay College Council of State Governments 
City University of New York P.O. Box 11910 
445 W. 59th St. Lexington, KY 40578 
New York, NY 10019 

Education Commission of the States 
State and Local Government Review 1860 N. Michigan Ave., Suite 800 
University of Georgia Chicago, IL 60601 



Appendix 

Government Finance Officers Association National Association of State Budget Officers 
180 N. Michigan Ave., Suite 800 400 N. Capitol St., NW, Suite 295 
Chicago, IL 60601 Washington, DC 20001 

International City Management Association National Civic Feague 
777 N. Capitol St. 1445 Market St. 
Washington, DC 20002 Denver, CO 80203 

International Institute of Municipal Clerks National Forum for Black 
160 N. Altadena Drive Public Administrators 
Pasadena, CA 91107 777 N. Capitol St. 

Washington, DC 20002 
International Personnel Management 
Association National Institute of 
1617 Duke St. Governmental Purchasing 
Alexandria, VA 22314 115 Hillwood Ave., Suite 201 

Falls Church, VA 22046 
National Academy of Public Administration 
1100 New York Ave., NW, Suite 1090 East National Feague of Cities 
Washington, DC 20005-3934 1301 Pennsylvania Ave., NW, 6th Floor 

Washington, DC 20004 
National Association of Counties 
441 First St., NW, 8th Floor Public Administration Service 
Washington, DC 20001 1497 Chain Bridge Road 

McFean, VA 22101 
National Association of Schools of Public 
Affairs and Administration Public Technology Inc. 
1120 G St., NW, 5th Floor 1301 Pennsylvania Ave., NW, Suite 704 
Washington, DC 20005 Washington, DC 20004 



Glossary 

Accounting: The process of identifying, measuring, and communicating economic infor¬ 
mation to permit informed judgment and decision making. 

Adverse or disparate impact: Criterion for showing that employment practices affect one 
group more harshly than another. 

Affirmative action: Use of positive, results-oriented practices to ensure that women, 
minorities, handicapped persons, and other protected classes of people will be equi¬ 
tably represented in an organization. 

Agenda setting: Phase in public policy process when certain problems come to be viewed 
as needing attention. 

Allotments: Amounts that agencies are authorized to spend within a given period. 
Apportionment: Process by which funds are allocated to agencies for specific portions of 

the year. 
Appropriation: Legislative action to set aside funds and create budget authority for their 

expenditures. 
Area of acceptance: Area within which the subordinate is willing to accept the decisions 

made by the supervisor. 
Authorizing legislation: Legislative action that permits establishment or continuation of 

a particular program or agency. 
Autocracy: Government by one. 
Bargaining unit: The organization that will represent employees in conferring and nego¬ 

tiating various issues. 
Behavioral awards: Used to reward behaviors that management wishes to encourage. 
Block grants: Grants in which the money can be used for nearly any purpose within a 

specific functional field. 
Bond: Promise to repay a certain amount (principal) at a certain time (maturity date) at 

a particular rate of interest. 
Boundary spanning: Representing an organization to outside groups and organiza¬ 

tions. 
Bounded rationality: Seeking the best possible solution, but not necessarily the most 

rational, from a purely economic standpoint. 
Brainstorming: Technique for enhancing the alternative-generation portion of the decision¬ 

making process. 
Budget padding: Proposing a higher budget than is actually needed. 
Business cycle: Periods of economic growth featuring inflation and high employment 

followed by periods of recession or depression and unemployment. 
Capital expenditures: Spending for items that will be used over a period of several 

years. 
Capital grants: Grants for use in construction or renovation. 
Categorical or project grants: Grants requiring that the money may be spent for only a 

limited purpose; typically available on a competitive basis. 
Charter: Local government’s equivalent of a constitution. 

468 



Glossary 469 

Cohesion: Degree to which members of a group are uniformly committed to the group 
and its goals. 

Comparable worth: Notion that men and women in jobs that are not identical but 
require similar levels of skill and training should be paid equally. 

Constituent policy: Policy designed to benefit the public generally or to serve the gov¬ 
ernment. 

Continuing resolution: Resolution permitting the government to continue operating until 
an appropriations measure is passed. 

Cooperative federalism: Greater sharing of responsibilities between federal and state 
governments. 

Co-optation: Situations in which citizens are given the feeling of involvement while exer¬ 
cising little real power. 

Coproduction: Using volunteer activity to supplement or supplant the work of govern¬ 
ment officials. 

Cost-benefit: Identifying and quantifying both negative impacts (costs) and positive 
impacts (benefits) of a proposal, then subtracting one from the other to arrive at a net 
benefit. 

Councils of government: Oversight bodies representing various localities to help coordi¬ 
nate local affairs. 

Cross-cutting requirements: Rules that apply to most grant programs. 
Debt capacity: Value of a city’s resources combined with the ability of the government to 

draw on them to provide payment. 
Decision analysis: Technique wherein decisions are likely to be made sequentially and 

under some degree of uncertainty. 
Decision tree: Technique that identifies various possible outcomes, given the risk associ¬ 

ated with each. 
Deferral: Decision by the president to withhold expenditure of funds for a brief period. 
Delegation: Assigning tasks to others. 
Democracy: A political system in which decision-making power is widely shared among 

members of the society. 
Deontology: Belief that broad principles of rightness and wrongness can be established 

and are not dependent on particular circumstances. 
Dillon’s Rule: Municipalities have only those powers granted in their charters; cities are 

creatures of the state. 
Direct orders: Requirements or restrictions that are enforced by one government over 

another. 
Discretionary spending: That portion of the budget still open to changes by the president 

and Congress. 
Distributive policy: Policy involving use of general tax funds to provide assistance and 

benefits to individuals or groups. 
Dual federalism: Pattern in which federal and state governments are struggling for power 

and influence with little intergovernmental cooperation. 
Effectiveness: Extent to which a program is achieving or failing to achieve its stated 

objectives. 
Efficiency: Relationship between inputs and outputs. 



47° Glossary 

Employee recognition program: Effective way to acknowledge special contributions of 
certain employees or groups to the organization. 

Entitlement grants: Grants that provide assistance to persons who meet certain criteria. 
Entitlement programs: Programs that provide a specified set of benefits to those who 

meet certain eligibility requirements. 
Equal employment opportunity: Refers to efforts to eliminate employment discrimination 

on the basis of race, ethnic background, sex, age, or physical handicap; ensures that all 
persons have an equal chance to compete for employment and promotions based on 
job qualifications. 

Equality: The idea that all persons have an equal claim to life, liberty, and the pursuit of 
happiness. 

Ethical or moral relativism: Belief that moral judgment can be made only by taking into 
account the context in which action occurs. 

Ethics: Process by which we clarify right and wrong and act on what we take to be right. 
Ethics audit: Evaluation of the value premises that guide an organization’s action. 
Excise tax: Tax applied to the sale of specific commodities. 
Executive order: A presidential mandate directed to and governing, with the effect of 

law, the actions of government officials and agencies. 
Exploratory evaluation: Investigating a variety of hunches or intuitions about program 

operations. 
Fiduciary funds: Funds used when government must hold assets for individuals or when 

government holds resources to be transmitted to another organization. 
Final-offer arbitration: Technique in which both parties must present their best offer 

with the understanding that an arbitrator will choose one or the other without modi¬ 
fication. 

Fiscal policy: Public policy concerned with the impact of government taxation and 
spending on the economy. 

Fiscal year (FY): Government’s basic accounting period. 
Formula grants: Grants that employ a specific division rule to indicate how much money 

any given jurisdiction will receive. 
Franchise: Exclusive award to one firm (or a limited number) to operate a certain busi¬ 

ness within a jurisdiction. 
Functional principle: Horizontal division of labor. 
Gainsharing plan: Monetary award for a group of employees based on savings generated 

by the group. 
General fund: Fund that handles “unrestricted” funds of government. 
Grants: Transfers of money (and/or property) from one government to another. 
Grantsmanship: Skills needed to compete successfully in the grant process. 
Gross National Product (GNP): Measure of total spending in the economy; includes 

total personal consumption, private investment, and government purchases. 
Hidden agenda: Privately held goals and priorities. 
Home rule: Provision allowing cities greater autonomy over local activities. 
Impoundment: Withholding of funds authorized and appropriated by law. 
Independent agencies: Agencies intentionally created outside the normal cabinet orga¬ 

nization. 



Glossary 4yi 

Individualism: The idea that the dignity and integrity of the individual is of supreme 
importance. 

Institutional subsystem: Responsible for adapting the organization to its environment 
and for anticipating and planning for the future. 

Intergovernmental relations: A term encompassing all the complex and interdependent 
relations among those at various levels of government. 

Interorganizational networks: Pattern of relationships within and among various groups 
and organizations working in a single policy area. 

Interventionist: External consultant brought in to reveal dysfunctional patterns of behav¬ 
ior and to try to develop more effective working relationships. 

Iron triangle: Term given to a coalition of interest groups, agency personnel, and mem¬ 
bers of Congress created to exert influence on a particular policy issue. 

Item veto: Allows a governor to veto specific items in an appropriations bill. 
Job description: A thorough analysis of the work to be done and the capabilities for a 

job; typically contains these elements: job title, duties required, responsibilities, and 
job qualifications. 

Lateral entry: Entry into government positions at any level. 
Legislative veto: Statutory provision that gives Congress the authority to approve or dis¬ 

approve certain executive actions. 
Liberty: The idea that individual citizens of a democracy should have a high degree of 

self-determination. 
Line-item budget: Budget format for listing categories of expenditures along with 

amounts allocated to each. 
Management by objectives: Participatory approach to establishing clear and measurable 

objectives throughout the entire organization. 
Managerial subsystem: Concerned with providing necessary resources for accomplishing 

a technical task and mediating between the technical and institutional subsystems. 
Mandate: Order requiring a government to do something. 
Merit pay: Increases in salary and wages that are tied to actual quality of work performed. 
Merit principle: Concept that selection and treatment of government employees should 

be based on merit or competence rather than personal or political favoritism. 
Morality: Practices and activities considered right or wrong and the values those prac¬ 

tices reflect. 
Negotiated investment strategy: Bringing together representatives of all affected groups 

to set priorities for funding. 
Neutral competence: The belief that a neutral public bureaucracy following the man¬ 

dates of a legislative body will meet the requirements of democracy. 
Nominal group: Face-to-face meeting that allows only limited interaction among partici¬ 

pants. 
Nonprofit organizations: Organizations prohibited by law from distributing surplus 

revenues to individuals. 
Objective responsibility: Assurance of responsiveness through external controls. 
Oligarchy: Government by the few. 
Ombudsman: Permanent office that receives complaints and acts on behalf of citizens to 

secure information, request services, or pursue grievances. 



472 Glossary 

Operating grants: Grants for use in development and operation of specific programs. 
Organization development: Process-oriented approach to planned change. 
Organizational culture: Basic patterns of attitudes, beliefs, and values that underlie an 

organization’s operation. 
Parity principle: Idea that an individual should have equal amounts of authority and 

responsibility. 
Participant-observer: Someone in either the target population or the agency who makes 

observations and draws conclusions based on firsthand experience. 
Performance appraisal: Specific evaluation with respect to an individual’s progress in 

completing specified tasks. 
Performance auditing: Analysis and evaluation of the effective performance of agencies 

in carrying out their objectives. 
Performance bonus: One-time monetary award based on superior performance on the 

job or in a particular task. 
Performance budget: Budget format organized around programs or activities; includes 

various performance measurements that indicate the relationship between work actu¬ 
ally done and its cost. 

PERT (Program evaluation review technique): A way to monitor the time or costs of 
various activities required to complete a project, showing the sequence in which the 
activities must be completed. 

Picket-fence federalism: Pattern of intergovernmental relations in which the horizontal bars 
represent levels of government and the vertical slats represent various substantive fields. 

Piecework bonus: Incentive that ties the worker’s productivity in a given task to the 
monetary rewards he or she receives. 

Planning-programming-budgeting system (PPBS): Effort to connect planning, systems 
analysis, and budgeting in a single exercise. 

Policy: Statement of goals and intentions with respect to a particular problem or set of 
problems. 

Policy analysis: Process of researching or analyzing public problems to provide policy 
makers with specific information about the range of available policy options and 
advantages and disadvantages of different approaches. 

Policy analysts: Persons who provide important information about public programs 
through research into the operations and impacts of the programs. 

Policy entrepreneur: A person willing to invest personal time, energy, and money in 
pursuit of particular policy changes. 

Political economy approach: Focusing on politics and economies as categories for 
analyzing organizational behavior. 

Position classification: Analyzing and organizing jobs on the basis of duties, responsibili¬ 
ties, and having the knowledge and skills required to perform them. 

Preaudit: Review in advance of an actual expenditure. 
Preemption: Federal government efforts to preempt an area traditionally associated with 

state government. 
Privatization: Use of nongovernmental agencies to provide goods and services previously 

provided by government. 
Process charting/flowcharting: Graphically demonstrating the various steps in an operation, 

the people who perform each step, and relationships among those elements. 



Glossary 473 

Program managers: Persons ranging from the executive level to the supervisory level who 
are in charge of particular governmental programs. 

Progressive tax: One that taxes those with higher incomes at a higher rate. 
Proportional tax: One that taxes everyone at the same rate. 
Proprietary funds: Used to account for government activities that more closely resemble 

private business. 
Public administration: The management of public programs. 
Public corporation: An essentially commercial agency in which work requires greater lat¬ 

itude and acquires at least a portion of its funding in the marketplace (e.g., Tennessee 
Valley Authority). 

Public policy: Authoritative statements made by legitimate governmental actors about 
public problems. 

Quality circle: Small group of people who do similar or connected work and meet regu¬ 
larly to identify, analyze, and solve work-process problems. 

Reconciliation bill: Legislative action that attempts to reconcile individual actions in 
taxes, authorizations, or appropriations with the totals. 

Redistributive policy: Policy designed to take taxes from certain groups and give them to 
another group. 

Regressive tax: One that taxes those with lower incomes at a proportionally higher rate 
than those with higher incomes. 

Regulatory commission: Group formed to regulate a particular area of the economy; 
usually headed by a group of individuals appointed by the president and confirmed by 
the Senate. 

Regulatory policy: Policy designed to limit actions of persons or groups to protect all or 
parts of the general public. 

Rescission: Presidential decision to permanently withhold funds. 
Revenue sharing: Grant pattern in which the money can be used any way the recipient 

government chooses. 
Risk management: Ways that public organizations anticipate and cope with risks. 
Risky shift: Difference in the daringness of decisions group members make as a group 

compared to the average risk of the same decision if each member made it alone. 
Role ambiguity: Occurs when the rights and responsibilities of the job are not clearly 

understood. 
Role conflict: Occurs when one faces two different and incompatible sets of demands. 
Rule making: Administrative establishment of general guidelines for application to a 

class of people or a class of actions at some future time. 
Rule of three: Provision of most merit systems that requires at least the top three appli¬ 

cants’ names to be forwarded to the hiring official to allow some flexibility in selec¬ 
tion. 

Satisficing decision: One that is just “good enough” in terms of some criterion. 
Scalar principle: Vertical division of labor among various organizational levels. 
Scientific management: Approach to management based on carefully defined laws, rules, 

and principles. 
Sexual harassment: Any unwarranted and nonreciprocal verbal or physical sexual 

advances or derogatory remarks that the recipient finds offensive or that interfere 
with his or her job performance. 



474 Glossary 

Special districts: Local governments created for a specific purpose within a specific area. 
Spoils system: The ability to give government jobs to the party faithful; “to the victor 

belong the spoils.” 
Staff managers: Persons who support the work of program managers through budgeting 

and financial management, personnel and labor relations, and purchasing and pro¬ 
curement. 

Stakeholders: The many different persons who are involved in a policy decision and are 
affected by the results. 

Strategic planning: Matching organizational objectives and capabilities to the anticipated 
demands of the environment to produce a plan of action that will ensure achievement 
of objectives. 

Structured interviews: Those in which a previously developed set of questions is used 
with each applicant. 

Subjective responsibility: Assurance of responsiveness based on an individual’s character. 
Suggestion award programs: Incentives for employees who make specific suggestions 

that result in savings for the organization. 
Sunset law: Provision that sets a specific termination date for a program. 
Sunshine law: Provision that requires agencies to conduct business in public view. 
Supplemental appropriation: Bill passed during the fiscal year, adding new money to an 

agency’s budget for the same fiscal year. 
Supply-side economies: Argument that decreased taxes and government spending will 

stimulate capital investment and economic growth. 
Support system: Network of people with whom one can talk about problems. 
System: Set of regularized interactions configured or “bounded” in a way that differentiates 

and separates them from other actions that constitute the system’s environment. 
Systems approach: Suggestion that public (or other) organizations can be viewed in the 

same general way as biological or physical systems. 
Systems theory: Effort to identify the interactions of various internal and external 

elements that impinge on an organization’s operations. 
Task forces: Groups brought together to work on specific organizational problems. 
Technical subsystem: Concerned with effective performance of an organization’s actual 

work. 
Time series analysis: Making a number of observations about the target population both 

before and after program intervention. 
Two-factor theory: Model of motivation involving two variables: job satisfaction and 

job dissatisfaction. 
Unit determination: Decision to include or exclude certain groups in a bargaining unit. 
Urban renewal: Government program designed to provide cities with money for public 

housing and urban redevelopment. 
Utilitarianism: Philosophy of the greatest good for the greatest number of people. 
Whipsaw tactics: Argument that pay or benefits negotiated by one group should be 

applied to others. 
Zero-base budgeting: Budget format that presents information about the efficiency and 

effectiveness of existing programs and highlights possibilities for eliminating or reduc¬ 
ing programs. 



Index 

Italic t followed by italic page number indicates table, italic f followed by italic page number indicates figure, and 
italic b followed by italic page number indicates box. 

A Agency administration and the Board governance, nonprofits and 
Absolute immunity, 145 courts, 70, 72, b71 Board-staff relations, 115 
Accountability, 18-19 Agenda-setting process, 50-51, 73 functions, 114-115 
Accounting, 195 AIDS policy, 227 overview, 113 

fiduciary funds, 192 Allotment, 195 size, 114-115 
general funds, 191 Alternative Dispute Resolution, Bond, 195 
government, 191-192 405 revenue, 187-188 
Governmental Accounting Alternative Dispute Resolution Act Boundary spanning, 300, 325 

Standards Board (GASB), 192 of 1990, 70 Bounded rationality, 325 
overview, 191 Alternative dispute resolution Brainstorming, 421 
proprietary funds, 192 (ADR) strategies, 70 Broad perspectives, 387 

Action orientation, 387 American Society for Public Budgeting, 299-300 
Adjudication, 66-67 Administration Budgeting and Accounting Act of 
Administrative organizations and code of ethics, 148 1921, 157 

executive leadership National Campaign for Public Budgeting and financial manage¬ 
administrative organizations, 37, Service, 428 ment 

39-41 Americans with Disabilities Act Accounting and computer-based 
local level, 43-49 overview, 238 information systems. See 
overview, 35-37 Americans with Disabilities Act Accounting; Computer-based 
state level, 41-43 (ADA), 227 information systems 

Administrative positions Anti-terror War, 217-218, b218 budgetary strategies and political 
business and government inter¬ Appleby, Paul, 18 games, 182-185 

action, 13-14 Apportionment, 195 budgets. See Budgets 
influencing public organizations, Appropriation, 195 capital budgeting, 186-187, 195 

14-15 Appropriations Committee, debt management, 187-188 
preparation for, 10-12 testifying before, b62 financial management overview, 
technical and managerial Arbitration, 70, 233 185 

training, 12-13 Area of acceptance, 325 overview, 157-158, 194-195 
Administrative Procedures Act Audit program manager’s role, bl70 

(APA), 65-68, 70 performance, 176 purchasing, 190 
Administrative responsibility phase of budget process, risk management, 189-190, 

avenues for public participation, 175-176 197, bl88-189 
134-136 Auer v. Robbins, 67, b69 Budgets 

ethics of privatization, 136-137 Authorizing legislation, 195 approaches to public budgeting, 
limits of administrative Autocracy, 27 176-182 

discretion, 131-134 Autonomy, 316 approval, 171-173 
overview, 130-131 capital, 195 
putting citizens first, bl33 B execution, 173-175 

Adverse impact, 239, 248 Bargaining, 231, 405-417 formulation, 169-171, fl69 

Advocacy, 116-117 process, 232-233 instruments of fiscal policy, 
Affirmative action, 236-238, unit, 248 158-159 

240-241,248 Behavioral award, 362 instruments of public policy, 

Affirmative action programs, Behavioral awards, 351 160-168, fl60, fl67 

240-241 Benchmarking, 281, 356 line-item, 177-178, 196 
Age Discrimination in Employment Benson, Herbert, 373-374 managerial tools, 168-176, fl69 

Act, 240 Block grants, 118 outcome-based, 181-182, 196 

475 



47 6 Index 

Budgets (Continued) Comparable worth, 242-244, 248 Decision making. See also Group 
padding, 184, 195 Computer-based information dynamics 
performance, 178-179, 196 systems, 192-194 models, 379-382 
policy guideline development, decision support systems, 193 organizational, 311-312 

170-171 integrated information systems, Decision support systems, 193 
program, 179-180 193-194 Decision tree, 290, f268-f269 
zero-base, 180-181, 197 management information group problem solving, f416 

Bureaucracy, 20, 304 systems, 193 Deferral, 174, 195 
democracy and, 19-20 performance measurement Delegation, 421 
representative, 133-134 systems, 194 Delegation and motivation 
sources of bureaucratic power, Conditions of employment, 225 goal setting, 402-404 

56-58 Conflict, 404-405 overview, 397-399 
Burnout, organizational factors Conflict, bargaining, and pay and job satisfaction, 

and, b371 negotiation, 404-405 399-400 
Bush administration, intergovern¬ Conflicts of interest, 140-142 reinforcement theory, 400-402 

mental relations and, 90, 92-93 federal rules, 141 Democracy 
Bush tax plan, 165-167 Congressional Budget Act of 1974, definition, 3, 27 
Business cycle, 195 172 values of, 3-5 

Constituent policy, 55-56, 73 Democratic dream, b5 
C Continuing resolution, 172, 195 Deontology, 126-127, 149 
Cabinet-level executive Contracting, 107-110, 118 Dillon’s Rule, 100, 118 

departments, 39-40 Cooper, Terry, 129, 132-133 Direct orders, 118 
Capital Cooperative federalism, 83-84, Discretion, administrative, 

budget, 186-187, 195 118 131-134 
grant, 82, 118 Co-optation, 149 Discretionary spending, 165, 196 
investment program, 195 Coordination, 299 Discrimination, employment 

Categorical grant, 81, 118 through unity of command, compliance questions, 238-240 
Centralized networks, 406 303 Discrimination, reverse, 240-241 
Charter, 118 Coproduction, 118 Discrimination in public 
Chevron v. National Resources Corporation income tax, 162 employment, correcting patterns 

Defense Council, 67-68, b69 Cost-benefit analysis, 265-267, affirmative action and reverse 
City administrative organizations 290 discrimination, 240-241 

and executive leadership, 43-45 Cost-effectiveness approach, 265 comparable worth debate, 
Civil Rights Act of 1964, 237 Council-manager city organization, 242-244 
Civil Rights Restoration Act, 238 44-45 glass ceiling, 241-242 
Civil Service Reform Act of 1978, Councils of government, 118 overview, 236-238 

212,214-217,224 Councils of government (COG), Disparate impact, 239, 248 
Civil service system 105 Distributive policy, 54, 73 

principles, 213 County administrative organizations Dual federalism, 82-83, 118 
Clinton presidency, intergovern¬ and executive leadership, 45 Due process, concerns for, 70 

mental relations and, 88-90 Courts and agency administration, 
Code of Ethics of the American 70, 72 E 

Society for Public Creativity and problem solving, Economic changes and challenges 
Administration, 154-156 376-379 to public service, 432-434 

Cohesion, 73 Cross-cutting requirements, 118 Effectiveness, 290 
Commission city organization, 44 Efficiency, 290 
Commission on Economy and D Efficiency versus responsiveness, 

Efficiency, 157 Davis v. Monroe County Board of 20-21 
Communications, 387 Education, 101, b95 Employee 

listening, 382-395, b392 Debt empowerment and teamwork, 
networks, f406 capacity, 195 331 
overview, 391, b392 management, 187-188 orientation, 316 
speaking, 395-396 Decentralized networks, 407 recognition awards, 351-352 
writing, 396-397 Decision analysis, 268-275, 290 recognition program, 362 



Index 477 

Employment, conditions of, 225 Excise tax, 162-163, 196 G 
Empowerment, 316-318 Executive office of president, Gainsharing plan, 351, 362 
Entitlement grant, 82 37, 39 Garcia v. San Antonio Metropolitan 
Entitlement grants, 118 Executive Order Transit Authority, 99, 231 
Entitlement programs, 196 12871,235 Gender and power, issues of, 324 
Entrepreneurship, 316 112375,237 General Accounting Office (GAO), 
Environmental analysis, 260 overview, 73 176 
Environmental sensitivity, 387 performance management 
Equal employment opportunity, F principles, 354-355 

236-238,248 Fact finding, 233 General fund, 191, 196 
Equality, 3-4, 28 Fair Labor Standards Act (FLSA), Gilligan, Carol, 128 
Ethical deliberation, approaches to 98-99 Glass ceiling, 241-242, 324 

overview, 124-126 Fayol, Henri, 298-299 Globalization and challenges to 
reasoning, development and Federal Administrative Procedures public service, 434-435, 

action, 126-130 Source Book, 65 b436-438 
Ethical problems for the individual Federal government dollar, fl 60 Goals, 316 

conflicts of interest, 140-142 Federalism Goal setting, 402-404 
following orders, 138-140 cooperative, 83-84, 118 Gore, Al, 217 
interacting with elected officials, dual, 82-83, 118 Governance process and the role of 

137-138 images of, b83 citizens, 438-439 
prohibitions on political New, 435 Governance transformation: global¬ 

activities, 144-145 picket-fence, 84-87, 119, b86 ization, devolution and role, 
whistle blowing, 142-144 Federalists, 35 b91-92 

Ethical relativism, 124-125, 149 Federal Labor Relations Council, Government accounting, 191-192 
Ethics, 124, 149 231 Governmental Accounting 

audit, 147, 149 Fiduciary funds, 196 Standards Board (GASB), 192 
privatization, 136-137 Final-offer arbitration, 248 Governmental units by type of 

Ethics of public administration Financial management. See government, t43 
Code of Ethics of the American Budgeting and financial Government redefinition and chal¬ 

Society for Public management lenges to public service, 432-434 
Administration, 154-156 Fiscal policy, 196 Grants 

establishing an ethical climate, budgets, 158-159, See also funding patterns, 96-97, t96 
146-148 Budgets types, 81-82, 118-119 

ethical problems for the individ¬ Fiscal year (FY), 168, 196 Griggs v. Duke Power Company, 
ual. See Ethical problems for Flexibility, 387 239 
the individual Flowcharting, 271-272, 290, Gross National Product (GNP), 

managing ethics, 145-146 f272 159, 196 
techniques for integrating ethics Formula grant, 81, 118 Group dynamics. See also 

into agency operations, bl47 Friedrich, Carl, 132 Leadership 

Ethics of public service Functional principle, 303 advantages of group decision 
approaches to ethical delibera¬ Future of public service making, 405-407, f406 

tion. See Ethical deliberation, efforts to support public service, changing group composition, 

approaches to 428,430-431, b429 409-411 

challenges, 439-441 ethical challenges, 439-441. decentralized networks, 407 

Issues of administrative responsi¬ See also Ethics of public disadvantages of group decision 

bility. See Administrative administration; Ethics of making, 407-408 

responsibility public service effective group leadership, b412 

overview, 123-124, 148-149 new public service, 426-427. interpersonal dynamics in 

Ethics of virtue, 129-130 See also New public groups, 408-409 

Evaluation management, reinvention, leadership roles, b410 

overview, 277-278 and reform managing groups, 412-413 

performance measurement, overview, 426, 441 overview, 405 

278-284, b283 role of citizens in the governance participation in group decision 

program evaluation, 285-289 process, 438-439 making, 414-417 



47# Index 

Group dynamics (Continued) systems analysis, 273-276, f273, Interpersonal skills and group 
specialized techniques for group f276 dynamics. See Communica¬ 

decision making, 413-414 Impoundment, 174, 196 tions; Delegation and motiva¬ 
synergy, 406 Incentive programs, 350-352 tion; Group dynamics; 
Vroom-Yetton model, 416-417, Independent agencies, 40, 74 Organization change and 

b415, f416 Indexing, 165 development 
Group norms, 312 Individual income tax, 161-162 Interventionist, 422 
Groupthink, 408 Individualism, 3, 28 Iron triangles, 52, 74 
Grove City v. Bell, 237-238 Information systems, computer Item veto, 196 
Guidelines for successful based. See Computer-based 

negotiation, b405 information systems J 
Gulick, Luther, 298-299, 302-303 Information technology Jackson, Andrew, 210-211 

the human side, 343-345 Jacksonians, 35-36 
H management reform, 340-343 Job 
Harvard Negotiation Project, 404 Institutional subsystem, 290 description, 220, 248 
Hatch Political Activities Act Integrated information systems, enrichment, 348 

(1939), 144-145 193-194 satisfaction and pay, 399-400 
Hawthorne Works study, 304 Intergovernmental relations, 81, Judicial influence and intergovern¬ 
Hidden agenda, 408, 422 118 mental relations, 93-96, b95 
Home rule, 100, 104, 118 the Bush administration, 90, Judiciary and public 
Human behavior, recognition of, 92-93 administration 

304-305 the Clinton presidency, 88-90 concerns for due process, 70 
Human resource management cooperative federalism, 83-84 the courts and agency 

Americans with Disabilities Act dual federalism, 82-83 administration, 70, 72, b71 
(ADA). See Americans with judicial influence, 93-96 legal principles relating to 
Disabilities Act (ADA) overview, 80-82 judicial review, b69 

discrimination in public employ¬ picket-fence federalism, 84-87 overview, 65-68, 70 
ment, correcting patterns. the Reagan and Bush years, Judiciary support agencies, 40-41 
See Discrimination in public 87-88 Jung model of psychological types, 
employment, correcting state and local funding patterns, 376-379, f378 
patterns 96-97 

Human resources management state and local preemptions and K 
changing character of labor- mandates, 98-102 Katz, Robert, 21-22 

management relations. See subnational relationships, Keynes, John Maynard, 158 
Labor-management relations 102-106 Kimel v. Florida Board of Regents, 

hiring, firing, and things Intergroup problem solving, 420 238,240 
in-between, 220-229 Interorganizational context of Kohlberg, Lawrence, 127-128 

merit systems in public public administration 
employment, 210-218 development of intergovernmen¬ L 

overview, 209-210, 247 tal relations. See Inter¬ Labor-management relations 
political appointee-career governmental relations bargaining process, 232-233 

executive relations, 244-247 management of nonprofit cooperation, b236 
state and local personnel organizations. See Nonprofit overview, 229-231 

systems, 219-220 organizations, management of strike decisions, 233-235 
overview, 79-80, 117-118 unions redefined, 235-236 
state and local perspective of Lateral entry, 248 

Immunity intergovernmental relations. Leadership, 387. See also Group 
absolute, 145 See Intergovernmental dynamics 
qualified, 145 relations effective group leader, b412 

Implementation working with nongovernmental participative, 361 
organizational design, 271-272, organizations, 106-110 power, 382-385 

f272 Interorganizational networks, roles, b410 
overview, 270-271 119 Legal principles relating to judicial 
reengineering, 276-277 Interpersonal sensitivity, 387 review, b69 



Index 479 

Legislative supervision: casework, Managing organizational dynamics. Negotiated investment strategy, 
64-65 See Organizational dynamics, 119 

Legislative supervision: oversight, management of Negotiated Rule Making Act of 
62-64 Mandate, 100-102, 119 1990, 66 

Legislative supervision: structural sneaky, 119 Negotiation, 404-405, b405 
controls Marshall Trilogy, 45-46 Networking, 8, 10, 23, 39, 42, 44, 

overview, 58-59 Maslow, Abraham, 399 47,51,58-59, 65,81,98,108, 
sunset laws, 47, 60-61 Maslow’s hierarchy of needs, 399 111, 131, 142, 158, 164, 167, 
sunshine laws, 61-62, 74 Mayor-council city organization, 170, 185,209,216, 223, 
veto, 59-60, 74 43-44 225-226, 230, 256, 271, 279, 

Legislative support agencies, 40-41 Mediation, 70, 233 301,315, 320, 337, 342, 357, 
Liberty, 4, 28 Mental models, 314 377,383, 403,419 
Line-item Merit Neutral competence, 149 

budget, 177-178, 196 pay, 224, 248 New Federalism, 435 
veto, 173 principle, 248 New public management 

Listening skills, 382-395, b392 system, 213, 215 definition of new public 
Lloyd-LaFollette Act of 1912, 229 system, state and local, 219-220 management, 335 
Long-range planning, 257 Merit Protection Board, 215 human resources, innovation and 

Merit systems in public performance, 345-356 
M employment human side of technological 
Management, functions of, Civil Service Reform Act and its innovation, 343-345 

298-300 aftermath, 214-217 implementation issues in quality 
Management by objectives (MBO), reinvention and the National and productivity, 357-361 

345-347, 362 Performance Review, information technology, the 
Management excellence 217-218, b216 Internet, and management 

framework, b24 spoils versus merit, 210-214 reform, 340-343 
Management information systems, Mission, 316 nonprofit management reform, 

193 statement, 259-260 334- 335,337-339 
Management-labor relations. See Moral overview, 333-334, 361-362 

Labor-management relations action, 129-130 principles of, 439 
Management of human resources. philosophy, 126-127 reinventing government, 

See Human resources psychology, 127-129 335- 337 
management relativism, 149 results, 339-340 

Management skills inventory, Morality, 124, 149 results of reform, 339-340 
32-33 Motivation. See Delegation and NLRB v. Yeshiva University, 232 

Managerial subsystem, 290 motivation Nominal group, 413, 422 
Managerial work Nongovernmental organizations 

distribution of time among work N (NGOs), 106-110, 334, fl06 

elements, 368 National Campaign for Public Nonprofit organizations, 46-49, 

elements of managerial work, Service, 428 74, t47 

367 National Commission on Public Bush tax plan, 166 

information aspects, 368-369 Service, 428, 430-431 images of organizing, 297-298 

interaction and communication, main conclusions, b429 management reform, 337-340 

368 National Commission on the State mandates, 101-102 

overview, 367 and Local Public Service, Nonprofit organizations, 

“typical” day, b370 430-431 management of 

work themes, 369 National League of Cities v. Usery, advocacy, 116-117 

Managers, skills needed, 21-22 231 board governance, 113-115 

Managing ethics National Performance Review, board-staff relations, 115 

establishing an ethical climate, 36-37,217-218, 221,638, financial management, 113 

146-148 b216 operational leadership, 

overview, 145-146 Native American tribe 110-111 

techniques for integrating ethics administrative organizations overview, 110 

into agency operations, b!47 and executive leadership, 45-46 resource development, 112-113 



4 So Index 

O P Planning, 299 
Objective responsibility, 149 Parity principle, 398, 422 Planning, implementation, and 
Office of Management and Budget Participant-observer, 287, 290 evaluation. See Evaluation; 

(OMB), 169-171 Participative leadership, 361 Implementation; Strategic 
Office of Personnel Management Pay and job satisfaction, 399-400 planning 

(OPM), 22, 215 Pay Comparability Act of 1990, Planning-programming-budgeting 
AIDS directive, 227 224-225 system (PPBS), 179-180, 196 
hiring plan, 222 Payoff matrices, 267-268 Policy, 74 
inventory of management skills, Payroll tax, 162 analysis, 261-265, 290 

32-33 Pay systems, 223-225 analysts, 28 
Oligarchy, 28 Pendleton Act, 212-214 entrepreneur, 74 
Ombudsman, 74 Performance formulation, 51-52 
Operating grant, 82, 119 appraisal, 362 implementation, 52-53 
Organizational audit, 176, 196 Policy process 

chart, 302-303, f3 02 bonus, 351, 362 agenda setting, 50-51, 73 
culture, 312-313, 326, 419 budget, 178-179, 196 formulation, 51-52 
design, 271-272, f 272 indicators, 290 implementation, 52-53 
learning, 313-314, 326 measurement, 278-284, 290, overview, 49 

Organizational development (OD), b283 stages, b49 
325,419 measurement systems, 194, types of policies, 53-56 

values, 310 355-356 Policy types 
Organizational dynamics, Performance management constituent, 55-56, 74 

management of benchmarking, 356 distributive, 54, 73 
early writers: concern for measuring performance, overview, 53 

structure, 300-304 355-356 redistributive, 55, 74 
functions of management, overview, 354-355 regulatory, 54, 74 

298-300 Personal mastery, 314 Political context of public 
images of organizing in the Personal skills in public administration 

public and nonprofit sectors, management administrative organizations 
297-298 creativity and problem solving, and executive leadership. 

organizational culture, organiza¬ 376-379,f378 See Administrative organiza¬ 
tional learning, and strategic distribution of time among work tions and executive leadership 
management, 312-322 elements, 368 overview, 34-35, 72-73 

the organization and its informal aspects of managerial relationships with the legislative 
environment, 307-312 work, 368-369 body, 49-65 

overview, 297, 325 managerial interaction and relationship with the judiciary. 
postmodern narrative on communication, 368 See Judiciary and public 

management, 323-325 managerial work elements, 367 administration 
recognizing human behavior, models of individual decision Political economy approach, 326 

304-307 making, 379-382 Political neutrality, 144 
Organization change and overview, 366, 386 Politics and administration, 18 

development power and leadership, 382-385, Position classification, 248 
diagnosing the need for changes, b385 Postaudits, 175-176 

418-419 stress management. See Stress Postmodernism, 323-324 
major objectives of organizational management Poststructuralism, 323 

development programs, b418 themes of managerial work, 369 Power and leadership, 382-385 
overview, 417-418 time management, 375-376 Pragmatic incrementalism, 318 
strategies for change, 419-421 Personnel classification system, 220 Preaudit, 174, 196 

Outcome PERT (program evaluation review Preemptions, 98-100, 119 
evaluation, 285, 290 technique), 275-276, 290, f276 Principled negotiation, 405 
measurement, 281 Philosophy, moral, 126-127 Principles of reinvention and 

Outcome-based budgeting, Picket-fence federalism, 84-87, entrepreneurship, 336 
181-182,196 119,b86 Privatization, 107-110, 119 

Outputs, 274 Piecework bonus, 351, 362 ethics of, 136-137 



Index 481 

Problem solving and creativity, Public administrators Results focus, 387 
376-379 inventory of skills, 22-23 Revenue bonds, 187-188 

Process overview, 21-22 Revenue sharing, 119 
charting, 271-272, 290, f272 Public corporation, 40, 74 Reverse discrimination, 240-241 
evaluation, 285, 290 Public management, personal skills. Risk management, 189-190, 197 

Process of work, 180 See Personal skills in public Risky shift, 407, 422 
Productivity improvement, management Role ambiguity, 370, 386 

357-361 Publicness, 8-9 Role conflict, 370, 386 
Professional Air Traffic Controllers Public policy, 74 Roosevelt, Franklin, 36 

Organization (PATCO), budgets, 160-168, fl60, fl67 Rosenblum, David, 4 
234-235 Public-sector unions, 229 Rule making, 74 

Professional and Administrative Public service Rule of three, 222, 248 
Career Examination (PACE), ethics of. See Ethics of public Rust v. Sullivan, 67, b69 
222,239 service 

Program budget, 179-180 the future. See Future of public S 
Program development service Sales tax, 162-163 

strategies, 183-185 power of, bl6-17 Satisficing decision, 381-382, 386 
Program evaluation reflections on, b26 Scalar principle, 303 

evaluation designs and Purchasing, 190 Scientific management, 326 
techniques, 286-289 Purpose of work, 180 Selye, Hans, 371-372 

overview, 285-286 Senior Executive Service, 215-216 
Program manager, 28 Q Sensitivity training, 420-421 

role in financial management, Qualified immunity, 145 Sexual harassment, 226-227, 248 
bl70 Quality assurance, 332 Shared vision, 314 

Progressive tax, 196 Quality circle, 349-350, 362 Six Cs for effective writing, 396-397 
Prohibition on political activities Quality of work life, 347-349 Smiley v. Citibank, 67, b69 

and public administration, Sneaky mandate, 119 
144-145 R Social power, bases of, b385 

Project grant, 81, 118 Rawls, John, 127 Sovereignty, 229-231 
Property tax, 163 Reagan and Bush years, intergov¬ state, 100 
Proportional tax, 196 ernmental relations and, 87-88 Speaking skills, 395-396 
Proprietary funds, 192, 196 Recission, 174, 197 Special districts, 105-106, 119 
Psychology, moral, 127-129 Reconciliation bill, 196 administrative organizations and 
Public administration Recruitment process, 221-223 executive leadership, 46 

approaches to, 4 Redistributive policy, 55, 74 Spoils system, 210-214, 248 
contrasted with business Reengineering, 276-278, 290 Staff managers, 28 

administration, 5-7 Reflections of a public service Stakeholders, 290 
current thinking, 7-9 junkie, b26 State sovereignty, 100 

definition, 2-3, 28 Regions Hospital v. Sbalala, 67, b69 State spending from tobacco 
political context. See Political con¬ Regressive tax, 196 settlement, t98 

text of public administration Regulatory Strategic management, 326 

Public administration, commission, 40, 74 Strategic planning, 291, 330 

interorganizational context. See policy, 54, 74 costs and benefits, 265-267 

Interorganizational context of Regulatory Flexibility Act, 66 decision tree, f268-f269 

public administration Reinforcement theory, 400-402 development of alternative 

Public administration theory and Relaxation strategies, 260-261 

practice response, 373 logic of policy analysis, 261-265 

accountability, 18-19 techniques, 373-374 organizing for planning, 

bureaucracy and democracy, Reorganization Act of 1939, 36 258-259 

19- 20 Representative bureaucracy, overview, 255-257, 289 

efficiency versus responsiveness, 133-134 planning for planning, 257-258 

20- 21 Reprogramming, 174 quantitative techniques, 

issues in, 17 Responsibility, objective, 149 267-270 

politics and administration, 18 Responsibility, subjective, 150 steps, 259-260 



482 Index 

Strategic view, 387 property, 163 Unions 
Stress management proportional, 196 public sector, 229 

exercise, 374 regressive, 196 redefined, 235-236 
organizational factors that sales, 162-163 shop, 231 

promote burnout, b371 Taylor, Frederick, 300-301 Unit determination, 249 
overview, 369-372 Team University of Alabama v. Garrett, 
relaxation techniques, building, 420 238, 240 

373-374 learning, 314 Utilitarianism, 126, 130, 150 
stress and the organization, 374 Technical 
stress signals and responses, competence, 387 V 

372-373 subsystem, 291 Values, 316 
Strike decisions, 232-235 Technology and challenge to public Veto 
Structured interviews, 248 service, 435, 438 legislative, 59-60, 74 
Subjective responsibility, 150 Thorndike’s law of effect, 400 line-item, 173, 196 
Suggestion award, 351, 363 Time management, 375-376 Volcker, Paul, 428 
Sunset laws, 60-61, 74 Time series analysis, 291 Volcker Commission, 428, 
Sunshine laws, 61-62, 74 Tobacco settlement, state 430-431 
Supply-side economics, 119 spending, t98 main conclusions, b429 
Support system, 373, 386 Total quality management (TQM), Vroom-Yetton model of 
Synergy, 406 318-320 participation in decision 
Systems, 291 commitment to training and making, 414-417, b415, f416 

analysis, 273-276, f273 recognition, 331 
theory, 291, 307-309, 326 employee empowerment and W 
thinking, 314 teamwork, 331 Wards Cove v. San Antonio, 239 

focus on customer, 330 Weber, Max, 304 
T measurement and analysis of Whipsaw tactics, 233, 249 
Taft Commission, 157 processes and output, 331 Whistle blowing, 142-144 
Task forces, 350, 363 overview, 329-330 justifications for, 143 
Tavistock Institute for Human quality assurance, 332 White, Leonard, 3, 301 

Relations, 347 strategic planning, 330 Wildavsky, Aaron, 183-185 
Tax top management leadership and Wilson, Woodrow, 2-3, 18 

Bush plan, 165-167 support, 330 Winter, William F., 430 
corporation income, 162 Two-factor theory, 422 Winter Commission, 430-431 
excise, 162-163, 196 Workplace violence, 228 
individual income, 161-162 U Writing skills, 396-397 
payroll, 162 Unfunded Mandate Reform Act, 
policies, 161 102 Z 
progressive, 196 Uniform Guidelines, 239-240 Zero-base budgeting, 197 






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