Management Control Systems, Results-Oriented Culture, and Performance: Empirical Evidence on New Public Management

37 Pages Posted: 12 Aug 2011 Last revised: 23 Jun 2013

See all articles by Roland F. Spekle

Roland F. Spekle

Nyenrode Business University

Frank Verbeeten

University of Amsterdam - Faculty of Economics and Business, Amsterdam Business School

Date Written: May 31, 2013

Abstract

New Public Management (NPM) has been guiding public sector reform for about 25 years now. Its position on the design of effective management control structures rests on three key ideas: (1) performance improvement requires a results-oriented culture that emphasizes outcomes rather than inputs or processes, (2) public sector organizations need to introduce performance management based on targets, monitoring, and incentives, and (3) public sector organizations should decentralize decision rights and reduce the reliance on rules and procedures. We examine the validity of these ideas, addressing the full set of instruments that NPM calls upon to establish effective control. We also take into account NPM’s contention that the effects of management control choices on performance may be indirect, operating through their impact on results-oriented culture. We conclude that NPM’s reform programme should be reconsidered. Although the evidence indicates that a results-oriented culture is positively associated with performance, we find little support for the assumed benefits of NPM-type performance contracting. In addition, the results suggest that both the effects of decentralization and the reliance on rules and procedures are opposite to NPM’s expectations.

Keywords: New Public Management, Management Control, Performance Measurement Systems

JEL Classification: M4

Suggested Citation

Spekle, Roland F. and Verbeeten, Frank H.M., Management Control Systems, Results-Oriented Culture, and Performance: Empirical Evidence on New Public Management (May 31, 2013). AAA 2012 Management Accounting Section (MAS) Meeting Paper, Available at SSRN: https://ssrn.com/abstract=1908703 or http://dx.doi.org/10.2139/ssrn.1908703

Roland F. Spekle (Contact Author)

Nyenrode Business University ( email )

Straatweg 25
P.O. Box 130
Breukelen, 3620 AC
Netherlands

Frank H.M. Verbeeten

University of Amsterdam - Faculty of Economics and Business, Amsterdam Business School ( email )

Plantage Muidergracht 12
Amsterdam, 1018TV
Netherlands
(+31)0205257391 (Phone)

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