Week 2: Accounting and Control in Public Sector Flashcards
What are the differences between the public and private sector?
1) Profit vs “Value for money”
2) Ownership
3) Size, diversity and complexity
4) Source of finance
5) Need for control
Characteristics of the public sector:
1) Objectives are difficult to define precisely
2) Outcomes are difficult to measures.
What is the New Public Management?
Aims to move public-sector organisations towards having a more economic rational. This many damage long term sustainability of Public-sector organisations.
What are some of the 7 doctrioanal components of the NPM (HOOD 1991) ?
1) Explicit standards and management of performance.
2) More emphasis on output contol. e.g. through rewards linked to performance.
3) Clear division of roles.
4) Greater control of resources to reduce costs
What are the characteristics of NPM?
- Target based management
- Greater emphasis on competition
- Standardisation of procedures
- Emphasis on efficiency
- Modelled on private sector styles of management
What part does accounting play in the New Public Management?
1) Standard costs
2) Performance targets to see which firms are failing
3) Budgets linked to performance
What is the policing problem?
High levels of obsession with crime rates, therefore intense pressure has led to manipulation of figures.
Response to the policing problem:
Police are releasing financial reports, to enhance transparency and encourage efficency.
New- Public management within the healthcare:
Healthcare is expensive, therefore burden on governments. Hospitals have increased transparency to encourage efficiency.
What can happen in the healthcare if there is too much coercive control?
Professional Resistance-
Coercive controls may not work with highly qualified individuals and their job may require professional judgment.
What is NPM motivated by?
Efficiency and effectivness
What is hydbridisation?
Combining both enabling and coercive controls together.
E.g. staff help create new budgets.
What is deep reform vs visible success of reform?
Deep reform goes below the surface, It involves restructuring and reshaping. E.g changes to organisations culture.
Visible success refers to the tangible and observable outcomes or achievements that result from the reform efforts. tend to be short term. E.g. improved performance metrics, increased efficiency.
