In 1996 Henry Mintzberg published a paper in the Harvard Business Review entitled ‘Managing Government, Governing Management’. In the paper Mintzberg covers four broad topics relevant to local government:

1. Private, public, cooperative and non-owned organisations.
2. The roles of people in society as customer, client, citizen and subject.
3. The management myths that activities can be isolated, performance can be fully evaluated using objective measures, and activities can be entrusted to autonomous managers responsible for performance.
4. The machine model, network model, performance-control model, virtual model and normative-control model available to organise government.

Private, public, cooperative and non-owned organisations

Mintzberg challenges the belief that the private sector is good and the public sector bad, or that government must become more like business. He believes that we have ‘confounded’ the relationship between business and government. He sees great strength in the private sector, public sector and the ‘sectors in between’, and a role for each in modern society. This anticipates some of the models emerging for service delivery involving councils, other levels of government, non-government organisations and volunteers.

He feels that the debate over allocation of resources between the private and public sectors is limited and needs to be broadened to consider cooperatively-owned organisations (controlled by suppliers, customers or employees – e.g. mutual insurance) and non-owned organisations (controlled by self-selecting boards – e.g. universities).

In local government today, some alternative models are being explored. For example, the local government business enterprise – a corporation that is wholly owned by a council and tasked to deliver services on behalf of the council to the community. Some are owned by several councils and deliver services to councils outside the ownership group. Strategic alliances between councils to collaborate in delivering shared services to their communities are being encouraged, particularly in rural areas in Australia. Some will find governance models that fall between private and public sector models.

Customers, clients, citizens and subjects

Mintzberg uses these labels for classification purposes and to highlight the various purposes of government. He believes that customer is the appropriate term for people buying cars, washing machines and toothpaste. He does not see himself as a customer of government and he expects something more than ‘arm’s length trading and the encouragement to consume’. When he receives a professional service from government he sees himself as a client. As a citizen, he believes his rights exceed those of customers and clients. As a subject he has obligations.

As customers and citizens, Mintzberg believes people have a reciprocal, give and take relationship with government. Customers receive direct services at arm’s length, while citizens benefit indirectly from public infrastructure. Public infrastructure includes social (e.g. libraries), physical (e.g. roads), economic (e.g. monetary policy), and mediative (e.g. courts). He sees the main difference between customer-orientated and citizen-orientated services as the frequency of occurrence – more frequent services are citizen-orientated.

As subjects and clients, he sees relationships as more one-sided. For example, police, the military and prisons. Some services fit into one or more categories. For example in local government parks are public infrastructure enjoyed as a citizen with the requirement that, as a subject, you respect the environment.

Differentiating between the various capacities in which people can act is becoming more important in local government today. Those extracting essentially private value from the public system need to be separated from those seeking public value. The strong emphasis on conflict of interest and best value in Victoria seeks to ensure that public interest, not private interests, drives decision making.

Mintzberg links the roles of customer, client, citizen and subject with the four types of organisations. He sees customers as appropriately served by privately or cooperatively owned organisations. In contrast, citizen and subject services should be provided by government because of the trade-offs required between the conflicting interests of citizens, and the necessary use of authority in subject services.

Consideration of the use of authority is a central tenet of the public value concept pioneered by Mark H. Moore. There is increasing interest in it as a way to understand the value sought by the community and to operationalise public services to deliver it.

Mintzberg sees the client relationship as more complicated. The minimum levels of professional services offered for education or health may not be effective when offered by government. There are nuanced requirements for professional services. Non-owned and cooperatively owned organisations, with public funding to ensure equity in distribution, may provide the best service.

The myths of Management

Mintzberg argues that a balanced society needs various institutional forms of ownership and control, and that there are a wide range of roles for government. This leads to a discussion about how government should be managed, and the ‘myth of Management’ (i.e. ‘the kind of management that now inundates us – in bookstores, MBA’ programs and hyped training seminars’). He sees this type of management as rarely applicable to the roles of people as customers, clients, citizens and subjects.

He identifies three assumptions underlying the Management view of management:

1. Activities can be isolated from one another – each unit would need a clear mission and to be left alone to achieve its goals.
2. Activities can be fully and properly evaluated by objective measures – goals can be expressed in quantitative terms, costs and benefits can be measured. There cannot be distracting ambiguity or nuance.
3. Activities can be entrusted to autonomous professional managers held responsible for performance – this can be difficult for government services.

Mintzbergs sees problems coping with these assumptions in the public sector. Separating government activities can be difficult because they are so interconnected. There would have to be “clear, unambiguous policies formulated in the political sphere for implementation in the administrative sphere”. Policies would need to be stable over time and politicians would need to stay out of execution of those policies.

This concern links with those of Peter F. Drucker expressed in an earlier classic paper post. The public service cannot, and should not, try to be more ‘businesslike’. It is a mistake to believe that the only management model available is that of the private sector. It has elements that are applicable and useful but it also has serious shortcomings that both Drucker and Mintzberg have identified. Local government needs a management model that is ‘local government’like’.

Measurement is a key element of the Management movement but can be difficult for government activities because many services are delivered by the public sector because they are hard to measure. He says that if

“If everything was so crystal clear and every benefit so easily attributable, those activities would have been in the private sector long ago”.

Assessment of many government services requires soft judgement, not hard measurement.

Machine model, network model, performance-control model, virtual model and normative-control model.

Mintzberg discusses how each has a different way to organise controlling authority and its activities.

The ‘government as machine model’ views government as a machine dominated by rules, regulations and standards. It was adopted by the public sector in the early 20^th century to combat corruption and arbitrary use of political influence. It offers consistency in policy and reliability in execution. It lacks flexibility and responsiveness to individual initiative. It is root of the ‘command and control’ model so criticised by John Seddon.

The ‘government as network model’ is the opposite of the machine model. Government is viewed as an intertwined system, a complex network of relationships created to work out problems as they arise.

The ‘performance control model’ seeks to isolate, assign and measure. It aims to make government like the business, in particular, the divisional structure used by conglomerates. The overall organisation is split into ‘businesses’ that are assigned performance targets and managers are held responsible for achieving them. Mintzberg believes that the conglomerate form of organising has come under pressure in the private sector. If businesses have little in common, why have them in the same organisation? A remote headquarters that only provides financial control offers little value. Emphasising planned and measured performance reinforces conventional hierarchical control. Again there are elements of command and control evident.

The ‘virtual government model’ delivers no services directly and private organisations are engaged to deliver all services. It seeks to privatise, contract and negotiate.

The ‘normative control model’ uses control based on values and beliefs. It was the model that Mintzberg believes kept the machine model functioning when the concept of public service prevailed. Service and dedication overcame the deficiencies of bureaucracy. Five key elements characterise the normative model:

1. Selection – people are chosen by values and attitudes rather than credentials.
2. Socialisation – ensures a membership dedicated to an integrated social system.
3. Guidance – using accepted principles rather than imposed plans, by visions rather than targets.
4. Responsibility – shared by all members who feel trusted and supported by leaders practicing a ‘craft’ style of leadership based on experience. Inspiration replaces so-called empowerment.
5. Judgement – performance is judged by experienced people, including service recipients.

The key to the normative model is dedication by and for the providers of the service. Providers are treated decently and reply in kind. Agencies (or business units) can be separated horizontally, but vertical control is normative (i.e. related to an ideal standard or model, or being based on what is considered to be the normal or correct way of doing something) rather than technocratic (i.e. controlled by experts). The model allows for radically different service delivery activities that are less machinelike and hierarchical.

Mintzberg concludes that there is no one best model and that society currently operates with them all. He provides the examples of tax collection relying on the machine model and foreign policy on the network model. He believes government cannot function effectively without normative controls. Government is an “enormously eclectic system” because it deals with so many facets of life. In saying that, he believes that some models are better suited to some purposes than others.

He sees the network model as particularly suited to complex, unpredictable activities, for example policy making, high-technology services and research. A potential problem with the network model is the network is captured by an elite.

Mintzberg believes that there needs to be “a major shift in emphasis to the normative model”. He cites the Japanese encouragement of human dedication and stresses its importance in government because of the vagaries, nuances and difficult trade-offs that must be made between competing interests. This is particularly important in client-orientated professional services, such as education and health, which can “never be better than the people who deliver them”. Professionals need to be freed from the direct controls of government bureaucracy and the narrow pressures of market competition. It is why he believes that non-ownership and cooperative ownership models can work well for those services.

Propositions to consider

Mintzberg concludes with some ‘propositions’ to consider. He believes that the influence of business values and Management thinking needs to be tempered in their application to government services. He provides three propositions relevant to local government:

1. Business is not all good and government is not all bad – each has its place in a balanced society alongside cooperative and non-owned organisations. He believes that societies get the public services that they expect. If people believe that the public sector is bumbling and bureaucratic, then that is what it will be. If instead they believe public service to be a noble calling, they will get strong government.
2. Business can learn from government no less than government can learn from business, and both have a great deal to learn from cooperative and non-owned organisations. Mintzberg believes that people in the public sector have learned to cope well with problems such as conflicting objectives, multiple stakeholders and intense political pressure, and that these types of pressures are becoming more prevalent in the private sector. Cooperatives have sophisticated ways to deal with dispersed constituencies, as well as special kinds of customers. Mintzberg believes that the non-owned organisation is the fullest realisation of the normative model in the West.
3. We need proud, not emasculated government. Mintzberg believes that attacks on government are attacks on the fabric of society. A society that allows individual needs to undermine collective needs will “soon destroy itself”. Whilst we all value private goods, Mintzberg asserts that they are valueless without public goods, such as policing and economic policies to protect them.

Above all, Mintzberg believes that balance is needed between the different sectors of society. In particular, private sector values are all pervasive and government needs to be careful about what they take from business. Mintzberg argues for the need to “balance our public concerns as individuals with the private demands of institutions”.

Mintzberg, Henry 1996. ‘Managing Government, Governing Management’ Harvard Business Review