UDK: GG5:35(4S)
1.G2 Review article
Principles of Public Management in Scandinavian Countries: A Theoretical Assessment
Jan Ole Vanebo
North Troendelag University College, Norway
Jan.O.Vanebo@hint.no
Jon Aarum Andersen
Orebro University School of Business, Orebro University, Sweden
Jon.Andersen@oru.se
ABSTRACT
In the Scandinavian countries, policy documents have been developed to strengthen leadership practices in the public sector. The policy documents "Code For Chief Executive Excellence" (Denmark) and "Leadership in Norway's Civil Service" pertain to how the public sector ought to be managed. This article addresses two problems concerning these documents. To what degree does New Public Management (NPM) influence them? To what degree does management and leadership theory and research support the principles proposed by these documents? This article concludes that NPM has had a significant impact on public management in the Scandinavian countries. The policy documents are based on leadership research and are in accordance with mainstream management theory. The idea of formulating a principle of management that would characterize the classical contributions is also evident in these documents.
Key words: New Public Management, Public Management, Principles, Policy documents, NPM in the Scandinavian countries
JEL: G28
1 Introduction
Management studies tend to be fairly functional and instrumental in orientation (Pollitt & Bouckaert, 2011). In the studies, management is about getting things done as quickly, cheaply, and effectively as possibly, and usually about getting things done through other people, often described as the staff, workforce, personnel, or human resources. Although sharing a concern with effectiveness, the study of public administration, by contrast, has typically focused on the importance of "public-sector values", such as democracy, accountability, equity, and probity.
Vanebo, J. O. & Andersen, J. A. (2014). Principies of Public Management in Scandinavian Countries: A Theoretical Assessment. Mednarodna revija za javno upravo, XII (1), 9—22..
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In all public and private organizations some individuals are given the authority and responsibility for four basic managerial activities - planning and decisionmaking, organizing, leading and controlling (Griffin, 1999). These employees are often referred to as managers, while the five activities are often described as management. The employees who do not have these responsibilities are called subordinates. Management is the process undertaken by one or more individuals to coordinate the activities of others in order to achieve goals of the organization. It is imperative to distinguish between the term leadership (managerial behavior), which is a function, and leader or manager, which refers to a position in a group or organization. In public or private organizations the formal leaders are called managers or executives. They execute the leadership function. Leadership is part of the managerial process in which the manager guides, supports, motivates the subordinates so that they can fulfill their duties according to the plan of the manager and goal of the organization (Andersen, 2013).
In the Scandinavian countries, official documents have been developed to strengthen leadership practices in the public sector. The documents pertain to how the public sector ought to be managed. They present principles or models for managers in the public sector. The Oxford Dictionary defines principle as 'a fundamental truth or proposition that serves as the foundation for a system of belief or behaviour or for a chain of reasoning.' Moreover, these documents contain, to a greater or lesser extent, definitions of what constitutes public organizations, especially in contrast to private companies and the ways of managing them. The purpose of this article is to assess: (1) the impact of New Public Management has had on the Scandinavian policy documents and (2) to what degree the documents are supported by management and leadership theory and research. In what follows is a theoretical assessment of three policy documents: Leadership in Norway's Civil Service, Code for Chief Executive Excellence (Denmark), and Characteristics of Leadership in Municipalities and Counties (Sweden). The assessment of each is based on a theoretical-analytical frame of reference. Some key definitions are presented, which are crucial for the theoretical-analytical assessment of the three principles for public management.
Arguably, New Public Management has had a significant impact on public management in the Scandinavian countries. The policy documents presented here support this proposition. In the article, these documents have been subjected to a theoretical assessment, and a comparison between the Danish and Norwegian documents is presented.
2 New Public Management
Over the last 30 years NPM has contributed to major changes in the organization and management of and in the public sector. "New Public Management" (Hood, 1991) induced a wave of administrative reforms that won widespread
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acclaim through the 1990s (Aucoin, 1990; Hood, 1991; Prior, 1993; Dunleavy & Hood, 1994; Walsh, 1995; Ferlie et al., 1996). The intention and hope of the reforming efforts have remained the same: to improve the effectiveness and efficiency of the public sector; to enhance the responsiveness of public agencies to their clients and customers; to reduce public expenditure; and to improve managerial accountability (Christensen & Lœgreid, 2010).
NPM is a two-level phenomenon (Pollitt & Bouckaert, 2011). At the higher level, it is a general theory or doctrine that the public sector can be improved by the importation of business concepts, techniques, and values. At the more mundane level, NPM is a bundle of specific concepts and principles. The inspiration for NPM has its source in various theoretical perspectives (Gruening, 2001): public-choice theory, management theory, classical public administration, neoclassical public administration, policy analysis, principal-agent theory, property-rights theory, the neo-Austrian school, transaction-cost economics, and New Public Administration and its following approaches. NPM derives also from organization theory (Klausen, 2013).
To analyze and make use of NPM as a normative recipe, Prior (1993) distinguished between NPM elements that relate to the overarching vision of how public-service production can be organized (i.e., what we can define as pertaining to the welfare state's configuration) and elements concerning the matters of internal organization and management. Klausen (2013) distinguishes between two core arguments, or pillars, and their associated recommendations, both of which come from "the private realm". The first is the economic argument while the second one concerns organization and management, or to be more specific, the economic argument in relation to the managerial one.
The economic pillar expresses the desire for a neo-liberal market orientation and a public sector managed by economic reasoning, as derived from neo-economic theory (public choice, principal-agent theory). The characteristic measures related to this pillar include budget cuts, privatization, separation of provider-producer, contracting out, user charges and vouchers, the concept of the 'customer', and competition. The managerial pillar in NPM pertains to organization and management.
A basic feature of NPM is managerialism and the introduction of two new management models in the public sector (Christensen & Lœgreid, 2011). The first model - let the manager manage - is connected to devolution. A main component of the NPM philosophy is hands-on professional management, which allows for active, visible, discretionary control of an organization by people who are free to manage; explicit standards of performance; a greater emphasis on output control; disaggregation of units; and private-sector techniques. The second model - make the manager manage - leans more toward the use of incentives to further certain decision-making behaviors. It implies increased exposure to competition, contract management, and
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market orientation (contracting out, purchaser-provider models) (ibid.). The Scandinavian documents pertain to both of these management models.
The classical writers on organization were concerned with the formulation of principles for management and leadership. Taylor (1911/1967) tried to solve the enigma of efficiency by presenting "The principles of Scientific Management". Fayol (1919/1946) presented 14 principles which could be applied in all kinds of organizations. Every organized activity requires planning, organizing, directing, co-ordination, and control. Gulick (1936/1937) addressed the limits of span of control in order to find the optimal number of subordinates that a manager could lead. Fayol (1916/1949, p. 42) wrote: "Without principles one is in darkness and chaos; interest, experience and proportion are still very handicapped, even with the best principles."
According to Fayol, the principles need to be applied with common sense.
3 Denmark - Code for Chief Executive Excellence 3.1 The Danish Document
The Code for Chief Executive Excellence, hereafter referred to as the "Code of conduct", was published by the Ministry of Finance in 2005. In it, the top executives of the state, counties, and municipalities have, together with Danish and international researchers, delivered the ingredients for Denmark's first code of conduct for good public executive leadership. For almost two years, a large part of Denmark's approximately 450 top executives of the state, counties, and municipalities participated actively in the debate about the most important terms, strategies, and competencies for top executives in a modern public sector. The top executives themselves have to a great extent been the driving force behind the process. The Code of conduct began with an analysis of both permanent and new challenges for Denmark's top public executives. The code itself relates to the roles of top leaders and to the behaviors and strategies for leadership within the public sector's politically led organizations. Nine recommendations, complemented by a foreseeable number of action-oriented questions to the top executive, constitute the elements of the Code of conduct (Figure 1).
The recommendations in the Code of conduct are expressions of how public executives can act and establish relationships to policy, the organization, and the outside world on the basis of personal leadership. The nine recommendations concern (1) "up" - toward the relation with the political leader, (2) "out" - the relation with the outside world, and (3) "inward" - the relation with the management of the organization. Each recommendation appears to be equally important; they should be treated holistically rather than as a list of prioritized leadership tasks. Good public government involves top executive leadership complying with all nine recommendations. To support the application and the impact of the code of conduct in practice,
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this document follows with a method of self-evaluation that the individual executive leader ought to use - a "code mirror". This method gives the individual top executive the opportunity to reflect on own leadership practices in light of the recommendations of the Code of conduct.
Figure 1: Code for Chief Executive Excellence (Denmark)
The public sector is currently undergoing a number of far-reaching reforms that require a sustained focus on good executive leadership if the new conditions and possibilities are to be used effectively. The aims and objectives are: (1) to create the basis for a continuing debate on good executive leadership in Denmark under the direction of the Code of conduct, the structural reform, and the developmental tendencies in general; (2) to create opportunities for network formations across the circle of top executives; (3) to challenge and inspire top executives through contact with Danish and international researchers; and (4) to involve new top executives who previously have not had the chance to participate in working with the code of conduct. The National Association of Municipalities (KL), the Danish regions, and the Ministry of Finance also initiated a forum for Top Executive Management. The Code is also relevant for middle managers. Hales (2006) has provided a comprehensive outline of middle managers role and tasks: direction, coordination and control of the operation of the unit; deployment of resources within the unit and external relations with others inside the organization and external parties.
9 Protecting the
public sector's	1 Clarifying
legitimacy and the	A relations to the
democratic values	/ \ political leader
5 demanding focus on targets and impacts
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3.2 impact of New Public Management
The Danish document begins with what is seen as tasks of the chief executive in the public sector. These tasks are unique compared with other countries, as the professional top executive is an advisor to the political leaders as well as the superior manager of his or her organization. For a top public-sector executive the space for action when exercising leadership is dependent on the political leader's preferences. In practice, however, the political leader will choose to share the space for action with the administrative manager by delegating responsibilities for a number of daily leadership tasks. This dual role gives the public manager the responsibility of bridging policies and professional competence as well as bridging policies and implementation. The focus on a dual role can theoretically be linked to rationalistic organization theory, which makes a distinction between the owners and the executive (Abrahamsson, 1993). It is more or less identical to the principal-agent theory (Jensen & Meckling, 1976). However, this dual role is also found in the private sector where the manager does what the owners or board of directors decide. The claim that this is unique to the Danish system is hardly correct. Instead it is rather typical for the Scandinavian public administration.
The document refers to the "knowledge society" and the present day's focus on competence and learning at work. Knowledge management is now a managerial responsibility. The Danish document does not only deal with public management, but also with inter-public management. This is also found in current scholarship which argues that public managers need to cooperate with other public organizations in new ways (Brookes & Grint, 2010).
It is noteworthy that the Code of conduct expects the public manager to be a role model. The leader as a role model is most distinctively expressed in transformational leadership theory, where it is claimed that transformational leadership makes employees have trust, admiration, loyalty, and respect for the leader (Burns, 1978; Bass & Riggio, 2006). One should also note that the classical focus on professionalism, equality, and impartiality as part of the public sector's value basis is repeatedly mentioned, as this constitutes one of the main differences between public and private organizations (Allison, 1983).
The Code for Chief Executive Excellence sets clear requirements for objectives and results-oriented interaction, leadership awareness, leadership behavior, the establishment of leadership environments, and leadership communication. The Code has, therefore, a strong and distinct basis in mainstream leadership research. By stressing the distinction between public and private organizations the Danish Code of conduct rests on a strong theoretical foundation.
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4 Norway - Leadership in Norway's Civil Service 4.1 The Norwegian Document
Leadership in Norway's Civil Service was prepared by the Ministry of Government Administration and Reform in a broad and complex process involving a number of contributors. A special council with participants from academia and governmental managers provided professional inputs to the policy document. A draft of the policy platform was presented to leaders at various levels, including state executive leaders and personnel managers. The governmental officers' main trade organizations also submitted a draft of the document. In 2008 all government executives received in print the document entitled "Leadership in Norway's Civil Service", with an attached letter from the Ministry of Government Administration and Reform. The document has been officially translated into English (Norwegian Ministry of Government Administration and Reform, 2008). It was posted on the government's website at the same time. The document clearly specifies the premise for managers within the state. The government has approved this document as the basis for work on the development of governance and leadership within public administration. It is followed up in Government and leadership development projects within individual state agencies. Additionally, it is used by individual managers as a basis for reflecting on and developing their own leadership performance. The document sets out the basis, framework, and principles of leadership in the Civil Service.
The document "Leadership in Norway's Civil Service" has four areas of focus: objectives, results and user-focus; cooperation and coordination; competence, learning, and development; and co-determination and participation. The manager is to ensure good results and to attain goals within his area of responsibility. The principle of governing objectives and results is outlined in the government's financial regulations. The hierarchical structure of the central government creates orderly conditions up toward the politicians, within the organizations, and externally toward society. Overall, this requires responsible, clear, and courageous leaders who lead the way with dialogue, coherence, and coordination across agencies and at different levels of the public administration. The State is seen as a knowledge-intensive organization with leading expertise in many fields. It needs further to develop and promote the advantages it has as a workplace: meaningful and socially useful tasks, good potential for development in exciting educational and expertise environments, and safe working conditions. Employees are directly involved in problem-solving as individual workers; however, they also affect decisionmaking indirectly through their trade unions. It is claimed that Norwegian leaders often have an informal, engaging, supportive, and non-authoritarian leadership style.
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Though the document is aimed primarily at those who have a leadership responsibility in a governmental agency, it is also aimed at employees, employees' representatives, and others concerned with the leadership within the public administration. The document points to a framework and principles of leadership within the state. It maintains that the state's leadership policy must be based on the state's characteristics, values, and overall objectives. Managers within the State are required to contribute to the development of a strong and effective public sector. They are to contribute to renewing the public sector in a way that provides more welfare and less administration, and they are to be more open, accessible, and user-oriented.
The document can be used in conjunction with leadership development, the recruitment of leaders, and the introduction of new managers. While leadership is important, the effects of the leadership are not always visible. Leadership is about working with employees, their organizations, and other parties to achieve results. The implication is that leaders within the State are, together with the employees, to contribute to the production of results that will benefit the community in accordance with political priorities and social values.
The State has complex tasks to perform. Various considerations must therefore be taken to order to ensure high welfare performance. This demand makes state leadership complex. The administration is based on fundamental values with strong roots in Norwegian culture and tradition. The tasks performed by the administration should reflect these values. State managers have the responsibility to develop democracy at the workplace, because it is both just and efficient.
Managers need to delegate tasks, supervise, and follow up on employees, and at the same time set a distinct direction and performance requirements. Governmental managers are faced with a host of large expectations from the citizens that the public sector is to serve, from their own employees, and from the Parliament and the Government as the country's executive political leadership.
4.2 The impact of New Public Management
The document stresses that there is a demand and an expectation that managers in the public sector run an effective organization. In the document it is evident that the importance of results-, task-, and relationships-orientations of managers as well as goal-achievement is highlighted. Additionally, the distinctions between public and private organizations and their respective management are emphasized (Allison, 1983). The document repeatedly underscores the demand and expectation that public managers develop an effective organization. It is worthwhile noting that the document (page 19) says: "The hierarchical structure of the central administration ensures orderly relations vis-à-vis the political leadership, within the administration
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and vis-à-vis the general public." This is theoretically an interesting issue, as some scholars argue against the hierarchical structure or argue in favor of networking solutions. However, the fact remains: all organizations are hierarchical (Andersen, 2012a). The public manager is expected to take the lead and show the way. The document does not leave any doubt about the mission of the public manager.
4.3 Theoretical Assessment
The document (p. 5) defines leadership as follows: "Leaders in the Civil Service, in cooperation with their staff, shall seek to achieve results that are in the community's best interests in accordance with political priorities and basic social values." This definition is similar to Blake and Mouton's (1985, p. 198) well-established definition: "Processes of leadership are involved in achieving results with and through others."
The Civil Service is a knowledge-intensive organization with leading centers of expertise in many fields. The Civil Service has to compete for highly qualified personnel. There is a need further to develop and express the advantages of working in the Civil Service, including good opportunities for professional development in stimulating learning and knowledge environments. It is thus obvious that today's focus on knowledge management is expressed in the document.
The document (p. 12) says that: "Norwegian managers tend to have an informal, inclusive, supportive and non-authoritarian leadership style." This claim is somewhat imprecise as Scandinavian business managers are more relationships-oriented than public managers, however, more change-oriented (Andersen, 2012b). Throughout the document the term leader "role" is found. It is, however, not defined. In leadership theories the term is used as it is in social psychology, where behavior is explained by the expectations of the focal person or the "role" related to which work-related tasks the manager spends most time on solving. In other words, leadership role refers to the activities of managers (Mintzberg, 1980; Johnsen, 2002; Andersen, 2000).
The document describes some general functions that all managers must handle as they relate to their position in the administration. These are strategic functions, operational functions, administrative and work processes, relational functions (both internal and external), and informational and communicational functions. The application of the term "function" has its basis in classical organizational theory. Fayol (1921/1946) described the functions of the executive (the tasks of the manager) as planning, organizing, directing and control. The classical list of functions or tasks is in current scholarship often presented as planning, organizing, guiding, leadership, and control (Andersen, 2000). The document also contains a table which shows the relationship between the four basic functions of (1) strategy, (2) operations, (3) building relations, and (4) communication and information and
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the four areas of focus (1) target, results, and costumer focus, (2) cooperation and co-ordination, (3) competence, learning, and development, and (4) co-determination and participation. This table has some similarities with Johnsen (2002), who described leadership activities and defined leadership as a goal-setting, problem-solving, and language-creating interaction between individuals.
This analysis concludes that the document "Leadership in Norway's Civil Service" has a strong and distinct basis in mainstream leadership research, despite the comments presented above. By stressing the distinction between public and private organizations, the document reveals a theoretically strong basis.
5	Sweden - Ten Characteristics of Leadership
The Swedish Association of Municipalities and Counties (SKL) administered a project entitled "Tomorrow's Leadership" during 2006 and 2007. A large number of top executives and employee representatives worked with issues related to the challenges faced by municipalities and counties, and how these challenges could affect the organization and the leadership.
The work resulted in the document titled "Strategic and professional leadership of municipalities and counties". This document lists ten characteristics describing the preferred kind of leader as someone who (1) has the assignment and citizens in focus; (2) interacts with elected officials and has faith in the political mandate; (3) brings the vision to life and conveys images of the future; (4) creates pride in the welfare mandate; (5) develops empowerment; (6) is results-oriented; (7) has a general overview and a holistic approach; (8) creates a climate equipped to meet the demands for change and development; (9) collaborates; and (10) is authentic.
This managerial leadership document addresses four problems: (1) How to face environmental challenges, (2) How to succeed in the mission, (3) How to become more results oriented, and (4) How to develop the leadership role as a carrier of culture.
The Swedish document is equivalent neither to the document "Leadership in Norway's Civil Service", published by the Norwegian Ministry of Government Administration and Reform, nor to the "Code for Chief Executive Excellence" published by the Danish Ministry of Finance. For this reason the Swedish document is neither further described nor assessed.
6	Conclusions
The Danish Code of conduct stresses the classical values of the public sector. The public sector is responsible for the society at large. Transparency, legality,
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stability, and continuity as well as norms on impartiality, professionalism, and loyalty are to be respected.
The public sector, however, is characterized by several and sometimes conflicting goals and criteria of effectiveness. The hierarchical model of governance is the prevailing one. This document argues that the tasks of the top executive in the public sector in Denmark is unique compared with other countries, in that the manager fills both the role of consultant to the political leaders and the role of manager of an organization. This is seen as a fundamental characteristic of the Danish system of governance. Thus, here we find the most fundamental difference between the private and the public sector according to the "Code of conduct".
The Norwegian document emphasizes the characteristics of the national state, both its value basis and its general objectives. Norwegian public administration rests on basic values strongly rooted in national culture and tradition. The hierarchical model is the basis for public organizations because it guarantees clear-cut relationships with politicians, internally within the organization, and toward citizens. It stresses that the Parliament and the Government are the superior leading institutions. Public managers' main task is to contribute to the achievement of political goals. Both in the Norwegian and Danish documents the values of public administration are highlighted as well as the hierarchical organization model. These characteristics imply consequences for public management. The Danish Code and the Norwegian case have both a multilevel management and leadership approach, focusing on upward, downward and external relations.
A theoretical assessment and thus the research-based foundation of these two documents are clear: both the "Leadership in Norway's Civil Service" and the Danish "Code for Chief Executive Excellence" are based on theoretical solid ground. This assessment holds even if some critical comments to these two documents have been presented.
The similarities between the three Scandinavian documents are that they all formulate principles, goals, and means for effective leadership and goal-attainment in the public sector. The difference is that the Danish and Norwegian documents are only concerned with governmental administration. The Danish Code of conduct, however, refers only to top executives. The Swedish document concerns only public managers in municipalities and regional public institutions. Both the Danish and Norwegian documents contain tools for managers and they constitute a basis for leadership-training programs.
Gruening (2001) has shown that the idea of principles has been part of the development of New Public Management all the way from the classical writers until today. Models, techniques, and principles used in private companies can be adopted and successfully applied to public management. The impact of
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New Public Management is now presented as a set of management principles in Scandinavian countries in the form of the Danish "Code for Chief Executive Excellence" and "Leadership in Norway's Civil Service."
Jan Ole Vanebo (Ph.D.) is professor of Management and Management accounting at the North Troendelag University College, Norway. He is senior visiting fellow at EIPA, Barcelona, and member of the steering committee for EPSA 2013 (European Public Sector Award 2013), managed by the European Institute of Public Administration (EIPA) in Maastricht. Professor Vanebo is coeditor of the book "Public Management in the Twenty-first Century - Trends, ideas and Practices" (2013), University Press, Oslo, Norway.
Professor Jon Aarum Andersen holds two Master Degrees (Master of Business Administration and Master of Social Science) from Norway. He is Doctor of Economics (Ph.D.) from Lund University, Sweden. Dr. Andersen has written 14 universitylevel textbooks and has 30 international research journal publications. He is now affiliated to Orebro University School of Business, Orebro University, Sweden and visiting professor at Ljubljana University, Slovenia.
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PovzETEK
1.02 Pregledni znanstveni članek
Načela novega javnega menedžmenta v skandinavskih državah: teoretična ocena
Ključne besede: novi javni menedžment, javni menedžment, načela, dokumenti politike, novi javni menedžment v skandinavskih državah
V skandinavskih državah so oblikovali dokumente politike, ki naj bi utrdili prakso vodenja v javnem sektorju. Dokumenta politike »Kodeks za odličnost izvršnih direktorjev« (Danska) in »Vodenje v norveški javni upravi« opisujeta, kako bi morali upravljati javni sektor. Ta članek obravnava dve vprašanji, ki se nanašata na ta dokumenta. Kakšen je bil vpliv Novega javnega menedžmenta (NJM) nanju? Kako podpirajo teorije upravljanja in vodenja ter raziskovanje načela, ki jih predlagata? Avtor v članku ugotovi, da je imel NJM v javni upravi v skandinavskih državah precejšen vpliv. Dokumenta temeljita na raziskovanju vodenja in sta skladna s sodobno teorijo upravljanja. Očiten je tudi njun namen oblikovati načela upravljanja, ki bi prispevala k učinkovitosti v praksi.
Mednarodna revija za javno upravo, letnik XII, štev. 1, 2014 23