ManagingGovernment,GoverningManagement

byHenryMintzberg

Capitalismhastriumphed.ThatwasthepatconclusionreachedintheWestas,onebyone,the
communistregimesofEasternEuropebegantofall.Ithasbecomesuchanarticleoffaiththatwehave
becomeblindtoitseffects.Thoseeffectsarehighlynegativeindeed,dangerousbecausethe
conclusionitselfiswrong.Inmyview,wehaveconfoundedthewholerelationshipbetweenbusiness
andgovernment,andwehadbestclearitupbeforeweendupnobetteroffthantheEasternEuropeans
oncewere.

TheTriumphofBalance

Capitalismdidnottriumphatall;balancedid.WeintheWesthavebeenlivinginbalancedsocietieswith
strongprivatesectors,strongpublicsectors,andgreatstrengthinthesectorsinbetween.Thecountries
undercommunismweretotallyoutofbalance.Inthosecountries,thestatecontrolledanenormous
proportionofallorganizedactivity.Therewaslittleornocountervailingforce.Indeed,thefirstcrackin
theEasternblocappearedintheoneplace(Poland)wheresuchaforcehadsurvived(theCatholic
Church).

ThebeliefthatcapitalismhastriumphedisnowthrowingthesocietiesoftheWestoutofbalance,
especiallytheUnitedKingdomandtheUnitedStates.Thattheimbalancewillfavorprivateratherthan
stateownershipwillnothelpsociety.ItakeissuewithMiltonFriedmanoftheUniversityofChicago,
whohasbeenfondofcomparingwhathecallsfreeenterprisewithsubversivesocialism.Thevery
notionthataninstitution,independentofthepeoplewhoconstituteit,canbefreeisitselfasubversive
notioninademocraticsociety.Whentheenterprisesarereallyfree,thepeoplearenot.

Indeed,thereisaroleinoursocietyfordifferentkindsoforganizationsandforthedifferent
contributionstheymakeinsuchareasasresearch,education,andhealthcare.Thecapitalismof
privatelyownedcorporationshascertainlyserveduswellforthedistributionofgoodsandservicesthat
areappropriatelycontrolledbyopenmarketforces.ThebookspublishedbyFriedmanandhis
colleaguesaregoodsofthatkind.Butistheirresearch?Orthehealthcarereceivedbypoorpeople
livingnearthoseprofessorsoffices?

BeyondPublicandPrivate

Foraslongasanyonecarestoremember,wehavebeenmiredinadebateovertheallocationofre
sourcesbetweenthesocalledprivateandpublicsectors.Whetheritiscapitalismversuscommunism,
privatizationversusnationalization,orthemarketsofbusinessversusthecontrolsofgovernment,the
argumentshavealwayspittedprivate,independentforcesagainstpublic,collectiveones.Itistimewe
recognizedhowlimitedthatdichotomyreallyis.

Thereareprivatelyownedorganizations,tobesure,whethercloselyheldbyindividualsorwidelyheld
intheformofmarkettradedshares.Andtherearepubliclyownedorganizations,althoughtheyshould
reallybecalledstateowned,becausethestateactsonbehalfofthepublic.Weascitizensnomore
controlourpublicorganizationsdirectlythanweascustomers(orassmallshareholders)controlthe
privateones.Buttherearetwoothertypesofownershipthatdeserveequalattention.


First,therearecooperativelyownedorganizations,whethercontrolledformallybytheirsuppliers(asin
agriculturalcooperatives),bytheircustomers(asinmutualinsurancecompaniesorcooperativeretail
chains),orbytheiremployees(asinsomecommercialenterprises,suchasAvis).Indeed,allcountriesin
theWest,includingtheUnitedStates,aretoalargeextentsocietiesofcooperativelyowned
organizations.AccordingtotheNationalCooperativeBusinessAssociation,almosthalfoftheU.S.
populationisdirectlyservedbysomecooperativeendeavor,andoneinthreepeopleisamemberofa
cooperative.IdidsomeworkrecentlyforamajorU.S.mutualinsurancecompany.Theenterpriseis
vigorouslycompetitive,yetitbenefitsfrombeingcooperativelyowned.Itsexecutivesarequicktopoint
outjusthowimportanttheabsenceofstockmarketpressuresisfortheirabilitytotakealongterm
perspective.

Second,wehavewhatIcallnonownedorganizations,controlledbyselfselectingandoftenverydiverse
boardsofdirectors.Thesenotforprofitorganizationsareoftenreferredtoasnongovernment
organizations(NGOs),buttheyarealsononbusinessandnoncooperativeorganizations(NBOsand
NCOs).Indeed,wearesurroundedbynonownedorganizations.Amongthemaremanyofour
universities(includingFriedmansUniversityofChicago),hospitals,charityorganizations,andvolunteer
andactivistorganizations(theRedCrossandGreenpeace,forexample).

Fromaconventionalpoliticalperspective,theinclinationmightbetolayoutthesefourformsof
ownershipalongastraightlinefromleft(stateownership)toright(privateownership),withcooperative
ownershipandnonownershipinbetween.ButIbelievethatwouldbeamistakebecause,hereas
elsewhere,extremesmeet:Itistheendsthataremostalike.Forexample,fromthepointofviewof
structure,bothprivateandstateorganizationsaretightlyanddirectlycontrolledthroughhierarchies
oneemanatingfromtheowners,theotherfromstateauthorities.Inotherwords,weshouldfoldthat
lineover.Whatseemslikeastraightlineisreallymorelikeahorseshoe.

Asahorseshoeshapedrepresentationofthefourformsofownershipwouldsuggest,theleapbetween
stateandprivateownershipcanbemademoreeasilythanashifttononownershiporcooperative
ownership.Thatmaybewhysomuchofourattentionhasfocusedonnationalizationversus
privatization.Theleapissosimple:Justbuyouttheotherside,changethedirectors,andkeepgoing;
theinternalcontrolsystemsremainintact.InRussiatoday,inmanysectors,theseleapshavebeentoo
simple:Statecontrolseemstohavegivenwaytoequallydevastatingcontrolbytheprivatesector.A
surerwayofachievingbalanceslowerandmoredifficultbutnowbeingpursuedsuccessfullyinsome
oftheotherEasternEuropeannationsistomakewideruseofallfourformsofownershiparoundthe
entirehorseshoe.

Unfortunately,weintheWesthavenotcometotermswiththefullrangeofpossibilities.Because
capitalismhassupposedlytriumphed,theprivatesectorhasbecomegood,thepublicsectorbad,and
thecooperativelyownedandnonownedsectorsirrelevant.Aboveall,saymanyexperts,government
mustbecomemorelikebusiness.ItisespeciallythispropositionthatIwishtocontest.Ifweareto
managegovernmentproperly,thenwemustlearntogovernmanagement.

Customers,Clients,Citizens,andSubjects

Wehavecustomers,VicePresidentAlGoreannouncedearlyinhisterminoffice.TheAmerican
people.Butdoyouhavetocallpeoplecustomerstotreatthemdecently?Wewoulddowelltotakea
lookatwhatcustomers,thisnowfashionableword,usedtomeanbeforetheJapanesetaughtusathing
ortwo.ThegreatestoftheU.S.corporationsthoseoftheautomobileindustrydidnottreattheir


customersverywell.Theylongpursueddeliberatestrategiesofplannedobsolescenceaeuphemism
forbuildingqualityout.Moreover,atleastonegiantretailchainregularlyusedbaitandswitchtactics,
luringincustomerswithlowpricestosellthemmoreexpensiveproducts.Andinonewellknownstory,
afamousconsumerproductscompany,inordertosellmoretoothpaste,firstmadetheopeninginits
tubesbiggerandthenmarketedtoothbrusheswithlongerheads!

Businessisinthebusinessofsellingusasmuchasitpossiblycan,maintaininganarmslength
relationshipcontrolledbytheforcesofsupplyanddemand.Ihavenotroublewiththatnotionforcars,
washingmachines,ortoothpaste.ButIdoforhealthcare.Forcars,washingmachines,andtoothpaste,
mostintelligentbuyerscanbeware,astheexpressiongoes;andwehaveprotectivemechanismsin
placeforbuyerswhocannotbeware.Butcaveatemptorisadangerousphilosophyforhealthcareand
othercomplexprofessionalservices.Sellersinevitablyknowagreatdealmorethanbuyers,whocanfind
outwhattheyneedtoknowonlywithgreatdifficulty.Inotherwords,theprivateownershipmodel,
muchasitprovidescustomerswithawonderfullyeclecticmarketplace,doeshaveitslimits.

Iamnotamerecustomerofmygovernment,thankyou.Iexpectsomethingmorethanarmslength
tradingandsomethinglessthantheencouragementtoconsume.WhenIreceiveaprofessionalservice
fromgovernmenteducation,forexamplethelabelclientseemsmoreappropriatetomyrole.
(GeneralMotorssellsautomobilestoitscustomers;ErnstandYoungprovidesaccountingservicestoits
clients.)Infact,agreatmanyoftheservicesIreceivefromgovernmentareprofessionalinnature.

But,mostimportant,Iamacitizen,withrightsthatgofarbeyondthoseofcustomersorevenclients.
Mostoftheservicesprovidedbygovernment,includinghighways,socialsecurity,andeconomicpolicy,
involvecomplextradeoffsbetweencompetinginterests.TomPeterscapturesthisideaperfectlywitha
storyaboutgettingabuildingpermittoenlargehishouse.IdontwantsomebureaucratatCityHall
givingmeahardtime,hesaidinoneofhisnewsletters.Iwantproper,quick,businessliketreatment.
Butwhatifmyneighborwantsapermittoenlargehishouse?WhosCityHallscustomerthen?

IfIhaverightsasacitizen,thenIalsohaveobligationsasasubject.TheBritish,ofcourse,retainofficial
statusassubjectsofthecrownathrowbacktothedayswhenindividualsforfeitedmuchoftheir
autonomyovertheirnasty,brutish,andshortlives,asThomasHobbesputit,inreturnforthe
protectionofthestate.But,Britishornot,inonewayoranotherweallremainsubjectsofour
governmentswhenwepaytaxes,allowourselvestobedraftedintoarmies,orrespectgovernment
regulationsforthesakeofcollectiveorder.

Customer,client,citizen,andsubject:Thesearethefourhatsweallwearinsociety.Ascustomersand
citizens,weenjoyareciprocal,giveandtakerelationshipwithgovernment.Governmentscustomers
receivedirectservicesatarmslength;itscitizensbenefitmoreindirectlyfromthepublicinfrastructure
itprovides.Butthereisonemajordifferencebetweengovernmentscustomerorientedactivitiesandits
citizenorientedactivities:frequencyofoccurrence.Reviewpublicsectoractivitiescarefullyfor
example,gooveragovernmenttelephonedirectoryandyouwillfindrelativelylittlethatfitsthepure
customercategory.(Andsomeofwhatdoesfitisratherunfortunate,suchaslotterytickets.Dowe
reallywantourgovernments,likethattoothpastecompany,hawkingproducts?Couldntthecurrent
malaiseaboutgovernmentreallystemfromitsbeingtoomuchlikebusinessratherthannotenough?)In
contrast,underthecitizencategory,youwillfindanenormousamountofactivityintheformofpublic
infrastructure:socialinfrastructure(suchasmuseums),physical(suchasroadsandports),economic
(suchasmonetarypolicy),mediative(suchascivilcourts),offshore(suchasembassies),andthe
governmentsownsupportinfrastructure(suchaselectionmachinery).

Assubjectsandclients,wehaverelationshipswithgovernmentthataremoreonesided.Toparaphrase
JohnF.Kennedy,thequestionforusassubjectsiswhatwemustdoforourgovernmentsintheformof
respectingstatecontrols.Incontrast,asclientswhoreceiveprofessionalservices,ourquestionisabout
whatthestateprovidestous.Thatgovernmentphonebookrevealsallkindsofactivitiesunderthe
subjectcategorypolicing,themilitary,regulatoryagencies,andprisons.Butmoresurprisingisthe
prevalenceofprofessionalservicesthatgovernmentsprovidedirectly,orindirectlythroughpublic
funding:allofthehealthcareinsomecountriesandmuchofitinothers,muchofeducation,plusother
servicessuchasmeteorology.

Ofcourse,notallgovernmentactivitiesfitneatlyintooneofthefourcategories.Ournationalparks,for
example,providecustomerservices(totourists)andprofessionalclientservices(totouristsstrandedon
mountainfaces).Parksarealsopartofthepublicinfrastructureweenjoyascitizens,andthatfact
requiresus,assubjects,torespecttheenvironmentofthepark.Totakeanotherexample,theinmates
ofprisonsaremostevidentlysubjects.Buttheyremaincitizenswithcertainrightsand,insofaraswe
believeintheroleofrehabilitation,areclientsaswell.Iintroducethesefourlabels,therefore,notso
muchforclassificationasforclarificationtofurtherourappreciationofthevariedpurposesof
government.

Letmelinktherolesofcustomer,citizen,client,andsubjecttoourearlierdiscussion.Customersare
appropriatelyservedbyprivatelyownedorganizations,althoughcooperativelyownedonessuchas
mutualinsurancecompaniescanoftendothejobeffectively.Onlyinlimitedspheresisdirect
customerserviceajobforthestate.Whenitcomestocitizenandsubjectactivities,weshouldstray
beyondthestateownershipmodelonlywithagreatdealofprudence.Thetradeoffsamongconflicting
interestsincitizenactivitiesandthenecessaryuseofauthorityinsubjectactivitiesmandateaclearrole
forthestate.

Theclientrelationshipisperhapsmorecomplicated.Itisnotclearthatthoseprofessionalservices
widelyacceptedaspubliccertainminimumlevelsofeducationandofhealthcare,forexampleare
particularlyeffectivewhenoffereddirectlybygovernment,letalonebyprivatebusiness.Neitheroneon
itsowncandeliverallthenuancedrequirementsofprofessionalservices.Marketsarecrass;hierarchies
arecrude.Nonownedorganizationsor,incertaincases,cooperativelyownedonesmayserveusbetter
here,albeitwithpublicfundingtoensuresomeequityindistribution.Incidentally,relyingon
cooperativelyownedorganizationsforprofessionalservicesisnotunusual.Evensuchobviously
commercialprofessionsasaccountingandconsultingoftendeliverservicesthroughcooperatives
namely,professionalpartnerships.

TheMythsofManagement

Wehaveseenthatabalancedsocietyrequiresvariousinstitutionalformsofownershipandcontroland
thatwithinthepublicsectorthereisawiderangeofrolesforgovernment.How,then,should
governmentactivitiesbemanaged?Toanswerthequestion,wefirstneedtotakealookatmanagement
itselforatleastatthepopularmythsaboutit.

Discussionofmanagementiscurrentlyalltherage.IshouldreallysayManagement,followingthelead
ofAlbertShaperoofOhioStateUniversity,whoyearsagowroteanarticletitledWhatManagement
SaysandWhatManagersDo(Fortune,May1976).WearetalkingabouthiscapitalletterManagement
hereanarrow,stylizedprocessthat,accordingtomyresearch,hassurprisinglylittleconnectionwith


whateffectivemanagersactuallydo.Yetthisisthekindofmanagementthatnowinundatesusin
bookstores,M.B.A.programs,andhypedtrainingseminars,forexample.Butdoesitreallyapplytoour
rolesascitizens,subjects,clients,andoccasionallycustomersofgovernment?Rarely,inmyopinion.Let
meexplain.

ThreeassumptionsunderlietheManagementviewofmanagement.

Particularactivitiescanbeisolatedbothfromoneanotherandfromdirectauthority.Theprinciple
derivesfromtheprivatesector,wheremanycorporationsaredividedintoautonomousbusinesses,
organizedasdivisions.Eachunithasaclearmission:todeliveritsownsetofproductsorservices.Ifit
satisfiesthegoalssetbythecentralheadquarters,itismoreorlessleftalone.
Performancecanbefullyandproperlyevaluatedbyobjectivemeasures.Thegoalsthateachactivity
mustachievecanbeexpressedinquantitativeterms:Bothcostsandbenefitscanbemeasured.(In
business,ofcourse,thecriteriaarefinancial,andcostsandbenefitsarecombinedtosetstandardsfor
profitandforreturnoninvestment.)Thatway,therecanbeobjectiveassessment,whichisapolitical
innature.Thesystemcannotaffordagreatdealofdistractingambiguityornuance.
Activitiescanbeentrustedtoautonomousprofessionalmanagersheldresponsibleforperformance.
Letthemanagersmanage,peoplesay.Manyhavegreatfaithinmanagerstrainedinthesocalled
professionofmanagement.Makethemaccountable.Iftheyperformaccordingtoplan,asindicatedby
measurement,rewardthem.Iftheydont,replacethem.
Theseassumptions,inmyopinion,collapseinthefaceofwhatmostgovernmentagenciesdoandhow
theyhavetowork.Toisolategovernmentactivitiesfromdirecthierarchicalcontrolinthemannerthat
Managementprescribes,therehavetobeclear,unambiguouspoliciesformulatedinthepoliticalsphere
forimplementationintheadministrativesphere.Inotherwords,policieshavetoberatherstableover
time,andpoliticians(aswellasmanagersofotheragencies)havetostandclearoftheexecutionof
thosepolicies.Howcommonisthat?Howmanygovernmentactivitiesfitsuchaprescription?

Lotteries,tobesure,butwhatelse?Lessthanyoumightthink.Manygovernmentactivitiesare
interconnectedandcannotbeisolated.Foreignpolicy,forexample,cannotbeidentifiedwithanyone
department,letaloneanyoneagency.Thereare,ofcourse,publicsectoractivitiesthatcanbeisolated
horizontallyfromoneanothermoreorless,asinthecaseofpoliceorprisonservices.Butcantheybe
isolatedverticallyfromthepoliticalprocess?Certainly,therehasbeennoshortageofefforttoisolate
them.Afewyearsago,theUnitedKingdommadeitsprisonserviceanostensiblyautonomousexecutive
agencyandappointedahighflyingbusinessmanagertorunit.Recently,inamajorscandal,the
managerwasfiredapparentlybecausehewouldnotdismissoneofthewardensafterahighly
publicizedescapeofthreeinmates.Onleaving,hecomplainedtothepressthattherewasmorepolitical
controlovertheserviceafteritbecameautonomousthanbefore.

Howmanypoliticiansarepreparedtorelinquishcontrolofhowmanyoftheirpolicies?Andhowmany
policiesingovernmenttodaycansimplybeformulatedinoneplacetobeimplementedinanother,
insteadofbeingcraftedinaniterativeprocessinvolvingbothpoliticsandadministration?Learningis
anotherofthecurrentbuzzwordsofManagement.Well,thisprocessofcraftingpoliciesislearning
mindlesslyapplyingthemisnot.Thebeliefthatpoliticsandadministrationingovernmentlike
formulationandimplementationincorporateplanningcanbeseparatedisanotheroldmyththat
shouldbeallowedtodieaquietdeath.

Nextconsiderthemythofmeasurement,anideologyembracedwithalmostreligiousfervorbythe
Managementmovement.Whatisitseffectingovernment?Thingshavetobemeasured,tobesure,


especiallycosts.Buthowmanyoftherealbenefitsofgovernmentactivitieslendthemselvestosuch
measurement?Somerathersimpleanddirectlydeliveredonesdoespeciallyatthemunicipallevel
suchasgarbagecollection.Butwhatabouttherest?RobertMcNamarasfamousplanning,
programming,andbudgetingsystemsintheU.S.federalgovernmentfailedforthisreason:
Measurementoftenmissedthepoint,sometimescausingawfuldistortions.(Rememberthebody
countsofVietnam?)Howmanytimesdowehavetocomebacktothisoneuntilwefinallygiveup?
Manyactivitiesareinthepublicsectorpreciselybecauseofmeasurementproblems:Ifeverythingwas
socrystalclearandeverybenefitsoeasilyattributable,thoseactivitieswouldhavebeenintheprivate
sectorlongago.

ConsideranexamplefromEnglandspublicsectorhealthcare.AlivertransplantsurgeonintheNational
HealthServiceoperatedontenpatients.Twodied.Oftheeightwhosurvived,onewhohadhadcancer
yearsearliersufferedarecurrence.Anotherpatientsliverbegantofail,andheneededasecond
transplant.Oftheremainingsixpatients,onlythreewereabletoresumenormalworkinglives.Asked
abouthisperformance,thesurgeonclaimedhissuccessrateas8in10.(Indeed,assoonashereplaced
thatfailingliver,hewaspreparedtoclaim9in11.Hecountedlivers,notpeople.)Animmunologistput
itat7in10,believingthatthesurgeonshouldnothaveoperatedonthepersonwhohadhadcancer.A
costconscioushospitaladministratorputthefigureat6in10.Thenursesclaimed3in10,takinginto
accountpostoperativequalityoflife.

Now,pictureyourselfhavingtomakeyourownassessment.Whereisthemagicenvelopewiththeone
rightanswer?Youwontfindit.Thefactisthatassessmentofmanyofthemostcommonactivitiesin
governmentrequiressoftjudgmentsomethingthathardmeasurementcannotprovide.Sowhen
Managementisallowedtotakeover,itdriveseveryonecrazy.Andnoonemoresothanthecustomer,
whoendsupgettingtheworstofit.

Finally,thereisthemyththattheprofessionalmanagercansolveeverything:Putsomeoneproperly
trainedincharge,andallwillbewell.Wearesoenamoredofthiscultofheroicleadershipthatwefail
toseeitsobviouscontradictions.Forexample,inthenameofempoweringtheworkers,weactually
reinforcethehierarchy.Socalledempowermentbecomestheemptygiftofthebosses,whoremain
firmlyincharge.Andthosebosses,ifknowledgeableaboutnothingbutManagementitself,sitinmidair,
alltoooftenignorantofthesubjectoftheirmanagement.Suchasituationjustbreedscynicism.In
mortalfearofnotmeetingtheholynumbers,managersrunaroundreorganizingconstantly,
engenderingmoreconfusionthanclarification.Inotherwords,ourobsessionwithManagementbeliesa
gooddealoftherealityoutthere.Consequently,itdistortsseriousactivities,asinthecaseofmany
publicschoolsystemsthathavebeenvirtuallydestroyedbythepowerofthemanagerialhierarchyto
directclassroomactivitieswithouteverhavingtoteachanything.

ModelsforManagingGovernment

Howthenshouldgovernmentbemanaged?Letsconsiderfivemodels.Eachismarkedbyitsownwayof
organizinggovernmentscontrollingauthority,orsuperstructure,andtheactivitiesofitsagencies,or
microstructure.(Thebudgetauthoritywouldbepartoftheformer,forexample;anenvironmental
protectionagency,anexampleofthelatter.)Someofthemodelsareolder,somenewer.Somewe
coulddowithlessof,despitetheircurrentpopularity;otherswecouldusemoreof,despitetheir
unfamiliarity.

TheGovernmentasMachineModel.

Governmenthereisviewedasamachinedominatedbyrules,regulations,andstandardsofallkinds.
Thisappliestothesuperstructurenolessthantoeachofthemicrostructures.Eachagencycontrolsits
peopleanditsactivitiesjustastheagencyitselfiscontrolledbythecentralstateapparatus.Government
thustakesontheformofahologram:Examineanyonepieceanditlooksjustliketherest.

Thishasbeenthedominantmodelingovernment,almosttotheexclusionofeverythingelse.As
FrederickTaylorsonebestway,itwaspopularizedinthe1930sinthepublicsectorbyLutherGulick
andLyndallUrwick.ItsmottomightbeControl,Control,Control.Infact,thetermbureaucrat,forcivil
servant,comesfromtheinfluenceofthismodel.

Themachinemodeldevelopedasthemajorcountervailingforcetocorruptionandtothearbitraryuse
ofpoliticalinfluence.Thatiswhyitbecamesopopularearlierinthiscentury.Itofferedconsistencyin
policyandreliabilityinexecution.Butitlackedflexibilityandresponsivenesstoindividualinitiative,so
nowithasfallenoutoffavor.Inoneformoranother,however,themachinemodelcontinuesto
dominategovernment.

TheGovernmentasNetworkModel.

Thisistheoppositeofthemachinemodel:looseinsteadoftight,freeflowinginsteadofcontrolled,
interactiveinsteadofsharplysegmented.Governmentisviewedasoneintertwinedsystem,acomplex
networkoftemporaryrelationshipsfashionedtoworkoutproblemsastheyariseandlinkedbyinformal
channelsofcommunication.Atthemicrolevel,workisorganizedaroundprojectsforexample,a
projecttodevelopanewpolicyonwelfareortoplanforconstructionofanewbuilding.Connect,
Communicate,andCollaboratemightbethemottoofthismodel.Ironically,likethemachinemodel,the
networkmodelisalsoholographicinthatthepartsfunctionlikethewhole:Individualprojectsfunction
withinawebofinterrelatedprojects.

ThePerformanceControlModel.

CapitalletterManagementfindsitsfullrealizationintheperformancecontrolmodel,themottoof
whichcouldbeIsolate,Assign,andMeasure.Thismodelaimsabovealltomakegovernmentmorelike
business.Butweneedtobespecificherebecausetheidealisnotjustanybusiness.Thereisan
assumption,notoftenmadeexplicit,thattheidealisthedivisionalstructurethatconglomeratesin
particularhavepopularized.Theoverallorganizationissplitintobusinessesthatareassigned
performancetargetsforwhichtheirmanagersareheldaccountable.Sothesuperstructureplansand
controlswhilethemicrostructuresexecute.Allverytidy.Butnotnecessarilyveryeffective.

Foronething,fewpeopleinbusinessstillbelieveintheconglomerateformoforganizing.Ifthe
businesseshavesolittletodowithoneanother,whybothertohavetheminthesameorganization?
Whatvalueisaddedbyaremoteheadquartersthatexercisescontroloffinancialperformancealone?
Foranotherthing,aheavyemphasisonplanningandmeasuredperformancereinforcesconventional
hierarchicalcontrolatthelevelofthemicrostructure,wheremanagershavepersonalresponsibilityfor
attainingimpersonaltargets.Thustheultimateeffectistoreinforcetheoldmachinemodel.Inother
words,theperformancemodeldecentralizesinordertocentralize;itloosensupinordertotightenup.
Andtighteningupcomesattheexpenseofflexibility,creativity,andindividualinitiative.Thusthebrave
newworldofpublicmanagementalltoooftencomesdowntonothingmorethanthesameoldmachine


managementnewlabelsontheoldbottles.Itworksfinewheremachinemanagementworked
sometimesevenslightlybetterbutnotanywhereelse.

TheVirtualGovernmentModel.

Carrytheperformancemodeltoitsnaturallimitandyouendupwithamodelthatcanbecalledvirtual
government.PopularinplacesliketheUnitedKingdom,theUnitedStates,andNewZealand,virtual
governmentcontainsanassumptionthatthebestgovernmentisnogovernment.Sheditall,weare
told,oratleastallthatitisremotelypossibletoshed.Invirtualgovernmentsperfectworld,the
microstructures(theactivitiesofagencies)wouldnolongerexistwithingovernment.Allthatkindof
workwouldtakeplaceintheprivatesector.Andthesuperstructurewouldexistonlytotheextent
neededtoarrangeforprivateorganizationstoprovidepublicservices.Thusthemottoofthismodel
mightbePrivatize,Contract,andNegotiate.Themodelrepresentsthegreatexperimentofeconomists
whohaveneverhadtomanageanything.

TheNormativeControlModel.

Noneoftheabovemodelshassucceededinstructuringsocialauthorityadequately.Perhapsthatis
becausesocialauthorityishardlyaboutstructures.Itsallsosimple,AnjinSan,theconfusedBritish
captaininShogun,shipwreckedinastrangeland,istoldbyhisJapaneselover.Justchangeyour
conceptoftheworld.Exemplifyingadifferentconceptoftheworld,thenormativecontrolmodelisnot
aboutsystemsbutaboutsoul.Hereitisattitudesthatcount,notnumbers.Controlisnormativethat
is,rootedinvaluesandbeliefs.

ThemodelisnotwellrecognizedinmostWesterngovernmentsthesedays,letaloneinmostWestern
businesses.IthasntexactlyworkedbadlyfortheJapanese,butthemoretheyhavedemonstratedits
superiorityindirectcompetitionwiththeWest,themoretheWesthasretreatedintoitsoldmachine
modelornewerversionsofitwhichworksinpreciselytheoppositeway.Onceuponatime,
however,whentherewasstilltheconceptofpublicservice,itwasreallythenormativemodelthat
managedtokeepthemachinemodelfunctioning.Inotherwords,serviceanddedicationmutedthe
negativeeffectsofbureaucracy.Butmuchofthatattitudeisnowgoneorgoingquickly.

Therearefivekeyelementsthatcharacterizethenormativemodel:

Selection

Peoplearechosenbyvaluesandattitudesratherthanjustcredentials.

Socialization

Thiselementensuresamembershipdedicatedtoanintegratedsocialsystem.

Guidance

Guidanceisbyacceptedprinciplesratherthanbyimposedplans,byvisionsratherthanbytargets.

Responsibility


Allmembersshareresponsibility.Theyfeeltrustedandsupportedbyleaderswhopracticeacraftstyle
ofmanagementthatisrootedinexperience.Inspirationthusreplacessocalledempowerment.

Judgment

Performanceisjudgedbyexperiencedpeople,includingrecipientsoftheservice,someofwhomsiton
representativeoversightboards.

ThemottoofthenormativemodelmightbeSelect,Socialize,andJudge.Butthekeytoallisdedication,
whichoccursintwodirections:byandfortheprovidersoftheservice.Providersaretreateddecently
andthereforerespondinkind.Theagenciescanstillbeisolatedhorizontally,butverticalcontrolbythe
superstructureisnormativeratherthantechnocratic.Themodelallowsforradicallydifferent
microstructures:moremissionary,egalitarian,andenergized;lessmachinelikeandlesshierarchical.

Thereisnoonebestmodel.Wecurrentlyfunctionwithallofthem.Taxcollectionwouldbe
inconceivablewithoutahealthydoseofthemachinemodel,aswouldforeignpolicywithoutthe
networkmodel.Andnogovernmentcanfunctioneffectivelywithoutasignificantoverlayofnormative
controls,justasnogovernmenttodaycanignoretheneedtoshedwhatnolongerbelongsinthepublic
sector.Government,inotherwords,isanenormouslyeclecticsystem,asvariedaslifeitself(becauseit
dealswithalmosteveryconceivablefacetoflife).

Butsomemodelsareforthebetterandsomefortheworse.Wemightwishtofavorthebetter.Weall
recognizetheexcessiveattentiongiventothemachinemodel.Butweshouldbeawareofitsresurgence
intheperformancemodel.Thisisnottodismisstheperformancemodel.Thequasiautonomous
executiveagencyisfineformanyoftheapolitical,straightforwardservicesofgovernmentsuchasthe
passportoffice.Letsjustkeepitthereandnotpretenditissomekindofnewbestway.

Weneedtobemoreappreciativeofthenetworkmodel,whichisnecessaryforsomanyofthecomplex,
unpredictableactivitiesoftodaysgovernmentsmuchofpolicymaking,hightechnologyservices,and
research,forexample.Butrelianceonthismodelcanalsobeoverdone.InFrance,bothpublicand
privatesectorshavelongbeendominatedbyapowerfulandinterconnectedlitewhomovearound
withafreedomandinfluencethatisprovingincreasinglystiflingtothenation.Thenetworksystemin
Francecouldusealotmoreagencyautonomytocheckthepowerofthatlite.

Itismypersonalbeliefthatwesorelyneedamajorshiftofemphasistothenormativemodel.Asthe
Japanesehavemadeclear,thereisnosubstituteforhumandedication.AndalthoughmuchofWestern
businessneedstotakethismessagetoheart,ithasbecomeespeciallyimportantingovernmentwith
itsvagaries,nuances,anddifficulttradeoffsamongconflictinginterests.Anorganizationwithout
humancommitmentislikeapersonwithoutasoul:Skeleton,flesh,andbloodmaybeabletoconsume
andtoexcrete,butthereisnolifeforce.Governmentdesperatelyneedslifeforce.

Ibelievethisconclusionappliesespeciallytoclientorientedprofessionalservices,suchashealthcare
andeducation,whichcanneverbebetterthanthepeoplewhodeliverthem.Weneedtofree
professionalsfromboththedirectcontrolsofgovernmentbureaucracyandthenarrowpressuresof
marketcompetition.Thatiswhynonownershipandsomecooperativeownershipseemtoworksowell
inthoseareas.

GoverningManagement

Ifanyoftheseideasmakesense,thenwemustprovethemfeasiblebybeginningtotemperthe
influencethatbusinessvaluesandcurrentlypopularManagementthinkinghaveonothersectorsof
society.Inotherwords,governmentmayneedmanaging,butmanagementcouldusealittlegoverning,
too.Considerthefollowingpropositions:

Businessisnotallgood;governmentisnotallbad.Eachhasitsplaceinabalancedsocietyalongside
cooperativeandnonownedorganizations.Idonotwishtobuymycarsfromgovernmentanymorethan
IwishtoreceivemypolicingservicesfromGeneralMotors.AndIwouldliketoseebothprivateand
publicsectorspassedover,forthemostpart,inthedirectdeliveryofhealthcareinfavorofnonowned
andcooperativelyownedorganizations.
Societiesgetthepublicservicestheyexpect.Ifpeoplebelievethatgovernmentisbumblingand
bureaucratic,thenthatiswhatitwillbe.If,incontrast,theyrecognizepublicserviceforthenoble
callingitis,thentheywillendupwithstronggovernment.Andnonationtodaycanaffordanythingbut
stronggovernment.IsntittimethatallthekneejerkingcondemnationofgovernmentintheUnited
Statesstopped?AsaCanadianwholivespartoftheyearinFrance,Icantestifythatthesenegative
attitudesareprovingcontagious,andtheyaredoingnoneofusanygood.

Businesscanlearnfromgovernmentnolessthangovernmentcanlearnfrombusiness;andbothhavea
greatdealtolearnfromcooperativeandnonownedorganizations.Peopleinthepublicsectorcopewith
theirownkindsofproblems:conflictingobjectives,multiplestakeholders,andintensepoliticalpressure,
forexample.Yettheirproblemsarebecomingincreasinglycommonintheprivatesector.Manyofthe
mostintelligent,articulate,andeffectivemanagersIhavemetworkforgovernment.Unfortunately,
theyarenotveryaggressiveaboutlettingtheirideasbeknown.Businesspeopleprofitgreatlywhenthey
listentothem.
Cooperativeshavesophisticatedwaysofdealingwithdispersedconstituencies,aswellaswithspecial
kindsofcustomers.Andthenthereisthenonownedorganization,whereinwefindtheWestsfullest
realizationofthenormativemodel,aboutwhichwehavemuchtolearn.Wecanbenefitgreatlyfrom
theexperiencesofbothassoonaswegetbeyondournarrowprejudices.

Weneedproud,notemasculated,government.Attacksongovernmentareattacksonthefabricof
society.Wehaveindividualneeds,tobesure,butasocietythatallowsthemtounderminecollective
needswillsoondestroyitself.Weallvalueprivategoods,buttheyareworthlesswithoutpublicgoods
suchaspolicingandeconomicpoliciestoprotectthem.
MakingnumerouspoliticalappointmentsisnowconsideredanaturalpartoftheU.S.politicalprocess.
(Thiswasnotalwaysthecase:Suchappointmentsareproportionatelythreetimesmorecommontoday
thantheywereinthe1930s.)1Eachnewadministrationsimplyreplacesthetoplayersofthe
departmentalhierarchies.Ibelieveitistimethatthiswasrecognizedforexactlywhatmuchofitis:
politicalcorruption;nottechnicallyillegalbutnonethelesscorruptingofadedicatedandexperienced
publicservice.It,too,stemsfromthemistakenbeliefthatthosewhohavemanagedsomethingcan
manageanything(althoughmanypoliticalappointeeshavemanagedonlyafewlawyersorresearch
assistants).

Ifpoliticalappointmentsaresowonderful,howcometheyarenotusedinthemilitary?ImagineaU.S.
presidentreplacingalltheoneandtwostarandmostofthethreestargeneralsofthearmywith
politicalappointees.Therewouldbeoutrage.Youcantrunthearmythisway,peoplewouldinsist.
Youhavetohavedevoted,experiencedpeople.Well,whyisitanydifferentforthedepartmentsof


commerce,education,orstate?Othercountrieshavefoundwaystoachievepoliticalcontrolwithout
resortingtopoliticaladministration.

Aboveall,weneedbalanceamongthedifferentsectorsofsociety.Thisappliestoattitudesnolessthan
toinstitutions.Privatesectorvaluesarenowpervadingallofsociety.Butgovernmentandothersectors
shouldbecarefulaboutwhattheytakefrombusiness.Businesshasprobablyneverbeenmore
influentialthanitisnow.IntheUnitedStates,throughpoliticalactioncommitteesandlobbying
activities,institutionalinterests(notonlybusinessinterests)putenormouspressureonthepolitical
system,reducingtheinfluenceofindividuals.Thesystemisoutofcontrol.Myargumenthereisnot
againstbusinessasbusiness;rather,itisforbalanceinsociety.Weneedbalanceamongourfour
sectors,andweneedtobalanceourpublicconcernsasindividualswiththeprivatedemandsof
institutions.
Todaytheprevailingmoodsupportstheprivatizationofpublicservices.Someofthatthinkingis
probablyuseful.Butagooddealofitisalsojustplainsilly.Andifwearesopronetoscrutinizingwhat
doesntbelongingovernment,shouldntwebeequallydiligentinconsideringwhatdoesntbelongin
business?Takenewspapers,forexample.Cananydemocraticsocietyaffordtohaveallnewspapersin
theprivatesector,especiallywhentheyareconcentratedinafewhandsthatcanexercisegreatpolitical
influenceshouldtheychoose?Othermodelsofownershipcanbefound,indeedinsomeofthemost
prestigiousnewspapersintheworldforexample,nonownershipofTheGuardianinEnglandand
multiplecooperativeownership(journalistsandreaders,alongsidesomeinstitutions)ofLeMondein
France.Letusnotforgetthattheobjectofdemocracyisafreepeople,notfreeinstitutions.Inshort,we
woulddowelltoscrutinizecarefullythebalanceinoursocietiesnow,beforecapitalismreallydoes
triumph.

1.DonaldJ.Savoie,Thatcher,Reagan,Mulroney:InSearchofaNewBureaucracy(Pittsburgh:The
UniversityofPittsburghPress,1994).

HenryMintzbergisaprofessorofmanagementatMcGillUniversityinMontreal,Canada,andatINSEAD
inFontainebleau,France.HeiscurrentlyoverseeingaventurebyfivebusinessschoolsinCanada,
England,France,India,andJapan.Theventureisseekingtocreateanextgenerationmastersprogram
forthedevelopmentofmanagers.