Managerialism

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Managerialism
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Managerialism - is the belief that organisations of every kind (firms, hospitals, universities, ministries, charities) are best run by professional managers who apply a common, generic set of management techniques, and that society as a whole improves when more of its activity is placed under such control. Thomas Klikauer put it bluntly: managerialism "combines management knowledge and ideology to establish itself systemically in organisations and society while depriving owners, employees (organisational-economical) and civil society (social-political) of all decision-making powers"[1].

The term is rarely used by managers themselves. It is mostly a word of critics. Supporters tend to speak instead of "professional management", "good governance" or "evidence-based administration", and many of the practices that critics label managerialist (targets, audits, performance pay, restructuring) are presented by their champions as plain common sense. So the concept sits on a fault line. One side sees an efficient and transferable discipline; the other sees an ideology that has slipped out of the factory and into every corner of public life.

Origins and history

The roots go back to the late nineteenth and early twentieth centuries, when large corporations needed layers of salaried administrators to coordinate thousands of workers. Frederick Taylor's scientific management and Henri Fayol's administrative management both claimed that management was a body of principles that could be learned and applied anywhere. That claim, that the skill is portable and independent of what the organisation actually produces, is the seed of managerialism.

Two books from the interwar period gave the idea a political dimension. Adolf Berle and Gardiner Means (1932) showed that in the largest American corporations, ownership had become dispersed among thousands of shareholders while real control had passed to salaried executives. A decade later James Burnham, a former Trotskyist, went much further. In The Managerial Revolution (1941) he argued that capitalism was being displaced, not by socialism, but by a new ruling class of administrators in business and government[2]. Whether in New Deal America, Nazi Germany or Stalin's Soviet Union, he said, the people who really ran things were managers. The book sold well and provoked fierce debate. It's often said to have influenced George Orwell, who reviewed Burnham critically.

The word "managerialism" as the name of an ideology was fixed by the philosopher Willard Enteman. In Managerialism: The Emergence of a New Ideology (1993) he argued that managerialism had quietly replaced both capitalism and socialism as the operating ideology of advanced societies[3]. Under it, a society is treated as little more than the sum of the decisions and transactions made by the managements of its organisations. Enteman's point was not that managers are evil. It was that nobody had voted for this arrangement, and few had even noticed it.

Robert Locke and J.-C. Spender (2011) then shifted the story to business schools. In Confronting Managerialism they describe managerialism as the outcome of a special group, management, entrenching itself systemically in an organisation, stripping owners of decision-making power and workers of the ability to resist[4]. Their villain is the post-1960s American business school, which, in their account, swapped practical industrial knowledge for neoclassical economics and finance theory, and then exported the resulting MBA model around the world. They contrast it, unfavourably, with the more participative German and Japanese traditions of co-determination and shop-floor engineering.

Core assumptions

Writers who analyse managerialism (critics mostly, but not only) identify a recurring set of beliefs:

  • Management is generic. The same techniques work in a steel mill, a hospital ward and a philosophy department. A good manager doesn't need to know the substance of the work.
  • Managers should have the right to manage. Professional autonomy of doctors, teachers or engineers is treated as an obstacle; authority belongs to the management hierarchy.
  • What gets measured gets managed. Performance is captured in numbers: KPIs, league tables, targets, benchmarking scores.
  • Markets and competition improve performance. Internal markets, purchaser-provider splits and outsourcing are preferred to direct provision.
  • Efficiency is the master value. Equity, professional judgement or public service ethos come second, if at all.
  • Organisational problems have managerial solutions. A failing school needs a new leadership team and a turnaround plan; underfunding or social context are secondary explanations.

None of these ideas is absurd on its own. The trouble, critics argue, begins when they are combined into a worldview and treated as beyond argument.

Managerialism in the public sector: New Public Management

The most visible expression of managerialism came in government. From the late 1970s the Thatcher government in Britain, and later administrations in New Zealand, Australia and the United States, set out to make the state run "more like a business". Christopher Hood (1991) gave this movement its lasting label: New Public Management (NPM). He identified seven doctrinal components[5]:

  • hands-on professional management in the public sector,
  • explicit standards and measures of performance,
  • greater emphasis on output controls,
  • disaggregation of units,
  • greater competition,
  • private-sector styles of management practice,
  • greater discipline and parsimony in resource use.

Hood's article also asked whether NPM really was a "public management for all seasons", and his answer was cautious. Reforms built around frugality and efficiency might undermine other administrative values, such as honesty, fairness and resilience in a crisis.

Christopher Pollitt was blunter. In Managerialism and the Public Services (1990) he examined the British and American reforms of the 1980s and concluded that much of what was sold as new was a revival of scientific management, applied to welfare services rather than assembly lines[6]. Ministers believed that better management would deliver more for less; Pollitt doubted the evidence and pointed to the political convenience of the belief. If services fail, blame the managers. Not the budget.

In practice NPM brought executive agencies, chief executives on fixed-term contracts, citizen charters, compulsory competitive tendering, performance management systems and an enormous expansion of audit and inspection. Some reforms worked. Others produced gaming, and nearly all of them shifted power from professionals to managers. Later frameworks such as "New Public Governance" were partly a reaction against NPM's narrowness, though the managerial toolkit largely stayed in place. See also public administration and quality of public administration.

Universities and healthcare

Higher education became one of the main testing grounds. Rosemary Deem, Sam Hillyard and Mike Reed (2007) studied academics who had taken management posts, from heads of department up to vice-chancellors, across sixteen UK universities[7]. They described a "new managerialism" imported from NPM: strategic plans, research assessment, workload models, income targets, and a growing class of "manager-academics" who stood between the institution's leadership and ordinary staff. Many of these people did not see themselves as managers at all. They had drifted into the role.

In the United States, Benjamin Ginsberg's The Fall of the Faculty (2011) quantified the shift. Between 1975 and 2005, he reported, the number of administrators at American colleges and universities grew by 85% and associated professional staff by 240%, while the number of faculty rose by only 51%[8]. Ginsberg rejected the standard explanation (that regulators and accreditors demanded more paperwork) and argued that administrators simply accumulate power, staff and budget, because that is what organisations without strong counterweights allow.

Healthcare followed a parallel path. The British National Health Service introduced general managers after the 1983 Griffiths report, an internal market in 1991, and later a dense system of waiting-time targets and star ratings. Similar reforms reached hospitals in Australia, Scandinavia and much of continental Europe. Doctors and nurses often complained that clinical priorities were being overridden by financial ones. The most cited case is described below.

Example of managerialism: Mid Staffordshire NHS Foundation Trust

Stafford Hospital, run by the Mid Staffordshire NHS Foundation Trust in England, became the textbook illustration of managerialism gone wrong. Between roughly 2005 and 2009, patients were left in soiled sheets, went without food or water, and waited hours for pain relief. Relatives' complaints, led by the campaign group Cure the NHS, prompted an investigation by the Healthcare Commission, which in 2009 reported standardised mortality ratios for emergency admissions of between 127 and 145 for 2005-2008, meaning 27-45% more deaths than expected for a comparable trust. Press reports later circulated figures of 400 to 1,200 "excess deaths", but the inquiry itself warned that no reliable number of avoidable deaths could be inferred from these statistics.

What made the case relevant to managerialism was the diagnosis. Robert Francis QC led two inquiries. In 2010 he concluded that the failure was partly the consequence of allowing a focus on reaching national access targets, achieving financial balance and seeking foundation trust status "at the cost of delivering acceptable standards of care". The board had cut nursing posts to balance the books during the period it was applying for foundation trust status. The full public inquiry, published in February 2013, made 290 recommendations and called for a shift away from a culture driven by performance and financial targets towards one built on patient outcomes and candour[9].

The managerial machinery worked exactly as designed. Targets were tracked. Budgets were balanced. Regulators approved the foundation trust application. And yet the indicators that the system watched said very little about whether elderly patients were being fed. For critics, Mid Staffordshire showed what happens when the people who run an organisation look at the dashboard instead of the ward.

Criticism

Klikauer (2013, 2015) offers the most sweeping critique. He treats managerialism as a full ideology, comparable to neoliberalism but distinct from it, that spreads from companies into schools, hospitals, sport, culture and even private life[10]. In his formula, management plus ideology plus expansion equals managerialism. The critique has several strands:

  • Democratic deficit. Decision-making passes to a managerial class that answers neither to owners nor to employees nor to citizens. Enteman's original worry.
  • Loss of professional judgement. Teachers, doctors, social workers and researchers lose discretion to standardised procedures written by people who have never done the job.
  • Goal displacement and gaming. Once a number becomes a target, people manage the number. Waiting lists get redefined, students are steered into easy courses, crime gets reclassified. Sound familiar? It is the logic of management by the numbers taken to its extreme.
  • Short-termism in business. Locke and Spender blame managerialism, business-school finance theory and the shareholder-value doctrine for the hollowing out of American manufacturing.
  • Administrative bloat. As Ginsberg's figures suggest, managerial layers tend to grow faster than the core activity they are supposed to support.
  • Self-justification. Each failure is read as proof that more or better management is needed, so the system rarely questions itself.

Critics on the political right make a different complaint, closer to Burnham's: that an unelected managerial elite in government and corporations escapes market discipline as well as democratic control. The two critiques disagree about the remedy but agree on the diagnosis.

Advantages claimed by supporters

Defenders of professional management (and of NPM specifically) point to real gains:

  • Clarity of accountability. Named managers with explicit objectives are easier to hold responsible than diffuse professional committees.
  • Transparency of performance. Before league tables and published waiting times, users of public services often had no idea how one hospital or school compared with another.
  • Control of costs. Budget discipline forced some bloated public bodies to cut waste, and competitive tendering lowered the cost of services such as refuse collection and cleaning in many local authorities.
  • Transferable skills. Planning, budgeting, project control and managerial skill in general really do apply across sectors; nobody wants a hospital without a competent finance function.
  • Responsiveness. Treating citizens partly as customers pushed some services to pay more attention to the people who used them.
  • Counterweight to producer capture. Professionals can organise services around their own convenience; managers can, at least in principle, represent the interests of users and taxpayers.

That said, much of the evidence for these benefits is contested, and gains in measured efficiency were often bought with effects that the measures did not capture.

Limitations of managerialism

Even sympathetic observers recognise clear limits to the managerialist model:

  • It struggles with outputs that are hard to measure: the quality of teaching, the value of basic research, the dignity of care.
  • Generic management can't substitute for domain knowledge. A manager who doesn't understand clinical risk will misread clinical data.
  • Heavy reliance on performance indicators creates incentives to hit the target and miss the point.
  • Principal-agent relations multiply rather than shrink. Managers acquire interests of their own, producing agency costs that the reforms were meant to eliminate (see principal-agent problem).
  • Imported private-sector methods may clash with the organisational culture and public-service ethos of the institutions they're applied to.
  • Repeated restructuring imposes transition costs and erodes institutional memory, often before any benefit can be observed.

Related concepts

Managerialism overlaps with, but is not identical to, several neighbouring ideas:

  • Bureaucracy. Max Weber's bureaucratic organization rests on rules and offices; managerialism rests on managers and targets. The two often coexist, and critics say NPM produced a new bureaucracy of audit.
  • Technocracy. Rule by technical experts. Managerialism is a variant in which the expertise claimed is management itself.
  • Neoliberalism. Shares the faith in markets and competition, though Klikauer (2015) treats the two as distinct ideologies: one is chiefly about markets, the other about who controls organisations and how.
  • Management by objectives and business process reengineering. Techniques frequently adopted as part of managerialist reform packages.
  • Corporate governance. The debate over who controls large firms, which goes back to Berle and Means, is the business-side version of the same question.
  • Professionalism. The traditional rival logic, in which authority comes from expert knowledge of the work and from peers, not from a position in a management structure.

References

Footnotes

  1. ↑ Klikauer T., Managerialism: A Critique of an Ideology, Palgrave Macmillan, 2013
  2. ↑ Burnham J., The Managerial Revolution: What Is Happening in the World, John Day, New York, 1941
  3. ↑ Enteman W.F., Managerialism: The Emergence of a New Ideology, University of Wisconsin Press, 1993
  4. ↑ Locke R.R., Spender J.-C., Confronting Managerialism: How the Business Elite and Their Schools Threw Our Lives Out of Balance, Zed Books, 2011
  5. ↑ Hood C., A Public Management for All Seasons?, Public Administration, 69(1), 1991, p.3-19
  6. ↑ Pollitt C., Managerialism and the Public Services: The Anglo-American Experience, Basil Blackwell, Oxford, 1990
  7. ↑ Deem R., Hillyard S., Reed M., Knowledge, Higher Education, and the New Managerialism, Oxford University Press, 2007
  8. ↑ Ginsberg B., The Fall of the Faculty: The Rise of the All-Administrative University and Why It Matters, Oxford University Press, 2011
  9. ↑ Francis R., Report of the Mid Staffordshire NHS Foundation Trust Public Inquiry, The Stationery Office, 2013
  10. ↑ Klikauer T., What Is Managerialism?, Critical Sociology, 41(7-8), 2015, p.1103-1119
Managerialism — recommended articles
Management theories — Administrative management — Bureaucratic organization — Principal-agent problem — Performance management — Quality of public administration — Management by the numbers — Shareholder theory
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