The Motivations for the Adoption of Management Innovation by Local Governments and its Performance Effects

Published date01 July 2021
AuthorRhys Andrews,Benedetta Bellò,James Downe,Steve Martin,Richard M. Walker
Date01 July 2021
DOIhttp://doi.org/10.1111/puar.13375
Research Article
625
Abstract: This article analyses the economic, political, and institutional antecedents and performance effects of
the adoption of shared Senior Management Teams (SMTs)—a management innovation (MI) that occurs when a
team of senior managers oversees two or more public organizations. Findings from statistical analysis of 201 English
local governments and interviews with organizational leaders reveal that shared SMTs are adopted to develop
organizational capacity in resource-challenged, politically risk-averse governments, and in response to coercive and
mimetic institutional pressures. Importantly, sharing SMTs may reduce rather than enhance efficiency and effectiveness
due to redundancy costs and the political transaction costs associated with diverting resources away from a high-
performing partner to support their lower-performing counterpart.
Evidence for Practice
To capture economies of scale and cut costs, English local governments are introducing a management
innovation, shared Senior Management Teams (SMTs).
Governments that adopt shared SMTs do so when the political circumstances are favorable and coercive and
mimetic institutional pressures are present.
The sharing of a SMT leads to reduced public service efficiency and effectiveness, but can help local
governments build much-needed organizational capacity.
Public organizations are increasingly called
upon to design and implement innovative
management practices to become more effective
and efficient (Brown, Osborne, and Walker2016;
Kim and Warner2016). However, despite the growing
emphasis on management innovation (MI) in the
public sector, evidence on the economic, political,
and institutional factors that lie behind its adoption is
only slowly emerging (Damanpour and Aravind2011;
Singla, Stritch, and Feeney2018). More significantly,
very little is known about whether MIs generate the
anticipated organizational improvements (De Vries,
Bekkers, and Tummers2015; Walker, Chen, and
Aravind2015). In this article, we investigate the
antecedents and performance effects of MI in public
service organizations. Specifically, we examine shared
Senior Management Teams (SMTs) in English local
governments—a MI that occurs when two or more
local governments formally agree that their service
delivery will be overseen by a single group of senior
managers.
Broadly defined, MI involves the introduction
of a new structure, process, system, program, or
practice in an organization or its units which changes
how managers manage (Birkinshaw, Hamel, and
Mol2008). MIs are therefore distinct from other
innovation types (e.g. service, partnership) that
entail material changes to what an organization
provides to its external stakeholders (Damanpour
and Aravind2011). Because the adoption of MIs
may result in the redesign and redevelopment of
management systems and processes, it is often radical
rather than incremental in orientation (Walker,
Damanpour, and Devece2011). MI may therefore
be particularly challenging for public organizations,
where changes to established rules and routines can
generate high economic and political transaction costs
(Rodrigues, Tavares, and Araújo2012).
To understand why local governments choose to
share SMTs, we investigate rational and institutional
perspectives on the adoption of MI (Birkinshaw,
Hamel, and Mol2008), developing and testing theory
relating to the economic, political, and institutional
antecedents likely to influence local government
decision-makers. From a rational perspective, sharing a
single SMT may be attractive to smaller organizations
seeking to generate scale economies and build
additional management capacity, especially in response
to fiscal stress (Kim and Warner2016). At the same
time, fierce electoral competition and short electoral
The Motivations for the Adoption of Management
Innovation by Local Governments and its Performance Effects
Rhys Andrews
Benedetta Bellò
James Downe
Steve Martin
Richard M. Walker
Cardiff UniversityWales Centre for Public Policy
City University of Hong Kong
Richard M. Walker Walker is the Chan Hon
Pun Professor in Behavioral and Policy Sciences,
Chair Professor of Public Management in the
Department of Public Policy and Dean of the
College of Liberal Arts and Social Sciences at
City University of Hong Kong. At City University
of Hong Kong Richard is the Director of the
Laboratory for Public Management and Policy
and Co- Director of the Center for Public Affairs
and Law. Richard is a Fellow of the Academy of
Social Sciences.
Email: rmwalker@cityu.edu.hk
Steve Martin is the Director of the Wales
Centre for Public Policy and Professor
of Public Policy and Management in the
Business School. Steve has led numerous
large scale research programs and attracted
more than £20 million of funding from
research councils. His research has focused
on public policy evaluation and public
service improvement.
Email: martinsj@cardiff.ac.uk
James Downe is a Professor in Public
Policy & Management in Cardiff Business
School, and Director of Research at the
Wales Centre for Public Policy. His current
research interests are in local government
performance regimes, political accountability,
sector-led improvement, public trust and the
ethical behavior of local politicians.
Email: downej@cardiff.ac.uk
Benedetta Bellò is a Post-Doctoral
Research Associate in Cardiff Business
School. Her current research interests are
in local governments’ performance, shared
services, performance-related pay systems,
and individual performance evaluation.
Email: bellob1@cardiff.ac.uk
Rhys Andrews is a Professor of Public
Management in Cardiff Business School. His
research interests focus on the management
and performance of public organizations.
He is co-author of
Strategic Management
and Public Service Performance
and
Public
Service Efficiency: Reframing the Debate
.
Email: andrewsr4@cardiff.ac.uk
Public Administration Review,
Vol. 81, Iss. 4, pp. 625–637. © 2021
The Authors. Public Administration Review
published by Wiley Periodicals LLC. on behalf of
The American Society for Public Administration.
DOI: 10.1111/puar.13375.
This is an open access article under the terms of the Creative Commons Attribution License, which permits use, distribution and reproduction in any medium,
provided the original work is properly cited.

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