Does Professionalism Matter? (NZIPA Paper)

Paper for the AGM of the New Zealand Institute of Public Administration, 27 June 2002.

Keywords: Governance; Health

Graham Scott’s Public Sector Management in New Zealand includes a half-hearted account of the views expressed in my The Whimpering of the State: Policy Under MMP in which he says ‘Easton makes the extraordinary claim that reformers ignored, or sought to undermine, the personal responsibility and professionalism of the core public sector.’ I am not sure I went that far, but I did report Alan Schick’s concern that there appeared to be an unaddressed tension between the reform’s managerialism with its emphasis on accountability, and professionalism which emphasises responsibility.

The diagram immediately below summarises Schick’s analysis into two columns. Unfortunately they wont fit in simply to the text format so I have put one above the other.



Managers cannot be held responsible for results unless they have the freedom to act.
vs People act in their own self-interest.

Personal responsibility
vz Accountability

A personal ethic, a commitment to do one’s best, a sense of public service.
vs An impersonal quality dependent on contractual duties and informational flows.

vs For-profit

The left-hand column shows public sector management theory leading to managerialism, where managers are given the freedom to act and are held responsible for the results, and in which personal responsibility and a personal ethic are expected of them.

The right-hand column shows the new institutional economics leading to contractualism, where people act in their own self-interest and they are held accountable, an impersonal quality dependent on contractual duties and informational flows. It was the latter that was emphasised in the 1987 Treasury PEB, but ‘clearly different conclusions might be drawn if the brief argued on different premises’.

Schick was concerned with the tension between the two modes of public sector management, and the possibility that contractualism undermines public managerialism, saying it ‘may diminish public-regarding values and behaviour in government’, including values such as ‘the trust that comes from serving others, the sense of obligation that overrides personal interest, the professional commitment to do one’s best, the pride associated with working in an esteemed organisation, and the stake one acquires from making a career in the public service’. The implication is the accountability of contractualism may sabotage the responsibility of managerialism.

The phenomenon is parallelled by the way which selfish behaviour may drive out altruistic behaviour. Richard Titmuss considered the best way of obtaining a good supply of quality blood for medical purposes at the least social cost. Economists might argue that commercial relations work best. However, Titmuss showed that voluntary donations of blood resulted in better quality and a cheaper supply. Moreover, if some blood supply became commercialised, with donors being paid, voluntary donors were discouraged, so that there is a deterioration in quality of supply and a rise in its cost.

Schick was here last year, and I asked him about the tension between these two modes of public administration. He said he was ‘troubled’ by it. This paper is my attempt to tease out the troubling tensions.

Dichotomies appear in a number of places in management theory. In his Modern Organisations Amitai Etizioni contrasts the ‘scientific management’ approach with the ‘human relations’ approach. Scientific management emphasises a pyramid of control topped by a single chief executive, with a need to provide mechanisms to ensure that those at lower levels do what is required. The expression ‘scientific’ is not particularly accurate, and sometimes the literature calls it ‘Taylorism’ or ‘the traditional approach to management’.

The human relations approach was a reaction, arguing that effective work processes require a more decentralised management style, in which social norms and non-economic rewards are crucial, and collegial relations important.

Another organisational specialist. Douglas McGregor, writing about the same time, used the more neutral terms of ‘Theory X’ and ‘Theory Y’, but they parallel Etzioni’s. McGregor’s Theory X is characterised by the assumptions:

1. The average human being has an inherent dislike of work and will avoid it if he [sic] can.

2. Because of this human characteristic of dislike for work, most people must be coerced, controlled, directed, threatened with punishment to get them to put forth adequate effort toward the achievement of the organisational objectives.

3. The average human being prefers to be directed, wishes to avoid responsibility, has relatively little ambition, wants security above all.

(Note how Theory X has the overtones of the primitive assumptions of human behaviour which drives the simplest economic theories – of humans inherently disliking work and requiring rewards to compensate them for it – and which pervaded the Treasury 1987 Post-election Briefing.)

He sets down six assumptions for Theory Y.

1. The expenditure of physical and mental effort in work is as natural as play or rest.

2 External control and threat of punishment are not the only means of bringing about effort towards organizational objectives. Man will exercise self-direction and self-control in the service of objectives to which he is committed.

3. Commitment to objectives is a function of the rewards associated with their achievement.

4. The average human being learns, under proper conditions, not only to accept but seek responsibility.

5. The capacity to exercise a relatively high degree of imagination, ingenuity, and creativity in the solution of organizational problems is widely, not narrowly, distributed in the population.

6. Under the conditions of modern industrial life, the intellectual potentialities of the average human being are only partially utilized.
D. McGregor The Human Side of Enterprise p.33-34, 47-48.
It is not my thesis that public sector reforms of the late 1980s are solely underpinned by Taylorism or Theory X but the notion of accountability is heavily influenced by them, while the human relations and Theory Y are related to the problem of responsibility which was troubling Schick.

In particular contractualism tends to require the pyramid of control with coercive mechanisms to ensure that those at lower levels to the achievement of their organisations’ objectives. The impact of Theory X is palpable. (In passing we note Isaiah Berlin’s puzzle that the central paradox of modern thinking about liberty is that it is often those most attached to freedom as a political value who ended up supporting ideas or measures that reduced its sphere or sought to extinguish it. )

By contrast, the behaviour which the human relations approach, Theory Y and public sector managerialism imply is a decentralised management style, in which social norms and non-economic rewards are crucial, and collegial relations important seems to be getting lost in some parts of the public sector.

Dichotomies are dangerous. Moreover, by going back forty years of organizational theory I have failed to represent the more recent developments which complicate the reality. But tonight I am putting forward these sharp differences to stimulate a discussion on the two modes of public servant governance which Schick sets out.

Do we need such a debate? There seems to be a complacency. Curiously – I will not say ‘extraordinarily’ – Scott’s book does not provide much evidence that professionalism is a central concern, for its few mentions are desultory. There is more concern about ‘professional capture’, the danger that professionals will administer the system in their interests rather than the wider public good. Or consider the State Services Commission report, Review of the Centre, on how the core public service should be managed. It uses the ‘accountability’ notion 36 times, but ‘responsibility’ gets only 14 mentions, and ‘professional’ a mere four. One is left with an uneasy feeling that the core public service may be moving away from notions of professionalism and individual responsibility.

This is not to say there have been no gains from the reforms. The contract or statement of intent with the minister often means that a public agency is far clearer about what its tasks are, although even here there is a loss. Traditionally the public service had a longer view than the politicians, but today that seems limited by the contract. Perhaps it could be resolved by including a statement to the effect that the Minister wants the department to create a capability to provide advice on matters which are not immediately on the ministerial policy horizon.

There has also been a major gain in that there is far better fiscal control over departmental spending. There remains the occasional blowout, but my impression that this is less common than before 1984.

How to maintain these gains and yet encourage professionalism and its attendant behaviour remains a major and troubling challenge to the public sector. To illustrate the problem, consider the severe tensions between managers and professionals in the public health system.

By way of background, the claim that business practices would improve public sector performance goes back almost a hundred years, when an MP and later cabinet minister, Alexander Herdman, advocated ‘scientific management in business and business methods in government’. (A. Henderson, The Quest for Efficiency: The Origins of the State Services Commission, p.38.) Among the many repeatings of this demand was in the 1988 Gibbs report Unshackling the Hospitals which made the spurious claim that there were substantial productivity improvements to be made by the introduction of business like management practices into the public hospital – gains of 22 to 30 percent gains were explicitly mentioned, although the evidence was thin, and never verified.

There had been a shift in the meaning of business management in the 80 years since Herdman, for now businesses were meant to be put under the pressure of market competition, which aimed to force the managers to seek maximum efficiency. So in the early 1990s, there was imposed on the public health system a revolutionary reform, central tenants of which was the introduction of business practices in a competitive environment or, rather, as competitive as was possible in the particular circumstances of health care. The public administration parallel to ‘marry in haste, repent in leisure’ is ‘reform in haste and undo the reforms painfully over a long period’. Most of the health reforms have been undone, but there remains the culture of business management in the public hospital system, typically involving generic managers who have come from outside and are not very knowledgeable about health care.

It is surprising that this culture of management is still there, since it has manifestly failed. There were no significant productivity gains from the reforms, and the new governance institutions, modelled on private corporations made losses which would have been quite unacceptable in private business. The new managerial hierarchies may be good at creating corporate plans and mission statements, but while the impending shortage of radiation therapists to treat patients was known as far back as 1998, it took last years’ crisis for any action to be taken. What does that say of the strategic capacity of health sector managers?

Even more worrying though, is the evidence of poor relations between the health system managers and the health professionals. Most is anecdotal, although everybody seems to accept the tensions exist and are deeply problematic. There is one systematic study which suggests that in at least one place there was deeply divisive relations within a hospital which led literally – to the deaths of patients. The 1998 Stent report suggests that the difficulties in an accident and emergency department appear to be the result of poor management and the underresourcing of the service. ( Health and Disability Commissioner Canterbury Health Limited: Report by the Health and Disability Commissioner Wellington, 2000).

It could be argued that this was a unique event, but it has also been publicly argued that in Wellington Hospital there was a similar underresourcing of beds, the effect of which was to increase the rate of cross-infection, again with consequential deaths. (L. Quaintance, ‘Is Our Health System Safe?’ North and South, November, 2000) More recently a doctor complained to me that a manager had closed beds in his ward without any discussion with the staff involved. He was not questioning whether the beds should have been eliminated – how could he know all the issues if he was not informed? His concern was the lack of consultation, for under this managerial regime those lower in the hierarchy need not be involved, even though the upper level managers do not have the professional competence to evaluate the effect of a decision on patients.

Perhaps not surprisingly, two health professionals have left the ward as a result of the failure to consult. I get the impression that the general dissatisfaction is reaching the point among so many health professionals that they are contemplating leaving the service and seeking work overseas. The major costs of the tension may not be just direct deaths and poor quality health care, but those further down the line as the lack of competent health professionals adds to the waiting lists, the lack of care, and the lack of early intervention.

If you believe Theory X, you will argue our doctors and nurses are underpaid internationally, and the problem of the shortage and the drain could be resolved if they were paid more. There is some truth in that, but Theory Y says that they have to be offered good working conditions too. (Indeed it might argue that good working conditions would reduce the amount they would have to be paid.) Good working conditions cover a more decentralised management style, in which social norms and non-economic rewards are crucial, collegial relations are important, and the work process involves self-direction and self-control. It is driven by an ethic of public service responsibility, not contractualist accountability.

This is not to say that the managerialism of accountability has no role. It was imposed because health professionals can be wasteful of resources. It is partly a matter of their work culture, with its commitment to the particularities of the patient, to neglect of the wider allocation of resources. There is much to be said for such a commitment. It is the professional and responsible doctors and nurses who grieve over unnecessary deaths and poor quality care of their patients. Their concern was sufficient to force the enquiry about the emergency services at the Canterbury Health Ltd. The trouble with accountability is that one can walk away from the problem because one met one’s accountability commitments and no personal responsibility was involved.

Even so, health professionals have to increase their responsibility for the resources they use. We were getting there. Over the years they became increasingly faced with the challenge. When I was teaching fifth year medical students, I would begin by writing on the board ‘UNLESS HEALTH PROFESSIONALS TAKE RESPONSIBILITY FOR THE RESOURCES THEY USE, SOMEONE ELSE WILL MAKE THE MEDICAL DECISIONS’. In a way that is what happened, for now managers make decisions, even when they have not the competence to decide on the number of bed a ward needs or the number of staff on call at an emergency centre.

Even so health professionals have been slowly taking up the responsibility for managing the resources. The prescribed medicines list introduced in the 1970s and 1980s, is an example of their increased responsibility for resources. It involves hospital doctors only using very expensive non-routine pharmaceuticals after consultation with their professional colleagues.

We had another outbreak of authoritarian managerialism in the proposal to create a complicated hierarchy of official committees over professional performance. The proposal has been dropped, but without addressing the problem. There is a need for improved management of failure by health professionals, but the approach needs to be based on Kaizen or continuous improvement, coupled with Total Quality Management where there is collegial responsibility at the lowest possible level. If the professions fail in that task, a more top down approach may be necessary. But that threat in an environment which emphasises responsibility and not just accountability should be sufficient to develop a comprehensive system of Kaizen.

Devolution is at the heart of all these issues. A better, if clumsier, expression is ‘subsidiarity’, which is based on the principle that decisions should be taken at the lowest possible level. Thus medical decisions need to be taken as far as possible at the clinical level, rather than having some manager determine the number of ward beds, without even consulting the health professionals involved.

Subsidiarity accepts the notion of hierarchical administrative systems, and it requires the clarity of institutional purpose that accountability emphasises. But at the heart of the approach is that of professionalism, of responsibility, of the trust that comes from serving others, the sense of obligation that overrides personal interest, the professional commitment to do one’s best, the pride associated with working in an esteemed organisation, and the stake one has in a professional career in the public service.

Subsidiarity is an integral part of the solution to the governance of the health system and – as it happens – also of the educational system, the research system, and the workshop floor. Does it also apply to the core public service? I do not get the same feedback of impending disaster from public servants that I get from health professionals, but I am anxious that two important publications of the last year seem to have ignored the troubling issue. Hence my raising the issue with you, for there can be few more appropriate forums than the NZIPA to begin the debate.