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The risks and returns of new public management : political business

Luke, Belinda, Kearins, Kate, & Verreynne, Martie-Louise (2011) The risks and returns of new public management : political business. International Journal of Public Sector Management, 24(4), pp. 325-355.

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Abstract

Purpose – This article aims to consider success in terms of the financial returns and risks of new public management (NPM) in state-owned enterprises (SOEs). Design/methodology/approach – Financial returns of New Zealand SOEs were examined through a review of their annual reports over a five-year period. Dimensions of risk were examined through interviews conducted in two phases over a two-year period with senior executives from 12 of the (then) 17 SOEs operating in New Zealand. Findings – Findings indicate the potential for SOEs to operate as profitable government investments, with clear support for positive financial returns under NPM. However, variations noted within individual SOEs also indicate that profitable and commercial operations may not be possible in all cases. An examination of the risks associated with SOEs’ operations reveals a number of dimensions of risk, encompassing financial, political (including regulatory), reputational, and public accountability aspects. Practical implications – There is a need for an enhanced awareness on the part of internal and external stakeholders (such as the government and general public) of the risks SOEs face in pursuing higher levels of profitability. Also required, is a more acute understanding on the part of internal and external stakeholders (e.g. government and the public) of the need for SOEs to manage the range of risks identified, given the potentially delicate balance between risk and return. Originality/value – While previous studies have considered the financial returns of SOEs, or the risks faced by the public sector in terms of accountability, few have addressed the two issues collectively in a single context.

Impact and interest:

2 citations in Scopus
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ID Code: 46064
Item Type: Journal Article
Keywords: Risk management, Economic returns, Public administration, New Zealand, Financial Returns, Accountability, New Public Management
DOI: 10.1108/09513551111133489
ISSN: 1758-6666 (online) 0951-3558 (print)
Subjects: Australian and New Zealand Standard Research Classification > COMMERCE MANAGEMENT TOURISM AND SERVICES (150000) > ACCOUNTING AUDITING AND ACCOUNTABILITY (150100) > Accounting Auditing and Accountability not elsewhere classified (150199)
Divisions: Current > QUT Faculties and Divisions > QUT Business School
Current > Schools > School of Accountancy
Copyright Owner: Copyright 2011 Emerald Group Publishing Limited
Deposited On: 21 Sep 2011 08:16
Last Modified: 21 Sep 2011 08:16

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