Letting and making managers manage: the effect of control systems on management action in New Zealand's central government

Business-like control systems that seek to let managers manage and hold them accountable for results have been a feature of New Zealand’s public management model since the late 1980s. In the experience of a sample of 41 Capital City public servants and consultants, these systems have clarified roles and responsibilities, created managerial freedoms and led to more transparent information. They have also fostered organizational silos and a climate of fear that inhibits innovation, as accountability and transparency have become synonymous with public and political criticism. Using a four-sided levers of control model (Simons 1995) the paper concludes that the New Zealand system over-emphasizes diagnostic controls based on formal plans and overlooks the paradox that effective control systems require a balance between control and empowerment. More balance is needed between formal reporting and more motivating, but less easily observed, controls related to organizational purpose and learning.