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

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 highperforming 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.P ublic 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 routine...

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