For more than a decade, Western economies have been facing a deep recession which has led to a renewed interest of public management scholars on the issue of austerity and cutback management (Raudla et al., 2013). The... [ view full abstract ]
For more than a decade, Western economies have been facing a deep recession which has led to a renewed interest of public management scholars on the issue of austerity and cutback management (Raudla et al., 2013). The consequences of this fiscal crisis have not been limited to central government since this situation has had a significant impact in recent years on local governments’ revenues. These organizations are now facing new challenges to ensure the delivery of effective public services in a context of weakened financial support of central governments and of increased demand of services. In this situation, cutback management is no longer an alternative but a necessity for local governments. The purpose of this paper is to extend the literature on cutback management in local governments by analyzing how French local governments are coping with the fiscal stress. However, rather than analyzing the cutback management strategies implemented, we decided to focus on the management tools and methods used in these organizations to increase efficiency and reduce costs. In other words, we want to analyze the way local governments respond to the fiscal stress by analyzing the management tools and methods used to increase efficiency and reduce costs.
Local governments being service organizations (Osborne et al., 2013), process improvement is a critical issue for these organizations in order to increase productivity and restore the fiscal health. In this context, local governments can draw on management tools and methods used by service companies to increase productivity and achieve continuous cost reduction without compromising the effectiveness and quality of public services. In this perspective, our analysis will focus on the use by local governments of process improvement methodologies (Radnor, 2010) and productivity improvement tools (benchmarking, process reengineering, lean management, value analysis, etc.) in order to understand how these tools and methods can provide solutions to the fiscal stress faced by local governments.
To answer this research question, we chose a qualitative methodology through case studies in eight French Communes over 50,000 inhabitants and in two Départements. For each organization, we analyzed the actions implemented during the period 2012-2016 to restore a balanced budget, and the management methods and tools used. Data collection methods consist of semi-structured interviews (>30) and documentary studies. For each organization, we met executive officers and senior managers in charge of the implementation of cost-cutting actions in various departments. In addition, we collected internal documentation describing the action plans implemented within these organizations to restore the fiscal health, and analyzed the sessions of municipal and departmental councils.
This paper will provide empirical evidence on the management tools and methods used by local governments to reduce costs and increase efficiency in various departments of local governments (pre-school and primary education, waste management, recreational and cultural facilities, etc.). These results will lead us to demonstrate the relevance of studying how local governments can respond to fiscal stress through a process improvement perspective, and that this perspective can extend the existing literature on cutback management which mainly focuses on the strategies implemented.
