Net Results of the Japanese NPM Movement at Local Governments since the Mid-1990s: Performance Budgeting, Total Quality Management and Target Based Budgeting

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• 23. This socio-organizational concerns also cut across recent concerns of American public administrators regarding implementation aspects, (Long, E.; Franklin, A. L. The Paradox of Implementing the Government Performance and Results Act: Top-Down Direction for Bottom-Up Implementation. Public Administration Review 2004, 64(3), 309–319), incentives for the exploitation of tools, (de Lancer Julnes, P.; Holzer, M. Promoting the Utilization of Performance Measures in Public Organizations : An Empirical Study of Factors Affecting Adoption and Implementation. Public Administration Review 2001, 61(6), 693–708), or organization learning perspective, (Moynihan, D. P. Goal-Based Learning and the Future of Performance Management. Public Administration Review 2004, 65(2), 203–216).
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• 28. Anthony's original definition of management control was as follows: “Management Control is the process by which managers assure that resources are obtained and used effectively and efficiently in the accomplishment of the organization's objectives.” (Anthony, R. N. Planning and Control Systems: A Framework for Analysis; Division of Research, Graduate School of Business Administration, Harvard University: Boston, 1965; 180 pp.) His new definition is as follows: “Management Control is the process by which managers influence other members of the organization to implement the organization's strategies.”(Anthony, R. N. The Management Control Function; Harvard Business School Press : Boston, MA., 1988; 216 pp.) This change of definition is generally interpreted as the need to give more focus on strategic dimension than before, as well as to stress the importance of indirect or behavioral control (“influence”).
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• 30. That's why recent texts include indirect control like “personal” or “cultural” control in management control function (For example, Merchant, K. A.; Van Der Stede, W. A. Management Control Systems: Performance Measurement, Evaluation, and Incentives; Financial Times/Prentice Hall: Harlow, 2003; 701pp. See also: Emmanuel, C.; Otley, D.; Merchant, K. Accounting for Management Control. 2nd edition. Chapman and Hall: London, 1990; 518 pp.).
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• 31. For some, product quality itself has still problems. Y. Kato questioned recent quality problems occurred in several Japanese companies, which could upset traditionally good image of Japanese products as a whole. After completing his fieldwork, he points out several background aspects for these problems: First, new quality problems are generated despite proper exercise of the same control activities. Second, problem-solving competence has gone downward because of retirement of competent workers. Third, difficulty of quality education because of presence of foreign workers, aged workers, or recent rapid turnaround of workers. Forth, routinization of traditional QC circles restrains new innovative propositions. Refer to Y. Kato, Nihon teki Hinshitsu Kanri no Saisei (Towards a Rebirth of Japanese Quality Control). Business Insight of Kobe University 2005, 13(1), 8–17.
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• 35. As for tragic history of Japanese TQC: Tokumaru, S. Nihon teki Keiei no Koubou: TQC wa Wareware ni Nani o Motarashita noka?(Rise and Fall of Japanese Management: What Has TQC Brought Us About?); Diamond Sha: Tokyo, 1999; 478 pp.
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• 38. General incentive structure has also sufficiently evolved since high growth era that followed World War II. Traditionally, Japanese companies have not used payment incentive to inspire workers to invest efforts into improvement of product quality. Just after graduating high school, female workers entered companies where they voluntarily participated in massive efforts for quality improvement, which made a legend that has even echoed abroad. This was done without special pay. But one has to keep in mind that they were actually compensated collectively because of rapid growth of Japanese companies and Japanese economy in general. This condition was favorable for inducing such group behavior has disappeared now and new realistic strategy is often searched in private companies, with or without real success.
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• 39. In fact, this stability is also a feigned one. Newly elected mayor / governor is culturally completely different from the predecessor. The personnel are obliged to adapt themselves to the new culture, but doing so completely, without reserve, is dangerous as this might restrain their adaptability to the next mayor / governor.
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• 41. Supposedly, Japanese local government budgeting has characteristics similar to those of “strong mayor system” (Rubin, I. S. Class, Tax, and Power: Municipal Budgeting in the United States; Chatham House Publishers: Chatham, NJ, 1998; 248 pp.).
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• 42. It is Chiho Kofu Zei, translated as Local Allocation Tax in The Japanese Local Administrationby Japan Center for Local Autonomy (1999). It is nothing but a general grant although it is called a “tax.”
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• 43. American TBB has been sometimes a reaction of financial management to taxpayer's riot, which has installed ceiling on tax revenue or expenditure growth.[6]Ironically, in Japan it is Central government that is the source of uncertainty.
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• 44. Shizuoka's flat-base organization was achieved by simplifying three layers into only one. In Japanese context of rapidly aging population and seniority system, the posts of managers are filled with aged personnel. It causes frustration among younger personnel. Flat type oriented organizational revolution has a motivational effect for employees and also leads to simplification of formal procedures. Namely, under the new system relatively young generation has more chances to arrive at the post of manager, and that might happen earlier than in the original structure. And concerning the formal procedures one has to keep in mind that traditionally for every decision the signature (in case of Japan, “personal stamp”) is needed from every level of hierarchy, starting with lowest and up to the highest, so the process of decision-making ordinarily takes a lot of time. This process is also simplified in a flat-base organization.
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• 45. Using this concept, reform leaders of Fukuoka City tried to generate a movement organized voluntarily by officers themselves. Through this movement, they wanted to change “Genes (spirit, culture, institutions): DNA” in order to establish organizational culture of continuous reforming across generations (Recommendation to the Mayor: In Search of Establishing Public Management, or DNA 2002 Plan: Towards Modification of City Office's DNA, Management Reform Committee of Fukuoka City, April 26, 2000, p. 15). To change the city officer's bureaucratic mind, Fukuoka city government adopted a particular strategy, where cheering up is considered to be more important than sanction or contract. This city uses the analogy of an Aesop fable of the sun and the north wind, according to which the former was more efficient than the latter in making a traveler to take off his coat. See also, Miyamoto, N.; Baba, Sh.; Imasato, Sh. Toward New Public Management in Japanese Local Government. A struggle to Transform DNA of Bureaucratic Culture — In the City Government of Fukuoka. Twenty-Fifth International Congress of Administrative Sciences, Athens, July 9–13, 2001.
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• 46. “Off-Site Meetings” are a less systematic type of QC activities. Such activities are proposed and organized by a consultant, or internally. As cases of Mie Prefecture and Amagi City illustrate, this approach is used to facilitate voluntary participation of officers in the reform program. Famous management guru in this domain is Shoji Shibata.
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• 48. The following is a quantitative analysis of a survey undertaken in Shizuoka and Mie Prefectures. Furukawa, Sh. What Sustains Behavior Geared to NPM Environment in the Workplace? A Critical Analysis of the Incentive Mechanism in the Case of Japan's Local Government. In Challenges of Public Management Reforms: Theoretical Perspectives and Recommendations(Selected papers from IRSPM VIII, The Eighth International Research Symposium on Public Management, Hosted by the Budapest University of Economic Sciences and Public Administration, 31 March – 2 April 2004), Edited by G. Jenei, K. McLaughlin, K. Mike, and S. P. Osborne, pp. 167–192. A similar research was conducted in 2000–2001 in Mie Prefecture alone. Yuge, K.; Sakano, T. Gyosei Hyoka System Donyu ni okeru Mokuteki Shiko Gata Gyo-Zaisei Un'ei no Jittai to Hyoka (An Appraisal of Performance Evaluation System in Prefectural Government). Keikaku Gyosei(Planning Administration) 2002, 25(1), 109–117. Finally, review of total management system after a new Governor has started his term uses a similar survey. “Mie Gyosei Keiei Taikei” ni yoru Kensei Un'ei(Review of Total Management System of Mie Prefecture), Mie Prefecture, March 2004.
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• 49. The same tendency was denounced also in Hokkaido Prefecture. Yamaguchi, J. Investigation of Policy Assessment System in Hokkaido. Government Auditing Review(Board of Audit Japan) 2000, Vol. 7. On Hokkaido Prefecture, see also: Christensen, M.; Yoshimi, H. A Two-Country Comparison of Public Sector Performance Reporting: The Tortoise and Hare? Financial Accountability and Management 2001, 17(3), 271–289.
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• 50. A management control system in a narrower sense, can be placed somewhere between operational control and strategic planning. Operational control is usually delegated to the managers.
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• 52. This point seems clumsy to them. Concrete agenda to overcome this barrier has not been found. A divisional manager said during a workshop: “Competency Model (Saga's HRM reform) is OK, but we would like to be given a ‘Business Model’ from the top.” In general, Japanese local officials, very good at performing minor technical tasks, have no experience of thinking strategically.
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• 53. MBO for performance appraisal in Japan is supposedly similar to that of Seoul City, judging from description of: Kim, J.-S.; Kang, H.-S. Performance Measurement Initiative: A Status Report and Reflection. In Building Good Governance: Reforms in Seoul, Chapter 11; National Center for Public Productivity and the Seoul Development Institute; Seoul, 2002. Besides, Seoul City's Performance Budgeting is organized according to the logic of Strategic Planning, i.e., first division's mission is defined, then “several” strategic objectives are stipulated, and budget is distributed with reference to this formula. It is completely different from Japanese way of thinking in Project Evaluation or Performance Budgeting. In Japan, first all the budgetary programs are classified by objectives, which produce a host of budgetary programs called “projects”(Jigyo). And for each project, the direct responsible, who could even be an operational worker, reflects on its objective and reviews it in terms of economy, efficiency, effectiveness, or other perspectives. For each project one tries to decide whether to continue or not. This is a laborious work. Supposedly, HRM deficiency influences motivation of divisional managers, and one has no choice but to depend on operational managers and workers.
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• 54. It is often used in Japanese companies to facilitate communication among employees, together with other measures like “fluid personnel change.” Such rearrangement is a tactics, typical in Knowledge Management theory, often spoken of in various domains in Japan: Nonaka, I.; Takeuchi, H. The Knowledge Creating Company: How Japanese Companies Create the Dynamics of Innovation; Oxford University Press: New York, 1995; 304 pp.
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• 55. It reminds of one of the four control levers of Simons, namely, strategic orientation. It means that a strategy itself is complementary or substitutive to some other control apparatus.
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• 56. Study group on this theme under the auspice of Ministry of Home affairs and Communications. Bunken Gata Syakai ni okeru Jichitai Keiei no Sasshin Senryaku: Atarashii Koukyo Kukan wo Mezashite(Strategy for Renewal of Local Government Management in Decentralized Society: Toward Creating New Public Space), April 2005.
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