Role of management education in adapting the Indian public sector to market-based economic reforms

• Date: 21 April 2023
• Pages: 315-332
• DOI: https://doi.org/10.1108/IJPSM-01-2022-0003
• Published date: 21 April 2023
• Subject Matter: Public policy & environmental management,Politics,Public adminstration & management
• Author: Nisha Prakash,Aparna Hawaldar

Role of management education in

adapting the Indian public sector to

market-based economic reforms

Nisha Prakash

Symbiosis Institute of Business Management (SIBM),

Symbiosis International (Deemed University) (SIU), Bengaluru, India, and

Aparna Hawaldar

School of Business and Management, Christ University, Bengaluru, India

Abstract

Purpose –In 1991, India embarked on market-based economic reforms initiatives pillared on liberalization,

privatization and globalization (LPG). The reforms exposed the public sector enterprises to competitive market

forces, raising the need to identify and develop the competencies necessary for survival. Executive training

programs were initiated to prepare public enterprises for the market-based reforms. Three decades later, the

reforms especially privatization is witnessing renewed interest under the current administration. In this

context, the article takes a closer look at the structure of management education provided to public sector

officers in India. The article also identifies barriers for implementing the learnings from the management

courses in the workplaces and suggests approaches for closing the gap.

Design/methodology/approach –The study follows a thematicapproach based on unstructured interviews of

senior executives of Indian public sector enterprises covering oil and gas, aeronautical, power and transportation

sectors. New public management (NPM) is used as a yardstick of “business-like”characteristics of public sector

enterprises.

Findings –Despite heavy investment, trainings have had only partial success in implementing the core

objective of NPM, i.e. to provide quality services in a professional manner to meet citizen requirements. The

study found that though concepts of NPM are introduced at multiple management training programs,

the public enterprises lag in the implementation of NPM. The ingrained hierarchical and procedural culture of

the enterprises was often highlighted as the challenge to its implementation.

Practical implications –The study will be of significance to Indian policymakers in designing management

education programs to public sector employees. It brings out –(1) various models of management education

provided to public servants across industries, (2) provide evidence on the extent of NPM implementation, (3)

identify barriers for transitioning the learnings from the management courses to workplace and (4) suggest

changes for improving effectiveness.

Originality/value –The existing research on LPG in India covers the economic transformation post-

implementationand the factors contributing to the success of its implementation. This study adds to the limited

literature available on the management education of public servants in the country.

Keywords Public administration, Public sector reform, New public management, Management education

Paper type Research paper

1. Introduction

In the last three centuries, public administration has played a significant role in transitioning

societies from feudal to contemporary and democratic systems (Frederickson et al., 2016). In

the last few decades, the public sector faced additional challenges as a result of globalisation.

The public sector no longer had the luxury of operating in a sellers’market, and it had to

compete with both domestic and international competitors. Even though there has been a

Management

education in

Indian PSUs

315

This paperforms part of a special section “HistoricalTrends and Emerging Issues in PublicManagement

Education”, guestedited by Prof. Morten Balle Hansen, Assoc. Prof. Anja Overggaard Thomassen and

Prof. Dag Olaf Torjese.

The authorswould like to thank the intervieweesfor sharing theirexperiences with them.The authors

wouldalso like to express theirgratitude to the anonymousreviewers forhelping them improve thearticle.

The current issue and full text archive of this journal is available on Emerald Insight at:

https://www.emerald.com/insight/0951-3558.htm

Received 3 January 2022

Revised 18 October 2022

20 March 2023

Accepted 26 March 2023

International Journal of Public

Sector Management

Vol. 36 No. 4/5, 2023

pp. 315-332

© Emerald Publishing Limited

0951-3558

DOI 10.1108/IJPSM-01-2022-0003

continuing shift away from the PSU model post industrialization, PSUs constituted nearly

25% of the Fortune Global 500 companies in 2019 (Fortune, 2021).

In India, thePSUs have contributedto the development of the country by creatinga strong

industrial base (Gupta et al., 2018).Post–independence,Government of Indiaadopted a socialist

modelof development –the Feldman-Mahalanobismodel (Feldman, 1928;Mahalanobis, 1953)–

focusingon building a strongcapital base throughPSU investments incore areas such as steel,

oil and transportation (Hambrock and Hauptmann-Socrates, 1999). The watershed year, 1991,

heralded the liberalisation of the Indian economy. As India embarked on a new route of

liberalisation and deregulation, the PSUsbegan to be perceived as “anachronistic”institutions,

inefficient and deficiently managed, controlled by vested interests, yielding lower return on

capital invested and liable to be privatised (Ahluwalia, 2002;Oommen, 1993). In the last

three decades Indian PSUs have been trying to transform themselves to competitive, fast

growing economic units(Khanna, 2015). To enable this transformation, the Indiangovernment

has made a strong commitment to empower the management teams of the central PSUs

(CPSUs), PSUs under the central government’s direct administration. Government has

recognized the need for CPSUs to be professionally managed with a keen focus on

performance. One of the most significant factors to ensure the efficient and profitable

operationof an organisation is theeffective utilisationof itsavailable resources.CPSUs employa

large workforce across disciplines and the success of these organisations is dependent on the

effectivemanagementof the personnel (Talukdar, 2013). Managementtrainingwas identifiedas

a requirement at all levels for preparing CPSUs for market-based reforms (Sharma, 1992).

In this context, this study tries to understand the structure of management education offered to

CPSU officers in India. In addition, the study investigates the implementation of the principles of

market-oriented new public management (NPM) within the CPSUs. An attempt was also made to

understand the key impediments to its implementation. The article concludes by suggesting

changes for closing the gap between training and implementation. The article is structured in six

sections –the following sections cover the background of the study followed by theories of public

administration, research methodology, findings and discussion and conclusion.

2. Background of the study

Historically, the publicsector has been a very importantproviderof goods and services in India.

In 1980s, the improving socio-economic conditions brought in changes in public expectations

(Borins, 1995). PSUs struggled to keep up with the expectations due to inefficiency, bureaucracy,

lack of accountability and corruption across levels (Kalimullah et al., 2012;Minogue et al., 1998).

Globalization increased competition in sectors once dominated by PSUs. Public sector

organizations across the world have gone through this transition during different timeframes

(Hood, 1991,1995;Lan and Rosenbloom, 1992;Pollitt and Bouckaert, 2011). Facing similar

problems in the 1980s, public sector enterprises in UK and Australia introduced New Public

Management(NPM) as a new paradigmof public administration (Hood, 1991).NPM targeted to

build flexibility, market orientation, transparency and performance management to attain the

3Es–efficiency, economy and effectiveness. The key elements of NPM were (1) ad option of

private sector management practices, (2) hands-on management with set performance

standards, (3) implementation distanced from policymakers, (4) focus on entrepreneurial

initiatives, (5) resource and output control, (6) performance-based reward systems and (7)

optimal use of markets, competition and contracts (Dunleavy and Hood, 1994,1991;Osborne,

2006). NPM focuseson empoweringthe customers to choosebetween various service providers

(Dunleavy and Hood, 1994). Despite its limitations (Christensenet al.,2008;Dunleavyet al., 2006;

Pollitt et al., 2004), NPM is widely regarded as a go-to framework for developing countries

hoping to transition theirpublic sector using market-based reforms (Elias Sarker, 2006).

India has been attempting market-based reforms at its PSUs since opening its economy.

After attaining independence in 1947, the Indian public sector focused on building the country as

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