1
Managerialism: A Historical
Overview
The introduction of managerialism in the public sector is associated with
the New Public Management (NPM) movement of the 1980s. In the
private sector, however, the genesis of managerialism is an event that
marked the beginning of the twentieth century (Fleischman and Tyson,
2006), though its roots date back to the Industrial Revolution. As a
background for understanding the reasoning behind the introduction
of managerialism in the public sector in general and in healthcare
in particular, this chapter provides a historical overview of the phe-
nomenon of managerialism, its impact on healthcare management and
the development of concepts of healthcare managerialism over time.
The introductory sections of the chapter outline the evolution of
performance management as a key managerial tool within private sec-
tor companies during the nineteenth century and the subsequent rise
of management as a crucial function inside these organisations in the
twentieth century. In addition, the discussion summarises the evolving
nature of the concept of performance and the approaches that have
been used to improve it from the early days of manufacturing until
more recently, as well as the impact of both on the ways organisations
have been managed, particularly in the past two centuries. The chapter
next explores the broader contemporary context in which private sec-
tor management approaches have often been uncritically transposed to
the public sector in general and into the health services sector more
specifically, thus giving rise to allegations of managerialism. Specif-
ically, our discussion focuses on the rationales that NPM advocates
proffer in support of the introduction of for-profit-enterprise-related
approaches to performance and quality management in public sector
contexts. Having developed a working definition of managerialism, the
chapter then traces the link between this phenomenon and the rise
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S. Melo et al., Quality Management and Managerialism in Healthcare
© Sara Melo and Matthias Beck 2014
2 Quality Management and Managerialism in Healthcare
of performance management and accountability as core themes within
the contemporary public sector and healthcare management literature.
To conclude, we discuss the spread of New Public Management and
recent developments of managerialism, including the emergence of
the concepts of ‘leaderism’ and its impact on health policy within an
international context. After providing the background for the book’s
underlying rationale, this chapter concludes with the presentation of
the outline of the remaining chapters.
The rise of the industrial organisation model and the
establishment of performance management as a key
managerial tool
Performance measurement and management are not recent phenom-
ena. The recording of information on commercial transactions is a
long-standing practice, probably as old as trade itself. Ancient civil-
isations already used bookkeeping records engraved in stone tablets
(Johnson and Kaplan, 1991), and in Britain auditing dates at least from
medieval times (Matthews, 2006, p. 6). However, as we will see later in
this chapter, it is worth noting that despite the long history of bookkeep-
ing records, performance measurement and management only became
key management practices in the mid-eighteenth century. Until that
time, the putting-out system was the dominant business model adopted
in an economy that was primarily agriculture based. Within this model
workers were paid for the amount of work done (piece work) and pro-
duction took place at their home (Mokyr, 1998), the economic units had
a simple structure and usually there were no shareholders. The owner-
entrepreneur managed the business by buying materials directly from
suppliers and selling to consumers without intermediaries. Records of
commercial transactions with customers, suppliers and subcontracted
labour were prepared by the business owner for his own use and accord-
ing to his will and needs. This information was used by the owner for
multiple purposes, such as to know the business’s whole financial sit-
uation, calculate the cost of producing goods and assess the honesty
of contracted labour in using the raw materials in the production pro-
cesses (Johnson and Kaplan, 1991). At that time, taxes were not levied
on profits (Day, 2000) and the putting-out system was thus characterised
by the absence of public scrutiny of accounts and by limited focus on
accountability.
In the period between about 1760 and 1830 a series of
changes occurred across four areas. These included economic growth,
