Academic journal article Innovation: Organization & Management

A Multilevel Growth Assessment of the Diffusion of Management Innovation Nested in State Levels: The Case of US Local Economic Development Programs

Academic journal article Innovation: Organization & Management

A Multilevel Growth Assessment of the Diffusion of Management Innovation Nested in State Levels: The Case of US Local Economic Development Programs

Article excerpt

(ProQuest: ... denotes formulae omitted.)

INTRODUCTION

Public service has always responded to calls for enhancing its efficiency and effectiveness in meeting the citizens' demands. Often such response has been in the form of management innovation. The USA Government Performance and Results Act of 1993 (GPRA) required government agencies to develop strategic plans tied to proposed budgets and performance measures that were then realised by legislation and mandates (Franklin & Long 2003). The GPRA has influenced policy and management practices in both state (Melker & Willoughby 1998) and local governments (Berman et al. 1999; Berman & Wang 2000; Wang 2002; Rivenbark & Kelly 2003; Poister & Streib 2005). The spread of management innovation will most likely diffuse from federal to state governments, from state to local governments, and from one local government to another because of federalism. In particular, it is expected to explain the adoption of strategic plans and performance measures that provide incentive to others to adopt, or create, novel instruments that are useful at local levels.

Local management innovation in this research indicates that the implementation of new management practices that represent a significant departure from current norms. Over time, it has transformed the way many functions and activities work in local governments, what is intended to further organizational goals (e.g., efficiency, effectiveness, quality; Birkinshaw & Mol 2006; Birkinshaw et al. 2008).1 Given the intense budgetary pressures and the ideology of small government, state and local governments in the USA have looked to private management instruments such as strategic planning, performance measures to optimise practices in state governments (e.g., Berry 1994; Poister & Van Slyke 2002; Nicolini & Shambarger 2007; Compin 2008) and local governments (e.g., Poister & Streib 1989; Julnes & Holzer 2001). Strategic plans and performance measures are relatively new innovations to local governments, some scholars found they were not commonly adopted by local governments (e.g., Poister & Streib 1989; Julnes & Holzer 2001; Walker & Boyne 2006).

The above-mentioned efforts indicated the importance of adopting local management innovation, but inappropriate and unconvincing evidences failed to our understanding the extent of their diffusion. For example, the studies of USA local management innovation diffusion uses a wide range of research designs, from case studies to quantitative analysis (e.g., Berman & Wang 2000; Wang 2002; Rivenbark & Kelly 2003; Poister & Streib 2005). Their analytical techniques; however, tend to focus only on local levels with cross-section design. These narrow analytic approaches tended to suffer from limitations of conventional statistical methods for estimating multiple levels of data, including issues related to efficiency of estimating standard errors, accuracy of assessing model fit and coefficients, the possibility of violating measurements, and failure to obtain more information (Heinrich & Lynn 2000). In particular, the practices of US local governance are heavily influenced by state mandates, laws and state factors (McCabe 2000; McCabe & Feiock 2005), which are expected to increase the adoption of local management innovation.2

Previous efforts, however, lacked true understanding of the diffusion of local management innovation spreading between and within local governments and ignored hierarchical influences in American governance; therefore, their results may sacrifice important information, such as state laws which may yield unreliable results. In addition, previous studies focused on the adoption of management innovation based solely on programs in general, not on selected programs (Berman & Wang 2000; Rivenbark & Kelly 2003; Poister & Streib 2005); this may preclude consideration of the adoption of a single management innovation. …

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