In Search of a Benchmarking Theory for the Public Sector

Abstract

Organizations withincertain branches of the public sector – such as police districts, municipal socialservices and local tax offices – compare their performances to reveal differencesas well as to show ways of improving performance. Benchmarking is based onideas – implicitly or otherwise – about managing organizations and improvingtheir performances. These ideas include ‘organizations want to copy ‘‘bestpractices’’’ and ‘performance comparison results in performance improvement’(Camp, 1989; and Bruder and Gray, 1994). As far as we know, the possibility ofcombining these and similar ideas into a theoretical framework has never beenexamined. This is confirmed by Bowerman et al. (2002, p. 432), who assert thatpublic sector benchmarking has not attracted much attention in the manage-ment literature. We will attempt to fill in this gap. That is, we will develop atheoretical framework that can be used to investigate public sector benchmark-ing. The starting point for this framework will be a combination of economic andinstitutional reasoning. Together these theoretical angles provide an explanationfor the way in which benchmarking is used in the public sector.This paper develops a theory and formulates hypotheses with respect to thevarious response patterns of public sector organizations to benchmarking. It usesinsights from both economic theory and a theory – developed by Oliver (1991) –which is based on neo-institutional theory and resource dependence theory. Thehypotheses will be exemplified and subsequently refined by empirical researchinto a benchmarking project of waste-water treatment by Dutch water boards.This benchmarking project used an adapted version of the Balanced Scorecard.It comprised two benchmarking studies, which used data from, respectively, theyears 1999 and 2002. Following both studies, we investigated the water boards’response patterns to the benchmarking project. As such, we used multipleresearch methods, including a survey and several case studies. The core of thepaper will entail a reflection on the response patterns of the water boards to the