Staff costs vs wasted time
The research is multidisciplinary, bringing together Public Administration and Business Administration. ‘Research on local governance is often about democratic processes and participation processes,’ says Van Genugten. ‘Now a business angle is being introduced.’ Oldenhof looked at the organisational structure of municipalities from two organisational design approaches from Business Administration. Both approaches focus on how structures should be designed to maximise performance. In doing so, they arrive at completely opposite structures.
In ‘economies of scale’, work is divided into small tasks, with one department performing specific tasks for as many services and residents as possible. ‘Think of a separate back office, front office and policy department,’ Oldenhof explains. 'There are often multiple layers of management. The idea behind this structure is to achieve economies of scale, especially in personnel costs.'
With ‘economies of flow’, the work is instead divided among departments that perform broad tasks, for a limited number of services or residents. Thus, departmental employees also take on management tasks. 'This approach focuses on preventing unnecessary waste of time. The likelihood of disruptions between colleagues is minimised and if they occur, they are resolved as quickly as possible.'
Scale paradox
Oldenhof gained insight into municipalities' structures through the questionnaire. She also collected annual reports showing organisational costs and staffing in FTEs. She linked these together. 'Then you see that the “economies of scale” approach is dominant, but that this does not deliver what it promises to deliver. The more a municipality is structured according to the principles of ‘economies of scale’, the higher the organisational costs are and the more FTEs in staffing are needed. While the argument for this approach is precisely that you need fewer staff and this will reduce your organisational costs.'
Surprise among municipal secretaries
Van Genugten notices that a fundamental view on organisational structure is limited among municipalities. ‘Reasoning is mainly based on experiential knowledge, while knowledge about organisational design and change is often lacking.’
This was also visible when Oldenhof discussed her findings during a sold-out workshop to municipal secretaries. 'You mostly see surprise then. They think they are working efficiently, but that turns out not to be the case.' She also notices misconceptions, for instance about the concept of self-directed teams falling under ‘economies of flow’. People often think that you can simply take away management and leave departmental tasks unchanged, whereas you first have to restructure departments so that they perform a complete set of tasks for a limited number of services or residents.'
In the final part of her research, a case study, Oldenhof takes an even deeper look at the relationship between structure and performance requirements, including service quality and employee learning opportunities. ‘Then we will see in a broad sense which approach is better for structuring municipal organisations: “economies of scale” or “economies of flow”,’ says Van Genugten.
From her own experience
Oldenhof knows from her own experience that her research can be very important for municipalities. After studying Public Administration, she worked for local government for several years. 'Among other things, I had to advise management. Then I noticed that there was little knowledge about municipal organisation design. I wanted to learn more about that and started doing a part-time master's in Business Administration.' Meanwhile, at the Radboud Management Academy, where public administration experts and business experts jointly provide training for municipal secretaries and others, the idea of starting a multidisciplinary study arose. Oldenhof responded to the PhD position. Van Genugten: ‘This research seemed written for her.
