The position and role of THE Slovak CEOs in local governments
Michaela Bátorová[1]
Abstract
Especially in times of crisis, when local governments (LG) face problems with tax collection and the consequent lack of money for their communal budgets, municipal representatives are forced to find new ways to be financially self-sufficient in order to ensure a sustainable provision of public services. New public management (NPM) provides various practices, for example, contracting-out or program-based budgeting, which might help to balance the uncertain situations. However, the usage of these practices requires certain organizational arrangements, especially clear division between politics and administration, and clear division of tasks among layers of administration. Central Eastern Europe (CEE) countries are well-known for their traditionally strong political leaders who have a large number of political and executive tasks. After a number of decentralization reforms and transfer of new functions to political leaders they now lack the capability (time and expertise) to take over their responsibilities. Therefore, the role of top local administrators (Chief Executive Officer) – prospective experts in the provision of public services – is inevitable in municipal decision-making. However, it is quite difficult to find studies which would clearly describe the role and position of these civil servants in CEE countries.
The purpose of this paper is to 1) show what the role of the Slovak Chief Executive Officers (CEOs) is in municipal-decision-making processes – particularly during the preparation of the municipal budget – and what it means for them to have this position; and 2) discuss what are the competences needed in order to overcome the crisis situations. The research was conducted over two months in Slovak local self-governments. Two main methods were used for data collection. First, the internal organizational rules (IOR) from 32 medium-size municipalities were collected and analyzed with content analysis. Second, the qualitative in-depth interviews were made with nine CEOs (prednosta mestského úradu). The results show that the position of Slovak CEOs is strong – thanks to their expertise power. This expertise power is used as a substitute for the lack of formal legal competences. Moreover, the role of CEOs depends very much on mayors and their interest in delegating some of their formal competences to CEOs.
Key words: political leadership, management, position and role, power, formal and informal functions of Slovak CEO, financial crisis.
1.Introduction
Since 1994, when the first communal elections took place in the Slovak Republic, a number of institutional reforms led to the current status quo of the Slovak local governments. The former socialist regime, characterized mainly by the state-centralization of political power, had been transformed into a highly decentralized public administration, where the responsibility had been given to sub-national self-governments (for a further discussion about the decentralization reforms see Nižňanský & Pilát, 2002; Belajová & Balážova, 2004; Slavík, 2004; Andris, 2007). The national, regional and local institutions started using modern managerial practices according to New Public Management concept (Baldersheim, 2003) in governing their areas, in order to involvecitizens in the communal government and increase the efficiency of delivery of public services. These practices have their origins in the old Western countries and were introduced to other post-communist countries with the aim to achievethe democratic-economical standards already existing in the old European Union (Peters, 2001).
In academic literature we can find various studies evaluating democracy from the central-local/vertical perspective in Slovakia (Nemec, Berčík, & Kukliš, 2000; Buček, 2001; Baldersheim & Illner, 2003). Most of the authors follow the tradition of old Western scholars (Page & Goldsmith; 1987; Hesse & Sharpe, 1991; John, 2001).They measured democracy mainly by the number and types of allocated functions to local governments, the respective discretion, and the access of local politicians to the central state. Later the interest of researchers from the industrial and also Post-communist countries included also horizontal, i.e. inter and intra-governmental relations (Buček & Malíková, 1997; Mouritzen & Svara, 2002; Soos & Price, 2002; Heinelt & Helpas, 2006; Soos, 2006). These studies have in common one aspect; inter alia,the description of relations between local politicians and administrators. However, in only two of them (Buček & Malíková, 1997; Soos & Price, 2002) was discussed the Slovak situation; and it was unfortunately only from the perspective of political leadership. The position and role of bureacrats during the municipal decision-making process was not elaborated in details. In this paper, I aim to fill this gap. I show, what the CEOs positions are in the municipal decision-making, what are their possibilities to influence this process, and in addition to this, how they can participate in overcoming the effects of the current crisis. The first partof the paper describes the theoretical framework, used in the research. The second chapter introduces the general picture of the situation in the Slovak local governments by defining the governmental form. The thirds chapter presents methods and materials used for the research. The results part reveals the position of Slovak CEOs by describing the formal and informal functions. The following chapter indentifies the CEOs’ roles by a cross-analysis of those functions. Finally, I offer some conclusions with suggestions for a further research. Last three chapters also include a discussion about the ability of CEOs to influence the consequences of the current financial crisis.
1.1Theoretical framework
This paper is intertwinedwith 4 main theoretical concepts: political leadership and management; power and position/role. The interrelation of these concepts is presented in the following paragraph. Political leadership, and likewise politics itself, has a number of definitions which are sometimes even contradictory.In this paper, I concentrate only on the one definition which sees political leadership as “theprocess whereby an individualinfluences a group of individuals to achieve a common goal” (Northous, 2007, p.3). In the context of local governments the individual, i.e. political leader, is (usually) the mayor, who by exercising power in various ways influences others (e.g. bureaucrats and elected officials) in order to achieve the legitimization and implementation of municipal policies. However, (political) leadership can be successful only if all the elements of the proposed definition are activated. Therefore, for example, without proper implementation of policies, the overall political leadership is perceived as a failure. In local governments, the implementation of policies is administered/managed by bureaucrats. Thus the success of the implementation is mainly dependent on the feasibility of the political policies and the managerial skills of bureaucrats.
The process from the definition indicates an interaction during the decision-making about the common goals/problems. It refers to reciprocal relationship among the political leader, municipal council and bureaucrats (except other interest groups). Thus, all the acting members influence each other. The forms and volume of the influence are highly dependent on the position and role, which individual members hold within the organization. Position is in this context defined by the functionalists’ theory. Scholars following this stream of thought understand the latter concept as a set of formal/legitimate and informal/illegitimate functions, prescribed to and gained by a holder of the position (see Bennis, 1958; Weber, 1978; Hardy & Clegg, 1996; Svara, 2003). The role is further perceived as a set of connected behaviours, rights and obligations, as conceptualized by actors in a social situation. Thus: “the role is an expected behaviour in a given individual social position” (Biddle, 1986, p.67). The position and role, combined with the personal attributes of an individual operating within the organization are also the main sources of his/her power (French & Raven, 1960; Pfeffer, 1992). This power can be in turn used for influencing during the decision-making process. From the hierarchical top-down (superior-subordinate) perspective, the influence depends on the leadership style (e.g. autocratic leader prefers to give orders; democratic leader rather persuades). Whereas from the down-top perspective probably the only way how subordinates caninfluence the superiorsis by persuasion. In the context of the local governments and traditional perception of politics-administrative relations, mayors usually give orders and bureaucrats persuade by providing professional advices. However, this is very simplistic view. For example, Dunn and Legge (cited in Nelson, 2004) explain in more detail the political-administrative relations. They distinguish between the orthodox politics administration dichotomy, the modified dichotomy, and the partnership. While, Mouritzen and Svara (2002) are even more precise, because they observed 4 different relationships. First,separate roles – true dichotomy between politics and administration,the manager is subordinate, in all cases, to elected officials. Second,autonomous administrator – the chief administrator assumes an equal or greater role than elected officials in the policy process while elected officials remain restricted from the administrative arena. Third,responsive administrator – the manager is subordinate to elected officials and political norms dominate administrative norms. Finally, overlapping roles – both the manager and elected officials are influential (reciprocal influence) and they share administrative and political functions.
The extent, to which the political leadership and municipal management are exercised, to a certain degree, depends also on the governmental model within which mayors and civil servants operate. Except others (Bennett, 1993; Heinelt & Helpas, 2006) Mouritzen and Svara (2002) developed 4 different local government forms based on relations between mayor, council and bureaucrats. First, the strong-mayor form is characterized by an elected mayor who controls the council and is fully in charge of executive functions. Second, in the committee-leader form, there is one political leader who may or may not control the council. The executive functions are shared. Third, the collective form is lead by the executive committee who is in full charge of executive functions. Finally in the council-management form, the executive functions are in thehands of a professional administrator – the political leader is “only” for ceremonies.
2.Legal Context for Positioning of Slovak CEOs in Local Governments
Slovak self-governments are lead by very strong mayors (Bennett, 1993; Buček & Malíková, 1997; Soos & Price, 2002) Despite the fact policy-making is de jure shared together with council. The main idea of such division is to ensure a balance of power and allow citizens (via “their” councillors) to govern their territory by following the principles of democracy (Belajová & Balážová, 2004) and thus avoid an autocratic leadership. Following the governmental typology (Mouritzen and Svara 2002) Slovakia clearly belongs to the strong-mayor local government models, because themayor is the head of the council, head of the execution, head of the administration and moreover, is even directly elected.
In turn, we could expect that the formal position of the top administrative officer is very weak. Soos & Price (2002) endorses this hypothesis since their analysis shows that Slovak CEOs did not appear in any of the formal municipal functions, which these authors analyzed[2]. Here need to be stated, that since 1990, Slovakia has been in the transformation process and the institutional changes and amendments have been a daily practice of the state legislators. Therefore, in year 2010 many conclusions from the few previous academic studies about Slovak LGs are no longer accurate. The latest amendments of the Local Government Act (LGA) from 3rd of March 2010, however, still ensures a strong position of political leaders, and provides them even more functions than before. One of such functions is that today’s mayors can appoint and withdraw CEOs; whereas in the previous system the municipal council had to approve the mayor’s proposal for filling this vacancy (which Soos & Price observed also in 2002). Thus, not surprisingly, the position of chief executive officer may become highly politicized (Soos & Price, 2002). This is why the current mayors have even more control over the administrative/managerial run of the municipal offices than previously and Slovak LGs are thus governed by strong political leaders. At the same time, however, the current LGA says that if the municipal council[3] decides to establish a position of a CEO then he/she manages (leads and organizes) works of the municipal office. Therefore it would be expected that the CEO’s job is a replacement of the mayor’s job in dealing with the management of the municipality. The typical organizational structure of Slovak local governments (Figure 1) supports this hypothesis. However, the degree, to which this replacement is achieved, depends only on the will of the mayor – on the number and type of functions, which he/she delegates to CEO (Malíková, 2000). Because according to LGA the CEOs are fully accountable to the mayors – there is a clear superior-subordinate relationship with a responsive role (Mouritzen Svara, 2002) of CEO, which means that mayors decide what the CEOs do. This power-division, furthermore, means that regardless of what decisions the CEO wants to make, the mayor must always approve them. Yet, such an ambiguous distribution of powers, sooner or later might lead to a conflict of competences.
Figure 1: Typical organizational structure of Slovak local governments
Source 1: Based on Belajová & Balážová (2004)
In order to see the authentic distribution of powers the empirical research is needed. The Local Government Act does not clearly state what the specific tasks of the CEO’s are, nor is there an academic study which would answer this question. Therefore with the purpose of learning more about the actual position and roles of the Slovak CEOs, I decided to revise the internal organizational rules of the Slovak LGs, and simultaneously to expose the personal opinions of the Slovak top municipal officials.
3.Materials and Methods
With the intention of measuring concepts of position and role, Mouritzen’s & Svara’s (2002, p 110) functional model was used. This model contains 16 general functional areas described in Table 1 within which the municipal CEOs are expected to act. The data for the analysis were gained from 2 groups of sources. The first group contains secondary materials such as the Slovak Local Government Act (from the year 2010) and the internal organizational rules (IOR) from a sample of 32 middle-sized (10-40.000 inhabitants) Slovak local governments. This sample represents 64% of the overall population of the middle-sized municipalities. The second data[4]-group contains the in-depth interviews conducted with the CEOs from 9 Slovak LGs. Interviewees come from the same sample of municipalities presented in the first group of data. Chosen municipalities for interviews were: Brezno, Lučenec, Malacky, Myjava, Partizánske, Senec, Sereď, Šurany, and Žiar nad Hronom. The selection of these municipalities was random. Albeit, a requirement that CEOs have to occupy their offices for more than 5 years was applied. The average time for one interview was 38 minutes. The longest lasted 76 min and the shortest 18 min. The interviews were recorded and further transcribed.
Table 1: The functional model of CEOs’ activities according to Mouritzen and Svara (2002)
#1 Formulating ideas and visions / #6 Giving the mayor legal, fiscal, and other kinds of professional and technical advices[5] / #10 Guiding subordinate stuff in handling specific tasks / #14 Solving problems and conflicts of human relationships#2 Promoting new projects in the community / #7 Giving the mayor political advices / #11 Developing and implementing new routines and work methods / #15 Stimulating co-operation between departments,
#3 Attracting resources from external sources / #8 Influencing decision-making processes in order to secure sensible and efficient solutions / #12 Managing fiscal affairs and accounts and maintaining budgetary control / #16 Being informed about the viewpoint of employees
#4 Keeping informed about citizen viewpoints / #9 Developing and implementing norms for the proper roles of elected officials vis-à-vis administrators / #13 Ensuring that rules and regulations are followed
#5 Making sure that resources are used efficiently
By using data from LGA and IORs the formal-function analysis was made, while the interview data was used for an informal-function analysis. The formal-function analysis refers to a technique, by which the data from the formal documents, LGA and IOR, is categorized and later displayed within the functional model. The categorization was based on a content analysis, which contains coding, sorting and sifting of data (Seidel, 1998). The informal-function analysis refers to the same technique, but instead of formal functions the non-prescribed – informal functions are analyzed. Even though Mouritzen and Svara try to focus on the overall performance of CEOs, one of the drawbacks of this classification is that it does not make a clear distinction between formal and informal functions (those which CEOs do, even though they are not obliged to do). Therefore, it is assumed that while analyzing only formal documents, some activities do not come out clearly enough in the model. This is also because IORs usually contain a statement which says that “except prescribed functions, CEOs are obliged to fulfil also extra tasks, which mayors assign them” (see for example IORs from Brezno, Lučenec, or Malacky). Therefore data from the interviews served for completing the gap in the functional model. The interview questions were open-ended. They also searched for the answers illustrating the role of CEOs in LGs. In particular, the focus was given to CEOs' behaviour, expressed by various ways of influence, during the municipal budgeting process. Especially this aspect is expected to have a strong weight in overcoming the impacts of the financial crisis.
4.Data analysis and discussion
4.1Formal functions
Asthe Slovak LGA is very general, local governmentshave a big freedom to define more specific functions for their leading civil servants. Therefore, we can expect that CEOs tasks vary from one municipality to another. The Chart 1 in the appendix verifies this hypothesis. The distribution of functions among LGs within prescribed categories is thus very heterogenic. Some municipalities decided to formulate many specific competences (e.g. in Veľký Krtíš, Lučenec, and Skalica); others preferred to be relatively conservative and thus added only 2-3 tasks to the broad functions stated in LGA (in Revúca, Piešťany, Dubnica nad Váhom). The distribution of formal functions within these categories is described in more detail in Table 2. The categories are in ascending order based on all functions recorded per each category. Each formal function found in a particular IOR represents one record in a certain category. In this way, we can see to which categories LGs paid more attentionto while prescribing individual tasks for their CEOs. Since the aim was to merely describe the overall picture of functions of the Slovak CEOs, the analysis per LGs is not elaborated in this paper.