Implications of Organizational Climate and Ethical Leadership on Reengineering in Municipal Government

ABSTRACT For the past two decades, increasing demands have been placed on government to "do more with less. " These pressures have resulted in innovative searches by officials to "find" practical solutions that enhance organizational productivity within stable to declining operational resource environments. Business Process Reengineering has been touted recently by organizational theorists as an innovative method for improving organizational cost-effectiveness, increasing responsiveness to clients, and enhancing service delivery (Hammer and Champy, 1993; Manganelli and Klein, 1994; Linden, 1994; Hyde, 1995). The advent and application of reengineering in government, however, has not been without fierce debate. Offsetting the positive aspects of its utilization, reengineering has been criticized as resulting in dehumanizing workforce reductions and increasing workloads for downsizing survivors. In environments of substantial dynamic change, concern exists for damaging cooperative relationships of management and labor. This study examines survey responses obtained from managers and supervisors in four Florida smaller sized municipal governments. It assesses the influence that organizational climate and ethical leadership have on instituting governmental process changes. The research results indicate a strong relationship between positive organizational climate and successful process reengineering. Less evidence exists to support a similar impact of ethical practices on reengineering outcomes. INTRODUCTION Over the past decade, America's business and industry have been forced to reexamine their organizational strategies, missions, and methods of conducting business (Hammer and Champy, 1993; Janov, 1994; Drucker, 1995; Bennis and Townsend, 1995). Many leading-edge corporations (e.g., IBM, Ford Motor Corporation, General Motors Corporation) have turned to a concept known as Business Process Reengineering. In many cases, reengineering has been effectively employed to lower operating and support costs, improve service delivery times, increase product and service levels, and enhance employee involvement in the attainment of organizational goals (Hammer and Champy, 1993; Hyde, 1995). American governments face similar constraints from their clientele (Linden, 1994; deLeon, 1996). Governments at all levels are being pressured to reexamine their operations. Municipalities, for example, are searching for the means to secure increased levels of service efficiencies within resource environments that are stable at best and often declining in scope (Benton and Daly, 1993). Business Process Reengineering may be an applicable method available to progressive governments seeking to extend service benefits and increase operational efficiencies and their effectiveness for those they serve (Linden, 1994). Moving towards reengineering as a strategy for achieving organizational efficiencies has promising potential. On the other hand, there are also negative consequences associated with these initiatives. When improperly implemented, they may harm the organization's culture and ethical standards. The purpose of this research is to assess the influence that organizational climate and ethical leadership have on the implementation of reengineering initiatives in municipal government. ORIGINS OF THE REENGINEERING MOVEMENT "Reengineering" as a concept emerged in the early 1990s. Often credit is given to Michael Hammer for coining the phrase, business process reengineering (referred to as "reengineering" in this article) based upon his 1990 Harvard Business Review article entitled "Reengineering: Don't Automate, Obliterate. " Reengineering is an innovative strategy used by companies to streamline operations through downsizing and delayering of organizational structures to redesign work processes, forge boundary-crossing partnerships, and enhance the formation of self-managing work teams (Hammer and Champy, 1993; Burstein, 1995). …