Managing airports: a test of the new public management

Abstract New Public Management advocates privatization, competition, and managerial incentives as means to achieve the goal of improving the quality of public services. This study draws from literature on market orientation to measure the customer responsiveness of managers of both government and privately owned organizations. Using data from 201 airports, this study examines how managerial market orientation is affected by ownership status, expected privatization, competition, performance-related pay, managerial contracts for nonaeronautical activities, and a number of control variables. We find that market orientation is significantly higher for privately owned airports than for government-owned airports, and that expected privatization and competition increase market orientation. Performance-related pay and management contracts are more frequently found in privately owned than publicly owned airports. We conclude with suggestions for ways to enhance this study, if it were replicated, and consider how this approach could be applied to other public services or industries under mixed ownership.

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