New Public Management Strategy and Customer Satisfaction in a Public Utility: The Case of National Water and Sewerage Corporations Uganda

Sylvia Tumuheirwe Alinaitwe; Alfred Okot Okidi; Iva Buljabasic

doi:10.36948/ijfmr.2024.v06i06.30873

New Public Management Strategy and Customer Satisfaction in a Public Utility: The Case of National Water and Sewerage Corporations Uganda

Author(s)	Sylvia Tumuheirwe Alinaitwe, Alfred Okot Okidi, Iva Buljabasic
Country	Uganda
Abstract	This study aimed to investigate the impact of New Public Management (NPM) strategies (Managerial Autonomy, Accountability, International Autonomy, and Financial Autonomy) on the satisfaction of NWSC customers. Additionally, the study determined whether trust was a crucial dimension in driving customer satisfaction. The study was conducted in two phases. In phase one, a qualitative research design was employed to gain information from 30 purposely selected National Water and Sewerage Corporation managers through interviews. Data was analyzed using N-VIVO. This information formed the basis for phase two, a cross-sectional research design to collect data from a systematic sample of 380 respondents using questionnaires. The study revealed a significant positive relationship between service provider responsiveness and user satisfaction. The Pearson's Correlation test static= 0.655 was significant at p< 0.01 level (2-tailed). The analysis shows that higher service provider responsiveness scores go with higher water-user satisfaction scores. This finding suggests that perceived benefits to water users is linked to customer-oriented reforms. Furthermore, the study explored the relationship between responsiveness and loyalty. Pearson's Correlation test static = 0.629, which is significant at the level for a 2-tailed test (prediction), indicates the relationship is positively significant at p< 0.01 level (2-tailed). The results generally indicated that, as service provider responsiveness increases, user loyalty also increases. Loyal attitudes to the water service provider include willingness to change provider if there was the opportunity, rating the amicability of relationships with front-line staff, including managers, and perception of whether the public utility is delivering on its mandate. Furthermore, behavior or loyalty includes a willingness to pay, which is rated as a critical factor for revenue improvement. However, when the study tested the relationship between satisfaction and loyalty, the relationship is negatively associated at p< 0.01 Level (2-tailed), and therefore, the hypothesis is not upheld with Pearson's Correlation test static = -0.537, which is significant at the level for a two-tailed test (prediction). The actual p-value is shown to be 0.000. This implies that the prediction that increased water-user satisfaction would positively influence loyalty does not hold, suggesting that even satisfied water users are not necessarily loyal to the NWSC. Therefore, to attain customer satisfaction, NWSC may not necessarily have to think that satisfaction would lead to loyalty. Clear policies must be in place to continually improve service delivery and enhance the various drivers of loyalty. Keywords: New Public Management; customer Orientation; Market orientation; Customer Satisfaction. 1.0 Introduction Globally, privatization was part of the new policy agenda in the 1990s. According to Aktan (1995), privatization is the sale of a publicly owned enterprise's (POE) assets or shares to individuals or a private firm. This policy was, in part, aimed at enhancing the ability of the global south to pay their debts owed to the northern countries. Other components of the agenda were liberalization and democracy. The assumption was to cut government expenditures and allow private initiatives to thrive. In Uganda, privatization was primarily fueled by the continued poor performance of State-Owned Enterprises (SOEs). By the 1980s, Uganda had become like a punched hole, draining away resources through subsidies from the Government budget. Privatization of state enterprises in the 1990s had become a central feature of the general reform program, placing state-owned enterprises (SOEs) on the market for sale. This came to be known as a strategy for promoting fundamental change. National Water and Sewerage Corporation (NWSC) was one of the key parastatals that was not privatized owing to its strategic importance to the National Strategic Goals (NDP III) and Sustainable Development Goals (SDG 6), which commit to achieving access to affordable, clean, safe drinking water for all by 2030. The corporation was also not privatized because it was already implementing Performance Improvement Reforms (PIR). Otage (2015) asserts that by 2005/2016, NWSC announced plans to start servicing some of Uganda's rural areas; furthermore, the corporation also had plans to connect services to 12,000 villages. It should be noted that NWSC's geographical coverage grew from 236 urban centers as of June 2018 to 258 as of June 2021, with an estimated water service coverage of 78% and sewerage service coverage of 23%. Expansion of the water pipe network also grew by 68%, from an average of 1,273 Km per annum in the period (2015 - 2018) to 2,135 km in the FY 2019/20 There is emerging consensus that poorly performing public utilities need fundamental change to meet increased water demand (Berg, 2008; Ohemeng, 2010; Fine, Ben, and Kate Bayliss, 2008; Shirley, 2002). However, no explicit agreement exists about the most suitable reforms and how they can be initiated and implemented to achieve the desired objectives in different contexts. The ongoing debates on urban water reforms are generally critical of whether NPM-inspired reforms that include introducing customer-responsive water services can improve urban water supply for all rather than just for some. Further, several concerns related to ideological and normative debates try to ascertain whether access to urban water supply should be regarded as an economic, political, or human right. The consensus in these debates could help determine the most viable urban water delivery alternatives (Nickson & Franceys, 2003; McDonald & Ruiters, 2005; Boag & McDonald, 2010). The above perceptions have wide-ranging policy implications for poor water supply that affect people's quality of life and their productive capacity, constraining the achievement of Millennium Development Goals (MDGs) (Wanyakala, 2011). Further, the centrality of water to all dimensions of human activities, like food production, including 70 percent of our bodies, should not be taken for granted. Therefore, ensuring an appropriate water supply, especially in rapidly growing urban areas in low-income countries, inevitably becomes a policy and research priority. The study, therefore, seeks to establish a relationship between service provider responsiveness and customer satisfaction, service provider responsiveness and customer loyalty, and to assess the effect of service provider responsiveness and customer loyalty.
Field	Business Administration
Published In	Volume 6, Issue 6, November-December 2024
Published On	2024-11-22
Cite This	New Public Management Strategy and Customer Satisfaction in a Public Utility: The Case of National Water and Sewerage Corporations Uganda - Sylvia Tumuheirwe Alinaitwe, Alfred Okot Okidi, Iva Buljabasic - IJFMR Volume 6, Issue 6, November-December 2024. DOI 10.36948/ijfmr.2024.v06i06.30873
DOI	https://doi.org/10.36948/ijfmr.2024.v06i06.30873
Short DOI	https://doi.org/

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New Public Management Strategy and Customer Satisfaction in a Public Utility: The Case of National Water and Sewerage Corporations Uganda

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