Question N: 01
After the complementation of this course, you are required to evaluate the contribution of public organizations in the development in a country (you may use a particular country as an example).
How far have the public organizations managed to fulfill the various and conflicting needs of the society? Cite concrete examples to strengthen your arguments.
Answer N: 01
Public organizations are fundamentally different to their private sector counterparts. They have numerous functions, follow a political leadership, and the majority does not operate in an external market. Their goals are to achieve people needs and give service to them. But these goals are not easy to achieve because of the conflict of interest and how hard is the determination and the size of people needs and the widespread of the globalization and the market influence. However governments can't include all public requirements, that lead more efforts for public organizations improve their effectiveness.
Public organizations are intended to better manage the general interest in the area
is their own (eg the purpose of a municipality is to satisfy the needs of the population, the purpose of the army is to defend...).To do this, they make utilities non-commercial.
Public organizations play a crucial role in the development of the nations because it is the pillar for the political security and provide the stability and continuous of the ruler prevailing in such country, however there are numerous goals and efforts played by the public government such as:
1- Protector: rules and regulations, laws, institutions, armful forces…
2- Provider: information, goods, services, welfare…
3- Stabilizer: security…
4- Redistribute: taxes…
Countries define national goals but they are not easily translated into managerial functions: providing for the common defense, insuring domestic tranquility, uplifting the national spirit, or even eliminating the scourge of poverty. Programs are introduced and organizations installed in the name of such purposes, but the managers emplaced to run them tend to think in more operational terms. They have to manage activities that are instrumental to those ultimate purposes; they have to play huge efforts for organizational existence.
The contribution of the public organizations in the development of a country:
Public organizations have huge influence on the development of the country while increase the people satisfaction by providing the governmental programs and many services those nations need, we summarize this contribution in the following statement:
1. Public goods: public organizations provide goods for public that can everyone benefit for the entire of the society, this goods play crucial role for the development and increase the trust of citizens that lead to more security and stability for the nations. For example of these goods the welfare provided the government for the people, this incentive produce development and reduces poverty in such country,
- Education: it is the pillar of the development that provided by the government that produce the human educated capital who lead nations to development, however many countries investigate in this field such as U.S.A.
- Security: countries who are in security are more developed than the insecurity countries because security attract the national and the international investigation and international currency that increase the GDP of the country.
- Human rights: nowadays, people struggle for their human right to achieve the human life requirement such as freedom of speech, media, and many issues concerning this dilemma, public organizations provide this rights for the citizens to produce the transparency and involving in decision making that lead to increase the people trust and participation in the political life of the country and the development of its enterprises. the importance of the employment in the development of the country, for example in Algeria the organization of the employment increase the number of employees in 2010.this lead to reduce the joblessness and the level of the poverty in the country.
- Justice: public organizations establish huge rules and regulations to achieve the equality among the citizens and establish the stability that lead to the development of the country.
- Subsidies: public organizations promote subsides for the citizens by many programs, to enforce the economy of the country and create new employees.foe example in Algeria the organizations of the reinforcement of the youth promotes new programs by facilitate the investigations and increase the choice of the jobs, this lead to develop the infrastructures and reduce the poverty among the people.
2. Introducing a new service or program: by establishing a manufacturing unit to increase the foreign investisments that achieve financial resources. Also build new infrastructure to promote and increase the facilities for the citizens.
3. The analysis of long-term economic and social development: by concentrates on comparing developments in different countries, regions and historical periods in order to gain a better understanding of the factors that have long-term effects on the dynamics of socio-economic development.
4. Raising standards of products or services provided: by focus on the international standards of productivity and use technology and the human resources management.
5. Changing rules or procedures to be more responsive to the needs of the clients: the change of the external environment lead the organizations to enact new policies and regulations to achieve the new environment and public needs particularly with the development if the information technology and the globalization to reduce the impacts of the international crisis, as a result it create a safe characteristic to the development of the country and avoid the dangerous disasters.
6. Developing a local capability without used much external resources: by improving the national recourses and be dependent to the external resources to reduce the import of services and goods, for example our country Algeria has huge natural resources and crucial geographic
Place among countries that lead it to involve all natural recourses and export to other countries and increase the development and the citizen's standard life.
7. The performance: public organizations perform its goals as well and serve much people that lead to the development of the country.
8. Reduce costs: the task of the public organizations is give services without any benefits such as security and freedom and welfare.
The assessment of the functions of the public organizations
Public organizations around the world found huge barriers and obstacles to achieve the goals that have planned for, because of the conflicting interests of the people and the numerous needs that conflict with the interest of the elite groups and the political themselves. And right now the scholars and the policy makers try to establish new policies that satisfy the majority of people, but this satisfaction is almost not exist among the people and not achieve the people needs, however, public organizations still seem poor and not efficient compared to the private sector counterpart that shows more capacities and efforts to serve people in all level of management (motivation, leadership, innovation, training, communication…)
In addition, the political influence, the pressure groups and the hierarchical system of the public organizations lead to the poor management and poor service also; even the widespread of the ideas of the new public management but it still work in bad manner, poor leadership, poor motivation, poor communication...etc
On the other hand, the task of the public organizations is to give services to people, and the organizations is just a tools of the wealth of people but with the dominant of the market principles, that's why the public organization found these obstacles to fulfill all the needs of the citizens particularly in the issues of the taxations and welfare, for example if the government seeks to increase the taxes for the industrial companies to achieve certain goals or increase the governmental incomes, is it fair to those companies to pay these taxes and help the government?
This is kind of conflicts of the interests that impede the public organizations to achieve its goals,
In contrast when the government seeks to help these companies by fund it will use the taxation also to the people to pay for them, this one also create another conflict to achieve the goals that planned for.
Obviously, public organization's conflict appears in all levels of government because of the larger of their clients and the variety of the needs, for example, in the task of the privatization of water or electricity who will be the victim? Absolutely is the citizen, and the masses because the privatization needs extra payments and more profits that burden the life of the people, but the another question is how the government could get the recourses and the fund? This is also another kind of conflict that faced by the public organizations.
After all of these factors that we mentioned above, we can't ignore the role of the public organization to fulfill the needs of the citizens and increase the stability in the country because we can't imagine a country without its organizations because if it let the market and public sector manage the services in the country as a result the government lost its control over the country,
And surveys have done by many scholars' shows that even the widespread of the private sector but the citizen still trust their governments and find fundamental support for a strong governmental role.
Public organizations play a crucial role to the development of the nations regarding to the huge services and the facilities to the citizens, but it has to be more efficient and obtain the principles of good governance to achieve the main goals and avoid the conflicts of interest, on the other hand learn from the private sector in the fields concerning the motivation, leadership, innovation and training.
Political groups also must reduce the influence and the impact of the hierarchy system to make it more dependent in decision making to achieve the main goals.
Question N: 02
“There are significant difference between the public and the private sectors” there are two (2) conflicting perceptions regarding the statement. Discuss both perceptions. Elaborate on your inclination toward one of the perception.
The Answer: 02
Does the public sector differ from that in the private sector? Most of the research evidence relating to this question suggests split to two significant perspectives. Nonetheless, the studies in this area are limited, the first perspective includes the scholars that agree that there is really different between the public and the private sector, on the other hand the second perspective paradoxically contend that there are no distinction between the public and private sector. This issues turn to the debate about the meaning and importance of the distinction, if there is not distinction between them, so, the question that we should to answer is: why do public organizations exist?
The functions of both public and private sectors seem common but when we begin to consider the relative importance of these functions and how they manifest themselves in real-life situations, significant differences emerge.
I. The first perspective: the public and the private sector are similar
Many authors caution against the focus on the distinctions between public and private sectors such as Bozeman, (1987), Murray, (1975), Simon, (1995, 1998), according to them, objections to such distinction deserve carefully attention because they provide valuable counterpoints to invidious stereotypes about government organizations and the people who work in them. They also point out realities of the contemporary political economy and raise challenges that we must face when clarifying the distinction.
These distinctions also pose intellectual dangers: oversimplifying, confuse, mislead, and impede sound of theory and research that seeks to develop knowledge that will applicable to all organizations by emphasizing on the commonalities among organizations.
However, the scholars asserted that their ideas and theories applied to both public and private organizations. Best evidence of this statement is what Max Weber claimed that his analysis of bureaucratic organizations applied for both government agencies and business firms. On the other hand, Frederick Taylor applied his scientific management procedures in public organizations and such techniques are widely applied in both public and private organizations today.
Simon (1995) argues that there are more similarities than differences between public and private organizations because they are equivalent on key dimensions, for example, the capacities of leaders to reward employees. He states also that who believe that the private sector operates more efficiently that the public sector is simply false (Simon, 1998); in addition the organization theory clearly assigned relative unimportance of the distinctiveness of the public organizations.
The contingency theory downplays any particular distinctiveness of public organization and argues also that public and private organizations have more similarities than differences.
The following investigations prove the realities of the statement that the public and the private sector are similar:
1. Empirical researches:
Major studies have failed to draw a distinction between public and private sector, studies have done by Hass, Hall, and Johnson (1966), to measure characteristics of a large sample of organizations, and the results show categories included both public and private organizations. Hinings (1969), have studied 58 organizations and classified them into categories based on their structural characteristics, he found no differences even he predicted that the public organizations would show more bureaucratic features.
2. The blurring of the sectors:
The leading figures of this trend both sectors overlap and interrelate in numerous ways (cooper, 2003), (Haque, 2001), (Moe, 2001). And the following arguments support this trend:
2.1 Mixed, intermediate, and hybrid forms:
The governments around the world designed new forms of organizations of a commercial nature, state owned enterprises, government corporations and government sponsored corporations. Such in my country Algeria the organization of SONATRACH, it's a government firms with a commercial trend. This kind of organization operate more independently than government agencies, the U.S.A also perform this system of organization such as the U.S Postal Service, the Resolution Trust Corporation and so on. However a number of governmental organizations tend to have relative independence from the regularity control and use their resources to support their activities.
On the other hand, the similarities can observe among the functions of the organization, while some private organizations work with government in ways that blur the distinction between them, and receive the funding and direction from the government, and the same case for the public organization which trend toward commercialization, as a result it change their functions that it stand for.
2.2 Functional analogies:
The widespread of the New Public Management in recent decades lead the governments to perform like the business and the private sector do their activities in the level of management, motivation, leadership, information technology and so on. That means government and business organizations are used similar techniques.
2-1 Complex interrelations:
government agencies and business interrelate in numerous ways, government buy many products and services from private organization, through contracts, grants, voucher, subsides, and franchises, there is many examples concerning this case prove that business become part of the service delivery process for government programs and further blur the public-private distinction.
2-2 Analogies from social roles and contexts:
governments provide laws, regulations and fiscal policies such as environmental protection regulation, tax laws monetary policies to influence private organization, as a result it affect the quality of life in the nation and the public interest, also it share in the implementation of public policies. However many private organizations serve their communities and the well being of the nations like the government organization do. On the other hand many public organizations behave like the private organization in the area of misuse of the authority by the interest groups who hold the government organization.
II- The second perspective: the public sector differs from the private sector
Scholars leading this perspective have asserted that there is a significant difference between the public and the private sector; they believe that if there is no difference then can we nationalize all industrial firms, or privatize all government organizations?
To investigate this perception we have to support the idea of both political and economic theory
* Politics and markets:
According to this theory the governments can't serve all the need of the nation, so it let the market and private sector deal this needs and induce consumers to attract with them. However markets have a limited power to treat type's governmental problems such as
Ø Public goods and free riders, when individuals have the incentive to act and let others pay, so government imposes taxes to pay for such services.
Ø Individual incompetence.
Ø Externalities or spillovers
On the other hand the government to solve the problems that create by the market, and its change. And also provide crucial services that are too risky for the private sectors. In contrast the economists argue that the market could solve many problems compared to the interventions of the government, and the private sector performs much better than the public sector.
· The political rationales for government:
According to this theory, the government provides many services for citizens but these services are the influences of the demand the interest groups. Obviously the public organizations are limited to certain functions because they provide services regardless the exchange of the economic market and they just focus on what the political and interest groups want.
· Agencies and enterprises as point on a continuum:
theorists have found continuum kind of organizations, enterprises (commercial task) and agencies (public task), there are numerous differences between them, however the enterprises focus on the pricing system and production costs compared to agencies which have trouble concerning the spending and revenue because of the legislature's control.
* Ownership and funding:
Organizations can be owned by the government or private, while the private can receive funding from government, in similar, the government agencies can receive funding from the private sources. This means that there are two categories of organizations public and private.
* The characteristics:
Theorists in this field assert that there are critical differences between the two sectors even the blurring of the distinction; they mentioned huge arguments support their idea; we can summarize it in the following:
Ø The public organizations don't sell their outputs in economic markets compared to the private organization. Hence, the services provided by the market are weaker in the absent of the government while we can't imagine market's service without the support of the government and its laws and regulations.
Ø The public organizations are more monopolist and wide through the people because its task is for the benefits of the people compared to the private sector which focus on its benefits.
Ø Government uses its power to impose external control of procedures, this difference concerning the attraction with the external control while public organizations have more political influences that lead to affect the production of goods and services that will be not valued at a market price. On the other hand they cause more rigid hierarchical arrangements and centralized rules for personal procedures, budgeting and procurement, that lead public managers get less decision making while they compliance to the higher authority and they are not authorized to refine their organizational task that can not directly linked to a legislative or higher authority executive mandate. Unlike the private counterparts have.
Ø Public personnel attitudes, values, needs are differ from those in the private sector. Obviously, public employees are lower motivate, monetary incentive, rewards and satisfy than those in the private (Perry, 1996, 2000, Houston, 2000).
Ø Private organizations operate more efficiently than the public organization because of the constraints, the rigidity and the centralization of the decision making.
Analysis my own trend
The widespread of the privatization and the principle of ruling the government like a business, lead to clarify the distinction between the public and the private sector among the scholars and even the people who look to the private sector as a profit sector, however, the choice of the market and the privatization is unfortunately applied to manage our services despite its high costs also despite its efficiency on the other hand that the majority of the people agree with it.
Angry criticisms focused on the governments with the implementation of the concept of privatization because of the extra costs that the people must pay for, but the problem regarding this issue is who determine our choices, the market or the policy makers? And to what extent they can serve us and represent our needs?
Obviously, based on the arguments that we mentioned above, I support with the distinction with the both sectors but in limited extent, because we don't have choices with the widespread of the market even it shows more efficiency in delivering services to the people, because we are in the time of the speed and needs cut the red tape of the government and get services in short time, on the other hand, in the absence of markets makes public sector is more bureaucratic, inefficient, change - resistant, and susceptible to political influence.
The widespread adoption of new public management policies and practices in recent decades, however, increases the blurring of distinction between the public and private sectors, by the application of private sector managerial approaches to the delivery of government services. Increasingly, the public sector has been described using the metaphors of the market and calls for operating "government like a business." If such private sector models can be applied directly to public organizations, then surely the public-private distinction is "essentially obsolete.
Nowell, G. (2009). Public Vs Private Managers:. Journal of Business & Economics Research .