Strategy For Public Sector Organization - Essay Example

?STRATEGY FOR PUBLIC SECTOR ORGANIZATION Introduction An organization that provides services to general public can be either owned by the gorverment or by private owners. Public organization are managed and owned by the national government, state government, provincial governments as well as municipality governments and are funded by public resources (Bowett 2013). They provide goods and services for free or at subsidized rates. They offer particular goods that is merit goods and public goods that may not be profitable to private owners due to their characteristics and nature of benefits they offer to the general public (Bowett 2013). Private owned organizations are not associated with the Government and include business enterprises, charities, and retail supply chains among others. Merits goods benefits both the individual seeking the services and the general public and the cost is partially met by the individual customers and therefore fit for public sectors and not private sectors for example a flu immunization benefits the customer since the likely hood of getting flu is minimized while it still lowers chances of a flu outbreak to the general public and therefore a public sector offer the vaccine due to both benefits (Bowett 2013). Public goods have two major characteristic. First their utilization is non-rival for Example Street lights are equally used by the public. Second the services and goods are non-excludable for example street lights benefits those who pay for the services and those who fail to pay as well as those who do not pay and it’s hard to exclude the defaulters from enjoying the services. Goods with non-rival and no excludable characteristics can only be provided by government owned organization funded by the taxes we all remit to the government. Public sectors organizations include public utilities, nationalized companies, government owned financial institutions, local authorities institutions, national government institutions and government departments such as finance that allocates government activities, Social Services departments, Trade and Industry department, Defense department concerned with countries security, Health that manage National Heath services (NHS), Education department, public recruitment department, Environmental department and Transport sector (Bowett 2013). This paper will critically analyze how public sectors are managed and why they fail to deliver quality and efficient services despite improved management. Role of public sectors organization Public sector organization plays a vital role in national economic growth. Economic growth of a country is relatively proportion to the growth and development of industries and infrastructures. Small enterprises also depend on the large enterprises as their suppliers and consumers. Development of infrastures and large organizations require huge capital to establish and most lending institutions can readily avail such facilities to public sectors and not to private owned organizations (Haider 2010). Infrastructures such as railways, sewerage pipes, power lines among others requires a huge investments and private owners cannot invest in such facilities that have low return but public sectors can invest in such infrastructural facilities that to provide important services to the public. Infrastructure development helps to attract private investor into a region to provide other profitable service (Mohammed? and Umar n.y, P. 473). Publically owned organization always strive to maintain balanced growth across the region and area of operation by investing in both developed and undeveloped areas thus ensuring regional balances (Haider 2010). Government owned facilities like education institutions and heath institutions are fairly distributed across the national boundaries while private organization concentrate in urban area to boost their profit and minimize operation cost. Sparsely populated areas have higher uncertainty, low number of consumers and negative factors that profit based organizations will always avoid. Publically owned organizations require a lot of employees and recruit many individuals according to their qualifications, skills, talents and experience a cross all business sectors (Haider 2010). Government is considered a good employer offering its employees job security, considerable compensation plans, retirement benefits, medical funds, life insurance and favorable working conditions compared to private employers (Mohammed? and Umar n.y, P. 479). Most goods and services provided by the public sector organization are merit goods and public goods that have benefits across the general public and their costs are ambiguous (Mohammed? and Umar n.y, P. 479). Most public organization provides these services to public without necessarily making profits. Challenges facing public sectors Challenges facing public sectors in United Kingdom Most of the economies in the European region are struggling due to unemployment among its citizens, high inflation rates, high cost of living, high rate of retrenchment, stability in growth and low economic growth (Ross 2011). Public sector organization are funded by the government and depends on current economic trend over a period of time, political factors across the countries, availability of resources such as employees competence and assets as well as demands and expectations placed on it by the public who are its customers. National and state governments in the United Kingdom are faced with challenges in terms of financing sustainable growth of its public organizations and meet public demands. The government should use the available resources sustainably to gain public confidence that their funds are used properly while offering cost effective services (Ross 2011). Hard economic times lead to unpredictable business environmental factors that change frequently. The company management must be dynamic to be able to meet the public expectation during the turbulent times. Capability of the organization to change with the prevailing external economic factors is a dispositional subject and requires the organization and its management to develop a well designed strategy (Schofield 2008, P. 2). Due to globalization and changes in population demands public organization are expected to offer more services and goods that are customers’ need oriented since they are also experiencing good results and services from the private sectors especially in United Kingdom and other western countries (Ross 2011). This is in contradiction to the public sector organization strategy of offering cost effective that have specific standards rather than custom based products. Most public institution are now focused in offering two types of products that are basic and standardized services and customer oriented services that focuses more on the customer needs at an extra cost (Ross 2011). The population in specific areas is also changing and government has to deal with unemployed population, unequal representation in government organization in regard to age, gender and disability, old age population and uneducated population. According to Schofield (2008, P. 3) citizens expect personalized services from public organization as they are not satisfied with the standardized serviced that most government organizations offer to all members of public who have different needs. The major challenge to the public sector is to change from goods and services that are standardized in nature to more flexible products that meets the individual needs of the members of the public who fund their operation through their taxes. Public organizations have for all time offered services to individual with different needs but personalizing their services has always been a greater challenge especially to the cost implications as well as the large number of people seeking their services on limited resources (Schofield 2008, P. 2). Funds to the public organizations are limited due to tough economic times currently being experienced by cost European countries. Due to low purchasing power and high cost of living most citizens are seeking services from less expensive government facilities. This has increased public goods demand with financial constrains and thus the organizations have to deliver more services with relatively low resources as compared to private owned organizations (Ross 2011). There is therefore need for more cost effective strategies and effective management practices. The nature and culture of government organizations does not support efficient management under constrained resources but this is necessary as the public is currently depending on their services. Cultural practices within public sectors have not been transparent and effective. For an organization to successes in current economic down turn they have to adopt new organizational culture that support transparency, analytical decision making process and a decision making process that involves all the stakeholders(Ross 2011).. The companies must also adopt organizational practices that support all the employees despite their differences in terms of cultural back ground, religion and beliefs, sex, physical ability, race, skill, talents and experiences. The diversity among the staff if properly tapped can help in building a strong organization where individuals fell appreciated and perform well. The public institution should term into potential and ability of experts who are employed from private sector and manage the employees who a not ready to embrace changes. The government organization needs employees who are team players, creative and who work to towards the organizational goals (Ross 2011). Public organizations suffer from poor management. Effective management is a crucial element of any organization (Ross 2011). The managers need to introduce new management structures that pay emphasis on results while still focusing on the cost effective measures. There is need to implement effective practice in fund management, data management, proper management tools, use of latest technology, absentee management, report filling and customer services (Ross 2011).organization needs to have external managers and auditors who ensure use of proper management tools in the organizations. They are need also to employee qualified experts in finance departments to ensure proper use of the available limited resources. Professional financial experts should implement strategic planning process, recognize economic risks and opportunities and come up with cost effective management options Strategic management The new trend in the management of public organizations is delving much into a balanced score card paying attention to vision and strategy oriented results neglecting control with the assumption that people will embrace necessary personal tendencies and act towards the realization of the targeted goals. Organizational leaders have realized their organization’s dimension systems have disruptive effect on the managers and employees and that what you measure is what you get (Kaplan and Norton 1992). Organization decision makers have noted that traditional way of doing things may result in misleading indicators for a constant improvement and innovation in modern competitive world. Financial measures are prioritized by some senior management in measuring performance systems while others consider improving operational processes to induce good financial measures as a priority. In embracing a balanced scorecard, managers bet an opportunity to focus on the business at four dimension perspectives. This four are; customer perspective which focuses on how customers see the organization, second is the internal perspective, which a self evaluation of excellence (Kaplan and Norton 1992). Thirdly is the innovation and learning perspective, a motivation to improve by creating value and lastly is the financial perspective which focuses on image portrayed to the share holders. This way senior managers acquire information from distinct perspectives and this balanced scorecard lessens overflow of information and ensues that only measures that are critical are attended to while more measures are added as required or if new ideas arise. The integration of scorecard into public sector management and the private sector has proved that many managerial needs can be met since the scorecard bonds together in single organizational assessment report, almost all elements of an organizations competitive strategy, with customer oriented goals, response time, and improving quality while putting emphases on teamwork (Kaplan and Norton 1992). The U.K has assumed a centralized target approach in the management of public service and public sector is not spared in this new trend of management and it is clear no single measure is conclusive in providing a lucid performance target where leadership anticipates a balanced perception in weighing financial and operations assessment in delivery of services. New performance targets in the United Kingdom were tied to budgetary allocation in all sectors of the public sector where performance indicators were set based on headline targets fragmented into detailed lower level targets (Hood 2006). A look into the National Health Service (NHS) shows that ten top- level targets were fragmented into 300 lower level targets to be attained by the various health delivery organizations within the public sector. Public health delivery institutions and hospitals were rated according to performance in a star- rating scheme based on targets where non performing managers could lose their jobs. The setting up of a crack unit under the direct command of the prime minister, called the Prime Ministers Delivery Unit (PMDU) which comprised over 35 senior staff members to monitor the performance level of sectors considered to be politically important was a trend in public management previously not tried. This crack unit dedicated its resources to persuade, cajole and in finding solutions to assist slow performers in reaching their targets (Hood 2006). Most of these targets worked well and results are evident but not without missing some points where these improvements cannot be fully attributed to the set targets and other unpredicted changes within that time especially in the education sector and health sector. Anticipated funding in these sectors was exceeded and there is no prove that increased funding influenced the outcome especially in the NHS where reported performance was good in domains of less funding like the hospital emergency rooms. The controlling partnership of the PMDU in monitoring the heath care services where a four hour waiting target for emergency rooms in hospitals having no incentives for patients to wait lesser hours contravened market discipline and sometimes the official targets set had to be ignored and new unofficial guidelines are applied to mitigate scenarios that might cause political embarrassments (Hood 2006). The set target by the UK public health sector policy makers was set at reduction of number of patients waiting for surgical operations to be reduced can be attributed to other changes not fashioned in the targets. To quantify above factors one has to consider gaming and strategic behavior that surround target systems like social planning, accounting systems, management of corporate entities and economic. A major type of gaming and strategic behavior is the ratchet effect of which normally the target setters fix oncoming years target on an incremental scale over the preceding year’s results leading to deliberate under performance by the line managers to below their production capabilities so as avoid higher targets being placed on them (Hood 2006). The other behavior is the threshold effect in which a uniform productivity target is applied to all units in an organizational system giving no incentive to perfection and innovation and this induces top performers to work below per in quality and quantity to just conform to the set standards of the target (Hood 2006). The third type of behavior is the output distortion famously known as the hitting the target and missing the point where reported results are manipulated to fit the desired target. Factoring these behaviors and their effect on the UK’s public sector, there is a balance of probability level where by a significant difference in recorded performance based on targets was noted, especially in the initial stages of introduction. Noteworthy to consider is the perception of the general public who thinks that government statistics are incorrect. This is in regard to performance levels over waiting lines in emergency rooms of U.K. hospitals (Hood 2006). There is an inexplicable variation in call loggings for ambulances where a target of 8 minute response time was set for category A calls and evidently records were manipulated to meet the less than eight minute wait time (Hood 2006). This clear evidence of inconsistency between reported and actual compliance in which target systems relied upon reported data from the organizations under scrutiny. This all indicates to the gaming behaviors of ratchet effects, output distortion and threshold effects. Conclusion Public organizations are crucial to economic growth in any country since they provide basic services and goods for the general public despite the economical return to the economy and the organization. These services may not be profitable to the private sectors and therefore most private owned organization avoids them. Previously most public organizations were faced with several challenges such as funding, poor management, poor services, and discriminatory cultural practices among others. In recent times most organization has changed to adopt new strategy to improve their service delivery and competitive advantages. However there is need use more management tools and conduct intensive analysis of internal and external environmental factors that affect their service delivery to ensure that their strategy are effective and improve their management since lack of proper analysis has turned out tragic rather than beneficial. References Bowett, R 2013, ‘organization - public sector organizations’ tutor2u Viewed 8 May 2013. Haider, MJ 2010, ‘Importance of public sector. India study channel articles. Hood, C 2006 ‘Gaming in Target world: The Targets Approach to Managing British Public Services’, Public Administration Review July/August, pp. 515 – 521. Kaplan and Norton 1992, ‘The Balanced Scorecard’ Harvard Business Review. Mohammed, J and Umar, S (n.y), ‘ The Role of Public Sector in the Economic Development of Balochistan’. The Dialogue 473 Volume III, Number 4 Ross, L 2011, ‘Public sector performance: A global perspective’. Chartered Institute of Management Accountants. London, United Kingdom Schofield, CP 2008, ‘Key challenges facing public sector leaders: themes from the Ashridge Public Leadership Centre essay competition 2007’.The Ashridge Journal Read More