Analysis of Competition in Public Sector - Research Paper Example

Analysis of Competition in public sector Table of Contents Introduction 3 Research Question and Objective 3 Literature Review 3 Research Methodology 4 Data collection 4 Sampling technique 5 Data collection instrument 5 Research philosophy 5 Research approach 5 Research strategy 6 Ethical implications of the research 6 Analysis of questionnaire 6 Analysis of findings 7 Evaluation of the research and future scope 9 Conclusion 10 Reference list 11 Bibliography 12 Appendix 13 Introduction The effectiveness and efficiency of public sector is pivotal in national development of any country. Public sector development activities include sectors such as, education, transportation, taxation, construction, industrial development, power and so on and so forth. Public sector of any country is considered to be its largest employer as well as spender (Helsley and Strange, 2000). Research Question and Objective What are the factors that result in increased competition in public sector worldwide? Literature Review The growing competition in public sector is the result of extreme criticism faced by the national government in early 1990s about services and performance. According to the public choice theory, low competitiveness in public sector is associated with bureaucratic control under which it operates. Earlier, the reward system was not influenced by performance and large discrepancies were observed in cost-output relation. The public choice theorists further argued that public bureaucracies are extremely slow in their activities and unresponsive to consumers (service users) (Heeks, 2002). The principal-agent theory argues that general public (as principals) is unable to hold bureaucrats and politicians (as agents) accountable for their activities due to information asymmetry, incomplete contract of employment and inability to supervise. According to Thiel and Leeuw (2002), the reason behind underperformance of the public sector is involvement of state officials in pursuing their short-term personal interests over that of the public. They also revealed that greater importance given to self-interest by officials led to performance paradox. The principal agent theory further suggested that solution to public sector discrepancies can be achieved only through increased competition. According to Hartley (2005), innovation is the key to competition in public sector. The innovation can be in the form of community governance, networked governance and collaboration innovation. It has also been observed that innovation is the only component that distinguishes public sector from private sector companies. It was argued that it is tricky to derive accountability and better performance from public servants because of monopolistic nature of the services. According to Kelly, Mulgan and Muers (2002), cost efficiency and creation of social well-being result in complicating competitiveness of public sector. There are several instances where individuals do not seek to replace their public service providers with such. The authors explained that there are three form of value creation that defines public sector: services, social outcome and trust. According to the authors’ observation, growing competition can result in betterment of these services. Growing public criticism and economic and social pressure brought about introduction of the New Public Management (NPM) model. It demonstrates various reforms that are necessary for improving competition in the public sector. Few of these reforms are redefining and reshaping the role of government, repositioning and restructuring organizations, changing and improving service delivery design, enhancing performance and accountability by reframing the system, and strengthening capabilities of available human resources. The main elements of NPM models are introduction of market and quasi-market type mechanism to stir competition among public service providers, contracting service facilities, decentralization of management, and change in employment relations and putting greater emphasis on quality and customer orientation (Barzelay, 2001). Research Methodology Data collection Data collection plays an essential role in a research. Data is pivotal in an exploratory research as it helps in determining validity and reliability of research results. In this research, data will be primarily collected through questionnaire method. The researcher intends to host an online questionnaire survey to gather data related to research objective. Keeping in view the convenience of researcher to analyze data, close-ended questions have been included. The data were obtained from 100 members of Barclays in United Kingdom. Sampling technique Sampling is a crucial part of research proposal as it determines the method of data collection. Different sampling techniques are applied depending upon the nature of research. In this paper, information regarding performance of public sector and need of competitive spirit therein can be obtained by applying random sampling method. Simple random sampling will be appropriate as public services are availed by general public, who are random individuals. Moreover, simple random sampling method also ensures reduction of biasness in the process. Data collection instrument Public sector is a vast arena for conducting research. Hence, a single data collection instrument can prove insufficient in gathering the required data. The researcher has referred to various journals and books regarding changes in public sector and growing competition in it. These secondary data sources have been used in literature review. For primary data, the researcher has selected close-ended questionnaire method as it has wide coverage and close-ended questions ensure availability of non-ambiguous information. Research philosophy The researcher in this paper has employed descriptive research philosophy. The reason for considering this philosophy was to have a better understanding of the picture associated with public sector through subjective interpretation and intervention. To answer the research question, it was necessary for researcher to collect information from participants without providing them with artificial scenario. Through descriptive analysis, the researcher aims at comprehending individuals’ perspectives towards improving competition in public sector. Research approach The researcher intended to devise a theory on basis of the insight gained by him after studying all observations. For this purpose, the most suited research approach is inductive approach. It is also known as theory building approach, where the researcher enumerated various factors responsible for increasing competition in public sector and based on his findings, had developed a relevant theory. Research strategy The researcher has selected non-experimental research strategy in this research paper, where he would observe and study individuals’ attitude towards competitiveness of public sector in their natural habitat or comfort zone. Furthermore, the researcher has taken into consideration the perspectives of ethical conducts. As a result, the research strategy of this paper was a simple framework, which helped to materialize every aspect of research design and rendered the research successful. Ethical implications of the research Prior conducting primary research, approval has been obtained from the module tutor. A number of ethical factors have been considered by the researcher to protect the rights of research participants. The researcher has confirmed that there would be no such situation that may harm the participants in future. The research will be conducted only after obtaining informed consent from them. Moreover, the researcher would not coerce any individual for taking the survey so that code of voluntary participation is not violated. The researcher will be responsible for maintaining confidentiality about identity and location of the participants. The participants will remain anonymous during the course of study. Analysis of questionnaire The questionnaire was prepared by the researcher and uploaded on internet for data collection. The questionnaire comprises one open-ended question and four close-ended questions, keeping in line with research proposal requirements. Another aspect of this questionnaire is that the result can be classified on the basis of age group as individuals belonging to different age groups utilize separate services. The questions of the questionnaire are based on various challenges the public sector leaders are facing, such as, technological innovation, growing expectation of individuals, citizen empowerment and changes in business environment. The open-ended question was used to understand whether the new reforms in the public sector are acceptable to general public. Further the researcher has used likert scale to improve the quality of data obtained through questionnaire. The survey was conducted on a sample of hundred individuals. The findings of the survey have been discussed in the next section. Analysis of findings The findings of the research have been represented through pie chart and the data has been represented in the table. The data analysis method that was employed by the researcher was percentage analysis. Table 1 (Source: Author’s creation) Figure 1 (Source: Author’s creation) In the questionnaire survey, 50% participants agree and 40% of that strongly agree with Heeks (2002) that with increasing competition, improvement can be brought in in the public sector. There were only a mere 10% of people who disapproved the statement.The data has been exhibited in figure 1 and table 1. Figure 2 (Source: Author’s creation) Figure 2 demostrates that technological innovation and increased expectation are the main reasons behind increased competition in the public sector. It was observed that 60 percent of the participants strongly agree to the statement, while 25 percent agree to it. Hence, it can be said that the observation is consistent with statement by Hartley (2005). Figure 3 (Source: Author’s creation) Figure 3 represents the opinion of participants regarding effect of bureaucracy and power centralisation on performance of public sectors. The data gather from the survey shows that majority of participants agree and strongly agree (33% and 57% respectively) with the statement that bereaucracy and centralisation of power has a negative effect on the performance of public sector as stated by Heeks and Thiel and Leeuw (2002). Figure 4 (Source: Author’s creation) The importance of citizen empowerment and changing environment in public sector industries have been represented in figure 4. It was observed that about 75% of the participants agree and strongly agree that citizen empowerment and environmental change are necessary to grow competition in public sector. This statement has been supported by almost all the authors as well as by the new public management model. Evaluation of the research and future scope The accuracy and comprehensiveness of the research results have been tested for reliability and validity and it was observed that consistent outcome has been produced with respect to research requirements. In this regard, inter-rate reliability and internal consistency reliability test along with formative validity test were applied, which showed that consistency has been achieved throughout the analysis and same result can be expected from other sample sets as well. Until now, little research has been conducted in this regard, which accounts for the limited availability of secondary data. Moreover, further analysis can be conducted with more number of samples to draw better inference. All these reasons reflect that there is a large scope for future researches on this subject. Conclusion Public sector is a vital part of any nation as it employs majority of the population and moreover it has the greatest contribution in the nation income and gross domestic product of the country. A nation is extremely reliant on its public sector. In the 1990s, the public sector of a number of nations faced huge criticism as bureaucracy and personal interest was overpowering the sector and the competitiveness of the sector was questioned. The main purpose of framing this research was to understand and determine the factors that affect competition in public sector. The literature review comprises certain theories proposed by various authors and effort has been made to determine the relationship between these theories and empirical findings by the researcher. The findings show that these theories have practical implication and consumer empowerment, technological innovation and greater expectation does affect competitiveness of public sector in positive manner. Since a little research has been undertaken in this regard, there is a huge scope for future research in this sector. Reference list Barzelay, M., 2001. The new public management: Improving research and policy dialogue. California: University of California Press. Benington, J., 2011. From private choice to public value. Public value: Theory and practice, pp. 31-49. Domberger, S. and Jensen, P., 1997. Contracting out by the public sector: theory, evidence, prospects. Oxford review of economic policy, 13(4), pp. 67-78. Haque, M. S., 2007. Revisiting the new public management. Public Administration Review, 67(1), pp. 179-182. Heeks, R., 2002. Reinventing government in the information age: International practice in IT-enabled public sector reform. London: Routledge. Helsley, R. W. and Strange, W. C., 2000. Potential competition and public sector performance. Regional Science and Urban Economics, 30(4), pp. 405-428. Kelly, G., Mulgan, G. and Muers, S., 2002. Creating Public Value: An analytical framework for public service reform. London: Strategy Unit, Cabinet Office, UKD. Kernaghan, K., 2000. The post-bureaucratic organization and public service values. International Review of Administrative Sciences, 66(1), pp. 91-104. Lane, J. E., 2000. The public sector: concepts, models and approaches. CA: Sage. Thiel, S. V. and Leeuw, F. L., 2002. The performance paradox in the public sector. Public performance and management review, 25(3), pp.267-281. Bibliography Brown, K., 2004. Human resource management in the public sector. Public management review, 6(3), pp. 303-309. Le Grand, J., 2007. The politics of choice and competition in public services. The Political Quarterly, 78(2), pp. 207-213. Schedler, K. and Proeller, I., 2011. New public management. Texas: UTB. Vining, A. R. and Boardman, A. E., 1992. Ownership versus competition: Efficiency in public enterprise. Public choice, 73(2), pp. 205-239. Vogelsang, I., 2002. Incentive regulation and competition in public utility markets: a 20-year perspective. Journal of Regulatory Economics, 22(1), pp. 5-27. Appendix Questionnaire Code age: 15-25 years 25-35 years 35-45 years 45 years- above Do you think public sector services can be improved by increasing competition in the sector? Agree o Strongly agree Disagree o Strongly disagree Do you agree that technological innovation and increasing expectation can result in increasing competition in the public sector? Agree o Strongly agree Disagree o Strongly disagree Do you agree that citizen empowerment and changing environment is responsible for growing competition in public sector? Agree o Strongly agree Disagree o Strongly disagree Do you think bureaucracy and centralisation of power is responsible for poor performance of public sector? Agree o Strongly agree Disagree o Strongly disagree Do you support the concept of ‘New Public Management’ model? 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