Private Sector Accountability Versus Public Sector - Literature review Example

Can private sector accountability mechanisms be applied effectively to the public sector? Name Professor Institution Course Date Can private sector accountability mechanisms be applied effectively to the public sector? Accountability is an aspect that has been debated in every sphere of life. In governance and ethics, accountability has been described as blameworthiness, answerability, and the anticipation of account-giving (Ebrahim 2005, p.61). In the context of governance, accountability has been key to conversations linked with challenges in public sector, private (corporate) and non-profit worlds (Ebrahim 2005, p.62). This element goes beyond accounting for a person’s action, but includes making right decisions, able to justify them and agree to suffer punishment in case of ultimate misconduct. The governments normally needs accountability in its institutions to serve the public better. Aucoin & Heintzman (2000, p.47) claim that in the absence of it, the public loses confidence on the government of the day. On the other hand, there are individuals who run parallel organization on a private basis and provide better service. These individuals maintain accountability to ensure that clients do not lose trust in them. Based on this information, this essay argues that private sector accountability mechanisms can be applied effectively to the public sector. Some of the mechanisms that can be used by public sector includes creating capacity, having the right components and structure, creating a sense of ownership, establish an effective leadership, using rewards and benefits, code of conduct and conducting monitoring and evaluation (Acar, Chao & Kaifeng 2008, p.7). The private sector also called the citizen sector, and is run by private persons, people or groups, normally as a way of profit enterprise, and is not run by the government (Haufler 2013). This comprises of each business controlled by any person, from small organizations to multinational companies. On the contrary, the public sector implies to the segment of the economy which provides basic state services. The public sector composition differs by nation, although in most nations the public sector consists of services such as military, police, public transit, public roads, healthcare and primary education (Haufler 2013). Both sectors provide services. However, it is the level of services that they provide that differs. Ackerman (2004a, p.450) claims that governance and accountability has become a hot subject in organization boardrooms for almost a decade — and it is has even become of great concern because of the recent business scandals such as the Enron, WorldCom, Nortel, Bre-X, etc. Public are seeking for higher degree of accountability and transparency in all sectors of business. However, Public sector is run by a lot of stakeholders, most with personal interests and do not care whether the institution collapses (Bovens 2005). This shows public sector faces a lot of challenges; favoritism, hiring of unqualified employees, conflicts interest, corruption and an ethical business practices. Certainly, in several countries, the public sector is in a terrible condition. Failed service delivery is a noticeable sign of lack of accountability. Bowman et al. (2004) provided two assertions which recognize the quandary in accountability in the public sector. He simply recognized these hypotheses as money and results. Money is strongly associated with accountability. Individuals would want to know that money is being employed in projects which it is meant for and they are receiving the value for their taxes (Bowman et al, 2004). These issues are debatable since several public sector institutions bear higher fixed costs to cover up an uneven workload to sustain their needed services. Curristine (2005b, p.130) maintains that governments bear the hard task of safeguarding the interest of the public whilst meeting the different needs of the same public. Public expectations keep on rising as they need better state services at low costs. Normally, the private sector is perceived to offer better services compared to public sector (Savas 2000). It is believed that the private sector is managed by individuals who would not like their businesses to loose trust of its clients and finally go down. This is now the opposite of most institutions in public service. It is not that service in the public sector cannot improve, but with proper foundation and mechanisms accountability, better services are guaranteed (Savas 2000). To help improve the situation, officers working in the public sector can borrow ideas from the private sector which tends to get better management. Capacity has to be created, not essentially to enlarge public sector, but to assist foster an accountable and effective public sector which is able to contribute to the decrease of poverty. Thompson (2004, p.246) affirms that good governance makes sure these needs are provided effectively and efficiently. It attains that objective by offering clear structures and processes for all facets of executive management. Yes the accountability mechanism in the private sector can be used in the public sector, but this cannot happen over time and the good components have to be in place just like in the private sector. The right components and structure can be hiring the right people for the job, creating a formal structure where roles do not overlap and putting in place the codes of conduct (Scott 2000, p.39). When the organizational setting is created for accountability, it is destined to flourish. When it is not, the organization work will be done by a few individuals, and at one point they will be tired of working for everyone else, accumulate wealth and resign from the work (Pollitt & Geert 2005). What makes the private sector more effective, is setting effective leadership and clear roles which are lacking in most public sectors. Individuals cannot be accountable when processes and roles are unclear. Getting rid of confusion concerning who is performing what and how they perform it, is a significant step. Pollitt & Geert (2005) argue that if the top management team is actually accountable, members of the organization will recognize gaps, learn processes and new roles, and eventually create a more competent team. In the private sector, the employees are paid well, involved in projects and key decision makings and feel appreciated (Savas 2000). This makes them feel the sense of ownership of organization and its performance. Once an employee feels part of organization they tend to get involved. If their more involvement such projects and rewards are done on the merit like in the private sector, a sense of ownership turns out to be more vital (Ebrahim 2009, p.887). Some institutions in the public sector like police service and the military are normally a den of corruption and bad behaviors (Aucoin & Heintzman 2000, p.52). It is here where the police frequently takes bribes to complement their salary because they are underpaid and also living in poor conditions. Through good remuneration and rewards they will feel appreciated and end corruption Accountability makes leaders to build ownership for the organization for its employees. Bowman et al. (2004) posit that where there is insufficient ownership in the organizations, employees tend to be economical with the truth, information and accountability. Workers do not feel they have any value to their work, that implies creating ownership for successes, problems, objectives, results, people and initiatives–in other words, getting work done (Bowman et al. 2004). In private businesses, owners are concerned and do not want their business to lose customers, therefore they have created a clear channel of communication and how resulted can be articulated. This is different in government institutions (public sector) which have a long chain of command with no clear channel of communication and reporting (Haufler 2013). In such a situation, it is difficult to seek out information, present and get feedback and indicate the need for remedial action at a particular time. Therefore, government institutions must establish a clear communication channel where results reported and ethical practices are also communicated (O’Connell 2005, p.85). As indicated earlier, benefits and rewards create a sense of ownership. Thompson (2004) argues that ownership is what drives management and employees and make them not desire to fraud or steal from their company. Good leadership creates this form of ownership and accountability (Thompson 2004). Therefore, for accountability to manifest, the corrupted management, which usually exists in most public companies must be done away with. This will allow a room to create the sound leadership structure. Accountability begins at the top level of the institution and manifests itself down. CEOs and managers ought to try hard to perfect their individual accountability and leadership skills before hoping for others to act the same (Aucoin & Heintzman 2000). A leader can reinforce accountability into the public service officers through their organization culture, but can be forced through punishment. Reinforcement starts in a society where people are brought up through moral values (Farazmand 2002, p.129). The public sector, just like private sector, is continually transforming in the course of new leadership, socio-political progress and environmental influences. Government institutions cannot enforce ethical behavior only through the use of codes of conduct or by means the dissemination of a plethora of laws (Farazmand 2002, p.130). Social upbringing and mindsets are frequently still entrapped in an ethical paradigm of an individual. People have the tendency to associate moral values with norms, which relate only to individual relations structures in which they interrelate. However, punishment is not the best, but putting and place the code of conduct which can drive someone’s conscience to act morally (Aucoin & Heintzman 2000, p.51). If the leaders’ goal inculcating accountability is to punish when profits target is not fulfilled, he will only thrive in building fear among the employees. Ackerman (2004a, p.457) No employee will be willing to come out and report an act which goes against accountability. According to Acar, Chao & Kaifeng (2008, p.18) accountability forms the foundation for building a learning organization. If public service officers need sustainable high-class processes, they require being capable of seeing what is working and what is not – and assess the basis for that (Acar, Chao & Kaifeng 2008, p.16). In this perspective the public sector needs to have a short chain of command which allows management to be close to the employees so that they can honestly state what they know, and what they do not understand. One significant thing the manager of the government institution can do to encourage a learning environment is to take up a systems approach including holding employees accountable (Bovens 2005). Corruption, mistrust and dishonesty are more in the public sector than the private sector. This is because the private sector has structured form of evaluation, auditing and monitoring units; this is contrary to the public sector where there are corrupt officers with the personal interest of accumulating wealth at the expense of public (Curristine 2005b). When many are involved in corruption, they tend to cover up the each other’s action. Just as used effectively in the private sector, public sector must establish sound evaluation and monitoring to ensure accountability (Kolstad, & Wiig 2009, p.525). Monitoring and evaluation allows for verification of the profit and loss the organization makes and factors contributing to either loss or profit. Actually, individuals seek for feedback since they understand it is intended to enhance the process and their knowledge. These public service institutions must use several forms of evaluation and feedback to review the success and health of a process, department and the manager. Kolstad &Wiig (2009, p.27) asserts that organizations which have inadequate numerous feedback mechanisms will simply determine their weaknesses when it is now too late. Integrity must be set out in the code of conduct. Individuals are called to account if they fail to do what their duties require. With accountable in mind, when anybody falls to meet the expectation, they own it up and work to get better (Farazmand 2002, p.137). In conclusion, the accountability in the private sector can be effectively applied within the public sector. In addition, administrators and public service officers require having a general grasp of the personal responsibility concept. Understanding and accepting personal responsibility indicates that an employee has accepted accountability and its control in their decision making. Being accountable enable one to react positively to unimagined performance. As it relates to public sector citizens require being aware that accountability also entails civic engagements too. Managers of public sectors must understand that accountability is intrinsic; therefore they must impact ethical behavior first before any other mechanisms. References Acar, M, Chao, G & Kaifeng Y 2008, Accountability when hierarchical authority is absent: Views From Public-Private Partnership Practitioners, The American Review of Public Administration, 38, p. 3-23. Ackerman, J 2004a, Co-Governance for accountability: Beyond exit and voice, World Development, 32 (3), pp.447-463 Aucoin, P & Heintzman, R 2000, The dialectics of accountability for performance in public management reform, International Review of Administrative Sciences, 66, p. 45-55 Bowman, J.,West J., Berman, M & Van Wart, M 2004, The Professional Edge: Competencies in Public Service, New York, M.E. Sharpe, Inc. Bovens, M 2005, Public Accountability’, in: E. Ferlie, L. Lynne & C. Pollitt (eds.), The Oxford Handbook of Public Management, Oxford, Oxford University Press. Curristine, T 2005b, Government Performance: Lessons and Challenges, OECD Journal on Budgeting, 5(1), p. 127-151. Ebrahim, A 2005, Accountability Myopia: Losing sight of organizational learning: Nonprofit and Voluntary Sector, Quarterly, 34(1), p. 56-87. Ebrahim, A 2009, Placing the normative logics of accountability in thick perspective. American Behavioral Scientist, 52(6), p. 885-904. Farazmand, A 2002, Administrative Ethics and Professional Competence: Accountability and Performance under globalization, International Review of Administrative Sciences, 68, p. 127-143. Haufler, V 2013, A Public Role for the Private Sector: Industry Self-Regulation in a Global Economy, Carnegie Endowment. Kolstad, I &Wiig, A 2009, Is Transparency the Key to Reducing Corruption in Resource- Rich Countries? World Development, 37(3), p. 521-532. Pollitt, C & Geert, B 2005, Public Management Reform: A Comparative Analysis, 2nd edn, Oxford, OUP O’Connell, L 2005, Program Accountability as an Emergent Property: The Role of Stakeholders in a Program’s Field, Public Administration Review, 65(1), p. 85-93. Scott, C 2000, Accountability in the Regulatory State, Journal of Law and Society, 27(1), p. 38-60. Savas, E 2000, Privatization and public-private partnerships, New York, Chatham House. Thompson, D 2004, “Restoring Distrust" in Restoring Responsibility: Ethics in Government, Business, and Healthcare, Cambridge University Press, pp. 245-260 Read More