Increasing Public-sector Effectiveness by Changing Organisational Culture - Coursework Example

Increasing Public-sector Effectiveness by Changing Organisational Culture A study has been conducted to determine a model for organisationaleffectiveness in public-sector organisations. The organisational culture is shaped by organisational structure, environment, and values, beliefs and underlying assumptions. Effectives in public sector organisations can be improved by the development of an organisational model based on an understanding of relationships between variables. Performance measurement systems are required necessary for measurement and monitoring of effectiveness. Organisational Structure Organisations have structures. Structures include degree or type such as horizontal differentiation, vertical differentiation, mechanism of coordination and control, formalization, and centralization of power. Classical theorist such as Taylor, Fayor, and Weber are of the belief that there is a single best way for organisations to be structured. However, organisations vary considerably on structural attributes. Modern theorists are of the belief that there is not one single best way to organize. An important aspect is the fit between the organisation’s structure, size, technology and requirements of the environment. This is also known as the “contingency theory.” Size refers to the capacity, number of employees, outputs, and resources. Differentiation such as departments, job titles and levels increase with size, but at a decreasing rate. Increased size relates to increased structuring but decrease in concentration of power. Practices such as flexibility in assignments, extent of delegation of authority, and emphasis on results relate to the size of the unit managed (Borgatti, 2001). Some activities are a natural fit with certain structures. Firms making one-of-a-kind products or small quantities of products such as ship building value people’s skills and knowledge more than machines; have work processes that are unpredictable or hard to automate; have fewer levels of hierarchy; have low percentage of workers and lower span of control; and have organic structure. Firms selling huge volumes of identical products such as razor blades make heavy use of automation and assembly lines. Such firms have bigger batches; taller hierarchies; large levels at the bottom and large number of managers; mechanistic and bureaucratic structures; and are relatively cheap to operate. Firms in continuous production such as chemical companies involve machines for most activities and humans simply monitor processes. Such firms are tall and thin or inverted pyramid shaped; have organic structure at the top; and have lower levels that are mechanistic (Borgatti, 2001). Organisational Environment Organisations are able to adapt to their environments. Organisations with structures that do not fit the environment are likely to fail. The economy is a giant network of organisations connected by buying and selling relationships. Stakeholders are entities in an organisation’s environment that play a role in the organisation’s performance, or a are affected by the organisation. Stakeholders have interests in an organisation’s activities and could influence the organisation to protect their interests. Interests may coincide on some issues and not on others leading stakeholders to cooperate with each other in alliances or compete with each other. When stakeholders are unconnected, they are unable to coordinate their efforts and have trouble controlling the organisation. When stakeholders are well-connected, the organisation cannot represent itself differently to each one (Borgatti, 2001). Organisational Culture Values, beliefs and basic assumptions that help guide and coordinate member behaviour are collectively known as organisational culture. Organisational culture is he set of key values, assumptions, understandings, and norms shared by the members of the organisation and taught to new members as correct. Organisational culture is considered as the critical key that managers use to direct the course of their firms. Study of organisational culture can include aspects such as levels of visibility, expressed values and underlying assumptions; strength such as strong or weak; and adaptiveness such as adaptive or unadaptive. Organisational culture has been assessed along several dimensions resulting in fundamentally similar models and theories. Culture has been categorized as adaptability, achievement, clan, bureaucratic; adhoc or hierarchy; and communal, fragmented, networked, or mercenary. Usually an organisation’s culture is could be a combination of bureaucratic, innovative or supportive. A bureaucratic culture is hierarchical, compartmentalized, organized, and systematic, with clear lines of responsibility and authority. Innovative culture includes creative, results-oriented, and challenging work environment. Supportive culture includes innovative teamwork and people-oriented, encouraging, and trusting work environment. Employees can be effective in their current jobs and realize their best potential when there is a match between the individual’s motivation and organisational culture (Yiing and Ahmad, 2008). Thus, organisational culture has important implications in the effectiveness of institutions. Framework of Relationships between Organisational Variables An employee’s belief in the organisational goals and values, and desire to remain a member of the organisation and loyal to the organisation is known as organisational commitment. Managers often seek ways to generate commitment from employees that translates to competitive advantage and improved work attitudes such as job satisfaction, performance, absenteeism, and turnover. Components of organisational commitment include affective, continuance, and normative commitment. Levels of organisational and managerial support; employee involvement in decision making; feedback about performance; leadership behaviour and organisational culture influence a person’s organisational commitment. Job satisfaction affects levels of job dissatisfaction, absenteeism, grievance expression, tardiness, low morale, high turnover, quality improvement, and participation in decision-making. Task performance and contextual performance are dimensions of employee performance. A framework of the relationships between the variables has been illustrated in the figure below (Yiing and Ahmad, 2008). Figure 1. Framework of Relationships between Variables (Yiing and Ahmad, 2008) Public-sector Organisations Public sector organisations are multi-functional, follow a political leadership, and most of them do not operate in an external market. There are five central aspects of public sector organisations including goals and values; leadership and steering; reform and change; effects and implications; and understanding and design. These are based on instrumental and institutional perspectives within organisational theory, and democratic theory and empirical studies of decision making (Christensen et al, 2007). The public sector has been struggling because of difficulty in recognizing processes; no tangible product at the end; difficulty in measuring improvement; lack of understanding as to who the customer is; lack of effective teamwork; failure to identify and correct the root cause of problems; and poor leadership. These problems were found in both manufacturing and non-manufacturing organisations. Basic principles that should be applied to organisations are that all work is a process; there is a need to understand what the customer needs for delivering it; it should be right the first time and every time; the aim should be for prevention and not detection; and the focus should be on value addition and not cost-addition (Halliday, 2002). Impact of Organisational Culture on Effectiveness Knowledge is an important asset in public sector organisations that should be carefully managed. However, knowledge management studies have been neglected in the public sector. This is a serious drawback as public sector organisations are in the business of developing and providing knowledge, and have been classified as knowledge-intensive organisations. Organisations have knowledge as their core product, provide knowledge to the public, or have knowledge workers developing and providing knowledge. Knowledge has been defined as “practical understanding that enables a firm perform various operations.” A natural and unavoidable barrier to the sharing of such knowledge is departmentalisation that prevents one department from benefitting from the experiences of the other. Proper structure to leverage knowledge sharing between organisations is required. However, the problem of designing an organisation that optimizes knowledge sharing is unsolved. An important facilitator of knowledge sharing between departments is existence of co-ordination between departments. Interaction, cooperation, and exchange of resources such as knowledge can be achieved by coordination. In order to be successful it is important to understand how the mechanisms of coordination impact knowledge sharing. Other organisational characteristics that influence knowledge sharing include trust, power games, and social identification (Willem & Buelens, 2007). The design of public sector organisations has remained a controversial issue. Specific values in public sector organisations have strong implications for the design of organisations. Values such as honesty, fairness, and equity are high importance values, while cost control and goal orientedness are economic and parsimonious values. Specific organisation designs and coordination mechanisms are more appropriate and frequently present in public sector organisations. One of the characteristics of public sector organisations is the existence of bureaucracy, and organisational commitment was lower in public organisations. Studies have emphasized on processes that led to dysfunctional bureaucracies and problems with red tape – lengthy procedures and huge amounts of documents. Values oriented towards frugality of resource use and cost-effectiveness and output control have been emphasized by new public management. The intention being increase in teamwork, limiting the number of rules, and more achieving value-driven management and decentralization in public sector organisations. As there is no single organisational design approach to public sector organisations, differences such as ambiguity in goals, difference in environment, and difference in political influences the design of public sector organisations. Relevant dimensions include ownership, funding, control, access to facilities, and agency. Values that form a part of organisation’s culture can program organisational behaviour. Coordination can be achieved through this programming. Cooperative episode and interdepartmental knowledge sharing cannot be achieved by values directly. The extent to which people identify with values influence favourable cooperative and knowledge sharing environment. Problems of communication among specialists can be overcome by social identity. Public sector organisations are dominated by procedures and high levels of formalisation. Lower levels of motivation and commitment are a major concern, and not ideal for knowledge sharing. Lateral coordination is important for the intensity and effectiveness of knowledge sharing. Information coordination does not lead to higher knowledge sharing intensity, though it leads to more effective knowledge sharing (Willem & Buelens, 2007). Figure 2. Model for Knowledge Sharing (Willem & Buelens, 2007) Improving Effectiveness in Public-sector Organisations The New York Council was analysing data and setting targets for reporting historical activity and forecasting future performance from as early as 1900s. New public management was born based on concepts such as value for money and performance measurement that included premises such as employment of professional managers; explicit standards and measures of performance; emphasis on consistency of services; decentralisation; increased competition between organisations and sub-units; emphasis on private-sector management styles; and increased accountability and parsimony in resources use. The term performance measurement emerged in the 1970s. Key features of modern performance measurement are alignment of the measurement systems with existing systems and organisational strategies; leadership commitment; culture where it is seen as a way of improving good performance; and continuous monitoring, feedback, dissemination and learning from results. Aspects of performance measurement include decision of what to measure; how to measure it; interpreting data; and communicating results. Indicators can be classified as output; welfare; performance; and composite indicators that are a combination of the other three. These include facts; planning, prediction and budget numbers; or numerical targets. Effective indicators include assumptions regarding the indicator and rationale for measurement; precision and accuracy of measurements; congruence; whether a static or vector; soft or hard measure; measurements of results or behaviour; and consequences of the measurement system (Fryer et al., 2009). Improvements in performance, accountability, transparency, quality of service and value for money have not yet materialised within the public sector. Problems associated with performance management in the public sector include technical, systems and involvement. Restructuring and reorganisations imposed externally restrict the successful implementation of performance management (Fryer et al., 2009). Systems that have been applied in the public sector do not have a significant influence on improving effectiveness. Outcomes of these systems have been commodification of services and deprofessionalisation of public sector workers (Adcroft & Willis, 2005). Performance Measurement Systems Public sector firms have to become more efficient, flexible and customer oriented for competing in the global economy. Competitive edge of a firm is determined by not only their own strategic choices, but also by their respective government actions in terms of provision of supporting infrastructure for competing. Performance measurement can result in improved performance, and public sector organisations must use them. Attribute of performance measures include clarity of role; clarity of purpose; responsible managers; incentives for good performance; budget and management systems supporting performance; accountability and transparency; appropriate staff capability; and cultural and values aligned with organisational performance. These attributes provide a starting point for examination of efforts to reform public sector organisations to make it more productive. The rationale for performance measurement is: measurement leads to understanding; understanding leads to control; control leads to improvement; tasks get done when they will be measured; and measurement allows distinction of success from failure (Halachmi, 2002). Model of Organisational Effectiveness Organisational performance is hard to measure in the public sector. Organisational performance includes external and external dimensions of efficiency, effectiveness, and fairness. Individual level factors that affect organisational performance positively include job satisfaction; organisational commitment; public service motivation; and organisational citizenship behaviour. High levels in these factors among public employees will lead them to work more towards organisational goals, and provide services wholeheartedly to the organisation. Public sector organisations with employees that have high levels in these factors will achieve better performance. Organisational performance could lead to higher satisfaction and commitment. Job satisfaction is an emotional response towards different facets of one’s job. It is positively correlated with motivation, job involvement, organisational citizenship behaviour, organisational commitment, life satisfaction, mental health, and job performance; and negatively related to absenteeism, turnover, and perceived stress. Organisational commitment is the relative strength of an individual’s identification and involvement with a particular organisation. Commitment involves an active relationship with the organisation, where individuals are willing to contribute to the organisation’s well being. Affective, continuance, and normative commitments are the components of organisational commitment. Affective commitment is most important to organisational commitment. Bases of public service motivation are rational, norm based and affective. Rational motives are based individual utility maximisation. Norm-based motives are based on desire to pursue common good and further public interest. Affective motives are based on human emotion. Participation in policy development, commitment to public program because of personal identification, and advocacy for special or private interest are rational motives. Serving the public interest, loyalty to duty and government as a whole and social equity are norn-based motives. Commitment to a program from a genuine conviction about its social importance and patriotism or benevolence is affective motive. The greater an individual’s public service motivation, the individual is more likely to seek membership in a public organisation. This is positively related to performance. Such organisations are less likely to depend on utilitarian incentives for managing individual performance. Behaviour not directly or explicitly recognized by the formal reward system that promotes the efficient and effective functioning of the organisation is known as organisational citizenship. These include working beyond required job duties, promoting positive environment, being involved in activities, and performing tasks beyond normal role requirements (Kim, 2005). Figure 3. Model of Organisational Performance (Kim, 2005) Conclusion Public sector organisations are multi-functional, follow a political leadership, and most of them do not operate in an external market. Public sector organisations are dominated by procedures and high levels of formalisation. Public-sector organisations are characterized by the presence of bureaucracy, lower organisational commitment, and problems of red tape. The public sector has been unable to recognize processes; identify tangible product at the end; measure improvement; understand as to who the customer is; develop effective teamwork; and identify and correct the root cause of problems; and suffered from poor leadership. Problems associated with performance management in the public sector include technical, systems and involvement. There has been an increasing realisation that public sector organisations have to become more efficient, flexible and customer oriented. Performance measurement systems can result in improved performance, and public sector organisations must use them. A model of organisational effectiveness include individual level factors that affect organisational performance positively including job satisfaction; organisational commitment; public service motivation; and organisational citizenship behavior. References Adcroft, A. & Willis, R. (2005). The (un)intended outcome of public sector performance measurement. International Journal of Public Sector Management. 18(5). 386-400. Borgatti, S. (2001). Organisational Theory: Determinants of Structure. Retrieved from http://www.analytictech.com/mb021/orgtheory.htm Christensen, T., Lægreid, P., Roness, P. & Røvik. K. (2007). Organisation Theory and the Public Sector. Routledge. UK. 208. Fryer, K., Antony, J. & Ogden, S. (2009). Performance management in the public sector. International Journal of Public Sector Management. 22 (6). 478-498. Halachmi, A. (2002). Performance measurement and government productivity. Work Study. 51 (2). 63-73. Halliday, S. (2002). Improving Service and Public Sector Organisations. WDP Consulting: UK. 1-7. Kim, S. (2005). Individual-Level Factors and Organizational Performance in Government Organizations. Journal of Public Administration Research and Theory. 15(2). 245-261. Yiing, L. & Ahmad, K. (2008). The moderating effects of organisational culture on the relationships between leadership behaviour and organisational commitment and between organisational commitment and job satisfaction and performance. Leadership & Organisation Development Journal. 30 (1). 53-86. Willem, A. & Buelens, M. (2007). Knowledge Sharing in Public Sector Organisations: The Effect of Organisational Characteristics on Interdepartmental Knowledge Sharing. Journal of Public Administration Research and Theory 2007 17(4). 581-606. Read More