Greater Chance of Approval from the Government - Case Study Example

Managing Financials in the Canadian Public Sector Question Contracting janitorial services will have long term merits to the provincial ministry and to the employees at large; which can be analyzed in relation to opportunity cost, reliability and other externalities in the implementation of various policies by the ministry and employees’ performance. For instance, customary, the employees have to spare some time in the morning or at the end of the day’s business to perform janitorial duties which if outsourced to other players will allow the employees to fully prepare and serve members of the public efficiently without distractions. In other approach, contracting these services would create room for specialization; the companies will use the best janitors/ janitresses in the job to enhance quality and efficiency thus cutting down on extra costs for the same job, and employees will have ample time to serve the members of the public assuming that these companies will be doing their tasks efficiently and on timely manner (Frey, 2005). Further, outsourcing these services to other companies has a financial merit in the long run; apart from one time severance payment the ministry will cut off the recurrent expenditure in the subsequent years, these companies will dedicate their skills and expertise to offer quality services with hope of license renewal after five years, with which the surplus can be channeled in other sectors/ ministries. Externalities such as injuries to employees while doing the janitorial services in a rush to get started for the day’s work will be ruled out once the contracting process is complete. Retaining in-house services on the other hand might be profitable in the short run as the employees are engaged in other creative activities but it is costly to the financiers or the exchequer in the long run. Contracting route on the other hand is faced by legal and other challenges which can socially and /or economically tumble the wellbeing of the country and the public confidence towards the ministry. For instance, depending with the government’s provision for public contracts, a 35% requirement (Graham & Q.U, 2005) would mean that the favorite bidder would be Adanac Cleaners who despite their costly service of $440000 a year have a greater chance of approval from the government. The major problem for the management will be the decision making process on which company to award the contract factoring in issues of cost, performance and the public policies by the government. Question 2: The major external control factors to be considered in this scenario are the political and socio-cultural factors in that the government has its own economic and socio-cultural goals and obligations to meet which will influence the operations of the ministry. For instance, Adanac Cleaners has the political/ socio-economic backing from the government’s policy to provide employment and the socio-cultural obligation of improving native contracting; factorto be considered in choosing the optimal bidder and the socio-cultural impacts to the ministry employees and those of the Adanac Cleaners. The City of Blonk region of provincial ministry is at play with interests to cut operational costs, improve on its employees’ performance, maintain a friendly working environment and increases the public confidence in service delivery by the office. The bidding companies are at play too with an aim of quality service delivery to the ministry and maximization of profits from the contract within the stipulated timeframe of five years while the government and labor unions are at paly with an aim of implementing their policies and mandates to the people they represent. At this point the risks involved include the legal procedures in contracting process which will highly be influenced by external macro factors rather than the internal business environment and the overall value of contracting the services rather than retaining the in-house services. For instance, the risk of awarding the ABC Company the contract which has minimal chances of approval despite their low operating costs and/ or awarding Adanac with an aim of recruiting/ absorbing some of the current employees which may not necessary hold due to the varying performance indices by the institution. Stakeholders at this point can be viewed as the current employees and the external factors and how they will impact on the contracting process in relation to the ministry’s long term socio-economic policies in relation to cutting cost and improving efficiency of the office. Question3: Consultative input gathering style would be appropriate in this case considering the sensitivity of the matter in relation to the external factors at play and the need for independent decision making by the director in relation to the wellbeing of the ministry and the society at large. For instance, as the director I would seek the employees’ expertise on the issue that is, how the contracting process would affect their personal routines and the general output in other areas which need to be evaluated in relation to the overall long term goal of efficiency and cutting cost (Madureira, Reis & Marques, 2013). The time frame provided by the boss due to political sensitivity of the matter would not allow for democratic majority vote which may take longer due to conflicting interests of the stakeholders at play. Furthermore, being a public institution, consultative input will be paramount to highlight the necessary aspects of the processes and procedures to the relevant stakeholders and comprehensively evaluate the group’s level of participation which can help estimate the success levels of the agreed course of action. Also, with four stakeholders at play; the ministry, government, ABC International Cleaners and Adanac, consultative input will be necessary as each of the stakeholders need to understand how their input in the process and the anticipated performance/ results impacted the decision and in case any of the stakeholders is not satisfied with the final decision then I can explain my reasoning and justify my choice. In addition, to mitigate the public outcry on performance, efficiency and contracting procedures, the method will be prudent as the groups will understand the level of commitment and the overall goal of the procedure which can be comprehensively understood with all stakeholders present. Question 4: First action would be to contact the current employees and evaluate their performance in relation to the ministry’ guidelines and the long term mission with clear definition of the needed level of commitment to each of them. At this point I would confirm and communicate the intended actions of the ministry and inform them on the available options to implement the program, its merits, challenges and the overall befits to the stakeholders. This would be followed by analysis of data from the relevant ministries such as of labor and industrialization to act as a guideline to the next course of action. For instance, it will be prudent to understand the ministry’s stake in awarding contracts, the legal procedures of the same and the unemployment rates from the government statistics which will guide in identifying the optimal bidder and/or the implementation procedures. Analyzing the bidder’s stake would be the next course of action that is, evaluate their competence and experience; their added value to the ministry, the overall impact to the public and the legal processes to determine the eligibility. For efficiency purposes, I would consult with other ministries alike to evaluate the impact of contracting in relation to retaining the in-house services and comprehensively analyze the value to other sectors, beneficiaries of the minimized cost. With this information at hand, I would finally convene a consultative meeting with all stakeholders and considering the timeframe for the implementation; I would share sentiments with each of them and finally confirm and communicate the final decision, objectively pegged on the prior analysis and the long term goals of the ministry. Question 5: Financial analysis would be the core process I would undertake coupled with the impact assessment of the optimal course of action that would yield more benefits to the stakeholders at play (Vance, 2008). For instance, contracting ABC International Cleaners would translate to $685000- $100000 performance bond in the first year of operation and subsequently saving the ministry $460000 in four years and other indirect costs to the employees while contracting Adanac Cleaners would translate to approximately $700000 in the first year [440000-50000+250000] and save the ministry $240000 in the subsequent years in the contract. This is subject to the fact that they might take on some employees if successful but since it is not guaranteed the figure may rise to $750000 in the first year of operations, amount higher than the current costs and in relation to ABC International Cleaners. The value of each proposal to the ministry and the society at large would be the next evaluation process such that I would settle on the decision that mutually benefit the stakeholders at play and obliges to the long term missions of the ministry and society. For instance, ABC International Cleaners have the lowest operating costs annually but awarding them the contract would conflict with the government’s policies of job provisions considering that they would not absorb current employees and/or they would operate with their foreign workers. Adanac Cleaners on the other hand are way above the normal costs for the first year of their operations and their subsequent savings to the ministry are dismal compared with the ABC International Cleaners though it is in line with the government’s socio-economic agenda of jobs creation to the natives. Question 6: The basic component of implementing my decision would be to comprehensively define the goal of the policy and my decision that is, objectively lay down the need for the change and the utmost goal of the policy/ process. For instance I would numerically explain to the my boss why I chose ABC International Cleaners over the Adanac Cleaners and vice versa by tabling the financial benefits to the ministry in relation to other ministries and/ or the other bidders. At this point, it will be prudent to inform the government or the exchequer before commencing implementation so as to smoothen the financing and other legal procedures involved in the process. I would also consider strategic timing of the implementation process to avoid disruption of the normal activities (Stecher, 2010) such that if I finally settle on the in-house services, it will be my obligation to alert the workers on the need to improve and adjust their performance. In addition, I would keep in mind those who are affected that is, if I settle for in-house services it will be prudent for me to explain my decision and implementation procedures to the outside bidders and to the government in relation to the laid out procedures and overall goals. Finally, I would consult with the other ministries which have outsourced these services which will be a guide to the employees and other stakeholders to get used to the change with time by incorporating the diversity of employees’ discretions of the implementation timetable. Conclusion Public policies differ from the private ones in that the overall motives and the timeframes are limited for efficiency purposes and the public good. This calls for a comprehensive decision making process which is complex depending with the stakeholders at play; their varied interests, the value they bring in to the policy and the overall need to mutually benefit each of them and independently settle with the decision that covers all these aspects as a leader. References Frey, R. S. (2005). Successful proposal strategies for small businesses: Using knowledge management to win government, private-sector, and international contracts. Boston: Artech House Graham, A.,& Queens University (Kingston, Ont.). (2007). Canadian public-sector financial management. Kingston, ON: School of Policy Studies, Queens University Madureira, A., Reis, C.,& Marques, V. (2013). Computational intelligence and decision making: Trends and applications. Dordrecht: Springer Stecher, B. M. (2010). Toward a culture of consequences: Performance-based accountability systems for public services. Santa Monica, CA: RAND. Vance, D. E. (2008).Financial analysis & decision making: Tools and techniques to solve financial problems and make effective business decisions. New York: McGraw-Hill. Read More