Whether a City should Privatize Its Public Services - Research Paper Example

Cities should privatize its public services Introduction With the increased number of dwellers and people visiting cities, logistics planning are increasingly becoming a problem especially in the big cities. More people visit these places every day, thus creating a confusion problem especially in the amenities and public services. The fact that cities are not only business centers, but also administrative, educational and tourist attraction centers are the major contributing factors to the high number of people visiting cities every day. People visit cities for various reasons. While some go to cities to purchase commodities, especially because most of the businesses operate in these cities, others visit them for investment purposes. In fact, cities are a business hub, contributing considerable amounts of income to the GDP of a country. Investment opportunities in the major cities are the main factors pulling people to cities. With the rapid increase in globalization in the current global scenario, more cities are finding it hard to house the various multinationals setting operations in these cities. Because more companies set up operations in the cities, there is an increase in demand for space to house these companies. This has created the need for rapid expansion plans, a demand that observers argue that the public sectors cannot adequately meet. Expansion plans require not only buildings, but also assess roads, utilities such as electricity, water and internet connectivity and security. Despite the expansion plans put in place by the government, the reality is that there is little impact on the ground to ensure satisfaction of the interested parties. Public offices entrusted with the responsibility of managing cities more often than not find themselves receiving negative criticism from frustrated investors, unsatisfied dwellers and disgusted visitors. Additionally, the change in the climatic conditions, which has subsequently led to changes in weather conditions, is yet another source of inconveniences. The inability of the city management committees to align their development plans along these changes in it is an indication of lack of capacity on the committees. Poor management of the cities coupled with the lack of various amenities leads to unsatisfied city dwellers. In addition to the congestion, there is an increased level of crime in our cities. Incidences of new visitors losing their track within the cities are not a new phenomenon. Further, people spending hours in traffic is not only inconveniencing but negatively contributes to the growth of our economies. People need to feel secure, they need to save on gas consumption and require adequate time to engage in constructive activities that would contribute to the growth of the economy. The various concepts associated with public administration, among them being the bureaucracy, managerial styles employed by managers in the institutions, the type of services and equality of people who seek services from these institutions are a source of mismanagement of these cities. This explains why dwellers prefer private sector facilities. It is with this understanding that this essay seeks to provide reasons and evidence as to why the city should privatize its public services. Literature Review of Public Administration Concepts Various concepts differentiate public sectors from private sectors. These are the very concepts that define the public sector, giving it its unique characteristics. While profit quality, efficiency and effectiveness that characterize the private sector aims at profit maximization, public sector lacks most of these qualities (Krause, 2011). Public sector, being an expansive sector covers various areas, offering services that most of the poor and the low-income earners in the cities rely on. Because of the nature of services provided by the public sector, the government creates monopolies, ensuring that it is the sole provider of these services to the people. The government, in an effort to protect investors from intensive capital projects with high risks provides such important services and amenities to the people (Krause, 2011). Thus, it denies legislation of the private sector investors in providing services such as sewerage, water, electricity, transports and a variety of other services to the people. The public sector further restricts its operations to service provision, shy of production and products manufacturing (Bejerot & Hasselbladh, 2013). In some instances however, the government provides essential goods that it believes that if the private sector was top provide to the people, it would culminate to exploitation and increased costs to the people. Some of the public institutions provide personalized services to the people while others provide impersonal services (Krause, 2011). Unlike in the private sector where personalized services cost more and thus are unaffordable to the larger population, public sector charges reasonable fees for such services, thus making them available to the people. The nature of the services required by the population determines the kind of institution that a government establishes in a specific area. However, there are services that the government provides to the people without considering the demand by the people. Security, water and electricity are necessities that the government has to put in place regardless of the demand from the population (Krause, 2011). On the other hand, not all people require cheap and affordable housing. Thus does not make it mandatory to the government to construct affordable houses in all areas of the cities. The quality of the service provided to an individual determines the face-to-face relationship between the provider and the client (“IFAC”, 2011). The ability of the service provided to satisfy the needs of the customer measures the efficiency and effectiveness of the service rendered. It is however difficult to measure the quality of services received using any other means. Thus, the satisfaction levels of the public with the services provided determines the success of the organization. Management in the public sector in most cases assumes bureaucracy model. Public organizations are highly bureaucratic institutions, which follow the hierarchy of command whenever passing policies or resolutions. As there are many levels of management in the public sector but with the absence of checks and balances especially auditing services, bureaucracy seeks to streamline the sector. By ensuring that all resolutions and decisions follow the chain of command, it increases the likelihood of transparency and avoids mistakes in any level of management (Dixit, 2002). There is a particular limit as to which an individual can make individual decisions. The oversight committee then conducts an analysis of the decisions made to ensure that they are in accordance with the laws of the land. The procurement process also follows the set rules of public procurement process, which involves a public tendering process. The lowest bidder in the tendering process wins, thus being the supplier of the various products and services required in the sector. The organization of public administration has the management at the top most level of the hierarchy, administration and operational officers in the lower levels. The management formulates the policies, passes resolutions and leaves the administration and operational officers to implement them (“IFAC”, 2011). The ability of these three levels to work unitarily determines the success of the organization. The checks and balances established ensures frequent inspection of the projects of any of these levels by the necessary quality assurance departments.one of the design principle that shapes the scope of managerial work in any of the managerial levels is time of discretion. This defines the maximum time that an individual employee can work on his/her own before a review of the decisions by the concerned parties (Dixit, 2002). Multiple tasks translate to different time spans. While one task could take a shorter time span, another task could take a longer time span. Citizens are the major shareholders of the public sector institutions, as the financing of these facilities takes place through their taxes. Bureaucracy seeks to vest more power to the owners of the organization (Pratt, et al., 2007). It assumes that the likelihood of owners of an organization making poor decisions that would lead to the collapse of the enterprise is unlikely. However, in the public sector, as no individual own public facilities, the management acts in accordance to the laws and the constitution of the land. Before assuming office, managers have to take an oath of allegiance and respect to the constitution of the country (Pratt, et al., 2007). Additionally, the management should show readiness to obey the rules of the country. With the understanding that they risk prosecution whenever they engage in any wrongful activities, managers of these institutions assume their duties with due diligence. They not only serve the public in their own capacity, but also with high levels of accountability. Accountability ensures that there is minimal misappropriation of public funds, little corruption and actions taken are in the interest of the public (Bejerot & Hasselbladh, 2013). Laws govern the public sector. Owned and maintained by the government, public sectors adhere to the laws of the country, especially the constitution of the land. Lawmakers establish the laws to govern all the public institutions. These laws cut across all the sectors. Committees established for managing these sectors, which in most cases fall under various ministries overlook on the budgeting process and approve budgets drawn by managers of these institutions. These officers appoint committees to head these organizations (“IFAC”, 2011). Sometimes, politicians take part in these appointments. Especially for a facility providing services to a particular group of people in a particular region, politicians have a big influence in the formation of the management committee. Thus, the running of these institutions takes place in a well-planned democratic process. People raise their concerns in the manner in which the various committees serve them. In case of dissatisfaction, the responsible officers appoint new committees to run the organizations. Further, public institutions should serve all people equally without any form of discrimination. Any person in need of a service from a public institution should access such a service by paying the required amount of fee (Dixit, 2002). There should be no form of discrimination as individuals try to access these services regardless of their color, origin, nationality or race. All people should receive equal services and to their satisfaction (Pratt, et al., 2007). Analysis of the problems associated with the concepts The government, through its various bodies holds the role of providing essential services to its people at affordable costs. However, although people access most of these services free from the government, in other instances they receive them at subsidized costs. This means that people pay lower amounts of money to use public facilities and utilities, unlike they would have spent if they received them from the private sector (“Urbanisation in MEDCs”, 2014). Cities, being highly populated areas have numerous public facilities and utilities developed and maintained by the government. With the class differences in the city, the city management committees have to develop different facilities for different classes of people (“United Nations”, 2010). However, in the recent past, because of the increased costs of running and maintaining these facilities, the government started charging a small fee for their use. People were opposed to this policy, despite their increased concerns about the poor qualities and services they received from the facilities. Although the fee focused at improving the quality of services provided by these facilities, the reality is that these services never improved (Gardiner & Saul, 2014). Among the most important publicly available facilities in the cities, include train transport, roads, electricity, internet connection, some cable TV networks, fun packs, and water as well as gas networks. Additionally, the homeless people have public houses and dormitories where they spend their nights at subsidized costs. Homeless people also enjoy baths from public run washrooms (“Urbanisation in MEDCs”, 2014). People also use public busses that charge subsidized fares to the city dwellers. Further, the government maintains schools, colleges and universities that charge relatively lower fees compared to the private schools. Despite all these facilities, people still prefer using private services, which are considerably expensive compared to the public facilities. People in most cases associate public amenities with poor maintenance and lack of creativity in the management and development of facilities (“United Nations”, 2010). The fact that these facilities do not focus on profit generation more often than not do not meet the needs of the people. Public amenities and facilities face a number of challenges compared to the private run facilities. As there is not profitability expected from these facilities, the very construction of these facilities is substandard. Additionally, the procurement process in most cases suffers from lack of transparency. Subsequently, most of the amenities available for public utility are of low quality (Gardiner & Saul, 2014). The rule of the lowest bidder during the procurement process exposes the entire process to manipulation and abuse. While it is difficult for public audit committees to detect any discrepancies whenever they happen, the very law protects individuals, whenever they settle for low bidders offering low quality products and services. It is important to understand that the public sector refrains from in profitability (“Urbanisation in MEDCs”, 2014). Thus, government owned and run learning institutions and hospitals cannot match the private sector institutions. Management is yet another factor affecting the quality of services and state of the public amenities in cities. Private sector managers understand the importance of providing a variety of services and improving the quality of their facilities through branding and upgrading to assume modernization trends (Dixit, 2002). The ability of a facility to attract more people determines the amount of money the facility makes from the public. With the diminishing number of people using public services, most of them operate at a loss. Revenue collected from these facilities inform of service charge cannot pay for salaries of the various people working there, leave alone for their maintenance (Gardiner & Saul, 2014)). Management in most cases have little knowledge and understanding of how to manage the facilities. The public sector also suffers from lack of accountability. The fact that many people are responsible for running most of these facilities is proof enough that these facilities suffer from poor management. Before assuming their positions, public administrators often take an oath of allegiance to the constitution and must uphold that pledge (“Urbanisation in MEDCs”, 2014). However, this does not deter them from engaging in corruption practices. Instead, they run these facilities sometimes like individual entities, with little professionalism and lack of expertise. As the public sector is less competitive, such managers do not take refresher courses. Even if they were to take refresher courses, rarely do they practice proper management skills. They neglect their duties, delegating whenever they can and look for loopholes to avoid accountability. Accountability as a challenge mostly focuses on the administrators being accountable for general notions of ethics, democracy, and legal mandates (“Urbanisation in MEDCs”, 2014). Coupled, internal standards of professional and organizational, as well as external standards legislative and popular controls keep the bureaucracy accountable. However, bureaucracy, the very system rejected in the private sector is alive in the public sector. Before making a decision in the public sector, managers have to follow all the channels of bureaucracy. This is time wasting, ineffective and extremely inconveniencing to the concerned parties. Politics also affect the management of these facilities. Whenever politicians get involved in the management of a facility, there is bound to be confusion, lack of trust and unnecessary arguments that bring into existence conflicts among the managers, workers, and users of the services (Gardiner & Saul, 2014). Politicians support their areas of interest, neglect where they have little support and punish sections that support other views (Bejerot & Hasselbladh, 2013). This leads to implementation of policies focusing a section of the people while at the same time discriminating others. To the extreme, this leads to discrimination among the various groups of people especially through race, religion, nationality, and colour. It is only recently when some public institutions changed their policies and started accepting African Americans. Conclusion There is an increase in the number of complaints raised on the inconveniences people experience in the cities. With the understanding of the high number of people either dwelling or visiting cities in a day, there is a high likelihood of occurrence of inconveniences. There are various factors contributing to the high levels of inconveniences affecting people in cities. Among these factors, include the extreme levels of bureaucracy, lack of accountability of the people and managers given the responsibility to manage these institutions, the high number of people seeking services in these institutions and the high level of corruption in the institutions. Negligence is yet another reason for the poor services people receive from the public institutions. Corruption in the committees holding the responsibility of managing the institutions also contributes to the many problems facing people in the cities. It is important to understand that currently, people demand a value for their money. The era of subsidized goods, services fast ending, and people, especially Americans opting for quality and services that meet their needs. People want to spend on anything that promises to meet their needs and wants. Subsequently, they reject anything that does not satisfy their needs and wants. Most of these are not real problems, but inconveniences caused because of negligence. While initially a section of critics attributed this scenario to outdated city planning, others believed that people’s ignorance contributes to these scenarios. The high numbers of people flocking public facilities in the cities, the mushrooming of street families and other ugly scenarios in the cities challenges the capacity of the city management committees. It is due to these reasons that this essay argue that for proper management and increased quality of services people receive from public sector, the government should consider privatizing them. References Bejerot, E., & Hasselbladh, H. (2013). Forms of Intervention in Public Sector Organizations: Generic Traits in Public Sector Reforms.Organization Studies (01708406), 34(9), 1357-1380. doi:10.1177/0170840613477639 Dixit, A. (2002). Incentives and organizations in the public sector: An interpretative review. Journal of human resources, 696-727. Gardiner, S. & Saul, M. H. (2014). City Moves to Drop Stop-Frisk Appeal: Motion Filed Thursday Seeks Term Limit for the Federal Monitor, The Wall Street Journal. Retrieved from https://www.nycpba.org/news/wsj/wsj-140130-frisk.html IFAC. (2011). Key Characteristics of the Public Sector with Potential Implications for Financial Reporting, International Public Sector Accounting Standards Board . Retrieved from http://www.ifac.org/sites/default/files/publications/exposure-drafts/IPSASB_ED_Key-Characteristics-of-Public-Sector.pdf Krause, R. (2011). States, cities privatizing trash, tolls to cut costs. Investor's Business Daily. Retrieved from http://search.proquest.com/docview/1000477258?accountid=45049 Mikus, M. (2014, Feb 24). Hammond agency considers privatizing recycling. McClatchy - Tribune Business News. Retrieved from http://search.proquest.com/docview/1501409405?accountid=45049 Pratt, J, Plamping, D & Gordon, P. (2007). Distinctive characteristics of public sector organisations and implications for leadership, Northern Leadership Academy. Retrieved from http://www.cihm.leeds.ac.uk/document_downloads/Leadership_and_public_sector_organisations.pdf United Nations. (2010). New chief of UN agency for urban settlements to focus on sustainable cities, UN News Centre. Retrieved from http://www.un.org/apps/news/story.asp/story.asp?NewsID=35734&Cr=habitat&Cr1=#.UxNZfvmSxJg Urbanisation in MEDCs. (2014). Problems of urbanisation in the CBD , BBC. Retrieved from http://www.bbc.co.uk/schools/gcsebitesize/geography/urban_environments/urbanisation_medcs_rev2.shtml Read More