Competing with the Public Sector in Broadcasting

There are two public sector broadcasters in the UK: the BBC and Channel 4. In their different ways, their behaviour attracts criticism from the private sector. However, this critique is unfocused and potentially counter-productive. A more efficient – or privatised – public sector would create greater, not lesser, problems for the private sector. The allegations of abuse of privilege and unfair competition may be justified, but the private sector needs a coherent alternative rationale for public funding of broadcasting before it can expect to win a public and political debate.     

WHAT HAS 20 YEARS OF PUBLIC–PRIVATE PAY GAP LITERATURE TOLD US? EASTERN EUROPEAN TRANSITIONING vs. DEVELOPED ECONOMIES

This paper surveys the literature on public–private sector pay differentials based on 20 years of research in transitioning countries of Eastern Europe (EE) and compares the results with estimates obtained from developed market economies. The majority of empirical studies from EE economies found evidence of public sector pay penalties during the period of economic transition from a communist to market‐based economy. In developed economies, however, the average differential is usually around zero or positive. The public sector pay inequality reducing effect relative to the private sector is greater in transitioning economies than in developed economies. Nevertheless, there is evidence that the sign of the public sector pay gap as well as the relative public sector pay distribution change with the progress of economic transition towards those usually observed in developed economies. Different pay‐setting arrangements between private and public sectors and competition for workers seem to be major arguments for the existence of systematic pay differences between the two sectors.     

AN EXAMINATION OF THE INFLUENCE OF MIDDLE-LEVEL MANAGERS IN FORMULATING AND IMPLEMENTING STRATEGIC DECISIONS

The upward influence of middle-level managers (MLMs) on strategic planning and decision-making is examined. It was found that: (1) upward influence activity was more prevalent in low risk/return types of strategic decisions than in high risk/return decisions; (2) upward influence activity was more prevalent during the implementation of strategic decisions than during the formulation of such decisions; (3) managers most often used rational arguments in their influence attempts; (4) managers were more likely to be successful than unsuccessful in influencing their superiors in strategic decisions; (5) managers most often attributed their success in influencing their superiors to internal causes and their failures to external causes; (6) managers from private sector organizations exerted influence in both high risk and low risk strategic decisions more frequently than did managers from public sector organizations; and (7) the number of years working with the superior was the best predictor of successful interactions and of risky decisions. Some insight into the development of widespread strategic thinking in an organization is provided.     

Employee perceptions of performance appraisals: a comparative study on Indian banks

Performance appraisal is the most critical human resource practice and an indispensable part of every organization; however, the practice continues to generate dissatisfaction among employees and is often viewed as unfair and ineffective. Indian banking sector is one of the biggest and fastest growing financial service sectors. The post-liberalization era has witnessed significant changes in the structure and operations of banks operating in India. Arrival of new private and foreign banks has given a cause to public sector banks to be more competitive, effective and innovative in their approach. Past researches have compared public and private sector banks and have indicated that new private sector banks are outscoring public sector banks in terms of technical and economic efficiency parameters. However, no study could be found that compared public and private banks in India on fairness perceptions of performance appraisal system. Therefore, this research studied the differences between public and private sector banks with respect to perception of fairness of the performance appraisal system and performance appraisal satisfaction. Perception of fairness of the performance appraisal system has been studied through nine factors. The study used independent samples t-test and qualitative analysis to study the mean differences between the two banks. Results indicated that private sector bank employees perceive greater fairness and satisfaction with their performance appraisal system as compared to public sector bank employees.     

Public–private sector wage differentials and the business cycle

This paper uses microeconomic data for the period from 1990 to 2004 to examine the relationship between public–private sector wage differentials and labour market conditions in Finland. The results show that the public sector wage premium is strongly counter-cyclical. On average, a 10 percent increase in the local unemployment rate increases the public–private sector wage gap by one percent. Separate analyses by government sector and quantiles of the distribution of wages reveal that it is local government workers and those working at lower skill levels who benefit more from increasing unemployment rate. The paper also exploits the longitudinal structure of the data to examine whether the results are constant over time. These results indicate that the cyclical pattern primarily emerges in years with deteriorated labour markets.     

Public and Private Management: What’s the Difference?

Critics of New Public Management argue that differences between public and private organizations are so great that business practices should not be transferred to the public sector. In this paper the theoretical arguments on the differences between private firms and public agencies are reviewed, and 13 hypotheses are identified on the impact of publicness on organizational environments, goals, structures and managerial values. Evidence from 34 empirical studies of differences between public agencies and private firms is critically evaluated. Only three of the publicness hypotheses are supported by a majority of the empirical studies: public organizations are more bureaucratic, and public managers are less materialistic and have weaker organizational commitment than their private sector counterparts. However, most of the statistical evidence is derived from studies that use narrow measures of publicness and fail to control for other relevant explanatory variables. Whether the existing evidence understates or overstates the distinctiveness of public agencies is therefore unclear. A research agenda and methods are identified for better comparisons of management in public and private organizations.     

PRIVATIZATION OF PUBLIC SECTOR ENTERPRISES IN PAKISTAN: PROSPECTS FOR REDUCING REGIONAL IMBALANCES*

This paper tests the somewhat counterintuitive hypothesis that public firms are more efficient than their private sector counterparts. A factor analysis (9 industrial groups/34 industries) indicated that for all Pakistani provinces, public enterprises contributed relatively more value added which supports the findings of Naqvi and Kamal. The paper also concludes that a policy to reduce Pakistan's regional income disparities by privatizing public enterprises would likely be ineffective.     

Are standardized EMSs useful in local authorities? A study of how a tool from the private sector is used in the public sector

Following the trend in the private sector, standardized environmental management systems (EMSs) have been introduced in several local authorities around the world. When the tool is transferred from the private sector to the public, one can ask how useful the tool is in the new environment, since the private and the public sectors are two different types of social sphere, with different institutional logics. Taking a closer look at the situation in Sweden, this paper aims to investigate the applicability of standardized EMSs in local authorities and the public sector in general. Based on qualitative interviews with public officers in two municipalities in Sweden, it is argued that EMSs are useful in municipalities. However, the study also reveals that an EMS seems to be more suitable for technical service administrations and municipally owned companies than social service administrations. Copyright © 2004 John Wiley & Sons, Ltd and ERP Environment.     

PRODUCTIVITY IN PUBLIC SERVICES

Abstract.  This paper discusses issues arising in the measurement of productivity in public services. Compared to measuring productivity in the private sector difficulties arise because the output of public services is often unpriced and because some public services are consumed collectively. A key problem is measuring the full range of outputs and quality improvements delivered by public sector organizations that are valued by society. Without comprehensive measures of output, productivity statistics may be misleading. I outline methods used in the measurement of both private and public sector productivity and discuss the measurement of public sector productivity in practice. Finally I discuss studies that examine factors underlying productivity differences and productivity growth in public and private sector organizations. Public sector reforms and the use of pilot schemes in public sector organizations present opportunities for research to identify causal effects on productivity.     

Reporting public sector financial results

Part of the process of recent public sector reform has involved replacing traditional cashbased accounts with accrual-based financial statements, similar to those found in the private sector. This article examines the use of accrual-based accounting in the public sector and provides examples from the UK National Health Service of situations where the accruals system may be deemed inappropriate. It shows that one possible response is to withdraw from the accruals mode and revert to cash measures, deeming the accruals adjustments to be ‘merely technical’. An alternative response is to change the mode of operating so that the cash impact of a transaction matches its accruals reporting impact. The conclusion is that there are modifications to public sector accounting practices away from those of the private sector that undermine the metaphor of running the public sector ‘like a business’.     

The Central Government-Private Sector Wage Differential

Since Ehrenberg and Schwarz (1986) there has been a plethora of articles investigating the relationship between public and private sector wages. This article examines part of this post 1986 literature by reviewing articles that examine central government-private sector wage differentials. In sum, most articles find that there is a premium paid to central government workers, although the premium has declined in recent years. In developing countries, however, the differential is usually negative. Women and minorities tend to do better in the public sector relative to their private sector counterparts. The evidence on union premiums between sectors is mixed, although the premium tends to be higher in the private sector. However public sector union workers do not do much better than private sector union members. The magnitude of all of the wage differentials discussed are sensitive to the estimation technique and data source used. The most common explanation for the public sector wage premium is economic rent accruing to government workers, although the public sector wage determination literature suggests that the differential is due to returns to political and 'vote producing' activities not relevant in the private sector.     

Public sector purchasing of health services: A comparison with private sector purchasing

Recent research has highlighted the existence of important differences between public and private sector procurement practices. Drawing on established transactional and relational conceptual frameworks, this paper examines whether the differing environments confronting public and private sector organisations affects procurement practices. By focusing solely on occupational health services as an example of a complex business service, the research allows the influence of environmental factors, notably policy drivers, to be considered across both public and private sector settings while service specific factors remain largely constant. Utilising a combination of questionnaires and in-depth interviews the research suggests that policy drivers had a major bearing on procurement practices adopted in the public sector, resulting in a very different pattern of engagement with service providers from that prevailing in the private sector. Specifically whereas private sector organisations utilised a range of approaches, which can broadly be classified as relational in nature, public sector organisations almost exclusively relied on transactional-based approaches. The nature of these services suggests that relational based procurement constitutes the optimal approach to the acquisition of such services. However, for public sector organisations the perceived restrictions imposed by public policy on procurement practices resulted in the adoption of an approach which can be viewed as resulting in sub-optimal outcomes.     

Are public sector personnel managers the profession's poor relations?

This article is concerned with differences between personnel practitioners in the private and public sectors. Drawing on survey and interview data from practitioners in both sectors, the authors report that public sector practitioners are less well‐qualified and are paid less than their private sector counterparts. Very few practitioners move between the sectors, suggesting the existence of separate and self‐contained career structures. It is argued that this is not a separation of equals, and is maintained partly by the existence of a system of myths and stereotypes which have the effect of discouraging able professionals from entering the public sector. The article considers the reasons for the continuing differences and the separation, particularly in the light of public sector reforms which might have been expected to have diminished them. The implications for personnel management in the public sector and for the personnel profession in general are then discussed.     

Towards a theory of the labor market with a public sector

The object is to specify and analyze equilibrium in a labor market with frictions when there is a significant public sector. In the vast majority of equilibrium studies on labor markets, a public sector has been ruled out by assumption. This seems a strange oversight as about 17% of workers in the US are public sector workers, whereas in western Europe, approximately 22% of workers work in the public sector. The goal in this study is to provide answers to such questions as: what happens to private sector wages if the public sector is increased? If the Government increases the number of public sector jobs, does this crowd out private sector jobs? When will private sector wages be greater (less) than the public sector wage? Reasonably complete answers to these questions (and others) are provided within the context of the model developed.     

Personnel Formalization and the Enhancement Of Teamwork: A public–private comparison

Formalization has long been regarded as one of the most distinctive features of the public sector. Personnel systems in the public sector are particularly formalized due to merit system protections and strong due process requirements. In much of the contemporary public management literature, personnel formalization implies red tape, referring to excessive rules that bring negative outcomes such as employee frustration. The present study offers an alternative view, suggesting that personnel formalization results in high-performance work practices, particularly teamwork, by ensuring that organizations attract the right employees and provide employees with various protections such as worker safety, procedural justice and conflict resolution. Given that public organizations are structured more formally, public sector employees are more likely to work in teams than their peers in the private sector. The authors test this view by using variables from the National Organization Survey (NOS) data set and find strong statistical support. Therefore, personnel formalization is not necessarily equivalent to red tape and not always detrimental to the public sector. It enhances teamwork, a central element of high-performance work practices.     

Comparing the impact of leader–member exchange,psychological empowerment and affective commitment upon Australian public and private sector nurses: implications for retention

This study uses Leader–Member Exchange (LMX) theory to test the associations between the supervisor–subordinate relationship, psychological empowerment and affective commitment amongst 1283 nurses working in Australian public and private hospitals. Both qualitative and quantitative data were collected, analysed and presented. The findings show that the quality of LMX is more important in public sector nursing contexts than in the private sector with regard to the relationship between empowerment and affective commitment. Furthermore, the relationship between empowerment and affective commitment is stronger for nurses in public sector organisations with low-quality LMX than for nurses in public sector organisations with high-quality LMX. As empowerment and affective commitment are both predictors of staff retention, the findings can assist in developing targeted current and future retention strategies for healthcare management.     

Further education and training in the french public sector

Since 1989, the French public sector has imitated the private sector's further education and training mechanisms. But today, it seems that just as in the private sector, the training policies in the public sector have severe limitations. Based on a case study of a large public research institute and on a national survey making it possible to compare the private and public sectors, the paper studies the further education and training policies and their links with the organizational needs. In the public sector, the difficult balance between individual's choices and strategic management comes on the one hand from the specificities of the administrative rules of human resource management, and on the other hand from the unions' power and strategies. Faced with new challenges (demographic evolutions, decentralisation, new demands from the users of public services), the French public sector must develop new training policies.     

Concordat or contract

The New Labour Government in England is seeking to promote public/private partnerships in health and social care as a key component of its political project. This article reports the findings from the first phase of an ongoing qualitative research study exploring the relationship between a private sector company and their public sector partners at four study sites. These findings indicate that organizations within the NHS do not view the development of public/private partnerships as a priority and furthermore currently have a limited ability to engage in strategic planning with the private sector. The findings are explored in the broader context of the evolution of ‘managed competition’ in health care systems and the role of partnership in that process.     

THE THEORY OF STATE-OWNED ENTERPRISES IN MARKET ECONOMIES

Abstract. Four topics are covered: the circumstances under which state-owned enterprises (SOEs) are more effective than private firms; the different approaches to modelling public and private firms; the performance of SOEs; and strategies including privatization to limit their more damaging effects. It is argued that ideological or development motives are important in their genesis, but that if efficiency and innovation are key considerations the normative case for their existence is more doubtful. Various types of SOE model are identified, deriving from the variety of circumstances in which they operate, and the theoretical perspective of the modeller. These include the property rights school, the public choice tradition, neoclassical, behavioural and budget maximizing approaches. All models assume the existence of monitoring problems, created by informational asymmetry. The consequences can include high non-pecuniary benefits for managers, a concentration on monitored activities, and lower innovation levels and efficiency than private firms. Curiously this is not necessarily reflected in higher prices or costs. Possible remedial strategies include a change of ownership, a change of objectives, the introduction of incentive-compatible payment schemes, improved performance indicators and privatization.     

Supply Chain Management as Private Sector Regulation: What does it Mean for Business Strategy and Public Policy?

The growing practice of environmental supply chain management by firms constitutes private sector regulation that is analogous in many ways to public sector regulation. Similarly to their public counterparts, private sector regulators set standards, apply standards, monitor for compliance, apply sanctions and require corrective action. Private sector regulation differs, however, in the source of authority, external oversight, analytical requirements, public participation and available sanctions. This article argues that supply chain management by firms goes beyond business objectives by creating positive environmental externalities for society, and that more systematic study of the similarities and contrasts between the two forms of regulation may provide valuable lessons for both. Further, it may be possible to increase the effectiveness of private sector regulation to achieve both public societal and private business goals. From a business perspective, supply chain management enables firms to strategically redefine their relationships with government, reduce uncertainty and promote goal‐oriented collaboration. Copyright © 2014 John Wiley & Sons, Ltd and ERP Environment