elective public management – week 5 organizational structures/ppp
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Building Competence. Crossing Borders.
Elective Public Management – Week 5
Organizational Structures/PPP
Prof. Dr. Andreas BergmannInstitut für Verwaltungs-Management
andreas.bergmann@zhaw.ch
5.ppt, FS09 2
Preliminary note
Structures (follows Processes) follows Strategy
Alfred Chandler, 1962 (later annotated by Jack Welch)
… is equally valid in the Public Sector!
5.ppt, SS07 3
Organizational Structures/PPP
Overview
Starting point: Legal Forms of the Public Sector
Traditional structure: division of labour according to Fayol/Weber
Influence of New Public Management and ICT
PPP as an additional structural option
5.ppt, FS09 4
Starting Point: Legal forms
Legal forms determine the degree of autonomy
• Administration unit
• Department
• Dependent agency (without an own legal identity)
• Independent agency (with own legal identity)
• Incorporated company under public law
• Incorporated company (limited company, companionship, foundation) under private law
• Incorporated company in private ownership
org.auto-nomy
ofthe
entity
5.ppt, FS09 5
Starting Point: Legal forms
Influenceof
politics
Legal forms determine the influence of politics
• Administration unit
• Department
• Dependent agency (without an own legal identity)
• Independent agency (with own legal identity)
• Incorporated company under public law
• Incorporated company (limited company, companionship, foundation) under private law
• Incorporated company in private ownership
5.ppt, FS09 6
Traditional: division of labour
Top level structure
• Divisional structure predominant
- Ministries (of Education, Justice, …)
- Department (of Finance, …)
- Divisional Units (in smaller entities, such as local administrations, i.e. tax collection unit)
• Structure often similar to Classification of Function of Government (COFOG, issued by UN/IMF)
- Caution! The expression „function“ or „functional classification“ does NOT
coincide with the „functional organizational structure“, as it is used in
Organizational Theory!!!
5.ppt, FS09 7
Traditional: division of labour
Functional Classification (~divisional structure)
• COFOG = Classification of Functions of Goverment- 01 General Public Services
- 02 Defence
- 03 Public Order & Safety
- 04 Economic Affairs
- 05 Environmental Protection
- 06 Housing & Community Amenities
- 07 Health
- 08 Recreation, culture & religion
- 09 Education
- 10 Social Protection
5.ppt, FS09 8
Traditional: division of labour
• Swiss Variant
- 0 General Public Services
- 1 Security
- 2 Education
- 3 Leisure & Culture
- 4 Health
- 5 Social Welfare
- 6 Traffic
- 7 Environment
- 8 Economic policy
- 9 Finance & Taxation
5.ppt, FS09 9
Traditional: division of labour
Main issue: Shared services
• May be substantial in larger administrations
- Communication
- Personnel
- Finance
- ICT
• Typical area of conflict
- Cost (economies of scale!) vs. Customization
- Result: decentral solutions predominant
5.ppt, FS09 10
Influence of NPM/ICT
Stances of NPM
• Organizational structure reflecting products (services)
- Product = smallest entity of delivery, which may be demanded by (external) customers
- Grouping either- by groups of products; or- groups of customers
• Outsourcing of shared services
- Shared service centers
5.ppt, FS09 11
Influence of NPM/ICT
Limitations by ICT
• ICT is process oriented (rather than product oriented)
- Heterogeneous products in public administrations require tailored processes and ICT
- But: Identical support processes do not require tailored processes and ICT
- Large ERP systems (SAP, Oracle) usually cover both
• Heterogeneous ICT is major cost factor
5.ppt, FS09 12
Influence of NPM/ICT
eGovernment
• More than a webpage
• Customer orientation:
- E.g. „circumstancial“ approach (www.win.ch)
• But: Integration of processes crucial
- Data exchange
- Web data in databases, responses into databases
- Limitation: electronic signature
5.ppt, FS09 13
Influence of NPM/ICT
Bottom line
• External perspective
- Introduction of product/market oriented structures
- Citizen should no longer be required to know the structures
• Internal perspective
- Integration of processes
5.ppt, FS09 14
PPP as an additional structural option
Preliminary definition of PPP
A PPP is an agreement between government and a private partner(s) (that may include the operators and financiers) according to which the private partner(s) delivers the service in such a manner that the service delivery objectives of government are aligned with the profit objectives of the private partner(s) and where the effectiveness of the alignment depends on a sufficient transfer of risk to the private partner(s). (OECD)
5.ppt, FS09 15
PPP as an additional structural option
Source: Bennett et.al.(2000) in Bult-Spiering-Dewulf (2006)
5.ppt, FS09 16
PPP as an additional structural option
Service concessions
Public finance Concession
Government
Concessionaire
Operating Company
Construction company
Service contract
Operating contract
Construction contract
Finance providers
Government
Finance providers
Operating Company
Construction company
Finance contract Operating
contract(s)
Construction contract
Source: WORLDBANK, 2007
5.ppt, FS09 17
PPP as an additional structural option
Structural effects
• In many but not all cases: separate entity is created (or an existing one is appointed)
- Special purpose entity
- Concessionaire
• In all cases: Responsibilities are shifted away from public administration
5.ppt, FS09 18
References
- Bolz, U. (2005) Public Private Partnerships in der Schweiz.- Bult-Spiering, M., Dewulf, G. (2006) Strategic issues in Public-Private Partnerships. An
international perspective.- The World Bank (2007) Improving the management of concessions: Better reporting and a
new process for deciding when to use a concession
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