Public Enterprise Management

Chapter # 1

Introduction

Public Enterprise Management deals with the management of the public sector, public policy process, analysis, its impact, the dilemmas of strategy, effective management and organization in a changing and complex environment, as well as looking at governance and the idea of enterprise in the public sectors.

Public EnterprisesPublic enterprise is a 

business organization wholly or partly owned by the state and controlled through a public authority.

Public enterprises are by this definition intended to be operated in the public interest. 

What is Public?Frederickson five perspective of the public as

Interest groups, Rational chooser, Represented, Customer, and Citizen.

Defining AdministrationPublic administration is like any other

administration which is carried out in public interest.

“Administration is determined action taken in pursuit of a conscious purpose. It is the systematic ordering of affairs and the calculated use of resources aimed at making those happen which one wants to happen”. (Marx)

Frederic k Lane defines administration as organizing and maintaining human and fiscal resources to attain a group’s goals.

Administration is the planned approach to solve all kind of problems (Dimock 1960)

Defining Public AdministrationL D White, Public administration consists of all

those operations having for their purpose the fulfillment or enforcement of public policy.

Woodrow Wilson Defines “public administration is a detailed and systematic application of law”.

Therefore public administration is nothing but the policies, practices, rules and regulation etc, in action.

Approaches Towards the PA Public Administration has different

approaches likePolitical, Legal, Managerial and Occupational.

Political Approach• The legitimate object of government [is] to do

for a community of people, whatever they need to have done, but cannot do, at all, or cannot, so well do, for themselves – in their separate, and individual capacities – (Abraham Lincoln)

Public administration is what government does.F A Nigro argues that public administration is

essentially a cooperative group efforts in public setting. Secondly, it covers all the three branches of government machinery, the executive, the legislative and the judicial.

Political ApproachPublic administration plays a crucial role in

formulation of policies therefore it is a part of the political process as well (for e.g. Bills and Acts).

It can be direct and indirect

Direct – provision of services like mortgage insurance, mail delivery, and electricity.

Indirect – when the government pays private contractors to provide goods and services to citizens (Roads building, BoTs).

Political Approach

Implementation of the public interest and doing it collectively.

The PA works under the universal label of public interest.

The public interest is a commonly accepted good.The rise of administrative discretion in the face

of legislative vagueness means that the job of the anonymous administrator is to define the public interest.

Legal Approach of Public AdministrationAs defined PA is what a state does, it is both

created and bound by an instrument of the law.

It has to execute the public law.Every application of a general law is

necessarily an act of administration.In the Pakistan, the 1973 Constitution is the

law of the land. All legislation must conform.PA is implementation of regulation.It is government telling citizens and

businesses what they may or may not do.

Managerial Approach of Public Administration

PA is the branch of management.PA is geared toward the maximization of

effectiveness, efficiency of the economy. Many graduate schools of management (or

business or administration) are divided into public and private.

Managerial Approach of Public Administration

Public administration is the executive function of government.Government agencies put into practice

legislative acts that represent the will of the people.

• Public administrators are found in middle management, the group responsible for the execution and interpretation of top management policies and the day-to-day operation of an organizational unit.

PA is art or science

It is actually both.It requires judgment, confidence and

common sense.It also requires technical skills that allow

for the absorption and transference of information.

Just because you have the academic degree does not mean that you can function as a high level administrator.

Occupational Approach

• It is whatever public employees in the world do. People in bureaucratic careers tend to rise and fall

on how well they can write. In a game of shuffling paper, the person whose memorandum ends up on top wins.

Oral presentations are also useful, but writing is more decisive.

Public administration is idealism in action.Many people enter public service careers because

they are idealists; they believe in and seek to advance noble principles.

Occupational ApproachIdealism draws people into public

administration because it provides them with worthwhile and exciting things to do with their lives.

In Academics it is a Cross-disciplinary field – political science, sociology, business administration, psychology, law, anthropology, medicine, forestry, and so on.

Models of Public AdministrationPublic Administration (Traditional)Public Management (New PM)Responsive Governance

Public PolicyPublic policy is the principled guide to

action taken by the administrative executive branches of the state with regard to a class of issues in a manner consistent with law and institutional customs.

Courses of action, regulatory measures, laws, and funding priorities concerning a given topic promulgated by a governmental entity or its representatives.

Public PolicyPolicy is an ongoing process; it involves not only

the decision to enact a law but also the subsequent actions of implementation, enforcement and evaluation.

Public Policy should distinguish between what governments intend to do and what in fact, they do.

Government’s inactivity is as important as government activity.

Forms of Business OrganizationsSole Proprietorship: A Business Owned and

Controlled by Single Person

Partnership: A Business Owned by two or more individuals

Corporations: A Legal Entity separate and distinct from its owners

Public Enterprises:

Public Enterprise ManagementThe public enterprises came into existence as a

result of the expanding scope of public administration.

The advent of the concept of welfare state after the World War II and the increasing developmental initiative undertaken by Government across the world, the system of public enterprises was developed.

The government sells goods and services to the common people through the means of a state owned enterprise system which incorporates the characteristics of both public and private enterprises. For e.g. the metro train facility for commuting in

big cities, developed, managed and run by the government.

Meaning of Public EnterpriseA.H. Hanson describes “PE mean state

ownership and operation of industrial, agricultural, financial and commercial undertakings”.

Mallaya explains “PEs are autonomous or semi autonomous Corporations and companies owned and controlled by state and engaged in commercial activities”.

Meaning of Public EnterprisePE’s are known for the economic activity.Govt has to provide following for PEs

Capital (Alone or Jointly)Structure Control of Management Takes or Bears Profits or Losses according to

the ratio of capital supplier.

Objectives of PEs Economic and Social Development Provision of employmentRegional Balance of the development Avoiding the concentration of the wealth Reducing the Income Inequality.

Characteristics of PEsAn Economic Activity of GovernmentManaged by the Govt.Government OwnershipProfit Maximization is not the first aim.

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