The Differences between Public Sector and Private Sector

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by Robyn Z. Abdusamad

Dr. Deborah LeBlanc PAD 620 Research Paper August 23, 2010

The Differences between Public Sector and Private Sector

SUMMARY

When we examine public sector versus private sector, plenty of differences come to mind. In defining each, we learn a private sector in an economy consist of all businesses and firms owned by ordinary members of the general public. It also consists of all the private households in which people live. The public sector in an economy is owned and controlled by a government. It consist of government businesses and firms and goods and services provided by the government such as the national health service, state education, jobs, roads, public parks and law and order. Throughout this paper, we will examine other differences that exist amongst public sector and private sector such as policy decisions and beneficiaries.

The Differences between Public Sector and Private Sector

Often you hear news analysts talk about the public and private sectors. While most people usually have an idea what these two terms entail, there are complex differences

between the two, which are also useful to learn about. Houston (2000) states, in spite of virtually universal agreement among scholars that public organizations have more goal complexity and ambiguity, public managers do not differ from business managers in response to survey questions about such matters. Public managers do not differ from business managers on perceptions about organizational formalization, in spite of a chorus of assertions that government agencies have more red tape and rules than private firms have. Public managers do, however, show very sharp differences in response to questions about constraints under personnel and purchasing rules. First, when we it comes to the public sector it is basically made up of organizations which are owned and operated by the government. Within the United States, the public sector consists of government agencies like federal and state offices. When a private individual speak of the public sector, they are typically referring to a public authority, or public body. Any federal institution that is associated with health care, police services, prison services, local and central government management, and all their departments, are also considered as a part of the public sector. Rainey and Bozeman (2000) states, organizations are made up of a complex of important dimensions and issues; researchers have developed bodies of research on these dimensions, which include goals, structure, motivation and many others. The comparisons of public and private organizations have been influenced by these patterns, drawing on conceptual and methodological developments in these areas. For example, researchers have compared business firms to public agencies on measures of work satisfaction among members of the organization and on their perceptions of organizational structure, using concepts and empirical measures that organization theorists had developed to measure satisfaction and structure. Next, there is the private sector. This sector is generally made up of organizations which are private , which means that they are not owned by, nor part of, the government. All small businesses, corporations, profit and non-profit organizations, partnerships, charitable organizations and middle to large entrepreneurships, are considered as part of the private sector. The specific examples are retail stores, credit unions, local businesses and non-government operated banks. So, what is the difference between the public and the private sector in regards to the way that they operate? Those who are in the public sector are known for supplying services to the public, and they are not competing with any other institution for profit. On the other hand, private sectors seem to have a goal of outshining their competitors, and maximizing their revenue. According to Perry and Rainey (1988), Privately owned and funded organizations are asserted to be more heavily influenced by their economic markets, and they are more autonomous from government oversight. They also state, Governmental regulation and government contracts can bring heavy governmental control to bear on some private firms. On the other hand, government organizations that are funded through market sales or user charges often have concomitantly greater autonomy from governmental controls. Majority of public sectors are managed under a bigger chain of command and control, while private sectors mostly operate in a corporate setting. As for the differences with their policy decisions, the activities in the public sector have a goal of adhering to what

is indicated by law, while the private sector is driven by the rules of shareholders and corporate owners. Schmidt (2008) states, The research agenda of companies is more focused and targeted and therefore perceived as easier to handle for managers. Also, the decision-making process is different. Managers of private enterprises can faster and easier change orientation, focus and targets. This implies, according to some managers, that the instrumentation used in the private sector is different from the one used within public research. [pic][pic]Finally, the beneficiary of the services provided by the public sector, is the general public. These goods and services are sometimes provided free and in other cases consumers have to pay a price. The goal of public sector activity is to provide services that benefit the public as a whole. This is because it would be hard to charge people for the goods and services concerned or people may not be able to afford to pay for them. Therefore, the services tend to be those considered very important to modern life that for moral reasons their universal provision is usually guaranteed, and they are associated with fundamental human rights. Helping others with a specific need or want is their way of defining a service. An example of a service which is not generally considered an essential public service is hairdressing. As for the private sector, it is mostly the consuming public who utilizes the goods and services that they offer in exchange for profit. A private sector is not controlled by the state. There are various legal structures that exist for private sector business organizations, depending on the jurisdiction in which they have their legal residence. Individuals can conduct business without necessarily being part of any organization. According to Burger and Stare (2010), The challenge remains how to simultaneously boost employment and efficiency in private services, while curbing the employment in public services without jeopardizing their performance. Exploiting the innovation potential in private and public services as well as the interfaces between the two may contribute to solving the problem. In conclusion, most studies show there is a small amount of evidence that the participants have sufficient knowledge of real public-private differences. Seemingly, when it comes to researching the differences between public and private sectors there are many comparisons that can be made amongst the two. Vuori (2007) states, Sector differences in the management of public and private organizations are likely to be inherently misleading because the procrustean dualism of their categories will tend to blank out important phenomena. Public and private managers both find themselves operating in environments, which we describe as spaces that combine both market and political forces. While there are plenty of differences between public and priv ate sectors, there are similarities between them too. Most public sector entities require some form of bureaucracy to implement the policies that guide the provision of the public good or service. Many Private Sector entities find that as they grow, creating some form of bureaucracy allows them to realize efficiencies and improve profitability. Bureaucracies, when implemented properly, can create a mechanism that helps either the private sector entity or the public sector entity to function in a consistent and predictable manner with defined roles.

SCHOLARLY REFERENCES

David J. Houston, Public Service Motivation: A Multivariate Test , Journal of Public Administrative Research and Theory, Vol. 10, No. 4; 713 -728 (2000). Hal G Rainey; Barry Bozeman, Comparing public and private organizations: Empirical research and the power... Journal of Public Administration Research and Theory; Apr 2000; 10, 2; ABI/INFORM Global pg. 447. James L. Perry and Hal G. Rainey, The Academy of Management Review , Vol. 13, No. 2 (Apr., 1988), pp. 182 -201.

EvanthiaKalpazidou Schmidt. (2008). Research management and policy: incentives and obstacles to a better public-private interaction. The International Journal of Public Sector Management, 21(6), 623-636. Retrieved August 25, 2010, from ABI/INFORM Global. (Document ID: 1545187541).

Vuori, Jari, Public and private manager: Does the difference really matter? , (2007); Leading the Future of the Public Sector: The Third Transatlantic Dialogue University of Delaware, Newark, Delaware, USA.

Burger, A., & Stare, M.. (2010). Public and private services transformation in the CEECs. The Service Industries Journal, 30(4), 479. Retrieved August 25, 2010, from ABI/INFORM Global. (Document ID: 1922870961).

Development of the Private Sector as opposed to Public: Implications of Higher Education

Chapter 1 - Introduction and Overview 1.1: Introduction Funding policies for higher education differ greatly from nation to nation and one of the major debates concerns the private-public mix. Five principal patterns emerge from the following variables: whether the system is comprised of just one sector or dual privatepublic sectors, the size of each sector if there are a mass variety of them, the contribution of private funds to each sector, and the contribution of public funds to each

sector. Beyond their defining empirical characteristics, each pattern is based on distinctive historical and ordinary justifications. Each therefore faces different policy choices within the more general private-public debate, although certain basic value questions commonly arise. Seen in comparative perspective, the United States continues to stand out for its significant dependence on private finance. This is because, compared to oth er developed nations, the United States still has an exceptionally large private sector with relatively great private finance and because, compared to almost all countries, the U.S. public sector also attracts various private financial monies. There is great variation, however, and individual U.S. state systems may find useful counterparts to their empirical realities and policy dilemmas in certain foreign (national) systems. Focusing on the prevalent organizational structure and management distinctions between the private and the public sector, the dissertation aims to demonstrate the tendency of the public sector to adhere to outmoded and inefficient management models as compared to the best practices models, strategies, tools and mechanisms adopted within the private sector. The difference between public and private sector management styles and models is customarily justified through reference to organizational structural differences. My research takes a opposing position, arguing that even though there may exist structural differences between public and private sector organizations, the differences are not such as to prevent the successful implementation of private sector management strategies and a typical example of something in public sector organizations. These statements and arguments shall be confirm through a review of the literature on public and private sector organizations and contemporary management strategies and, solidified through the results of the field study. Many administrative scholars c laim that government and business organizational values should be different, but whether they really are different merits further empirical analysis. Despite the rapidly expanding number of studies on values in public and private settings in recent decades, efforts to empirically study the differences and similarities between the values of both public and private sectors have been exceptional; most research is single sectioned and single disciplinary in both theory and method. Although a lively debate has been initiated on the relationship between market and public values and the dissatisfaction of value intermixing, most contributions are ideological rather than descriptive. We contribute to this debate empirically by comparing value orientations in public and private sector organizations, drawing upon theories and concepts from both public and business administration. The purpose of the dissertation is to argue and prove that there exists no valid obstacle in the face of the public sector s adoption of management strategies which are comparable to those prevalent in the private sector. A guideline for the successful implementation of total quality management (hereafter TQM) in the public sector shall be proposed.

1.2: Importance of Topic The study proposes to examine the similarities and differences between the public and the private sector to determine if private sector strategies can keep a strong hold on

successful adaptation private sector, in comparison to the systems of other organizational structures. Such provided evidence indicates that the competition for students, faculty members, research support and financial resources has markedly increased within the United States and internationally over the last decade (Dill, 2003). Increased competitiveness with public sectors has become a proven interest in the production of human capital, while the research shows that market failure in which the increased competition weakens learning in higher education. Because of information imperfections in the market for higher education, this kind of fragmented public ownership is characteristic of the public universities in the U.S., where none of the nation s many public universities are controlled by the national government. Rather, most public universities are operated by state governments, and the rest are operated by local governments. Since there are 50 states in the U.S., each of which has nearly complete sovereignty in the field of education, this offers the potential for substantial competition, and that potential has been realized in public universities in the U.S; also has often pr ompted quite actively with each other, as well as with the nation s many private universities, for both students and faculty. The result has been continuous pressure on both private and public institutions to perform well. Presumably as a consequence, both public and private institutions can be found at the top of the quality spectrum. (Dill and Soo, 2004), the growing rivalry among institutions of higher education has become a contest for academic prestige, not a competition for the most effective production of human capital. The high visibility of college and university rankings that rely upon indicators of research performance and student selectivity encourages all four-year institutions to invest in an increasingly pricey competition for status. In a national study of the US higher education market Brewer, Gates, and Goldman (2002) discovered that both public and private institutions are making extensive investments designed to increase the selectivity of the admissions process by linking tuition discounts with academic merit and student ability. These institutions are also investing in student consumption benefits such as comfortable dormitories, attractive eating facilities, and fiber optic computer networks that will help draw high ability students. The researchers suggest that this attempt to build prestige by cream skimming the student market does not lead to an improvement in the quality of educational delivery. A recent study on the relationship between institutional selectivity and the presence of educational practices known to be associated with student learning confirms that they are largely independent (Kuh and Pascarella, 2004). A colleges selectivity offers no guarantee that it provides a more effective learning environment than a less selective school. The research questions are: Q1: Can Institutional management strategies, tools, and paradigms, traditionally associated with the private sector be applied to the public sector? Q2: How can TQM as a strategic management paradigm are successfully implemented in the public sector? The importance of the topic stems from its area of focus and purpose.

Focusing on the differences between the public and the private sectors and outlining the set of contemporary management strategies associated with best practices and total quality management, the dissertations. The primary purpose is to prove the possibilities, and imperatives, of the public sector s adoption of private sector management strategies. The dissertation derives greater primary importance upon consideration of the relationship between public and private sector organizations. As Flynn (2002) explains, public and private sector organizations do not occupy different spaces, nor do they operate in isolation from one another. Rather, public and private sector organizations operate within the same space, the same environment, as in market, economy and community and, continually interact with one another on a business and professional level. Insofar as it proceeds from an acknowledgement of the similarities between the two, and the imperatives of removing artificial obstacles to the efficient and effective operation of the public sector, whether within the context of sectoral matrix or its relationship with the private sector, this present study is important.

1.3: State of the Field The greater majority of comparative researches and studies on public and private sector management have focused on structural differences, just as the majority of the literature on TQM and strategic management has focused on their implementation in the private sector. There exists, however, a small body of academic literature which focuses on the disputation of the boundaries between the private and the public sector, insofar as the applicability of TQM and strategic management is concerned. This critique aims to contribute to the abovementioned literature by making a case for applicability and designing a model for realization and implications of Higher Learning institutes. 1.4: Field Research Problems The aim of the Thesis is to explore public and private sector strategy in an Educational setting. This has been done by carrying out eight interviews within two organizations. The first organization (Organization A) is a public sector organization and a set of four interviews were carried out with public sector managers and consultants. The second organization (Organization B) is a private sector organization and another set of four interviews were conducted with private sector managers and consultants. The field research was limited to semi-structured interviews which, in itself, may be challenging and there was no opportunity to conduct a survey of employee opinion on strategic management/TQM, their observed opinion on their organization s management failures and successes and, most importantly, on the possibilities of implementing TQM paradigms in the public sector. The researcher sought to overcome this particular problem, or limitation, through reference to secondary case studies on the successful implementation of TQM in public sector organizations. Another problem which the researcher confronted while conducting the field research was the subjectivity versus objectivity of the respondents. Despite the fact that the interviewees

were, without exception, very helpful and pleasant, often trying to give as complete an answer as possible to the questions posed, it was difficult to determine whether these responses were objective or not. It was serving upon the researcher, therefore, to ensure the validity of the responses. Finally, the interviewee bias issue was another problem. The researcher had to purposely detach himself from the context in order that he may later analyze the primary data from a detached perspective and not allow his own findings and opinions to tamper with either the direction of the interviews, influence the responses of the interviewees or impinge upon the primary data findings.

1.5: Outline of Thesis Research has been compassed of five chapters. Following the introductory chapter, which outlines the nature of the study, Chapter 2 will present reviews on related literature on contemporary management strategies, public versus private organizations and the tools, mechanisms and strategies of best practices business models. The focus shall be on TQM and, Chapter 3, will be devoted to defining it, outlining its theoretical precepts and discussing its implementation and present and defend the dissertation s selected methodology and present the results of the field research while Chapter 4 & 5 will present a guideline for the successful implementation of TQM in the public sector and offer a detailed discussion and debate of the research results. Finally, Chapter 6 will conclude the study through an articulation of the research findings, a discussion of the implications of these findings and the presentation of a set of recommendations. 1.6: Summary As the current chapter has sought to explain, the dissertation shall focus upon management strategies and paradigms in both the public and private sector, highlighting the differences therein. The argument, however, is that the disparity between management strategies is not justified and if private sector management strategies and models were to be applied in the public sector, productivity and performance efficiency and effectiveness, not to mention efficient allocation and usage of resources would be maximized. As Dent, Chandler and Barry (2004) explain, contemporary management practices are predominantly geared towards the maximization of organizational efficiency through the implementation of performance measurement and excellence tools and strategies. The implementation of these models within the public sector has, over the past decade, contributed to the raising of productivity levels by at least 15-20%, in addition to which they have functioned to eliminated resource wastage by anywhere from 40-90% . While the private sector has exploited these models, strategies and tools, the public sector has, in the main, not. Consequently, and as Moore (2004) maintains the public sector is largely denied the performance betterment and productivity maximization tools afforded to the private sector. The argument, thus, is that were the public sector to implement and exploit contemporary management practices widely used in the private sector, performance, productivity and, efficiency levels would all experience varying degrees of increase.

Through a qualitative approach, focusing on the experiences of one public and one private sector organization, this argument shall be supported. The following chapter presents a review of the relevant contemporary literature on the selected topic, with particular focus on total quality management as the optimal management paradigm.

Chapter 2 - Contemporary Management Practices: Organizational Development, Structure and Contemporary Management Practices. Schools are closely examining their operations and organizations to determine which administrative support functions, and redundancies, are diverting scarce resources away from higher education s core purpose. * They're also finding ways to rationalize traditionally decentralized and highly Many Universities are reacting with determination and creativity to the new challenges they face. Budget deficits have mushroomed following sudden declines in endowment values, deep cuts in state education funding, and limits on tuition increases that can be passed along to already financially burdened students and families. All these trends are making the operating environment for universities particularly difficult. These pressures are placing core academic missions of teaching, research and outreach at increasing risk; thus creating a want to generate discrepancy-planning scenarios as a result: Complex organization structures; ones whose governance processes often produce isolated organizational entities, with widely disparate service levels and unworkable spans of control. 2.1: Introduction Within the context of an ever-increasingly competitive global business environment and highly stringent consumer quality requirements, the predominant goal of contemporary management strategies, paradigms and practices has become quality management, defined as dynamic responsiveness to consumer needs, shifting market patterns and consumer/customer satisfaction As a growing focus of concern within management, knowledge management is an area of research and practice that is still searching for a stable set of core concepts and practical applications. This paper undertakes to contribute to this search by addressing some fundamental questions about the nature, domain, conceptual foundations, and practical challenges of knowledge management and organizational learning. Working from the premise that knowledge is inherently personal in nature and will therefore largely remain tacit in the minds of individuals, the personal knowledge approach generally offers recommendations for knowledge management practice that focus on managing people as individual generators and carriers of knowledge. To manage the personal knowledge of individuals, managers are typically urged to identify the kinds of knowledge possessed by various people in an organization and then to arrange appropriate interactions between knowledgeable individuals. For example, the personal knowledge approach views the dissemination of knowledge in an organization as a task that can best be accomplished by transferring people as knowledge carriers from one.

The consequence of the private sector s adoption of quality management strategies, tools and paradigms and the public sector s failure to do so is that the latter is operating at lower efficiency levels than the former (Daley, 2001; Rosenbloom et al., 2001). The comparatively poor performance of the public sector, as measured through strategic business outcomes, has fortified the call for the public sector s adoption of strategic management tools, including those furnished by TQM (Rosenbloom et al., 2001; Johnson, 2006). The public sector, in brief, needs to adopt managerial approaches which are comparable to those employed by the private sector. To assert the imperatives of the public sector s adoption of management paradigms, tools and strategies commonly associated with the private sector, does not constitute support for the blind transference of management models. Instead, it implies the importance of designing paradigms through explicit reference to an organization s particular characteristics. Differences in values between the public and private sectors in our society often divide us. For our citizenry to understand how higher education differs from Corporate America is critically important. These enterprises represent two of the major forces in our society. Corporate America dictates our economy, our material well-being, and our position as a world leader. Higher education is the fortress for learning, for generating new knowledge, and for serving the public good in our society, and indeed throughout the world. Most people in one sector do not understand the fundamental nature of the other. This factor is even more profound when you realize that the majority of people who sit on boards of trust or who influence policy for institutions of higher learning are from the corporate and business world. A good example is right here in Georgia. Of the 18 members of the University System of Georgia Board of Regents who served in 2006, one was a physician, one an attorney, one an educational consultant, and 15 were leaders in business and industry. Given that the public sector often emerges as the very antithesis of the private sector, as shall be discussed in the upcoming section, insofar as it is mechanistic, formal and centralized, compared to the organic, informal and decentralized nature of the private sector, blind cross-sectoral transference of management paradigms would not be successful. Private sector management strategies, tools and paradigms cannot be transferred to the public sector with the expectation that implementation will be either successful or seamless. Instead, they must be adapted to the characteristics and needs of both the sector itself and the organization in question. Adaptation, as shall be discussed through the literature reviewed in this chapter need focus on a large array of organizational characteristics, from organizational growth stage to prevalent decision-making models. Following an articulation of the differences between public and private sector organizational structures and prevalent management methodologies, the literature reviewed in this chapter shall seek the exposition of the importance of growth stage consideration, the value of participative decision-making and the imperatives of utilizing strategic management tools. While public sector management virtually eschews the entirety of the stated, not only is there no valid reason for doing so but, it is contrary to the precepts of scientific management. 2.2: Public and Private Sector Organizational Management The overabundance of organizational types, sizes and activities has necessarily complicated management philosophy. Contemporary management practice has stepped

away from the one size fits all management paradigms, theorizing that best practices is inextricably dependent upon the design of management models which are influenced by a number of variables. Among these variables are the size, structure, business processes, industry and sector of the organization in question and, most importantly, the organization s growth stage (Churchill and Lewis, 1983; Scott and Bruce, 1987). As explained by Management and organizational development scholars, contemporary management philosophies, such as total quality management, lend to the articulation of a best-practices paradigm, or excellence model, precisely because they consider all of the stated variables during the model design, planning and implementation phases (Seghezzi, 2001). In today s circumstances, the local bodies are a standard shift with regard to their financial reporting system. Some of the local organizations have made genuine efforts to shift from the existing cash basis of accounting to alternate of accrual system of accounting. This is a welcome step by such bodies towards a more accountable and obvious financial reporting system. Management is defined as planning, organizing and controlling in an organization; and leadership is interpreted as the establishing of direction, and motivating and aligning of people. Academia will continue to recruit and retain provosts, deans, academic vice presidents, and other chief academic officers who are charged and challenged with leading the staff with centralized student support services and the faculty with decentralized curriculum development and academic program planning; setting the tenure direction for the various applications of teaching, scholarship and service; understanding the educational mission and the interdisciplinary relationships of the arts, sciences, and the professions; overseeing all learning repositories and resources, ranging from academic libraries to scientific and technological laboratories; working collaboratively with campus constituencies whose participatory contributions provide the vehicle and bridge for authentic academic dialogue; and facilitating the development of an administrative foundation that combines strategic budgeting with the academic management of programs and services. The public sector, however, still lags behind and, in general term, has betrayed a reluctance to engage in the restructuring of their management models, the redesigning of their business strategies and the reorganization of their structural composition. Insofar as management scholars are concerned, the aforementioned reluctance is somewhat unconsidered and largely unjustifiable. Certainly, they admit to the existence of fundamental variances between private and public sector organizations but maintain that structural and areal inconsistencies do not constitute a applicable obstacle against the design and adoption of a best practices, excellence model or total quality management standards (Flynn, 2002; Dent, Chandler and Barr y, 2004). The above stated does not seek the contestation of the fact that there are differences between the public and the private sector and that these differences must be reflected in management strategies and paradigms. However, it does dispute the prevalent assumption that the applied management paradigms and strategies need be almost divergent. Such divergence is expressed in the predominant tendency for public sector organizations to eschew the exigencies of updating and reworking their management strategies and paradigms towards greater consistency with their external environments. This has concluded in the posteriors relentless adoption of highly formalized and

extremely centralized management strategies and organizational structures, rendering the organizations in question vulnerable to eventual Management scholars have determined that public sector organizations are largely modeled after the traditional bureaucratic organizational structure, as influenced by Weber (Gibson, 1966; Cane and Thurston, 2000; Dent, Chandler and Barry, 2004). The implication is that all of the four components of organizational structure labor division, departmentalization, and span of control and scope of decision-making are shaped by the habitual managerial theory. This, according to numerous management scholars, has only served to offset an organization s inherent capacity for flexible response to changing external conditions and has, in the long run, resulted in the formulation of mechanistic and weakened organizations. 2.3 Characteristics of Public Sector Organizations: As explained by Flynn (2002) among others, labor division within the public sector organization is invariably highly specialized. Task specializations are clearly articulated and each employee has a specific set of job functions, clearly set out in his/her job description, which he/she must operate by (Bourgeois, 1984; Bourn and Bourn, 1995; Flynn, 2002). While the advantages of specialization and clearly articulated job descriptions are practically too numerous to articulate, the disadvantages are enormous. Certainly specialization entails that employees are often matched to jobs according to their skill-sets and explicit job descriptions mean that employees always have a clear understanding of the tasks they are required to perform and know the boundaries of their professional responsibilities. Excessive occupation, however, as is often the case with private sector organizations means that employee cannot function beyond the parameters of their jobs and are devoid of the proactive, problem-solving skills which are deemed integral to contemporary organizational success according to Bourgeois Quite simply, employees are confined to the limits of the skills that they brought with them upon joining the organization, and on which basis they were hired, and their job descriptions. During the 1960 s, management scholars engaged in the critique of public sector management, maintain that the functional departmentalization trend typical of public sector organizations only serves to compound the nature of the obstacles towards efficient and effective organizational functioning. The grouping of employees according to their professional skill-sets and their job descriptions has its advantages. The most obvious of these, naturally, is departmental efficiency. The disadvantages, however, are the invariable tendency for the evolution of narrow departmental visions and the formation of communication and operational disconnects between the various departments. Within the context of an organizational structure which hardly facilitates extra-departmental communication, cooperation and organizational cohesiveness, organizational goals are often sacrificed for departmental ones. The consequential detach prevents department heads and employees from embracing a vision other than the immediate departmental one. As may be deduced from the above, the traditional organizational structure typical of public sector entities is geared towards extreme centralization of control and authority. Decision-making ends towards

the oppressive, with the command chain flowing downwards. Employees are virtually excluded from the decision-making process and final decisions are confined to top management. The public sector organization is, thus, addit ionally distinguished from the private sector by its vertical hierarchical Structure. The traditional bureaucratic, centralized and highly formalized character of public sector organizations is problematic because it gives rise to mechanistic organizations which are highly vulnerable to deterioration, compounded with the probability of their being rendered beside the point by the market and or sectors in which they operate. Bourgeois (1984) agrees and adds that the tendency of public sector organizations to devolve into mechanistic ones, largely consequent to extreme specialization and centralization, constitutes one of the more telling signs of organizational atrophy. Mechanistic structures, implying task repetition, inflexibility and centralized control, render an organization incapable of responding to external environmental changes or emergent demands. The organization functions according to a predetermined set of business strategies and tasks which employees execute in abidance with a rigid blueprint. The mechanistic process by which such organizations function, may mean that business processes and tasks are executed with a high degree of efficiency but, as Kearney and Berman (1999) emphasize, not with Effectiveness. They are not effective because they do not address the reality of the surrounding external environment, do not influence it and are not influenced by it. As deduced from the literature reviewed in the above, public sector management and organizational structure are inconsistent with the requirements and criteria of best practices. They are inflexible, consequently impassive to external environmental forces and demands and, accordingly are deteriorates structures which are increasingly incapable of survival within a highly competitive and ever-changing business and or market environment. 2.4 Characteristics of Private Sector Organizations There is a wealth of literature on private sector management strategies and on the characteristics of private sector corporate entities. As much of the dissertation will focus upon private sector management theory, the literature reviewed in this section will be limited to an explanation of the characteristics of private sector companies in immediate comparison to public sector ones. Organizational development and industrial management scholars, Birkinshaw and Hagstrom(2002) maintain that it is erroneous to assume that private sector organizations can be categorized under one general heading and, subsequently, allotted the same set of structural, organizational and strategic characteristics. Certainly, and in the most general of terms, it is possible to describe private organizations as flexible and decentralized vertical structures which rely on specialization but equally focus on diversified skill sets. To define private organizations decision-making process and strategy as a largely participatory one; it provides only a general framework for the characteristics of private organizations and should not obscure the fact that there exists management, strategic and structural differentials within and certain environment. Mistaken beliefs about PPP * Public private partnerships are the same as privatization

* By entering into a public private partnership, public sector loses control over the provision of services * Public private partnerships apply only to infrastructure projects * The principal reason for government entering into public private partnerships is to avoid debt * Public sector employee will lose under public private partnerships The cost of service will increase to pay for the private partner's profit * There are only two partners in a public private partnership The variances and differences that exist between private sector firms is the key to their successfulness. The majority of private sector firms customize management styles and strategies for greater reliability within internal environmental structure, associated with the similarity of external environment, and primarily with the market in which they operate. Kearns (1995) adds that even as they preserve the outlined structural framework and ensure that selected management models support and promote shared decision-making, decentralization and varied skill-sets, the more successful of the private sector organizations design the particularities of their management strategy in consideration of their growth stage. The implication here is not just that individual private sector organizations are continually evolving and are continuously engaged in the re-articulation of Furthermore, the dilemma in uncertainty of purposes is intensified by excessive and unnecessary peripheral agencies, with purposes that overlap and distend official procedures. One might say that the goal of public administration is to ratify public policies, but the overlapping and the main ambiguity of most of these policies, and the vagueness of the enactment of these policies make public administration s purpose to be more unclear. However, the fact that public institutions are not profit driven, should not lead us to believe that public sector employees and managers are not concerned about financial matters. As is the case with private companies, public sector units and organizations fight for funding and influence. Another factor that makes the public sector different from the private is decision making in public administration, the decision must be and should be pluralistic. The founding fathers intentionally created a democratic republic where all key decisions are made in politicized environment. This allows for utmost participation: open debate, multiple veto points; a decision making hierarchy where consensus must be achieved at each level, ideally, an informed decision. While private administration s decision -making is much simpler it s monopolistic or close to monopolistic. This type of decision-making would avoid any conflicts in interest; hence, the goal is clearly defined. (bureaucracy ) The visibility of public administrators is another notable difference between pu blic and private sector. While a manager in a private business may work in relative obscurity, the public manager must operate in the public eye. His or her actions are constantly subjected to public scrutiny. The openness of the work of the public manager doesn t end in merely carrying out public policy; the public manager has to respond to the demands of the public. Denhardt speaks of the anticipated stress between efficiency and

responsiveness, the pressure to manage effectively and to be simultaneously responsive to public concerns. This pressure often leaves public organizations in a pressing state, trying to serve a public that demands effective government but repels at paying for it (taxes). These are organizational growth stages, decision making and strategy. The rationale for their discussion lies in the fact that they comprise some of the more influential factors in the design of both private sector management strategies and TQM paradigms. In concise, and as shall be clarified through th e literature reviewed in successive sections, there is no one size fits all management model types, as Bourn and Bourn (1995: 128) so briefly states findings. Instead, what are loosely referred to as management type should be regarded as frameworks which provide organizations with the guidelines requisite for the design of a management paradigm which immediately addresses their needs, requirements and characteristics. Within the context of the stated, TQM emerges as a framework, not a paradigm which provides organizations with the tools and strategies required for the design of a TQM management paradigm with `strategically fits into the organization and is optimally consistent and considerate of its needs. Numerous factors must be considered when designing this model, among which are growth stages and decision-making and communications models. These shall be discussed below. 2.5: Growth Stages and Challenges Organizational development scholars have forwarded multiple business growth models. Among these are the industry, large business, small business and general growth models. Greiner's five-stage model (1972; 1998), is the more popular of the business growth models. These views are shown as series of evolutionary growth periods, followed by changes forced by crises. Apart from these two factors, evolution and revolution, Greiner identifies three other key dimensions to organizational growth. These are the size and age of the organization and the growth rate of the industry it is in. (As shown in Table 1 and 2) 2.6: Summary The purpose of the foregoing literature review was to articulate the differences between the public and he private sectors, on the one hand and to outline the criteria for the selection and design f management strategies, on the other. As the literature reviewed suggested, effective and efficient, goal-oriented organizational performance is primarily predicated on decentralization and flexibility. The organizational entity needs to be structured in such a way as would allow participatory management and a two-way of information. This enables the arrival at infinitely more informed and realistic decisions, strategies and policies. Besides that, flexibility has emerged as a key predicator of success; wherein organizations have to be flexible enough to redesign management strategies according to requirement, develop management paradigms which are consistent with the organization s growth stage and decision-making frameworks which meet the demands of the situation at hand. Through a review of the academic literature on all of the stated management concepts, the chapter has sought to demonstrate that the outlined concepts are simply consistent

with scientific management precepts and should not, in any way, be regarded as peculiar to private sector management. The next chapter shall build upon the aforementioned through a review of the literature on contemporary management theory, with particular focus on total quality management. The intent of the forthcoming chapter is to expose the best practices management model most widely used in the private sector for the purpose of later arguing, not just the advantages and possibilities of its implementation in the public sector but, the exigencies of such implementation

Chapter 3 - Contemporary Management Practices: The Conceptual and Theoretical Fundamentals of TQM 3.1: Introduction

Tracing its roots to an economically desolated post-war of Japan, Total Quality Management (TQM) is popularly perceived of as a comprehensive management paradigm whose primary goals are customer satisfaction, and a high degree of organizational flexibility as would ensure continued and timely responsiveness to external environmental developments and demands. It is deliberately designed to motivate organizational energy, as opposed to mechanism while functions as a instruction against the waste, of which public sector companies growth stages are particularly vulnerable to TQM. These companies comprehensive management viewpoint is primarily founded upon an understanding of the fluid nature of the external environment and the necessity of managerial capacity to respond to those changes in such a way that preserves customer satisfaction, loyalty, competitiveness and superior overall performance. Not only does its successful implementation offset the potential for organizational atrophy and transform formerly mechanistic organizations into dynamic ones but, it is adaptable to, and adoptable in, both private and public sector companies. 3.2: Definition of Total Quality Management Saylor (1996) states that the definition of TQM is contained within its appellation: Total Quality Management. Proceeding from within the parameters of the stated, the definition of TQM is as follows: Total: Within the definitional parameters of TQM, the meaning of the word total operates on two different kevels. In the first place, it refers to the totalizing perspective that this managerial approach takes towards the concept of organization. Total refers to the whole of the organization in its entirety, such as all units and subunits that embrace it, maintaining that the accomplishment of operational competence is dependent upon the feat of all units as one. On the second level, total refers to the t otality of the organization s human resources and personnel, emphasizing that the responsibility for achieving quality depends mainly on each individual within the organization not wholly management. (Saylor, 1996). Therefore, total references the inclusive view that this executive philosophy has of an organization and its contention that the attainment of

excellence is dependent upon the operation of each unit and the role that each person within the organization plays. Quality: Within the context of the TQM philosophy, quality does not simply refer to the final output but to all steps involved in the production of that output and the business processes requisite for the maintenance of quality output. The attainment of quality output, according to this particular managerial philosophy, is incontrovertibly linked to the organization s understanding customer needs through constant market and consumer research and on continually adjusting organizational operation to meet those needs and satisfy expectations (Saylor, 1996). Quality here is identified as the penultimate organizational aim, insofar as its attainment and subsequent sustenance is the predicator of organizational success, consumer/customer loyalty and the protection of existent market shares, not to mention their expansion. Management: Within the framework of TQM, management does not simply refer to the control exercised over the business processes implemented for the attainment of quality or even to the management of the organization per se but, to the role that top management plays in order to incite and motivate quality performance and the drive towards excellence. The management component of the appellation references top management s responsibility to design and implement the business processes, maintain both project management and performance measurement models, utilize strategic planning and statistical tools to ensure the articulation of realistic organizational goals, the fulfillment of those goals within a well-defined schedule and, above all, management s function as a model of, and drive for, total excellence of quality (Saylor, 1996). 3.2.1 Fundamental Ideology As may be deduced from the above stated definitions, TQM references a number of interrelated principles. These are conformance to quality determined specifications, adherence to the requirements established by the outlined by the defined quality standards, fitness for use, avoidance of loss and minimization of operational waste, the satisfaction of consumer demands and, more ideally, the exceeding of consumer/customer expectations (Reeves and Bednar 1994). The classification of the aforementioned organized principles, and the communication of the associated elements involved within each area has the viability of confident managerial viewpoint, parallel with an amendment of the ongoing capacity of the company s performance, in order to accommodate the stated principles.

3.3: Hypothetical foundation Moving to TQM is like any other organizational change. It must be managed effectively, and leaders of the change must take into account aspects of the organization's present day cultures. In fact, although TQM brings a number of benefits to those in the organization, you can expect some people to be cynical and resistant to change. Everyone in government has seen management fads come and go but a well managed TQM organizational change is likely to bring most if not all people on side over time.

However, the somewhat all-inclusive organizational management approach to Total Quality Management does not imply that its adoption may support abandonment of strategic planning and project management tools (Zbaracki, 1998; Bacdayan 2001; Longo, 2000). 3.3.1 Theory of Total Systems TQM practitioners and scholars maintain that a management philosophy, TQM is inherently founded upon the total system perspectives theory. TQM, in other words, proceeds from the theoretical parameters of the total systems approach but extends beyond it. Determination of the validity of the aforementioned necessitates a brief review of the literature on the total systems theory. In today s circumstances, the local bodies are a standard shift with regard to their financial reporting system. Some of the local organizations have made genuine efforts to shift from the existing cash basis of accounting to alternate of accrual system of accounting. This is a welcome step by such bodies towards a more accountable and obvious financial reporting system. Management is defined as planning, organizing and controlling in an organization; and leadership is interpreted as the establishing of direction, and motivating and aligning of people. Academia will continue to recruit and retain provosts, deans, academic vice presidents, and other chief academic officers who are charged and challenged with leading the staff with centralized student support services and the faculty with decentralized curriculum development and academic program planning; setting the tenure direction for the various applications of teaching, scholarship and service; understanding the educational mission and the interdisciplinary relationships of the arts, sciences, and the professions; overseeing all learning repositories and resources, ranging from academic libraries to scientific and technological laboratories; working collaboratively with campus constituencies whose participatory contributions provide the vehicle and bridge for authentic academic dialogue; and facilitating the development of an administrative foundation that combines strategic budgeting with the academic management of programs and services. Proceeding from the above cited definitions for, and rationale behind, the total systems theory; numerous TQM and total system theorists have maintained the existence of an inextricable link between the two. Goyal and Gunasekaran (1990) note that the total system approach lends to the formulation of dynamic organizations, capable of instantaneous organization-wide response to extra environmental developments and changes consequent to the fact that their management paradigm is founded upon an acknowledgement of the co-dependency between micro and macro organizational elements and intra and extra environmental variables and characteristics. 3.3.2 Strategic Planning Strategic management, defined as a disciplined effort to produce fundamental decisions and actions shaping the nature and direction of an organization s activities within legal bounds (Bryson,1988, p. 26), is an integral componential element of the TQM philosophical and theoretical paradigms.TQM fundamentally derived from the formulation constraint of organizational operation plans as which subscribe to the organization s capacities, are realistic within the context of its resources and which

ultimately ensure, not just the articulation of realistic and achievable goals but which establish a plan for the realization of those goals. The interrelationship between strategic planning and TQM is such that the distinction between them is often blurred. 3.3.3 Project Management Ravichandran and Rai (2000) maintain that project management is one of the more important components of the TQM philosophy. Project management, defined as the coordinated management of projects within an organization, allowing or the independent management of individual projects but within the la rger centralized context of overall organizational management, ensures that value and quality are maintained on an organizational wide level, In other words, project management functions as a tactic for guarantying that the projects undertaken by an organization are constant with its strategic means, do not result in the consumption of organizational resources, and each are executed resourcefully. Not to mention above all, carefully planned in retorts to consumer market demands in agreement with consumer and market quality potential.

3.4 Performance dimension and Statistical strictness Management, industrial engineering, and organizational development scholars contend that one of the more important of the numerous theoretically based components of TQM is statistical rigor. The quantitative analysis of an company s financial and non financial performance indicators allows for the more accurate informing of an organization s progression towards the attainment of its objectives, more accurate ad realistic decision making processes and a continued capacity to monitor extra environmental developments and the organization s position towards them, concomitant with capacity for response (Bendell, Disney andMcCollin, 1999; Zbaracki, 1998). Within the context of TQM, therefore, statistical rigor allows for, and establishes the foundational elements and framework for, total quality management. There are some factors that would affect performance which should be taken into account when managing, measuring, modifying and rewarding the performance and they are as follows: 1. Personal factors: skills, confidence, motivation and commitment of the individuals. 2. Leadership factors: encouragement quality, support, guidance provided by the managers. 3. Team Factors: the quality of support by the colleagues. 4. System factors: the facilities and work systems provided by the organization 5. Contextual (situational) factors: the changes and pressures of the internal and external environment.PM system promote accountability to stakeholders; particularly in government organizations (Kloot, 1999; Pollanen, 2005). 3.5: Summary

This chapter brings to a close the literature review section of the research and will continue to clarify the definitional and academic frameworks of TQM through a review of select literatures has been argued throughout, and does not withstand precise definitions but can only be understood in the general and philosophical sense. This is not a failing on the part of TQM believers but purposeful as far as the ove rview of the construct assists it s organizational, ideals and multitudes of cultural adaptability and conversion.

Chapter 4 - Research Style 4.1: Introduction This chapter intends to provide an overview of the methodological approaches and research design selected for application to a study on public and private management strategies. In its exploration of the phenomenon of private and public sector management strategies and paradigms, the dissertation shall investigate the differences between the two organizational types and seek to answer the question of why they are managed differently and whether or not public sector organizations can subscribe to management models and strategies usually reserved for the private sector. Secondly, and in light of the comparatively poor performance of the public sector versus the private sector, the study shall investigate the possibilities of implementing, following adaptation, total quality management strategies and paradigms to the public sector. Thirdly, following the analysis of primary data collected through a set of interviews conducted with employees and management staff in a public and private sector organization, the dissertation shall critique prevalent public sector management Models styles. Finally, a proposal for the implementation of Total Quality Management, commonly associated with the private sector to the public sector, shall be proposed and the proposal defended through empirical evidence. 4.2: Research Background There is an understandable reflex to attribute changes in the field of higher education and research to changes in governmental policy. From a perspective of administrative reform, however, it is more accurate to represent governments and higher education systems as both being subjected to the same overall development of a knowledge-based economy. Government and public sector behavior are not exterior but without external nature to this development. The concept of the knowledge based economy suggests that governments and higher education systems are both subjects and objects of the impact of the same overall technological, international, cultural, and economic developments. The dynamics in public and private relationships in the knowledge-based economy are just as much caused by the private as by the public sector side of the entirety as a whole. 4.3 Research Questions

Q1: Can management strategies, tools, and paradigms, traditionally associated with the private sector be applied to the public sector? Q2: How can TQM as a strategic management paradigm are successfully implemented in the public sector? 4.4 Research Objectives 1. To study the literature on total quality management and its influence on contemporary management paradigms. 2. To analyze the existent differences between public and private sector management. 3. To determine whether public and private organizational structural and departmental differences function as an obstacle towards the implementation of private sector management tools, strategies and paradigms to the public sector. 4. To identify the source of the public sector s (in comparison with the private) poor business performance. 5. To isolate the generic differences between the public and private sector and assess whether such differences contribute to the relative success of the one versus the comparative failures of the other. 6. To generate a proposed paradigm for TQM implementation suitable for the public sector. 4.5: Research Strategy Evaluation research traditionally makes use of a variety of research methods (Robson,2002) has implemented many different research strategies, including: * Documentary analysis of a wide range of sources, including discussion in various communities. * Quantitative data analysis such as service usage, reach etc. * Interviews, especially with key individuals * Focus group approaches using structured group discussions, * Expert analysis, especially on technical matters * Planning between objectives and or vision and evidence or projections * Testing services and issues by students * Feedback in evaluation and distribution. To this end results of the formative evaluation are continually fed back into the work of those involved with the development of the Information Environment (including development projects, government agencies, publishers and commercial hardware software developers) and members of the Higher Education community who

are using it to help with learning and teaching (notably teachers and resource managers). Robson (2002) identifies three research strategies, or plans for responding to the research question. These are the experimental, the survey and the case study strategies. A researcher may select one, or even all three of these strategies, depending on the requirements of the research itself and the nature of the study. Naturally, and as Yin (1989) concurs, scientific researches exploit the experimental strategy while the social sciences tend towards the survey and the case study strategies. The current research shall adopt the conceptual model approach, as discussed and defined by Yin (1989). According to Yin (1989) conceptual models are particularly useful for the collection of well-defined information and its later discussion and analysis. Often used when two facts are being evaluated and distinguished, as in organizations A and B, the selected approach requires that the researcher outline, or organize his/her data, into a modular format. The secondary abstract form, being prepared on the basis of the composed primary data, enables the mapping of a phenomenon and for its theoretical analysis. In other words and as further explained by Yin (1989) this approach allows for the explanation of facts through theory, the expansion of knowledge through the clarification of the relation between reality and theory and, most importantly, is ideally suited for the comparison of two entities. The nature and concerns of the current research have led to the determination of the imperatives of extensively exploiting the conceptual model approach. The research shall focus on the critique and examination of two organizations, data on which was collected through primary research. Organization A is a public sector entity, Organization B is a private sector corporation, an educational institution. Primary data, as earlier noted, was collected through extensive interviewing. 4.5 Qualitative Variety The system of higher education in the United States is extensive and diverse, with over 4000 degree-granting institutions serving more than 15 million students. Non university public community colleges comprise about 25 percent of the institutions, with large state sponsored universities, elite private universities, and non-elite smaller public and private universities and two-year colleges adding to the mix of institutional types. When selecting a sample for a qualitative survey, a different set of priorities must be considered. Each qualitative survey that is conducted is almost similar to an individual and date induced systematic research. Sample size is not vital; rather the establishment of clear patterns in the data utilized. A well -established private for-profit sector also exists in the U.S., mostly non-degree career training institutes but with a growing number of degree-granting institutions at the university and non-university levels. These for-profit institutions are generally quite small with enrollments under 500 students, though a few have expanded dramatically and are now among the largest institutions of higher education in the country. According to Patton (1987), The sample should be large enough to be credible, given the purpose of evaluation, but small enough to permit passable depth and detail for each case or unit in the sample. The oldest institutions of higher education are almost all private, and a few are quite wealthy and selective in their admissions. Most, however, operate on modest budgets and serve the general student population. A substantial proportion of private institutions originated as religious institutions, and though overt religious influence has

faded over the years, Catholic institutions in particular remain widespread. There remain a small number of single sex institutions, women oriented for the most part and mostly private. About 100 Historically black institutions, public and private, traditionally continue to focus on providing educational opportunities for African American students. Institutional diversity in the U.S. arises from several sources, primary the personality of the higher education system. Government level education is controlled by the individual states, and it is has no federal rector of education, and ultimately no chain of command of institutions that directs curricular direction, admission policies, or degree-granting status. Second, although whether public or private, the consent to operate as an institution of higher education, is granted by the states, it is overseen by non-governmental volunteers and with accreditation is permitted to maintain a significant amount of sovereignty. Furthermore, there are over fifty separate accrediting agencies that recognize institutions from particular regions or with exacting Majors. Finally, the federal government provides financial aid to students that can be used at any institution, regardless of affiliation category, giving students freedom and admittance to a full range of educational opportunities. No priority or privilege is given to public institutions, and there are essentially no curricular or organizational requirements established by the federal government regarding institutional eligibility, other than those provided by the states and the endorsement agencies. 4.6 Qualitative Data Collection Cooper and Schindler (2005) warn the business researcher against approaching the research with a specified data collection method in mind. Instead, the researcher should first identify the type and nature of the required data and then select those collection methods which are best suited to the collection of the identified data types. While Ghauri and Gronhaug (2005) largely agree with this advice, they nevertheless declare that the researcher must limit his selection of data collection methods, such as applying only one source, not to the type of data required, but to the collection methods available to the researcher. For example, it is simply not viable for the researcher to assume the collection of primary data across several public and private industries, even if the nature of the required data has determined this to be the most favorable method variety. It is necessary for the researcher to compromise between the available data collection methods and the methods optimally required by the needed type of data (Ghauri and Gronhaug, 2005). For the purposes of this research and given that both primary and secondary data is needed, three data collection methods will be used. Apart from the desk-based data collection method traditionally associated with secondary data collection, primary data will be collected through the adoption and expansion of semistructured interview methods. There is no single way to conduct a field study and a combination of methods e.g. unstructured interviewing, direct observation, semi-structure or structure interviewing can be used (Merriam, 1998). The researcher,

however, limited herself to the semi-structured in-depth interview/Data proved method. 4.6.1. Interview Strategy The interviews were mostly directed towards clarifying the management strategies used in private and public organizations. Emphasis was placed on the differences and similarities between the two in order to determine whether or not inherent structural differences determined variances in public and private sector management strategies. At an early stage, the researcher had determined that since the study was focused on management strategies, interviewees were to be drawn from the top-management pool at one public and one private sector organization. The organizations were subsequently selected and contact was initiated between the researcher and the potential interviewees. Four interviewees from each organization were chosen; with selection determined both by the respondent s position in the organization and his/her consent. As stated, four members from Organization A, a County Council, consented to the interview these were one department head, one public sector manager consultant. Both were interviewed at their place of work, with interviews lasting 10 minutes and one through email fill in the blanks. The same was followed for Organization B, a private sector financial institution; each interview with consent was based on confidentiality and Personal information removed. 4.7: Eminence Research results Ultimately, the data collected is used to inform the research findings. If the data is not verifiable, the implication is that the findings are potentially suspected. Accordingly, it is Incumbent upon the researcher to validate his/her findings. Beyond that, Miles and Huberman (1984) contend that it is equally important for the researcher to evaluate the quality of his/her data prior to its exploitation.

4.8 Reliability A study is reliable only if another researcher, using the same procedure and studying the same phenomenon, arrives at similar, or comparable, findings. Accordingly, it is important that the researcher maintains a comprehensive protocol of his study, in case others may be interested in checking its reliability. Even with the best of intentions in mind, the researcher is often confronted with a variety of variables which may impinge upon the reliability of his findings. If he is partly drawing conclusions on the basis of interview data, it could very well be that respondents were biased or, simply not in the mood to answer the questions with any degree of interest. It is not uncommon for respondents to simply tick a response to an option on a questionnaire for example, without reading or considering it. Accordingly, research scholars advise researchers to carefully select their respondents, ensure that they are, indeed, willing participants in the study and will answer the questions with the minimum degree of bias. (Sekaran,2003).

4.9: Summary As may have been deduced from the above, the research will adopt a conceptual model, qualitative and deductive methodological approach. Selection, as the research purpose sought to argue, was primarily determined by the very nature of the research hypotheses, questions and objectives. Furthermore, the researcher determined the imperatives of such in-depth analysis as would allow the identification of behavioral trends and patterns while, at the same time, enabling the exposition of the root causes of the stated. Consequently, research into organization management of public and private sectors may not wholly be aligned with the quality mishap of managerial compositions, as with an active process of organizing that is within the cognitive phase of any governess. There is no argument of claimless limitations to this approach and the researcher forfeits the significance of quantitative analysis. However, given the boundaries of the research s topic and importance, parallel with time and resource constraints, the usage of a defined practical approach would best satisfy the expressed objectives and vast variety of the research questions. From within the matrix of the stated methodological approach, the next chapter shall review the results of the interviews, primarily focusing on the presentation of the conceptual model for both Organization A and B, as based on the interview data.

Chapter 5: Final Conclusion Despite the referenced shortcomings or limitations, the fact remains that the study satisfied its outlined objectives and validated its hypotheses. The position adopted by the study was that there are no valid obstacles in the face of the public sector s adoption of TQM management paradigms comparable to those prevalent in the private sector. The literature supported this statement and the field study, especially as relates to Organization A which established that management strategies popularly associated with the private sector can be used in the public sector. This kind of fragmented public ownership is characteristic of the public universities in the U.S., where none of the nation s many public universities are controlled by the national government. Most public universities are operated by state governments and the rest by local governments. Since there are 50 states in the U.S., each of which has nearly complete control in the field of education, this offers the potential for considerable competition. The result has been continuous pressure on both private and public institutions to perform on as profitable as possible. Most probably, as an end result, both public and private institutions can be found at the top of the quality range. This was affirmed through Organization A s actual use of private sector management strategies. The findings as shaped by both the lit erature review and the field study, however, did not support the contention that there are no obstacles to successful implementation. That statement was ultimately qualified through discussion of the soft foundation of TQM success and the steps that an organization should take before attempting the implementation of TQM. The conclusion, reached, therefore, is that while private sector

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1. Sources of Revenue Govt. = Tax Dollars. The procurement communities and the requirements communities spend their own dollars. Tax dollars are a sure source of money subject, of course to the budget process. This demands good stewardship of the funds expended Private = Revenues generated from Sales. If the firm cannot sell its products profitably and wisely it will run out of money necessitating borrowing and eventually extinction.

2. Profit motive: Govt. = No profit motive. Because it operates on a yearly appropriations budget, the motivation is spend it while it's available or lose it. Private = Profit is the Bible of Private business. If a firm cannot make a reasonable return on the money they have invested in the production of goods for sale they would be better off putting their capital in the bank and closing the business. This motivation is the most important difference. It drives efficiency in operation of the supply function as well as the whole business. It pays stockholders dividends without which there would be no investors.

3. End Product: Govt. = Purchase goods and services to provide more services or materials for the benefit of the taxpayer. It has no products to sell for profit. In DoD it is weapon systems to counter a known or developing threat or to enhance victory on the battlefield. Private = Purchase goods and services to manufacture or develop a product of service to sell. If such product or service is not competitive the company will have to find another that will.

4. Availability of Information: Govt. = Life in is an open book. The Freedom of Information Act (FOIA) requires the Govt. to provide information regarding contracts and many other issues. The logic for FOIA is that the taxpayer which suppliers are is entitled to know how his/her money is spent.

5. Structures and sources of Authority: Govt. = Large body of public statutes and regulations FAR, DFARS, Agency FAR supplements. The only Agency authority that the Govt. recognizes is Express Actual Authority. In Plain words the Contracting Officers Warrant. Private = Laws of Agency, the Uniform Commercial Code, Common Contract Law

6. Socio/Economic: Govt. = Statutory consideration for small business, small business set asides, minority's and women owned business, 8A set asides. Private = If a contractor to the Govt. the above mandates flow down from the Contract. It not, it is considered good public relations and a strategic goal.

These by no means constitute the whole of the differences but they are the most important ones. Do not be swayed by those who say that Government procurement can be carried on exactly the same as it is in the Private Sector. There are mechanical similarities in process and like functions but these are more tactical than strategic.

The public sector is extremely diverse, encompassing federal as well as state and local governments, special jurisdictions (e.g., publicly-owned utilities, school districts, hospital districts, energy districts), and non-profit as well as not-for-profit private corporations and organizations.

Public entities consist primarily of federal, state, county, and local governments. They also include some schools, universities, and hospitals that are operated as public sector governmental entities, such as, public schools on federal land, state-controlled universities, and federal hospitals.

Quasi-public jurisdictions include public utilities; authorities that operate bridges, tunnels, transit systems, or ports; public school districts, and colleges and universities that are state-related but have separate organizational structures and governing boards. For example, while utilities are subject to operating and rate-setting provisions set by public utility commissions, they are formed as public corporations with independent boards of directors. Similarly, many state-related universities are organized as corporations under constitutional provisions that place their management in the hands of independent boards of governors or regents.

Private non-profit and not-for profit organizations include charitable groups, societies, and institutions (e.g., churches, charities, an d hospitals); private education-related organizations (e.g., schools, colleges, and universities); and other education- and research-related corporations (e.g., independent research and development institutions, philanthropic foundations, and professional societies). These organizations are characterized by their relative independence from control by public entities. They have tax exemptions as charitable, educational, or trade-related organizations, and they are governed by independent boards of directors and/or trustees.

For this class, the term public sector incorporates all three types of public sector organizations. It should be noted, however, that the most prevalent interpretation of public sector relates to tax-supported entities, jurisdictions, and organizations. Many of you think of the public sector as the federal government, because it alone represents a buying organization that accounts for the expenditure of a disproportionate share of aggregate taxpayer dollars compared to all of the rest. As you can read, the public sector is far broader than just the federal government.

The private sector, on the other hand, consists of for-profit organizations that are privately owned and not controlled by any government, quasi-public jurisdiction, and non-profit entities. These organizations can take the form of sole proprietorship: CCorporation, S-Corporation; Limited Liability Company; or General Partnership, Limited Partnership. Private sector organizations include a variety of privately owned firms and companies in a number of industries. Ownership in regular C -Corporations is by stockholders, whether preferred or common, and stockholders can be other companies along with individuals.

You should be able to differentiate between the public and pri vate sector throughout this class.