Principles of organization of public sector entities

In today's economy, there is growing importance of different types of institutions whose goal is not to maximize profits and increase value but meet important social needs. These organizations make up the so-called public sector. These include both institutions of particular importance for the functioning of the state and its citizens, as well as organizations engaged in a market activity.

New Public Management

New Public Management - its main idea comes down to the implementation of the principles of managing of public entities relevant to the business units. Between the management of public organizations and business units there are a number of differences:

• Management of network of public entities is done by public authorities, i.e. authorities which are representatives of the public and implement specific, democratically approved program
• In business organizations within a single organization the individual members are always connected to a common goal and act together for the success of all, the network of public bodies consist of individual institutions which do not have to interact with each other and may even have contradictory goals and therefore, these institutions do not have to contribute to the success of the whole,
• The right to manage the business organizations derives from law to property, and in public organizations it arises from the power of state bodies and local authorities,
• Business organization is guided by the individual good. Management of the public organization is related to the common good of communities across the country, region or locality
• As opposed to business organizations, public institutions can not be assessed on the basis of making a profit or market value. Assessment can only be based on a realization of the public interest which makes these judgements difficult to quantify, very diverse and characterized by subjectivity,
• Despite fact that public organizations often do business on the market, they are to a small extent subject to the influence of the market forces,
• Public organizations often carry out tasks assigned by top level government bodies.
• Activities of public entities is regulated primarily by administrative law, while the business units operate primarily on the basis of the code of commercial and civil law. As a result, public organizations are less flexible than typical businesses.

Advantages of Principles of organization of public sector entities

The public sector has several advantages when it comes to organization. These include:

• Access to a wide range of resources: Public sector entities often have access to a wide range of resources such as government funds, grants, and tax breaks that private companies typically don't have access to, allowing them to finance projects and initiatives that are beneficial for society.
• Increased accountability: Public sector entities are more accountable to the public than private companies, as they are more likely to be subject to government oversight and public scrutiny.
• Focused on social needs: Public sector entities are often focused on addressing social needs, rather than maximizing profits. This allows them to focus on projects and initiatives that have the greatest potential to benefit society.
• Mobilization of people: Public sector entities can often mobilize more people than private companies, as they have access to a larger pool of potential volunteers and employees.
• Long-term planning: Public sector entities often have the ability to plan for the long-term, as they are not subject to the same short-term pressures as private companies. This allows them to focus on initiatives that may have long-term benefits for society.

Limitations of Principles of organization of public sector entities

One of the main limitations of the principles of organization of public sector entities is their lack of flexibility to respond quickly to changing economic conditions. This can lead to inefficiency, as the public sector may be slow to respond to new opportunities or challenges. Other limitations include:

• Limited resources - public sector organizations often have limited resources, making it difficult to meet the demands of the public.
• Lack of accountability - public sector organizations often lack the accountability that private sector organizations have, making it difficult to ensure that public funds are spent responsibly.
• Ineffective management - public sector organizations often suffer from ineffective management, resulting in inefficient operations.
• Bureaucratic red tape - public sector organizations are often bogged down by bureaucratic red tape, making it difficult to get things done quickly.
• Political interference - public sector organizations are often subject to political interference, which can lead to decisions that are not in the best interests of the public.

Other approaches related to Principles of organization of public sector entities

• The public sector organizations have to be organized according to the principles of efficiency, effectiveness and equity. Efficiency means that the organization has to use resources in an optimal way, while effectiveness means that its goals have to be achieved. Equity means that the organization has to be fair to its stakeholders and achieve results that are beneficial to all.
• The public sector also needs to respect the principles of transparency and accountability. Transparency requires that the public sector organizations provide full disclosure of their activities, while accountability requires them to be answerable to the public for their actions.
• The public sector should also be organized according to the principle of good governance. Good governance means that the organization should be structured and managed to ensure that it operates in the best interests of the public.
• The public sector should also be organized according to the principles of sustainability. This means that the organization should strive to ensure that its activities do not cause harm to the environment or to future generations.

In summary, the public sector organizations should be organized according to the principles of efficiency, effectiveness, equity, transparency, accountability, good governance and sustainability. These principles ensure that the public sector is organized in a way that is beneficial to the public and the environment.

Principles of organization of public sector entities — recommended articles

Charitable foundation — Types of organisation — Etatism — Anglo-Saxon model of corporate governance — Policy instrument — Non-governmental organization (NGO) — Bureaucratization — Continental model of corporate governance — State administration

References

• Christensen, T., & Lægreid, P. (Eds.). (2002). New public management: the transformation of ideas and practice. Ashgate Pub Limited.
• Gruening, G. (2001). Origin and theoretical basis of New Public Management. International public management journal, 4(1), 1-25.
• Schedler, K., Proeller, I., &... Schedler-Proeller. (2000). New public management. Bern: Haupt.