Understanding and Managing Public Organizations

Classical decision-making skills have faced refusal time and again to make way for the new age policies. Simon Herbert contradicted the tenets of classical group theory because they were more like vague proverbs, in some cases too ambiguous to apply and in other cases contradictory.

His assessment was correct, based on the fact that decision-making is not only based on strict rules but on other factors as well, ensuring optimum use of resources with minimal expenditure.

Administrators require complete knowledge and information, skills and abilities and foresight, among other factors, to reach the best decision for their organization and staff.

There are different types of ownerships for organizations: privately owned or government owned organizations. Determining the difference between public and private ownership is associated with two main problems: ownership, funding, and economic and political authority.

These lead to four main approaches to determining public and private organizations: publicly owned and funded organizations, publicly owned but privately funded organizations, privately owned but government funded agencies, and privately owned and funded groups. Privately owned teams have a high economic authority and little political power, while publicly owned organizations have a little financial authority and great political authority.

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These organizations are dependent on resources. Dependence theory studies how the external resources of an organization influence its behavior, taking into account social context matters, the importance of power in understanding the internal and outer actions of agencies and organizations have to have strategies to enhance their autonomy and pursue other interests. The problem with this theory is that when the external resources do not supply the organization’s needs as required, it leads to loss until people find other alternatives.

The transaction cost economic theory accounts for the real cost of outsourcing the production or services. Examples include transaction costs, contracting costs, coordination costs, and search value. This approach takes into account all costs when making a decision, not just market prices. It illustrates the make versus buy decision for companies.

An organization’s policies determine how it interacts internally and with its partners. Kingdon’s theory tries to make sense of the policy process by focusing on scrutinizing ideas and their alternatives and their workability. Policy communities’ help to characterize the complex context of public management by analyzing how certain matters gain prominence in the public domain. These general management mannerisms inform the agenda of the communities. Refining the process helps in controlling the entire process and outcome.

Other theories of the policy process that have currency in public administration and management literature include the garbage can model of decision-making which shows decision-making in organizations as being much less systematic and rational as commonly thought.

Mintzberg brought forward basic categories used to group design decisions, such as Identification stage, i.e. recognizing the problem and diagnosing it through information gathering, and Development stage which helps in identifying alternatives that the design of a particular solution follows.

The evaluation and passing a solution supports the selection phase in which people evaluate the identified solution and passing it on to the final stage of authorization for the organization to make a formal commitment to the decision.

The manner in which people perceive employees in a group tells a lot about it. Theory X assumes that workers are lazy, passive, resistant to change and responsibility, and are indifferent to organizational needs. The management must, therefore, take complete responsibility for directing and controlling the organization.

Theory Y, on the other hand, assumes that employees are fully capable of self-direction and self-motivation. Management based on this approach would be useful as self-discipline, and is more effective than authoritarian direction and supervision.

Theory X individuals would, therefore, be more concerned with physiological needs, satisfying their needs before concentrating on the organization’s requirements. Adopting a leadership model would assist in solving such a challenge.

Attribution models of leadership assume that people make references to leaders depending on what they expect from a leader. They draw conclusions on a leader’s abilities by observing and interpreting different types of environmental and behavioral cues.

It attempts to explain behaviors by showing a cause: personal and impersonal causes. These help us to assess events based on motives for finding objects as well as understanding the environment.

The theory does not explain how human beings can be both logical and rational. It does not account for cultural, social, and historical factors that contribute to the attribution of a cause. Furthermore, the fact that people tend to preserve their image introduces subjectivity to their analysis which could lead to a wrongful interpretation of results.

Contingency theory emphasizes the importance of the roles of both a group leader’s personality and the situation the manager is in. This method utilizes three key factors: leader-member relations, task structure, and the position power to explain a group’s interaction among themselves and with their leader, their culture, and beliefs.

Human resource theory, on the other hand, explains how management behaviors and structures can positively or negatively influence employee behavior. Having and acting on organizational behavior can affect how the rest of the employees will behave in an organization.

These theories try to explain how the environment influences group phenomena. Human behavior is not affected by rules and regulations alone but by other factors as well. There is no linear way in which they will act.

Organization life cycle models use metaphors used for living organisms to explain the subsequent stages of substantial growth and development (Nordström, Choi & Llorach, 2012).

Down’s model views these sequences in three parts from establishing of legitimacy to innovation and expansion, and then to formalization and control. Quinn and Cameron, on the other hand, have four stages: entrepreneurial stage, cooperation stage, power stage, and innovation or decentralization stage (Nordström, Choi & Llorach, 2012).

These models are similar in the sense that during the birth stage the organizations attempt to obtain legitimacy, and, needed from the environment, to attain survival threshold. It is, however, becoming quite the norm for the government to outsource its services.

The government has, for the last three decades, been contracting out service delivery to private organizations due to certain reasons, including cost savings, institutional factors, office structures and managerial abilities, and fiscal mandates (Warner & Hefetz, 2008).

Politics influence these privatization decisions as leaders consider the political consequences of implementing decisions that go against their electorate’s interests. Privatization or contracting out more likely occur in areas where the groups that have vested interest in government services have relatively less influence on service delivery options (Keetch, 2013).



Keetch, C. (2013). Trends in the Contracting out of Local Government Services. University of South Florida.

Nordström, C., Choi, G., & Llorach, C. (2012). The Organizational Life Cycle Stages and Effectiveness: A Study of Swedish Gazelle Companies. Jonkoping University.

Warner, M. & Hefetz, A. (2008). Managing Markets for Public Service: The Role of Mixed Public-Private Delivery of City Services. Public Administration Review, 68(1), 155-166.