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Chapter 2
Blurring Sectors:
Public and Private

Organization Theory:

A Public and Nonprofit Perspective

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Note to instructor: These slides do not follow the outline order of the chapter. This is intentional, for lecture purposes. Feel free to rearrange and modify to suit your needs.

What Chapter 2 Does

  • Lays out a spectrum of organizations, from government thru nonprofit to business
  • Considers similarities and differences among organization sectors
  • Explores how lines blur between sectors
  • Examines the environment that all organizations share

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Organization Terms

  • Department
  • Agency
  • Bureau
  • Bureaucracy

Caution:

Many terms have multiple definitions

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Department:

-- major subunit of a large org

-- cabinet-level office in U.S. Fed gov

Agency:

-- an administrative unit of gov

-- an independent reg. agency w/in gov.

-- a synonym for “bureau”

-- a nonprofit organization

Bureau:

-- a major division within a department

-- a “cost center” within an organization

Bureaucracy:

-- a synonym for gov or large org (sometimes derisive)

-- a form of organization (e.g., ideal type)

What “Blurring” Means

  • It’s a blending or overlapping of “privateness” and “publicness”
  • Organizations blur more and more often

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Types of Blurring

  • Continuum of public-to-private
  • Mixture of public and private
  • Who staffs the front office?
  • Who staffs the back office?
  • Overlap of purposes

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This slide introduces the next several slides

Public-Private Continuum

Gov. agencies

Gov. corps.

Gov-nonprofit ventures

Nonprof.: Helping

Nonprof.: Advocacy

Nonprof.: Member

Public-private ventures

Private monopolies

Commercial firms

PUBLIC . .

. . PRIVATE

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See Fig. 2-1 for organization examples

Front Office / Back Office Jumble

  • Government
  • NASA
  • US AID, DOT
  • Government
  • State health services
  • Nonprofit
  • Fundraising campaign
  • For-profit
  • Student loans (banks)
  • Private
  • Engineering firms
  • Construction firms
  • Nonprofit
  • Health service providers
  • Private
  • Marketing firm
  • Government
  • Loan guarantee prog.

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The first column represents the front office of an organization, which is what the public sees. The second office represents who might handle a particular operation for the “fronting” organization. More examples are available in Chapter 2, Table 2-2. You or the students may wish to create additional examples.

Overlapping Purposes

  • Government, nonprofit, and for-profit orgs at times offer similar services
  • Examples:
  • Hospitals, trash services, security services
  • Loans, package delivery, many others
  • Reasons:
  • What, why, when, for whom, where

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Reasons are manifold.

-- What involves the type and intensity of service (e.g., free clinics vs. private physicians and specialists)

-- Why involves whether public need, level of essential investment, commercial potential

-- When involves situations such as catastrophes and temporary situations

-- For whom involves cohorts within the public (e.g., the poor, the rich)

-- Where involves local choice (e.g., trash pickup)

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Contrast & Compare
Public & Private Organizations

  • In what ways do public and private organizations differ?
  • In what ways are they alike?
  • How might their differences and similarities influence generic organization theory?

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This slide introduces the next group of slides. Invite students to share their thought about these questions. Use the classroom chalkboard (or have students serve as scribes) to list student answers to each question.

Ways Gov’t Orgs Are Unique (1 of 3)

  • Function: Administering the law
  • Finance
  • No profit for owners/shareholders
  • Typically funded thru appropriations
  • Mission
  • Determined by law
  • Set by political officials, usually not internally
  • Constitutional/statutory constraints

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Ways Gov’t Orgs Are Unique (2 of 3)

  • Purpose, roles are more complex, political
  • Political factors influence
  • organizational structure, size
  • processes, location(s)
  • External environment judges effectiveness, efficiency through accountability to
  • defined constituencies, general public
  • political officials, oversight bodies

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Ways Gov’t Orgs Are Unique (3 of 3)

  • Goals are both general and contradictory
  • Sometimes contradictory, such as service and enforcement
  • Sometimes unattainable, such as full homeland security

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Ways Nonprofits Are Unique

  • Function: Addressing unmet needs
  • Nonprofits serve . .
  • Members – churches, unions, clubs, others
  • Nonmembers – help/service orgs, PACs, others
  • Some have tax exempt revenues
  • Churches, charitable orgs, others
  • Must have IRS/state tax approval
  • Often rely on volunteers

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Ways Public Orgs Are Similar

  • Public organizations = gov’t + nonprofit
  • Needs driven
  • Not profit driven
  • Effectiveness determined by success in addressing mission
  • Will fill needs that free-market ignores
  • Must maintain substantial public trust

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Ways Businesses Are Unique

  • Function: Serving as economic engine
  • Benefit owners by selling goods/services
  • Mission:
  • Chosen by owners
  • Changes at will of owners; market-oriented
  • Accountable
  • Primarily to shareholders
  • Secondarily to customers

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Ways All Orgs Are Similar

  • Structure, scale – the range is enormous
  • Shared environment – common to all
  • Demographic trends, natural environment
  • Globalization, overarching events (e.g., 9-11)
  • Technology advances, ever-rising expectations
  • Behaviors – often anthropomorphic
  • Self-protection, life cycles, personality (culture)
  • Competition – in many forms

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Fundamentally, the list of traits all organizations share in common is far longer than the list of traits unique to each category of organization – whether government, nonprofit, private, or any hybrid thereof – even though their distinguishing traits involve fundamental differences. Possible exercise: Have teams of students develop lists of similarities and differences (see earlier “your thoughts” slide).

Market Theory & Public Orgs

  • Roles in market for public organizations:
  • Indivisible markets, e.g.,
  • Addressing widespread air and water pollution
  • Allocating broadcast frequencies
  • Unprofitable markets, e.g.,
  • Caring for the poor
  • Services for extreme rural areas
  • Applies polit. decisions from public desires

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(Un)important Fundamentals?

  • True or false:
  • Public and private management are fundamentally alike in all unimportant respects.
  • This affects generic (comprehensive) organization theory?
  • What is your reasoning?

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Adapted from Graham Allison (1992)

Ethics in Public Organizations

  • Ethics involves
  • Doing the right thing
  • Based on society-wide standards, values
  • Through principled reasoning
  • Essential for maintaining public trust
  • Public service challenges include
  • Maximizing benefit while minimizing harm
  • Resolving “right vs. right” issues

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Blurring & Postmodernism

  • Pros & cons
  • Pro: Challenges assumptions, viewpoints, labels, principles – even “rationality”
  • Con: Incomplete, self-absorbed, “jargonistic”
  • Advocates
  • Stepping outside a topic to question it
  • Rethinking fundamentals
  • Being creative and open
  • Applying broad view

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Sector Blurring & Public Orgs

  • Government, nonprofit, and for-profit organizations populate a continuum
  • Organizations themselves may intermix public and private sectors
  • All share a dynamic environment
  • Ethics, important for all organizations, are essential for public organizations

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Key-point recap.

Emphasize subpoints important in your course.