Building Competence. Crossing Borders. Elective Public Management – Week 5 Organizational Structures/PPP Prof. Dr. Andreas Bergmann Institut für Verwaltungs-Management

5.ppt, FS09 2 Preliminary note Structures (follows Processes) follows Strategy Alfred Chandler, 1962 (later annotated by Jack Welch) … is equally valid in the Public Sector!

5.ppt, SS07 3 Organizational Structures/PPP Overview  Starting point: Legal Forms of the Public Sector  Traditional structure: division of labour according to Fayol/Weber  Influence of New Public Management and ICT  PPP as an additional structural option

5.ppt, FS09 4 Starting Point: Legal forms Legal forms determine the degree of autonomy Administration unit Department Dependent agency (without an own legal identity) Independent agency (with own legal identity) Incorporated company under public law Incorporated company (limited company, companionship, foundation) under private law Incorporated company in private ownership org. auto- nomy of the entity

5.ppt, FS09 5 Starting Point: Legal forms Influence of politics Legal forms determine the influence of politics Administration unit Department Dependent agency (without an own legal identity) Independent agency (with own legal identity) Incorporated company under public law Incorporated company (limited company, companionship, foundation) under private law Incorporated company in private ownership

5.ppt, FS09 6 Traditional: division of labour Top level structure Divisional structure predominant -Ministries (of Education, Justice, …) -Department (of Finance, …) -Divisional Units (in smaller entities, such as local administrations, i.e. tax collection unit) Structure often similar to Classification of Function of Government (COFOG, issued by UN/IMF) -Caution! The expression „function“ or „functional classification“ does NOT coincide with the „functional organizational structure“, as it is used in Organizational Theory!!!

5.ppt, FS09 7 Traditional: division of labour Functional Classification (~divisional structure) COFOG = Classification of Functions of Goverment -01 General Public Services -02 Defence -03 Public Order & Safety -04 Economic Affairs -05 Environmental Protection -06 Housing & Community Amenities -07 Health -08 Recreation, culture & religion -09 Education -10 Social Protection

5.ppt, FS09 8 Traditional: division of labour Swiss Variant -0 General Public Services -1 Security -2 Education -3 Leisure & Culture -4 Health -5 Social Welfare -6 Traffic -7 Environment -8 Economic policy -9 Finance & Taxation

5.ppt, FS09 9 Traditional: division of labour Main issue: Shared services May be substantial in larger administrations -Communication -Personnel -Finance -ICT Typical area of conflict -Cost (economies of scale!) vs. Customization -Result: decentral solutions predominant

5.ppt, FS09 10 Influence of NPM/ICT Stances of NPM Organizational structure reflecting products (services) -Product = smallest entity of delivery, which may be demanded by (external) customers -Grouping either - by groups of products; or - groups of customers Outsourcing of shared services -Shared service centers

5.ppt, FS09 11 Influence of NPM/ICT Limitations by ICT ICT is process oriented (rather than product oriented) -Heterogeneous products in public administrations require tailored processes and ICT -But: Identical support processes do not require tailored processes and ICT -Large ERP systems (SAP, Oracle) usually cover both Heterogeneous ICT is major cost factor

5.ppt, FS09 12 Influence of NPM/ICT eGovernment More than a webpage Customer orientation: -E.g. „circumstancial“ approach ( But: Integration of processes crucial -Data exchange -Web data in databases, responses into databases -Limitation: electronic signature

5.ppt, FS09 13 Influence of NPM/ICT Bottom line External perspective -Introduction of product/market oriented structures -Citizen should no longer be required to know the structures Internal perspective -Integration of processes

5.ppt, FS09 14 PPP as an additional structural option Preliminary definition of PPP A PPP is an agreement between government and a private partner(s) (that may include the operators and financiers) according to which the private partner(s) delivers the service in such a manner that the service delivery objectives of government are aligned with the profit objectives of the private partner(s) and where the effectiveness of the alignment depends on a sufficient transfer of risk to the private partner(s). (OECD)

5.ppt, FS09 15 PPP as an additional structural option Source: Bennett et.al.(2000) in Bult-Spiering-Dewulf (2006)

5.ppt, FS09 16 PPP as an additional structural option Service concessions Source: WORLDBANK, 2007

5.ppt, FS09 17 PPP as an additional structural option Structural effects In many but not all cases: separate entity is created (or an existing one is appointed) -Special purpose entity -Concessionaire In all cases: Responsibilities are shifted away from public administration

5.ppt, FS09 18 References -Bolz, U. (2005) Public Private Partnerships in der Schweiz. -Bult-Spiering, M., Dewulf, G. (2006) Strategic issues in Public-Private Partnerships. An international perspective. -The World Bank (2007) Improving the management of concessions: Better reporting and a new process for deciding when to use a concession