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| Columns |
| Economic and Business Forum |
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by
D D Phiri, 05 May 2006
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06:27:08
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Managing public service institutions
We usually think of a country’s economy in a free system as made of the private sector and the public sector.
The private sector is made up of sole traders, partnerships and joint stock companies. This sector incorporates the itinerant trader, the hawker and the vendor. Capital used here is privately raised from personal savings or borrowed within the private sector.
The public sector, which is the main focus of this article, is made up of government ministries and departments, local government institutions and miscellany of institutions some of which fall within the category called public corporation.
In the public service sector, we meet public utilities, state schools, state hospitals and other health facilities, research and development institutions.
When we discuss agents of economic development, we seldom refer to institutions such as those listed above. Yet they play a key role in the field of economic growth and development if properly managed.
They are headed by personnel not generally called managers, though they are in fact managers in practice. Some are called administrators, directors, rectors, chief executives, vice chancellors or matrons. The success of the institutions they operate depends as much on managerial ability as in private firms.
Public service institutions such as school, colleges, universities, research and development are paid out of government budgets. When managing them managers primarily think of getting the approval from the services. This at once causes differences in attitude between the manager of a private firm and that of a public service institution.
Utilities such as electricity, telecommunications, postal services and water boards have an impact on the economic and social development of a country. Water and electricity are needed by firms engaged in manufacturing, where electric power and water are subject to intermittent interruptions potential investors are put off. As one way of enticing investors into the country the state must make sure public utilities—whether privatised or not—are under competent management.
The utilities must supply services not only regularly but at competitive prices. These bodies are often monopolies. This makes it necessary for the state to regulate their activities even when they are privatised.
Regulating private firms is not easy. It goes against the spirit of market freedom. The owners of the business would like to be left alone and operate the business as they see fit. But a service that is widely in demand by the majority poor must be prepared to give way somewhere in the interest of stakeholders other than shareholders.
If the utilities charge too high prices, not only do they hurt the poor but they frighten away those investors whose costs of production are greatly influenced by how much they pay for electricity.
Colleges and universities, indeed all schools, have a great impact on a country’s economy. Recent economic history affirms that countries that have plenty of schools and high quality outputs are advancing economically. A country that looks after its educational institutions ensure itself steady economic growth.
Educational institutions need competent managers. They may be called headmasters/headmistresses, principals or vice chancellors but they are managers all the same. The role of a manager is to control and direct the resources of an institution both material and human. He or she must see that what has to be done is done well and at the least cost. There must be competence in management.
While most universities in the world depend on government for their budgets, the best of these managers raise extra funds from the commercial sectors, alumni, college fees and some endorsements. To do this, one has to be good at salesmanship or public relations. No person has too much money, not even millionaires. To make the latter donate to the university. You must convince them that your institution is where their money would be most useful.
We continuously read of millions of kwacha worth of drugs lost in transition. Why does it take so long before the thieves are caught. One must look into the management side of the health facilities. We usually think of doctors when we discuss hospitals but by ignoring the administrative set up, we indirectly frustrate the work of doctors. In the absence of drugs, doctors can do nothing.
If public service institutions are to operate successfully they must give honest answers to the following questions.
What is our business and what shouldn’t be? They should be clear in mind and on paper what they are doing and what they ought to be doing.
They must work out priorities. There is never enough time nor money to do all things at once. Managers must decide on what should be done first, what should be done next and what may be discarded.
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