ORGANIZATIONAL STATUS AND PERFORMANCE: A CONCEPTUAL FRAMEWORK FOR TESTING PUBLIC CHOICE THEORIES

Popular belief is that ownership change (from public to private) brings about improved performance. But (i) ownership displays a spectrum, not an either/or; (ii) degree of competition is conceptually and often actually independent of ownership; and (iii) so is change-of-ownership's assumed instruments for improving performance, change in managerial incentive structures and reporting structures. The article surveys the relevant theories, popular and scholarly, and develops models for testing the relationships between status change (ownership) and performance (indices of productivity, profitability etc.), and between status change and internal organizational change (indices of reorganization and of linkage), in a small number of British organizations which underwent change in recent decades. Preliminary results of one or two analyses illustrate the methods and the possibilities.     

ORGANIZATIONAL STATUS AND PERFORMANCE: THE CASE OF THE SWEDISH PHARMACIES

In recent years, studies of the relationship between organizational status and success have focused largely on organizations transferring from the public to the private sectors: pharmacies in Sweden provide a case study of organizational status change in the reverse direction. Popular belief suggests progressive deterioration in the performance of an organization where ownership changes from owner-manager to public corporation, market conditions change from competition to monopoly, and internal management becomes increasingly command orientated. This article explores change in various performance and organizational variables in the National Corporation of Swedish Pharmacies, from its creation in 1971 until 1990. The corporation displays a high degree of stability amongst its senior management team, task specialization amongst employees is low, whilst standardization of working methods is high. Decentralization of authority has occurred over several years. A review of several measures of success, including productivity, financial ratios and innovation, demonstrates substantial progress over the period, comparing favourably with other Swedish public sector organizations. It is concluded that public sector ownership and monopoly supply need not result in deteriorating performance and lack of innovation, provided that criteria for success are clearly stated and properly monitored.     

The Influence of Emotional Labor and Emotional Intelligence on Job Performance: Does Ownership Type Matter? A Comparison of Public and Private Organizations in China

ABSTRACT

Given the limited knowledge about the effect of contextual factors of organizational ownership types on emotional labor, this research addresses two main questions: (1) whether emotional labor varies among organizations with different ownership types; and (2) whether emotional labor and emotional intelligence relate to job performance in different ways in public and private organizations. This paper examines the research questions with 306 self-report questionnaires from the public sector, domestic privately-owned enterprises and foreign-invested firms in China. Significant differences were found in the emotional labor reported in public and private organizations. Overall, emotional labor was found to have a significant effect on in-role performance, and emotional intelligence moderated the link between emotional labor and job performance in public organizations, but not in private organizations.     

Ownership or Competition? An Evaluation of the Effects of Privatization on Industrial Relations Institutions, Processes and Outcomes

This paper examines whether privatization and exposure to product market competition leads to changes in labour management and industrial relations. Three sets of propositions are examined: privatization will lead to lower changes in industrial relations institutions and processes; privatization will lead to lower average levels of remuneration relative to public sector firms; and privatization will lead to relatively higher levels of efficiency. In each instance it is hypothesized that competition will add to ownership effects. These propositions are examined drawing on data derived from the UK bus industry.     

Ownership or Competition? An Evaluation of the Effects of Privatization on Industrial Relations Institutions,Processes and Outcomes

This paper examines whether privatization and exposure to product market competition leads to changes in labour management and industrial relations. Three sets of propositions are examined: privatization will lead to lower changes in industrial relations institutions and processes; privatization will lead to lower average levels of remuneration relative to public sector firms; and privatization will lead to relatively higher levels of efficiency. In each instance it is hypothesized that competition will add to ownership effects. These propositions are examined drawing on data derived from the UK bus industry.     

Privatisation in Developing Countries: A Review of the Evidence and the Policy Lessons

Privatisation is widely promoted as a means of improving economic performance in developing countries. However, the policy remains controversial and the relative roles of ownership and other structural changes, such as competition and regulation, in promoting economic performance remain uncertain. This article reviews the main empirical evidence on the impact of privatisation on economic performance in developing economies. The evidence suggests that if privatisation is to improve performance over the longer term, it needs to be complemented by policies that promote competition and effective state regulation, and that privatisation works best in developing countries when it is integrated into a broader process of structural reform.     

From public to mixed ownership in local public services provision: an empirical analysis

There is a long tradition of companies that provide local public services, such as energy distribution or solid waste collection, being strategically important for the promotion of the development of areas where they are present and having a great influence on citizens’ quality of life. This article examines the determinants of the choice of ownership structure for Italian companies that provide local public services, and the effects that this choice has on their performance. Economic and financial data at company level was merged with economic, political, financial and territorial data on the municipality with the majority of shares in it. A two-stage multinomial selection model was employed, in order to carry out the analysis with more than two alternative ownership structures and to control for endogeneity. The empirical evidence indicates that the municipality’s political and budgetary conditions matter in the choice of ownership structure. Although the computed Average Treatment Effects seem to indicate that mixed ownership increases operating efficiency, the profitability indicators provide evidence to the contrary.     

“Time is money,efficiency is life”: The transformation of labor relations in China

The past twenty-five years of economic reform have seen the transformation of labor relations in China, with the widespread adoption of capitalist labor practices by firms of all ownership types. This transformation has occurred in the absence of both large-scale privatization and political change, but was part of a gradual yet dynamic liberalization and “opening up” to foreign trade and investment that occurred across both regions and across types of firms. The first half of this paper details this process of dynamic liberalization that has spawned competition and change in labor practices, including marked increases in managerial autonomy and labor flexibility. This explanation goes beyond the regional emphasis to also examine changes across types of ownership; the gradual liberalization of labor policies and convergence with capitalist practices can only be understood as part of a more general trend ofownership expansion, through the introduction of new types of firms, andownership recombination, which is the fusing of the public and non-state sectors through novel forms of organization. The much-needed panacea to this shift to capitalism—a state regulatory and legal regime that is capable of mitigating its excesses and effective organizations to represent labor—is not yet well established. The second half of this paper explores two institutions, the labor contract system and the official trade union organization, to show how labor relations have shifted dramatically toward flexibility, insecurity, and managerial control. The author would like to thank those who offered comments and criticisms, including Mark Frazier, Jaeyoun Won, Bill Hurst, Jacob Eyferth, Elizabeth Remick, Mark Selden, Ruth Collier, and two anonymous reviewers.     

The cost efficiency of water utilities: when does public ownership matter?

This study explores the impact of different ownership types on the efficiency of water utilities. Theories and evidence have shown a puzzling relationship between ownership and performance. Moreover, relatively recent contributions (Andrews et al. 2011) have argued that this relationship can be further convoluted by the effect of organisational and environmental variables. The current study aims to contribute to this literature by providing some empirical evidence for Italy, by proposing a methodology that combines non-parametric efficiency estimation and cluster analysis. Our main findings indicate that privately owned utilities indirectly controlled by a public organisation reach the highest level of efficiency but, when size and geographical location enter the analysis, ownership has a stronger significant effect on efficiency, and mixed utilities gain higher cost efficiency. Therefore, we may conclude that administrative reforms about privatisation and the institutional setting should consider a set of variables that characterise each individual organisation.     

PUBLIC RESPONSIBILITY AND INEQUALITY IN HEALTH INSURANCE COVERAGE: AN EXAMINATION OF AMERICAN STATE HEALTH CARE SYSTEMS

This article examines the effect of the three publicness dimensions on inequality in health insurance coverage across 50 American state‐level health care systems. The analysis validates a Gini‐coefficient measure of Americans' unequal distribution of health insurance coverage across nine income groups and compares public ownership, financing, and control of health care systems across all 50 states from 2002 to 2010. There is a significant and negative relationship between public ownership and inequality in health insurance coverage, although the substantive impact of ownership is relatively small. Both public financing and control substantially reduce inequality in health insurance coverage across income groups. However, both of these must be present in order to be effective at reducing inequality. This article expands our understanding of the link between different institutional arrangements and inequality in health insurance coverage in hybrid health care systems.     

Public Procurement Directives in the European Union: A Study of Local Authority Purchasing

Prompted by the Single European Market initiative, virtually all public procurement, except for defence equipment, is now subject to European Union rules which prohibit discriminatory (buy national) purchasing policies. This paper examines the impact of recent procurement Directives on local authority tendering and contract award behaviour (compliance), and considers whether the legislation has been successful in opening-up such public procurement to international competition. Although local authorities are making extensive use of the Official Journal to advertise their requirements, there is evidence that purchasers do not always adhere to the new legislation and it is not obvious that adherence to the legislation is improving. Moreover, an analysis of local authority contract award data for 1993 revealed that almost all contracts were won by domestic firms. However, doubts about the ultimate ownership of such firms and the sourcing of components means that there remains considerable scope for further work.     

Agricultural Production and the Nutritional Status of Family Members in Tanzania

Abstract

The paper studies the effect of crop output value and livestock ownership on the nutrition of children, adolescents and adults in agricultural households. Using anthropometric data to measure nutritional status, this paper finds that both crop values and large livestock ownership have positive and significant effects on the nutrition of children under age 10. The effects persist after controlling for household socioeconomic status. Higher crop values and ownership of livestock are linked to better long-term indicators of nutrition (height-for-age) among the youngest children and better short-term indicators (BMI-for-age and weight-for-age) among older children. The effects also vary between boys and girls.     

Public Service Motivation and Psychological Ownership in Taiwan’s Government-Owned Enterprises

The purpose of this study was to examine the predictive power of each dimension of public service motivation on psychological ownership in a Taiwan sample. The sample consisted of 1087 employees from four government-owned enterprises. The research found that for all government-owned enterprises compassion was significantly negatively correlated with psychological ownership, while commitment to the public interest and self-sacrifice were significantly positively correlated with psychological ownership. Moreover, theoretical and practical implications of the results are discussed.     

The relationship between competition and efficiency of waste-collection services in the Czech Republic

This paper examines the role of the competition on the waste-collection market. Based on the case study of the Czech Republic, we evaluate the influence of competition intensity on supply side of the market on efficiency of waste-collection services. The rate of competition was approximated by the number of submitted bids to public tenders and efficiency was measured by per capita expenditures for municipal waste-collection services. We developed two regression models – the first model verified a competitive effect on the public procurement market for the provision of waste-collection services; the second model identified factors that affected municipal expenditures for waste-collection services per capita. We concluded that the competition in the waste-collection market increases by organising open tenders for suppliers at regular intervals, by adapting the duration of contracts to economic life of fixed assets, by sustaining pressure on service providers through a change in suppliers or the distribution of contracts among jurisdictions.     

Does the Increase in Competition between Schools Improve the Quality of the Service? The Role of Educational Reform in Chile

We analyse the effect of geographic competition between schools on academic performance in Chile. The analysis controls for prior pupil performance, and a range of school and municipality characteristics. We allow for the endogeneity of voucher school location, using the number of local Catholic churches as an instrument. We find that a larger number of public schools positively affects the quality of education of other schools located in the same area, particularly amongst middle-class families and in middle-ranking schools. However, the number of voucher schools is associated with lower performance in neighbouring schools, which we attribute to pupil sorting.     

DOES OWNERSHIP MATTER FOR THE PROVISION OF PROFESSIONALIZED SERVICES? HIP OPERATIONS AT PUBLICLY AND PRIVATELY OWNED CLINICS IN DENMARK

In terms of clinical procedures (to take the example used in this article, hip operations), both public and private organizations provide highly professionalized services. For this service type, our knowledge about ownership differences is sparse. To begin to fill this gap, we investigate how the ownership of hip clinics affects professional behaviour, treatment quality and patient satisfaction. The comparison of private and public hip clinics is based on data from the Danish Hip Arthroplasty Register and the Danish Central Patient Register combined with 20 semi-structured interviews. We find that private clinics employ stronger individual financial incentives and try harder to increase the income/costs ratio than do public clinics. Private clinics optimize non-clinical factors such as waiting time much more than public clinics and have fewer complication-prone patients than public clinics. However, the clinical procedures are very similar in the two types of clinics. Private clinics do not achieve better clinical results, but patient satisfaction is nevertheless higher with private clinics. The implication is that ownership matters for highly professionalized services, but professionalism neutralizes some – but not all – ownership differences.     

Analysis of Changes in External Accountability and Accounting in Privatized Industries: A Case Study of British Gas

This study investigates the consequences of regulation for organizational and accounting change in privatized industries by means of a case study of the gas industry, with particular emphasis on issues of accountability and the role of accounting information. The paper extends Stewart and Ranson's (1988) discussion of the distinctive conditions which apply to public and private sector organizations by highlighting an important interim phase in relation to privatized industries, where public service obligations coexist to varying degrees with private sector objectives. The extension of their framework of public and private sector models to include a new 'commercial' model provides the basis for an analytical framework encompassing the three cultures — that is, public service, commercial and competition — which is used to understand organizational change in the gas industry.     

The Impact of Environmental Factors on the Measurement of Managerial Efficiency in the Italian Waste Management Sector: Framework and Empirical Evidence

ABSTRACT

The public and private sectors are different in terms of ownership, funding, and control. The degree of publicness influences the decision-making processes, strategies, and actions, thus severely impacting the performance levels. This study contributes to the existing literature on managerial efficiency environmental factors by proposing a framework and methodology for estimating the influence of the “publicness effect.” A new method is tested, relying on the combined integration of three different data envelopment analysis models in the Italian waste management sector. Results show that the “publicness effect” accounts for 33.87% of managerial efficiency for public companies and 11.6% for mixed ones.     

Why was democracy lost in Russia's regions? Lessons from Nizhnii Novgorod

The phenomenon of crony capitalism has been explored primarily with reference to its impact on economic growth. This study investigates the political implications of crony capitalism and, specifically, the interaction between political competition and crony capitalism. Based on a case study of a political trajectory in one of the regions of the Russian Federation, I argue that under crony capitalism political competition can undermine the legitimacy of state authorities and such democratic institution as the electoral mechanism. Played out in public during the electoral campaigns unrestricted political competition uncovers the predatory nature of crony elites engaged in struggle for power and wealth and increases public perceptions of corruption.