SUPPLEMENTARY MATERIAL

Introduction to Public Management

ITP511S

2015

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Complementary notes for Introduction to Public Management Semester 1, 2015 Dear Student

Welcome to the study of Introduction to Public Management at the Polytechnic of Namibia. I am sure that throughout the semester you are going to learn a lot from this course and will be successful in your studies. However in order to do so, additional contemporary information has been provided for you. Below find the additional information useful for your studies. Carefully follow the current table of content in your study guide and simply complement the content with the following additional topics.

Unit 1 - Introduction to Public Management 3.9 Ethics, corporate social responsibility and corporate governance

Unit 2 - The environment within which Public Management 2.1 Macro-environment (External environment)

2.1.7 The ecological/natural environment 2.1.8 The international environment

2.2 Micro-environment (Internal environment) 2.2.7 The market 2.2.8 Competitors

Unit 3- Public Management Functions 1.6 Delegation

Unit 4 -Public Management skills 6. Customer care 7. Emotional Intelligence

Unit 5 – Information Management in Public Management 5.1 Introduction 5.2 What is an information system?

5.2.1 A definition of information system. 5.2.2 The basic components of an information system.

5.3 Characteristics of useful information in an organisation. 5.4 Developing an information system

Now that you’ve included the additional topics in your table of content, here is

the content for each new topic:

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UNIT 1

Additional notes

3.9 Ethics

The code of moral principles and values that directs the behaviour of an individuals or a group in terms

of what is right or wrong is based on ‘ethics’. A code of ethics sets standards as to what is good or bad in

behaviour and in decision-making.

Individuals express their values in attitudes, beliefs, and judgments about right and wrong. People learn

their values from their parents and family, teachers, and communities. A code of ethics could be better

understood if we compare it with the behaviour of an individuals or a group controlled by prescribed

laws, on the one hand, and by free choice on the other. Figure 1 below illustrates how human behaviour

falls into three areas.

Figure 1.1 Three types of human behaviours

The first area is that of prescribed, enforceable laws, in which the legal system governs values and

standards. The laws of the country govern the behaviour of the Namibian people and organizations in

many ways, for example, individuals and organizations have to pay taxes, and they are not allowed to

take undisclosed sums of money out of the country.

At the other end of the continuum is the area of free choice, where no laws govern the behaviour of

individuals or organizations and where there is complete freedom of choice. Examples of free choice are

an individual’s choice to buy a new car or an organization’s decision to hold a Christmas party for its

staff members. Between these extremes lies the area of ethics. In this area, no specific laws govern- yet

there are certain standards of conduct, based on shared principles and values about moral behaviour,

that guide the individual or organization. In the area of free choice, the individual and the organization

are accountable only to themselves. In contrast, in the area of prescribed law, individuals and

organizations are accountable to enforceable laws.

Ethical questions often appear as ‘grey areas’ and there is much uncertainty about what constitutes

proper behaviour. An ethical dilemma arises in a situation in which it is difficult to tell right from wrong

because all the alternatives may potentially give negative consequences.

The situations sketched in the box overleaf illustrate typical ethical issues with which managers have to

contend. How should managers deal with these and other similar issues? In the following sections, we

provide guidelines on how managers can make ethically acceptable decisions.

behaviour directed by

prescribed law

behaviours directed by

ethics

behaviours directed by free

choice

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3.9.1 Levels of ethical decision making

Managers find it easier to decision what course of action to take if they can identify the level at which an

ethical dilemma appears. In business, most issues that managers have to confront fall into one of five

levels, which are not mutually exclusive. These levels are illustrated in figure 2 below.

Figure 1.2 The level of ethical decision-making

3.9.1.1 Individual level

Ethical questions at the individual level arise when people face issues involving individual responsibility,

such as being totally honest when completing expense accounts, calling in sick when they are needed at

home, accepting a bribe, or misusing organizational resources – such as time, telephones, and

computers- for personal purposes.

3.9.1.2 Organizational level

When ethical issues originate at the organizational level, the individual dealing with such issues should

consult the organization’s policies, procedures, and code of ethics to clarify the organization’s stand on

the issue. An example of an issue at this level would be an organization that required an employee or

group of employees to overlook the unethical behaviour of a colleague whose action has benefited the

organization.

3.9.1.3 Association level

At the association level, an accountant, lawyer, teacher, medical doctor, or management consultant may

refer to their professional association’s code of ethics for guidelines on conducting ethical business. In

Namibia, both the private and the public sectors make extensive use of the services of freelance

consultants, some of whom have been victims of the downsizing, re-engineering, or affirmative action

policies of their previous employers. There is no enforceable code of conduct regulating the ethical

conduct of these consultants to ensure that their clients receive fair treatment and protection of their

rights. For example, Academics in the study of Public Management suggest that an Association for Public

Managers been established in Namibia to enhance the ethics and moral issues among our civil servants.

international

societal

association

organisational

individual

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3.9.1.4 Societal level

At the societal level, laws, norms, customs, and traditions direct the legal and moral acceptability of

behaviour. Many business customs that are commonplace in the Middle East and Asia are not

acceptable in the western countries, and vice versa. An example at this level may be a manager

consulting with experts on the legal and moral codes of the country with which he or she is dealing,

before reaching on an ethical issue.

3.9.1.5 International level

At the international level, a mix of cultural, political, and religious values that influence decision often

confuses ethical issues. An example of an ethical issue at this level would be whether an employee

should accept or condone the policy an organization doing business with a government that condones

human rights abuses, such as making use of child labour.

The ethical levels discussed above can and often do overlap, but it is still useful to identify the level

when confronting an issue and to ask whose interest, value, beliefs, and economic interests are at stake.

Such information can help to clarify the situation and facilitate better decision making for pubic

managers.

3.10 Steps in the ethical decision-making process

Public manager who faces an ethical decision should investigate all the variables pertaining to the

specific issue and then take a decision based on the appropriate approach or a combination of

approaches. The actual steps in this process do not differ much from the decision-making process to be

but the emphasis is on ethical considerations, as figure 3 indicates here below.

Figure 1.3 Stages in the ethical decision-making process

Let’s look at these steps in more detail.

1 •identify the problem

2 •determine whose interests are involved

3 •determine the revevant facts

4 •determine the expectations of those involved

5 •weigh up the variouys interests

6 •determine the range of choices

6 •determine the consequences of those choices for those involved

8 •make your choice

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Step1: identify the problem

Define the ethical problem. Here it is important not to confuse the ethical problem with the associated

symptoms or problems. For example, suppose the organization you work for is compromising on the

quality control of the drug sold to pregnant women in order to meet an urgent and large order. Your

ethical problem here is whether you have the right to endanger the life of fetuses and pregnant women.

Step 2: determine whose interests are involved

A decision with ethical consequences can affect many stakeholders, such as customers, suppliers,

employees, shareholders, the government, and environmental lobby groups. Prior to making choice, it is

essential to determine whose interests are involved and how the various stakeholders would react to

the various scenarios created by different choices. Say, for example, that many deformed children are

born because of the poor quality of the drugs taken by their pregnant mothers. Stakeholders in the

scenario are customers (mothers and babies), the organization, employees and the shareholders.

Another stakeholder is the government, which will act against a drug company that compromises on the

quality of the drugs taken by pregnant women.

Step 3: determine the relevant facts

Unless the decision maker examines all the relevant facts, he or she cannot make an ethical choice. In

the example cited above, the decision maker should avail himself or herself of all the relevant facts

relating to the compromised quality control of the drug. For example, the decision maker should

investigate the possible consequences of a batch defective drug for the health of pregnant women and

their babies.

Step 4: determine the expectations of those involved

In complicated ethical decision, many stakeholders have expectation based on actual and tacit

agreements. The end-user has a legitimate expectation to receive a safe drug, whereas the client has a

legitimate expectation to have the order delivered on time. The decision makers should consider all the

stakeholders’ expectations before reaching a decision.

Step 5: weigh up the various interests

The next step is for the decision maker to judge whose interests are the most important. In our example,

the decision makers should weigh the possible benefits to the organization of a larger order against the

possible negative consequences of defective products. All those factors have to be taken into account

when making the final ethical decision.

An ethically conscious way to consider the various interests is to reverse roles with the other parties to

the conflict. Put yourself in the position of the other party. How would you feel if a defective product

had harmed your baby’s or your spouse’s health? If you were the chief executive officer, how would you

feel if the organization stood to lose an order worth millions of rands? Once the decision maker

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completes this process, he or she should be in a position to make a judgment about whose interests are

the most important.

Step 6: determine the range of choices

A range of choices is available in any given decision-making situation. The decision maker should first

determine what is possible, before deciding on what to do. In the case of our example, he or she could

decide to cancel; or remain silent and go ahead and process the order; or discuss the problem with his

or her superiors. If the decision maker is intimidated into taking a decision, he or she could consider

speaking to the media.

Step 7: determine the consequences of these choices for all those involved

This is not an easy exercise, because it is difficult to predict the consequences of the various alternatives

with any certainty. However, this is an important step in the ethical decision-making process. In our

example, the decision maker may decide that by keeping silent, a number of deformed babies could be

born. Alternatively, if the customer cancels the order, the decision maker may lose his or her job.

Step 8: make your choice

The decision makers should now be in a position to make a reasoned judgment, taking into account the

facts, the stakeholders, the consequences of each possible option, and the weighed reasonable

expectations of all involved. The ultimate decision could still be the wrong one, but at least the maker

followed a rational process and the decision represents the best judgment of the decision maker.

Having discussed both the formal and informal approaches to ethical decision making, as well as the

steps that managers can follow to solve ethical problem, we shall now consider what institutions can do

to ensure that managers follow ethical standard in their decision-making.

3. 11 corporate social responsibilities

Corporate social responsibility implies that a public manager, in the process of serving his or her own

business interests, is obliged to take actions that also protect and enhance society’s interest. The overall

effect is to improve the quality of life in the broadest possible way, regardless of how ‘quality of life’ is

defined by society. The public manager becomes concerned with the social and economic outputs and

with the total effect of the institution’s actions on society.

3.11.1 Levels of social responsibility

The foundation of capitalism is based on the ideas of Adam smith, who believed that in the long term,

individuals and organizations best serve public interests by pursuing their own self-interest, and that

government should interfere as little as possible.

The economist Milton Friedman elaborated on the ideas of Smith and said that, when an organization

makes a profit, it is being socially responsible. Friedman believed that diverting organizations from the

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pursuit of profit makes the economy of a country less efficient. According to him, private organizations

should not accept the responsibilities belonging to government.

Friedman’s view represents one extreme of the debate on social responsibility. At the other extreme are

those who argue that social responsibility policies should be part of an organization’s mission statement.

Most managers’ views fall between those two extremes.

Figure 1.4 Levels of social responsibility

3.11.2 Social obligation

Because society allows organizations to exist, organizations owe it to society to make profits. According

to the social obligation view, the generation of profits within the legal framework of the society in which

the organization operates represents socially responsible behaviour by the organization. Thus, the

socially responsible behaviour of the organization consists only in its economic and legal responsibilities.

Economic responsibilities include the maximization of profits, the provision of goods and services to

society at a reasonable cost, and the creation of jobs and where applicable.

Legal responsibilities refer to the organization’s obligation to comply with the general civil and criminal

laws that applies to the public and to laws that regulate business activities. In Namibia in recent years,

consumer and environmental movement have made much progress in convincing the governmental to

introduce laws that govern business in the areas of protecting the environment and consumer safety.

Furthermore, progressive new labour laws fully govern labour practices in Namibia.

3.11.3 Social reaction

The social reaction view holds that organizations owe society more than the mere provision of goods

and services. Organizations should at least be accountable for the ecological, environmental, and social

costs resulting from their actions. Ideally, organizations should also respond to society’s problems, even

those for which they are not directly responsible. Socially responsible behaviour, as defined at this level,

therefore includes voluntary actions by the organization, such as supporting worthy causes that will help

solve some of society’s problems. The most common type of social reaction takes place when civic

groups go to an organization and ask for donations for scholarships, anti-drug programmes, or

sponsorship of sports teams.

social obligation

social reaction

social responsibility

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3.11.4 Social responsiveness

Social responsiveness refers to the socially responsible actions of organizations that exceed social

obligation and social reaction. Organizations engaging in the socially responsive behaviour actively seek

to find solutions to social problems. Socially responsive behaviour includes civil responsibilities such as

supporting or opposing public issues, and responding to the present and future needs of society by

trying to fulfill them. It also implies communicating and liaising with the government and the other

organizations about existing and anticipated socially desirable legislation and community programmes.

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UNIT 2

ADDITIONAL NOTES

2.1 Macro-environment (External)

2.1.7 The ecological/ natural environment

The ecological or physical environment contains the limited natural resources from which an

organization obtains its raw materials; organizations also dispose of their waste into the natural

environment. Water creates various forms of pollution. Since the 1960s, there has been a growing

awareness of the need to conserve the limited resources of our natural environment. People have

protested against all forms of pollution and against the destruction of the natural environment by such

projects as opencast and mining and the building of roads and dams. It has been speculated by theorists

such as Malthus that the earth could become overpopulated. Organizations are likewise becoming

increasingly aware of the natural environment and the interdependence between organization and the

natural environment. This interdependence presents opportunities as well as threads to organizations.

Threads include a shortage of resources:

the rising cost of energy

the cost of pollution and

damage to the country’s natural resources

Management must take timely steps to limit, as far as possible, any detrimental effects, the organization

may have on the environment to prevent unfavourable attitudes towards the organization. But, most

importantly, in order conserve, maintain, and manage the country’s dwindling natural resources.

It is against this background that sustainability issues such as green industries, buildings and transport

are becoming crucial for management. A quest for lower carbon dioxide emissions is putting pressure on

the car industry to manufacture cars that are less dependent on fossil fuels and more dependent on

electricity. Other industries are pressurized to generate and use solar and wind power, opening up

opportunities to produce green energy. New buildings, for example, can be designed and build to

generate their own solar power to drive their air conditioners and heating systems.

2.1.8 The international environment

While each of the preceding environmental factors influences, to a greater or lesser extent, the business

environment of each organization, the business environment grows in the complexity, with more

opportunities and threats, if an international dimension is added. Similarly, businesses that operate

internationally find themselves in a far more complex environment. Each country has unique

environmental factors, their own technology, economy, culture, laws, politics, markets, and completion

which differs from those of others countries. International and multinational organizational, in

particular, are affected by international trends and events. Globalization not only offers opportunities,

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however, but also poses threats. Management must therefore constantly assess possible global threats

to their products and markets.

2.2 Micro-environment (Internal)

2.2.1 The market

The market for the organization’s products or services consists of people who have need to be satisfied

and the financial means with which to satisfy them. Market research should provide managers with

valuable information regarding possible new trends in the purchasing behaviour of its customers.

Management should also realize that changes in their markets are influenced directly by the variables in

the macro-environment. For example, demographic trends affect the number of customers, while

economic factors determine the purchasing power of consumers, and cultural values exert particular

influences on the purchasing behaviour of consumers.

2.2.2 Competitors

A market economy is characterized by, among others, a competitive market environment. Therefore

every organization that tries to market a service or product in the market environment is constantly up

against completion- and it is often competitors, and not consumers that determine the actual quantity

of a particular product to be marketed, including the price levels for that product. In addiction

organizations compete not only for a market share for their product, but also compete with other

organizations for labour, capital, and materials.

Completion ensures that excessive profits are kept in check, incentives are provided for higher

productivity and technological innovation is encouraged. Although the consumer benefits from

competition, it is still a variable that management has to take into account when developing strategies

to enter a market.

In its assessment of competition, management should bear in mind that the nature and the intensity of

competition in a particular market environment are determined by five forces.

The threat of new entrants (competitors) or competitors departing;

The bargaining power of clients and consumers

The bargaining power of suppliers

The treat of substitute products or services

The number of existing competitors

The market environment causes interaction between organizations and their suppliers, consumers, and

competitors with alternative offerings. The interaction between these groups may results in

opportunities or threats for the organization. Management must be sensitive to trends in the market

environment to enable it to make the most of opportunities and to avoid possible threats timeously. The

tools that management should use for this purpose are environmental scanning and information

management.

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UNIT 4

PUBLIC MANAGEMENT SKILLS

ADDITIONAL NOTES

6. Emotional intelligence (EI)

A book of contemporary management issues would not be complete without reference to the concept

of emotional intelligence (EI). Emotional intelligence is the ability to access, manage, and make use of

one’s own feelings in the workplace- as well as those of other people.

Emotional intelligence was thoroughly researched by Goleman, who found that it is more important to

work success than the rational intelligence quotient (IQ) or technical skills. The emotional competencies

that differentiate superior average performers are:

Self-awareness;

Self-management (managing one’s own emotions)

Social awareness (empathy)

Social skills (managing relationships)

Emotional self - awareness entails being in touch with oneself. This means that one can sense, articulate,

and reflect on one’s emotional states and the way they affect one’s performance. Being in touch with

themselves enables individuals to be comfortable with their own strengths and weaknesses.

Emotional self-management is the ability to regulate one’s emotions such as disappointment, anxiety

and anger and to refrain from acting impulsively. Signs of this competence include still being effective in

stressful situations or being able to deal with disappointment without giving up.

Social awareness refers primarily to empathy. The empathy competence gives people an astute

awareness of others’ emotions, concerns, and needs. It enables managers to put themselves in the

shoes of their employees. The empathetic person can read emotional currents, such as tone of voice or

facial expression.

Finally, ‘social skills’ entails the ability to attune ourselves to, or influence, the emotions of another

person. It refers to essential social skills such as: developing others, managing emotions effectively in

other people, creating an atmosphere of openness, creating clear lines of communication, managing

conflict, inspiring others to work towards the organization’s vision, managing change, building networks,

and managing teamwork.

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UNIT 5

ADDITIONAL NOTES

4. INFORMATION MANAGEMENT IN PUBLIC MANAGEMENT

4.1 A definition of an information system

We tend to use the terms ‘data’ and ‘information’ interchangeably, although there is a definite

distinction between the two concepts. Data refers to raw, unanalyzed number and facts about events or

conditions from which information is drawn. For example, sales figures for discovery’s five companies

for 2005 are an example of data. Information, on the other hand, is processed data that is relevant to a

manager. In the discovery example, the given data can be processed into information. The financial

managers can calculate an increase in the sales of each of the five companies for the past few years.

Individual companies’ sales can be compared with one another as well as with the sales of other

competitors in the healthcare industry.

Management information is information that is timely, accurate, and relevant to a particular situation.

Management information enables management to establish what should be done in a specific situation.

Increases in discovery’s sales in all five of its companies can be seen as management information, since

it indicates immediate action: management should capitalize on their decisions and success of the past.

They may decide to enter even more markets where they can expect profitable growth, such as

providing more cost – effective private healthcare for the millions of individuals who, even though

employed, cannot afford access to private healthcare.

Smit et al; 2013:195 define an ‘information system’ as the people, procedures, and other resources used

to collect, transform, and disseminate information in an organization. Stated differently, an information

system accepts data resources as input and processes them into information products as output.

4.2 The basic components of an information system

An information system utilizes hardware, software, and human resources to perform the basic activities

of input, processing, output, feedback, control, and storage.

Information systems receive data as input. Discovery receives data such as their sales figures from each

of their five companies. The information system needs to process this data by organising and analyzing it

in a meaningful way to provide information as output to managers. Discovery’s managers may want to

know the growth rate of sales, earnings per share, return on common equity and so on. The

information, and not the data, should enable management to make decisions. This information must

then be stored. Storage refers to the activity by which data and information are retained for subsequent

use. Discovery could use magnetic tape, computer disks, or other means of storage for this purpose.

Finally, an information system provides feedback on its activities in order to determine whether the

system meets established performance standards.

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Figure 5.1 an information system model

Information systems include certain resources that contribute to their information- processing activities.

‘Hardware resources’ is a broad term that denotes the physical components are of a computer system.

The four main categories of computer system components are:

Input devices, such as keyboards, optical scanning devices, and magnetic ink character readers

which allow one to communicate with one’s computer.

A central processing unit (UPU), which consists of electronic components that interpret and

execute the computer program’s instructions. The CPU can be seen as the ‘brain’ of the

computer.

Output devices, for example printers, audio devices, and display screens.

Auxiliary storage, for example magnetic disks and tapes, and optical disks.

Software resources are the programs or detailed instructions that operate computers. These include:

System software, which manages the operations of a computer.

Application software, which performs specific data-processing or text-processing functions such

as a word-processing package or a payroll program.

Procedures that entail the operating instructions for users of an information system.

The human resources required to operate an information system include specialist and end-users.

Specialists are people who develop and operate information system, such as system analysts,

programmers, and computer operators, while end-users are people who use the information produced

by a system. Managers are end-users of information.

4.3 Characteristics of useful information

Information must have certain benefits over raw data to be considered a value-added resource to the

organization. There are certain characteristics that information should have in order to be useful and of

value to the organization. These characteristics are:

Quality (accuracy): Information is of high quality if it portrays reality accurately. The more

accurate the information, the higher its quality.

transformation

output information

feedback

input data

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Relevance: Managers and employees often receive information that is of little use. Information

is relevant only when it can be used directly in the problem- solving and decision –making

processes.

Quantity (sufficiency): Managers and employees often complain about an information overload.

Quantity is the sufficient amount of information available when users need it- more is not

always better.

Timeliness (currency): Timeliness means the receipt of the needed information while it is

current and before it ceases to be useful for problem- solving and decision-making processes.

Receiving information too late can have a detrimental impact on an organization.

The above four characteristics of useful information, namely accuracy, relevant, sufficient, and

currency, are interrelated and are essential to the provision of information that serve as a value-

added managerial resource. In what follows, we examine how organizations organize information

system so that they can provide managerial end-users with information that is all those things

4.4 Developing an information system

Most managers are not Information system (IS) specialists. However, they are IS users in line and

staff departments, such as accounting, operations, marketing, purchasing, and so forth. Their

performance will, in part, depend on the quality of the IS support available. It is therefore

imperative for end-users to have a say in the development efforts of IS specialists in order to ensure

that the system meets their information requirements.