Public Value - An Important Concept for Public and Nonprofit Organisation

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Public Value an important concept for public and nonprofit organization in relation to competing values, reforms and results

Gulf Investment House(GIH)

Contents

Introduction:

Public Value:

Measuring Public Value:

Competing Values Framework:

Competing value framework and GIH:

Conclusion:

Bibliography

Introduction:

Gulf Investment House is a financial service company. In 1998 Gulf Investment house was found. GIH is a shareholding company located in Kuwait.KD 44.2 million is the subscribed and paid up capital to list the company on the Kuwait stock exchange. Reputed Kuwaiti financial institutions and individuals are the shareholders of GIH. GIH has invested in the USA and other markets. Adel Al Subaih is the chairman of GIH. Bader Al Ali is the CEO of Gulf Investment House. (wikipedia, 2013)

Public Value:

Over the past ten years the concept of public value attracted many policy makers.The desires to maximize the shareholders value in the private sector is known as public value.Public value is designed to get the opinion of the public managers to improve the service or performance of an organization. Through many different ways public values are created.Public value approach helps to improve the decision making quality in an organization.In order to promote trust in public organizations and to meet the rising expectations of the customers, organizations are making public managers to engage with their customers and the public.Public sector alone does not create public value. Private sectors, nonprofit organizations, informal community and goverments generate the outcomes of public value.Politicians and public managers are responsible to explain what they do to the public. (Coats, 2013)

Legitimacy and support,public value and operational capabilities are linked with each other.Public value is generated in nonprofit organizations by serving as missions.With the help of the relationship with the public sector, nonprofit organization also contributes to the attainment of public value. Nonprofit organizations generate public value by bridging the gap between public policy formulation and implementation of the policy. Towards financial performance and efficiency public value is less weighted. Legitimacy and support,public value and operational capabilities are linked with each other.The public managers should imagine and made a vision that can command legitimacy and support and which can be operationally done in the domain in which they are responsible. (C.Mendel, 2012)

The process of answering what question is known as what question.Create answers how question.It specifies how public value can be continuously improved.Sucess question is answered by measuring the public value. (Coats,2013)

Measuring Public Value:

When people re-elect a politician it is understood that he was a successful leader during his reign. For public managers and staffs they have to develop a clear measure of success. For public managers it is difficult to know whether they have met the objectives of their organization. Public value can be measured using the following factors.

  • Collectivity
  • Security
  • Trust and legitimacy
  • Autonomy
  • Personal utility

Without trust and legitimacy other factors are not possible.Communal interest and altruistic values are included in collectivityInvalid source specified.

Factors

Measures

Trust and legitimacy

Complaint levels, surveys conducted among shareholders and public, audit inspection analysis

Collectivity

Measuring social outcomes(education,poverty,etc),active co-production,measures of effective partnership

Security

Measures resilience,reliability,service standards,equity,cost and efficiency.

Personal Utility

Measures of flexibility,quality of service

The public value of GIH is measured and the complaint level received from the customers is low. Shareholders and the public do not lose their trust on GIH. GIH is also taking part in many philanthropic activities,GIH is also providing standard service to its customers with low cost.The quality of service offered by GIH is also found out to be high.

Competing Values Framework:

In 1980s CVF emerged from public sector organizational effectiveness held at the State University New York. Based on the assertion of CVF, organizations of human are shaped by two fundamental contradictions. The two fundamental contradictions are:

  • the desire for flexibility and autonomy Vs the need for control and stability
  • the focus on internal control and needs Vs responsiveness to the external environment

The two dimensions namely internal-external and flexibility-control produce four quadrants. At different times organizations may exhibit different tendencies in each quadrant. Public administration concentrate more on the control quadrant rather than any other quadrant.Based on a survey conducted among the civil servants from Thailand and USA, it was found that Thai civil servants were strong in collaborate quadrant whereas the USA civil servants were found to be strong in control quadrant. (Talbot, 2013)

Internal

External

Flexibility

Collaborate

  • Knowledge
  • Community

Create

  • Growth
  • Innovation

Stability

Control

  • Quality
  • Efficiency

Compete

  • Profit
  • Speed

The proxies of control are asset turnover and gross margin.EVA and change in EVA growth are the proxies for compete. Sales growth and standard deviation in market model are the proxies for create.The proxies for collaborate are future growth values and sales or number of employees. (Talbot, 2013)

Competing value framework and GIH:

CVF is used to find out the reforms carried out in organizations. CVF is applied to Gulf Investment House.The pattern of reforms carried out in GIH under each quadrant is given below:

Control:

  • Strategy and business planning
  • Financial management
  • HR management
  • Information system Management
  • Performance measurement

Compete:

  • Quality customer service
  • Agentification
  • Regulatory reform

Collaborate:

  • Quality customer service

Create:

  • Openness
  • Transparency
  • Accountability

From the above it is clear that GIH mainly concentrated on the reforms in the control quadrants.Much smaller efforts were made in the other three quadrants. So it is recommended for Gulf Investment House to concentrate on the reforms in other quadrants also.When GIH concentrates equally on the four quadrants, it can achieve a remarkable success.

Conclusion:

Many policy makers are attracted towards public value concept because public value approach helps to improve the decision making quality in an organization. Public value approach also increases the efficiency and performance of an organization. The public value in Gulf Investment House is measured on the basis of Collectivity, Security, Trust and legitimacy, Autonomy and Personal utility.When CVF is applied to GIH it was found out that GIH concentrated more on the reforms in the control quadrants.GIH can concentrate equally on the four quadrants to achieve a remarkable success.

Bibliography

C.Mendel, S., 2012. How non profit organizations create public valu. pp.1-30. http://urban.csuohio.edu/publications/center/center_for_nonprofit_policy_and_practice/Mendel-Brudney_NPF_Submission.pdf

Coats, D., 2013. Public Value: The next steps in public service Reform. The work foundation, p.62.

Coats, D., 2013. Public Value: The next steps in public Service Reform. the work foundation, p.60.

Talbot, C., 2013. measuring public value:A competing values approach. the work foundation, p.24. http://www.theworkfoundation.com/downloadpublication/report/202_measuring_pv_final2.pdf

wikipedia, 2013. wikipedia. [Online] Available at: http://en.wikipedia.org/wiki/Gulf_Investment_House [Accessed 6 march 2014].

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