The Effect of Outsourcing on Public Sector Organizations JOHN H HANNAH III UNIVERSITY OF PHOENIX The Effect of Outsourcing on Public Sector Organizations This paper will examine the particular issues associated with the impact of outsourcing on public sector organization’s performance and employee commitment. As the move to outsourcing is part of a wider phenonom for flexibility in the organizational, structure, development and change paradigms of public sector organizations.
This paper begins by examining the problems associated with an outsourcing strategy in public sector organization. Many counties within the US, have chosen to outsource the investment and operation of non-competitive public services, such as water and waste management, public transports, mail services, information and communication technology services, facilities management and road infrastructures. Outsourcing today has become an essential revenue and growth strategy for almost every existing corporation.
It creates flexibility in the company, ensuring the maximum utilization of available resources within the company. It also offers corporations cost advantages and help free up their management resources. Orange county government-anywhere USA, requested the services of a Home Land Security Specialist to assist in the collaborative, assessment, development and strategic enhancement of it municipality’s Information Technology (IT) and Critical Facilities’ (CF) upgrades and security.
Upon the completion of plan, expectations and deliverables, a series of introductions with Directors, Managers and Supervisors, it was apparent the federal dollars associated with the project was indeed the motive for the invitation. In my initial general assessment and development of a strategy, the organization handbook was the first critical reading which uncovered a mission statement, values, ethical guidelines and the organizational cultural premise. “The Mayor’s outline the vision, values and mission as simple – to serve. You have an important job to do as we work to meet the needs of our citizens.
We ensure that roads are built and maintained; we protect environmental resources; we respond to crisis and emergency situations; we staff facilities that care for people; and we ensure that the quality of life of our citizens is protected our challenge is to build on the strengths of our diverse community so that everyone can enjoy the very best Orange County has to offer. We are committed to maintaining an organization where citizens are engaged in civic affairs, take ownership in their government and have input in the decision making process”.
The following core values serve as our foundation: 1. FAIRNESS, 2. WORK ETHIC 3. INTEGRITY AND CHARACTER 4. EXCELLENCE AND INNOVATION: 5. PROFESSIONALISM AND ACCOUNTABILITY (Orange County Government, 2012) . The role of the Security Specialist in this public sector organization is to examine the particular issues associated with the impact of outsourcing on public sector organization’s performance and employee commitment and develop a strategy to move this organization toward outsourcing initially in the areas of IT and CF.
Provide an assessment and evaluation of the organizational readiness for change in the area of outsourcing. This paper begins by examining the problems associated with an outsourcing strategy in public sector organization in the form of an assessment. As public sector moves to outsourcing as part of a wider strategy to increase flexibility in the organizational, structure, development and change paradigms of public sector organization. Outsourcing helps organizations to be focused.
Since the most valuable resource within management is time, once a process is successfully outsourced, the management gets more and effective time to explore new revenue streams, time to accelerate other projects and time to focus on customers. Traditionally executives spend 80 percent of their time managing details, and only 20 percent on planning and customer relations, in other words, a successful outsourcing process can help reverse this ratio.
Outsourcing can also help companies to have access to new technologies that might not be used in their company. This is mainly because the outsourcers use the latest state-of-the art technologies to serve their private sector clients. And this might also increase the change paradigm shift and rapid migration of these companies to new technology. Outsourcing also helps multi functional areas and department of a public sector providing the benefit of 24-hour operational cycles and providing necessary services to their customer.
The ever- growing pressure for increased productivity and profitability of city, county and state governments thus, the pressures to reduce costs and improve productivity are the main factors that influenced the beginning of offshore outsourcing. For example, the main advantages to move production to private contracting of products and services to reduce in-house human resources management cost. Hence, today outsourcing has become an attractive and powerful strategy for companies to reduce cost and improve performance.
These models provide theoretical guidelines upon which valid and reliable organizational assessments should be based. All of these models provide value to management and human resource organizational leaders performing organizational assessments based on a internal aspects or a system theory evaluation approach (Erwin & Garman, 2010). The McKinsey 7S Framework model is used as a tool to assess and monitor changes in the internal situation of an organization closed system assessment. The model is based on the theory that, for an organization to perform well, these seven elements need to be aligned and mutually reinforcing.
So, the model can be used to help identify what needs to be realigned to improve performance, or to maintain alignment (and performance) during other types of change. The basic premise of the model is that there are seven internal aspects of an organization that need to be aligned if it is to be successful evaluation and assessment tool. The Seven Interdependent Elements of the 7s model are Hard elements (strategy, structure and systems) and the Soft Elements (shared values, skills, style and staff) (Waterman, Peters, & Phillips, 1980)
Burke & Litwin Model (The Casual Model of Organizational Performance & Change) – The Burke & Litwin Model, suggests linkages that hypothesize how performance is affected by internal and external factors. It provides a framework to assess organizational and environmental dimensions that are keys to successful change and it demonstrates how these dimensions should be linked causally to achieve a change in performance. According to Burke-Litwin’s model, an organization may conduct a change intervention in stages as they relate to a specific focus in two stages “First order and Second order” changes.
If an OD intervention is directed toward structure, systems, and management practice result, it can be considered a first order change, if interventions are directed toward mission, strategy, leadership, and organizational culture then result in second order change (Burke & Litwin, 1992). The Marvin Weisbord-Six-Box Model (Weisbord’s Model) is designed to assess the functioning of organizations based mainly on the techniques and assumptions of the field of organizational development. The model represents a particular way of looking at organizational structure and design.
It gives attention to issues such as planning, incentives and rewards, the role of support functions such as personnel, internal competitions among organizational units, standards for remuneration, partnerships, hierarchies and the delegation of authority, organizational control, accountability and performance assessment. The model also follows the basic ‘systems’ approach to organizational functioning including the well-known inputs and ‘outputs’ categories. The six-box model is comprised of the following components (boxes): (1). Purposes, (2). Structure, (3) relationships; (4). Rewards, (5). Leadership, (6).
Coordinating technologies. The only disadvantage to this model is it s design to only address internal environments (Weisbord, 1978). An open system organizational development theory and (Burke & Litwin) model will be utilized to conduct a diagnosis analysis planned change assessment to the organization. These changes are usually designed to address an organization problem or to help an organization prepare for future. It is the one method of quickly bringing change, which focus on human and social aspects of the organization as a way to improve organization’s ability to adapt and solve problems.
The best theory is developed from practice; the best practice should be grounded in theory (Seeger, 2006; Brown, 2011). The Burke & Litwin Model hypothesizes’ how performance is affected by internal and external factors. Public sector management occurs within a complex, dynamic system involving stakeholders, coupled with informational and resource material flows and behaviour that is characterized by interactions related to internal and external environments. According to Burke-Litwin’s model, an organization may conduct a change intervention in stages as they relate to a specific focus in two stages “First order and Second order” changes.
If an OD intervention is directed toward structure, systems, and management practice result, it can be considered a first order change, if interventions are directed toward mission, strategy, leadership, and organizational culture then result in second order change (Burke & Litwin, 1992). The theory of Organizational readiness for change is considered a multi-level, multi-faceted construct. From and organization-level construct, readiness for change refers to organizational members’ shared resolve to implement a change (change commitment) and shared belief in their collective capability to do so (change efficacy).
Organizational readiness for change varies as a function of how much organizational member’s value the change and how favorably they appraise three key determinants of implementation capability: task demands, resource availability, and situational factors. When organizational readiness for change is high, organizational members are more likely to initiate change, exert greater effort, exhibit greater persistence, and display more cooperative behavior (Weiner, 2009). References Bateman, T. S. , & Snell, S. A. (2007). Management: Leading & collaboratiing in a competitive world (7th ed. . New York, NY: McGraw Hill – Irwin. Boland, T. , & Fowler, A. (2000). A systems perspective of performance management in public sector management. The International Journal of Public Sector organizations, 13(5), 417-446. doi:10. 1108/09513550010350832 Brown, D. R. (2011). An experiential approach to organization development (8th ed. ). Boston, MA: Prentice Hall. Burke, W. W. , & Litwin, G. H. (1992). Causal model of organization performance and change’. Journal Management, 18(3), 523-545. doi:10. 1177/014920639201800306 Erwin, D. G. , & Garman, A. N. (2010).
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