public governance BIG third year 2020-2021, Appunti di Project Management

Scarica public governance BIG third year 2020-2021 e più Appunti in PDF di Project Management solo su Docsity! 1 PUBLIC GOVERNANCE - MONICA HILDEGARD OTTO FROM GOVERNANCE TO COLLABORATIVE GOVERNANCE Mapping and managing stakeholders Governance → different actors must find solutions, the best way, for whatever has to be organized. Policymaking can be done by using the approach of governance. If we have to take decisions about education, the government approach (top-down) means that the policymaker takes the decision. Over time, the government approach brings out the governance approach, where people are involved. Opportunities and risks related to the governance approach: Risks → time-consuming and there could be conflict of interests. This could be the best way for finding solutions, but it is not that every time the governance approach could be implemented. We have experienced a move from government to governance, which is inevitable, because the role of public institutions have been changing and people have new and larger needs. Overtime, Italy had to create policies and reforms to satisfy the needs and interest of people. We have been experiencing needs and desires of people and the role of public institutions is to serve these needs. The public needs have been EVOLVING overtime for different reasons: o Growth of population o Science saying that new-borns in 2000 will live more o Health becoming more complex (the concept of HEALTH has been changing over time and it has become more and more complex) o Communication and information: the increasing exposure to info and networks increase the expectations (e.g. expectations for care, treatments, innovative solutions etc) o Budget constraints: the financial – economic crisis led to a reduced availability of resources within the health care systems worldwide ➔ Therefore there is a GAP between available resources and population’ needs. Resources available in the hands of public institutions are not sufficient. The society’s needs will become larger thus, a solution is needed. 2 Stakeholders = actors with a stake into education, for example. If there are some other actors that care about your issue, you can be passive and use a top down approach or you can involve others, using a governance approach. Taking the perspective of businesses, so the private and not the public institution we should have in mind the market forces, the ones shaping the ability of business being competitive in the market. PORTER’S 5 FORCES: The five competition forces are the ones cited above in the image. They are a holistic way of looking at any industry and understanding the structural underlying drivers of profitability and competence. These forces are related to players found in the market, such as buyers or suppliers. When we speak about the market, we think about these, because they shape the ability of a company being competitive. The mission of a business is doing profit. Based on Porter, this is done by taking care those forces present in the market. The profit of the company depends on the market, which is fundamental. Based on this approach we can identify market stakeholders. The government is seen as an external element with no say in this system. If you change the way of producing, the costs change. Mapping the non-market environment: The BACH system focuses on the light-blue area, which is the one of the market environment: the company has to play in the market field, the blue one. Now we focus on the non-market part. There are other stakeholders, who also are media or activists, even a citizen. The same actor may have an interest as citizen and activist = there is a conflict of interest. 5 - Starts always from an issue (more effective if it is a question). An issue is a problem, a situation, that an organization wants to solve. You use the IA3 to map non-market stakeholders, the non-market environment and you try to identify solutions for the issues that you have in mind. - Allows to identify potential alliances for solving the issue. - Settles the basis for shaping a strategy for solving the issue. You can identify how the environment positions itself to the issue and what solutions can be posed. For the first one: the answer is A. What happens in the non-market environment can affect the ability of the company in being profitable. For the second one: explain what it is and how it is implemented and the 6 questions. Use an example (even the one made in class) and state the issue as a QUESTION. COLLABORATIVE GOVERNANCE Collaborative Governance is meant both to provide a conceptual framework for understanding collaborative governance and to serve as a practical guide to the design and implementation of collaborative undertakings. Public value can be created by a force multiplier. There is an agreement between parties, public and private ones, that join their forces to create value and they share their forces and share discretion (responsibilities and potential outcomes). Collaborative governance can be linked to the concept of public private partnership. But PPPs can have 2 different types of definitions: - Narrow definition: refers to the financial solutions, all those partnerships aimed at financing an infrastructure, such as leasing. - Broader definition: the one we consider. Thus, they are partnerships between the public and private for the realization of different projects, with the sharing of responsibilities. In this definition we can consider collaborative governance, that typically among the private actors is focused on THE BUSINESS, the FOR-PROFIT organizations. 6 Park in Chicago: The plan was to build a much-needed underground parking lot, topped with turf and perhaps a few benches and statues. In hopes of lightening the burden on the city’s budget, Mayor Richard Daley approached local business leader John Bryan about raising $30 million in private money to help pay for the project. Bryan accepted the mayor’s bid for private involvement and raised it—but with a crucial twist. He called for making the acres above the parking lot a cultural showplace, not just a green space, by letting donors put their stamp on a particular piece of the park in exchange for substantial contributions. - Stakeholders involved: local govt, citizens (both those who needed to find parking and the visitors) who are the ones that will benefit the most from the collaboration, local businesses (both families who contributed and not). - Why should the municipality be interested in creating these values? What is the interest of the business? → local govt may have political incentives in providing the public service, and the rich families may have increase in prestige and would gain reputation in collaborating with them. The businesses are embedded into the public context; thus, they also should have a return from their actions. - The parties share responsibilities, such as the city govt that has to guarantee a fair play for all the businesses that want to contribute. Thus, the public institutions (municipality) have the responsibility to SATISFY THE PUBLIC INTEREST. Also, the business is providing money and is probably going to manage from a practical point of view the park. Both the private and public institutions have responsibilities and their shared responsibility is to satisfy the public interest. Protecting Ports with the Coast Guard: Idea of involving private organizations to protect the US ports, thus, to manage security. - Stakeholders: public institutions, citizens (the ones that benefit from the protection) and business involved in taking care of the security of the port. - Share discretion, responsibilities: what could be a different type of partnership implemented among the parties? Range of discretion between public and private: 7 First step: type of discretion → the power of deciding. Is it in the hands of private or power or both? In the table example, it is shared because there are responsibilities in the hands of both. In order to be successful these collaborations need a balance between responsibilities and power. There are other situations, where the responsibility is public, such as in the case of ports. Only the middle one is collaborative governance. Second step: the price/cost of collaboration o Increase in capacity and flexibility: the shared discretion can augment government’s capacity for accomplishing public missions and increase the flexibility with which such missions are pursued. o The shared discretion also extracts a price. Authority becomes ambiguous, strategic complexity grows, and accountability breakdowns proliferate. ➔ The critical question for policy is when that price is small and when large relative to the gains achieved from granting discretion. Third step: targeting collaboration. We have to decide if it is the case to collaborate or not. Not every public goal, to be sure, requires or can benefit from collaboration. Before deciding to collaborate, an organization must decide if it is willing to accept a change in capacity. In order to decide if collaborating a number of issues have to be considered. Among the main ones: 1. It is important to recognize the organization identity. An organization may decide that to adequately perform its core function, it must shed other functions. The issue of collaborating must be viewed in light of the issue of organizational capacity. The decision is a decision to retain and emphasize an area of distinctive competence and internal skills. 2. What can be the added value for the organization? What is the opportunity cost? Many times collaborating represents the opportunity for a reduced price or the need for access to new proprietary technology. But pay attention not to lose internal capacity to deliver outputs by becoming too reliant on the work of other organizations. 3. How much strategic a service /activity /function is for the organization? Among the environmental variables to be considered: political calculus, ideology, etc. ➔ Collaborating as a tool, a means, to reach something and not an end! 10 Managing Privatization: lessons from developing countries’ experience During much of the 1990s, water utilities worldwide experienced a wave of privatization, in particular of divestment of state-owned enterprises. It means to lower the investments of the public and leave in the hands of the private the management and delivery of the service, also divestment means shedding an enterprise, function, or asset. Like delegation, this requires a direct, positive act by government but unlike delegation it is a one-time event. The enterprise or asset is either sold or given away as an ongoing business or shut down. Where state- owned enterprises are abundant, “denationalization” is frequently used to mean divestment. The idea behind the strong privatization/divestment that happened in the 90s are two hypothesis: 1. The fiscal hypothesis: it suggests that privatization will relieve governments of the burden of investment. 2. The efficiency hypothesis: the private should be able to increase the increase of the service, thus, more flexible and faster in taking decisions. It should be easier for the private to find new sources of water and energy and utility. It suggests that water utilities performance will improve under private ownership because it is ‘obviously’ more efficient than the public sector. Value of privatization: - Quality of water - Money - Unit cost - Coverage of territory - Amount of water - More access The value of privatization is given by a number of impacts, not only the economic ones, but also the efficiency and effectiveness. Objections to privatization: 11 Take home messages: PRIVITAZION: increasing involvement in the private. It can be ambivalent. The public still matters = collaboration is the key; it is a vehicle. There are some pre-conditions for successful privatization: o Clarify what the objective of the collaboration is, keeping in mind that the collaboration per se is not the final aim. o Political will and public opinion support o Assign responsibility to SH involved into the privatization Example of exam question: 1- A = Improve efficiency and performance. This experience was a failure 2- Not to privatize and not to start the collaboration. When having high opportunity costs goes against having a collaboration, because behind collaboration you have high or low costs. Here you have identity loss and loss of competences, loss of authority and hierarchy. 12 Lecture 14: CONTRACT MANAGEMENT Before signing a contract, it is important to decide “make or buy” decision, based on the identification of the needs of the public organization, which is the first step. In the end, the contract should satisfy the needs identified at the beginning of the cycle, but sometimes contracts fail. Contract and collaboration are not the GOALS. The public procurement cycle: Public procurement = activity of procuring services in public setting. A public hospital that has to buy trucks from pharmaceutical firms has to follow some points. Make or buy decisions: Contracting (collaborating) out changes the nature of the organization’s own work, and it may have a positive or negative impact (or a little of both). Before deciding to contract, an organization must decide if it is willing to accept this change in capacity. In order to decide if making or buying a number of issues have to be considered. Among the main ones: 1. It is important to recognize the organization identity. An organization may decide that to adequately perform its core function, it must shed other functions. The issue of collaborating must be viewed in light of the issue of organizational capacity. The decision is a decision to retain and emphasize an area of distinctive competence and internal skills. 2. What can be the added value for the organization? What is the opportunity cost? Many times collaborating represents the opportunity for a reduced price or the need for access to new proprietary technology. But pay attention not to lose internal capacity to deliver outputs by becoming too reliant on the work of other organizations. 3. How much strategic a service /activity /function is for the organization? Among the environmental variables to be considered: political calculus, ideology, etc Contracting as a tool – a means and not an end! Contract → Contracting is a situation where a government organization enters into a relationship with a private, no-profit or other government agency to provide a quantity and quality of services for a negotiated price for a fixed time period. A contract has to be specific enough to provide a high quality good or service, but flexible enough to allow for that a good or service to be modified to meet the government’s evolving needs. Contracting is an operational tool for improving organizational performance. The contract can be a way to protect the identity of the organization. 15 Contract manager responsibilities: TEAM OF PROFESSIONALS WITH DIFFERENT COMPETENCES (MANAG, SOFT AND HARD, LEGAL) THAT ARE COMPLEMENT TO EACH OTHER. The one on the right concern legal competences. The contract manager has to be able to monitor and control the performance of the contract. Also, he has to build KPIs consistent with the contract per se, also with public procurement activities and the investigation phase. He has to translate the contract into KPIs. To do this, we need technical skills of performance management and soft skills to bargain with different professionals involved the KPIs. He analyses the reporting, because he has to report to its own organization and also to the stakeholders = he has to be accountable. He has to provide relationship manager (all on the left) = soft / behavioural skills, which involve tools of risk management. The responsible would be a collector of responsibilities, and he is not one, but generally it is a team of contract manager. Typically, there is a person who relies on third parties support. Common mistakes in contracts: Cohen 1. Problems related to letting contracts → problems linked to bureaucracy of the writing of the contract 2. Communication issues → poor communication (as in the case of Atlanta) or asymmetry of information between government and contractor, inevitable in the principle and agent dilemma. 3. Contractor internal management issues → contractor may have internal problems, such as insufficient stuffing or training – not prepared to manage contract – he has not all competences listed before and so on. 4. Government contract management issues → there is not any performance measure, systems for monitoring or controlling the evolution of the contract. 5. Environmental or external issues → political conflict of interests or oppositions from unions or parties or medias… 16 World bank perspective: Common causes of poor performance associated with inadequate fundamentals include 1. insufficient planning prior to the transition from award of contract to the contract execution phase; 2. poor communication; 3. insufficient resources (capacity and/or capability); 4. inadequate governance and/or confusion of responsibilities; 5. poor decision making; 6. vulnerability to fraud and/or corruption; 7. ineffective risk identification and mitigation HOW TO SOLVE? There is no magic formula, we need to have the competencies of being able to address all the responsibilities of the contract manager team. BEST PRACTICES → THE TRANSITIONAL WORK CORPORATION is a no-profit corporation that was created to help welfare recipients comply with the time limits incorporated into the federal welfare reform legislation of the mid-1990s. Established in 1998 as a cooperative response to welfare reform. TWC's mission is to serve people seeking self-sufficiency utilizing the transitional jobs model to provide opportunities and support leading to more competitive employment. TWC made a contract with the govt to provide service of job coaching and supporting. 17 TWC was a government contractor, so it got paid by the govt, providing critical services to the city of Philadelphia and the Commonwealth of Pennsylvania. However, it was also an independent, mission-driven, no-profit organization with multiple sources of revenue. TRANSITIONAL WORK CORPORATION started Philadelphia@Work: The primary relationship for participants in the Transitional Work Corporation’s Program, Philadelphia@Work (P@W), is with a Career Advisor. The Career Advisor will guide the participant through the transitional work experience and provide continued support through the first six months of permanent employment. Career Advisors will manage an active caseload of active participants (participants in transitional employment) as well as an inactive (employed) caseload of participants. The work includes a series of weekly one-on-one meetings conducted with the transitional employee to provide feedback and guidance to the individual. In addition, the Career Advisor may conduct regular peer support sessions with other transitional workers assigned to the Career Advisor. Responsibilities include maintaining case management files on individual transitional workers (active and employed) and providing management with appropriate reports on participant status when requested. - Thus, Philadelphia decided to sign with TWC an annual performance-based contract to keep high the accountability of the contractor. However, if the government contract managers are not familiar with the work of the contractor and do not actively engage the contractor in developing the performance measures, they may end up emphasizing the wrong measures, setting thresholds that are too high or too low, and providing a lower value of service to the citizen/consumer. - In the case of TWC, the city did not discuss the performance measures with TWC in advance, and the contracts were not finalized until several months into the one-year term of the contract. Then, performance measures were revised, and the contract succeeded in the end. Performance measures: o Enrolments — people who sign up for the program; o Participants who successfully complete the program; o Participants placed in permanent jobs; o Participants that receive longevity bonuses for staying in their permanent jobs. - KPI is a random indicator while a performance measure is either one measuring the following: efficacy, efficiency, equity, and economy. 20 Lecture 17 CORPORATE SHARED VALUES (CSV) The concepts / approaches of CSV can be defined as policies and operating practices that enhance the competitiveness of a company while simultaneously advancing the economic and social conditions in the communities in which it operates. CSV = embed the shared values in the strategies of the company Shared value creations focuses on identifying and expanding the connections between societal and economic progress. Creating shared values through 3 ways: - By reconceiving products and markets - Work on products > By redefining productivity in the value chain, in terms of o Energy use and logistics + Resource use o Procurement + Distribution o Employee productivity + Location - By enabling local cluster development Every firm should look at decisions and opportunities through the lens of shared value. This will lead to new approaches that generate greater innovation and growth for companies—and also greater benefits for society (Porter and Kramer, 2011). 1. Reconceiving products and markets: Meeting societal needs through products and addressing unserved or underserved customers. 2. Redefining productivity in the value chain: It is possible to change the practices in the value chain to guide productive in such a way that partners can be better employed. Changing practices in the value chain to drive productivity through better utilizing resources, employees, and business partners. If you redefine the way you produce, you are doing a CSV approach, not a philanthropy, because you want to improve efficiency. 21 The main ways in which shared value thinking is transforming the value chain: - Energy use and logistics + Resource use - Procurement + Distribution - Employee productivity + Location CSR → NOT strictly linked to profits. 3 cases to redefine productivity, examples: while acquiring goods, a company needs to care about who is the supplier. In the distribution case: you can change the way you involve the distribution’ actors and you may increase efficiency and productivity and then you can contribute to the societal needs. Here, you involve some women and you improve delivery. Here you can invest in the employee productivity (if you improve the wellness of your employees, also the productivity should benefit) and location productivity (localize some production activities in other parts of the world to cut costs). 3. By enabling local cluster development Clusters are geographic concentrations of players like firms, related businesses, suppliers, service providers, and logistical infrastructure in a particular area (like boundaries of countries). The creation of clusters should increase the efficiency in sharing knowledge and innovation and improve the ability to be productive. Improving the 22 available skills, supplier base, and supporting institutions in the communities where a company operates to boost productivity, innovation, and growth. The idea is that creating these clusters you improve productivity of those areas thanks to an exchange of innovation and ideas. In this way, those areas become more competitive and decide to lose part of their autonomy for the stake of the cluster in order to improve the productivity of the entire cluster. The value created by the cluster IS HIGHER than the value that each single player of the cluster could reach alone not being part of that cluster. Enlarging the clusters is a benefit, not a damage. Sustainability through governance: The role of inter-organizational networks and partnerships The role of IOs: They can help in creating shared values and supporting different stakeholders that can influence and affect global needs. They can manage the multi-stakeholder initiatives. OECD Guidelines for Multinational Enterprises: they are targeted to international enterprises and are not legally binding. They can provide guidelines on several new topics such as sustainable development, environmental management, bribery, and corruption. These guidelines are voluntary adopted even by non- members of OECD. Guidelines are addressed to multinational enterprises, but who adapts the guidelines are the countries. There is not a direct involvement of the OECD, but the countries decide to spread the guidelines within their territory. Indeed the main stakeholders are: NCP collect complaints by NGOs. The task of implementing the guidelines is a shared task: NGOs (support the countries with guidelines and interact with businesses which are directly involved for this reason) + countries themselves. These guidelines are a support for companies to understand what should be the attitude in doing corporate shared values. OECD Watch is an international alliance of NGOs which facilitates civil society’s activities around the guidelines The NGOs all around the world support the Guidelines through the network. 25 - Aware about the problem of Child labor and its consequences. Seeing this partnership from outside could make someone else starting this process himself (partnership as indirect tool for creating shared value) - Do not forget to operationalize the phenomenon! - Improve Ikea's image (for IKEA) Who are the stakeholders to be actively involved? • IKEA’s Suppliers and subcontractors • IKEA → responsibility holder • (Local) NGOs (e.g. WWF) • UN program / agencies (UNICEF, UNDP) • IGOs • Experts • Children in India + their families • Women affected by the program • Local and rural communities • Children's Ombudsman for Southern Asia • Carpet industry • Government and other public institutions Who would the beneficiaries of the partnership be? What could the impact on them be? Main beneficiaries: Children and women - Local communities would benefit from more educated children - School system. «Secondary» beneficiaries IKEA: reputation, positive effect on customers UNICEF: story of success to create awareness and imitation. The virtuous cycle: «Imagine a child who has the opportunity to go to school thanks to this project and then have a higher education and with his human capital go work in Silicon Valley and invent a world changing technology for example” What are the actions to be undertaken, in terms of allocation of tasks and responsibilities? IKEA: ethical code for suppliers (to be embedded into the contracts!) + monitoring system (random audits, inspections, etc) + registration of all workers to monitor their date of birth → Local NGOs as watch dog. Funding the partnership: Ikea can save some profit for sustainable actions UNICEF: it could specialize in the day to day operations thanks to its experience and structure + Decisions regarding service delivery UNICEF could also manage the political level thanks to its connections and expertise in the domain UNICEF could work in partnership with local Uttar Pradesh authorities to develop some KPIs. 26 What are the actions to be undertaken, in terms of definition of result indicators suitable for the evaluation of the partnership? Examples of dimensions and KPIs for measuring the partnership performance (pay attention to “confounding variables”): Operational results - Number of schools built / the number of children attending school; - Number of educated local teachers; - Number of women’s self-help groups. Effectiveness - Level of literacy (percentage) growth related to the situation before the partnership; - Growth in the percentage of children who attend school; - Encouraged dialogue with local stakeholders (TRUST and participation). Impact - Awareness of human rights instruments within the local community (usage statistics, NGOs creation); - Political awareness of the impact of the partnership. (Surveys); - Media-attention on the partnership. Written by local community. (number of published articles). Indicators of institution building - Own initiatives developed due to the partnership (descriptive); - Own money earned by the community as result of the partnership ($, INR); - Establishment of local human rights NGOs or initiatives (descriptive); - Printed compilation of human rights standards available, including the relevant articles of the International Bill of Human Rights (number of articles); - An accessible and independent place or institute to address human rights violations (average Km proximity to a human rights post/office); - Democratic elections of local government (percentages); - Women participated in local government (percentage) - Whether the community can continue developing without the cash flow of the company (descriptive, financial sustainability, cash flows). PAT: partnership assessment tool (UN global compact initiative) KPI that compares the data from birth registrations and census with that of children enrolled in school. The difference would be the potential kids that are working in these factories Enforcement of labor laws Steps to be followed: What dimension the KPI should measure (impact, Institutional capacity etc…). Qualitative & quantitative KPIs. Methods for gathering data, info, evidences for KPIs. 27 WRAP-UP: Creating shared value: the corporate perspective - CSV as a non-market strategy, i.e. a way to tackle / to manage /to shape the non-market environment and related issues without forgetting how this is strictly connected to the competitive advantage of businesses. - CSV combines the competitive advantage of companies with the improvement and satisfaction of public needs and values: o csv incorporate into the strategy of a company not only the competitiveness of it but also practices that advance economic and social development and sustainability. o unifies all the ideas and goals, and it helps the organisation to have some achievements which should both better the situation of the company and it enhances social objectives. - Among the possible ways to create share values we considered: a) reconceiving products and markets b) redefining productivity in the value chain, in terms of energy use and logistics + resource use, procurement + distribution, employee productivity + location a) enabling local cluster development ESG → use environmental and social factors to evaluate companies and countries on how far they are with sustainability in 3 dimensions. o Environmental factors include the contribution a company or country makes to climate change through greenhouse gas emissions, along with waste management and energy efficiency o Social include human rights, labor standards in the supply chain, adherence to workplace health and safety, integration with local community o Governance: a well-defined corporate governance system can be used to balance or align interests/ tasks / responsibilities between stakeholders and can work as a tool to support a company’s long-term strategy Creating shared value: the international organization and networks role - International organizations can support the creation of multi stakeholder networks and the creation of shared values