Organizational Design for Performance Management in State-Owned Enterprises

Introduction

Public sector organizations financed by public resources exist to achieve outcomes that benefit the society. As such performance measurement and management is a core element public sector reforms in many nations encouraged by international bodies like OECD and World Bank (Boyne, 2010). Yet many public sector organizations face many challenges including poor quality service delivery, fiscal stress, critics everywhere call for privatization and contracting out governmental services; weak economic fortunes demeaning government efforts to spur job creation and expansion of infrastructure; increased media scrutiny, demands for more transparency, accountability and performance; instability of civil service marred with extensive bureaucracies (van Antwerpen & Ferreira, 2016; (Odaro, 2012). All these calls for radical changes and transformation in the public sector organizations. Theorists offer an array of prescriptions of organisational change interventions ranging from process, leadership, to delegation-based approaches (Nutt & Backoff, 1993). In the context of strategic management literature, the process based prescriptions offer steps necessary in effecting organisational change (Pettigrew, 2012). Besides, Ocampo (2000) argues that three well-known models of reform in public administration and management include reinventing government, business process reengineering, and the New Public Management (NPM). In private sector organizations, strategy is often viewed as a way of defeating rivals in competitive markets, however in the public sector, it is conceptualized as a tool for improving organisational performance and provision of better services (Boyne & Walker, 2010). Its ascent in public organizations is the result of increased emphasis placed on accountability for higher levels of performance and overall service quality (Walker, 2013). The dominant approach to the study of strategy in organizations and as tool for transformation has been the design school. According to (Mintzberg, 1990), (Sarbah & Otu-Nyarko, 2014) the design school views the strategic management process as involving conceptual design to achieve an essential alignment between external threat and opportunity against internal distinctive competencies. Within the context of strategic management design, the job of the general manager is to craft a strategy to create an organization organisational architecture, routines, and culture taking into accounts the environmental context to maximize performance (Roberts, 2007). Factors that affect strategy implementation can be categorized as leadership style, information availability and accuracy, uncertainty, organizational structure, organizational culture, human resources, and technology (Rajasekar, 2014). Organizational alignment literature positions, organisational design to provide the much needed link between organisational strategy and performance (Kafashpoor, Shakoori, & Sadeghian, 2013). Therefore from open systems perspective, establishing and maintaining a fit among three elements of an organization: the strategy of the firm, its organizational design, and the environment in which it operates ensures high performance (Roberts, 2007) (Alford & Greve, 2017). Muczyk (2004) argues from a systems theory perspective that organizations as systems function effectively when all parts fit properly.