Chapter 2 Blurring Sectors: Public and Private Organization Theory: A Public and Nonprofit Perspective Note to instructor: These slides do not follow the outline order of the chapter. This is intentional, for lecture purposes. Feel free to rearrange and modify to suit your needs. What Chapter 2 DoesLays out a spectrum of organizations, from government thru nonprofit to businessConsiders similarities and differences among organization sectorsExplores how lines blur between sectorsExamines the environment that all organizations share Organization TermsDepartmentAgencyBureauBureaucracy Caution: Many terms have multiple definitions Department: -- major subunit of a large org -- cabinet-level office in U.S. Fed gov Agency: -- an administrative unit of gov -- an independent reg. agency w/in gov. -- a synonym for “bureau” -- a nonprofit organization Bureau: -- a major division within a department -- a “cost center” within an organization Bureaucracy: -- a synonym for gov or large org (sometimes derisive) -- a form of organization (e.g., ideal type) What “Blurring” MeansIt’s a blending or overlapping of “privateness” and “publicness”Organizations blur more and more often Types of BlurringContinuum of public-to-private Mixture of public and private Who staffs the front office? Who staffs the back office?Overlap of purposes This slide introduces the next several slides Public-Private Continuum Gov. agencies Gov. corps. Gov-nonprofit ventures Nonprof.: Helping Nonprof.: Advocacy Nonprof.: Member Public-private ventures Private monopolies Commercial firms PUBLIC . . . . PRIVATE See Fig. 2-1 for organization examples Front Office / Back Office JumbleGovernmentNASAUS AID, DOTGovernmentState health servicesNonprofitFundraising campaignFor-profitStudent loans (banks)PrivateEngineering firmsConstruction firmsNonprofitHealth service providersPrivateMarketing firmGovernmentLoan guarantee prog. The first column represents the front office of an organization, which is what the public sees. The second office represents who might handle a particular operation for the “fronting” organization. More examples are available in Chapter 2, Table 2-2. You or the students may wish to create additional examples. Overlapping PurposesGovernment, nonprofit, and for-profit orgs at times offer similar servicesExamples:Hospitals, trash services, security servicesLoans, package delivery, many othersReasons: What, why, when, for whom, where Reasons are manifold. -- What involves the type and intensity of service (e.g., free clinics vs. private physicians and specialists) -- Why involves whether public need, level of essential investment, commercial potential -- When involves situations such as catastrophes and temporary situations -- For whom involves cohorts within the public (e.g., the poor, the rich) -- Where involves local choice (e.g., trash pickup) -- Contrast & Compare Public & Private Organi ...

1. Chapter 2
Blurring Sectors:
Public and Private
Organization Theory:
A Public and Nonprofit Perspective
Note to instructor: These slides do not follow the outline order
of the chapter. This is intentional, for lecture purposes. Feel
free to rearrange and modify to suit your needs.
What Chapter 2 DoesLays out a spectrum of organizations, from
government thru nonprofit to businessConsiders similarities and
differences among organization sectorsExplores how lines blur
between sectorsExamines the environment that all organizations
share
Organization TermsDepartmentAgencyBureauBureaucracy
Caution:
Many terms have multiple definitions

2. Department:
-- major subunit of a large org
-- cabinet-level office in U.S. Fed gov
Agency:
-- an administrative unit of gov
-- an independent reg. agency w/in gov.
-- a synonym for “bureau”
-- a nonprofit organization
Bureau:
-- a major division within a department
-- a “cost center” within an organization
Bureaucracy:
-- a synonym for gov or large org (sometimes derisive)
-- a form of organization (e.g., ideal type)
What “Blurring” MeansIt’s a blending or overlapping of
“privateness” and “publicness”Organizations blur more and
more often
Types of BlurringContinuum of public-to-private Mixture of
public and private Who staffs the front office? Who staffs the
back office?Overlap of purposes
This slide introduces the next several slides

3. Public-Private Continuum
Gov. agencies
Gov. corps.
Gov-nonprofit ventures
Nonprof.: Helping
Nonprof.: Advocacy
Nonprof.: Member
Public-private ventures
Private monopolies
Commercial firms
PUBLIC . .
. . PRIVATE
See Fig. 2-1 for organization examples
Front Office / Back Office JumbleGovernmentNASAUS AID,
DOTGovernmentState health servicesNonprofitFundraising
campaignFor-profitStudent loans (banks)PrivateEngineering
firmsConstruction firmsNonprofitHealth service
providersPrivateMarketing firmGovernmentLoan guarantee
prog.
The first column represents the front office of an organization,
which is what the public sees. The second office represents
who might handle a particular operation for the “fronting”
organization. More examples are available in Chapter 2, Table
2-2. You or the students may wish to create additional
examples.

4. Overlapping PurposesGovernment, nonprofit, and for-profit
orgs at times offer similar servicesExamples:Hospitals, trash
services, security servicesLoans, package delivery, many
othersReasons: What, why, when, for whom, where
Reasons are manifold.
-- What involves the type and intensity of service (e.g., free
clinics vs. private physicians and specialists)
-- Why involves whether public need, level of essential
investment, commercial potential
-- When involves situations such as catastrophes and
temporary situations
-- For whom involves cohorts within the public (e.g., the
poor, the rich)
-- Where involves local choice (e.g., trash pickup)
--
Contrast & Compare
Public & Private OrganizationsIn what ways do public and
private organizations differ?In what ways are they alike?How
might their differences and similarities influence generic
organization theory?
This slide introduces the next group of slides. Invite students to
share their thought about these questions. Use the classroom
chalkboard (or have students serve as scribes) to list student
answers to each question.

5. Ways Gov’t Orgs Are Unique (1 of 3)Function: Administering
the lawFinanceNo profit for owners/shareholdersTypically
funded thru appropriationsMissionDetermined by lawSet by
political officials, usually not internallyConstitutional/statutory
constraints
Ways Gov’t Orgs Are Unique (2 of 3)Purpose, roles are more
complex, politicalPolitical factors influence organizational
structure, sizeprocesses, location(s)External environment judges
effectiveness, efficiency through accountability todefined
constituencies, general publicpolitical officials, oversight
bodies
Ways Gov’t Orgs Are Unique (3 of 3)Goals are both general and
contradictorySometimes contradictory, such as service and
enforcementSometimes unattainable, such as full homeland
security
Ways Nonprofits Are UniqueFunction: Addressing unmet
needsNonprofits serve . .Members – churches, unions, clubs,
othersNonmembers – help/service orgs, PACs, othersSome have

6. tax exempt revenuesChurches, charitable orgs, othersMust have
IRS/state tax approvalOften rely on volunteers
Ways Public Orgs Are SimilarPublic organizations = gov’t +
nonprofitNeeds drivenNot profit drivenEffectiveness determined
by success in addressing missionWill fill needs that free-market
ignoresMust maintain substantial public trust
Ways Businesses Are UniqueFunction: Serving as economic
engineBenefit owners by selling goods/servicesMission: Chosen
by ownersChanges at will of owners; market-
orientedAccountable Primarily to shareholdersSecondarily to
customers
Ways All Orgs Are SimilarStructure, scale – the range is
enormousShared environment – common to allDemographic
trends, natural environmentGlobalization, overarching events
(e.g., 9-11)Technology advances, ever-rising
expectationsBehaviors – often anthropomorphicSelf-protection,
life cycles, personality (culture)Competition – in many forms

7. Fundamentally, the list of traits all organizations share in
common is far longer than the list of traits unique to each
category of organization – whether government, nonprofit,
private, or any hybrid thereof – even though their distinguishing
traits involve fundamental differences. Possible exercise: Have
teams of students develop lists of similarities and differences
(see earlier “your thoughts” slide).
Market Theory & Public OrgsRoles in market for public
organizations:Indivisible markets, e.g.,Addressing widespread
air and water pollutionAllocating broadcast
frequenciesUnprofitable markets, e.g.,Caring for the
poorServices for extreme rural areasApplies polit. decisions
from public desires
(Un)important Fundamentals?True or false: Public and private
management are fundamentally alike in all unimportant
respects.This affects generic (comprehensive) organization
theory?What is your reasoning?
Adapted from Graham Allison (1992)
Ethics in Public OrganizationsEthics involvesDoing the right
thingBased on society-wide standards, valuesThrough principled
reasoningEssential for maintaining public trustPublic service

8. challenges includeMaximizing benefit while minimizing
harmResolving “right vs. right” issues
Blurring & PostmodernismPros & consPro: Challenges
assumptions, viewpoints, labels, principles – even
“rationality”Con: Incomplete, self-absorbed,
“jargonistic”Advocates Stepping outside a topic to question
itRethinking fundamentalsBeing creative and open Applying
broad view
Sector Blurring & Public OrgsGovernment, nonprofit, and for-
profit organizations populate a continuumOrganizations
themselves may intermix public and private sectorsAll share a
dynamic environmentEthics, important for all organizations, are
essential for public organizations
Key-point recap.
Emphasize subpoints important in your course.

9. Organizational Theory & Development
PA 565 Winter Term 2018
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Chapter 1
Varieties Of Organization Research And Theory
Organization Theory:
A Public Perspective
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What Chapter 1 DoesReviews what an organization isExplores
the theories of organizationsSubject matterLevel of
analysisTypes of theories
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What is an Organization?Government agency, professional
association, private firm, nonprofit, corporationWhat else?

10. *
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What Is An Organization? (1/2)A collection of people engaged
in specialized interdependent activity to accomplish a goal or
mission
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What Is An Organization? (2/2)“Organizing is like a grammar,
it is a systematic account of some rules and conventions by
which sets of interlocked behaviors are assembled to form
social processes that are intelligible to actors”
Karl Weick
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Private OrganizationsCreated by individuals & orgs Within the
context of law For profit-makingAccountable to owners/stock
holders

11. *
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Government OrganizationsCreated by law to administer the law,
carry out public policy Includes all types of government
agencies, levels of gov’t, authorities, special
districtsAccountable to the public
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Nonprofit OrganizationsCreated by inds & orgs to help solve
specific social/political problems or issuesEstablished within
the context of state law To fulfill charitable needs,
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Nonprofit OrganizationsCarry out public needs not provided for
by business or gov’tPartner with gov’t (Lester Salamon)
*

12. *
Nonprofit OrganizationsAccountable to boardsDepend on public
trust
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Bureaucracy (1/2)CharacteristicsStableSpecialization of
functionHierarchicalHiring/promotions based on expertiseStrict
rules
Max Weber
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Bureaucracy (2/2)Focus on efficiency & rationality
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Varieties Of Organization TheorySubject matterWho, what, why
of orgsLevels of analysisIndividual & group (motivation)

13. Structural (org chart, hierarchical pattern)Or global (values,
leadership)
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Varieties of Organization TheoryProvide conceptual tools to
diagnose problems and assess solutionsContribute to
understanding and action in organizations
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Types Of TheoriesSystemsAspects of org and the
environmentShows how activities are interrelatedPolitical
economyRelations between political and economic systems and
non-market settingsRationality and decision making
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Types Of TheoriesPostmodernChallenges all theories by asking
“what is real?” Meaning of words used

14. *
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Types of TheoriesPublic Choice Uses an economic/self-interest
interpretation for actionsIndividuals and orgs behave
rationallyGovernment should be minimalSupports maximizing
an individual’s choice
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Purpose Of Organization Research & TheoryUncover the reality
of orgsUse the knowledge to predict (and sometimes control)
orgsImprove functions of orgs
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Public organizations differ from private organizations in critical
ways. Based on our discussions in class, and other course
materials, what are the most significant differences?
Please title your response as "Midterm." Click on the button
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question using any course material. If you use outside materials,
please cite your source either in text citation or using a
reference page. Please use 12 point font Arial which is the

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