ACCA SBL Syllabus B. Governance - Types of public sector organisations - Notes ^{2 / 5}

FORMS OF ORGANISATION

The term ‘third sector’ (after private and public) is charitable and non-governmental organisations. 

These don’t exist primarily to make a profit nor to deliver a service on behalf of the state. 

They exist primarily to provide a set of benefits that cannot easily be provided by either profit-making businesses nor the public sector.

Organisations delivering international medical aid are a good example of non-governmental organisations (NGOs). 

Well-known NGOs such as Medicins sans Frontiers (‘doctors without borders’ in English) are large and well-structured organisations, delivering important medical aid in war zones and the like. 

They are often mainly privately funded (e.g. by benevolent individuals) 

NGOs and charities may have an executive and non-executive board, but these are subject to a higher board of trustees whose role it is to ensure that the NGO or charity operates in line with its stated purpose

Here, the agency relationship is between the NGO (agent) and its donors (principal). 

When donors give to NGOs or charities, it is important for them to be reassured that their donation will be responsibly used for its intended purpose and the board of trustees help to ensure that this is what happens.

Sometimes governments may help fund an NGO but give it effective autonomy in its decision making

These organisations are sometimes referred to as QuANGOs – quasi-autonomous non-governmental organisations. 

QuANGOs are sometimes accused of being unaccountable for their decisions because they only weakly report to the government (and the taxpayers) who fund their decisions. 

QuANGOs can be politically awkward and, accordingly, their use in the public sector changes over time.

LOBBYING AND LOBBY GROUPS

These campaign to influence government policy, they ‘lobby’ politicians to try to get them to vote in the legislature in favour of their particular interest. 

These ‘lobby groups’ are legal, but some argue against them as the best funded will be the most likely to be heard, and so may act against the public interest

STAKEHOLDERS IN THE PUBLIC SECTOR

Public sector bodies have a complicated model of how they add value. 

Taxation is mandatory and may be paid against the wishes of the taxpayer.

People need to feel fairly treated and not being over-exploited nor badly served. 

Because there are so many claims to balance, then, the stakeholder pressures on a government are often very difficult to understand.

Some stakeholder claims are recognised by some but not by others, and this can make for a very complex situation indeed when it comes to deciding which stakeholder claims to recognise and which to reduce in weight or ignore. 
Some stakeholders have a very weak voice, while others have no effective voice at all in order to express their claim. 

Part of the debate in politics is the extent to which these weaker stakeholders are represented and how their assumed needs are met.

Types of Public sector organisations

• At the national level
  National government is divided into central government departments (e.g. a foreign office, a defence department, a health service, etc) 

  These departments are led by a political minister from the governing political party. 

  This is important in democratic countries because the policies adopted by these departments affect many people and it is important that they are subject to political change if the electorate changes a government at an election (this being a part of the social contract between the government and the governed).

  National government policy is configured and coordinated centrally to ensure that strategic policies are pursued and that departments work together to ensure this. 

  The head of government (not to be confused with the head of state) is responsible for national government policy and in a democracy, he or she can be re-elected or defeated based on his or her performance in the role.

• Below national level (‘subnational’)
  Some countries are organised into regional authorities, with some powers devolved down to these subnational bodies, as they are best handled by local people 

  For example, roads, utilities, local schools etc

• Above national level (‘supranational’)
  These are a little more complicated. 
  National governments sometimes come together for a shared purpose and form supranational bodies
  These bring tension though, as each individual nation is subject to pressure from its own people (eg. EU and UN)