Public-private Competition for the Quality of Service Dr Artashes Gazaryan, The School of Democracy and Administration




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источникhttp://www.nispa.org/news/gazaryan.rtf
The 9th NISPAcee Annual Conference

“Government, Market and Civic Sector: The Search for the Productive Partnership”

Riga, Latvia, May 10-12, 2001


Public-private Competition for the Quality of Service




Dr Artashes Gazaryan, The School of Democracy and Administration,

Klaipeda, Lithuania



Organizations depend on their customers

and therefore should understand current and future customer needs,

should meet customer requirements

and strive to exceed customer expectations.

ISO9000:2000


In the wide sense of the word, we recognize quality of services as an ability of provider to do what is really needed by the client and do it in a most effective way.

The new international standard ISO9000:2000 ‘Quality management systems: Fundamentals and vocabulary’ defines quality as ‘degree to which a set of inherent characteristics fulfils requirements’. These requirements reflect stated needs or expectations of the customers. Correspondingly, only customers may do the ultimate decision on which service is good in term of quality and which one is bad. It means, in respect to public services, evaluation by the public itself, people from the grass roots, directly or through representatives in democratic bodies.

It is easy to say but not easy to accomplish in practice, especially in administrative machinery of totalitarian, post-totalitarian, or post-post-totalitarian regime. When officials, even on the local level, consider themselves as ‘state servants’ instead of being ‘public servants’ (which is the case in Lithuania, Ukraine and some other countries) – they often look ‘up’ for the guidelines and approvals of what they are doing, to the top of hierarchic pyramid. They also forced to do so because of the deep financial dependence from the central government. Actually, they may have in the budget only those items, which are considered by the ‘highest authority’ as necessary to do, and as much funding as considered by the ‘highest authority’ as sufficient. It gives total ‘justification’ to the local officials in respect to the quality of public services that are in their responsibility: in term of scope – ‘we have no funds to do anything more’ and in term of level - ‘we have no funds to do it better’.


Thus, public administration institutions, although established in theory by their customers, are; in fact, often less ‘client-oriented’ than private business institutions. Officials’ devotion to the virtual ‘public interests’ is using for decoration of the actual dependence on the personalities and groups in power, does not matter if these personalities and groups are somehow institutionalized or not. To evaluate own actions’ effectiveness and efficiency ‘state servants’ need feedback directly from those who give them job and keep them in position. These ‘those’ are rarely parliaments or councils of any kind – stakeholders are often just some people in certain key positions, may be also in parliaments or councils…

Consequently, the effort paid to ensure full information to the public, and to meet public expectations, and to do it on the best possible level of efficiency is less that should be for the proper management, and the results are mournful, from the public interests’ point of view.

That does not means public officials are bad managers. Mostly, they ‘make things happen’ quite successfully. But it means they are ‘wrong managers’, because things, which they manage to happen, are not those which should happen to ensure sound natural survivability of the alive organisms of state or regional economies, public utilities and establishments, etc.

Being actually guided by the another criteria of good administration, many officials in post-totalitarian countries are developing skills of administrating public affairs in the ordered way, in accordance with concerns and guidelines of often ‘unknown fathers’. These concerns are above understanding and not intended to be understood, just followed. Meanwhile, the skills of ‘listening to the client’, ‘creating organizations from outside to inside’, ‘strategic management’, ‘empowerment’, ‘business process re-engineering’, ‘total quality management’, etc. – can not find a room in mental maps of virtual ‘state’s servants.

Concepts and skills of contemporary management are enabling private enterprises to be most effective and efficient in doing business, whatever it would be. Underdevelopment of mentioned skills disables officials as managers of public utilities and puts them out of competition even in cases, where private business was never been able to compete with the public one. For example: centralized heating happen to be ‘economically inefficient’ even in big cities; public bus pulls are not able to survive without big donations to cover loses, wile single owners of single buses somehow make a profit; public enterprises, repairing roads are not able to do it for the same price as private ones, etc.

In some cases, problems of inefficiency of public utilities may be solved in privatization process. In other cases, privatization creates even more and bigger problems, also because of poor management from the public administration side. Take one example - privatizing apartments’ insides and leaving outsides without owners at all…

Whatever is to be done by public officials – it should be done well enough, administration of public affairs should be of good quality itself, to ensure a good output for public. And good output should be considered as a good quality of services, the best possible ‘value for money’ of taxpayers. Actually, criteria are the same as for private business, and success depends very much on the extent, to which public officials are able to meet these criteria.


The quality of administration is a certain outcome of certain organizational decisions – structures of responsibilities, more or less defined procedures, bad or good communication, etc. High quality administrative management requires implementation of certain quality assurance mechanisms and models, which in their turn may require considerable changes in a way, how all organization operates.

It is remarkable, that new generation’s international standard ISO9004:2000 gives clear recommendations to the use of certain basic management ideas and concepts for the organizations of any nature:


‘To lead and operate an organization successfully, it is necessary to manage it in a systematic and transparent manner. The guidance to management offered in this international Standard is based on eight quality management principles.


These principles have been developed for use by top management in order to lead the organization toward improved performance. …

  1. Customer focus

Organizations depend on their customers and therefore should understand current and future customer needs, should meet customer requirements and strive to exceed customer expectations.

  1. Leadership

Leaders establish unity of purpose and direction of the organization. They should create and maintain the internal environment in which people can become fully involved in achieving the organization’s objectives.


  1. Involvement of people

People at all levels are the essence of the organization and teir full involvement enables their abilities to be used for the organization’s benefit.

  1. Process approach to management

A desired result is achieved more efficiently when activities are related resources are managed as process.

  1. System approach to management

Identifying, understanding and managing interrelated processes as a system contributes to the organization’s effectiveness and efficiency in achieving its objectives.

  1. Continual improvement

Continual improvement of the organization’s overall performance should be a permanent objective of the organization.

  1. Factual approach to the decision making

Effective decisions are based on the analysis of data and information.

  1. Mutually beneficial supplier relationship

An organization and its suppliers are interdependent and mutually beneficial relationship enhances the ability of both to create value.


These eight management principles accumulate best practices from many areas of business, mostly private – industries, logistic, services, etc. And they perfectly fit to the public institutions’ realities. Successful use of these principles would ensure effectiveness and efficiency of overall order and operations of public institutions. It would allow setting clear criteria for the performance and organizing relevant feedback to officials. From the external bodies’ point of view, it would result not in continual improvement of service delivery only, but also in rising transparency and responsiveness of administration.


Tangled bureaucratic order (or disorder), unintended of course, and improper motivation of personnel, can not ensure quality of services that is expected by the public and can be recognized satisfactory. People used to see a lot of improvement in this respect in private sector. The gap between public and private institutions is rising, and attitude is changing not for the benefit of public sector. Most of post- totalitarian countries demonstrate worsening of roads’ maintenance, housing, street lighting, heating, electricity and water supply, etc.

Even when the quality of services in public organizations remains the same as years ago – it actually means that level of service is getting worsen in comparison with what people can require. Being too much ineffective against private sector – public sector loosing respect and confidence from the public. Disappointment is rising, also suspect in corruption (proven or not), and willingness to collaborate falls down. Thus, the call for quality management in public administration institutions is urgent and of vital importance.


Our experience in working with some public institutions (local administrations, schools, hospitals, cultural establishments, etc.) demonstrates that it is possible and useful to teach them and, if necessary, to provide consultants’ support in designing and implementation of quality management systems, from the most simple to the developed TQM. Quality management allows improvement in all critical aspects of public institutions’ activity – efficiency, effectiveness and transparency. It closes door for corruption, brings to the much more confidence from the public and facilitates good cooperation with the private sector.


Dr. Artashes Gazaryan

The School of Democracy and Administration

VDM, P.O.Box 94, Klaipeda LT-5800, LITHUANIA

Tel. 370 6 410790, 370 85 39621

E-mail: a.gazaryan@klaipeda.omnitel.net




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