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Values Shape Decisions

The views expressed are those of the author and do not necessarily reflect the views of ASPA as an organization. 

By Anna Marie Schuh
September 19, 2017

Candidates promising to run government like a business are not new. The first time I heard this promise in a presidential campaign was from Jimmy Carter. After that, I experienced many presidential efforts to make quality value servicegovernment function more like business, e.g., Reagan’s Grace Commission, Clinton’s National Performance Review. However, this “running government like business” viewpoint started much earlier than my experiences and will continue long after the current administration with many business people running Federal agencies. The perspective has its genesis in Woodrow Wilson’s 1887 article asserting that administration can be separated from politics with the underlying assumption that administrative principles are the same in business and government.

The problem with this viewpoint is while some operational elements can function similarly in business and government, not all can because the institutional goals, values and focus of business and government are very different. Without a clear understanding of these differences, the average, citizens expect business and government to operate similarly. Without a clear understanding of these differences and their effects on service delivery, the public manager becomes confused about which operational elements will work in government and which will cause harm. Consequently, I want to use this column to clarify those differences for the public manager who sees conflict between business practices and government operations.

From a general perspective, the goal of business is to seek a profit. The old political science axiom is that government does what business cannot or will not do. Business seeks to provide wealth to its shareholders and only does things that create wealth for its owners. Government seeks to enrich its citizens whether or not that enrichment is cost neutral.

From a more specific perspective, the goal of business is to provide services to customers and the goal of government is to provide services to citizens. Customers purchase at arm’s length, while citizens become involved intalk the service delivery process through their interaction with the bureaucracy and elected officials. Business uses a competitive marketplace to provide services, while government’s two-fold role is to protect citizens from threats and to keep the marketplace competitive and responsible. In short, business offers the product and maximizes its profit, while government provides specific services and maintains a marketplace for the product that is fair to the citizen.

In terms of values, government respects the public interest while business admires profitability. Business pursues a brief time frame with immediate impact, e.g., taking shortcuts to maximize quick profits. Government uses complicated processes to support American institutional values such openness and fairness. For example, bidding contracts and allowing all citizens to apply for government jobs are costly and slow procedures, but they provide access to all citizens and information for citizens to verify fairness. Government confronts competing values (e.g., expensive access versus limited cost) while business focuses on one value — limited cost. Government must be transparent to meet citizen expectations of openness and fairness, while business can be opaque to maximize advantage.

Business and government approach efficiency differently. Business values “maximum efficiency” while government values efficiency in the context of transparency and fairness. For example, business relies on contracting out many services to keep overhead down. Government must be more careful about contracting out because of unintended consequences that conflict with American institutional values. Some examples are outsourcing of prisons challenges the justice system by vendors who lobby for stricter laws to obtain more prisoners; the Office of Personnel Management’s privatization of personnel investigations led to national security problems from faulty investigations conducted in a way that maximized profit.

focusFinally, the focus of business and government are different. Business focuses on profitability, which typically results from efficiency. Government focuses on things of social value, many of which cannot be done efficiently. America is not a corporation because there is no bottom line for government. Unlike business, government does not sell their product to other people; government provides the product to all of us. Ruthless cost cutting in the private sector benefits the owners of the company while ruthless cost cutting in government has historically led to higher unemployment which is deleterious to the average citizen who either experiences the unemployment or pays for the unemployment benefits through taxes.

Understanding the differences in goals, values and focus between business and government enlightens the public manager who applies various business techniques in the government context. The government manager who recognizes government can never be as efficient as business is more able to tailor business practice to the government environment. Those who think government can be as efficient as business unwisely expect the impossible. The public manager must be true to the goals, values and focus of government to maintain the public trust and avoid thoughtless efficiency that diminishes government service. As Roy Disney said when he led the Walt Disney Company, “It’s not hard to make decisions when you know what your values are.”


Author Bio: Anna Marie Schuh is currently an Associate Professor and the MPA Program Director at Roosevelt University in Chicago where she teaches political science and public administration. She retired from the federal government after 36 years. Her last Federal assignment involved management of the Office of Personnel Management national oversight program.

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The American Society for Public Administration is the largest and most prominent professional association for public administration. It is dedicated to advancing the art, science, teaching and practice of public and non-profit administration.

One Response to Values Shape Decisions

  1. David Hamilton Reply

    September 19, 2017 at 3:01 pm

    An excellent overview of the dichotomous values that are often blurred into the commonly referenced but poorly defined differentiation of government and business. Having worked in local governments in two countries and studied them, I conclude that although governments can and should be run in a business-like manner, they can not and should not be run as a business.
    Your example of the privatization of prisons is spot on. I saw first hand the undesirable social outcomes along with the inflated costs associated with the private incarceration industry. In one county, we ended their contract and transferred it to our Sheriff. In one year, we improved the quality of service while lowering overall costs by $1million.

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