Public Management as Social Dilemmas

Introduction

Public management is imperative as it is used in addressing the differences that exist concerning how people and institutions interact; this is due to the governance structure that defines systems and the social issues that describe interactions among humans (Leite, Silva, & Afonso, 2014). It is based on these different factors that there is the need for any management to make sure that interests of institutions and those of humans are reconciled so that the public goods are delivered to people without a compromise due to individual needs. As a result, Miller (1992) argues that “the tension between self-interest at the individual level group efficiency creates a social dilemma that is the heart of managerial problems” (p. 35). The main idea postulated by Miller (1992) is that there is the need for institutional control which is required for an organization to meet its goals of delivering public goods and services. One of the key features of public administration should be collective action framework that should be characterized by the engagement of all public actors.

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As a result, different issues should be should be addressed when the collective action framework is used to examine managerial problems. The first issue is the individual and group performance of the workers; for instance, noted that the hierarchical administration focuses more on authority than the performance of the people. Therefore, in the collective action framework, the output of the people in delivering the public goods should be examined in order to determine the factors that can be used to overcome the self-interests. For example, Miller’s (1992) investigation and the subsequent argument are based on the seniority in administration, i.e. hierarchy in which instead of aligning the self-interests of employees to those of organizational performance, rewards are based on authority. The second issue that has to be addressed is the normative focus on the managers. According to Vining and Weimer (2005), the primarily normative focus is a waste of time as in many bureaucratic systems, self-interests drive management decisions.

One of the lines of reasoning that support the assertion by Miller is that in any social organization, there are logical impossibilities that hinder the existence of a perfect system. As such Miller (2000) states, “no system exists that can perfectly reconcile the conflicting self-interest of individuals in an interactive social organization” (p. 290). Also, this is related to a moral hazard in which there is self-interest among workers to pursue issues that end up distracting the performance of social organizations as is the case of ‘Moral Hazards in Teams’ (Miller, 2000). Due to the need to overcome the self-interests that lead to social dilemmas, the main idea that Miller (1992) postulates is the necessity of organizational control which should be based on the ability of managers to inspire workers. This informs the argument by Miller (1992) that managers should inspire “a willingness to cooperate, to take risks, to innovate, to go beyond the level of efforts that are narrow, self-interested analysis of the incentives would summon” (p.2). The implication is to ensure that management efforts are centered on measures that ensure personal interests are overcome and that communal morality is upheld.

To sum up, the implied social value that is of critical concern to Miller (1992) concerning public administration is ensuring that self-interests do not override the needs of an organization. In addition, there must be managerial undertakings to make sure that there is a corporate culture that dictates the way employees work. It is based on such culture that Miller (1992) proposes the existence of Pareto-superior institutions which are the key to ensuring that personal issues do not dictate the way the organizations are managed. Miller (1992) explores the hierarchical firms and the administration measures that are meant to solve economic problems in the context of individual needs and values. As a result, Miller points out to the need to confront the tendencies of self-interests among employees in order to achieve the desired managerial ends.

Evaluation and Analysis

Correctness and Relevance of Facts

The assertions that Miller (1992) puts forward is that there is always a need for organizational rules that dictate the desired code of ethics which in turn ensure that employees perform their duties as expected and shadow the individual needs. This can be understood through different perspectives that have been used to determine interactions of people and the resulting outcomes. For instance, Ferris and Tang (1993) stated that institutions are critical in shaping behaviors. In relation to Miller’s argument of self-interest, this assertion tends to focus on the management being based on the creation of a framework that ensures that there is an atmosphere of cooperation. This is necessary for the delivery of public goods and services. Also, through the institutionally reinforced behaviors, the primary focus is to make sure that different types of social problems are addressed (Osborne, Radnor, & Nasi, 2013). However, it is imperative to note that there are varying schools of thoughts on the issue of ‘Management as Social Dilemmas’. Apparently, individual preferences can be shaped by institutional frameworks that lead to people attaching a meaning to their actions based on the laid down procedures (Ghemawat & Costa, 1993). However, there are implicit factors that have been put forward by many scholars. For example, individuals have the ability to set their goals independently irrespective of institutional context (Ferris & Tang, 1993); the argument supports the assertions that self-interest at the level of an individual leads to social dilemmas that form the focus of public management.

The social dilemmas that result from the personal interest in the course of interactions with the organizations are the basis of speculations and can affect the delivery of services if proper managerial actions are not taken. According to Knott and Hammond (n.d), there exists social dilemma referred to as ‘tragedy of commons.’ The dilemma occurs when the existence of a common resource is depended on how people share it. For instance, with the ‘sharers’ having an incentive to utilize the common good or service, there is a high likelihood that self-interests are likely to lead to misuse of the reserve, and hence the need for an agency to control how it is utilized. In relation to the reserve being a public good or service, it is the mandate of the concerned government to regulate the use (Hood & Dixon, 2013). The failure by the government to manage the shared resources will have an end result of misuse which is caused by the personal interests. Such a case shows the necessity of public management strategies in addressing social actions and avoiding failures.

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Nevertheless, it is important to note that the agencies set by governments to mitigate the failures of markets are also subject to the social dilemmas that lead to competition. Hence, for efficiency to be realized, cooperation based on clear framework becomes the essence of success. It is due to the perspective of success amidst the social dilemma that Knott and Hammond (n.d) stated, “While managers and employees may each be tempted to engage in suboptimal, self-interested behavior, if one side does behave in a trustworthy, committed and cooperative way, it makes it easier for the other side to behave that way as well” (p. 142). Such a perspective leads to the relocation of the moral hazard, i.e. the self-interest incentive that hinders the efficacy of social organization (Miller, 2000). However, it is important to note that though this supports the need for cooperative management, the moral hazard cannot be completely eliminated. As such, an ideal reconciliation of the self-interest of people with the needs of social organizational cannot be perfectly achieved. The core to the efficiency is ensuring that there is the cooperation between the players.

Evaluation or Judgment of the Logical Consistency of the Argument

Miller (1992) presents his case by consistently analyzing the various structures and frameworks that relate to public administration and the inherent social dilemmas. The judgment that forms the basis of his argument is the need for cooperation and putting in place a framework that is supposed to result in a situation where the self-interest does not diminish the supply of the public goods. In the argument, one of the frameworks that Miller (1992) points out to is the existence of hierarchically ordered systems that are supposed to install a given institutional work culture and a particular way of social interaction. Even though there are shortcomings in such arrangement where seniority is upheld instead of personal performance which in reality should be the core to the effective reward and relocation of the moral hazard, such a framework tends to ensure consistency in delivery of the public goods. As a result, Miller (1992) has a logical argument. A case in point, Ostrom and Ostrom (1971) also argued that for administration to be good, it should be hierarchically ordered to ensure that the various ranks are filled by civil servants who are technically trained to ensure that the desired discipline is achieved in the institutions. It is through such discipline that the cooperation that leads to efficiency is realized.

Also, Miller’s argument of self-interest as one of the factors leading to social dilemmas can be evaluated in the context of Simon’s Challenge in the reconstruction of the administrative theory in which the key focus was to come up with the criteria of efficiency. Even though the Simon’s Challenge did not find a reason to support the claim of hierarchical ordering, there is a common agreement that a system which guarantees efficiency is crucial (Ostrom & Ostrom, 1971). Also, there is a different school of thought that is based on public interest theory. The self-interest as postulated by Miller (1992) is aligned with the private interest theory. The theory has been used to explain public management in the context of ‘general will’ and the need to act out of ‘common good’ (Ginosar, 2014). This implies that workers who deliver public goods and services have traits that depict the absolute moral values; this is in contrast to the private interest that is associated with the moral hazard in which the motivation of groups and individuals is centered on the maximization of the special interests. As a result, there is the need to put in place regulatory measures.

It is important to note that the aspect of self-interest is prehistoric. According to Ostrom (1998), in the past, survival was determined by both the self-interest and collective action if anyone was to succeed in different undertakings. As such, the concept can be understood by the application of the rational choice theory which is the key in the identification of human behaviors such as the individual needs characterized by the tendency to maximize personal needs. Based on the theory, it makes it easy to know how structural factors influence social dilemmas. For example, in a collective action, if every individual contributes to a certain course, there is the realization of a positive benefit (Gilbert, 2006). However, the rational choice theory brings into the perspective the fact that people are likely to shift to the group where there are no contributions due to self-interests (Whiteley, 1995). As a result, majority of people will join the non-contributors, and hence the outcome in the equilibrium will be at intercept; theoretically, there will be no benefit. These are kinds of social dilemmas that need an alternative which in this case is the administration that will ensure cooperation by putting in place management strategies. As per the rational choice theory, the primary focus is modeling the social interaction as a game. As a result, the interactions in a game setting are in such a way that managers are in a position to know how they can achieve desired outcomes in the institutional structure (Vining & Weimer, 2005).

In discussing public choice theory, Ostrom (1975) stated that the same individuals are likely to pursue varying strategies based on the incentives that have been created. Ostrom (1975) added that in the institutional setting an individual could have different functions. This is due to structures of authority that act as rules that dictate behaviors. Also, it is worth noting that institutions possess a life which is important in designing the frameworks that influence their survival. Despite these arguments that concur with the perspective by Miller (1992), it is imperative to denote what constitutes public administration. According to Thoenig (2003), public administration does not solely deal with designing structures that are meant for regulation and coordination of behaviors. Instead, it is much more concerned with how participants are transformed by structures that are informal (Szarucki, 2015). Therefore, all the ranks in a hierarchy are crucial in addressing the social dilemmas. Miller’s perspective is also consistent with Gotsis and Kortezi (2011) argument that, “organizational politics consists of intra-organizational influence tactics used by organizational members to promote self-interest or organizational goals in different ways” (p.451)

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An Appraisal of Values

As it has been pointed out in this paper, Miller (1992) brings into perspective organizational control as a means to attain the desired individual behavior. As such the core argument is that managerial dilemmas are caused by both the internal and external forces that can be addressed through the cooperation among the workers and should not be based on altruistic strategies. Furthermore, it is worth noting that the argument is based on the assumption that all employees are rational individuals who will be more aligned with the cooperation rather than individualistic needs if there is a common believe that all the players will be supportive (Williamson, 1981). The assumption is driven by the type of the information that workers and managers possess.

According to Miller (1992), information is one of the key determinants of efficiency in a hierarchical system. For instance, informational biases can limit the extent to which workers deliver public goods and services. Also, in exploring self-interest, Miller (1992) provides various externalities and issues that managers are supposed to consider when making strategies relating to their organizations. This is clearly depicted by illustrations and examples that relate to the game theory, the personal dilemmas, and the repeated reference to Nash Experience. It is through this concise description of scenarios that managerial dilemmas and social issues that relate to managers and employees are clearly understood. For instance, Miller’s assertions are in the context of different theories. Similarly, the illustrations or examples align with the accepted standards that define public administration in the delivery of the public goods and services. As such, I feel that Miller’s analysis of managerial dilemmas is in line with the accepted standards and values. For instance, social dilemmas are caused by initiatives that enhance diversity and normally occur in three distinct levels which include the individual, managerial, and organizational. In line with the notion of the self-interests, Schneider and Northcraft (1999) stated, “… though it is in the interest of all members of an organization that everyone furthers the organization’s pursuit of diversity, it may be in the interest of particular individuals to further only their own goals” (p. 1448).

Conclusion

The main argument that has been presented in this paper points out to the fact that the morally hazardous behavior which is characterized by self-interest hinders the ability of the public agencies to deliver goods and services to the general population. The self-interest as explained in the realms of rational choice theory leads to the fundamental argument put forward by Miller (1992) and that has been explored throughout the paper based on the perspectives of the other scholars in the field of public administration. It is based on this understanding that the idea of a hierarchical system is denoted as imperative in ensuring that there is a control that results in cooperation and hence leading to efficiency. This implies that social dilemmas are overcome through bureaucratic rules that regulate the moral hazard to ensure positive benefits. As a result, the main position is that in the delivery of public goods and services, the hierarchical system is inevitable. The basis is to ensure that there is a coordination of all workers at the various ranks to instill discipline.

Even though the hierarchical system has been opposed by Ostrom and Ostrom (1971) who pointed out that it is not the ultimate reason for efficiency, it is important to note that the alternative is also related to structures that ensure that there is control of the institutions. Thus, all possible positions on the matter of ‘Management as Social Dilemmas’ are all based on structures that ensure that there are strategies to deal with the individual behaviors that are likely to shift towards self-interest. This is due to the fact that there is nobody who is willing to forgo the realization of personal benefits as it is in the case of the ‘tragedy of commons.’

References

Ferris, J. M., & Tang, S. Y. (1993). The new institutionalism and public administration: An overview. Journal of Public Administration Research and Theory, 3(1), 4-10.

Ghemawat, P., & Costa, J. E. (1993). The organizational tension between static and dynamic efficiency. Strategic Management Journal, 14(S2), 59-73.

Gilbert, M. (2006). Rationality in collective action. Philosophy of the social sciences, 36(1), 3- 17.

Ginosar, A. (2014). Public-interest institutionalism: A positive perspective on regulation. Administration & Society, 46(3), 301-317.

Gotsis, G., & Kortezi, Z. (2011). Bounded self-interest: A basis for constructive organizational politics. Management Research Review, 34(4), 450-476.

Hood, C., & Dixon, R. (2013). A model of cost‐cutting in government? The great management revolution in UK central government reconsidered. Public Administration, 91(1), 114- 134.

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Leite, D. N., Silva, S. T., & Afonso, O. (2014). Institutions, economics and the development quest. Journal of Economic Surveys, 28(3), 491-515.

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Miller, G. (2000). Above politics: Credible commitment and efficiency in the design of public agencies. Journal of Public Administration Research and Theory, 10(2), 289-327.

Osborne, S. P., Radnor, Z., & Nasi, G. (2013). A new theory for public service management? Toward a (public) service-dominant approach. The American Review of Public Administration, 43(2), 135-158.

Ostrom, V., & Ostrom, E. (1971). A different approach to the study of public administration. Public Administration Review, 31(2), pp. 203-216.

Ostrom, V. (1975). Public choice theory: A new approach to institutional economics. American Journal of Agricultural Economics, 57(5), 844-850.

Ostrom, E. (1998). A behavioral approach to the rational choice theory of collective action presidential approach. The American Political Science Review, 92(1), 1-22.

Schneider, S. K., & Northcraft, G. B. (1999). Three social dilemmas of workforce diversity in organizations: A social identity perspective. Human Relations, 52(11), 1445-1467.

Szarucki, M. (2015). Evolution of managerial problems from the perspective of management science. Business: Theory and Practice, 16(4), 362-372.

Thoenig, J. (2003). Institutional theories and public institutions: Traditions and appropriateness. London, UK: Sage Publications.

Vining, A. R., & Weimer, D. L. (2005). Economic perspectives on public organizations. New York, NY: Oxford University Press.

Williamson, O. E. (1981). The economics of organization: The transaction cost approach. American Journal of Sociology, 87(3), 548-577.

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