Saturday, September 25, 2010

Private sector efficiency in perspective

Maxine Udall provides a much-needed sense of perspective to the private vs public sector debate, and claims of private sector's inherently superior efficiency,

"... concentrated economic and political power in the private sector is as much a "problem" as an ineffective, inefficient guvment especially one that has been deprived of the funds needed to regulate a complex capitalist society based on commercial exchange and characterized in some sectors (like health and finance) by several types of market failure...

It's a problem when guvmint is always and everywhere perceived to be the problem. It makes it difficult to pass legislation that would protect homeowners, borrowers, small businesses, renters, consumers (all the people who fuel and benefit from economic growth and prosperity) from corporate abuse of political and economic power...

Just ask yourself, as I often do, was your last unpleasant encounter with a cell phone company, a cable television company, a credit card company, or a bank or was it with a government agency? In my case, I'm sorry to say that some of the larger, more powerful parts of the private sector lose hands down."

2 comments:

Jayan said...

It is a mistake that people view private sector as highly efficient mechanisms. In most of the private enterprises are efficient in select areas. They get pretty good talent at lower rates and cheaper inputs when compared to rest of the developed world. They have deviced pretty innovative way to make money. All these are one side of efficiency story.

Most of the companies have very good first time customer experice. Making a customer in maitainance mode happy is completely different game. Processing a credit card default of 5 days, reverting a wrong service charge, fixing a faulty telecom bill etc are good example. I have not seen any one successfully managing this with just the front office desk. One needs to escalate the problem to very high level (country head etc) to get some thing done. The good point, however , is that there is some one you can escalate to. With goverment service provider this option is pretty weak. The roles and responsibilities are not very clear. Even if a manager wants things to be done, his team may not be willing to listen to 'instructions'. Otherwise how do explain the large number of latecomers in any govt offices?

In short - On an average, the responses from private parties are less than satisfactory.. and response from govt offices are un-acceptable.

gulzar said...

agree completely with you jayan. thanks for ur comments