Public Private Organization-Business Management - Sample Essay
Group 4 Securicor (G4S) is one of the largest secure outsourcing companies in the United Kingdom (UK) and Ireland. The company has a turnover of more than 1.7 billion Pounds and over fifty-five thousand employees, supervised from over a hundred offices. The company has more than ten thousand customers that include the UK government sections, which depend on G4S for dependable and secure delivery of their services. In the UK and Ireland, the company consists of Care and Justice Services, Cash Solutions, Integrated Services, Secure Solutions, Technology, and Utility Services.
The company was started in the twentieth century, when Philip Sorensen and Marius Hogrefe founded a guarding company known as “København Fredriksberg Nattevagt”, in 1901. Afterwards, Sophus Falck started the Redningskorpet Company. The Redningskorpet, which later changed its name to Falck, began by providing protection, ambulance, and fire engine services. In 1988, the Falck family sold the business to Baltica, a Danish Insurance corporation that went on to sell off fifty-five percent of Falck to a number of other major insurance companies.
During the 1990s, Falck expanded in Europe by acquiring several companies which included Patena Security in Sweden, Falken in Norway, SIMIS in Germany, Sezam Sp. Z o.o in Poland, AS ESS, a security operator with businesses in all Baltic states, and Nederlandse Veiligheidsdienst (NDV), the largest security operator in the Netherlands.
In 1950, the Sorensen family consolidated its businesses as “Securitas International.” In 1963, Store Detectives Ltd and Securitas Alarms Ltd were set up by the family in the UK. Jorgen Philip Sorensen was selected as the managing director of the UK part of the group in 1965. The UK part of the business was organized under the name Group 4 from 1968 onwards.
In 1981, the activities of the Sorensen family were split up into Securitas AB for Swedish activities and Group 4 for the rest of the European activities. Group 4 then moved on to expand to several countries all over the world. In 1990, the group acquired the American Magnetics Corporation, which specialized in access control systems. This helped Group 4 Falck win the prestigious contract to handle security at the pentagon.
After the merger of Group 4 and Falck to form Group 4 Falck in 2000, the development continued with a number of acquisitions such as ADS in Germany, SOS in Australia, SPAC in Finland, BOS in Czech Republic, Unikey in Norway, and Banktech in Hungary. The growth in Indonesia, Kazakhstan and the republics in Central Asia saw profits increase by 20% in 2001. The company also acquired Euroguard, a security company in France.
The most significant merger was in 2004, when Group 4 and Securicor merged to create the modern Group 4 Securicor (G4S). By 2007, with England’s Nick Buckes at the helm, G4S entered the FTSE hundred of leading companies in the stock exchange. Since then, it has made around one billion pounds worth of acquisitions.
In the UK, G4S operates across the UK and Ireland, from South West England to North West Scotland, and from Cork in the Republic of Ireland to Belfast in Northern Ireland. The company also manages and provides services to both UK government agencies and commercial businesses in the Isle of Man, Jersey and Guensey, among others.
G4S’ values include customer focus, where they have close, open relationships with their customers, which generate trust and partnership for the mutual benefit of the organization. It also includes expertise, where the company develops and demonstrates its expertise through their innovative approach to creating and delivering the right solutions for their customers. Performance is also another value for the company, where it endeavors to improve its performance each year to create long-term sustainability. The company values integrity, where it aims to be trusted by its customers to do the right thing by the customer. The company also values its employees, where it endeavors to employ the best people, increase their competencies, provide prospects, and inspire them to apply the company’s values.
In UK, G4S operates in sectors such as financial institutions, government, leisure and tourism, oil and gas, private energy and utilities, transport and logistics, major corporate and industrials, ports and airports, and also in retail. Additionally, its services include cash solutions, employment services and training, facilities management, security solutions, risk management and consultancy, transport security solutions, care and justice services, event security solutions, investigative services, ordnance management, secure data solutions, and utility services. This essay will look at the major issues in public services in relation to the G4S Company.
The main drivers of change which have led to reform of the way public services are delivered since the late 1970’s
The most significant driver for changes in the way G4S delivers public services is the government. The government makes decisions, sets policies, directs strategies and meets the daily crises that affect all areas of the public sector. When it comes to dealing with complex, difficult, and long-term challenges, the type that the public sector reform invariably involves, the influence of the government is much less certain. One of the greatest challenges for government leaders is ensuring government departments work jointly to deliver policy decided at corporate or cabinet level. The departments and their ministers are protective of their powers, reluctant to cede authority, and both fearful and resentful of intervention from the presidential administrative center, which is the powerhouse of all policies.
It is the office of the president through the cabinet office that sets and determines the direction of the government, and in particular, its domestic agenda, notably its public sector reform program. According to Burton (2013, p.54), “it is an unusual minister who takes a deep personal interest in civil service reform.
Past reforms that succeeded required clear direction from the prime minister and senior ministers, and visible prime ministerial support to the officials who must shape the ideas and actions for civil service reform.” The style of the government depends on the character of the leader. For example, Tony Blair was determined to drive forward public sector reforms himself, expanding his office’s remit across government ahead of his own ministers. David Campbell on the other hand took fourteen months to produce his much-vaunted vision for public sector reform, in the White Paper Open Public Services. By then, many of his Cabinet ministers were already forging ahead with their own reform plans, especially in schools, local government, health and welfare. This made the Cameron vision look unoriginal.
The policies put in place by many governments in the way they deliver public services depend on the type of leaders in place and their leadership style. This greatly contributes to the kind of pressure they put on their fellow leaders to change the delivery of public services.
In order to better deliver public services to its citizens, the government in UK has been forced to outsource these services to companies such as G4S. Outsourcing has increased in a large scale since the late 1970s, but the bulk of public services are still provided by the government. The expansion of outsourcing has however been uneven, with a great amount of external commissioning having taken place in waste services, transport, prisons, welfare to work, and back-office services such as Information Technology, workforce, and amenities management. Until recently, G4S has been largely unaccountable, unreliable, and unethical. With governmental intervention in its demand for better service delivery policies, and due to public scrutiny, G4S now promotes greater efficiency, effectiveness, and innovation. The company is now doubly accountable, both to the public and its stakeholders.
Education has also contributed greatly to the changes in the way G4S delivers public services. All public services are being buffeted by the changes in education since 1970. An educated public is impatient with the quality of services they receive. The 1940s wartime ethos of ‘Be patient, join the queue, wait your turn, be grateful it’s free’ which pervades the traditional institutions of the welfare state is no longer accepted. People see transactions with the state in terms of their own privileges, and not in terms of favors or aid given to them. A wide range of intermediary figures that in the past have drawn authority from the state, ranging from caretakers on estates to teachers and elected councilors have fallen significantly in status. Their words, their actions, and their instructions no longer go unchallenged (Stewart and Walsh, 1992).
This access to education by the masses has made people more aware of their rights, which has led to their demand of transparency by companies that deliver public services such as G4S. As the public service delivery companies’ manages and executives increasingly gain influence over key public services like health, education, law enforcement, transportation, among others, people are permitted to know about their incentives and rewards, which has an impact on the companies’ behaviors and consequently, how they deliver their services. This has made G4S to change the way it delivers public services.
Deference to authority was often in the past expressed in terms of trust. There has been a substantial shift away from traditional patterns of trust. This has been driven in no small part by changing patterns of education. As important as the increase in access of higher education has been the increase in the people who in the United States (US) would say they have had ‘some college.’ The result is the creation of a credulous public to parallel the formally educated public that is more conscious of their rights, which forces companies such as G4S to change the way they deliver public services (Butler and Collins, 1995).
Information revolution has been a driving force for the changes in the way G4S delivers public services. Information and Communications Technology (ICT) has been a revolutionary force that reconfigured organizations, services and relationships.
In particular, the internet presents the challenge of ‘disintermediation.’ This is the ability of users to trade directly with providers of services which is dissolving the position of intermediaries. This process has started with insurance brokers, banks and travel agents, but is moving rapidly into the public services. This enables the public to demand for changes in public service delivery with the help of ICT through mobile phones and the internet. In addition, ICT has encouraged transparency in organizations such as G4S that deliver public services. This has forced the company to come up with new methods that are ethical and that provide value for the masses, which has changed the way the company delivers public services (Pratchett, 1999).
Consumerism has also significantly contributed to changes in the G4S delivers public services. The public are no longer approaching relationships with the state and private companies as captive clients but as active consumers. Companies such as G4S and public officials, including politicians, have to offer a transactional value. They are also judged by the standards of the best private sector services. Accessibility is benchmarked in opposition to those areas, for instance economic services, which have responded to the rise of the 24/7 way of life. Customer care is judged against the high standards experienced in leisure time spent at home and abroad. This trend towards consumerist attitudes is uncomfortable for politicians and such companies. It is sometimes resisted and even condemned as inappropriate by politicians and bureaucrats alike, but it is irreversible.
Control over time plays an important role in quality of life as households find they are spending more time working and less time at home. Being able to access a service on their own terms becomes doubly important for people who are always working. This makes them demand for changes in the way public services are provided, consequently forcing governments and corporations such as G4S to come up with policies that address these changes (Potter, 1988).
What to consider in developing a strategic plan for a public sector organization
Strategic planning is a means to an end, a technique used to place a business such as G4S, through prioritizing its use of resources according to identified objectives, in an attempt to direct its path and development over a period of time. The persons in executive control of G4S have the freedom to determine its direction.
The operating environment of G4S is predominantly competitive and, implicitly, a profit motive is the driving force behind the strategic plan development. However, in public sector organizations, those in executive positions often have their powers constrained by statute and regulation which predetermine, to various degrees, not only the purpose of the organization but also their levels of freedom to diversify or reduce a loss-making service. The primary financial driver in these organizations is not earnings, but to exploit output within a specified budget. There are various models that G4S can use to develop a strategic plan.
The first model is the basic strategic planning. This is a strategy that can be implemented within the first year to get a sense of how planning is carried out, and then embellished afterwards with more planning phases and activities to ensure well-rounded direction. The planning is usually carried out by top-level management (Bryson, 1988, p.73).
The planning process in this model includes identifying the purpose of G4S. This is mostly found in the mission statement. This is a statement that describes why G4S exists, in other words, it is the company’s basic purpose. This statement changes over the years (Bryson, 1988, p.73).
The second step in this model requires the management of G4S to select the goals that the company must reach if it is to accomplish its mission. These are the general statements about what the company needs to accomplish in order to meet its purpose or mission, and address the major issues facing it (Bryson, 1988, p.73).
The third step in the model includes the identification of specific approaches or tactics that must be implemented to reach a certain goal. These tactics always change as the company eventually conducts more robust tactical development, particularly by strictly examining the external and internal environments of G4S (Bryson, 1988, p.73).
The fourth step involves identifying specific action plans to implement each strategy. These are the specific tasks that each major function, for example, a certain department in G4S, must undertake to ensure each strategy has been effectively implemented. In this case, the objectives should be clearly worded to the extent that the management can assess if the objectives have been met or not (Bryson, 1988, p.73).
The final step in this first model requires monitoring and updating the strategic plan. The planners regularly reflect on the extent to which the goals are being met and whether action plans are being implemented. The most significant indicator of success of G4S is positive feedback from the company’s customers (Bryson, 1988, p.73).
The second model to be considered by G4S in developing its strategic plan is an issue-based or goal-based planning. If G4S began with the first plan, the basic planning approach, it will evolve to using this second plan, which is more comprehensive and effective type of planning (Bryson, 1988, p.75).
The goal-based planning requires an external or an internal assessment to identify G4S’ strengths, weaknesses, opportunities, and threats (SWOT). This strategic analysis is used to identify and prioritize major issues and or goals. It is also used to design major tactics to address the issues or goals. The strategic analysis is additionally used to design or update the company’s vision, mission, and values (Bryson, 1988, p.75).
The third model that G4S should consider when developing a strategic plan is the Alignment model. The general principle of the model is to guarantee strong alignment among the company’s mission and its resources to effectively operate the company. This model is useful for organizations that need to fine-tune strategies or find out why they are not working. G4S might choose this model if it is experiencing a large number of issues around internal efficiencies (Bryson, 1988, p.80).
The first step in this model starts by the planning group in G4S outlining the company’s mission, programs, resources and needed support. The second step involves identifying the areas that are working well and the areas that need adjustment. The third step involves identifying how these adjustments should be made. The final step involves including these adjustments as strategies in the strategic plan (Bryson, 1988, p.80).
Reasons for the growth in usage of the Private Finance Initiatives
Private Finance Initiatives (PFIs) is a form of procurement where the public sector procures services over a prescribed concession period of about twenty years, in a manner which leaves the risk of ownership and efficient operation of the project facilities with a private sector supplier such as G4S. It is designed to achieve improved value for money through a focus on whole life costing and increased risk transfer to the private sector. There are various reasons for the growth in usage of PFIs and other such methods (Bing et al, 2005, p.26).
The most significant reason for developing countries to use PFIs arose due to the lack of public funds and the need for modern technology and efficient management skills. On the other hand, developed nations, such as the UK use PFIs to allocate projects risks. This reasons forced the emergence of Public Private Partnerships (PPP), under which the public sector entities could work with private sector entities such as G4S in developing, administering, and offering public services to the masses (Clifton and Duffield, 2006, p.580).
In earlier years, public infrastructure was created mainly in the public sector, using traditional procurement methods such as ‘design-bid-build’, and ‘design and build’. Furthermore, the public finance was used to award contracts to the private sector contractors. The public sector entities awarding the contracts were in charge of the actual provision of services to the public once the projects were developed. The private sector’s role at the time was limited to designing and constructing facilities. Additionally, in the 1980s, governments considered two alternative mechanisms for engaging the private sector: total privatization of public facilities, and PPPs (Bennett and Iossa, 2006, P.2145).
Total privatization enables governments to transfer the total responsibility for developing, managing, and providing public services to the privates sector, to corporations such as G4S. PPPs enable governments to invite private sector entities to finance and develop infrastructure projects without losing state control over the regulatory aspects of service provision, including the pricing of the services provided by the infrastructure facility. Over time, the total privatization of public infrastructure facilities at prices heavily subsidized by the governments became politically controversial. Additionally, governments were hesitant to subject certain facilities to total privatization for reasons such as national security. Therefore, PPP became the popular option, which has been used by many governments since then. This proves that the use of these mechanisms has been successful (Pina and Torres, 2001, p.935).
G4S is one of the largest secure outsourcing companies, which has been tasked with the delivery of public services in the UK and Ireland. As seen from the points above, there are various reasons such as government policies, education, consumerism, ICT, and deference to authority, which has changed the way G4S deliver public services since 1970s. developing strategic plans for a public sector organization involves examining its internal and external environment, and aligning them with the organizational goals, in order to come up with the best competitive tactics. The use of PFIs has enabled governments to outsource the delivery of public services to private companies with ease, which has led to the provision of better quality services to the masses.
- Bennett, J., & Iossa, E. 2006. Building and managing facilities for public services. Journal of Public Economics, 90(10), 2143-2160.
- Bing, L., Akintoye, A., Edwards, P. J., & Hardcastle, C. 2005. The allocation of risk in PPP/PFI construction projects in the UK. International Journal of project management, 23(1), 25-35.
- Bryson, J. M. 1988. A strategic planning process for public and non-profit organizations. Long Range Planning, 21(1), 73-81.
- Burton, M. 2013. The Politics of Public Sector Reform From Thatcher to the Coalition. New York, Palgrave Macmillan.
- Butler, P., & Collins, N. 1995. Marketing public sector services: concepts and characteristics. Journal of Marketing Management, 11(1-3), 83-96.