Studies in the Management of Government Enterprise

179 Pages·1981·5.518 MB·English

by  Richard J. Horn (auth.), Richard J. Horn (eds.)

STUDIES
IN THE MANAGEMENT OF
GOVERNMENT ENTERPRISE
SOCIAL DIMENSIONS OF ECONOMICS
A series of books
sponsored by
the Department of Economics,
The City College of the
City University of New York
Volume 1
STUDIES IN THE
MANAGEMENT OF
GOVERNMENT
ENTERPRISE
RICHARD J. HORN
EDITOR
MARTINUS NIJHOFF PUBLISHING
BOSTON/THE HAGUE/LONDON
DISTRIBUTORS FOR NORTH AMERICA:
Martinus Nijhoff Publishing
Kluwer Boston, Inc.
190 Old Derby Street
Hingham, Massachusetts 02043, U.S.A.
DISTRIBUTORS OUTSIDE NORTH AMERICA:
Kluwer Academic Publishers group
Distribution Centre
P.O. Box 322
3300 AH Dordrecht, The Netherlands
Library of Congress Cataloging in Publication Data
Main entry under title:
Studies in the management of government.
(Social dimensions of economics; v. 1)
Bibliography: p.
1. Government business enterprises-United States
Management-Addresses, essays, lectures. I. Horn,
Richard J. II. Series.
HD3887.S78 353.09'2 80-21349
ISBN-13: 978-94-009-8140-9 e-ISBN-13: 978-94-009-8138-6
001: 1 0.1 007/978-94-009-8138-6
Copyright © 1981 by Martinus Nijhoff Publishing
Softcover reprint of the hardcover 1s t edition 1981
No part of this book may be reproduced in any form by print, photoprint, micro
film, or any other means without written permission from the publisher.
Contents
Introduction by Richard J. Horn 7
1. The Government as Manager: Weapons Procure-
ment by James M. Suarez 10
Notes 23
Comments on "The Government as Manager:
Weapons Procurement" by Seymour Melman 24
2. A First Approach to the Economic Theory of
College Management by Barry Bressler 28
Notes 57
Comments on "A First Approach to the
Economic Theory of College Management
by Charles E. Lamberton 59
3. A Post-Accord History of Principal Federal Re-
serve Functions by William B. Harrison 63
Notes 90
Comments on "A Post-Accord History of Princi-
pal Federal Reserve Functions" by Bernard
Shull 92
4. Public Ownership and Natural Resource Utiliza
tion by David L. Shapiro and Robert B.
Shelton 96
Notes 104
Comments on "Public Ownership and Natural
Resource Utilization" by Gerald Sirkin 109
5. The Development and Implementation of an
Operational Planning System by Gary
Gappert and Martine G. Brizius 114
Notes 139
Comments on "The Development and Implemen-
tation of an Operational Planning System"
by Ellen Susanna Cahn 141
6. New York City's New Integrated Financial Mana
gement System (lFMS) and Its Managerial
Consequences by James D. Hardy 144
Notes 172
Comments on "New York City's New Integrated
Financial Management System (IFMS) and
Its Managerial Consequences" by Harvey T.
Dill and Roger P. Murphy 176
Introduction
The six studies in this volume represent investigations into
aspects of the management of government enterprise. For the
most part the concern is with those governmental units or
agencies that provide products having nongovernmental
counterparts. In each case the enterprise is taken as given, and
there is no attempt to justify the participation of government in
the production of goods. Instead, these studies attempt to
define the positions and the functions of the decision makers,
to evaluate product and pricing decisions and to specify
appropriate mechanisms for providing the adequate and
timely information required for efficient control.
The first two studies examine the managerial role. James
Suarez defines an enviornment in which the typical public or
private sector classification does not apply. Given the
monopsonistic position of the government in the armaments
market, many managerial marketing decisions are not
available to private firms. Thus the objectives of the
participants in this market appear to be confounded. Suarez
investigates this interdependent relationship.
8 STUDIES IN THE MANAGEMENT OF GOVERNMENT ENTERPRISE
In "A First Approach to the Economic Theory of College
Management," Barry Bressler addresses the problem of
resource allocation within the college establishment. Bressler
draws on utility theory to define the manager's objective
function and on the imposed budget reductions suffered by
units of the City University of New York to suggest some of the
implications of this managerial construct.
The third and fourth papers concentrate on the products of
two government enterprises. In the first case William Harrison
discusses the range of nonmonetary functions assumed by the
Federal Reserve Banks. Those services have been overshadowed
by the monetary role played by the system - services largely
ignored in discussions among economists and largely
unnoticed by the general public. Harrison treats each service
intensively in order to give a complete account of Federal
Reserve activity and productivity.
Shapiro and Shelton approach the managerial decision
making process by defining an objective function that differs
from that examined by Bressler. Bressler's manager maximizes
utility given a budget constraint. Shapiro and Shelton
investigate an agency that can affect its budget through the
pricing of its product. However, unlike profit-motivated firms
that have pricing power, the government agency involved may
set prices below the marginal cost of production.
The final two studies deal with the application of managerial
techniques in governmental bodies. In both cases the
approaches described have been implemented in order to
expedite the flow of information needed to make timely
decisions.
Gappert and Brezius describe and evaluate a planning
system used by the New Jersey State Department of
Education. This system incorporates aspects of the Planning
Programming-Budgeting system and the Management-by
Objectives system. It permits the agency to specify its
objectlves and to measure its success in reaching its goals.
Introduction 9
The last paper by James Hardy describes New York City's
need for a financial managment system by analyzing the
Integrated Financial Management System designed to meet
the requirements of the city and of the financial community as
well.
RICHARD J. HORN
The City College of New York
STUDIES IN THE MANAGEMENT OF GOVERNMENT ENTERPRISE
The Government as Manager:
Weapons Procurement
JAMES M. SUAREZ*
A firm engaged in a major program for the Defense De
partment is a hybrid. Although a weapons manufacturer is os
tensibly a private enterprise, to a great extent it is managed and
controlled by the government, for the government determines
many of the firm's broad policies and detailed operating proce
dures. For a large portion of the economy the distinction bet
ween public and private enterp!ise has become blurred as the
government has taken on a number of the decision-making
functions that in a wholly private enterprise would be the pre
rogative of management.
Included in this intertwined public-private sector are
entire corporations, such as Lockheed, General Dynamics,
Grumman, McDonnell Douglas, and Northrop and nearly au
tonomous divisions of large diversified corporations, such as
the North American Aviation and Aerospace divisions of
Rockwell International and the Pratt & Whitney and the Si
korsky divisions of United Technologies.These companies and
divisions are geared to meeting the needs of the Defense De
partment instead of the private marketplace. Prime defense
contractors do not make standard, off-the-shelf commercial
products. Rather they manufacture specialized commodities
*Hunter College, CUNY.