Privatization
Amongst primary functions of the government is providing basic and essential services to its citizens. It does so by ensuring a high level of efficiency in the utilization and mobilization of human and economic resources (Lieberherr & Leiren, 2017). However, achieving the needed efficiency faced by difficulties. Such cases necessitate privatization and outsourcing of services, two common ways through the government adopt to optimize the provision of public services. The two methods promote improved delivery of services. While privatization poses a risk of monopoly, it is the best option as it is associated with increased operational efficiency and higher productivity. These two economic achievements are hardly possible with mere outsourcing of services.
Privatization involves a complete transfer of human and physical resources to a private manager, facilitating actualization of more proactive cost-efficiency strategies. According to Kim (2010), private entities are associated with higher financial discipline, a culture that is rare with public companies. Saving of time and cost is high in private entities as managers in such company have profit targets to hit. Thus, economic resources in these organizations are mobilized meticulously. Such is impossible for outsourcing where managerial efficiencies still exist despite engaging a third party for provision of a particular service. Privatization makes it possible to pursue any viable efficiency-related strategy, thus a better option compared to outsourcing.
Privatization is associated with less influence from the public as compared to the outsourcing of services, making the realization of corporate goals easier. According to Michael et al. (2014), private entities experience less criticism from the public, especially from politicians. Unobjective critics, who often oppose projects without justified grounds, have a less to no say to a private entity. Unlike for outsourcing where the provision of a particular service must be scrutinized, sometimes hindering a seamless process, privatization sees every necessary detail appropriated in a process is followed to the latter. Realization of corporate goals is easier with privatization that experience less unobjective scrutiny from the public.
Privatization seals off loopholes utilized by opportunistic individuals to benefit unconventionally from public resources. As Johnson (2014) highlights, outsourcing involves the partial transfer of services to a private provider. Such a case occasions chances of corruption and related vices. Opportunistic individuals in the corridors of power consider outsourcing as a chance to extort money from contractors (Forbes Leadership Group, 2012). For instance, handouts and bribes characterize the process of contracting a private company. every individual involved in privative company prioritizes creation of real wealth which is beneficial to all. Privatization solves the problem of opportunism in the delivery of services, maximizing the benefit of economic resources to the public.
Governments can achieve more efficiency in mobilization of economic resources by privatizing its services as compared to outsourcing. while the two options help achieve some level of efficiency, maximizing effect of privatization is higher than that of outsourcing. Private companies are associated with higher financial discipline. This culture lacks in most of public entities despite outsourcing. Besides, private companies are less criticized or influenced by the public. profits targets can be pursued seamlessly without hiccups from uninformed critics. Lastly, privatization shields public resources from opportunistic individuals who exploit every outsourcing process for personal gains. Undoubtedly, privatization is more reliable in mobilizing resource for the benefit of the public.