In order to understand the structural change and implementation of hybrid organizations in public administration it is necessary to gain a comprehension of what defines hybrid organizations as opposed to public and private organizations. Differences between these three types of organizations exist in managerial approaches to goals and rules, and they also vary in regards to effectiveness with achieving distinct aims and objectives (Lan and Rainey, 1992). The extent to which these types of organizations are similar or differ illuminate organizational and managerial approaches that may function well for certain approaches but not for others.
A study conducted by Lan & Rainey (1992) explored private, public, and hybrid organizations in order to assess and explore differences in regards to goals, rules, and effectiveness. The researchers sought to demonstrate specific factors involved in common assertions held with regard to private and public organizations by utilizing hybrid organizations as a model for comparison. By conducting an in-depth examination of these common assertions and comparing all three types of organizations, it is possible to devise a more accurate perception of the characteristics of each type of organization that contribute to their effectiveness.
It is a commonly held assertion that public organizations are characterized by greater numbers of rules, more procedures, and more authoritarian constraints than demonstrated by private organizations, and research findings have demonstrated support for these beliefs (Lan & Rainey, 1992). However, research has determined that other resoundingly supported assertions regarding increased complexity, vagueness, and multiplicity among public organizations in relation to private ones are unfounded and significant differences in these realms do not exist (Lan & Rainey, 1992). The lack of differences among all three types of organizations and blurring of sectors in general lends to potential difficulties in establishing identities and definitions for each type of organization (Lan & Rainey, 1992). The blurring of lines between private and public organizations results from the many similarities shared by these types, and it is this interrelation and overlap that led to the evolution of hybrid forms of organizations that blend together features of public and private organizations (Lan & Rainey, 1992). Hybrid organizations can be perceived and understood as organizations that lie in the middle of a continuum between government agencies on one end and private enterprise on the other (Lan & Rainey, 1992).
What components lend to definitions as to what comprises public and private, and thus hybrid, organizations? The three components that could be considered as most integral in understanding the distinction between private and public organization are interest, access, and agency (Lan & Rainey, 1992). Significance regarding definitions of these types of organization involves their importance in research and establishment of theory (Lan & Rainey, 1992).
Lan & Rainey (1992) used three categories of classification in their investigation of core differences between organizations. Public organizations were defined as those that were government owned and exclusively received public funding. Private organizations were defined by the researchers as corporations or firms that were owned privately and funded through sales rather than public funding. Hybrid organizations were classified as those that are professional, service-based organizations involved in the delivery of goods that are somewhat public, and demonstrate a blend of private and public ownership. Furthermore, examples given of hybrid organizations included hospitals and schools, organizations that cannot exclusively be categorized as private or public (Lan & Rainey, 1992).
Lan & Rainey (1992) posited four hypotheses in their exploration of hybrid organizations in relation to private and public organizations. The first hypothesis involves perceived differences in regards to goals and effectiveness with each type of organization. Specifically, the authors hypothesized that public managers perceive goals within their organization as lacking in clarity, difficult to measure, and more difficult to achieve than that demonstrated by private organizations (Lan & Rainey, 1992). Furthermore, it is hypothesized that the perceptions of hybrid managers exist somewhere between those of public and private managers (Lan & Rainey, 1992). In regards to perceptions of effectiveness in achieving goals, it was hypothesized that hybrid organizations would demonstrate perceptions somewhere between those of private and public organizations due to the fact that the goals they pursue are different in regards to political oversight and orientation to profit (Lan & Rainey, 1992).
The second hypothesis posited in the study by Lan & Rainey (1992) involved procedures and rules within the organizations. Specifically, the authors suggested that public managers would demonstrate more procedures and rules than private managers, with more constraints on manager authority, and that hybrid organizations would once again fall somewhere in the middle in regards to these factors. This hypothesis aligns with commonly held assertions regarding differences between these types of organizations (Lan & Rainey, 1992).
In regards to effectiveness, it is a commonly held assertion that public organizations are less effective than private organizations (Lan & Rainey, 1992). Perceptions regarding effectiveness of organizations may stem from how goals are perceived and whether these perceptions are vague (Lan & Rainey, 1992). The third hypothesis proposed in the study by Lan & Rainey (1992) stated that managers' perceptions of effectiveness in achieving set out organizational goals depending on factors such as perceived clarity of these goals, ease in measurement of the goals, and increased instrumentality used for evaluation of performance. It was suggested that private managers would have lower perceptions on all of these factors, thus resulting in less effectiveness in goal achievement, while private organizations would have greater perceptions, with hybrid organizations demonstrating perceptions between the two ends of the continuum (Lan & Rainey, 1992).
The fourth and final hypothesis proposed by Lan and Rainey (1992) related to organizational effectiveness. In particular, it was suggested that there would be an observed relationship between increased rules and procedures among public managers which would result in a positive association with perceived organizational effectiveness. On the other hand, it was expected that private managers would not exhibit this association due to their decreased organizational rules and procedures, and once again, hybrid organizations would demonstrate results between those shown by private and public organizations (Lan & Rainey, 1992).
Results of the study by Lan & Rainey (1992) added support to findings of previous studies that investigated common assertions held regarding public and private organization. Specifically significant differences were not found between public and private managers in terms of their perceptions of measurability and clarity of organizational goals, and findings did not indicate that vagueness of goals within hybrid organizations is significantly associated with less organizational effectiveness (Lan & Rainey, 1992). Furthermore, hybrid managers and public managers demonstrated higher clarity of goals than private managers, which may be explained by greater adherence to rules among public and hybrid organizations.
Overall, it may be interpreted from the results of this study that hybrid organizations truly are a blending together of definitive aspects of public and private agencies, to form organizations that take on characteristics of both ends of the spectrum. The similarities and differences outlined indicate that hybrid organizations provide an appropriate model for when organizational needs are not met on the private and public ends of the organizational spectrum.
The majority of public agencies in the Western world may be defined as hybrid organizations, meaning that their classification falls between being a completely government run agency and being a private commercial firm (Kickert, 2001). The importance of this type of organization is increasing due to the fact that the number of these types of agencies is growing. Due to the increased prominence of hybrid organizations, it is important that governance in these types of agencies be appropriately comprehended and explained by individuals involved in the development of public management theory (Kickert, 2001). In order to further understanding with regard to governance of hybrid organizations, Kickert (2001) examined case analyses from a total of eleven executive agencies within various Dutch ministerial departments. The departments included in the study were Agriculture, Nature, and Fisheries; Education and Sciences; Justice; and Transport and Public Works.
Kickert (2001) argues that the most effective strategy for democratic government departmental agencies is a theoretical approach that blends management theory from both private and public organizations. The author describes how hybrid organizations have a widespread presence throughout the public sector, and that these types of agencies are integral to the functioning of modern-day democratic society (Kickert, 2001). The importance of hybrid organizations within society has increased in recent times due to the growth in the privatization of what were once entirely public services (Kickert, 2001). Hybrid organizations operate under the expectation that they will function similarly to private businesses in that they should be characterized by efficiency and a client-centered orientation, even though the operations performed by hybrid organizations are largely public in scope (Kickert, 2001). This blending of expectations and tasks from each end of the public -- private spectrum often leads to some tension and ambiguity within these hybrid organizations (Kickert, 2001). Also, there are marked differences between various hybrid organizations depending on where the agencies fall on the continuum between being public and private. Variables upon which hybrid…