Policy Recommendation for TSA Privatization and Collaboration

Policy Recommendation for Collaboration and TSA Privatization

The objective of this study is to evaluate the benefits of collaboration between the federal government and non-profit organizations. The study cites different examples of collaborations across the world and their achievements. Moreover, the paper investigates whether it is beneficial to privatize the TSA (Transportation Security Administration) since the organization has performed below the international standards in the last few years. Finally, the study recommends the best policy option for the MRCC (Mt. Rossmoor Community College) in order to increase the number of students' enrollment and revenue in an academic year.

In the contemporary public administration environment, public organizations are currently entering the era of collaboration where various public sectors form an alliance to address issues and challenges that hinder them serving people better. Moreover, they are entering into the collaborative ventures to protect the U.S. national and foreign interests. The public sector collaboration is defined as a voluntary and reciprocal support and relationships between two or more public agencies or non-profit organizations with the intent to deliver the public goods. The collaboration of public administration is essential because the incremental improvement and innovation in public services positively affect millions of people. The ultimate goal of the collaboration is to enhance organization innovation. (Crow, 2015).

Collaboration can invigorate the public organizations by increasing innovation and assist in attracting highly skilled and qualified employees to the organizations. Kelly, & Schaefer, (2014) describe collaboration as an activity that involves different team members working to implement a program or project. However, a true collaboration is more than the activity, it involves a process of associated behaviors that can be developed and taught. This is a process that governs norms and behaviors that help to maximize individual contribution. The outcome of collaboration is a collective achievement that enhances innovation, foster the cross-functional activities, increases employee energy, productivity, and creativity. Moreover, a true collaboration improves organizational agility and flexibility, increase extreme high employee retention rates and enhance organizational competitive advantages. An effective collaboration can improve the performances and enhance the top-line revenue in the public sector. However, trust is the bedrock of an effective collaboration. In a collaborative environment, trust is a process whereby everyone is able to open express his or her opinion without fear of aggression or retaliation. When people are disrespected, they tend to look elsewhere where they feel they can contribute effectively. Moreover, effective communication is the foundation of collaboration because communication assists the stakeholders to outline the roadmap on the method to work collaboratively. (Hatch, 2012).

Based on the aforementioned benefits to be derived from collaboration, public sector organizations are required to build a network of relation to delivering quality public services and serve the citizens better. In essence, collaboration innovation is the key determinants for the public service improvement that involves multiple actors with the intent to pool knowledge, creativity, innovation, and resources together to deliver innovative service to the community. A key driver of collaboration and innovation in the public service is to deliver better services for people. The findings of the survey carried out by GovDelivery in 2012 show that 96% of the respondents believe a strong relationship between two or more government agencies is beneficial because it enables the agencies to deliver better services to the public, enhances better decision, and greater participation of the government process. For example, the advance in the information technology has made both businesses and private individuals to demand better services from the public services.

Goldsmith & Eggers (2004) believes that innovation and collaboration go hand-in-hand in modern day public administration. Typically, collaboration assists the public administrators to use innovative strategies to manage limited resources to launch effective changes. Thus, collaboration refers to the partnership relationships between two or more public agencies and other organizations with the intention to meet public goals. The essence of collaboration is to develop a network of connection among parties seeking connection to reach the organizational benchmark. In essence, this type of network and association is increasingly important among pubic agencies because it assists them providing essential services, which they will not be able to deliver if implemented the program alone. Thus, collaboration has become an important innovative strategic planning that provides opportunities for the public sector to meet important organizational goals.

Collaboration between Public Agencies and Non-Profit Organization

The government contract is very critical for "the provision of public services in the United States" (Witesman & Fernandez, 2012 p 690), and non-profit organizations have played an important role in the delivery of essential services at local, state and national levels. The interplay between nonprofits organizations and public organizations involves the financial dependency of non-profits on government funding in assisting the implementation of public programs. The principal-agent theory believes that for-profit organizations divert government resources to pursue their main interest, thus, public sectors can minimize the agent problems by selecting agents that have closely aligned related interests. (Fernandez, 2009). VanSlyke (2007) argues that non-profit organizations and pubic organizations have converging missions and interests based on their legal responsibilities and non-for-profit status to deliver common goods and services for public interests. The argument suggests that the non-profit providers will be a better partner of public sector than for-profit firms will because their performances are likely to be satisfactory to the government. Since the goal of non-profit organizations is to deliver the public goods without seeking for profits, this perception will give them more competitive advantages. (VanSlyke, 2007). From the agent's theory perspectives, the goal alignment between nonprofit organizations and public organizations makes the public managers trust the non-profits than for profits. (Bryce, 2005). Thus, the atmosphere of mutual trusts and shared interests will assist the public officials to reduce the transaction costs because they will implement less frequent monitoring and less rigorous screening of nonprofit contractors. In the atmosphere of a higher level of trusts, reduction of opportunism, and lower transaction costs, a collaboration between public organizations and non-profits organizations yield better results for delivering of public goods.

The agent theory argues that the major problems arise from the collaboration are the moral hazards and adverse selection. In the contractual relationships environment, the adverse selection arises when the principal enters into a collaboration with an agent without understanding the level of risks or costs involved. Thus, the agent is likely to misinterpret or withhold the information from the principal since the asymmetry information favors the agent. Thus, the government can minimize the effect of adverse selection through screening and collect the additional information about the agent. (Fernandez, 2009). Similarly, moral hazard is an opportunistic behavior that the agents employ to maximize their benefits. Thus, the agent seeks to promote their interest and maximize their profits at the expense of the principals. The agent problems arise when the principals and agents pursue a diverse goal; however, the goals and interests of public organizations and non-profit sectors are related because both organizations attempt to offer services to the community. Since the goal of for-profits organizations is to maximize their profits, a contracting collaboration between a for-profit organization and public organization may jeopardize the standard set by the government. While the for-profit organizations are to increase their market shares, and profits, however, non-profit organizations are to pursue communal interests bound by the legal constraints. Under the federal and state laws, non-profit organizations are to distribute their assets for the public purpose upon dissolution of their assets. (Witesman, & Fernandez, 2012).

The role of a non-profit organization for the provision of social services has grown significantly in the United States over the last three decades. Many non-profit organizations are able to deliver social services that neither for-profits organizations nor governments are able to match. (Salamon, 2003). Thus, a collaboration between the governments and non-profit organizations is an effective strategy to serve the client better, and the potential gains of collaboration include delivery of quality services, enhancing economic efficiency, the spread of risks as well as an increase of access to resources. (Gazley, Chang, & Bingham, 2006). A collaboration between the government and non-profit is an attractive option for the non-profit organizations and government to reduce their transaction costs that can be incurred from uncertainty in client needs, service demand, and funding. Moreover, the collaboration allows the non-profits and public sector to maximize their benefits since both organizations will share the risks associated with service delivery and production.

Despite the benefits associated with collaboration, its drawback is the costs of establishing an effective collaboration because both parties should draw an implementation plan to develop an effective partnership program. Moreover, loss of managerial autonomy, the opportunity costs associated with the resources, time devoted to the collaborative activities and difficulty in evaluating the results are other shortcomings of the collaboration. While the benefits derived from the collaborative ventures are collective among the collaborative parties, however, the costs may be difficult to measure.

Despite the shortcoming associated with the collaboration venture between the government and non-profit organization, however, collaboration is still an effective strategy to achieve the goals of the public organizations. Many public organizations seek a partnership with a non-profit organization to meet the public needs while maintaining the operation costs. This type of outsourcing can serve as a valuable tool to achieve the public organization objectives. Donahue, & Zeckaser, (2006) point out that the non-government actors engage in a collaboration venture with the public organizations to improve the public sector performances and deliver public values. Moreover, the private non-profit entities may offer essential services especially when the government does not have essential resources require accomplishing a specific project's objective. Productivity is another rationale for collaboration. For example, the external agents may possess productive capacity that the governments lack. By collaborating with non-profit organizations, the government will able to tap their efficiencies to improve performances at lower costs.

Feiock & Jang (2009) argue that nonprofit organizations possess the significant social networks, which the governments are able to tap. For example, the collaboration will assist both the government to enjoy the short-term political gain, long-term economic benefits, and reduction of the transaction costs. A collaboration of non-profits organizations and the government is also very critical for the economic and social development because the governments may lack the expertise to develop particular social services. Despite the benefits to be derived from collaboration between the non-profit and government, the non-profit organizations may experience a volatility in revenue making them altering their mission. Notwithstanding, non-profit organizations are trustworthy with the goal to serve public interests. (Valentinev, 2008).

Examples of Collaboration between Government and Non-Profit Organizations

Wilson, (2012) explores the collaborative arrangement between the City of Philadelphia and William Penn Foundation designed to enhance the English proficiency of the immigrants in the city. In 2001, the Major of Philadelphia issued an executive order mandating all the city agencies to secure federally funded programs to improve English proficiency of people with LEP (limited English proficiencies). By definition, LEP people are the individuals with limited ability to write, read and speak the English language. The data presented by the U.S. Census Bureau reveal that 10% of Philadelphians and 20% of the U.S. residents use a local language other than English at home. (Mule, 2010). The outcome of this habit led to low level of English proficiency among the Philadelphians residents. In response to a low level of English proficiency, the Philadelphia government made a policy to advance the integration of immigrants into the stream of the American population. In the United States, language barriers are part of the most identified barriers of immigrants. In collaboration with a non-profit organization, the Philadelphia government implemented a plan to assess the language needs of people at the local level, train staff members to enhance the policy implementation, and develop English language assistance policies. Thus, the Philadelphia government entered into the collaboration contracts with different non-profit organizations such Language Line Services to improve the language competency of the immigrants. Along the Philadelphia government, the non-profits organizations view language barriers as an obstacle to effective immigrant integration. With a partnership with the Language Line Services, the Philadelphia government has been able to improve the language proficiency of the immigrant resident in Philadelphia.

At the international level, Lan, & Galaskiewicz, (2012) provide information about the collaboration arrangement between non-profit organizations and the Chinese government to achieve innovation in the country over the past 30 years. The global competitiveness and intention to encourage innovation in the country have made the Chinese government enter into the collaborative ventures with different non-governmental organizations. Over the years, the Chinese government has collaborated with different non-government organizations to compete with western countries in term of technological development, innovation and eradication of diseases. For example, the Chinese government collaborated with "the International Association for Chinese Management Research for the development of biotechnology, disaster relief, and economic development" (Lan, & Galaskiewicz, 2012 p 496). Moreover, the government has collaborated with the NGO to eradicate the HIV epidemics in Yunnan Province.

Similarly, Canada has experienced a rapid economic transformation in the last few decades, and over the years, the Canadian government is concerned with the rapid increase of costs of government projects. To address the problem, the government has entered into a collaborative venture with different non-profit organizations. (Osborne, & Murray, 2000). For example, the British Columbia government has entered into a collaboration with non-profit organizations to offer different services to disadvantaged children and their families in the province. Thus, the "Ministry of Children and Families" in British Columbia province entered into the collaborative arrangement with the United Way, a non-profit organization to improve the standard of living of the disadvantaged children in the province. In 1996/1997, the budget approved for the program was over $3 million for different programs such as children health improvement, the well-being of children, childcare support, and support for children at risk. The collaboration lays a foundation for a future collaboration for the provision of essential services in Canada.

Many countries have also adopted different measures to offer the effective team-based care and support for people suffering from the chronic disease. However, the organizations face challenges that hinder them achieving these objectives. To address these problems, the Australian government collaborated with the non-profit organizations to offer community and primary healthcare services to people. The public organizations such as NSW Diabetic health system entered into the partnership arrangement with the Aboriginal medical Centre, which was a non-profit organization, to deliver a long-term-care for Aboriginal suffering from chronic conditions. In 2011, more than 172,600 Aboriginal people live in NSW (New South Wales), and the region is larger than other Aboriginal states. In the last few years, the population of the Aborigines is increasing, and improving the health of the Aborigines is the major goal of the Australian government. Thus, the NSW Health entered into a partnership with different non-profit organizations, and one of the organization was the Aboriginal Medical Center. The alliance strategic of the NSW health Aboriginal Plan 2013 was to improve the Aboriginal health over the next 10 years. The plan is a catalyst to enhance health system to achieve the Aboriginal health outcomes within the next 10 years with the intent to enhance the quality of health offered to the Aboriginal people. The benefits to be derived from the collaboration is to achieve a complementary health goal to improve the health outcomes of the Aborigines. Moreover, the NSW health system has been able to address the shortage of healthcare personnel problem with a collaboration with the non-profit organization because the Aboriginal Medical Center specialists such as physicians, nurses, other healthcare professionals are able to fill the gap created by the health care personnel shortage in the NSW Health Center.

A collaboration between the non-profit organization and the government arises because of the U.S. government's objective to address the problem of people suffering from the HIV (human immunodeficiency virus). (Khosla, Marsteller, Hsu et al. 2016). Typically, people suffering from the HIV requires the heterogeneous services spanning both social and medical needs that include legal aid, psychological counseling, and medical care. In the United States, HIV services are delivered through a mixture of agencies such as non-for-profit organizations and local health departments. Thus, these agencies are required to collaborate to satisfy the multiple needs that cannot be served by the government agencies only. In the United States, the African-American group is being severely affected by the HIV than other ethnic groups. In Baltimore Maryland, there were 30,558 people suffering from HIV. Typically, both the state and city are severely being affected by HIV epidemics. In the Baltimore Metropolitan, more than 18,317 suffered from the HIV making the city rank third in the HIV epidemic in the United States. In 2010, the Department of Health and Environmental Health Administration collaborated to address the HIV epidemic in Baltimore, Maryland with the primary goal of coordinating HIV prevention care and treatment. The goal of the program is to decrease the HIV incidence rate in Baltimore.

Another example of collaboration is referred as "the White House Rural Council" policy, a collaboration between "Federal Office Rural Health Policy and the National Rural Health Association" (Cruger, 2015 p 1) aimed to create the economic opportunities for over 60 million Americans residing in the rural areas. The goal of the collaboration is to improve the rural health access of the rural population. The services include expanding oral and mental health services and expanding telemedicine for a large number of children and elderly people in the rural areas across the United States. The collaboration is very critical because there is a limited access to healthcare in the rural areas in the United States, and a continuation of this type of innovative collaboration will assist in enhancing a greater access to the healthcare system in rural areas. Despite the benefits to be achieved from this type of collaboration, the funding mechanism for the partnership may serve as a challenge. Moreover, transactional costs of the collaboration may be high because the tangible benefits of the collaboration cannot be recorded immediately.

Answer to Question 4

The objective of this report is to provide a recommendation on whether to privatize the TSA (Transportation Security Administration). The report examines the cost and benefits of the TSA privatization and reveals the efficiency, public satisfaction, and cost effectiveness from the TSA privatization will increase

The terrorist attack of September 11 has geared up the policy makers that security of the airport is very critical for the protection of the American population. The U.S. government responds to the attacks by proposing different security options to enhance safety and security of the airport across the United States. One of the security options recommended is the privatization of airline safety and security using the insurance firms. Paul & Thomas (2002) argue that the insurance companies could be used to regulate the efficiency and effectiveness of airline without imposing costly rules, thus, the entrepreneurship and competition will shape the security and safety of the airport rather than monopoly and politics associated with the airport administration. The study exposes the fallacy of the FAA (Federal Aviation Administration) and examines the FAA's strategic plan implemented 2001. After establishing the FAA, the agency employed more than 69,000 people who were dedicated to improving security, efficiency, and safety of aviation as well as the safety of commercial transportation to protect the environment and national security. The federal government speeds the establishment of the FAA because of the security failure of the airport that leads to the attack of the Trade Center in 2001. After the formation, the Congress expanded the bureaucratic control of the agency.

The TSA major activities are to oversee the security of highways, transit, pipelines and rail. Moreover, the TSA collects the intelligent data to enhance the effective security of the nation's airport and airways. At present, the agency has 62,000 employees, and their annual budget is $7.9 billion in 2013. After a decade of the TSA's operations, a comprehensive evaluation of the TSA reveals that the agency has been identified for mismanagement, security failures, dubious investment, and hopeless bureaucracy. After the Detroit bomber attempted a mass murder, the American citizens lost patience with the security of the airline. President Obama even asserted that the airport security systems have failed and they are on the road to disaster. The security system requires a better strategy to improve results to satisfy the customer. Thus, the government needs to find better and new method to speed efficiency of the airport system in order to enhance human safety. A recent congress report about the TSA operations shows that the TSA will be better off if the federal government privatizes the organization and transfers the management to private entrepreneurs. (Department of Homeland Security, 2014).

As a special consultant, I recommend that the federal government should privatize the Transportation Security Administration to improve the cost effectiveness, efficiency, and public satisfaction with the organization. The federal government's takeover of the TSA is a mistake because the TSA is affected with high-level bloated bureaucracy and poor management. Since the inception of the TSA, mismanagement and bureaucracy have been their major problems. The initial budget to hire and train the workforce in 2002 was $104 million, however, the costs of training ended to $741 million. The TSA management also wasted a large amount of money to rent expensive hotels, paying excessive employee bonus, and throwing expensive awards. Since 2005, the TSA has been plagued with criticisms and operational missteps. In 2012, a report from a House committee revealed that the TSA was costly, poorly executed, and counter-productive. Moreover, the TSA has recorded numerous of security screening failures. For example, the TSA screeners failed to detect 75% and 60% of fake explosive tests in Los Angeles and Chicago airports respectively, and over 25,000 security breaches were recorded since their inception. Moreover, the TSA is ranked 232 out of 240 federal agencies concerning efficiencies. The TSA will be free of monopoly federal bureaucracy, excessive red-tapism, and corruption by allowing the private firms to take over the function of airport screening process using the SPP (screening partnership program). The best strategy to manage the TSA is to separate the "airport screening from the regulatory" aviation's oversight. (Edwards, 2013 p 9).

The federal government should "remove the primary responsibility for passenger and baggage screening from TSA to the nation's commercial airports. The airports would then be free to contract to screen to expert security companies, which would compete for the opportunity to service each airport." (Edwards, 2013 p 9).

By using this strategy, the expert security companies will be in charge of the airport screening rather than use contract-screening policy that is affected by the high level of bureaucracy and regulatory policy. After September 2001, the federal legislation that formed TSA allowed some airports to use private firms' for screening and opt for using the TSA screening. The San Francisco is one the largest airports that uses the private screeners and this airport produces the good results since the adoption of private screeners. Since the TSA understood that the expansion of the SPP (Screening Partnership Program) across the U.S. airports was a threat to their bureaucracy, the TSA rejected the application of six airports that applied for the SPP program in 2011. Comparative analysis of the performances of the private screening to TSA screening reveals that private screeners perform excellently better than the TSA screeners do. The result of the investigation carried out by a consulting firm, Bearing Point, Inc. in 2004 revealed that the private screener performed better that TSA screener. In 2005, the GAO concluded that the private screeners performed better than TSA's screeners. In 2007, USA Today carried out an investigation to compare the performances of the private screeners with GSA screeners. The outcome of the investigation revealed that private screeners in SA (San Francisco) international airport performed excellently better than the federal screeners in term of detection abilities. Although, TSA argues that the costs of running the private screening are higher than the costs of federal screening, however, the GAO found out that the claim was incorrect. The findings of the investigation carried out by the Transportation and Infrastructure show that the SPP program generates savings. They also "found that the private screeners at the San Francisco airport were 65% more efficient than the federal screeners at the Los Angeles airport." (Edwards, 2013 p 10). While the federal rules mandate private screeners to have the same training with TSA screeners, however, the private screeners are able to record lower training costs compared with the SFA training costs. Moreover, the private screeners are able to lower the costs of operations despite the TSA screening protocols imposed on the private screeners. (Aliya, 2011).

Costs and Benefits of TSA Privatization

Several benefits the federal government will derive from privatizing the TSA. First, the federal government will record 15% cost savings by privatizing the TSA. For example, the training costs of the private screeners will be reduced assisting the federal government to lower the cost of operations. Typically, the cost saving from the staff training has been demonstrated by the San Francisco international airport where the airport management is able to record a lower staff training costs compared to Los Angeles airport that is under the FSA operation. Moreover, 13 airports that have opted for the privatization are able to lower the screening costs by 11%. The downside of the privatization is that approximately 25% of TSA employees will lose their jobs. At present, the TSA has 62,000 employees with the annual budget of $7.9 billion. The average salary of the TSA is $37,223 while a supervisor earns $47,557. Although, TSA IT specialists earn between $75,193 and $104,340. Thus, if 25% of 62,000 (15,500) TSA employees lose their jobs because of privatization, it shows that 15,500 of the TSA employee will lose their jobs. If the average salary of all the TSA staff is $45,000, the federal government will record cost of labor savings of (15,500 x $45,000) $697.5 Million by slashing the number of TSA staff by 25%. Based on the benefits to derive from the TSA privatization, this paper recommends that the federal government should privatize the TSA to record cost savings, efficiency, and public satisfaction.

Many countries have privatized their airport security and achieved tremendous success. For example, Canada privatized their airport screening in 1996 and achieved a tremendous success. Chris, & Hughes, Mark, (2013) contribute to the argument by citing the benefits derived from the privatization of the Australian airport. Before the privatization of the Sydney airport, the airport operations were run inefficiently. Moreover, the airport recorded the weak financial results yearly making the airport face challenge to generate profits. To address the problem, the government initiated the divestment by selling the Brisbane, Melbourne, and Perth Airports in 1997. Moreover, the government sold Canberra, Adelaide, Gold Coast Airports in 1998 as well as the Sydney Airport in 2002. The Sydney Basin Airports, Camden and Hoxton Park was sold in 2003. The argument of the national government was that the sales of the airports would increase their economic efficiency, and improve managerial efficiency. The goal of privatization is also to reduce the cost of operations and increase the global competitiveness and market advantages of the Australian aviation industry. The aim of the privatization is also to avoid the large capital investment associated with airport operations.

After the privatization, the Australian airports recorded a strong growth in total factor productivity and technology change. Abbott and Wu (2002) pointed out that the privatized airports were able to record high growth rate, however, they are not able to record a growth on the scale and technical efficiency. However, the Australian largest airports were able to achieve competitive market advantages at international level. Assaf (2011) argues that most of the Australian airports record a significant growth in factor productivity after the privatization. The outcome of the analysis reveals that an increase in productivity is based on the change inefficiencies. Typically, "Melbourne airport has generated positive net cash from operations in every year since privatization. The assets of Melbourne airport have consistently exceeded its liabilities and this is trending in a favorable direction." (Aulich, 2015 p 5). Moreover, the Sydney airport was able to record 80% of operating profit from operating revenue.

"In many ways, the United States has become a laggard in commercial aviation. Numerous other nations have privatized their airports, air traffic control, and aspects of their aviation security. American policymakers should study those reforms and pursue such innovations here. Privatization offers a viable alternative to America's often mismanaged and inefficient government aviation infrastructure." (Edwards, 2013 p 11).

The benefit of the FAA's privatization is that the agency will be free of bureaucratic control, and replace capricious controls with the clear market incentives. Moreover, the privatized organizations are likely to adopt the latest technology because the latest technology will reduce the cost of operations. Paul & Thomas (2002 point out that impact of politics on the FAA operation does not make sense. Corruption is also another threat to FAA efficiency since corruption is a threat to institutional survival. The historical record reveals that private organizations ae less corrupt than public organizations. Generally, the private organizations have a strong incentive to be honest because consumer trust will be lost, and their operations will be shattered if it is exposed that private organizations engage in the corrupt activities. The issue is not generally the case with the public organizations. While corruption might prove disastrous to private organizations, the issue is not always the case with the pubic organizations because it does not damage the public institutions reputation despite that bribery and corrupt flourish in the public sector than the private sector. The case of the Arthur Andersen is a typical example of how corruption affect the private organizations because the company suffered heavy loss from the accounting scandals. However, the scandal that involved the FDA (Food Drug Administration), which exposed numerous employees who accepted bribes to facilitate the generic drug approval, did not affect the organization. Rather than leading to the collapse of the FDA, the federal government increased the budget of the FDA to solve the corruption problem. Moreover, David Kessler, the FDA commissioner was reappointed by Clinton administration. Definitely, a private organization involving in such a scandal will probably not survive. Even if the organization survives, the top executives will be fired to prevent the occurrence happening in the future.

Beyond citing this example, public authorities are more corruptible. The benefit of FAA privatization is that the organization will be free of corruption that will enhance the efficiency of the employee. (Aulich, 2015). John, (2007) discusses the case of public road transportation to enhance a greater understanding of the benefit to be derived from the privatization of the FSA. The author argues that the public sector has not been able to demonstrate the financial success story with regards to the management of roadways. In the last three decades, the road's high management has recorded a loss for the past three decades. Under the public road management, the U.S. roads are funded and managed through a complex mixture nonuser and user taxes at local, state and federal levels. However, their financial records are in bad shape recording a continuous financial loss.

Analysis of the transportation management in the United States, and outside the United reveals the public organizations do not possess necessary management skills to enhance the profitability of the public transportation. Moreover, the management has not been able to enhance the security of the passengers. Gregory, (2008) argues that privatization of the FAA is the only method to enhance the security of the airline passengers since the private businesses understand that they will lose money if they mistreat customers. Gregory (2008) further points out that "government airline security has been ineffective, bizarre and burdensome." (p 1). In 2003, a college student smuggled the "box cutters onto two airplanes" without being detected. (Gregory, 2008 p 1 ). Yearly, people sneak prohibited items and the airports have delayed countless flights leading to the ridiculous shutdown of the airport gates because an agent thinks someone look suspicious. The author believes that privatization is the solution because the private firms realize that they are likely to lose their assets if they do not protect the interest of the customers. Contrarily, the government will not record the liabilities if something goes wrong. Moreover, the government does not have an institutional incentive to protect airline passengers because they do not fear lawsuits, bankruptcy, prosecution or competition. Rather, they use the airline security to expand their power and size. For example, every potential terrorist attack or successful terrorist attacks "translate into bigger bureaucratic budgets showing that failure is rewarded with more money" (Gregory, 2008 p 1). By consequence, the norm of the airport is onerous, intimidation, fear of officials, hassles, and "a false sense of security against terrorists." (Gregory, 2008 p 1). The best strategy to address these problems is by deregulating and privatizing the TSA to take over the security and safety of the passengers.

Schulz, & Kling, (2010) support the argument of the previous authors by pointing out that privatization of the TSA is the only way to improve and enhance the security of the U.S. airports. Using this scenario, the private firms will be responsible for the design and implementation of the airport security. The market-based model will reward the private companies because they are able to satisfy the customer, adapt to emerging threats, facilitating efficient and speedy passenger screening processes.

Financial, Organizational, Human Resources and Political Issues to consider when making Decisions

After the Trade Center attacks on September 11, 2001, the federal government created the TSA and their major functions are to oversee the security screening of the 450 U.S. commercial airports across the United States.

Answer to Question 5

Policy Problem

The "MRCC (Mt Rossmoor Community College)" is ranked as the 5th fastest-growing community college in the United States with the students body growth rate of 24% within the last past 5 years because of the recent s housing boom. However, the budgetary cut policy initiated by the state government has affected the state university making many colleges and universities in the state considering increasing the tuition fees by 8% per year on top of the previous year tuition increase of 14%.

Policy Option

The MRCC has faced different policy options because of a decline in the budget allocations by the state government makes the MRCC face the tough choice whether to increase the fees per unit or maintain the current fee level. The college is also anticipating whether to increase or decrease the number of course offered. Moreover, the college is anticipating whether to offer the online courses. An increase in the course fee per unit will impose a financial burden on students. Moreover, an increase in the course fee per unit will affect many stakeholders including parents and students. However, some prospective students may be discouraged to enroll with the MRCC because of the new policy option. Since education is one of the mainstays of the U.S. economy, the colleges and universities are required to find the best policy option to source for the fund so as not discouraging people enrolling in the college.

Identification of Key Stakeholders

As a superintendent of the college, it is critical to identify the key stakeholders who will be affected by the policy option.

First, the MRCC is one of the key stakeholders that will be affected by the policy option. The MRCC is an education provider because its management has the final say whether to increase the tuition fees. Moreover, the MRCC attempts to offer the best educational services based on the tuition fee of the course per unit. Students are other stakeholders and some students may opt to withdraw from the MRCC if they decide to increase the tuition fee of the course per unit. Moreover, some students may opt for a loan to complete their education. Parents and guardians are the other stakeholders that the policy choice of the college will affect. Since the parents or guardians are the major sponsors of the students' education, they will be affected by the new policy option.

Application of Financial knowledge to make Ethical and Sound decisions in the Public's Interest

The paper recommends that the MRCC management should not increase the course fee per unit rather the college should increase the number of courses offered by using the online platform. The best policy option that the university should implement is to increase the number of courses that the colleges will offer; however, these courses should be online courses, which will assist the MRCC to reach a large number of prospective students in the United States and outside the United States.

"Online education has grown tremendously over the past ten years. The increased accessibility of the internet and the World Wide Web has created vast opportunities for non-traditional education through this medium. The explosion of technology has also made teaching outside the traditional classroom possible for teachers and has also provided learners with easy access to course material." (Sing,. & Beverly, 2008).