Hybrid Organizations in Public Administration: Structure and Management

Defining Hybrid Organizations

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 illuminates organizational and managerial approaches that may function well for certain purposes but not for others.

A study conducted by Lan and 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 and Rainey, 1992). However, research has determined that other widely 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 and Rainey, 1992). The lack of differences among all three types of organizations and the blurring of sectors in general lends to potential difficulties in establishing identities and definitions for each type of organization (Lan and 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 and 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 and Rainey, 1992).

What components lend to definitions of what comprises public, private, and thus hybrid organizations? The three components most integral to understanding the distinction between private and public organizations are interest, access, and agency (Lan and Rainey, 1992). The significance of these definitions lies in their importance for research and the establishment of theory (Lan and Rainey, 1992).

Lan and 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 as corporations or firms that were privately owned and funded through sales rather than public funding. Hybrid organizations were classified as professional, service-based organizations involved in the delivery of goods that are somewhat public in nature, and demonstrate a blend of private and public ownership. Examples of hybrid organizations given by the researchers included hospitals and schools — organizations that cannot exclusively be categorized as private or public (Lan and Rainey, 1992).

Goals, Rules, and Effectiveness Across Organization Types

Lan and 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 within 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 those demonstrated by private organizations (Lan and Rainey, 1992). Furthermore, it was hypothesized that the perceptions of hybrid managers exist somewhere between those of public and private managers (Lan and 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 differ in regards to political oversight and orientation to profit (Lan and Rainey, 1992).

The second hypothesis posited by Lan and 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, along with more constraints on managerial 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 and Rainey, 1992).

In regards to effectiveness, it is a commonly held assertion that public organizations are less effective than private organizations (Lan and Rainey, 1992). Perceptions regarding organizational effectiveness may stem from how goals are perceived and whether those perceptions are vague (Lan and Rainey, 1992). The third hypothesis proposed by Lan and Rainey (1992) stated that managers' perceptions of effectiveness in achieving organizational goals depended on factors such as the perceived clarity of these goals, ease in measuring them, and increased instrumentality used for performance evaluation. It was suggested that public 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 and 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 and 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 and Rainey, 1992).

Results of the study by Lan and Rainey (1992) added support to findings of previous studies investigating common assertions held regarding public and private organizations. Specifically, significant differences were not found between public and private managers in terms of their perceptions of the 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 and 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, results of this study suggest that hybrid organizations truly are a blending together of definitive aspects of public and private agencies, forming 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 or public ends of the organizational spectrum.

Governance and Management in Hybrid Agencies

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 growing number of such agencies. 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 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 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 — 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 tension and ambiguity within hybrid organizations (Kickert, 2001). There are also marked differences between various hybrid organizations depending on where they fall on the continuum between public and private. Variables upon which hybrid agencies differ from each other include markets, products, financing, and ownership, and various agencies use differing management practices and approaches (Kickert, 2001).

The results obtained by Kickert (2001) indicated what was termed "devolution" of hybrid agencies within the Dutch public sector. Devolution is described as having the ability to sometimes result in reduced autonomy for an organization, apparent in increased ministerial control over policy, while governance relationships have demonstrated increased transparency and explicitness (Kickert, 2001). The author suggested that hybrid organizations have an important role in the governance of the Netherlands and that their presence will remain for some time. Therefore, it is unrealistic and impractical to maintain a strict, distinct separation between private and public organizations (Kickert, 2001). Approaches utilized within hybrid organizations must strike a balance, as the application of management strategies successfully used in private organizations to the operations of hybrid organizations does not lead to effective results (Kickert, 2001). Furthermore, it is important that theorists take into account the functioning of hybrid agencies in the development of public sector theory, given the ever-increasing presence of hybrid organizations within the public realm (Kickert, 2001).

Organizations can no longer always be effectively classified as purely public or private. The expansion of public services to include private elements has necessitated the development of hybrid organizations in which components are adopted from each end of the spectrum. Governance in these types of organizations must maintain balance in order for optimal functioning and successful outcomes.

Conclusion: Future Directions for Hybrid Organizations

Hybrid organizations have evolved out of a lack of appropriate approaches to issues offered by the public and private realms. Processes and strategies have been adopted from each end of the public and private spectrum to create new types of organizations that blend these spheres in attempts to more successfully serve society while still maintaining effective managerial and fiscal control. Hybrid organizations are becoming increasingly prevalent, especially within public and social services organizations. Due to the increasing emergence of hybrid organizations, it is of the utmost importance that factors contributing to the sustainability of these organizations be recognized. Of these factors, the most crucial is identity development, which can act to establish models upon which hybrid organizations can be developed effectively.