Consider the managers of two organizations. Organization 1 is a government agency and its manager, the...

Consider the managers of two organizations. Organization 1 is a government agency and its manager, the CEO, is employed by the federal government financed by the taxpayers. It may be a regulatory agency. Organization 2 is a private for-profit business and its manager, the CEO, is employed by the board of directors appointed by the shareholders and financed by the earnings of the company. How does the position of these two managers differ with respect to the following?

1.The incentives they face

2.How they are held accountable and how their performance is judged

3.How they receive feedback good and bad

4.How their performance is related to the people they are supposed ultimately to serve.

Expert Solution

1. The manager of the government agency gets the incentives as per her performance, dexterity, and achievements which may or may not be market-based. Whereas, the manager of a for-profit organisation gets the incentives on the basis of organisational performance based on market indicators like profit, market share etc.

2. The government agency manager will be accountable on the basis of the attainment of government objectives such as social welfare, good order etc. Whereas, the manager of a for-profit organisation will be accountable on the basis of the achievements of the company under his work based on profit earnings, prices of shares etc.

3. The government managers get the feedback from the top brass or the committee setup by the government and the private firm manager get it by the board of directors and through a survey from the lower brass.

4. The government agency manager is related with the stakeholders of the organisation in the perspective of the overall satisfaction to them while the private firm manager is related to people for the product the company is selling.

Rahul Sunny answered 2 years ago

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