Decision-Making Models Used in the Public Sector

The federal government makes decisions on service provision in the public sector using diverse approaches. For instance, before investing in any project, public officials use the merits model to determine if there is a need for a good or service in society and if it will benefit them. Subsequently, the federal government uses the cost-benefit analysis to determine the ventures it should spend money on because of their profitability and those it should avoid. The study of the merit method of decision-making and cost-benefit analysis helps compare and contrast the two techniques.

The federal government may decide to invest in a project for its merit, such as the availability of demand and benefits to society. This aspect is used when allocating resources for ventures in critical areas, such as healthcare, road construction, and education. Under this model, public officials check if a site is heavily populated enough to warrant the construction of a school or hospital near it (Szymaniec-Mlicka, 2017). Additionally, the federal government assesses if there is a genuine need for public service and if it will result in a maximization of social welfare (Kumar & Saha, 2017). If these two criteria are met, then the public decision to channel investment funds in the region is made; if not, the project is discarded.

The public sector also uses a cost-benefit analysis model to determine if a project is viable or non-viable. This method is applied primarily in industries that create a revenue source, such as the exploitation of oil and gas reserves. The federal government considers the benefits of drilling an oil well and the short-term profits it will gain and then decides if the venture is worth exploring (Loesch, 2019). If not, the project is abandoned altogether as it would result in losses. In my personal opinion, I feel that the cost-benefit analysis method of decision-making in the public sector is better because it helps the federal government allocate limited resources properly.

References

Kumar, S. P., & Saha, S. (2017). Influence of trust and participation in decision making on employee attitudes in Indian public sector undertakings. SAGE Open, 7(3). https://doi.org/10.1177/2158244017733030

Loesch, M. (2019). Conceptualizing Governance Decision Making: A Theoretical Model of Mental Processes Derived Through Abduction. Old Dominion University.
https://digitalcommons.odu.edu/cgi/viewcontent.cgi?article=1043&context=publicservice_etds

Szymaniec-Mlicka, K. (2017). The decision-making process in public healthcare entities – identification of the decision-making process type. Management, 21(1), 191-204. https://doi.org/10.1515/manment-2015-0088

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