GOVERNANCE  This occurs in

o Supplier-client
 Usage, utilization, direction, management,
o Lawyer-client
performance, organization.
o Doctor-patient
 Policies, actions, process and activities
o Insurer-insured relations
GOOD GOVERNANCE
COASE THEOREM
 Management of an organization with the end in
 Deals with the economic efficiency of an
view of achieving the organizational goals in the
economic allocation or outcome in the presence
best possible way or in a way that improve the
of externalities
welfare of their stakeholders,
 Coase theorem is a legal and economic theory
1. Achieving the organizational goals using
that affirms that where there are complete
time-tested and social acceptable ways
competitive market with no transaction costs,
2. To the efficient and effective use of the
an efficient set of inputs and outputs to and
organization’s resources and accountability
from production optimal distribution are
for the stewardship of the resources
selected or that the bargaining will yield to an
3. To holding a balance between the financial,
efficient and mutually beneficial outcome
social individual and communal goals in an
regardless of how property rights are divided.
organization
4. To the rules of the game for an institution in ELEMENT/CHARACTERISTIC OF GOOD GOVERNANCE
relation to its shareholders of the business
1. CONSENSUS ORIENTED
and he society at large
2. PARTICIPATORY
STAKEHOLDER THEORY 3. RULE OF LAW
4. ACCOUNTABILITY
 A theory of organizational management and
5. EFFICIENCY AND EFFECTIVENESS
business ethics that addresses the morals and
6. TRANSPARENCY
values in managing an organization ( Ian
7. RESPONSIBILITY AND RESPONSIVENESS
Microsoft, stakeholder of the mind 1983)
8. EQUITABLE AND INCLUSIVE
 A stakeholders involved 9. STRATEGIC VISION
1. Employees 10. FAIRNESS
2. Financiers
3. Suppliers POLITICAL PRINCIPLE OF GOOD GOVERNANCE
4. Communities
 GG is based on establishment of representative
5. Political groups
and accountable form of government
6. Trade association
 GG require good institutions – set of rules
7. Competitors
governing the actions of individual
8. Customes
organizations and negotiation of difference
9. Shareholders
among them
 Managers – have the primary duty to maximize
 GG requires the primary of rule of law
shareholders interest in ways that are
maintained thru impartial and efficient legal
permitted by laws and social values ( Edward
system
freeman 1988)
 GG requires a high degree of transparency and
PRINCIPAL-AGENT THEORY / AGENCY accountability in public and corporate processes
DILLEMA/AGENCY PROBLEM a participatory approach to delivery service is
required
 A contract that occurs when one person or
entity (agent) is able to decisions in behalf of, or ECONOMIC PRINCIPLES OF GOOD GOVERNANCE
that impact, another person or entity (principal)
 GG requires policies are promoted broad-based
economic growth and dynamic private-sector
 and social policies that promote poverty
reduction. Economic growth is best achieved in
an efficient transparent and market-based.
 Investment – is highly priority through policies
and institutions that improve access to quality
education, health and other services that
underpin a country’s human resource- based
 Effective institution and good corporate
governance are needed to support the
development of the competitive private sector
for materials to function social norm that
respect contracts and property rights are
needed
 Careful management of the national economy
is vital in order to maximize economic and
social environment.
 The management of modern offices is based on
written documents called the “FILES” which are
present in their original and draft form
 When the office is fully developed, official
activity demands the full working capacity of
the officials, regardless of the fact that his
obligatory time in the office is firmly
determined.
 The management of the office follows general
rules which are more or less stable , exhaustive
and which can be learned

GOOD GOVERNANCE IN THE PUBLIC SECTOR

 Approaches of public administration

1. The formal structure of the bureaucracy
2. The general environment concept
I. THE FORMAL STRUCTURE OF BUREAUCRACY
 BUREAUCRACY- the general formal and
structural elements of a typical organization.
The normal way in which the legal-rational
authority is exercised
 Formal element of BUREAUCRACY
1. Division of labor
2. Historical order
3. Impersonal

Hierarchy

 Separates superiors from subordinates

 Basis of remuneration, authority , privilege and
promotion

Impersonal Rules

 For the systematic control of subordinates to

limit arbitrariness and personal favouritism

CHARACTERISTIC OF GOVERNMENT BUREAUCRACY

 There is the principle of fixed and official

jurisdiction areas which are generally gathered
by rules- by laws or administrative regulation
 The principle of office hierarchy and of levels
graded authority mean of firmly ordered system
of superior and subordination in which there is
supervision of lower offices by higher ones