Decision-making Function

Enterprise Sector

Public Sector

Goal setting of the Chief Executive Officer (CEO) and the Elected Executive Officer (EEO)

Relatively narrow: to turn consumers into customers, delight customers, increase shareholder value — though the corporate social responsibility (CSR) movement is advancing broader environmental, diversity and others stewardship objectives for corporationes.

Broad: to maintain a minimum winning coalition among competing interests and competing stakeholders in pursuit of multiple economic, social, cultural, environmental, and political objectives.

Orientation

Substantial resources pursuing limited goals.

Substantial resources pursuing unlimited goals.

Major constraints

Financial, regulatory

Coalition maintenance, talent

Validation

Year-end results, total shareholder return (TSR)

Election results.

Support of the policy making board

Boards of directors generally give high support to the CEO — or they get rid of him/her.

Legislatures typically have a large minority that continuously squabbles with the majority, consistently opposes the initiatives of leadership, and regularly tries to embarrass or otherwise trip up the EEO.

Control over the decision process

High control over decision process and the who, what, when, and how of decision -making. CEO can decide who will participate on what issues at what time in what arena.

Low control over the decision process and the who, what, when, how of decision -making. The legislature, public interest groups and other stakeholders, media, awareness of FOI vulnerabilities — all constrain the ability of the EEO to more than shape the process.

Decision rules

High control — though the CEO can and does set standard operating procedures (SOPs) for the rest of the enterprise, s/he can easily and quickly make exceptions or change them. Often requires board approval but ‘common cause’ facilitates flexibility. Somewhat less freedom to set rules in a regulated industry.

Low control because the EEO is formally constrained by procedures established externally by law (the ‘bureaucratic process’ ‘) and informally constrained by the decision criteria imported by stakeholders.

Flexibility

High, though for public companies the imperatives of disclosure and, for all enterprises, capital planning impose significant constraints.

Low, because in the process of forging a winning coalition entails commitments — promises and rewards;, threats and punishments — thant cannot be easily revisited.

Control over staffing

High in the hiring and assignment of people; some constraints on sacking imposed by laws and regulations.

Low in the hiring and sacking of people and very limited in the assignment of people.