Name_________________________________
Virgin Mobile USA: Identifying a Target Market
Richard Branson enlisted Dan Schulman to become the CEO of Virgin Mobile USA, a newly formed start-up in highly competitive and mature industry.
One of the first tasks that Dan had to accomplish was to choose his target market. After getting loads of data from IDC and Salomon Smith Barney, and studying it for several weeks, he noticed that among consumers aged 15-29 penetration rate was around 45% versus about 50% for general population. Also the growth rate for this particular group was predicted to be strong in the next 5 years.
“Why haven’t the big players targeted this market?” Dan asked himself. One reason was that young consumers often didn’t have good credit history and didn’t pass the credit checks required by cell phone contracts. Another reason was that the cell phone companies were wary to acquire low value subscribers, because their average cost of acquiring customers was about $370 per customer and they were afraid that this group would be unprofitable for them.
Despite these challenges, Dan’s team decided that this segment of the market represented the greatest opportunity. Schulman explained: “This is a market that has been underserved by the existing carriers. They have specific needs that haven’t been met.”
After more marketing research, Dan’s team was able to compile an average profile of their target customer:
A lot of the consumers in this age group are in flux in their lives. They are either in college, they are just leaving their home, or they may be getting their first cell phone. Their usage is probably inconsistent. One month, they may not use the phone at all, and another month, they may use it quite a bit, depending on whether they are on vacation or in school.
Their calling patterns are different from the typical businessperson. They are more open to new things, like text messaging and downloading information using their phones. And they are more likely to use ring tones, faceplates, and graphics. Phones are more than a tool for these young people; they are a fashion accessory and a personal statement.
Questions:
1. What factors did Dan’s team use to choose a target segment?
2. Did they consider the ‘fit’ factor? Why?
Adapted from: Gail McGovern (2007) “Virgin Mobile USA: Pricing for the Very First Time” HBS Case 9-504-028, Harvard Business School, Boston, MA.
PUB 503 ML: Theories, Principles, & Practice of Public Administration
Questions & Key Terms [Day Two]
Critical Thinking Questions
1. What is Policy? Is it taken for granted or does it have to be written down somewhere? Is it subjective or objective? How does the term apply to government, private sector organizations and groups, as well as individuals? Give at least three examples.
2. Why is Woodrow Wilson consider the father of public administration in the United States? How did future President Wilson influence the development of political “think tanks” in America?
3. What is a “paradigm”? How is it utilized by folks trying to explain the relationship between folks who are responsible for the delivery of governmental services to the stakeholders located within their area of responsibility?
4. How did the wealth and power of the Rockefeller family influence the development of public administration? Explain.
6. What is governance? Does it work? Explain
Historical Paradigm Shifts of Public Administration
1
1
What Is Policy?
A policy is a deliberate system of principles to guide decisions and achieve rational outcomes. A policy is a statement of intent, and is implemented as a procedure or protocol.
Policies are generally adopted by a governance body within an organization.
Policies can assist in both subjective and objective decision making.
Policies to assist in subjective decision making usually assist senior management with decisions that must be based on the relative merits of a number of factors, and as a result are often hard to test objectively, e.g. work-life balance policy.
In contrast policies to assist in objective decision making are usually operational in nature and can be objectively tested, e.g. password policy.
The term may apply to government, private sector organizations and groups, as well as individuals.
Presidential executive orders, corporate privacy policies, and parliamentary rules of order are all examples of policy.
Policy differs from rules or law.
While law can compel or prohibit behaviors, policy merely guides actions toward those that are most likely to achieve a desired outcome.
THE BEGINNING
That uniquely academic president, Woodrow Wilson, is commonly thought to be the founder of public administration in the United States.
In 1887, Wilson introduced Americans to the field with an essay titled, “The Study of Administration.”
In it, the future president observed that it “is getting harder to run a constitution than to frame one,” and called for
the bringing of more intellectual resources to bear in the management of the state.
Wilson also noted that: “the many, the people. … are selfish, ignorant, timid, stubborn. … they are not the children of reason.” Hence,
“bureaucracy can exist only where” it is entirely “removed from the common political lives of the people.”
Think Tanks for Public Service
Aside from Wilson’s formative essay, public administration’s intellectual roots were planted in practical ground
—even in the streets.
The reformist “public service movement” that was sweeping the American political landscape in the early twentieth century was a factor in John D. Rockefeller’s decision, in 1906,
to found, and fund, the New York Bureau of Municipal Research.
The Bureau was a prototype of what we now know as “think tanks,” and, although its focus was limited to New York City,
it was extraordinarily creative in laying the intellectual and practical groundwork of what public administration should be.
Public Administration and The Intellectuals: The Fortuitous Year of 1914
Public Administration: “No Career for a Gentleman” Perhaps because professional public administration was being practiced solely in sordid city streets,
the occupants of ivory towers had no interest in stooping to its level.
During the first decade of the twentieth century, Ms. E. H. Harriman offered $250,000 to the presidents of
Harvard, Yale, and Columbia to start a school of public administration.
Rejected by the Ivy League, Harriman gave her money to the New York Bureau of Municipal Research, stipulating that it create, in 1911, its Training School for Public Service, which produced the nation’s first corps of trained public administrators.
Ultimately, Mary Harriman prevailed. In 1924, the bureau gave its Training School, lock, stock, and students, to Syracuse University, where it became the Maxwell School of Citizenship and Public Affairs.
The American Political Science Association
In 1912, an influential scholarly journal devoted an entire issue to municipal research bureaus,
and, in 1914, academia’s attitudes evidenced a sharp turnabout.
In that year, the American Political Science Association’s (APSA) Committee on Practical Training for Public Service, which had been founded only two years earlier,
persuaded the reformist mayor of New York to welcome the nation’s first “Conference on Universities as Related to Public Service.”
The conference recommended, with unusual foresight, that “professional schools,” and possibly new degrees, be established to educate public administrators, and its attendees founded the freestanding Society for the Promotion of Training for the Public Service.
The Society ceased its activities in 1917 (it was effectively a casualty of World War I), it nonetheless served as an inspirational model in the founding of the field’s principal professional association,
the American Society for Public Administration.
Six Paradigm Shifts of Public Administration
The politics/ administration dichotomy, 1900–1926
The principles of public administration, 1927–1937
Public administration as political science, 1950–1970
Public administration as management, 1950–1970
Public administration as public administration, 1970–present
Governance, 1990–present
PARADIGM 1: THE POLITICS/ ADMINISTRATION DICHOTOMY, 1900–1926
In his book, Politics and Administration, published in 1900, Frank J. Goodnow contended that there were “two distinct functions of government,” which he identified with the title.
“Politics, has to do with policies or expressions of the state will, while administration has to do with the execution of these policies.”
Goodnow’s point is that elected politicians and appointed public administrators do different things—eventually was labeled as
the politics/administration dichotomy [opposition]
Note: the politics/administration dichotomy offered some protection for a fledgling profession, particularly when the Great Depression struck in 1929.
The dichotomy held that public administrators merely brought efficiency to the execution of policies made by elected politicians, and thus, in their bland, bloodless, apolitical, and clerical way, more than paid for themselves.
The Dilemma of the Dichotomy
Because some ardently believed in the politics/ administration dichotomy would not accept the reality that public administrators often make policy, it plagued the field for decades,
ultimately displacing the founders’ idea that, while politicians and administrators did different things, they nonetheless must work together for the greater good.
In Leonard D. White’s Introduction to the Study of Public Administration of 1926, he expressed the progressive value of public administration at the time:
politics must be cleaved from administration so that the field can develop as a pure science which will assure the attainment of governmental efficiency.
This perspective provided the intellectual base for public administration’s next paradigm.
Paradigm 2: Principles of Public Administration, 1927–1937
In 1927, W. F. Willoughby’s book, Principles of Public Administration, the title indicated that:
That public administrators would be effective if they learned and applied scientific principles of administration.
Willoughby’s textbook reflected intellectual trends that suffused the whole of management theory,
and public administration was no exception.
The status of public administration soared during the principles-of-administration period.
“Professional associations for government employees had grown with ‘unexampled rapidity’ …
Money and Power
Its rising stature can be attributed, at least in part, to the Rockefeller family, whose interest in the field remained undiminished following its success with the New York Bureau of Municipal Research.
Rockefeller philanthropies poured millions of dollars into the profession, leaving “no important part of the public administration community … untouched.…
By the late 1920s, there may have been thirty to forty universities with public administration programs, and “many were so subordinated to political science departments that their survival was in doubt.”
This bleak condition soon changed. Between 1927 and 1936, the number of universities that offered public administration courses quadrupled.
A person could not have spoken about the field of public administration in 1925 and had confidence that the audience knew what was meant. In 1937, the situation was quite different. …
and governments were calling on the public administration community to provide advice on administrative problems more and more frequently.”
https://en.wikipedia.org/wiki/Rockefeller_family
Faith and Power in their Words
Although the faith that the pioneering public administration scholars had in the dichotomy and administrative principles was, as we review shortly, largely misplaced, research confirms
that their central insight were pretty much right about what public administration could and should be. These principles improves governing.
Proof is in the Pudding
Career federal executives are measurably and significantly more productive public administrators than
those who are political appointees.
Mayors who are greatly involved administratively, and who have high levels of education and deep job-related experience,
put more pupils in schools, collect more property taxes, and spend more on social programs than less educated and experienced mayors.
The professionalizing reforms of local government that were advocated by the first public administration professors—home rule, few governmental jurisdictions, and short ballots, among others—
all correlate positively with more efficient and responsive government.
As a Result of Their Success
The City or County Manager Improves Governing
The primary professional devised by the public administration pioneers was the local government’s chief appointed executive, and these professionals clearly have fulfilled the hopes.
When making decisions, city managers are much more responsive to citizens than are mayors of cities without city managers.
“The most consistent predictor” that a city council will agree to proposals for more efficient and effective governance is the presence of a city manager who has long been in office.
In addition: The pioneers also strongly advocated the adoption of the council-manager plan, or council-manager form of government, in which the local government’s elected council votes to hire and fire the government’s top appointed executive and approve budgets and policies,
but essentially forbids council members from mucking about in day-to-day administration.
Note: the council-manager plan also promotes teamwork in governing because the council-manager governments, “elected officials and administrators …
have extensive interactions,” and there is a growing “complementarity” between them.
Enhanced teamwork also reduces conflict, and here again the council-manager plan leads all other forms.
Indeed less conflict and more cooperation in governing directly increase public productivity.
The Challenge, 1938–1950
Dissent from mainstream public administration accelerated in the 1940s in two mutually reinforcing directions.
One objection was that politics and administration could never be separated in any remotely sensible fashion.
The other was that the principles of administration were something less than the final expression of managerial rationality.
These two subtle intellectual shifts were causing the politics/administration dichotomy to be questioned.
The Wreckage of Paradigm 2
By mid-century, the wreckage had been wrought. The two defining pillars of public administration—the politics/administration dichotomy and the principles of public administration—
had been abandoned by creative intellects in the field, leaving it bereft of a distinct intellectual identity.
Simon himself was rather mellow about the future, writing that, “Can anything be salvaged in the construction of an administrative theory?
As a matter of fact, almost everything can be salvaged.”
Simon proposed that there be two kinds of “public administration” (that is, the professors, in contrast to the public administrators) working in harmony:
Those scholars concerned with developing “a pure science of administration” based on “a thorough grounding in social psychology,”
and those concerned with “prescribing for public policy,”;
it must attempt to absorb economics and sociology as well.”
Paradigm 3: Public Administration As Political Science, 1950–1970
Paradigm 3 began as an exercise in reestablishing the linkages between public administration and political science.
But there were issues.
The public administrators were no longer really sure what they should be doing, groping for answers to the point that “the study of public administration in the United States” during this period
was “characterized by the absence of any fully comprehensive intellectual framework.”
Unfortunately, political science seems to have less utility in the education of public administrators.
Asks a scholar: “What can political science contribute to the improvement of practitioner skill?
An overview of the major intellectual approaches within political science suggests the answer is ‘not much.’”
Or, to put the matter plainly, political science educates for “intellectualized understanding” of public administration, whereas
public administration educates for “knowledge-able action,”
Paradigm 4: Public Administration As Management, 1950–1970
During this time a few public administrators began searching for an alternative from political science and they found it in management, sometimes called administrative science or generic management,
which holds that sector, culture, institution, mission, whatever, are of little consequence to efficient and effective administration, and that “a body of knowledge”—statistics, economics, accounting, operations research, and organization theory are often cited—“exists that is common to the fields of administration.”
Paradigm 4 occurred roughly concurrently in time with Paradigm 3, although it never received the broadly-based favor that political science once garnered from the study of public administration.
But in both the Political Science and Management paradigms, the essential thrust was one of public administration losing its identity within the confines of some “larger” concept.
Cornell University’s Graduate School of Management, founded in 1948, is generally thought to be the first academic unit that embraced the idea of
generic management.
Those Public administrators who toiled in these schools (which, as a practical matter, were rarely “management” schools but “business” schools),
while not as actively reviled as those in some political science departments, were treated, at best, with indifference,.
The “Groundswell” of Management
During the 1950s and 1960s, scholars writing in a variety of journals accelerated the drumbeat of generic management as the logical successor to
more “parochial” paradigms, such as public administration and business administration.
In 1956, the important journal, Administrative Science Quarterly, was founded on the premise that
public, private, and other institutional distinctions of management were false.
By the early sixties, a national survey of graduate programs in public administration concluded that
“management” was “a groundswell development that tends to pervade all others.”
Suddenly it seemed that a number of administrators were rediscovering the line in Wilson’s seminal essay of 1887:
“the field of administration is a field of business. It is removed from the hurry and strife of politics.”
The Impact of Management: Understanding the “Public” in Public Administration
The unambiguously clear impact of the management paradigm is that it pushed public administration scholars into
rethinking what the “public” in public administration really meant.
Defining the “public” in public administration has long been a knotty problem for academics, in part because Western culture has never completely sorted out
the “complex-structured concept” of “publicness” and “privateness.”
Publicness and privateness in society are composed of three dimensions: agency, interest, and access.
The Agency, or Institutional, Definition of “Public”
Agency refers to the distinction between an institution that acts on behalf everyone (that is, it acts publicly), and an institution that acts only in its own behalf (it acts privately).
Traditionally, public administrators have thought that the “public” in public administration refers
to the institution of government and its agencies, and this definition still dominates thinking in the field.
The Interest, or Philosophic, Definition of “Public”
Interest is concerned with who benefits. It is in the (public) interest of government to benefit everyone it governs; it is in the (private) interest of the for-profit firm to benefit only its owners.
The Access, or Organizational, Definition of “Public”
The final dimension of “publicness” and “privateness” is that of access, which addresses the degree of openness to the public found in an organization’s activities, space, information, and resources.
Three Interlocked Understandings of “Public” Our three definitions of public administration-institutional, interest, and organizational—are in no way mutually exclusive.
Rather, they are mutually reinforcing.
Of equal importance, these definitions clarify not only the “public” in public administration, but also demonstrate that “publicness,” and hence public administration, is unique.
Paradigm 5: Public Administration As Public Administration, 1970–present
“Public administration as public administration” refers to public administration’s successful break with
both political science and management,
and its emergence as an autonomous field of study and practice.
The trick in public administration is to reconcile political and administrative reasoning, that often is difficult but far from impossible.
What is NASPAA?
The Network of Schools of Public Policy, Affairs, and Administration (NASPAA) is a Washington, D.C.-based non-profit organization.
It is an international association of public affairs schools (schools of public policy and administration) at universities in the United States and abroad.
NASPAA is also the recognized by the Council for Higher Education Accreditation as the accreditor of master's degree programs in public policy, public affairs, and public administration.
Its stated mission is to "ensure excellence in education and training for public service and to promote the ideal of public service."
One hundred eighty-four MPA and related degree programs are accredited by NASPAA, and its accreditation associates with greater prestige, more effective programs, an enhanced ability to recruit higher quality faculty and students,
and, in contrast to the chaotic core curricula found in schools of management, NASPAA-accredited programs offer a consistent core curriculum nationally.
In 2013, NASPAA changed its name to the Network of Schools of Public Policy, Affairs, and Administration, but still refers to itself as NASPAA. Don’t ask.
https://en.wikipedia.org/wiki/Network_of_Schools_of_Public_Policy,_Affairs,_and_Administration
It’s The Heart Of The Paradigm That Makes It Work!
Central, perhaps, to Paradigm 5 is the resurrection of the politics/administration dichotomy that defined public administration’s origins a century ago. But the dichotomy has re-emerged in a significantly new form—
as a political–administrative continuum, rather than as a politics/administration division-that furnishes the field with an intellectual gravitas that is sensible, understandable, and workable.
In Paradigm 5, politics and public administration do co-exist on the same social continuum,
but as separate and distinct formations of logic, whose activities sometimes overlap.
At the far ends of that continuum, political acts can be distinguished from administrative acts, and easily so.
It may be less easy to separate the political from the administrative in the middle reaches of that continuum, but we nonetheless understand that politics’ values relate more to power, community, pluralism, personality, loyalty, emotion, and ideology,
whereas public administration’s values relate more to fairness, hierarchy, elitism, impersonality, professionalism, analysis, and neutrality.
Paradigm 6: Governance, 1990–present
The roles of the profit, nonprofit, and public sectors are metamorphosing in heretofore almost unimaginable ways.
Most particularly, these sectoral changes profoundly alter how we govern.
Globalization, the Internet, and social media, among other forces, are pressuring American governments to relinquish, by design or default,
their traditional responsibilities to citizens, other governments, and other sectors.
As a scholarly wit winsomely asked, “Wither the state?”
What is Governance?
Governance comprises all of the processes of governing – whether undertaken by the government of a state, by a market or by a network –
over a social system (family, tribe, formal or informal organization, a territory or across territories)
and whether through the laws, norms, power or language of an organized society.
It relates to "the processes of interaction and decision-making among the actors involved in a collective problem that lead to
the creation, reinforcement, or reproduction of social norms and institutions".
In lay terms, it could be described as the political processes that exist in and between formal institutions.
https://en.wikipedia.org/wiki/Governance
Does Governance Work?
Focused deterrence is a network-based method designed to reduce gang-related violence by coordinating police, prosecutors, social workers, clergy, outreach workers, victims, former gang members, social-network analysts, and public and private employers, among others.
Used in about sixty diverse cities, the approach has often been spectacularly successful, with homicides in several cities cut by half or more in just two years.
In High Point, North Carolina, focused deterrence eliminated in a single day an open-air drug market that had endured for decades, despite unremitting “cuff-and-stuff” attempts to close it, and it had yet to return five years later.
Governance is not a panacea.
No paradigm is,
Nearly four-fifths of local managers say that collaboration’s most significant challenge is “turf wars,”
and almost two-thirds find it to be time-consuming.
A large-scale analysis found that certain “critical variables” must be present for governance to succeed. They are:
trust;
commitment;
solid leadership;
a history of co-operation;
incentives to collaborate; balanced power and resources among the participants;
face-to-face conversation among the collaborators;
and a shared understanding of processes, people, and goals.
When it comes to governance, “small wins” matter a lot.
Governance also works well in the independent sector. Among its benefits are greater efficiency and organizational stability, and fewer overlapping programs.
“Political networking increases [non-profits’] advocacy effectiveness and community networking increases organizational effectiveness.”
Public administration, happy at last.
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