Public Utilities

Public Utilities

Management Challenges for the 21st Century

David E. McNabb

An introduction to the current issues and challenges facing managers and administrators in the investor and publicly owned utility industry, this engaging volume addresses management concerns in three sectors of the utility industry: electric power, natural gas, and water and wastewater systems. Beginning with a brief overview of the historical development of the industry, the author looks at policy issues and discusses management ethics. He then examines a number of the major challenges in these organizational functions: management and leadership, planning, marketing, accounting and finance, information technology, governance, and human resources. In the final section of the volume he looks at issues specific to each of the three industry sectors.

Chapter 2: Policy Challenges Facing Public Utilities

David E. McNabb

Subjects: economics and finance, industrial organisation

Extract

The range of the decision alternatives available to public utility managers is framed by the policies that exist at the time the decisions must be made. Public policy has been defined as ‘an intentional course of action followed by a government institution or official for resolving an issue of public concern’ (Cochran et al. 1996, p. 1). Two levels of policy guide public utility managers in their everyday organizational activities: internal and external. Internal policy includes the normal levels of organizational and management policies and procedures that shape the business enterprise. The vision of senior management and board of directors, the organization’s mission, its resources, and the existing organizational climate and culture form internal policy. External policy is a reflection of the environment that shapes and constraints the range of choices from which management policy may be selected. External policy is primarily formed by the influences resulting from the political and public-attitude environment of the period. Examples included tax policy, investment policy, antitrust policy, and the like. Public policy is not a static concept. Rather, the changing attitudes, intentions, and actions of governments and citizens that affect society or a particular segment of a society continuously shape and modify public policy. There are many types of public policies, examples include a nation’s industrial, education, welfare, public safety, environmental, energy, water policies, and the like. Public policy also shapes the types of laws passed by federal, state, and local governments. It also provides a framework for...

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