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 6: Utility Management and Leadership Challenges

David E. McNabb

Subjects: economics and finance, industrial organisation


Skilled, knowledgeable management may be the most important asset and scarcest resource that any utility has; it must be used wisely and revitalized regularly. Existing management must provide the environment and conditions under which future good management will be available when it is needed (Farris and Sampson 1973). This chapter is a brief introduction to some of the more important principles of management that future utility managers, external directors, and new commission members need in public service management. It includes the definition of management used in the discussion, a description of the public utility operating environment within which managers work, and provides an overview of the key constraints and universal principles that guide managers in carrying out their tasks. Typically, two paths to senior management have been followed in utilities. One is the engineering side of the business; the other is the professional management path. There is no single best path to follow and no one best way of recruiting future utility managers. Engineers typically benefit from additional education in management; business management professionals often need additional education in the technical aspects of the utility. All utilities – large and small, energy, water, and sanitation – have need for both types of managers. Equally, there is no one best way of developing future utility managers. One school of thought suggests that potential future managers should be allowed and encouraged to extend themselves as much as possible, even at the risk of failure. Stellar performers must not be held back by...

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