Organisation theory and the Ministry of Energy : an analysis of state management of electricity towards formulating effective policy

Abstract

A problem in the management of natural resources was perceived as resulting from the characteristics of organisations established to carry out that management. An analysis of the management of electricity was undertaken to consider the validity of that perception. Literature on the operation of organisations provided a theoretical focus for the analysis. It identified characteristics of organisations which may impair their performance. Underlying organisational performance are the goals set to determine operation and the control mechanisms designed to ensure that the goals are followed.

The analysis revealed that the Ministry of Energy Electricity Division reflected its early operating environment in both the organisation's characteristics and the strategies it adopted. Recent changes in the Ministry’s operating environment were identified, which were not reflected in its subsequent behavior. A performance gap between the activities desirable, given the new conditions and the statutory goals in place, and those observed was thereby identified.

A major contributing factor to the existence of the performance gap was the substantial autonomy held by the Ministry in determining the means it adopted for managing electricity and its resources. It adopted means which were congruent with its own characteristics rather than with the conditions of its operating environment. A policy making or influencing role was, therefore, deemed undesirable, since it undermined the control of the organisation.

Options for establishing effective control were considered and it was concluded that the clear identification of goals and the establishment of a control authority independent of influence by the organisation was necessary. It was further concluded that improved performance would be expedited if the control authority actively adapted the organisation, such that its internal character reflected the predetermined goals.