Moving on from the initial background discussion above, Klausen adds a third and fourth sector to his model, and makes an overarching differentiation among the sectors in the following way:
- The public sector has a particular public law (in Denmark, e.g., the Public Administration Law and the Consolidation Act on Social Ser-vices) and is governed politically and bureaucratically.
- The private sector has its own private law (in Denmark, e.g., the Sale of Goods Act, the Companies Act and the Financial Business Act) and is governed by the market, with weight on competition and personal incentives.
- The third sector has typically been defined negatively as a consequence of so-called failures of market or government, and thus by definition is not part of these sectors, and is non-profit. It has also positively been defined as characterised by voluntariness, idealistic values, and network orientation. The third sector also has a few laws specifically about it (in Denmark, e.g., the Act on Non-formal Education and Democratic Voluntary Activity).
- The fourth sector consists of family and social networks, which Klau-sen argues are also underpinned by their own set of rules and ways of working that distinguish them from the other sectors (Klausen, 2001, p. 94).
Formalised Unf
ormalised
Public Private
Non-pr ofi t For-profi t The Public Sector
Public organisations
The Third Sector Organisations Non-profi t institutions
The Private Sector Private companies The Fourth Sector
Family and social networks
Figure 8. Klausen’s sector model dividing the four sectors among the three overall characteristics (Klausen, 2001, p. 96, my translation).
Sectors and regulation mechanisms
Klausen argues that what makes the sectors different from an organisational and management point of view is not the three characteristics of private/public, for-profit/non-profit, and formalised/non-formalised, but rather more specific traits of each sector. These are – again, ideal-typically – defined by Klausen in Table 5.1 For the reader to get the overall picture, they are included here in full (translated from Danish), although my focus will be on the public and third sectors.
1 Although this is not specified by Klausen, the table seems tailored to the Danish system.
Dimension/ sector Public sector Private sector Third sector Fourth sector
Objectives Broad, ambig-uous, the result of political process
Well defined
Broad, idealis-tic (defined by members, cli-ents, or society)
Selective, per-son-bound
Tasks
Ensuring order, democracy, health, edu-cation, infra-structure, social welfare; ‘wicked problems’
Everything which money can be made from, ‘tame problems’
Selected based on members’, clients’, or soci-etal orientation and also ‘distant others’
Mutual pro-tection of and help for family, friends, and also ‘distant others’
Funding
Taxes and levies (now also sale of services, to a limited extent)
Commerce, fishery, produc-tion, specu-lation (now also, to a large extent, public subsidies)
Member contri-butions, public and private donations (now also sponsor-ships and sales of services)
Gifts (one service is worth the other)
Legal basis
Among other things, public law, municipal governing law, worker-protec-tion law
Among other things, tax law, stock-exchange regulation law, limited compa-ny, competition, environment, worker- and consumer-pro-tection law
Among other things, founda-tion law
Civil law (family and inheritance law, and law of property and purchase, etc.)
Dimension/ sector Public sector Private sector Third sector Fourth sector
Workforce Hiring and col-lective labour agreements, few selective incentives
Hiring and col-lective labour agreements, numerous selective incen-tives
Volunteer work force as well as hiring, few selective salary-based incentives, process and participation most important
Volunteer, process and participation most important
Evaluation criteria Efficiency and
productivity (taxpayers’
money), polit-ical legitimacy, transparency in administration
Profit for owners and shareholders (not necessarily efficiency and productivity)
Accordance with basic values (not nec-essarily profit, productivity, and efficiency)
Can you vouch for your own actions? (stå inde for!)
Basic values/rationale behind actions Democracy,
welfare state, rational action towards objec-tives
Profit, rational action towards objectives
Idea-based aims, norm- and value-based rational action towards objec-tives, and also, to a certain ex-tent, emotional rationality
Social bonds, norm- and value-based rational action towards ob-jectives, and a great deal of emotional/af-fective ration-ality
Table 5. Characteristics of the four sectors, compared (Klausen, 2001, p. 97)
Looking back at my initial question of what makes working in the public sector different from working in the third sector, I will now discuss some of the cate-gories in Klausen’s model, while others will be included later in the thesis as parts of the analysis.
Tasks
The public sector has a large set of given tasks it has to fulfil by law and other based on the results of political processes. It is a particular trait of the public sector that its services must be available for everyone in society, whereas there is legitimate differential treatment in the private and third sectors (Klausen, 2001, pp. 122–123). Klausen also argues that many of the tasks in the public sector are so-called wicked problems, i.e. particularly complicated and complex tasks that (unlike tame problems), cannot easily be defined or solved, as both definition and solution criteria are subject to political disagreement and a high level of complexity. Tame problems can readily be solved, as they are clearly delimited in a way that makes solving them more straightforward (Klausen, 2001, pp. 113–
114). Here the third sector differs in that ideal-typically speaking, organisations are able to choose whom and what to work for and to benefit, based on their members, clients, or the societal orientation of the association. This again indi-cates that third-sector work is oriented more specifically towards a chosen (tame problem) task, while laws and a number of (ambiguous) requirements govern public-sector work to a larger extent, and may lead to more wicked problems.
Funding
The public sector is primarily funded by taxes and levies, which are distributed based on political decisions. The third sector relies on member contributions along with public and private donations. How money is acquired and what is needed to procure it also influence the organisations.
Workforce
The public sector is (traditionally) primarily based on hiring paid staff, and there are few selective incentives directed at the individual employee. The third sec-tor is (unsurprisingly) based on volunteer (i.e. unpaid) work, supplemented by only a small amount of paid staff. My focal point is the volunteer who has no salary-based incentives in the third sector and few when working for pay in the public sector. For this type of person, the difference experienced would come from shifting between being paid to do a job in the public sector and not being paid to do a job in the third sector, and potentially instead enjoy the before mentioned process and participation as an associational member. As discussed in the introduction, the significance of payment may not be very big, as long as payment is there.
Evaluation criteria
Here we also see substantial differences between the sectors. The public sector is required to use taxpayer money efficiently and productively. Furthermore, it is important to have political legitimacy and transparency in the way the sector is administered. A third-sector association primarily needs to live up to its own basic values. It does not necessarily have to make a profit, be productive, or be efficient, although this will depend on the basic values of the given association or other entity in the sector. So while public-sector work is underpinned by require-ments for how the work should be done that are not necessarily directly related to the work being done, third-sector work must first and foremost live up to the basic values of the entity the person is working in.
Basic values/rationale behind actions
For the public sector, the basic values are democracy and (upholding) the welfare state, while the third sector has somewhat more complex idea-based aims, lead-ing to norm- and value-based actions, coupled with a certain amount of emo-tional raemo-tionality, as well. One could argue that it should then be expected that the third sector is ruled by more person-based and individual ideas and values, whereas public-sector goals are broad and common to many organisations.
With this overview of some of the aspects of the sector model, we will move on to looking at the organisations inside these sectors.