EURO-ECO 2010 Hanover 2 - 3 Dezember 2010	Environmental, Engineering - Economic and Legal Aspects for Sustainable Living
	European Academy of Natural Sciences, Hanover European Scientific Society, Hanover University of Bremen, Bremen

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Abstracts EURO-ECO 2010

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The oncoming information era offers new approaches to the management of modern organizations, including management of government institutions (hereinafter-GI).

One of the essential features of government institutions under modern conditions is the fact that their performance is at the intersection of business processes that require market flexibility along with the execution of government orders and strict regulations. Therefore, there is a necessity to take into account principles of management requiring a combination of competence of narrowly focused specialists, efficiency and high productivity of top management. Traditional functions of management involving planning, organization, motivation and control have undergone certain changes both in terms of transformation of the role of top management and establishment of management communications. Thus, performance of government institutions seems to be organizationally combined or even diversified. In practice, it’s always difficult to fulfill all these aspects. There is a lack of clear recommendations on strategic planning activities of government institutions, such as universities.

We assume that performance planning of government institutions, particularly, universities, concerning market interactions is to rely on the Balanced Scorecards (Balanced Scorecards, Harvard Business Review, 1992; hereinafter, BSC) firstly developed by R. Kaplan, D. Norton and L. Meisel. However, there are hardly any scientific works on the Balanced Scorecard of government institutions and those in charge of them often implement modern management by intuition or according to the outdated traditions.

From our point of view, the BSC system is to be adjusted to a particular GI or educational institution in accordance with its mission and strategy for implementation of the following four parameters: performance, education, economic growth and development of labour force. The BSC should not be in contradiction with the essence and parameters of budget planning and programoriented development.

Such a function of management as work organization is a process of distribution of resources and tasks among the staff and coordination of these processes to achieve the goals of government institutions. The responsibilities of the top management are the following: selection and formation of the organizational object, identification of modes of operation, formation of mechanisms of its adaptation in the external and internal environment.

Management models existing in practice should be complemented by a distribution of rights and responsibilities in a government institution enabling fulfillment of its tasks. This work sometimes requires divisional management structure where centralized management of polystructural economic activities is combined with decentralized item-by-item management of market units oriented at consumers, products, or territories.

As wee see it, the divisional structure applied in practice has become less effective than matrix structure, which is usually used in the management of joint stock companies or holdings. Quite often government institutions, which are not holdings, actually function as such because they have divisions where the same specialists can work. To some extent, the work of government institutions may include mini-clusters necessary for implementation of particular projects. In our view, it is the matrix structure that is result-oriented and gets the maximum results from employees. In this case, human capital assets are most fully used by government institutions.

The matrix structure also requires staff support through motivation and incentive activities. Direct financial incentives do not always lead to the necessary motivation, although they provide a chain “work - result.” Moral incentives do not substitute physical, moral satisfaction from work and recognition of employee’s achievements is still important for the worker. Motivation and incentives in modern government institutions also require further scientific development.

Use of other assets of an institution has also changed its priorities. Public institutions tend to possess tangible assets such as buildings and structures as well as intangible assets to be mobilized for the development of an institution itself. Very often fulfillment of intangible capital is more significant than renting of already old buildings. That is, traditional tangible assets have become less important for the successful operation of government institutions than unused possibilities of intangible resources. Government institutions creating or acquiring intangible assets rarely plan their constant use. At the same time, inventions and patents can be a “dead” load for such an institution. Both centralized and in-house systems of accounting and valuation of intangible resources are required. This is how they start being applied. The application of the BSC system, which we have already suggested, will stimulate the exploitation of intangible resources.

The transition to an information-oriented society requires efficiency of manager’s performance and high adaptation to the changing environmental conditions. In other words, government institutions are to have the ability of flexible transformation while using effective market structures and management systems.