Having considered the in-house administration costs and the costs to the contractor, John A O’Looney suggests to further look into the transaction costs and core competencies of the organization.
Transaction Costs
Learning from experience, many public managers finds that it is very difficult to identify all the services in the contract for outsourcing. However, if a service is not listed in the contract, it is expected that an additional charge will be imposed for additional service. As suggested by John A O’Looney, if the public manager is unable to foresee and plan for any unexpected changes in the outsourced service, the transaction costs such as renegotiating the contract and setting new performance measures will eat up the expected savings.
Now, let examine as to whether the transaction costs will eat up the expected saving in outsourcing the service provided by the Hong Kong Auxiliary Police. According to John A O’Looney, high transaction costs tend to exist when the service is complex, experimental or poorly understood. The services provided by the Hong Kong Auxiliary Police are definitely complex in nature. Take the role of reserve at times of natural disaster as example. First of all, the nature of the natural disaster is difficult to expect. Secondly, the date, time and location of the natural disaster may affect the assistance required from the auxiliary police. Therefore, it is impossible to take all the contingencies into account in the contract. As a result, the transaction costs to outsourcing the services provided by the Hong Kong Auxiliary Police is high.
Core Competencies
Apart from the transaction cost, John A O’Looney also mentions the concept of core competencies. He stresses that organization should focus on its core competencies to maintain a high degree of competitiveness in the market. He quotes Cannon as an example to illustrate the importance of core competencies. Cannon has put tremendous resources and development in the optics area while outsourced the production line. As a result, Cannon gains the financial benefits in outsourcing ancillary services and also maintains its competitiveness in the optics market.
Now, let explore what are the core competencies of the Hong Kong Auxiliary Police. According to ‘Vision and Statement of Common Purpose and Values’ issued by the Hong Kong Police in 1996, it states very clearly about the vision, common purpose and values pursued by the Hong Kong Police. The details of ‘Vision and Statement of Common Purpose and Values’ are[1]: -
Vision
That Hong Kong remains one of the safest and most stable societies in the world
Common Purpose
The Hong Kong remains Force will ensure a safe and stable society by :
v upholding the rule of law
v maintaining law and order
v preventing and detecting crime
v safeguarding and protecting lift and property
v working in partnership with the community and other agencies
v striving for excellence in all that we do
v maintaining public confidence in the Force
Values
v Integrity and Honesty
v Respect for the rights of members of the public and of the Force
v Fairness, impartiality and compassion in all our dealings
v Acceptance of responsibility and accountability
v Professionalism
v Dedication to quality service and continuous improvement
v Responsiveness to change
v Effective communication both with and outwith the Force.
According to Service Quality Wing Chief Superintendent Gordon Yeung, the “Vision and Statement of Common Purpose and Values’ provides a clear direction (Vision), specifies the core functions (Common Purpose) and provides guiding principles (Values) to Force members in the execution of duties. [2]. In order words, the core competencies of the Hong Kong Police including the Hong Kong Auxiliary Police are upholding the rule of law, maintaining law and order, preventing and detecting crime, safeguard and protecting lift and property, working in partnership with the community and other agencies, striving for excellence in all that police do and maintaining public confidence in the Force. Having examined the roles play by the Hong Kong Auxiliary Police, the services provided by the Hong Kong Auxiliary Police definitely fall into the category of upholding the rule of law, maintaining law and order, and safeguarding and protecting life and property. To sum up, the three major services provided by Hong Kong Auxiliary policed are the core competencies of the Hong Kong Police.
[1] The Hong Kong Police, “Vision and Statement of Common Purpose and Values”, Web version
http://www. info. Gov. hk/police/aa-home/English/vision.htm (15 May. 20004)
[2] The Hong Kong police,”Off Beat”,Web version
http://www.info.gov.hk/police/offbeat/722/eng/bottom.htm(1 June,2004)
Credit:ivythesis.typepad.com
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