Saturday, January 12, 2008

The competitive environment of EO grade

When I wrote the paper on the management of the Executive Officer Grade back in 2004, one of the models used in the analysis was Michael Porter's five forces of competition. After reading the recent article of Michael Porter repeating his theory, I took another look at my old paper and corrected some grammatical errors. The revised paper was again uploaded to my website.

Section 3 of the paper was about the competitive environment of the Executive Officer Grade. In 2004, the government was already employing non-civil service contract staff. There were then such contract executive assistants doing the work of executive officers, either recruited by the General Grades Office or by the departments themselves under a variety of titles. At that time, the issue was not wide spread, but I already pointed out that contract executive assistants could be the substitute for government executive officers. It would be a competitive force to be reckoned with.

Michael Porter advocates that the five forces of competition should be viewed as a whole. The five forces model represents the competitive environment of an organization. All elements could have their effects on one or more forces. Given the experience on the use of contract executive assistants in the last few years, their effects on the competitive forces are now more strongly felt.

Substitute. During the recruitment freeze, executive assistants were the substitute of executive officers. All new jobs for executive officers, and shortfall in executive officer manpower were met by executive assistants. Not only executive assistants were engaged in junior executive officer work, there were also senior executive assistants or experienced contract officers in other names engaged in more complex executive officer duties. At that time, the Grade failed completely when facing this competitive force. This should not be viewed lightly because once the model proved to be successful, there is a long term threat to the existence of the Grade. Notwithstanding that the recruitment of Executive Officer II resumed in 2007, there is no guarantee that contract executive assistants would not be used in a large scale in the future.

Suppliers. I did not look at the effect of contract executive assistants on the bargaining power of suppliers in 2004. In fact, there was no supply to the grade until 2007. When recruitment resumed, the Grade faced a different supplier market. In the past, the Grade recruited openly in the manpower market every year, and executive officer openings were the prime target for fresh graduates. In 2007, the market was full of graduates with a few years of working experience. Furthermore, there was a large pool of contract executive assistants who had ample experience in the work of executive officers as well as being tested on the job for some time. To look at candidates with contract executive assistant background was like choosing officers who had already gone through a probation period. In a way, contract executive assistants provided a good opportunity for the Grade to pick the best from the suppliers.

Buyers. Buyers in the competitive environment of the Grade are mainly senior executive officers in departments. The availability of contract executive assistants increased their bargaining power in many aspects. The main cause of the manpower problem in the last few years was the inability of the General Grades Office in supplying executive officers, while departments were facing staff shortage from wastage as well as new manpower demand in new services. Both the Financial Services and Treasury Bureau and Civil Service Bureau encouraged the engagement of non-civil service contract staff to meet the manpower demand. Buyers were given power. Instead of seeking supply from the grade management, departments were happily sourcing manpower by themselves from the market. The bonuses were, not only could they solve the manpower supply problem, buyers could also do it cheaper, and in a more efficient manner. They also had more power in managing the contract executive assistants than government executive officers in the area of pay and benefits, hiring and firing. Such arrangement enabled departments to deploy the just-in-time management theory of the modern world.

Government. While some academics considered government as a major force in the competitive environment. Michael Porter did not include government as the sixth force. He proposed that the government, or government intervention, or government rules and regulations, should be viewed as an important element which could affect all five forces. Indeed, the attitude and policy of the government towards the use of non-civil service contract staff greatly affect the forces and the competitive environment of the Executive Officer grade. The most important question is: are we going to engage contract executive assistants forever? The government stated openly that non-civil service contract staff would only be used for short duration to meet manpower needs of temporary nature or project based. In fact, everything is temporary before it gets permanent, and all permanent needs are temporary if dissected into projects. I predicted that, despite the continued effort to recruit government executive officers, the use of contract executive assistants will also continue, thus providing substitute of executive officers in all cases of sudden surge of manpower demand.

As long as the non-civil service contract arrangement is still in place, the competitive environment of the Executive Officer Grade will continue to be affected. I would say the major impact would be the bargaining power of buyers. First, departmental users are not required to rely entirely on General Grades Office on the supply. Contract executive assistants could be engaged anytime. General Grades Office will degrade into a promotion machine for government executive officers. Its major function of recruitment is no long the lifeline for departmental management functions. Another major role of the General Grades Office is the maintenance of the coherence of executive officers as a group, but it would not be easy if contract executive assistants are not treated as members of the family.

The other major impact on the buyers would be the reputation of the Executive Officer Grade as the essential back up force in the government. In the past, the General Grades Office was called upon on many occasions to organize and tackle major tasks of ad hoc nature. Her ability to mobilize at short notice a large pool of managers helped trouble-shoot many problems. Recently, there were incidents that departments advertised non-civil service contract openings in order to gather a team quickly from the market. The Grade is losing the leverage of her supplier bargaining power in the competitive environment.

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