Structure and Forms of Public Organisations
Public organisations exist in different structural forms to meet different kinds of public purposes. Some require direct political control, some require professional autonomy, and some require commercial flexibility. This module explains three major forms: Ministries/Departments, Public Corporations, and Government Companies.
1) The “Form” Question: Why Different Structures Exist
Basic Idea
Organisational forms represent different ways of balancing: control, efficiency, specialisation, accountability, and service orientation.
A ministry is suited for core sovereign functions and policy coordination; corporations are suited for public utilities requiring professional management; government companies are suited for commercial/industrial activities needing operational flexibility.
Figure 1: Choosing an Organisational Form
2) Ministries and Departments
A Ministry is a major executive unit headed by a political executive (minister) and supported by a permanent civil service. A Department is a specialised administrative unit within a ministry. This form is designed for policy-making, coordination, and core governmental responsibilities.
- Policy formulation and policy coordination
- Rule-making, oversight, and regulatory tasks
- Budgeting, planning, and programme direction
- Inter-ministerial coordination and cabinet support
- Clear hierarchy and responsibility chain
- Direct political accountability through minister
- Legality and procedural compliance are central
- Financial control through budget and audit systems
- Secretariat + attached/subordinate offices
- Standard rules, file-based processes, delegated powers
- Field formations for implementation
- Committees for coordination
Figure 2: Typical Ministry–Department Structure
Common Limitations
- Procedural intensity can slow delivery when quick operational response is needed.
- Coordination costs rise as departments multiply and policies overlap.
- Field realities may not fully shape headquarters decisions without strong feedback systems.
3) Public Corporations
A Public Corporation is a statutory body created by a specific law, designed to provide a public service or manage a public utility with greater operational autonomy than a department. It is expected to combine public purpose with professional management.
- Created by statute; powers and duties defined in the Act
- Distinct legal identity; can hold property and enter contracts
- Often has rule-making or regulatory powers within its domain
- Governing board with managerial authority
- Professional leadership and specialised staff
- More flexibility in operations than ministries
- Public accountability through legislature/ministerial oversight mechanisms
- Audit and performance reporting requirements
- Risk of “distance” from day-to-day democratic control if oversight is weak
Figure 3: Statutory Corporation Governance Model
Typical Issues
- Autonomy can become politicised through board appointments and informal control.
- Public objectives may conflict with financial sustainability (tariffs, subsidies, service obligations).
- Accountability can weaken if reporting is procedural rather than performance-oriented.
4) Government Companies
A Government Company is a company in which government holds a controlling share, operating under company law rather than a special statute. It is used when the state undertakes activities with significant commercial, industrial, or market-facing features.
- Registered under company law; has corporate form and identity
- Government holds majority share and strategic control
- Board-driven governance with shareholder oversight
- Greater freedom in procurement, staffing, and operations (relative to departments)
- Can raise resources, enter partnerships, and compete in markets
- Performance targets often linked to efficiency and output
- Risk of drifting toward profit-only logic
- Needs explicit public obligation clauses, transparency norms
- State oversight through policy directives and performance monitoring
Figure 4: Government Company — Shareholder & Board Model
5) Comparative View: Ministries/Departments vs Corporations vs Companies
| Aspect | Ministries & Departments | Public Corporations | Government Companies |
|---|---|---|---|
| Legal Basis | Executive/constitutional framework; administrative rules | Statute (enabling Act) | Company law (registered company) |
| Primary Orientation | Policy, regulation, core functions | Public utility/service with professional autonomy | Commercial/industrial operations with flexibility |
| Control Style | Direct political + administrative hierarchy | Indirect oversight via statute/board/reporting | Shareholder control + board governance |
| Operational Flexibility | Lower (procedural and financial rules) | Moderate (statutory autonomy varies) | Higher (corporate decision processes) |
| Accountability | Political accountability + audit + rules | Public accountability + statutory reporting | Corporate reporting + policy oversight + audit |
Key Takeaways
- Ministries/Departments maximise control and policy integration, but may reduce speed and flexibility.
- Public Corporations balance public service obligations with professional autonomy under statute.
- Government Companies provide commercial flexibility, but need explicit public-purpose safeguards.
Conclusion: Organisational form is a design choice that shapes how authority flows, how quickly decisions are taken, how money is controlled, and how accountability is enforced. Ministries and departments serve as the core policy and coordination machinery; corporations and companies provide alternative structures where professional management or commercial agility is required.
