So far
four other strategies for businesses have been discussed in the previous
articles. This will be the fifth and the last of the third area of the Rational
Planning Model. Another matrix will be discussed under this final part.
Need-Provision
Matrix
This
matrix is specifically designed for the public sector organizations, which are
rather into social welfare than profit maximization. However in the allocation
of resources towards the best interests of the society, public sector
organizations too do have to develop strategies, to ensure the effectiveness
and the efficiency of the process.
The
matrix consists of the need for a product (high and low) and provision of
resources by the private sector (high and low).
Need
Low High
No
Provision
|
Selected
Provision
|
Encourage
Others
|
Extensive
Provision
|
High
Provision By Others
Low
No
Provision
This is
where the need for the product is low yet the private sector is providing for
the product highly. Entertainment industry can be taken as a close example. The
‘need’ for entertainment is low (the ‘want’ for entertainment is high), but the
private sector is generating wants out of entertainment industry.
Selected
Provision
This is
where the need for the product is high and the private sector provision is high
too. In such cases the public sector will only intervene if necessary. Health
industry shows these characteristics. Public sector will only intervene when
there is some massive capital expenditure.
Encourage
Others
This is a
situation where the need for the product and the provision by the private
sector are both low. Public Sector will motivate the private sector to provide
for any low demand for the product.
Extensive
Provision
This is
where the need for the product is high and for some reason the private sector
provision is low. Mostly very expensive provisions fall into this category or
completely social welfare motive businesses are found in this category.
Examples include maintaining law and order, national security and
infrastructure facilities.
