Organisations in the public sector: stakeholders, context and PHARMAC

Purpose - The purpose of this paper is to explore how the public sector entity within New Zealand's public health system, the Pharmaceutical Management Agency (PHARMAC), continues to operate unfettered, with minimal government interference, in the face of ongoing public challenges.Design methodology approach - The literature focuses on the philosophical paradigms of Willcocks and Mitchell et al. Willcocks explores multiple layers of organisational effectiveness, and Mitchell et al. introduce the notion of saliency. The concepts are then explored with respect to PHARMAC, with information regarding PHARMAC gathered from both publicly available documents and semi-structured interviews. The application of the paradigms to the organisation is described.Findings - PHARMAC's ongoing success and operations are due to a combination of factors. A lack of conflict between the organisation and theoretical constructs plus factors unique to the New Zealand situation provide a multi-faceted explanation. There is danger in complacency, however; the current set of compatible factors may not be sustainable.Social implications - A more informed debate should enable the development of better performance and effectiveness measures. This may reduce the inherent tensions between administrators and clinicians in the public health sector of New Zealand, and potentially elsewhere.Originality value - The author is unaware of any other conceptual piece that draws together these paradigms at multiple levels in public sector organisations, especially within New Zealand.