A study of the possible impact of structural and operational issues on the performance of public enterprises in Sri Lanka

Though Public Enterprises (PEs) in Sri Lanka make a very high contribution to the national economy, their performances have not improved despite many past reform efforts. Since the present government does not consider privatization for improving their performance, there is an urgent need to find effective ways to improve their performance. Since no previous research appears to have investigated performance issues affecting them, the focus of this exploratory research was to study the possible impact of structural and operational issues on the performance of PEs in Sri Lanka, limited to state corporations and statutory boards. It aimed to identify performance-related structural and operational issues associated with: External factors (political, regulatory, policy etc.), Board-level issues (appointments, competence, accountability, leadership etc.), and Managerial issues (planning, autonomy, competency, transparency, procedures etc.). Secondary data on non-financial performance issues were collected from reports published by the three regulatory and oversight organizations that report on the performance of PEs, while financial performance issues were collected from the Annual Reports of a stratified sample of eight PEs that represented all eight categories of PEs in Sri Lanka. Primary data were collected using in-depth unstructured interviews of a representative selection of 20 knowledgeable participants from the same stratified sample of eight PEs, all three regulatory/oversight organizations, and a relevant trade union. Collected secondary and primary data were coded and analyzed using qualitative content analysis to: yield 11 exploratory outcomes related to the performance issues affecting PEs in Sri Lanka, identify five areas for future research, and propose a basic diagnostic benchmark that could identify and quantify accountability deficiencies in public enterprises. Since PEs are funded by public money, the insights gained through this study may be used for improving their performance to minimize the burden on the Treasury, and contributing to the national economy and the development of Sri Lanka.