The holding company as a possible institutional solution for the public sector organization

Abstract

The main characteristics of modern business, such as rapid changes, new business models, development of ICT, and many others, generate the demand for the usage of advanced organizational models. Since the public sector is very important for local communities, many authors discuss which organizational form of public companies is the most suitable, not only to provide the most efficient services to the residents, but also to reduce expenses and to use the city budget efficiently. Many of these authors mention different network organizational models in this context. The advantages of network models are significant in both public and private companies. They include improvements in learning systems, better allocation of resources, more efficient planning, easier dealing with complex problems, identifying the key values, easier technological improvements, and, in the very end, increased quality of products and services (Jaško et al., 2010). These models are all based on specialization. It means that every organization should identify its primary activity (or primary activities), which is the main cause of their existence, and then focus on it. This basic activity is called a core business. An organizational concept like this one is necessarily followed by cooperation with other organizations in order to complete the value chain, so the customers can receive full service. There are many ways for every organization to eliminate all the activities that are not part of its core business.