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Session 2

Analysing and Reading Financial Statements

The aim of reading an income statement is to understand a company's revenues, expenses, and net income over a specific period, providing insight into the financial performance of the business. Additionally, we will discuss how this information can be used to evaluate performance and make informed decisions.

Financial Ratio Analysis

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Further Learning

Leadership, Governance, and Strategic Approaches in Health Systems

Bao et al., (2013) propose replacing the current governance model, which is rigidly rule-based, with one focused on collective buy-in, drawing on Hupe and Hill’s (2007) concept of co-production and Brauns’ (2015) framework of New Public Management (NPM). These approaches are complementary: co-production emphasises horizontal coordination and shared goals through networked collaboration, while NPM focuses on vertical authority, providing legitimacy and structured guidance without resorting to bureaucratic control. Together, they address the growing recognition that authority and power are increasingly dispersed across actors and levels of governance (Bao et al., 2013).

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These two approach because co-production emphasises, a horizontal orientation towards shared goals, providing it with networked coordination, while New Public Management (NPM) emphasises a vertical orientation from the state, providing it with authority (not bureaucratic control) and legitimisation (Hupe & Hill, 2007). These two perspectives complement the growing research demonstrating that the authority and power necessary to achieve expected outcomes and maintain legitimacy and trust has become dispersed. Along these lines, leaders and governance mechanisms must be capable of operating across horizontal structures of authority, as well as vertical or traditional hierarchical structures (Bao et al., 2013).


Co-production is a framework that shifts away from traditional hierarchical mechanism of organisation and can be used to inform leadership practices emphasis a shared purpose (Cleary et al., 2018). It recognises that governance is inherently multi dimensional with a range of administrative choices and collaborative arrangements, which can be more congruent or legitimate in a particular context than other (Hupe & Hill, 2007; Sorrentino, Sicilia, & Howlett, 2018). It places an emphasis on the quality of inter-organisational relationships, distributed professional networks, “collaborative partnerships, participatory governance and other forms of multi-actor relations” (Sorrentino, Sicilia, & Howlett, 2018, p. 280).


New Public Management is a framework that informs a range of public administration methods to manage services provided by the government to improve their effectiveness, efficiency, responsiveness and accountability in modern bureaucracies (Brauns, 2015, p. 109). It adopts business orientated management processes from the private sector, to which supporters of the NPM movement argue to improve flexibility, efficiency and systems integration, and is more conducive to problem solving and innovation (Bao et al., 2013; Fourie, 2012). It has an emphasise on increased competition, customer satisfaction and measurement of performance controls (Bao et al., 2013; Brauns, 2015). In the last 30 years, the NPM has been shown to increase government efficiency, improve service access and delivery to citizens, and trimming government size while expanding the private and nonprofit sectors (Bao et al., 2013). Increased pressure by citizen on public services in advanced economies, and the rise of the customer service movement, forced public administration managers to increasingly focus on serving the needs of the citizens rather than the needs of bureaucracy - the weaknesses of the NPM framework (Fourie, 2012).

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Addressing Governance Challenges in South Africa

 

Given the key components of governance and leadership described above, their absence in South Africa’s public administration gives credence to the public scrutiny of the public sector’s performance. Additionally, given the hard forms of power that force leaders and professional in the public health system to feel like ‘street-level bureaucrats, these perspectives enable us to use softer forms of power to develop strategies that improve leadership and governance (Bao et al., 2013; Dzambo, 2014; Gaede, 2016; Hupe & Hill, 2007; Walker & Gilson, 2004). These strategies aim to ensure that the limited resources available in the public health sector can realise the NHI.​

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Governance reform must also prioritise creating an enabling environment for leadership. Gilson and Agyepong (2018) argue that leadership development requires both individual and organisational changes. Training alone is insufficient; the organisational context must support and sustain new leadership practices. Strategies such as distributed and relational leadership, which encourage collaboration and shared responsibility, can catalyse collective action and innovation.

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Finally, adopting co-production and NPM frameworks can help South Africa’s health system shift from a bureaucratic, process-oriented culture to one that is citizen-focused, outcome-driven, and capable of addressing complex challenges. These approaches, when implemented thoughtfully, provide the tools needed to realise the NHI and improve public health outcomes.

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