As economic growth slowed during the 1980s, governments in many countries began to reduce the size and scope of the public sector and to explore ways to strengthen the role and capacity of the private sector.(1) The preferred treatment for renewed economic development in rich and poor countries alike is lean public organizations and robust private firms (Moussios et al., 1990; World Bank, 1983). From Bamako to Washington, down-sizing, right-sizing, and privatizing policy measures have been advocated as cures to contain the cancerous growth of public bureaucracies. The focus is currently on training public managers to function in a reduced organism that is more dependent on private-sector partners. Injections of credit, technical assistance, and management training are to be provided to the private sector to stimulate growth and development; regulations that have bound the feet of organizations are to be loosened.
Many Latin American countries have experienced severe economic difficulties and have begun the prescribed policy treatments. A capable managerial workforce is necessary for these policy interventions to succeed. Training of effective managers in both public and private sectors is needed to rekindle economic and political change (Collins and Wallis, 1990; Ozgediz, 1983). Yet in both the public and private sectors in developing countries, managerial capacity at all levels is in short supply (Kerrigan and Luke, 1987).
It is important to understand the contributions of management education to the development of mid-level managerial capacity of both public and private sectors and their organizations. There are several implicit and unexamined assumptions about managerial education and retention, Several of these assumptions are:
1. Trainees will return to the public and private organizations from which they came, thereby increasing the managerial capacity of those sectors;
2. The reward preferences of public and private managers are different; and
3. Managerial education is a means to democratize managerial cadres in both public and private sectors by increasing the representation of women and lower-class managers.
To explore these assumptions, this study examines similarities and differences in intentions to return to former employers after completions of management training and motivations and background characteristics of trainees with prior work experience in both public and private sector organizations in Latin America. The issues surrounding each of these assumptions are discussed below.
Is graduate management education contributing to the development of managerial capacity of both public agencies and private firms, or is it facilitating a brain drain from the public to the private sector?
One purpose of the present study is to determine whether students from each sector plan on returning to the same organization and sector upon completion of their graduate studies. Enhanced managerial capacity of both public and private organizations is important for the success of these policy reforms. Yet, lack of commitment to the public sector and its organizations has been cited as a major problem in developing their managerial capacity.
According to the World Bank (1983), in half of all developing countries, public-sector managers leave their organizations to work in the private sector. Perlman (1989) notes that top-level managers in Latin America move in and out of the public sector. If management education is facilitating a brain drain of these potential middle managers from the public to the private sector, capacity of public-sector agencies will suffer. In the private sector in developing countries, the issues of turnover and career mobility have received little attention. Yet, if foreign donors are investing in management education to increase management capability of specific organizations or sectors, these issues warrant closer attention and comparative analysis. …