A range of alternatives are available to water companies in the UK (United Kingdom) for reducing future water supply deficits, each having different implications in terms of environmental impacts (both positive and negative), level of service provided towater supply, public services, focus group, analysis

Sabie (Abaluta) Oana Matilda

English

Research Papers in Economics

466 
STRATEGIC MANAGEMENT – CASE STUDY: THE WATER SUPPLY SYSTEM IN GREAT BRITAIN 
 
Sabie (Abălu ă) Oana  
Bucharet, Academy of Economic Studies Faculty of Management Calea Serban Voda, nr. 22-24, sector 4, Bucuresti 
E-mail: oana_maty@yahoo.com Phone: 021 3354653 
 
A range of alternatives are available to water companies in the UK (United Kingdom) for reducing future water supply 
deficits, each having different implications in terms of environmental impacts (both positive and negative), level of service 
provided to customers and associated costs. This paper presents the results of two choice experiment valuation studies in the 
south east of England, in which water supply problems are considered. Further to the specifics of the individual scenarios, 
these studies lead to more general observations relevant to the future evaluation of water supply options.
224 
 
Keywords: water supply, public services, focus group, analysis 
 
JEL code for paper: Z Other Special Topics 
 
During a study visit at the University of Newcastle upon Tyne in northern England I have participated in a series of 
meetings which aimed to identify consumer preferences on the options / alternatives  for the water supply by 
combining multiple methodologies.  
Currently companies supplying water in the UK have a number of alternatives for preventing possible shortages of 
water resources in certain areas and seasons. Each alternative presents certain advantages and limitations that affect 
the environmental impacts, costs associated and the level of service provided.  
The  paper  summarizes  the  results  of  two  surveys  on  consumer  choices  regarding  the  availability  of  paying 
additional  costs  for  the  service  delivered.  In  terms  of  specifications  possible  scenarios,  this  leads  to  general 
observations relevant for future evaluations of options for supplying water, as follows: to maintain and ensure the 
present level of service delivery is an opposition to pay for any improvement in safety for the supplies and service, 
in contrast, recipients of service are willing to pay more to prevent negative impacts on the environment.  
To investigate the content and validity of these principles was that a survey company and representative sample 
consisted of distributing questionnaires to several focus groups. 
Survey results were the foundation of research in order to improve them.  
 
1. Establish methods of research  
The most commonly used assessment is contingent achievement involving a hypothetical transaction to maximize a 
specific policy in the investigation. Processes contingent valuation focuses on assessing a specific scenario that 
promote a possible change in service quality and the environment. Given these issues is mandatory for researchers 
to accurately and fully inform beneficiaries of the service specification on the possible scenarios in order to identify 
the exact preferences of the latter.  
It  recommends  implementation  of  an  evaluation  by  sequential  use  of  alternative  methodology  consisting  in 
identifying attributes and service levels provided to them. The best known approach is the use of profiles to 
describe  the  goods  or  services  analyzed.  Profiles  represent  levels  of  particular  attributes  that  characterize  the 
consumer receiving service.  
 
2. Options assessment of water 
Complex assessment methods are becoming more frequently used to identify consumer preferences on the options 
of  water.  For  example,  contingent  evaluation  has  been  used  widely  in  water  supply  industry  to  measure  the 
reliability of service. Moreover, evaluation contingent and other alternative methods have undergone changes in 
their contents, thus being able to estimate / detect the availability of consumers to pay the costs of water supply in 
terms of conservation and environmental protection.  
Results of studies suggest that recipients are willing to pay a small amount, but not unimportant to improve the 
reliability of water supply and to reduce negative environmental impacts.  
Water companies in south east England have developed management plans for resources which compare forecasted 
demand with the current level of demand for water, under several scenarios.  
These plans formed the foundation for the development and implementation of water resources in south eastern 
England under the Environment Agency. The case studies presented below highlight some problems arising during 
the implementation strategy, the problems that are solved in a better collaboration between service providers and 
beneficiaries.  Techniques  and  methods  of  economic  evaluation  can  provide  information  about  consumer 
preferences and this helps in improving the management of water resources.  
 
                                                       
224 This paper is a parte of IDEI 1780 project financed by NURC 467 
3. Case study number 1 - Risks relating to the transfer of water resources  
One of the basic principles established by the strategy of water resources refers to the need to transfer water from 
areas with surplus to areas facing shortage during the dry season. In this variant had to resort before opting for any 
other alternative (water reservoirs).  
In the area of Sussex in south east England local water companies forecast that will face major shortages of water 
supply in dry years.  
At  the  same  time  have  been  identified  in  other  areas  of  additional  water  resources.  To  eliminate  the  risk  of 
significantly reducing the water resources, and hence the emergence of temporary incapacity provision of water 
services to the proposed transfer of water from surplus areas to areas facing a shortage of water.  
This option was considered in the context of the strategy of water to the region becoming favorite strategic option 
for services respecting environmental standards.  
After some experiments have identified a potential risk regarding to the transfer of unwanted species in the basin 
for collecting water from the Sussex area. Of all the species identified, two of them were classified as dangerous, 
which is why they were included in the analysis and risk assessment of adoption of these decisions.  
Crassulla helmsii plant is an aquatic parasite (intruder) and Ergasilus sieboldi is a bacterium / parasite a specific 
fish.  
These endangered species of aquatic life of rivers and Rothera Wallers Haven, and the land on which they were 
drained (Pevensey Levels and Romney marshes). These contaminated areas are not currently Crassulla helmsii, 
although fish from the river is infested with the parasite Rothera Ergasilus.  
Crassulla develops into a rapidly and destroy aquatic flora. Once he has made presence felt this plant is difficult 
exterminated, especially during the winter that it is not frozen.  
The presence of bacteria in fish does not affect in any recreational activities on water courses and areas supplied 
from these rivers.  
At the time of adoption of the measure to transfer the water could not make a more precise estimate of operating 
costs. All these deficiencies have led to use the method with several variants / scenarios, which method is more 
flexible than the assessment quotas.  
Following the use of appropriate methodology to successfully identify the best scenario. Final solution was to 
transfer the necessary water resources, leaving them the possibility of beneficiaries to choose between several 
different prices.  
 
4. Case Study number 2  
One of the possible ways to resolve the imbalance of water in western Sussex area consisted of "Hardham Artificial 
Reharge Supply. Considered that when demand for water exceeds the deficient supply of the necessary quantity of 
discharge water during the events of rye in the conservation of the environment.  
In the winter months is an artificial regeneration of water resources that have been discharged from the aquifer 
during the summer, through capture of a nearby river. Water shall, except chloriding, fully treated before going 
back in the aquifer.  
After some mathematical calculations and analysis of cost-benefit has reached the following results:  
- Beneficiaries of the service are willing to pay an additional cost of more than 10 pounds per year to prevent the 
multiplication of plant parasite;  
-  The  beneficiaries  are  willing  to  fund  in  addition  to  approximately  18  pounds  per  year  bacterial  parasite 
destruction in fish.  
 
In conclusion, this paper presents results of two experiments conducted as a case study in south east England area 
facing problems with water in the region. Beyond the specific scenarios presented, these case studies led to several 
general observations relevant for future assessment of the options of water. For example, at the current level of 
reliability  to  provide  the  service  consumers  are  not  willing  to  pay  additional  costs  for  new  investments,  but 
consumers are willing to pay higher fees for providing this service in order to prevent negative impacts on the 
environment, and to a more generally, the beneficiaries are willing to pay for the operations of water supply which 
would  lead  to  the  conservation  and  improvement  of  the  environment,  although  this  depends  on  the  type  of 
improvements taken into account.  
More to explore the meaning and validity of these principles to appeal to an experiment that targeted consumer 
options, options that were studied using the analysis of the resulting distribution of questionnaires to six focus 
groups.  The  results  provide  qualitative  support  for  preliminary  observations,  suggesting  that  beneficiaries  are 
satisfied with current levels of provision of quality service and have a preference for environmental protection and 
not  for  improving  the  service  (quality  of  investments).  Taking  into  account  the  environment  and  improving 
environmental factors, it was found that participants in these focus groups could see the importance of the strategic 
management on environmental protection. 
 
   468 
References 
1. Hannagan Tim, Strategic Management, Palgrave Press, Wales, 2002 
2.Plumb I., Androniceanu A., Abălu ă O., Management of public services, ASE Printing House, Bucharest, 2003 
3. Paul Joyce, Strategic management for public services, Open University Press, USA, 1999 
4. *** - questionaires, diffrent materials resulted from the discussion with the focus groups 
   

Abălu ă O., Management of public services, ASE Printing House,

questionaires, diffrent materials resulted from the discussion with the focus groups

Strategic management for public services,

Strategic Management,

STRATEGIC MANAGEMENT a€“ CASE STUDY: THE WATER SUPPLY SYSTEM IN GREAT BRITAIN

http://steconomice.uoradea.ro/anale/volume/2009/v4-management-and-marketing/85.pdf

STRATEGIC MANAGEMENT a€“ CASE STUDY: THE WATER SUPPLY SYSTEM IN GREAT BRITAIN

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