Key Differences Between Public Sector and Private Sector The following are the major differences between public sector and private sector:
Public and Private Administration Public and Private Administration The expansion of public sector into industrial enterprises has been into practice for quite some time, a little over half a century now. The public sector organizations in order to function efficiently are borrowing heavily from the business knowledge, administration and process orientation of the private organizations.
However, there still remains a considerable difference between these two administrative practices. It would be interesting to learn about both similarities and differences between these two to arrive at a better understanding.
Let us first understand the differences and see what the authors and subject matter experts have to say about it.
According to Paul H. Appleby the public administration is different from private administration in three important aspects, the first is the political character, secondly the breadth of scope, impact and consideration and public accountability. These differences seem very fundamental and very valid in the Iight of our own exploration of the subject in previous articles.
The other three are: Principle of uniformity Principle of external financial control Principle of service motive Herbert Simon cited very practical and easy to understand differences based on popular beliefs and imagination and therefore might seem more appealing. He said that public administration is bureaucratic while private administration is business like.
Public administration is political while private administration is apolitical. And finally; the aspect most of us would swear by that public administration is characterized by red tape while the private administration is free of it.
The management Guru Peter Drucker sums up the difference in more comprehensive manner. He says that the very intuition which governs both kinds of administration is different from each other.
While the public administration functions on service intuition the private administration follows the business intuition. They also have different purposes to serve, with different needs, values and objectives.
Both of them make different kind of contribution to the society as well. The way the performance and results are measured is different in a public administration than that of private one. Let us now understand the similarities between the two and see to what extent and in which areas are they similar.
You would be surprised to know that there are many similarities between the ways in which a public and a private administration functions. The similarities are so much that some subject matter experts and authors like Henry Fayol, M P Follet, Lyndall Urvick do not treat them as different.
Fayol said that all kinds of administration function on some general principle irrespective of them being public or private.
The planning, organizing, commanding and controlling are similar for all administrations. The above arguments and several other points suggested and illustrated by other authors as well clearly point out that there are more similarities between the two administrations than what we see and understand.
The managerial aspects of planning, organizing, coordinating and controlling are the same for public and private administration The accounting aspects like maintenance of accounts, filing, statistics and stocking are the same Both of them have a hierarchical chain of command or reporting as the organizational structure Both get influenced, adopt and reform their own practices in the light of best practices of the other.
They also share the same pool of manpower And lastly they share similar kinds of personnel and financial problems.Public vs Private Sectors. You often hear news analysts talk about the public and private sectors. Although most people generally have an idea what these two terms entail, there are intricate differences between the two, which are also useful to learn about.
Peter Leisink and Eva Knies, Public Personnel Reforms and Public Sector HRM in Europe, The Palgrave Handbook of Public Administration and Management in Europe, /_12, (), (). Mares, who worked in the private sector in the chemical and manufacturing industries, and was the fossil energy chief in the Reagan administration’s Department of Energy, offers 25 reasons why.
Public and private sector financial management differ in many ways, some of the more significant being differences in scale, risk tolerance, managerial turnover, reliable benchmarks and rewards. Academic journal article Public Administration Quarterly.
HRM Practices in the Public and Private Sectors: Differences and Similarities. By Harel, Gedaliahu H.; Tzafrir, Shay S. Read preview The detailed evaluation of the public versus private sector made by Rainey (, , ) clearly shows that each area has its own distinctive. between public and private sector organizations in HRM policies and practices, while the results reported by refer to similarities between the two sectors, and reveal both similarities and differences.