Differences Between Public and Private Sectors

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The Differences between
Public Sector and Private Sector


Robyn Z. Abdusamad

Dr. Deborah LeBlanc
PAD 620 – Research Paper
August 23, 2010

The Differences between
Public Sector and Private Sector


When we examine public sector versus private sector, plenty of differences come to mind. In defining each, we learn a private sector in an economy consist of all businesses and firms owned by ordinary members of the general public. It also consists of all the private households in which people live. The public sector in an economy is owned and controlled by a government. It consist of government businesses and firms and goods and services provided by the government such as the national health service, state education, jobs, roads, public parks and law and order. Throughout this paper, we will examine other differences that exist amongst public sector and private sector such as policy decisions and beneficiaries.

The Differences between
Public Sector and Private Sector

Often you hear news analysts talk about the public and private sectors. While most people usually have an idea what these two terms entail, there are complex differences between the two, which are also useful to learn about. Houston (2000) states, “in spite of virtually universal agreement among scholars that public organizations have more goal complexity and ambiguity, public managers do not differ from business managers in response to survey questions about such matters. Public managers do not differ from business managers on perceptions about organizational formalization, in spite of a chorus of assertions that government agencies have more red tape and rules than private firms have. Public managers do, however, show very sharp differences in response to questions about constraints under personnel and purchasing rules.” First, when we it comes to the public sector it is basically made up of organizations which are owned and operated by the government. Within the United States, the public sector consists of government agencies like federal and state offices. When a private individual speak of the public sector, they are typically referring to a public authority, or public body. Any federal institution that is associated with health care, police services, prison services, local and central government management, and all their departments, are also considered as a part of the public sector. Rainey and Bozeman (2000) states, “organizations are made up of a complex of important dimensions and issues; researchers have developed bodies of research on these dimensions, which include goals, structure, motivation and many others. The comparisons of public and private organizations have been influenced by these patterns, drawing on conceptual and methodological developments in these areas. For example, researchers have compared business firms to public agencies on measures of work satisfaction among members of the organization and on their perceptions of organizational structure, using concepts and empirical measures that organization theorists had developed to measure satisfaction and structure.” Next, there is the private sector. This sector is generally made up of organizations which are ‘private’, which means that they are not owned by, nor part of, the government. All small businesses, corporations, profit and non-profit organizations, partnerships, charitable organizations and middle to large entrepreneurships, are considered as part of the private sector. The specific examples are retail stores, credit unions, local businesses and non-government operated banks. So, what is the difference between the public and the private sector in regards to the way that they operate? Those who are in the public sector are known for supplying services to the public, and they are not competing with any other institution for profit. On the other hand, private sectors seem to have a goal of outshining...
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