Private and Public Sector

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  • Topic: Private sector, Public sector, Voluntary sector
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  • Published : November 2, 2011
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7 CULTURAL DIFFERENCES BETWEEN THE PRIVATE AND PUBLIC SECTORS We often wish that there were more businessmen in government. That would be good for business and good for government. Yet the experience of those who are drafted into ministerial office from the business community is usually frustrating. The latest example is Digby Jones, former Director General of the Confederation of British Industry, which represents big business in the UK. In June 2007 he was appointed Minister of Trade by the British Prime Minister, Gordon Brown. He resigned in April, 2008, after less than a year in office. Last week, he described his time as a government minister as “one of the most dehumanising and depersonalising experiences a human being can have”. Hyperbole, perhaps, but it does illustrate the huge chasm that lies between private sector attitudes and public sector culture – a gap of understanding that is getting wider: 1   The public sector is obsessed with process where the private sector’s priority is purpose; 2   In the private sector, responsibility and authority rest in the same place, in the person of the entrepreneur, but in the public sector it is usually unclear where they lie in complicated structures; 3   The public sector acknowledges little relationship between job security and performance; 4   There is a big difference in public and private sector concepts of the “work ethic” – to put it politely; 5   Survival in the private sector depends on the ability to face facts as they are, but promotion in the public sector depends on the ability to say things one knows to be total nonsense; 6   The private sector demands that the individual accepts the consequences of his actions; and 7   The public sector is all about power, but private business exists only if it gives others what they want. In the Publin report D9 On the differences

between public and private sector
innovation Ian Miles and Rannveig Røste
argue that there are great differences
between the public and private sectors as
regards innovation. They point out that
public organizations are typically the
primary supplier of services and are not
competing in order to maximize profits.
This lack of product competition is widely
held to mean a lack of incentives to
However, as Miles and Røste point out, the
notion that the connection between a firm’s
behaviour and pecuniary reward is the
central dynamic of economic rationale and
the development of innovation has to be
seen as too simplistic. Frost and Egri
consider that there is a “rational myth of
innovation” that portrays organizations as
One important outcome of the Publin project
is that we have learned more about
innovation related human behaviour in
general, and that this knowledge may also be
used to get a better understanding of
incentives for innovation also in the private
We have found that public sector workers
may be motivated by idealism, the joy of
creating something new, an intense interest
in the topic at hand, friendship and a sense
of belonging, career ambitions, etc.
One obvious difference between the public
and private sectors is that the public sector is
not profit driven in the business sense of the
term. However, the motivations for
innovation found in the public sector are
probably also present in private firms, and
definitely in third sector organisations.
The fact that public institutions are not profit
driven, should not lead us to believe that
public sector employees and managers are
not concerned about financial matters. As is
the case within private companies, public
sector units and organisations fight for
funding and influence.

Another factor that makes the public sector
different form the private is the unit of
analysis. Apart from publicly owned
companies, most public institutions are part
The Publin Post 1of a larger chain of command and...
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