The Differences between
Public Sector and Private Sector
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by
Robyn Z. Abdusamad
Dr. Deborah LeBlanc
PAD 620 – Research Paper
August 23, 2010
The Differences between
Public Sector and Private Sector
SUMMARY
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
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On the other hand, government organizations that are funded through market sales or user charges often have concomitantly greater autonomy from governmental controls.”
Majority of public sectors are managed under a bigger chain of command and control, while private sectors mostly operate in a corporate setting. As for the differences with their policy decisions, the activities in the public sector have a goal of adhering to what is indicated by law, while the private sector is driven by the rules of shareholders and corporate owners. Schmidt (2008) states, “The research agenda of companies is more focused and targeted and therefore perceived as easier to handle for managers. Also, the decision-making process is different. Managers of private enterprises can faster and easier change orientation, focus and targets. This implies, according to some managers, that the instrumentation used in the private sector is different from the one used within public research.” [pic][pic]Finally, the beneficiary of the services provided by the public sector, is the general public. These goods and services are sometimes provided free and in other cases consumers have to pay a price. The goal
However, such services should only be provided by the government mainly because of the resources involved and the coverage. There is no opportunity for privatization as this would mean that the government would no longer be responsible for the protection of health and human services. The key reasons why the agency should not privatize revolve around the quality of health and human services as well as maintaining government jobs. Since the agency mainly offers health and related social services, there are concerns that private companies will reduce the amount of
The author uses a wide range of expert opinion such as Dr Chan, Gary Radler and Kevin Stone etc. ‘‘By no means can you say universally that government organisations have more complex cases and certainly not on a ratio of four
There are two types of businesses, private and public. The difference between public companies and private companies is their ownership. Private held companies are under control of a single or group of shareholders when public companies are owned by the government.
Free market which private influence that which the key economic question of what, how and for whom to create will to be decided by the individual consumers and private producers (Chrystal, 2011). The free market economy that which every individual in the country has the right to acquire private ownership of resources in the market. The state may give the private possession of resources that to every individual in the country has the right to acquire private ownership of resources. Examples with the National Health Care in the UK is also belong to provides the private health insurance to people to be shorter the waiting times of patient for treatment that which to obtain with quicker, and the acquired the better facilities such as private room. Freedom of enterprise and choice through by the individuals are free to own resources as well as to establish any enterprise of the choice in the free market (Mulhearn, 2011). For example, the free market is in the United States which provided the health insurances to act as the population is covered by public health insurance. Medicare is a uniform national public health insurance program for aged and disabled
Given the current international debates on state buildings and adherence to no harm principles, an exploration of the pitfalls of contracting out state service is timely (Ya Ni & Bretschneider, 2007). For the most part, contracting out is a transitional strategy. External agencies usually execute the most urgent functions while the state capacity takes them on over time. However, the risk of such procedures is that they can erode the limited capacity and result in parallel systems of government that can undermine the legitimacy of the state. As citizens view the vital services that non-state actors execute, the compact between them and
This collaborative effort between government and business to provide infrastructure, access and security is to ensure confidence for all participants so that they can communicate and do business on the internet, thus providing businesses a lucrative way to obtain sales. Another way government regulation benefits businesses are by administering research programs and grants that produce knowledge in areas like medicine, agriculture and communication, business in these fields can freely apply the knowledge gained onto the products and services they provide, but under the strict oversight of a relevant administrative bodies from which the source knowledge was derived from, such as the Food and Drug Administration which is under the Department of Health and Human Services. These businesses can than expand and deliver services to the public at lesser cost to them because research and trial were done under government funding. Other ways businesses can benefit from government regulation is through rationale interventions by government to intercede in areas of market failure. One such rationale is the protection of competition. This is where government protects a market from being controlled by a business holding 90 percent of the market
The market sector also known as the ‘private sector’ differs from the third sector because focuses on human need, it is not philanthropic, and is self interested, among other differences.
It is common practice now for governments to contract with private companies for services which were traditionally under public administration. As a general concept, administrative law regulates public bureaucracy while private bureaucracies are subject to other private law areas such as torts or contract law.
Public or private agencies will provide the service while local government will purchase it. The service that was being purchased by the local government will be used by the customers that are the society. It is an approach to restructure the public management to be more effective by contracting out the functions to other party beside the government can save more cost. So, all the government decision regarding the services would affect the non-governmental agencies and vice
The private sector is that part of the economy, sometimes referred to as the citizen sector, which is run by private individuals or groups, usually as a means of enterprise for profit, and is not controlled by the state. The public sector is the part of the economy concerned with providing various government services. The voluntary sector or community sector (also non-profit sector or "not-for-profit" sector) is the duty of social activity undertaken by organizations that are not for-profit and non-governmental.
The New Public Service draws motivation from democratic political theory and alternative approaches to management and organizational design growing from the tradition in public administration theory. The government fulfills a responsibility to citizens because they ensure that there are procedures to guarantee successful operation of democratic principles through voting, representation and due process (Catlaw & Denhardt, 2015, 2011, 2008). As citizens we have the role of developing the capacity to be consistent with interests and to respect the rights of other people to do the same. Smaller groups are called civil society and they are important because they work out personal interests. The New Public management has championed a dream of public administrators as the business visionaries of another, leaner, and progressively privatized government, duplicating the practices as well as the values of business (Catlaw & Denhardt, 2015, 2011, 2008). Advocates of the New Public management have built up their debates generally through compare and contrast in relation to the public organizations. The New Public management will, obviously, dependably win. We continue to argue that the better comparison is with what we call the "New Public Service," a development based on work in just democratic citizenship, group and society (Catlaw & Denhardt, 2015, 2011, 2008).
According to Paul H. Appleby, the public administration is different from the 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 light of our own exploration of the subject in previous articles. Josia Stamp went a step further and identified four aspects of the difference of which the only one similar to that of Appleby’s is that of public accountability or public responsibility as Stamp identifies it. The other three are Principle of uniformity, Principle of external financial control, and Principle of service motive. Herbert Simon cited very practical and easy
Public interest is given priority. The public sector looks into the interest of the general public. The government under this economy is said to be welfare state. It introduces social insurance schemes, incurs expenditure and manages economy in the interest of general masses of the country.
Private sector is that part of the economy that is controlled by private individuals or groups. The objective of these firms is to earn profits. These economic entities are not controlled by the State therefore are called private sector companies.
Interestingly, the spread of New Public Management (NPM) in administrations (whereby the entrepreneurial behavior of managers has been favored, as well as the introduction of more market-based /private sector features in the public sector) has favored more decentralized systems where managers have an increase say over overheads. For instance, international organisations such as the World Bank have increased their field presence by opening country offices. Through effective decentralization, office managers have gained increasing control over overheads – ranging from decision on rents to office