A COMPARISON BETWEEN PUBLIC AND PRIVATE SECTOR MANAGEMENT

Introduction The issue as to whether there are differences between public and private sector management has engaged the attention of scholars and practitioners. While scholars, especially those in public administration are of the view that, there are significant differences, public managers also perceive some differences between the two. Whatever ones opinion is about the debate, one thing becomes clear after a close examination of the two sectors and that is, even though there are differences between the two sectors, the similarities between them can hardly be mistaken or glossed over. Again, whatever ones opinion is on this matter, it cannot be gainsaid that, comparison between the two sectors which has become a necessary academic chore, so to speak, among students of administration, provides the opportunity to gain more insights into the dynamics of the two sectors.

DIFFICULTIES IN APPLYING PRIVATE BUSINESS STUDY TO PUBLIC ADMINISTRATION

The literature indicates that there have been difficulties in applying private business study to public administration. This, as a matter of fact, is not surprising given the different environments in which the two sectors operate. According to Barber (1972:22) the difficulties in applying such studies in the public sector is due to the following reasons: 1) 2) 3) The nature of the basic administrative problem of the public sector varies substantially from the basic problem in private sector. The greater emphasis in public administration is on law and legal context within which public administration must function or operate. The greater relationship between public administration and public welfare and its consequent organizational and operational ramifications. The responsibility of the public administrator to the public, a situation not matched in private industry.

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The difficulties of quantifying the goals of public administration in the absence of reliance on a pure profits test. The different considerations in determining goals in public administration, which are much wider than those in private industry.

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HOW PUBLIC AND PRIVATE MANAGEMENT DIFFER

The literature is replete with reasons why public and private management are considered different. A summary of these reasons, as given by scholars and practitioners will definitely provide us with a general view on this issue. Areas in which the two sectors differ Management in public and private sectors differ in a number of ways including the following. Different Structures Responsibility in public administration tends to be blurred. Due to this, agency heads, compared to their counterparts, in the private sector tend to be helpless. This is explained by the fact that, unlike the situation in the private sector, no individual or institution is given complete authority in the public sector. The authority in the public sector is distributed within the governmental structure. For major issues approvals are required from superior bodies. The frustrations of public officials over critical issues such as budget approval and related issues are mainly due to this phenomenon. Different Purposes Unlike the private sector where the purpose for the existence of organizations (bottom line) is stated clearly as profit, market performance and survival, public managers are mainly concerned with public good (commonweal). What this means is that, whereas private sector institutions are mainly concerned with the well-being of their employees and stockholders, public sector institutions are required to cater for the interest of the public or people outside the organization. Performance Criteria Whereas rewards to private businesses are mainly based on their performance and how they satisfy their customers, rewards in public 2 of 5

organizations are not tied directly to performance. They are rather tied to extraneous factors, which may not enhance their growth. Greater Internal Diversity It is sometimes difficult to promote the much needed internal cohesion in public organizations due to a number of reasons including political and historical. On the other hand, private organizations are better placed to develop the necessary internal cohesion. Conflict Between Policy Makers and Public Managers The administrative-political mix in public organizations, as represented by the positions of politicians and public managers, tend to breed conflict. This arises mainly from a division between the two whereby elected officials or politicians are mainly concerned with policymaking while public managers are mainly glued to implementation functions and procedures. Even though a division may surface in a boardroom of private-sector organization, it hardly takes the characteristic of the public sector as described above. Scrutiny by the Media and Public Interest Groups Since they depend mainly on public funds to implement policies, public organizations tend to be heavily scrutinized by the press and the public, who feel they have a right to know everything. On the other hand, private organizations are not scrutinized as much. Time Horizon or Duration of Office The time horizon in public organizations tends to be short i.e. from one election to another. The elected officers have a manifesto and a mandate within a specified time frame to deliver. This tends to create a lot of pressure on public managers who are required to demonstrate result. On the other hand, managers in the private sector tend to have a longer tenure. Emphasis on Strong Individual Leadership There usually is a lot of pressure on elected and appointed leaders in public organizations to demonstrate their personal power. Under the circumstance, delegation of responsibility and reliance on group decisions are considered as weaknesses. On the other hand, business executives tend to be less visible and are therefore not subjected to that much pressure.

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Atmosphere of Control and Mistrust An atmosphere of control and mistrust normally pervade in public organizations as a result of rules, regulations and strict control on employees. Even though this may also exist in private organizations, they are usually not in the magnitude experienced by public-sector organizations. Dealing with many Superior Officers Public managers are placed in such a situation that they have no choice but to form a coalition of insiders and outsiders in order to survive. This is because they are required to respond to the demands of their bosses who tend to be many. Private managers, are by contrast, spared this ordeal because they generally look more to one higher authority. Legislative and Judicial Impact Public managers often come under scrutiny of legislative oversight groups as well as the judiciary. On the other hand, private managers are rarely scrutinized with the same intensity. Differences in Status It is generally believed that, working for the government comes with it a lower status compared to working in business and industry. The Ghanaian situation clearly testifies to this point.

WHICH IS MORE DIFFICULT TO MANAGE?

It certainly will be interesting to take the debate to another level by asking the question which of the two sectors is more difficult to manage? There appears to be a consensus on the answer. The general consensus is that, it more difficult to manage public sector organizations. Conclusions by administrators and managers who have had a stint in both sectors generally appear to support this point of view. Certainly, the open socio-technical system in which public managers increasingly find themselves poses a great challenge. Besides the usual challenges from internal sources, public managers have to contend with external forces, which are more complicated and

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therefore more difficult to deal with than what prevails in the private sector. Clearly, the points stated above testify to the fact that, managing in the public sector can be more exacting. In giving reasons for this, Barber (1972:22) rightly points out that: Public administration, unlike private administration, operates in a political framework both in the sense of political responsibility and control, and in the sense that its objectives are necessarily based on different and wider criteria. This sentiment has been echoed by Berkley and Rouse (1984:10) who observe as follows: If the laws that govern the acts of public institutions were applied to private institutions, most of the management and staff of the latter would end up behind bars.

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