Public versus Private Administration


What are the Disparities between a Public- and a Private Administration?

As a cooperative human action with a high degree of rationality, administrationOpens in new window is regarded as a universal activity common to all types of public and private organizations. However, there are some distinctions between public and private types of administration, and these distinctions are, it would seem, much greater than the similarities.

On the basis of the nature of the administrative settings, Public administrationOpens in new window is governmental administration concerned with operating programs or providing services on a collective basis (rather than directly to individuals), supported in the great majority of cases by tax revenues, not direct payments (such as user charges or fees) for services rendered; whereas private administration relates to administration of private business organizations whose products or services are furnished to individuals based on their own needs or wants in exchange for a direct (usually monetary) payment—a quid pro quo transaction.

Now we shall proceed to see how Public administration is distinct from and similar to Private administration.

Distinctions Between Public and Private Administration

The common notion of Public Administration is that it is bureaucraticOpens in new window, characterized by red tapismOpens in new window, inefficiency and inertia, whereas private administration is efficient and businesslike.

The more important distinguishing features of Public Administration may be described under the following headings:

1.1  Political direction

Public Administration takes place in a political context and is subjected to political direction in most policy matters, while private administration is non-political.

Public administrators work under political direction and scrutiny. They put into effect the policies made by the elected members of the legislature and political executive (Ministers). Business or private administration, on the contrary, is not subject to political direction except in times of emergency. It functions largely under the influence of market economic conditions.

1.2  Profit motive or marginal return

Public Administration is service oriented and profit making is not its goal. A businessman will never undertake a venture which is not likely to yield any profit to him, even if it is essential for the public welfare. In addition, ‘profit’ serves as a simple criterion to judge the efficient or inefficient performance of a business firm. But, the abstract value of ‘social good’ promoted by public organizations cannot be measured in terms of monetary gain or loss.

There is no direct comparison between the governmental agency’s costs and the value of its services to the public. Thus, ends of public administration are communal, while those of private business are personal. The main beneficiary of public administration activities is the entire community, whereas that of the business is the owner of the business himself.

1.3   Conformity to legal framework

Public Administration operates within a legal framework. The activities of public administrators are fixed by a set of constitutional practices, laws, rules and regulations. Government officials must always act within their legal powers. They cannot act contrary to, or in excess of legal power. If they do so, their actions can be declared invalid or challenged in the courts of law on the grounds of ultra-viresOpens in new window. This is the reason why everything done by public officials must be supportable by reasonably clear statutory authority.

The numerous legal constraints on the actions of public officials account for the limited discretion enjoyed by them in discharging their duties. However, such legal constraints are essential to prevent the officials from abusing their powers. By contrast, the behaviour of business organizations and the activities of business administrators are subject to less legal constraints. Business executives in the private sector can usually do anything which is not forbidden by law. This give them freedom to select and carry on only profitable activities.

1.4  Consistency of treatment

A public administrator is required by law to maintain a high degree of consistency in his dealings with the public. He needs to adhere to the principle of equity of treatment in serving the people. He is under legal obligation not to show any discrimination against any person. If he shows any favour to anybody, all others are entitled to similar treatment.

In other words, the public official is denied discretion in the interests of fairness and equality. On the other hand, the business administrator is not legally obliged to treat the small and big customers alike. Private business concerns can show preference to large clients. Thus, business administrators do not adhere to the principle of equity of treatment in their dealings with their customers.

1.5  Public accountability

Public accountability is the hall-mark of Public administration in a democracy. The Public administrator carries on his work in a “glass bowl”. His actions are open to public review and scrutiny at all times. In the words of ApplebyOpens in new window, “Government administration differs from all other administrative work by virtue of its public nature, the way in which it is subject to public scrutiny and outcry.”

In democratic settings, Public administration is held accountable for its activities through legislative oversight and judicial review. This shows that in the sphere of Public administration the initiative for securing accountability lies with those to whom it is due. Private administration has no such obligation, administrators in the private sector are not accountable to the public for what they do and what they fail to do.

1.6  Social essentialities

Certain public services such as national security, law and order, health care, transport and communications are to the existence of community itself. Besides, the nature of some of the government services is so wide, comprehensive and expensive that no private administration can undertake them.

For example, it employs a large army of officials and spends huge amounts of money to maintain railways to facilitate movement of goods and passengers; the post and telegraph network facilitates communications; hospitals and dispensaries are meant to provide medical aid and public health services to the people. On the contrary, private business organizations are mostly concerned with providing marketable consumer goods that are not essential to the existence of society.

The distinctive features discussed above are the more important ones for separating public from private administration. We shall now see how Public Administration is similar to private administration.

Similarities Between Public and Private Administration

Notwithstanding the preceding distinctions, many similarities exist between administrative activities in the public and private sectors. The following similarities between the two types of administration may be observed:

  1. Both public and business administration rely on common techniques relating to planning, organization, budgeting, delegation, control and the like. Accounting, statistics, office management and procedures and stock taking are problem of administrative management common to both public and private administration.
  2. Today the principle of profit motive is not peculiar to private administration. Profit-making is now accepted as a laudable objective for public sector industries also. Further, the business organizations have also developed the sense of community service. They have come to realize that they too have to contribute significantly to community development.
  1. In personnel management the private organizations have been influenced greatly by the practices of public organizations. For example, the private organizations have come to realize the need to treat employees fairly. But this is not a one way process.

    In recent years public organizations have also attempted to adopt private business methods and practices. To give an example, the public corporations created to run the government owned economic and commercial activities are largely modelled on private business concerns. They resemble the private companies in structure.
  2. Today private business concerns are also subjected to many legal constraints. Government is exercising much control over business firms through taxation, monetary and licensing policies. Consequently, they are not as free as they once used to be.
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