Private Management vs Public Administration

Overview
To some, the difference between public administration and private management only lies in definition. From the onset, it would be prudent to point out that while there is some overlap between public administration and private management, the two are largely distinct on multiple fronts. In the first part of this text, I will demonstrate that the two discipline fundamentally differ on multiple aspects. In the second part of the text, I will assess the implications (for the public administrator) of the differences between the two disciplines in the realms of decision making, human resource management, as well as accountability.
Part 1
1. Definition
To begin with, and perhaps most fundamentally, the two disciplines differ in terms of definition. According to Waldo (as cited in Khan, 2008), public administration could be conceptualized in terms of “the organization and management of men and materials to achieve the purpose of the government” (p. 3). On the other hand, as the author further points out, private management could simply be defined as the organization as well as management of private business enterprises.
2. Goals and Objectives
The motives and scope of public administration and private management differ significantly. According to Milakovich and Gordon (2013), the overall motive of public administration is the provision of essential services to the general public. Thus, the key mandate of public administration is the promotion of public good. Public administration could therefore be linked to the larger political process. Private management is apolitical. This effectively means that private management is largely concerned with the advancement of activities of an economic nature with the overall objective being the maximization of shareholder wealth (or maximization of stakeholder wellbeing). This essentially means that it does not involve itself with public governance issues.
3. Accountability
Third, the two discipline differ when it comes to accountability. It is important to note that as Horn (1995) points out, accountability to the general public could be deemed the primary basis of public administration. This effectively means that those in power are ‘answerable’ to the general public. The public could, thus be seen as the ‘boss’ in this setting. Public accountability could, for instance, be explained in the manner in which funds are utilized in public administration. Indeed, as Horn (1995) observes, “the government is accountable to the citizens for the manner in which it manages and uses public funds” (p. 139). On the other hand, in private management, accountability happens to be to certain clearly identified stakeholders (Rabin, 2003). The said stakeholders could be inclusive of, but they are not limited to; shareholders, customers, suppliers, employees, etc. This, in private management, there is no explicit call or requirement for accountability to the general public.
4. Internal Constituents
Next, there is also a difference in terms of internal constituents. In public administration, we have a higher proportion of persons whose appointment is not largely rooted on merit, but on political connections. Khan (2008) refers to beneficiaries of such appointments as political appointees. In the private sector, however, most appointments are firmly based on merit. This is to say that superior academic qualifications and/or experience come in handy on this front. Further, it should also be noted that according to Fry and Raadschelders (2013), leadership positions in public administration have a higher turnover than is the case in private management. This is primarily due to the change in political leadership – with those mostly affected by such changes being political appointees.
Public Administration
Private Management
Definition
Could be conceptualized in terms of “the organization and management of men and materials to achieve the purpose of the government.”
Could simply be defined as the organization as well as management of private business enterprises
Goals and Objectives
Overall motive is provision of essential services to the general public
Largely concerned with the advancement of activities of an economic nature with the overall objective being the maximization of shareholder wealth (or maximization of stakeholder wellbeing).
Accountability
Accountable to the general public
Accountability is to certain clearly identified stakeholders
Internal Constituents
Appointment is in some instances not rooted on merit, but on political connections
Most appointments are firmly based on merit – i.e. on superior academic qualifications and/or experience
Table 1
Part 2
1. Human Resource
In public administration, the human resource function is largely rooted upon civil service and related regulations. Thus, to a large extent, Khan (2008) points out that “the top bosses in the public sector really do not have much control over their subordinates” (p. 4). Thus, in seeking to manage human resources in the public sector, public administrators ought to make use of tools that differ from those deployed in private sector settings. For instance, ‘employment at will’ only applies in the private sector. In the public sector, however, civil service regulations protect all civil servants – effectively meaning that their services cannot be terminated without a notice and/or reason. As Khan (2008) observes, the mere fact that public administrators do not have express firing and hiring rights means that they have to largely rely on techniques such as persuasion so as to advance certain agendas.
2. Decision Making
A public administrator ought to be aware of the fact that to a large extent, decision making is largely founded on the political agenda of the day or the political pledges of the present administration especially when it comes to the advancement of public good. This differs from decision making in private enterprise – in which case decisions are firmly rooted in management theory. A public administrator’s driving force should, therefore, be the promotion of the general public good. While the public administrator could still apply certain management theories and concepts in the execution of his roles, he is largely beholden to the overall agenda of the government of the day and, thus, has to ensure that the decisions he makes seek to advance the said agenda.
3. Accountability
As it has been pointed out elsewhere in this text, the public administrator’s main role is the further advancement of the wellbeing of the public. It therefore follows that a public administrator is accountable to the general public and must not seek to derive an unfair benefit from his position or advance an agenda that would essentially hurt or be against the interests of the general public. He ought to be guided by the relevant principles of good governance and ensure that, amongst other things, public funds are properly deployed and utilized. The table below summarizes the implications highlighted above:
Human Resource
Public administrators should rely on techniques such as persuasion so as to advance certain agendas
Decision Making
A public administrator’s driving force should be the promotion of the general public good
Accountability
A public administrator is accountable to the general public and must not seek to derive an unfair benefit from his position or advance an agenda that would essentially hurt or be against the interests of the general public
References
Fry, B. & Raadschelders, J.C. (2013). Mastering Public Administration: From Max Weber to Dwight Waldo. CQ Press.
Horn, M.J. (1995). The Political Economy of Public Administration: Institutional Choice in the Public Sector. Cambridge University Press.
Khan, A. (2008). An Introduction to Public Administration. University Press of America.
Milakovich, M.E. & Gordon, G.J. (2013). Public Administration in America. Cengage Learning.
Rabin, J. (Ed.). (2003). Encyclopedia of Public Administration and Public Policy: A-J. CRC Press.