Strategic Management - Public Sector

Strategic Management - Public Sector Strategy

The strategic approach forwarded by the companies activating in the private sector is most always centred on increasing their profits. They also desire to fully satisfy the needs of their customers by offering high quality products and services at competitive prices, incorporating the latest technological developments to increase the administrative, production and operational processes and integrating their staff within the strong corporate culture and achieving superiority over the competitors in the respective industry, but the ultimate goal remains that of increasing their profits. Private companies start up by selecting the industry where to activate and by establishing the nature of their activity. Once this is achieved, they move on to selecting the best candidates to occupy the desired positions, train them and remunerate them; then, the companies purchase the necessary machineries and technologies to support their operations. Most of the times, the need for more capital increases as the business develops and the private company has to think of new ways of attracting additional funds. Finally, with the completion of their operations, the company considers their shareholders: how will their operations be perceived by the customers, the employees, the general audience, the investors, the government or the general public.

Human Resource -> Technologies -> Funding -> Shareholders

The public sector is somewhat different from the private one and the question being posed here is how do the entities in the public sector develop and implement their strategies, given that they mostly offer services and no actual product is present.

A primary specification to be made is that the public companies are somewhat similar to the service companies activating in the private sector: none of them have an actual product to manufacture and sell and the satisfaction of their audiences directly depends on the quality of the services delivered. But this then depends on the skills, knowledge, experience, training and personal characteristics of the employees delivering the services. Both types of entities implement similar strategies in regard to their human resource. They try to professionally form them by offering training programs, they motivate them and encourage them to get involved in the decision making process and increase their performances, they try to integrate them within the corporate culture and align their individual goals with the overall goals of the organization. In this particular line of thoughts, the human resource strategy within the public sector is almost identical to the human resource strategy implemented by the service companies in the private sector. A specification must however be made in regard to this issue, as most service companies in the private sector often possess more financial and non-financial resources that better allow them to develop and implement the adherent strategies.

Another standpoint to be used in answering the posed question is given by the technological department. In this order of ideas, both private and public companies desire to possess and use the latest technologies on the market as to increase the performances of their operations. Take for instance the case of a new and better accounting software. This will not only be sold to private companies, but also to the entities in the public sector. As such, the strategic approach of the technologies used by the two types of companies is also similar, with the specification that private companies are sometimes better financially equipped to make the desired purchases.

In terms of financial strategies, both organizations wish to attract various investors to fund their operations. Whereas the private companies issue stocks, bonds or engage in other types of financial operations to retrieve funds from interested investors, the public companies often find it more difficult to attract the needed funds. Take for instance the case of a state university. The administration of the college is unable to list the school on the market and gain shareholders and most of their operations will be financed from governmental subsidies. But like the private companies, they have the need, desire and capability to attract additional funds. In this order of ideas, the university could live of donations or several academic programs financed by wealthy individuals. In all, the private and public entities are similar from a financial strategic standpoint as they make increased efforts to attract additional funds. The primary difference is that the investors in the private sector are driven by the possibility to increase their future income, whereas the "investors" in the public sector do not expect to make a financial gain, but are driven by personal interest (such as a desire to give back to the community) and are often more difficult to attract.