Cultural Difference between Public and Private Organisations - Essay Example

?Cultural Differences between Public and Private Organizations Organizations are broadly ified into two types; the public sector organizations and the private sector organizations. This classification is based on the differences of purposes, goals, commitments, and setups of the organizations which also lay the basis of difference in the culture between the public and the private organizations. Differences between the organizational cultures of the public and private organizations have been studied by several researchers in the past. Particularly, a spark in academic inquiry was instigated by Murray (1975) and Rainey et al. (1976) who attempted to determine the ways in which the public and the private organizations as well as the behaviors and attitudes of their personnel differed. Considerable research in public administration was conducted in the ensuing years, but determination of these differences was largely overlooked by most of the scholars and journalists (Baarspul, 2009, p. 1). Although most of the researchers mutually consent that employee behavior in the public organizations is different from that of employees in the private organizations, yet certain researchers have expressed disagreement as a result of their studies while the compilation of empirical findings is nearly non-existent to date (Baarspul, 2009, p. 1). This paper discusses the differences of organizational cultures between the public and private sector organizations. Study of these differences is important because knowledge of the culture generally prevalent in either of the two types of organizations is a pre-requisite to understand the way these organizations play their role in the society, and to introduce positive changes in them to enhance their productivity and efficiency for the benefit and well-being of the society. Differences in the cultures of the public and the private organizations are caused by differences of the work environment, and dynamics of the workplace that come into play as a result of mutual interaction and integration of a wide array of factors that include but are not limited to the goals, decision making processes, attitudes and behaviors of the organizational personnel, and the patterns of communication. The prime goal of the private sector organizations is to safeguard the interests of the stakeholders that primarily include the owners of the organizations, and the people who have invested in the organization to purchase its shares. On the contrary, “the most often repeated observations about public organizations are that their goals are particularly vague and intangible compared to those of private business firms and that they more often have multiple conflicting goals” (Rainey, 2009). Decision making processes in the private organizations in general and private for-profit organizations in particular is smoother as compared to those in the public organizations. Chances of occurrence of conflict, turbulence, and interruptions are more in the public organizations owing to the disorganization of the system and issues of decision making. These differences in the processes of decision making can fundamentally be attributed to the difference of roles played by the private and public organizations in the society. The main purpose of the private organizations is to make money for the stakeholders by selling their services and/or products to the consumers. On the other hand, “The typical general purpose, tax-supported governmental agency, such as a state department of mental health, contracts for services and collects information about the needs of people that call for a public response” (Nutt, 2005, p. 289-290). These differences of roles propose considerably different accountability and expectations which impart the conditions for different decision making processes in the private and the public organizations. The attitudes and behaviors of the organizational personnel play a key role in shaping the organizational culture. An organization that operates in the public sector is assumed to function differently from another operating in the private sector. To a large extent, cultural differences between the private and public organizations can be attributed to the differences of attitudes and behaviors of people associated with and working in them. For example, civil servants have a more conditional commitment towards their organization than the managers and employees working in the private organizations (Buelens and Van den Broeck, 2007). The goals and values of employees working in the private organizations are more aligned with the goals of their organization than the public sector employees (Lyons et al., 2006). The differences of attitudes and behaviors of the public and private sector employees also reflect in the differences of their motivations. While the employees of both types of organizations are motivated equally by the intrinsic rewards, (Maidani, 1991), job security is a potential motivational factor for the private sector employees whereas the public sector employees are more motivated by extrinsic rewards and higher status in the organization. According to Hooijberg and Choi (2001), the public and private sector organizations share both similarities and differences related to the managerial perception of the effectiveness of leadership, and managers’ adaptation to different roles of leadership. The public and private organizations differ in the patterns and flow of communication across different channels which are significant causes of difference between their organizational cultures. Differences related to communication are caused by a number of factors that include but are not limited to the issues of transparency, focal audience, and legal constraints. The public organizations are structured in a way that causes the atmosphere to be transparent so that all communications can be openly scrutinized irrespective of their origin. Public organizations consider and regulate the interest of all. In contrast to the public organizations, private organizations are more protective about their trade secrets, and in a vast majority of cases, even the people integrally involved are not provided with complete information by the top management or the owners of the organizations unlike the public organizations. Information in the private organizations is overly-protected and there are numerous blockages in its flow across different channels and departments. Legal constraints affect the quality of communication in an organization. Communications in the public organizations, particularly in the textual form have much legal constraints. “Especially under consideration are verbiage which may affect ethnic or cultural tones, discrimination of any kind, and countless other interpretive areas. Public administration communications will often tend to simply follow the stability of "legalese."” (Guignard, 2011). On the other hand, there is freedom of open communication of philosophies and ideas in the private organizations unless the content is illegal or deliberately hateful in any way. In addition to that, private organizations communicate with the aim to obtain maximum profit and thus communicate in a market atmosphere whereas communication in the public organizations aims at the development and implementation of policies. Concluding, there are numerous cultural differences between the public and private sector organizations that originate in the goals, decision making processes, attitudes and behaviors of the organizational personnel, their drivers of motivation, and the transparency and flow of communication across different channels and departments, and the underlying purposes of communication. All of these factors are governed by the fundamental purposes of establishment of these organizations. While the public sector organizations are meant to consider and address the needs and concerns of the society, goals of the private sector organizations are established with an entrepreneurial mind to make money. Goals of the public organizations are more intangible and poorly defined than those of the private organizations. Private organizations display quicker and smoother decision-making than the public organizations. Employee loyalty in the private organizations is more than that in the public organizations. Communication in the public organizations is more transparent than that in the private organizations, which is also a cause of freer flow of communication across all channels. These differences give rise to different strategic planning, goals, and ultimately different organizational cultures. References: Baarspul, HC 2009, Do Employees Behave Differently in Public- vs. Private-Sector Organizations? University of Twente. Buelens, M, and Van den Broeck, H 2007, An Analysis of Differences in Work Motivation between Public and Private Sector Organizations, Public Administration Review, Vol. 7, No. 1, pp. 65-74. Guignard, EJ 2011, Communication Differences Between Public and Private Organizations, [Online] Available at http://voices.yahoo.com/communication-differences-between-public-private-10593433.html [Accessed: 31 August 2012]. Hooijberg, R, and Choi, J 2001, The Impact of Organizational Characteristics on Leadership Effectiveness Models: An Examination of Leadership in a Private and a Public Sector Organization, Administration & Society, Vol. 33, No. 4, pp. 403-431. Lyons, ST, Duxbury, LE, and Higgins, Ch, A 2006, A Comparison of the Values and Commitment of Private Sector, Public Sector, and Parapublic Sector Employees, Public Administration Review, Vol. 6, No. 4, pp. 605-618. Maidani, EA 1991, Comparative Study of Herzberg’s Two-Factor Theory of Job Satisfaction among Public and Private Sectors, Public Personnel Management, Vol. 20, No. 4, pp. 441-448. Murray, MA 1975, Comparing Public and Private Management: An Exploratory Essay, Public Administration Review, Vol. 35, No. 4, pp. 364-371 Nutt, PC 2005, Comparing Public and Private Sector Decision-Making Practices, Journal of Public Administration Research and Theory, Vol. 16, pp. 289-318. Rainey, HG, Backoff, RW, and Levine, CH 1976, Comparing Public and Private Organizations, Public Administration Review, Vol. 36, No. 2, pp. 233-244. Rainey, HG 2009, Understanding and Managing Public Organizations, John Wiley & Sons. Read More