Difference between non-profit public sector administration and private sector - Essay Example

The domain of the public sector are those parts of economic and administrative life that have reference to the the delivery of goods and services by and for the government, whether at a national, regional or local level. The private sector, on the other hand, comprises of organisations which do not have affiliations with the government, and form the part of a nations economy beyond the direct control of the government. In order to compare and contrast the administration in the two sectors, it is important to determine the fundamental goals which drive them.

While the private sector has competitive goals of tangible profit, growth and market share spurred by innovation, creativity, good will and recognition, the public sector including non-profit organisations often deals with intangibles like justice, accountability to public, integrity and fair play, where mission effectiveness is of primary importance. The terms of employment and leadership also determine the administrative structures in each. In the public sector, job security is high and despite poor performance, separation requires extensive documentation over a long period of time.

The span of control is low, which also means more individuals to a particular task and we see that job security, stability, and sheer size of organizations tend to foster well-defined bureaucracies. Educational qualifications and political affiliations play a major role in the selection of those at the top, regardless of managerial capabilities. Forced to be competitive in order to survive, the private sector companies value efficiency over all else. They have little use for bureaucratic hierarchies.

Corporate bureaucracies consist of performance-driven individuals, who function in situations of large spans of control.The number of people required to do a job is strictly monitored and adhered to, any excesses are trimmmed immediately based on optimum efficiency and job security is low. Managerial capabilities are usually the sole determining factors for high positions in a private sector organisation. Thus it is easier for an excellent performer to rise on the corporate ladder, whereas in the public sector, “seniority” is the determining factor.

In other words, we might see an individual promoted purely on the basis of the fact that he or she has been in the organisation for a particular period of time, despite possible poor performance, while diregarding cases of good performance from more recent employees. In the private sector, an individual may shift from one organisation to another, and usually gain in status because of his or her skills whereas in the public sector any change from one organisation to another may come with a loss of grade.

This system for promotion may be demotivating to the good performers, and render them further inefficient, and the senior people who are promoted on the basis of their position may tend to perform at lower levels as well, secure in the knowledge that they will have a job and promotions irrespective of their performance. This inefficiency may contribute towards the employment of more individuals into the public sector, further weighing down its administrative system. The private sector is under the whip of stakeholders, owners and the market conditions, which means that administration is naturally efficient.

There is no need for additional bureaucracy or agency to ensure productivity, a private sector company monitors itself. The public sector, which is ultimately answerable to the taxpayer, is constantly monitored by inspectors and legislators. Customer satisfaction, however, is the ultimate goal of both the sectors, without the achievement of which their existence has no meaning. Organisations in the private sector are driven by profit and hence keep themselves regularly updated on customer demand, whereas the administration in the public sector may be clueless about ground realities, ensconced in its structure of sinecure and bureaucracy.

Privatisation of organisations in the public sector is increasingly the norm,except in areas sensitive to national security, and administrative structures in the public sector are changing in response to the demands for efficiency.