Characteristics of Public Agencies Essay

1004 Words 5 Pages
The most basic distinction between public and private organizations is that the political community own public agencies whereas ownership of private organizations belongs to entrepreneurs or shareholders. However, there are many other differences between public and private organizations. The funding for public agencies derives mostly from taxation, which contrasts with private agencies receiving funds predominately from consumers in the form of fees. In the public sector, organizations are largely controlled by political forces, which also results in the imposition of constraints by the political system. Subjection to constraint results in frequent changes in policies within public organizations. The owners and shareholders of private …show more content…
The procedures for decision-making in the public sector are more formal, more opposed to risk and less flexible than can be found in the private sector. Public agencies also have a stronger obsession with rules to the point where adherence to rules overshadow the prospect of obtaining results. In this manner, managers have little freedom to act as they see fit. Managers within the private sector are not subjected to the same constraints, which results in a manager’s ability to lead subordinates with less likelihood of running into a contradiction (Boyne, 2002). One of the major concerns with implementing the management practices of private organizations in the public sector is the difference in goal orientation. The primary goal of private agencies is to profit. The business either succeeds or it fails. As discussed prior, public agencies have many goals because of the need to satisfy numerous stakeholders (Boyne, 2002). In a succeed or fail environment, a manager must take initiative to garner successful outcomes, which means the manager needs to have the flexibility to make necessary decisions without being held back by excessive rules and procedures. In the private sector, managers that fail to achieve productivity and success will either be subjected to increased pressure to improve or could lose their job. Evaluation of management ability in the private sector is done my reviewing profit earned, market share

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