10 Major Differences Between Public And Private Administration

In order to get a clear and accurate idea about the nature and scope of public administration, it is necessary to know the similarity and differences between public and private administration. This article will help you to draw the dividing line between public and private administration.

In general, the concept of administration, whether public or private, is universal. If we understand administration to mean cooperation in the conduct of business, then the presence of administration is essential, whether in the private sector or in the public sector.

Although the importance of administration is recognized in both public and private sectors, the form and style of public and private administration are not the same. There are a lot of differences between public and private administration.

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Differences Between Public and Private Administration

Points of Comparisons	Public Administration	Private Administration
Definitions	Sales of products and services	Private Administration refers to the activity of privately owned organizations or institution
Goals and Objectives	Public welfare	Maximisation of profit
Legal Framework	Governed by a statutory law	Governed by the directors of the organizations
Public Accountability	Accountable to the people for its actions	Only accountable to the owner of the organization
Freedom of Action	Limited freedom of action	Its freedom of action is much wider
Political Character	Run by political direction and regulation	Completely separated from politics
Approach	Bureaucratic approach	Egalitarian approach
Revenue or Income	Taxes, duties, fees, etc.	Question of Control by economic interests
Scope	Much wider in scope	limited in scope
Fully depends on and controlled by economic interest	Not controlled by any economic interest	Fully depends on and is controlled by economic interest

10 Major Differences between Public and Private Administration [Details]

There are some key differences between public and private administration. Paul H. Appleby, Herbert A Simon, and Peter Drucker have made a clear distinction between public and private administration. They are –

1. Differences in the definition.
2. Differences in goals and objectives.
3. Differences in the legal framework.
4. Differences in public accountability.
5. Differences in discretion and freedom of action.
6. Differences in terms of political character.
7. Differences in approach. 
8. Differences in revenue or income. 
9. Differences in scope.
10. Differences in the question of control by economic interests.

1. Differences in the Definition

When the word administration is used for government activities and organizations, it is called public administration. (All government offices) 

On the other hand, private administration refers to the activities of a private organization. (All privately owned companies or organizations)

2. Differences in Goals and Objectives

The purpose of public administration is to perform its functions keeping in view the interest or welfare of the people. The success of government administration depends on the protection of the public interest or the acceptance of the basic demands of the people. The prime goal of public administration is to implement public policy introduced by the government.

The private administration as a whole is not engaged in the public interest. Here the administration is employed according to the needs and interests of the management of a private or non-government organization.

The main goal of the private administration is to fulfill the personal aspirations of the owner of that particular organization. So it can be said that private administration is a profit-oriented administration.

3. Differences in the Legal Framework.

Another fundamental difference between public administration and private administration is that public administration is governed by a statutory law, which is also created by a particular political authority. Therefore, the activities of public administration are limited to the limits of this particular law.

Although the administration of a private organization is governed by law, there is no obligation to do so within the limits of the law. In the case of private administration, the director may change the law if necessary.

4. Differences in Public Accountability

Public accountability is the backbone of public administration. The government is accountable to the people for errors in public administration. The failure or success of the government depends on the failure or success of the public administration. Public administration is directly accountable to the government and indirectly accountable to the citizens.

On the other hand, private administration is not accountable to the people. Their prime goal is to generate maximum profits. 

5. Differences in the Discretion and Freedom of Action

The discretion and freedom of action of public administration is limited compared to the private administration. The executive branch of the government directly controls public administration by enacting several laws in the legislative branch of the government. 

On the other hand, private administration is not controlled by the government. Its freedom of action is wider than public administration. Its rule regulations are frequently changing in terms of their requirements.

6. Differences in terms of the Political Character

The most important thing which differentiates public administration from private administration is its political character. Public administration is run by political direction and regulation. The main task of public administration is to implement public policies.

On the other side, private administration is completely separated from politics. There is no political influence in the operation of private administration. Its functions are directed by market forces. 

7. Differences in Approach 

The bureaucratic approach is used for running public administration, but private administration has an egalitarian approach. 

8. Differences in Revenue or Income

The main sources of revenue of public administration are mainly taxes, duties, fees, etc. whereas private administration generates their income from selling their products and services. 

9. Differences in Scope

There is a big difference between public and private administration in terms of their scope. Public administration is much wider than private administration. The citizen can get almost every service from public administration like food, health facilities, education, communication, housing, transportation, and so on. 

But on the other hand, private administration deals with those sectors from which they earn profits. 

10. Differences in the Question of Control by Economic Interests

Public administration is usually not controlled by any economic interest. As the goal of public welfare becomes the main one, in the case of public administration, financial gain or profit-making does not get special importance. The question of making a profit does not arise in the case of police, defense, or government service activities.

On the other hand, the competence and efficiency of the administration of a private organization are tested on how the administration can raise the financial goals of the organization.

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Similarities between Public and Private administration

While there are some fundamental differences between public and private administrations, there is no denying that there are similarities between public and private administrations.

Many Administrative thinkers like Henry Fayol, M.P Follet, Luther Gulick, and Lyndall Urwick deny the distinction between these two. According to them all administrative systems, it’s either public or private administration have to perform similar kinds of functions. The similarities between public and private administration are-

1. Follow Same Principles
2. Training
3. Service-Oriented
4. As a Group Efforts
5. Facing Problems

1. Similarity in Functions

Both the administrations are governed by a number of general principles. Henry Fayol speaks of 14 principles, Luther Gulick calls this general principle as POSDCORB (Planning, Organizing, Staffing, Directing, Coordination, Reporting, and Budgeting).

2. Training

Another similarity between the two administrations is that they provide appropriate training to employees in need of special administrative experience and skills.

3. Service-Oriented

The activities of some private administrations like public administration can touch public life in terms of service. Privately owned transport systems, power supply, etc. are as important as public administration nowadays.

4. As a Group Efforts

In both the public and private spheres, the administration is a kind of group effort, where different levels of employees execute a particular objective through mutual interaction or means.

5. Facing Problems

Both public and private administrations may face a number of specific problems such as decision-making problems, problems in managing director-management relationships, and problems in the production or supply of consumer goods. However, the form and character of the problem may vary depending on the field and the environment.

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Conclusion

From the light of the discussion on differences between public and private administration, it can be concluded that there are a lot of fundamental differences between public and private administration, but it is true that there are some similarities also. 

Many emphasize the differences between public and private administrations, while others emphasize the similarities between the two. The Public Private Partnership (PPP) is very important today. Many things in public administration today can be achieved with the help of private administration. That’s why Recently, the line between private and public concepts has not been clear.

Judging by the necessity of the administrative system as a whole, it can be said that it is not possible to have any real purpose in verifying the differences between the two or the errors of both. What is needed is a joint effort of both private and public administration. 

The goals and objectives of the government administration cannot be achieved without the help of non-governmental organizations or private administration. It is possible to build a healthy and strong administrative system through the skills, cooperation, and coordination of both and this environment is beneficial for both government and non-government organizations.

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References

1. Chakrabarty, Bidyut, and Bhattacharya, Mohit. Public Administration: a Reader. Oxford University Press, 2007.
2. Chakrabarty, Bidyut. Prakash Chand. Public Administration In A Globalizing World: Theories and Practices. SAGE INDIA, 2012.