Public Management & Private Management

There is a general belief that public management is a more difficult task, operating under a broader range of internal and external constraints, than is private management. Is this time-honored belief accurate, or are the similarities between public and private management greater than their differences? This is the core question that the following discussion will explore and seek to answer.

Public agencies are brought into being by the state, and exist to serve the interests of the state. In a federal state, agencies may be created by, and in the service of, some subdivision of the national state (such as an American state government). Even in a unitary state, specific public agencies may be several layers removed from the political leadership, and be more responsive to their particular public constituencies than to the directives of the national leadership. Nevertheless, the general rule may be considered valid that public agencies exist to serve state interests. In democratic societies, at least in principle, the state structure itself exists to serve the broad public interest, and state agencies tend to show some responsiveness to perceived public interests.

Private firms and agencies, in contrast, exist to serve some private interest. The vast majority of private agencies are business firms, which exist to make money for their owners, whether these are a few proprietors or a large body of stockholders. A division of a firm may be well removed from direct purv

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ns, as well as with their customers. These large organizations are inherently bureaucratic, thus by no means free of red tape or constraints on managerial autonomy. It should not be entirely surprising if the public-private distinction is less significant than the common characteristics of large organizational entities. Efficiency of Public Management: What of the presumed lower efficiency of public employees? In the English-speaking world, it is commonly assumed that public employment offers greater security and lower pay than comparable private employment. It is thus thought to be a harbor for the mediocre. In fact, however, one study found that public employees in the United States scored higher on average on a standard ability test (the AFQT, or Armed Forces Qualifications Test), than did their counterparts in private industry (Crewson, 1995, p. 635). It is notable that this result was found in the United States, where the virtues of private enterprise and the shortcomings of "bureaucracy" are even more cherished than in other English-speaking countries. Standardized test scores are by no means a full measure of managerial ability. However, test scores, along with broadly similar measures such as academic performa

Category: Business - P