Decision making in private administration is simpler than in public administration. There are no hierarchies involved in strategy formulation and the process tends to take a monopolistic close to a monopolistic state. Usually in a private administration, the owner of an entity or the top management consisting of few members is charged with the task of formulating policies and goals of an entity. The top managers do not engage the workers or middle level and lower level management teams in the decision making process thus making the decision making process to be quick unlike in the public administration.
Also, due to the fact that fewer people are entrusted in the decision making process, issues of conflict of interests rarely arise. This ensures that an entity’s goals are clear and well defined unlike in the public administration where goals are ambiguous (Pierre, 2003). Another notable difference is the visibility of the public administrators. Mostly, managers in private sector operate or work in relatively obscured environment unlike managers in the public sector. Public managers usually operate in an environment whereby the public eye is on them. Their actions are often scrutinized by the public.
The job of a public manager does not only entail carrying out or implementing the public policies, he or she has to meet and respond frequently to the demands and questions of the public. An inevitable tension exists between responsiveness and efficiency. A manager has to manage the public sector effectively while at the same time responding to the demands and concerns of the public. Due to this pressure, public organizations are left in “no-win” situations as they try to meet the demands of the public for an effective government while at the same time, the same public defaults in paying taxes.
This is not the case with private administrators. Private sectors are privately owned and are not in charge of producing public goods. They are thus not subjected to public scrutiny unless in very special cases (Heady, 1991). Another difference between private and public management or administration lies on the impact politics has on these two forms of administration and in their management processes and function. Both the private and public administrations have some political aspect but the degree of political involvement differs.
Political influence is more important in the public administration unlike in the private administration. In the public sector, policies and other decisions which affect the private sector or the companies are either directly or indirectly affected or regulated by laws and regulations. Such policies may affect the financial support granted to the private sector as well as the governing laws which may positively or negatively impact the private sector. The public sector on the other hand is controlled by politicians elected by the public thus making political influence important.
There is a direct link between public governance and funding strategies for public sector thus political influence is very essential (Beldia, n. d). The legislative oversight of public administration and private administration is also different. Private sector is usually subjected to regulatory regimes which controls the way business is conducted. Business practices are guided by these legislations which mostly do not concern matters like employment. Public administration on the other hand is regulated by many legal restrictions which include employment laws.
Employments as well as employment contracts are highly regulated in public sector unlike in the private sector. In the public sector, various procedures have to be applied before hiring or firing employees and this must be done in a formal manner and in writing. All the procedures must be documented for reference purposes to ensure accountability and transparency are upheld. Usually, jobs even the most menial are advertised and equal employment opportunities given to all people.
This is not the case with the private sector. In a private sector, the owner is at liberty to hire or fire individuals whom he feels are not productive enough. Also, the private sector is not mandated to advertise for job posts especially for some of the junior staff. Promotion is also done as per the direction of the owner or the board of directors. Unlike in the public sector, salaries and wages in the private sector are decided by a company and not the government (Heady, 1991).
The funding of the private administration and that of the public administration as noted earlier are different. Private sector is fully funded by the customers and investors. For funding of this sector to flow, the customers who are the end users of the goods and services must be satisfied by the products. As such, quality management and creativity are essential for ensuring continuous funding by the customers. This is not the case with private sector or administration.