Public Administration and Private Administration

Public Administration and Private Administration

Private Administration is the management and organization of private business enterprises. This is an administrative purpose carried out by the private individuals, a team, or a group, to make a profit. It is a business activity that is non-political in a landscape.

Public Administration is the field of study that is concerned with the systematic application of public policies and programs formulated by the state. It relates to the administrative functions carried out by the government.

Differences between public and private administration

John Gaus, Ludivig Von Mises, Paul H. Appleby, Sir Josia Stamp, Herbert A. Simon, Peter Drucker, etc., in their writings, have made a distinction between public and private administration. 

According  to  Simon,  the  distinction  between  public  and  private  administration relates mainly to three points: 

Public administration is bureaucratic whereas private administration is business-like; 

Public administration is political whereas private administration is non-political; and 

Public administration is characterized by red-tape whereas private administration is free from it. 

Felix A. Nigro has pointed out that the government is also different from a private organization, as no private company can equal it in size and diversity of activities. 

According to Sir Josiah Stamp, the four principles, which differentiate the public from private administration, are: 

Principle of  Uniformity:  Common and uniform laws and regulations mostly regulate public Administration. 

Principle of External Financial Control: the representatives of the people through a legislative body control Government revenues and heads of expenditure. 

Principle of Ministerial Responsibility: Public administration is accountable to its political masters and through them to the people.

Principle of marginal Return: The main objective of a business venture is profit, however small it may be. However, most of the objectives of public administration can neither be measured in money terms nor checked by accountancy methods.

According to Paul H. Appleby, public administration is different from private administration. He remarks, “In broad terms, the governmental function and attitude have at least three complementary aspects that go to differentiate government from all other institutions and activities: breadth of scope, impact, and consideration; public accountability; political character. No non-governmental institution has the breadth of government. Appleby notes that the political character of Public Administration differentiates it from private administration. Public Administration is subject to political direction and control. This is the primary distinction between the two. 

He further argues, “Administration is politics since it must be responsive to the public interest. It is necessary to emphasize the fact that popular political processes, which are the essence of democracy, can only work through the governmental organization, and that all governmental organizations are not merely administrative entities, they are and must be political organisms.” 

Appleby reflects further on the distinction between public and private administration in the context of public accountability “Government administration differs from all other administrative work to a degree not even faintly realized outside, by virtue of its public nature, the way in which it is subject to public scrutiny and outcry. This interest often runs to details of administrative action that in private business would never be of concern other than inside the organization. According to Appleby private administration cannot claim the breadth of scope, impact, and consideration of the public administration. 

He observes, “The organized government impinges upon and is affected by practically everything that exists or moves in our society. It involves policies and actions of immense complexity. Its fullest possible understanding requires the wisdom of many specialists as well as the key participants in public and private life. 

The more important distinguishing features of Public administration may be described under the following sub-heads: 

Political Direction

Public administration is political, while private administration is non-political, public administration takes place in a political context. 

Absence of profit motive

The absence of profit motive from the Public administration is another feature, which distinguishes it from the private administration. The primary purpose of a governmental organization is to provide services to the people and promote social good. 

Prestige

Public administrators who serve in the Government enjoy high status and prestige in comparison to their counterparts in private enterprises, especially in developing countries.  

Public Gaze

All the actions of public administration are exposed to wide public gaze because the public closely watches it. This does not happen in private administration. 

Service and Cost: Most governments spend more money than their income or revenues. That is the reason for finding generally a deficit budget that is, expenditure exceeding income. Conversely, private administration income often exceeds expenditure without which they cannot survive. 

Legal framework

Public administration operates within a legal framework. It is rule-oriented. The responsibilities of public administrators are fixed by a set of constitutional practices, laws, and regulations. Government officials are obliged to act within their legal powers and not outside the law. 

Consistency of treatment

A government official is required by law to maintain a high degree of consistency in his dealings with the public. He has to observe the principle of equality of treatment in serving the people. It is a legal obligation not to discriminate against any person.

Public accountability

Public accountability is the hallmark of public administration in a democracy. Public administration is responsible to the public, though not directly but indirectly through political executive, legislature, judiciary, etc.

Large-scale administration

Public administration is a large-scale administration. It is said that almost anything under the sun is directly or indirectly under the domain of public administration. It is, by all means, larger than any big private concern in terms of size., complexity, and diversity of activities.

Officials remain Anonymous

In public administration, even the most senior officials remain anonymous and their identity is not disclosed. This is so because whatever they do, they do in the name of the government and not in their own name.  Financial meticulousness: Public administration has to be very careful in financial matters because it is working as a custodian of people’s money. 

Political Direction 

In public administration, there is political direction. The administrator under public administration has to carry out the orders which he gets from the political executive with no option of his own. Politics is at the core of Public Administration. It has to implement the decisions taken by the political executive. Private administration is not subject to political direction but functions largely on the basis of direction and regulation of market forces.

Profit Motive 

Public administration is conducted with the motive of service while the motive of private administration is profit-making.  If private administration is useful to the public, its service to it is a by-product of profit-making. Private administration will never undertake work if it does not bring profit.

Service and cost 

In public administration, there is an intimate relationship between service rendered and the cost of the service charged from the public. Only such an amount of money is raised by taxation,  which is necessary for the rendering of service. In private administration income of funds exceeds expenditure because there is usually an attempt to extract as much money as possible from the public.

Nature of Functions 

Public administration is more comprehensive.  It deals with the various types of needs of the people. In a socialist state, the scope of the State is still larger. Private administration does not cover so many aspects of human life.  It mostly concerned with the economic needs of life.

Efficiency 

Efficiency is said to be the cornerstone of any organization. However, due to varied responsibilities, lack of effective control, less accountability, the involvement of a large number of levels, and job security of employees, efficiency has not been there in public organizations to the effect desired. It is considered by many that in public administration efficiency is less. Because of extravagance, red-tapism, and corruption, which may dominate in public administration it, may not be in a position to function in an efficient manner. But in private administration, the level of efficiency is superior to public administration. The incentive for more profits impels individuals to devote more to work.

Public Responsibility 

Public administration has a responsibility to the public. It has to face the criticism of the public,  press,  and political parties.  The private administration does not have any great responsibility towards the public.  It is only responsible to the people indirectly and that too for securing its own ends and not for the welfare of the people.

Public Relations 

The public and private administration also differ in the principles of public relations. Public relations have narrower content in public administration than in private administration.

Uniform Treatment 

Public administration is consistent in procedure and uniform in dealings with the public. In such a system a civil servant cannot show favor to some people and disfavor to others. But private administration need not bother much about uniformity in treatment. The public administrator must maintain a high degree of consistency in his actions. They must serve the public without discrimination. The private administrator is subject to no similar requirement. RatheruniformityoftreatmentishallmarkofPublicAdministration.

Monopolistic 

In the field of public administration, there is generally a monopoly of the government and it does not allow private parties to compete with it. For example,  no person can establish posts and telegraphs, railways, etc. But in private administration,  several individuals or administrations compete with each other to supply the same commodity or meet the same needs. Thus there is no monopoly in private administration.

Financial meticulousness

Public administration has to very careful in financial matters.  Public money is to spend meticulously and according to the prescribed procedure.  It is the legislature, which exercises financial control over the executive. But there is no difference between finance and administration in private administration.  There is no external financial control.

Social Prestige 

Public Administration carries greater social prestige than private administration. Service to the community is the basic characterizing public administration.

Social Consequence 

The social consequence of public administration will be great because a defect in it will do more harm to the public.  But in private administration, this will be less.  Even if any harm is done by it will be of less significance and thereby may be negligible.

Public Administration is far more closely tied up with the constitution and formal laws of a country than private administration. It is thus closest to political science and emphasizes elements such as equality, fairness, and rule of law in decision-making. Private administration,  on the other hand,  stands by profit,   effectiveness,   cost-benefit analysis. The difference between the two is more apparent than real.  Both respond to the environment differently‘ which inevitably produces consequences for the functioning of the organization and its management.  It can be concluded that public and private administration are the two species of the   same genus,  but they have special values and techniques of their own which give each its distinctive character.

Similarities between Public and Private Administration

Scholars like Henry Fayol, Mary P. Follet, and L. Urwickdo did not make a distinction between public and private administration. 

The classical writers held the view that public and private administrations are the undifferentiated members of the genus administration. 

Henri Foyal, for example, says that there is only one administrative science, which can be applied equally well to the public and private sectors. In his address in the Second International Congress of Administrative Science, Fayol remarked, “The meaning which I have given to the word administration and which has been generally adopted, broadens considerably the field of administrative sciences. It embraces not only the public service but also enterprises of every size and description, of every form and every purpose. All undertakings require planning, organization, command, coordination, and control and in order to function properly, all must observe the same general principles. We are no longer confronted with several administrative sciences but with one which can be applied equally well to public and to private affairs”. 

The following similarities between the two types of administration may be noted:  

Both public and business administration rely on common skills, techniques, and procedures.

In modern times the principle of the profit motive is not peculiar to private administration, because it is now accepted as a laudable objective for public sector enterprises also. 
In personnel management, private organizations have been influenced greatly by the practices of public organizations. 

The private concerns are also subjected to many legal constraints.  The government is exercising much control over business firms through regulatory legislation such as taxation, monetary and licensing policies, etc. Consequently, they are not as free as they once used to be.

There is a similar type of hierarchy and management systems, both in the public and private sectors. Both have same kind of organization structure, superior-subordinate relationships, etc. 

Both Pubic and private administration carry on continuous efforts to improve their internal working and also for the efficient delivery of services to people or customers.

Public and private administration serves the people, whether being called clients or customers. Both have to maintain close contact with people to inform about their services and also to get feedback about services and products.

In both cases, public relations help them to inform and improve their services to the people. The preceding discussion shows that the distinction between public and private administration is not absolute. In fact, they are becoming more and more alike in many respects. However, it does not mean that there are no significant differences between these two types of administration. 

Waldo observes that Public administration is distinct because it reflects the peculiar characteristics of government activity and the public setting in which it functions. 

Given the wide acceptance of the ideas of liberalization, privatization, and globalization, both public and private administrations have to compete in the same area to provide services to people. Here both are dealing with customers, who pay for their services, in such a situation it narrows down the differences between the public and private administration.  

New  Public  Management,  which has come into prominence, recently, puts emphasis on managerial techniques, which are to be adopted by public administration for the efficient delivery of public services. But in providing public services in the field of social and welfare areas there exists a difference between public and private administration With this brief characterization, it could be stated that both public and private administration are placed in different environments. But this difference is more apparent than real. 

According to Waldo, The generalization which distinguishes public administration from private administration by special care for equality of treatment,  legal authorization of, and responsibility of action, public justification of decisions, financial probity, and meticulousness, etc. are of very limited applicability,” In fact, public and private administrations are the “two species of the same genus, but they have special values and techniques of their own which give to each its distinctive character.