There is a difference between public and private management. This paper will look at the differences between these two sectors of management. Public and private organizations have been seen from different perspectives, which vary from one person to another. This is a subject that has been there from time immemorial. Public organizations have been regarded to have a great impact on the public. These are the organizations that affect the way public interests are taken.
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Understanding and Managing Public and Private Organizations
Management differs in public and private organizations. The perception of public organization management has differed from that of private organizations. Management in public organizations has been regarded to be based on the way public interests have been taken. In public organizations, public interests have been considered in all policies. Public organizations are required to have some financial reports to be accessible to the public. For an organization to be public, it must have sold some of its stake and portion to the public. This means that the public will have to be included in the sharing of profits. Management of public firms requires, therefore, that the public be involved in strategic decisions. They will need to have some say in making important decisions (Lowson, 2002).
Private organizations have always been ahead in innovation, compared to public organizations. Innovation in the search for new ways of increasing profit has been the driving force. In public organizations, this is not the case, as most managers are leading in bureaucracy. This perception is due to the fact that public firms are for the government and the government will always pay them even if they fail (Pettigrew, Thomas, & Whittington, 1977).
Private firms do not have to share their information with the public and with anyone who is not part of the owners. In most cases, private firms are owned by either founders or investors. In this sense, most decisions come from them. They do not have to consult anyone when they are making important decisions. When there is a need to have funds for expansion, the management of private firms will turn to private funding as they have limited access to the public for funds (Lowson, 2002).
Another difference that is evident is that, in private firms, operations, which are inefficient and drain money from the organizations are usually closed. This frees money that will be used in other ventures and operations that bring money to the organization. Most operations of public firms are losing money. The services that use a lot of money are the ones that cannot be utilized for productive purposes. This is the trend that is seen in public firms. It is, therefore, common to see operations in public firms being undertaken and the overall value of these operations is a waste of money. Management in private firms requires that the challenges be met with zeal and the value of money that is used in these ventures gets the most value (Hitt, Freeman, & Harrison, 2001).
Managers in public firms are more inclined to the political implications than financial implications. In public organizations, the perception is more about politics and not the financial health of the organization (Fleetwood & Ackroyd, 2004).
The text of Rainey does not change my perception of management in these two sectors as they seem to match what I believe.
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Fleetwood, S., & Ackroyd, S. (2004). Critical realist application and management studies. New York: Routledge.
Hitt, M. A., Freeman, R. E., & Harrison, J. S. (2001). The Blackwell handbook of strategic management. Wiley Blackwell.
Lowson, R. H. (2002). Strategic operations management. New York: Routledge.
Pettigrew, A. M., Thomas, H., & Whittington, R. (1977). Strategy and management. New York: Sage.