There is always a great distinction between public and private organizations. The management system, structure, culture, motivation, and employee attitudes bring out the difference that exists between public and private organizations. Psychology and economic scholars such as Maslow came up with theories that highlight the difference between private and public organizations (Boyne, 2002). Maslow’s theories focus on what motivates employees within an organization. The psychological orientation of employees in the private sector is different from that of employees in the public organization (Boyne, 2002). Apart from the two types of organizations, there is an emerging category of an organizational model that combines the characteristics of a public organization with those of a private organization. The attitude of employees and the management style of a hybrid organization reflect a perfect balance between private and public models. Many organizations are shifting to the hybrid model to offset the limitations of both public and private models. The organizational model adopted by an organization determines its management style and the source of motivation of its employees.
The government owns all the stakes in public organizations and therefore a higher degree of formalization is required before an organization begins its functions (Aldridge, 2002). The procedures and regulations that guide the registration of a public organization are very elaborate and thorough to promote transparency and accountability. The three arms of government that include the legislature, judiciary, and the executive have to approve all new public organizations before they begin operating (Boyne, 2002). Public schools and state-owned corporations are examples of organizations that function under the public model. The objectives of public organizations are not very specific and definite and therefore make the evaluation process difficult. Public organizations encourage consultations in decision making because they view disagreements and divided opinions as a positive sign (Aldridge, 2002). Disagreements in a public organization ensure that the final decision is inclusive and represents the interests of all stakeholders. Managers in public organizations advocate for the collective value of an organization through consultative practices (Aldridge, 2002). The employees in public organizations work with an aim of benefiting the society and do not put much value on economic rewards. Community service and social responsibility motivates civil servants during their daily activities.
The criteria for a private organization is somehow less complex compared to public organizations (Baldwin, 1990). The registration process of a private organization is less formal since it does not require the approval of the legislature and the executive. The objectives of a private organization are very specific and attainable at all levels. The management in private organizations does not favor stakeholders’ participation in decision making (Baldwin, 1990). Private sector managers use analytical methods in making important decisions affecting the organization. The employees in private organizations work hard to achieve the economic objectives of the organization with salaries and rewards being their major source of motivation (Baldwin, 1990).
Governments have developed a lot of interest in the private sector recently by buying stakes in private organizations. A hybrid model is a combination of the private and public model rolled into one. There is a common trend where governments have been offering bailouts to financial institutions in exchange of being sold some shares (Baldwin, 1990). Private organizations focus on making profits, and this has motivated many governments to start investing in the private sector to make some money for financing its activities (Boyne, 2002). Private organizations benefit from the hybrid arrangement by enjoying government protection and bailouts (Boyne, 2002).
In conclusion, public and private organizations have different management and organizational models. Governments have some form of control in private organizations and this has led to the emergence of hybrid organizations. Public organizations have a major commitment of serving the public whereas private setups focus on making profits. The government takes over the management of private organizations after bailouts in order to recover its money. The mutual benefits enjoyed by both sides have made many private organizations adopt the hybrid model.
References
Aldridge, R. & Stoker, G. (2002). Advancing a new public service ethos. London: New Local Government Network.
Baldwin, J. N. (1990). Perceptions of Public versus Private Sector Personnel and Informal Red Tape: Their Impact on Motivation. The American Review of Public Administration, 20(1), 7-28.
Boyne, G. A. (2002). Public and Private Management: What’s the Difference? Journal of Management Studies, 39(1), 97-122.