Public and Private Administration

Some thinkers like Henry Fayol, Mary Parker Follet and Urwick are of the opinion that Public and Private Administration exhibit many common fundamental characteristics and the difference between them is of degree rather than kind. On the other hand, Paul H Appleby, John Gaus, Ludwig Von Mises, Josiah Stamp, Peter Drucker are of the opinion that there are crucial differences between the two.

Similarities between Public Administration and Private Administration

1. Skills- Many common skills are used in the two eg. Accounting, Statistics, Office Management etc. Many retired civil servants are employed by big business houses and public corporations too sometimes borrow the services of experts from private sectors eg. In UK, Iron and Steel industries absorbed during their nationalization, all employees that were previously running them which proved very beneficial.
2. Influence each-other- Public corporations import into Public Administration, the ideas and organisation of it's Private counterpart.Similarly, big business organisations too have been influenced by governmental practices in such areas as staff welfare, superannuation benefits, etc.
3. Administrative set-up- There is a certain kind of hierarchy and administrative set-up in both. Both have clear demarcation of work, duties and responsibilities.
4. Research and improvement- both do these activities as there is always sufficient scope for improvement.
5. Public Relations- both sectors have to deal with masses in order to know their needs and necessities and accordingly adjust the services they provide.

Note:- L.I.C., a private enterprise at the time, was taken over by Govt. of India in 1956.

Differences between Public Administration and Private Administration

1. Prestige- Public Administration is regarded as more prestigious as it provides more opportunities to serve the public and also due to the sovereign power vested in the government machinery.
2. Political direction- The bureaucrat is supposed to carry out public policy made by the legislators. He or she has little choice in executing the orders he or she gets from political executives.
3. Profit motive- Profit making is not the ultimate objective in public administration unlike in private administration. Public Utility Services of Govt. of India often run at a loss yet the Govt. is duty bound to spend on them.
4. Uniformity of treatment- Public Administration is consistent in procedures and uniform in dealings with the public. It is not expected to show discriminatory attitude towards certain sections. Business Administration does believe in favoring the regular customers.
5. Legal framework and procedure- Public Administration has to operate strictly according to law, rules and regulations whereas business firms have considerable flexibility in adapting their operations to changing situations.
6. Essential services- Public Administration deals with matters which are of vital importance for the very existence of the people. Eg. defence of country, law and order, educational and health facilities.
7. Scope of activity- Public Administration is more comprehensive. Several services like police and fire protection, public works, education, recreation, sanitation, social security, agricultural research, national defence etc. come under public administration.
8. Monopolistic- Several services rendered by the state and falling under public administration are of a monopolistic character. Because of this unique quality it is sometimes more difficult to gauge the efficiency of the conduct of public business where competition is non-existent and hence the need for a higher quality of service is not reinforced.
9. Public responsibility- Public administration is accountable to the public and open to public scrutiny. A civil servant has to take into consideration, the possible reaction of the masses before taking any decision. The administration is continuously scrutinized by the public, the media and the political parties. As stated above, a public servant is not entitled to show discrimination of any kind in discharging his duties.
10. Financial control- Public administration is subject to very extensive financial control. It is the legislature that passes the Appropriation bill which authorizes the executive to spend the money.In India, the Comptroller and Auditor General (CAG) controls our national finances and presents his/her reports to the parliament. Thus, there exists a dichotomy between administration and finance.
11. Social necessity- Public administration operates in order to cater to the needs of the society and not for financial benefits.
12. Efficiency or effectiveness- In business administration, the efficiency is measured by input-output relationship and by the 'profits' made. However taking this view in public administration is not sufficient. Effectiveness of the administration is measured successful achievement of policy goals. For instance, in case of a natural disaster like a drought or a flood, providing swift relief and care to the victims takes precedence over optimizing the expenditure.
13. Public criticism- Inefficiency and fallacies of public sector organisations are in constant media glare and subject to criticism.