Many scholars and practitioners have been working hard to define public and business administration in attempts to establish the main differences between the two notions. The science of administration is not necessarily the same in respect to various fields and aspects it can be applied at. Numerous researches and debates on the matters of public and business administration struggle to define the essence of their connection. Moreover, business management is rather common in the business world than business administration, whereas public administration is a solid undisputable concept established long time ago. This unnoticeable idea, in fact, defines the major difference between the two. Administration is most of the time concerned with the determination of goals and objectives, while management refers to the planning and development of the strategies toward accomplishment of those goals and objectives. Therefore, this paper aims to examine the differences between the public (PA) and business administration (BA) with specific references to their values, perspectives and characteristics.
Conceptual Differences of Public Vs. Business Administration
Currently existing scholar literature has the difficulty to provide clear and coherent definitions of public and private administration or management. This significantly escalates the central dilemma of studying various organizations due to the divergence of opinion, which all come from different vantage points. One of the most popular opinions held by the general population implies that government and perhaps whole countries would function more efficiently, if public administration managed their affairs like businesses. Undoubtedly, public and private administration are inevitably linked since both are the parts of one state’s infrastructure. Therefore, both exert a high degree of influence on one another in terms of shaping their values, perspectives and characteristics. Precisely, today’s private sector affects public sector in numerous ways including performance budget, cost-benefit analyses, cost-accounting procedures, performance appraisals, management by objectives and various other aspects.
Noteworthy, given the difference in definitions of public versus business administration, it is a challenge to determine whether a certain good or service belongs to one or another sector. Commonly, private goods entail limited ownership, whose use maximizes the value to the owner while reducing it to others. At the same time, public goods entail extended degree of ownership, whose value is available to general population and is maximized when its benefits are experienced by a larger number of individuals. One of the greatest examples of a public good and service simultaneously is national defense. The whole population of a country is a subject to its benefits as there is no value in providing it for single individuals. It is often argued that public sector exists on the grounds of a market failure. To be more precise, since no private business has ever been interested in the provision of unemployment and welfare benefits, a public sector must exist in order to fill in the gaps and fix market inefficiencies. In addition, governments also serve as guards and guides for the private sector in terms of regulating the goods and services provided by the private sector in order to prevent negative externalities and maintain national well-being. For instance, nearly all business organizations produce harmful emissions, which must be taken care of or otherwise, people would suffer from a polluted surrounding environment. Since general population is in no power to exert authority and strong influence on businesses, public sector must step in to sustain a healthy infrastructure in the country.
Differences in Values, Perspectives and Characteristics of PA & BA
Major difference in values of public and business administration lies in their ultimate purposes and objectives. Precisely, public sector focuses on the establishment and maintenance of equality and justice in respect to social principles, goals and standards held by the general population of a certain country. Whereas the main goals and purposes of businesses imply efficiency, profit generation and competitive advantage. In order to live up to its values and fulfil goals, public sector facilitates the creation of appropriate institutions, which ensure that citizens are guaranteed the basic human rights such liberty and the pursuit of happiness as well as regulate private enterprises. Such institutions usually include agencies, bureaus and departments that operate under governmental control and legislation. On the other hand, private sector comprises of enterprises that produce goods and services that satisfy public needs such as food, clothing, comfort and many others. In addition, public sector is in charge of establishing such structures as health care, army, navy and post offices, which are the vital contributors to the achievement of public administration values. Although, private sector can also venture enterprises that provide similar services, the initial value of such businesses is self-interest (profit).
Perspectives of both public and business administration differ on the grounds of their intrinsic values. Since the key values of the public sector are to take care and provide support to the general public, its perspectives focus on the attainment of the commonwealth as compared to private sector’s major goal to generate profit. In this context, another visible perspective of the public administration is market interference, which is necessary to control the private sector in attempts to build strong state infrastructures. Whereas business administration concentrates on the development of the free market, which facilitates market development and thus, increased profits. In order to realize their perspectives, both public and private sector exploit own instruments. Public administration exploits the functions of its governmental structures (legislative bodies, city councils etc.), while business administration approaches private management positions (finance, sales, human resource, marketing managers etc.). Another noteworthy difference in the perspectives of the PA and BA is the ability to measure them. The commonwealth of the nation that public sector aims to attain is rather impossible to measure in comparison to the profit of the business sector, which can be forecasted, projected and estimated using numerous available financial tools.
Despite the lack of clear definitions of both PA and BA, their characteristics are rather obvious. First, public sector features decentralized power due to the fragmented federalism system, while private sector is characterized by the centralized power usually held by the CEO or respective authorities. Second, in terms of strategizing goals and objectives, public sector is rather short-term oriented in comparison to long-term orientation of the private sector. Third, PA pays significant degree of attention toward the diversity of its goals and population, while BA focuses on efficiency. Moreover, in terms of their values, public sector is cultural driven as compared to the competition-driven business sector. Finally, since PA aims to secure and support the general population, its policies and activities are transparent for the sake of trust and fair government-nation relationship. Thus, public sector reports directly to the people. On the other hand, BA is rather internally controlled representing closed business systems, which influence and communicate with the public through lobbying and media.
Similarities in Values, Perspectives and Characteristics of PA & BA
Considering numerous debates about the nature of public and business administrations and their relationship, it is obvious that both have similarities as well as differences. However, the similarities in values, perspectives and characteristics of PA and BA are rather verbal and theoretical than actually practical. For instance, both sectors are strongly dedicated to their distinctive purposes whether it is the commonwealth of the nation or individual profit. Moreover, both sectors are held accountable for their actions and thus, they must respond to the outside pressures of the parties affected. As it has been mentioned earlier, public and private sectors possess their own structures, which are different in their nature but similar in terms of the approach as both design them around their values. Another rather visible and tangible similarity is the need for the operational elements to achieve objectives and sustain their activities. These include input and output, funding, leadership, labor and various managerial resources. Given their numerous essential differences and a few similarities, it is reasonable to assume that public administration and business administration are rather different notions.
Direction of Change in PA & BA
Historically, PA and BA existed in a conflict since private sector has always aimed at generating profit while public sector posed sufficient barriers and regulations on the former in order to build and maintain equal and fair social environment. However, with time this trend have been changing toward integration and cooperation of both, which has brought the line between the public and private sector to a moving juncture and subtle shifts. Private contractors have long furnished such services as refuse collection for certain local governments. Today, public sector allows private firms to engage in a wide set of activities and services ranging from coordination of recreational programs to fire protection. Governments have established universal standards to determine whether a certain governmental service should be publicly or privately owned for the purposes of facilitating maximum benefits to the general population. Governments are constantly pressured to manage their budgets efficiently, appropriately allocate resources and improve economy in order to ensure growth and sustainable development of the public sector. In turn, this requires integration of services and collaboration with the private sector to maximize the values of both PA and BA. Since, sustainability of the national well-being requires significant financial resources, governments are challenged to decrease expenditures or search for the outside investment.
William Coleman argues that modern consumers and taxpayers exert a great degree of influence on the area of urban service delivery and that current society is in power of comparing and selecting alternative systems and sources of supply. In today’s environment of rising public awareness and needs, governments find it difficult to manage everything on their own. Therefore, assistance of private sector is necessary as it facilitates appropriate service demand and delivery allowing for the creation of the competitive prices and alternative supply sources. This implies that regardless of a historical conflict between the public and private sector, modern environment has evolved their relationship to the level of inevitable codependence and cooperation, which is expected to grow and complicate.
Current Challenges PA & BA
Currently, both public and private sectors are facing rather numerous and complex challenges that are both global and local as well as highly volatile boundaries. Customized approaches such as “one size fits all” that were popular and effective some time ago have proven to be efficient no longer. Precisely, current challenges of PA and BA are closely linked to the global changing trends described above. Both sectors exist in codependence and thus, require support and cooperation from each other. Organizations and institutions from both sectors call for the establishment of strategic interdisciplinary partnerships in attempts to avoid or prevent and overcome possible issues. In particular, private enterprises can serve as the distribution channels for public services and transactions to increase public awareness and access. For example, public sector can increase population’s cyber security by cooperating with the private sector that owns major part of the assets (telephones, PCs, electronic devices etc.). In this way, both parties will achieve their goals and objectives through adherence to their values and perspectives.
Even though public administration and business administration have not been clearly defined yet, their differences and similarities appear to be rather obvious. Moreover, regardless of the thin line between the two, both sectors play distinctly vital roles in the growth and development of the society. In the wake of current social and market trends, integration of public and private services as well as cooperation of PA and BA is inevitable in order to sustain national welfare. Therefore, both sectors should reconsider their future perspectives and realign their values and characteristics with the mutually beneficial goals and objectives.