public management - public affairs

Management in the public sector is both similar and different than the private sector, but the differences outweigh the similarities (Hill & Lynn 2009, 28).  There are two primary reasons why private sector and public sector management differ: political and legal forces, and market failures.  However, there was an initiative during the Clinton Administration that Vice-President Al Gore termed “Reinventing Government”, where government should be more efficient and operate like a business. This innovative way of thinking about government operations led to public sector change both nationally and internationally (Hill & Lynn 2009, 30).

There are similarities, for example, local municipalities and private firms both have internal stakeholders that provide direction to their respective organizations.  A firm typically has a board of directors and a government has a city council.  A private firm has a chief executive officer and a municipality has a city manager, dependent on the government structure.  Both the public and private sector organizations will have similar departments and staff that perform similar functions but the key distinction is what they are producing, why they are producing it, and within what parameters are they producing it. 

A private firm will produce goods and services as long as it is profitable and to maximize those profits.  A public organization will address market failures by providing essential services that the private sector can’t or will not, because of asymmetrical information and the need for distributional equity (Lynn & Hill 2009, 27).  Public sector organizations produce public goods, a good that can be consumed equally by all and no one can be excluded from consuming (Hill & Lynn 2009, 26).  Examples of public goods would be clean air, water, and national defense, all of which would suffer from the free-rider problem if we relied on the private sector to produce (Lynn & Hill 2009, 26).

Works Cited Hill, Carolyn J. and Laurence E. Lynn, Jr. 2009. Public Management:  A Three-Dimensional Approach. Washington, D.C.: CQ Press.