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Objectives of Public and Private sector organizations – A comparison

Both public sector and private sector organizations have objectives and missions. But depending on the type of organization, there are differences between the public and private sectors of a country. Some of them are discussed below.

  • Public sector organizations are established by statute or a similar vesting document passed by the government or other law making bodies. Therefore, managers cannot change them according to the changing conditions. On the other hand, directors of a private sector organization may determine its objectives and change them whenever necessary.
  • Output of a private sector entity can be valued by the paying customers and therefore can be incorporated in its objectives, missions and decision criteria. It may not be possible to allow the market to determine the income of a public sector entity.
  • When a private firm fails to meet the aspirations of its stakeholders, it can result in serious consequences which can lead to even closure of the firm. In the public sector, disbelief can be suspended for long periods, with the result that some stakeholders’ aspirations are ignored.
  • Private sector firms should earn a satisfactory return on investment otherwise the investors might withdraw the investment in the firm. Public sector organizations still consider that their capital is free and therefore, the need to earn a return is always ignored.

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Comments

Dilli Ram on October 05, 2017:

Will you help me to provide some points that is objective private sector in government

Jacobina Eliakim on March 05, 2017:

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Lameck Peter on April 04, 2016:

why Tanzania government can benefit in private sector rather than public sectors?

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Lasantha Wijesekera (author) from Sri Lanka on May 20, 2012:

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