Public and Business Administration Comparison - Coursework Example

Public and Business Administration Number: Introduction If there is a practice that has proven itself to be very dynamic and of critical importance, then it is administration. Simply put, administration is the act of directing organizational resources towards the accomplishment of a certain goal. The pervasive and sacrosanct nature of administration is seen in it encompassing law, business, academics and public administration. Business and public administration have been hailed by management scholars as the very conduits for sustainable development. Public administration is concerned with the directing of resources and the directing of academic disciplines so as to prepare the civil service for its work, and to fulfill the implementation of government policy. Business administration involves the management of business operations and resources, in order that the business entity meets its objectives. For this cause, business administration is interchangeably referred to as private administration. The foregoing means that there are differences between business and public administration. The fundamental difference between the two is that whereas public administration is concerned with the management of the government, business administration focuses on the directing of corporate organizations. On one hand, public administration is mainly concerned with the delivery of social or public good. Public goods refer to services or commodities that are non-competitive and non-excludable to the point that an individual or a group consuming them must not reduce their availability to others. Security, education, healthcare and consumer protection are some of the public goods. Public administration will strive to provide these services, without aiming at profit-making or profit-maximization. On the other hand, business organization is mainly interested in fulfilling its objectives. Business objectives are always independent of public good since a business organization is an autonomous entity. The same business objectives are also underpinned by the need to make profit. Raadschelders and Kwang-Hoon (2011) divulge that public administration directly also leads to jobs that have the same title in the public sector. Because of this, partakers of public administration courses learn all the aspects of all the responsibilities that relate to all levels (local, state and federal) of the government. Public administration course modules will therefore cover economics, foreign affairs, national defense, immigration, finance and even ethics so that they can perform in both the public and private sectors. The case immediately above does not apply to business management. Business management particularly places more emphasis on the general management of private enterprises or organizations. Application of interdisciplinary approach will still apply, but different approaches and standpoints will be used. For instance, while business administration will study finance to help determine profit margins, the most feasible form of investment, budgets and statements of accounts, public administration may look at how legislation and finance can be integrated so as to revamp the economy (Rhodes, 2011). Again, the beneficiaries of public administration are the citizens. On the contrary, the beneficiaries of private administration are limited to the project owners, shareholders and clients. This state of affairs is underpinned by public administration being interested in providing social services or public goods, unlike business administration. The same also means that the systems of evaluation being used in public and private administration are different. Although both sectors carry out evaluation by considering the overall goal, business administration chiefly factors the profit margin. Public administration may use qualitative and quantitative measures such as accessibility of the services provision and the raising of standard of living to gauge its performance. Nonetheless, public administration may factor the profit margin just as its counterpart, business administration. Herein, the point of convergence between the two is that this evaluation is mainly done annually. Countries that follow closed-systems of employment also bring about a different aspect in employment in public administration and business administration. In public administration, even after the abolition of a given portfolio, the officer receives a taxi situation in the closed-system set up. In business administration, an employee’s tenure goes as far as the functions of a given portfolio are needed. In another wavelength, decision making in public administration factors political and social considerations and is chiefly collective in nature. Business administration on the other hand factors the relation between the objective standards and the economy. In the event that losses are made, in public administration, the liability is borne in the state budget. In business administration, the losses are settled by drawing from the business’ assets. Husar-Holmes (2012) asserts that public administration is largely accountable to the public. This is the main reason why a civil service department may publish its statements of accounts and achievements in the public media at the end of every fiscal year. The scope of accountability in business administration also stretches to different bodies, depending on bureaucratic chain of arrangement. As for business administration, accountability is limited to the project board or the private sector. When it comes to finances, different sources abound in public administration. Public administration factors different sources of revenue such as taxation, court fines, bonds and bails, levies, service fees, grants and aids from international bodies and states. The converse is the case with business administration. Business administration factors plough-back profit, loans, asset acquisition and capital as the chief sources of revenue. The Most Important Similarities, Characteristics and Differences in Value between Public and Business Administration The most outstanding similarities between public and business administration are both concerned with directing resources in order to ensure cost-efficiency and to ultimately further organizational goals. Both forms of administration give rise to jobs and aim at services provision. Both forms of administration are to operate within the legal specifics provided by the constitution. Above all, public and business administration both enter into contract with the public to perform their functions and to meet their objectives. The relationship between public administration and the public is best explained by John Locke’s theory of Social Contract. In this case, the state enters a contract with the public so that the public cedes away its absolute power or authority, at one end. The state at the other end is obligated to use the powers ceded to it to provide the values needed. For instance, the public’s power to punish crime is ceded away to the state which now uses this power to expend its state monopoly of legitimate use of violence and instruments of coercion to maintain law and public order. This shows that in public administration, the public is not just the target of satisfaction, but the origin and center of public administration. Likewise, business administration factors the public since the values it seeks to provide are for public consumption (Meredith, 2012). The most important difference between the two is public relations being geared towards the provision of public goods or social values, while private administration is centered on the need to make profits. Another important contrasting feature is public administration being geared towards public satisfaction and the beneficiaries in private administration remaining restricted to project owners, shareholders and clients. It is for the same reason that while public administration remains accountable to the public, private administration’s sphere of accountability is restricted to project owners and shareholders. The Direction of Change According to Bang-Cheng and Li-Ping (2011), since the dawn of the post Cold War, there are tremendous changes that are taking place in both private and public administration. For one, the changes in private and public administration have been heralded by competition between the two sectors. The 21st century has witnessed private administration become aggressive and competitive with many public organizations undergoing privatization. At the moment, there are calls to have even the most basic public goods such as the state monopoly over the use of legitimate force privatized. Proponents of privatization cite the need to inject efficiency and accountability into the police, military and prison systems. The backlog in unresolved criminal cases and the need to inculcate more effective technologies in fighting crime such as the use of DNA evidence are stated as the reason for the privatization of the police force. The congestion in prison systems, the dilapidated and inundated infrastructure and the high influx of contraband products and crime therein are the chief reasons being cited for privatization of the prison system. The need to abate and properly manage the high operational expenditure and concerns about contravention of human rights are again mooted as serious reasons for the privatization of the army and to an extent, the police (Tepe, Gottschall and Kittel, 2010). It is against the backdrop of the call to inject efficiency, accountability and transparency in services delivery that water, electricity, telephone, transportation and mining have all shifted from being publicly administered to being privately run, in Britain. British Steel, British Gas, the British Rail and transport are under private administration, since the 1970s. The competition between the two sectors has had the British Petroleum being split in-between, with the government owning 49% of it (Vigoda-Gadot and Beeri, 2012). Likewise, there are also cases where nationalization (acquisition of private firms by the government) has taken place. Security concerns, the privately owned entity being sacrosanct in the running of the government or in the provision of public goods and forceful acquisitions or takeovers are the main reasons for nationalization. Instances of nationalization also abound. In 2009, the world saw Citigroup and General Motors undergoing partial nationalization. In 2008, the Federal National Mortgage Association and the Federal Home Loan Mortgage Corporation underwent nationalization. In response to security concerns following September 11th Attacks, the airport security industry underwent nationalization, and became operational under the aegis of the Transportation Security Administration, pronto. Description of the Changes The changes in the public administration have been sharper than those in private administration. The immediately aforementioned changes which have seen privately administered organizations undergo nationalization and public institutions become privatized may not be considered as very sharp or distinct since this has traditionally been the case in America’s corporate life. For instance, America’s brush with nationalization can be seen to date as far back as 1862 and 1863 when the Legal Tender Act and the National Bank Act nationalized the US monetary system and the banking and money system, respectively. Thus, nationalization and privatization cannot be described as sharp changes (Bloom, Sadun and Van Reenen, 2012). What makes changes in public administration sharper is the raft of changes and policy amendments that are being mooted, in response to the 2007/8 Global Economic Recession. For instance, for the first time, the US is considering the amendment of the Public-Sector Trade Union. This is after the movers of the bill such as Governor Scott Walker and Senator John Thrasher tabled this motion in November 26th, 2011. The import of this is that should the bill pass, the remuneration of public servants will be reduced and the public union’s collective bargaining rights significantly curtailed. Changes in private administration have mainly taken the form of employee downsizing, following the 2007/8 Global Economic Recession. This may not be counted as a sharp change, given that traditionally, business administration has pegged job security on the functions of a given portfolio prevail (Zurga, 2011). The changes are coupled by competition and economic expedience. The competitive aspect of the changes is exemplified in private organizations undergoing privatization, and public institutions becoming privatized. The economic necessity is underscored by the fact that all these changes are necessitated by economic factors. Sensitivity to security concerns and continuity in the provision of essential values also catalyze these changes. This last aspect gives public administration an edge over business administration. Values and Limitations of Each One Wright (2011) is poignant that the main value that public administration offers is stability and continuity in the provision of public goods and social services. Public administration ensures that these services are provided are disbursed in a manner that an individual or a group consuming them must not reduce their availability to others. Without public administration, the provision of security, education, healthcare and even consumer protection may cease to become affordable since private administration naturally impose competitive prices. The main shortfall of public administration is the absence of the competitive element in its affairs. The absence of competitiveness readily invites corruption, lack of transparency and accountability and the maintenance of status quo, at the expense of excellence and generation of revenue. The main value of business administration is the competitive spirit it injects into the economy. Without it, all values would be being monopolized by the government, and thereby opening up the public to the dangers of state monopolies. It is the same competitive element that undercuts business administration. It is this competitive element that makes business administration profit-centered and highly capitalist. In the event that checks are not imposed, the public become susceptible to unfair treatment. References Bloom, N., Sadun, R. & Van Reenen, J. (2012). Americans Do IT Better: US Multinationals and the Productivity Miracle. American Economic Review, 102 (1), 167-201. Husar-Holmes, M. (2012). Raising the Ranks of Public Sector Leaders: Results of a National Survey of Executive Masters of Public Administration Programs. Public Personnel Management, 41 (3): 449-63. Bang-Cheng, L. & Li-Ping, T. (2011). Does the Love of Money Moderate the Relationship between Public Service Motivation and Job Satisfaction? The Case of Chinese Professionals in the Public Sector. Public Administration Review, 71 (5), 718-27. Meredith, M. J. (2012). Strategic Communication and Social Media: An MBA Course from a Business Communication Perspective. Business Communication Quarterly, 75 (1), 89- 95. Raadschelders, J. & Kwang-Hoon, L. (2011). Trends in the Study of Public Administration: Empirical and Qualitative Observations from Public Administration Review, 2000-2009. Public Administration Review, 71 (1), 19-33. Rhodes, R. A. W. (2011). One-Way, Two-Way, or Dead-End Street: British Influence on the Study of Public Administration in America since 1945. Public Administration Review, 71 4), 559-71. Tepe, M. Gottschall, K. & Kittel, B. (2010). A Structural Fit between States and Markets? Public Administration Regimes and Market Economy Models in the OECD. Socio-Economic Review, 8 (4), 653-84. Wright, B. E. (2011). Public Administration as an Interdisciplinary Field: Assessing Its Relationship with the Fields of Law, Management, and Political Science. Public Administration Review, 71 (1), 96-101. Vigoda-Gadot, E. & Beeri, I. (2012). Change-Oriented Organizational Citizenship Behavior in Public Administration: The Power of Leadership and the Cost of Organizational Politics. Journal of Public Administration Research & Theory, 22 (3), 573-596. Zurga, G. (2011). Public Administrations Added Value to the Competitiveness of National Economy. Proceedings of Rijeka Faculty of Economics: Journal of Economics & Business, 29 (1), 193-223. Read More