4

Public Administration and

IPrivateAdministration
but it ha
E.N. Gladden writes that, "Administration is a long
and slightly pompous ord
affairs." t is a
after people to manage
humble meaning, for it means to care for or to look from the househci
all kinds of organisations
process of management which is practised by private. Where
Administration may be publicor
to the most complex system ofthe government.
society, political party, church or
it refers to the activities of a household, club, co-operative the activities of the state
it is called private administration; and when it refers to
company, it is called public administration
provincial or local government
performed by the central,
administration. So it becomes
Public and Private
It is customary to distinguish between
similar to, or different from Private
Is Public Administration
necessary to deal with the question: there is no difference
which is of the opinion that
Administration? There is one school of thought
activities and techniques are similar in al
between the two and that the administrative
believes that there are
or Private. The other school
organisations, whether they be Public Felix A. Nigro
the Public and Private Administration.
important points of difference between as no private company
has pointed out that government is also different from private organisation,
can equal to it in size and diversity of activities.

SIMILARITIES BETWEEN PUBLIC ADMINISTRATION AND

PRIVATE ADMINISTRATION
Some of the thinkers ike Henry Fayol, Mary Parker Follet and Urwick are of the opinion
characteristics
that Public and Private Administration exhibit many common and fundamental
and that difference between them is one of degree rather than of kind. Henry Fayol treated

good administration as a process which included a certain number of principles common to all
organisations. In his address to the Second International Congress of Administrative Science,
has
Fayol remarked, "The meaning which I have given to the word administration and which
been generally adopted, broadens considerably the field of administrative science. It embraces
not only the public service but enterprises of every size and description, of every form and
every purpose. All undertakings require planning, organisation, command, co-ordination and
control and in order to function properly, all must observe the same general principles. We are
no longer confronted with several administrative sciences, but with one which can be appled
equally well to public and to private affairs. Elaborating Fayol's thesis, L. Urwick observed,
"1t is difficult to contemplate seriously a biochemistry of bankers, a physiology of professors,
or a psychopathology of politicians.... he attempts to sub-divide the study of management or
administration in accordance with the purpose of particular forms of undertaking seems to

many authorities equally misdirected."2

PUBLICADMI
INISTRATION AND PRIVATE ADMINISTRATION 35
The following are similarities between public and
private administration
1. Skills: There are many skills, techniques and procedures which are common to both,
piblic as well as Private Administration. Accounting, Statistics, Office Management and
Procedures, Purchases, DIsposals and stocking and many other activities are common to both
Public and Private Administration. A statistician or an engineer may be doing the same kind of
work whether he is employed by a government owned Railway Department or a Private
Transport Company. This is why many retired civil servants in India are re-employed by big
business houses, and the Public Undertakings too, sometimes borrow the services of experts
from the Private Sector to run its industrial enterprise. In U.K., all the employees who were
running Iron and Steel Industries prior to their nationalisation, were absorbed by the govern-
ment. It proved to be a successful experiment. The specific knowledge and skill which they
brought along stood in g0od stead and working of nationalised Iron and Steel Industry
improved to a very great extent.
2. Influence each-other : In the recent times business practices and standards have
exercised a profound influence upon Public Administration, specially, in matters like office
management and running of the commercial enterprises. The whole idea of the public
corporations and companies is to import into Public Administration the organisation and
management of Private Administration. Public corporation, which is actually 'a halftway house
between its commercial prototype and the traditional government department' shows a close
affinity between Public and Business Administration. Likewise, big business organisations
have been influenced by govenmental practices in such matters as staff welfare, superan-
nuation benefits, etc.
3. Adminlstrative set-up: There is a certain kind of hierarchy and administrative set-up both
in public and private sectors. Both have some kind of organisational structure, higher and lower
status employees and both have clear demarcation of work, duties and responsibilities. In both
the cases we find that there are people who are responsible for taking policy decisions while
others are there to implement them.
4. Research and improvement Both public and private enterprises feel that there is always
Suficient scope for improvement. None of them can claim perfection both in quality and quantity
of work done by them. That perhaps is the reason that research work and investigations are
always being carried on in both the branches of administration to improve upon procedure and
techniques.
5. Public relations Both the public and private sectors believe that there should be
maximum contact with the masses. If that contact is lost, administration is bound to be a failure
as it shall not come to know about the needs and necessity of the people whom they are
required to serve.
The similarities between Public and Private Administration becomes evident whena
private undertaking is taken over by govemment. The taking over of the L.l.C. by t
Government of India in 1956 did not involve the government in a number of fresh problems.
The institutions like the Administrative Staff College at Hyderabad imparts training to personnel
drawn from industry, commerce and government organisations, in the belief that administration
in these different spheres has many common features. In fact, since private enterprises have
developed into huge organisations with their offices and operational programmes spreading
al over the country or the world, Private Administration has itself assumed the impersonal
Gnaracter of Public Administration. That is why, principles of democratic management, public
 36 SAHITYA BHAWAN PUBLIC ADMINISTHa

as much
in vogu9 in
f
responsibility and popular control on administrative discretion are
Administration as in Public Administration.
AND
ADMINISTRATION
DIFFERENCE BETWEEN PUBLIC
PRIVATE ADMINISTRATION
Though Public Administration has fairly big common ground with the Private Adsufirien
its own
Administra.
and s
characteristics
distinctly of
tion, yet it is rightly assumed that it has many Ludwig Von
iah
Mises, Josiah
Starr,
Peter Drucker, etc. are of the opinion that there
the latter. Paul H. areGaus,
John crucial diff-erences between that
Appleby, PublicPuti ic arr
to mark it off from
advocate of
the view
the leading titlert
Private Administration. Paul H. Appleby
was
Administration.
In his book
Private have atlea
Administration basically differs from the function and
aftitude
governmental
broad terms the from all other institutionsar
Democracy" he remarked, "In dififerentiate government
accountability; political charactar
to
aspects that go
nree complementary consideration; public
impact and Gaus of the Harvar
activities:breadth of scope,
John
of government."
non-governmental institution
has the breadth activities as "different fro
government
No Public Administration regarded
Crux of Ludwig Von Mise
Graduate School of in kind as well as in scope."The
diference between busi.
organisations almost is that the
that of private argument has an incentive
Stamp, the four prin-
to Sir Josiah ness management (private)
According money
from private ad calculation-namely,
ciples, which
differentiate public and method of
Public Administration
ministration are profit-unavailable to
Common and the major points of
1. Principle of unitomity According to Josiah Stamp and Private Ad.
mostly regu- Public
uniform laws and regulations difference between
late Public Administration.
ministration are in the spheres of "uniformity
The
Financial Control: accountability and
2. Pnrimciple of Extemal impartiality, responsibility,
through a Simon observes, "In the
representatives of the people
government serviceability."Herbert
legislative body control Govenmental Administra-
and heads of expenditure.
popular imagination,
revenues Private Administration is
Responsibility:
tion is bureaucratic,
is
3. Principle of Ministerialaccountable to its business like; Governmental Administration
Public Administrationis is non-politica
Administration
through them to the people. political, Private
political masters Governmental Administration is
characterised
Retum The main
4. Principle of Marginal Administration is not.
busines venture is profit, by red tape, Private
objective of a
however small it may be. However,
most of Peter Drucker, the well-known management
service (govern
the objectives of Public Administration can scientist, observes that the
different
neither be measured money
tems nor
ment) institution is in a fundamentally
different in its
checked by accountancy methods. business' from business. "It is
makes a diferent
it has different values; it needs different objectives. And it
purpose; institution
and results are quite different in a service
contribution to society...Performance
is the one area in which service
from what they are in a business. 'Managing for performance'
American political scientisis
institution difers significantly from business." More usual among
between tne
in the field of Public Administration is the tendency to distinguish
specializing to
motive, which they attribute to business, while assigning the "service" motive
"profit"
Public Administration is that it is bureaucratic, characterised
government. The popular image of
by red tapism, inefficiency and inertia, whereas Private Administration is efficient and business
like. The following are the diferences between the two types of administration
to
1. Prestige:Public Administration enjoys high prestige and social status as compared
Private Administration especially in the third world countries. This is due to the sovereign power
PUBLIC ADMINISTRATION AND PRIVATE ADMINISTRAT!ON 37
vested in the government machinery. Beside this, Public Administration gets more opportunities
for rendering service to the people than the latter. Hence, it commands more respect than the
Private Administration.
2. Politlcal direction Unlike Private Aministration, Public Administration is subjected to
political direction in most policy matters. It is the minister who lays down broad policy outines
under which the bureaucrat has to implement the policy. The ends it (private) pursues are of
its own device. Its objectives generally do not depend upon political decisions. The ad-
ministrator under Public Administration has to carry on the orders which he gets from the
political executive with litle option of his
own. is
Heady of the opinion that Pubic Administration
is that sector of administration which is found in a political setting. Concerned primarily with
the carrying out of public policy decisions made by the authoritative decision makers in the
political system, Public Administration can be roughly distinguished from private or non-public
administration.
3. Profit motive: Public Administration is service oriented and profit making is not its goal.
A businessman will never undertake a venture which is not likely to yield any profit to him. In
Public Administration there is no correlation between income and expenditure, since most
govemment departments are spending departments and even in the so called revenue
producing departments, the primary motive is always public service. Public utility services of
the Government of India often run at a loss, yet the government is duty bound to spend on
them. Ludwig Von Mises has rightly observed, "Business management or profit management
is management directed by the profit motive. The objective of business management is to make
a profit. The objectives of Public Administration cannot be measured in money terms and
cannot be checked by accountancy method."
4. Uniformity of treatmet:Public Administration, according to Josiah Stamp, is subject to
the principles of uniformity. It is generally consistent in procedure and uniform in dealings with
the public. It is not expected to show discriminatory attitude towards certain sections of people,
as is the case in Private Administration. Private Administration need not wory much about
uniformity in treatment. Business Administration does believe in discriminatory treatment
towards its regular customers. For instance, a shopkeeper wil be inclined to attend to his
regular customer more promptly than the one who is an occasional vistor. A booking clerk at
the railway station wil make the people stand in queue before issuing tickets. 'First come, first
served' motto is kept in view by the Public Administrators. In the words of Richard Wamer,
"Business need not worry over much about uniformity in treatment."
5. Legal framework and procedure: Public Administration has to operate strictly according
to law, rules and regulations. Adherence to faw brings in a degree of rigidity in operation in the

public sector. There is always the fear of audit. Glenn Stahl has rightly observed, "The conduct
of public services is governed by legal previsions, so that it is frequently difficult for the civil
Business Administration is
servant to change procedures or expand activities." Contrastingly,
of law
relatively free from similar constraints andregulations. There are of course general laws
business but individual business firms have considerable flexibility to adapt their
regulating their relative freedom from
operations to changing situations. This is possible because of
specific laws and rules that abound in Public Administration.
the state are more
6. Essentialservices: Glenn Stahl writes, "The services performed by
of course, relative
urgent than those performed by private institutions. The degree of urgency is,
 38 SAHITYA BHAWAN
PUBLIC ADMINISTRATI
be urgent under simple agricultural
to the times. The inspection and certification of milk may not
Thus, Public Administrationdeai
conditions, but it becomes eminently so in an urban society."
existence of the people. For instanc
with matters which are of vital importance, for the very
creation of educational and health
defence of the country, maintenance of law and order,
are provided by the
Public Administra.
facilities and other essential services related to public Iife
or negligence results in
tion. In the discharge of these duties and services, any lapse
on the other hand,
does not deal with
paralisation of the public life. Private Administration,
of cloth which lalls in the domain
matters of so grave importance. For example, manufacturing
the borders of the country.
of Private Administration is not as important, as defending
Public Administration is more comprehensive.
Particularly ina
7. Scope of activity :

SOcialistic sOciety, its jurisdiction extends to all types

of activities pertaining to the individuals
limited to the extent it used to be in
In the modern welfare states also its jurisdiction is not
is "the basic service which
police states of the middle ages. Its real core as Nigro emphasizes, works, education,
iS perfomed for the public, such as, police and fire protection, public
national defence and others. It is
recreation, sanitation, social security, agricultural research,
is so broad, because each of these
for this very reason that the field of Public Administration
themselves upon individuals in moden
services arises out of different needs which press
of people's life.
sOciety." Private Administration does not cover many aspects
so

Administration to the society are

8. Monopolistic: Many services rendered by the Public
handled
of a monopolistic character. No individual is allowed to run services, which are being
Administration. Many business
by the government itself. This is not the case in Private
is
organisations may be suppliers of the same commodity at a time. For instance, soap
manufactured by many factories at a time. Glenn Stahl writes, "The services peformed by the
state are generally of a monopolistic or semi-monopolistic character, a fact which springs from
the very urgency of the functions undertaken. Because of this fact it is much more dificult to
gauge the efficiency of the conduct of public business than of ordinary private business, which
is subject to competition and forced to balance its books from year to year."
9. Public responsibility: Public Administration has responsibility to the public. Public
accountability and public scrutiny is one of the most important characteristics of Public
Administration, a feature which is absent in Private Administration. Public Administration has
to face the criticism of the public, press and political parties. The searching eyes of public
criticism are directed towards Public Administration. The civil servants have to think carefully
about possible public reactions before taking any particular step. The politics of a country and
the aspirations of her people have a great influence over the activities of Public Administration.
On the other hand, Private Administration does not have any great responsibility towards the
public; it is not responsible to the public in the sense in which Public Administration is. Paul H.

Appleby observes, "Government administration difers from all other administrative works to a
degree not even faintly realised Outside, by virtue of its public nature, the way in which It
subject to public scrutiny and public outcry. An administrator coming into government is struck
at once and continually thereafter, by the press and pubiic interest in every detail of his life,
personality and conduct. This interest often runs to details of administrative action that in private
business would never be of concem other than inside the organisation. Each employee hired,
each one demoted, transferred or discharged, every efficiency rating, every assignment of
responsibility, each change in administrative structure, each conversation, each letter, has to
PUBLIC ADMINISTRATION AND PRIVATE ADMINISTRATION 39
be thought about in terms of possible public
agitation, investigation or
govemment executive lives and moves and has his being in the presence of public judgment...Every
dynamite."
Nigro and Nigro also observe, "The peculiar element in Public Administration is that
everything a government agency does is the public's business. Tax money is being used, so
every citizen has the right to know how it is spent and to criticize
public officials with whose
decisions they do not agree. As has often been said, the public official
bowl; he or she is subject to searching and constant outside
operates in a gold fish
scrutiny. Private companies want
satisfied clients, and they are also increasingly subject to
government regulation, all of which
makes public relations an important element in business success.
still remain private in character and their
Nevertheless, companies
business and not that of the general public1
internal operations are to a large extent their own

10. Financial control: Public Administration is

This control is exercised by the external
subjected to very extensive financial control.
agency....it is the legislature that passes the
Appropriation Bill which authorises the executive branch to spend the money. In India the
Comptroller and Auditor General (CAG) controls our national finances and presents his
to the Parliament. The Parliament also controls national reports
finances by different means and
methods. Thus, there is a dichotomy between administration and
finance. Such complete
divorce of finance and administration does not exist in Private Administration.
11. Sociai necessity: Public Administration
exists to meet the social needs of the people.
For example, govermment is
undertaking many social welfare measures to promote the
interests of weaker sections of the society. Private Administration
does not for social
necessity. It is mostly concerned with providing marketable consumer goodsoperate to public rather
than hospitals, schools, roads and
postal network.
12. Efficiency or Effectiveness In Business
in terms of resource use. It is a matter of
Administration, efficiency is usually measured
least cost approach to
input-output relationship, the implication being the
organisational performance. Efficiency is thus considered in terms of
profit earning. The profit test may be applicable to some of the production or commercial units
in the public sector. But to assess
performance in the public sector merely by the profit indicator
would be taking a narrow view of the role of this sector.
More than efficiency, 'effectiveness'
assumes critical significance in the
to successful achievement of
appraisal government performance. Effectiveness refers
of
specific policy goals. In times of crisis such as severe drought
or
devastating flood, government cannot sit down and calculate the costs of operation to reduce
expenditure. Immediate relief rather than minimum cost weighs heavily in
in such circumstances. government's mind
13. Public criticism: The actions of
public sector organisations are much more
to the public gaze. An achievement rarely gets publicity, but a little fault hits the exposed
headline. This wide public criticism is not to be found in Private newspaper
Administration, nor is it so very
closely watched by the public and the publicity media. Huxley observes, "The state lives in
a
glass house, we see what it tries to do, and all its failures,
of. But
partial or total, are made the most
private enterprise is sheltered under good opaque bricks and morta."
James Forrestal once said that "the difficulty of
be well done, but the government work is that it not only has to
public has to be convinced that it is being well done. In other
words,
there is a
necessity both for competence and exposition and l hold it is extremely difficult to
combine the two in the same
person." This is why some business persons fail in government
positions. Impatient with the need to justity their decisions to
the public and accustomed to
giving orders in their companies that quickly produce action,
they complain that in government
 40 SAHITYA BHAWAN PUBLIC ADMINITRATIt
interest and numerous lawga
they are thwarted red tape. In civil service, conflict of
by eliminated, but a sizaa
must be observed. Some of the red tape may safely be
regulations
residue will always be necessary to protect the public interest.
and
public serie.
of treatment, impartiality
To sum up, public accountability, uniformity features disting
are the essential characteristics of
Public Administration. These special
with what goes on in prhiva
need not be equated
public from Private Administration. It much exposed to 'polite
to Peter Self, "Public Administration is very
management. According and the administrative system has
.Demands very often come from the political system
integrated with the political system in the w
respond to them. Business firms are not directly
Administrative agencies
inhabit a political instea
administrative agencies necessarily are. articulates demands that monitor resuts
of a market environment, and the political system
quite different ways from the marketsystem. reflects the pecula
is distinct because it
Waldc observes that Public Administration functions.
in which it
characteristics of government activity and the public setting
the Public and Private sector is
however, greatly influenced b
distinction between
The
nation. In the U.S.A., for instance,
the private sector plays
the political philosophy of each sector is in many ways dependent cr
important role in the American society. The public in that country s
very and services. Hence, the tendency
the private sector for the supply of goods
than a distinct bifurcation of
responsibilities.
toward a blurring of lines rather
THE PUBLIC-PRIVATE PARTNERSHIP

and Private Administration is narrowing.

Nigro and Nigro
gulf
the between Public
Today, between Public and Private Administra
observe, "Whenever comparisons are made
candidly other and occupies a separate
that each is opposed to the
tion, the impression may be given Public Administration is accomplished a
distinct field. much of what takes place in
Actually, line between Private
and individuals; indeed, the
the collaboration of numerous private groups leaves of
blurred that it is difficult to tell where government
and 'Public' has now become so
and private business begins."14
and private business is
government
important reason for the difficulty separating
in
One These contractos
of private contractors and companies.
the great use made by government not government
millions of workers who, while technically
spend billions of dollars and employ
work force. In the U.S. federal government, contracting
employees, are really part of its with two-thirds of its attributable to the
accounts for about one-seventh of total budget outlays,
also make substantial use of contractors
Department of Defence. State and local government
installations, such as those o
for construction, professional and other services, Many huge contractors
Administration (NASA) are operated by private
the National Aeronautics and Space
communities is much affected by increases0
for the government. The economic life of many
decreases in the volume of government contracting.
Since the government provides the fund
it is 'government by contract', but at the same time a merging
of the public and private sectors.
administration is seen t0
S. R. Maheshwari observes, "The 'private' component of private
administration... On d
be decreasing, thereby narrowing the distance between it and public
closer analysis, the public is penetrating the private administration,
and to that extent, tn8
available with tne
dichotomy becomes less and less rigid. A large share of funds currently
line of demarcation between
private sector comes from public institutions, which weakens the two we
public and private administration. In the course of controversies in 1985 grippingcontrolling
known private sector firms-DCM and Escorts-it was disclosed that the families
PUBLIC ADMINISTRATION AND PRIVATE ADMINISTRATION 41

the management owned less than ten per cent of total capital investment in each, a large
portion of the finance came from public financial institutions, like the L.I.C., General Insurance
Corporation, Unit Trust of India and Term-lending institutions like l.D.B.I., I.C.I.C.I., I.F.C.I., etc.
According to a survey conducted by the Reserve Bank of India and published in 1983, the
Dublic financial institutions owned between 25 and 50 per cent of total paid-up capital in 122
surveyed companies and in other 26 companies 50 and 75 per cent of the total paid-up
capital."16

Dennison asserted, "Men who have had a fair chance to study both private and public
activities, and who have open minds to make the proper analysis and scientific comparisons,
usually discover that the differences between the large organization and a small one is much
greater than the differences between a governmental organisation and one under private control;
and that between government and private enterprises of comparable management and nature
there are more significant resemblances than differences.""
Private business is also regulated and controlled by the law of the land and profit is not
its sole aim. Its object too is the provision of service for the people. There is increasing
regulation of business activities and methods in the social interest. Unfair practices are being
forbidden. Moreover, both have some common techniques of work and employ some common
skills. Private management can ignore the larger public interest only at its peril. At the other
end, Public Administration can hardly ignore the needs of efficient management. Therefore
the difference between the two is one of degree and not of kind. Nevertheless, Private and
Public Administration are not two distinct entities. They are the two species of the same genus,
administration.
However, "though there are certain points of similarity between public and private
administration yet no private organisation can ever be exactly the same as a public one."