The ethical difference between private and public sector

Since both sectors have different goals, it is no surprise that they have ethical differences as well.

The main one is that public sector organisations have a duty to the public, while private companies only
have a duty to their shareholders. This difference can lead to different decisions being made about
things like environmental regulations or employee safety.

Shareholders often pressure organisations and businesses to focus only on profit. While profit is critical
to commerce, if it is the main goal, some companies may need to cut corners on ethical issues.

While the public sector is not perfect, it is typically more ethical than the private sector. Even though
they still have to work with budgets, the main goal is not to make a profit.

The public sector is accountable to the public and needs to maintain high ethical standards. If they do
not, they can face investigations and lose public trust.

An example of this was the MPs expenses scandal in 2009, where it was revealed that some MPs had
been claiming expenses for things such as personal haircuts. This led to public outcry and a loss of trust
in MPs.

In contrast, private companies do not have the same level of accountability. They are only accountable
to their shareholders and not the public. This can lead to some companies behaving unethically without
any consequences.

The Volkswagen emissions scandal is a good example of this. The company installed software in their
cars that would change the emissions levels when being tested. This meant that the cars appeared to be
less polluting than they actually were.

The cost of a lack of ethics

A lack of ethics can lead to corruption, which can have a number of negative consequences.

It can lead to public funds being wasted or stolen, and it can make it difficult for the public to trust
government officials.

However, corruption can also lead to a loss of public faith in private companies. This can make it difficult
for businesses to operate, as they may have trouble getting funding or customers. It can also lead to
social unrest and violence.

The social value model

By the end of 2022, the government wishes to implement the Social Value Model in all of its contracts.

The Social Value Model is a way of measuring the value of a project or contract in terms of money and
the social, economic, and environmental benefits it will bring.

This means that when awarding contracts, the government will take into account things like how many
jobs will be created, what the carbon footprint of the project will be, and how it will benefit the local
community.
The Social Value Model is a way of ensuring that public money is spent in a way that benefits society as a
whole, not just those who are directly involved in the project.

Comparison of the two sectors

The public sector is typically more transparent than the private sector, but there are exceptions to this
rule.

The private sector is often quicker to make decisions, but it can be less transparent. Which one you think
is more ethical will likely depend on your own values and priorities.

Below, we will take a look at where the two sectors differ in terms of integrity, ethics, values, and
corruption.

Integrity

Integrity is the quality of being honest and having strong moral principles. As we mentioned above, the
public sector is often more transparent, as it is responsible to the public. This means that public officials
need to be honest about their actions and decisions.

The private sector is not as transparent, as it is only accountable to its shareholders. This can lead to
some companies behaving unethically without any consequences.

Ethics

Ethics are a system of moral principles. The private sector is making great strides in being more ethical.
The age of technology has made it easier for companies to be held accountable for their actions, using
tools such as a dynamic purchasing system.

Values

Values are the principles that guide our behaviour.

The public sector is typically guided by public service values, such as democracy, equality, and human
rights.

The private sector is often motivated by profit. However, there are a growing number of companies that
are beginning to adopt sustainable and ethical business practices.

Corruption

A lack of ethics can lead to corruption, which can have a number of negative consequences.

Unfortunately, both sectors are susceptible to corruption. In the public sector, corruption can lead to
public funds being wasted or stolen. In the private sector, it can make it difficult for businesses to
operate, as they may have trouble getting funding or customers. To combat corruption, both sectors
need to continue to work on being more ethical and transparent.
Basis Public Sector
Public Sector refers to the
part of the Country’s overall
Definition economy which is controlled
by the Government or
various Government bodies.
Public sector companies are
owned and managed by
Ownership
Government/Ministries/State
Govt./Govt. Bodies
Generally, Public Sector
entities are driven by the
purpose of providing the
basic public services to the
common public at a
Primary
reasonable cost in their
Purpose 
respective industries by
being also self-sustainable
and profitable. However,
profitability is not the
primary motive.
Public sector companies
mostly operate in industries
such as Water, Electricity,
Industry Focus
Education, Oil & Gas, Mining,
Defense, Banking, Insurance,
Agriculture, etc.
Companies in the Public
Sector get all possible
Financial financial support from the
Support from Government even in adverse
Government circumstances wherein the
financial health of the
companies is not good.
Entities in Public Sectors are
Listing in Stock
publically traded on
Markets
exchanges.
Companies in the Public
Sector are relatively less
Profitability  profitable because of their
primary purpose of not being
profitability driven.
Private Sector
The private Sector refers to the
part of the Country’s overall
economy which is controlled by
Individuals or Private
Companies.
Private sector companies are
owned and managed by Private
Individuals and Private
Companies.
The purpose of Companies in
the Private Sector is profit-
making by operating within the
rules and compliances of the
respective country.
Private Sector companies
generally operate in multiple
industries such as Technology,
Banking, Financial Services,
Manufacturing,
Pharmaceuticals, Real Estate,
Constructions, etc.
Very little or no financial
support from the Government
unless a private entity is too big
and systemically important for
the Country.
Entities in Private Sectors are
publically traded on exchanges.
Companies in the Private Sector
are relatively more profitable
than their public sector
counterparts in the same
industry.
Public Sector vs Private Sector Head to Head Differences

Let’s now look at the head-to-head difference between Public Sector vs Private Sector.
Conclusion

The public sector vs private sector is differentiated by the nature of the ownership and their purpose of existence. The businesses operating in
both the public and private sectors are critical to the economy of any country and co-exist in the economy. There are certain industries wherein
it makes sense for the Government to take ownership and manage the businesses in that industry. Industries like defense wherein many things
are sensitive from the national security point of view, are owned and managed by the Government. The private sector makes up a large part of
the overall economy of any country, and of late, they have been participating in almost all businesses/industries at multiple levels of the value
chain.