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The private-public sector divide isnt as big as you think

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Do private sector and public sector managers have anything to learn from each other? For all the controversy surrounding PFI/PPP deals and reform in the public sector, there has been inadequate discussion of what makes public and private different. Do the public and private sectors have more in common than they realise? Stefan Stern reports

Mary Tetlow, director, Public Management Foundation


There are a lot of parallels between public sector and private sector management. But you need to understand exactly what it is you are talking about: what is motivating people, what are the results of managers actions?


Clearly there are analogous areas projects to run, dealing with the outside world, managing budgets. But how public and private managers relate to the outside world is where you see some of the biggest differences. Public accountability is very different from the relationship private businesses have with their shareholders. This has major implications for how people manage; it dictates behaviour.


Private sector management is perhaps not as straightforward as it is sometimes characterised. Growing awareness of issues such as corporate social responsibility has affected how organisations behave. There is a sense that the private sector is more efficient than the public sector, but its not clear what the evidence is for that. Does competition necessarily produce efficiency?


Motivation is different in public and private organisations. The public service ethos is different from the private sector focus on the bottom line.


Ruth Lea, head of policy unit, IoD


There is a huge difference between public and private, in that when economic forces turn against you, as they have now, you have to react rapidly in the private sector, whereas the public sector is cushioned to some extent. In the private sector you may have to cut costs quickly and take people with you. There is more scope for adaptive management and, ironically, a more democratic kind of leadership.


Public sector management tends to be far more centralised, large and cumbersome. There is no reason why services for the public have to be provided by or owned by the state. It can still be taxpayer-funded.


The big difference is that in the private sector, if you dont provide a decent service, youre out. People are very muddled about the profit motive. It is not inimical to good service its a great thing for waking you up in the morning.


Peter Buckle, group HR director, Westminster Healthcare


There are differences in employment culture. I think people are often happier in smaller units rather than big organisations. In our sector independent healthcare that might mean working in a defined team rather than a general hospital employing thousands.


In spite of what people think, remuneration packages are not always quite as generous in the private sector, especially when you take into account pension arrangements. Its proof that money is not everything.


We are very much faster on our feet than the public sector. Peoples terms and conditions will vary some staff will retain NHS contracts, others will be on new ones. This is a real test of the quality of your management.


The job of a manager in our sector is much more that of a general manager than it would be in the public sector. The leadership role is different too. There is a business agenda as well as a medical one. We have a wider view of care than exists in the NHS. We dont contract out catering, cleaning, housekeeping, maintenance of our properties. Its a total service, less fragmented.