Public Vs. Private Sector Decision-Making Practices


Companies can either be public or private based on the form of ownership. The private sector comprises businesses, companies, or enterprises owned and managed by the management, founders, or group of private investors. Contrarily, public companies refer to government-managed firms that have sold a portion or all the shares to the public, giving them the power to claim part of the corporate profits and assets. Other than their ownership, these sectors experience notable differences, especially in decision-making. Unlike private organizations that have smooth decision-making processes, public organizations experience tremendous conflicts, recycles, interruptions, and turbulence within the decision-making process. Some primary differences between the public and private sectors emerge from the nature of the laws they adhere to, cost reduction strategies, user-needs-based approaches, and citizen empowerment values.

Professionalism Values in Decision-Making Process

The private and government sectors seem to have different sets of rules that lay the basis for the professional values of the decision-making process. Unlike the private sector, the public sector tends to be more bureaucratic, increasing the number of rules constraining employees’ behavior. According to Suzuki and Hur (2020, p.3), the classic Weberian bureaucracy contains tenure protection, meritocratic recruitment, and special labor laws regulating public sector workers’ conduct. Some of the set rules and regulations within the public sector include the control systems, internal controls, and competitive bidding statutes that call for the selection of the lowest bidder. However, these general laws do not apply to the private sector. Indeed, many companies within the private sector do not have strict rules that dictate the employee’s code of conduct. The public sector is more rule-bound than the private sector since the government-owned firms operate on the traditional corporate culture, have a complex structure, and remain incapable of generally trading their bureaus on the markets (Ohemeng et al., 2019, p.26). Hence, the primary difference between the public and private sectors is that the former is law-bound as opposed to the latter.

Administration Efficiency Values in Decision-Making Process

Unlike in the private sector, where businesses make decisions to reduce costs and meet the consumers’ needs, public organizations only focus on adhering to the guidelines and laws. Specifically, private companies make decisions and adopt business practices that improve overall production, reduce costs, reduce cycle times, and increase customer service superiority. This sector embraces these organizational values since the success of these establishments depends on fulfilling consumer needs. As a result, they strive to reduce the resource inputs to meet the ultimate goal and increase its customer base. Contrarily, the public sector worries less about its impacts on the customer than the established regulations and operations within the set budgets. Indeed, the public sector focuses on values that consider political compromise, shared interests, and needs (Alqooti, 2020, p.17). Altogether, unlike the private sector, which has a greater motivation for efficiency gains and where every resource impacts the bottom line, decisions within the public sector do not consider its impact on cost reduction and customer satisfaction.

Service Improvement Values in Decision-Making Process

Whereas the public sector engages in different activities, the private sector organization have over the years relied on using a user-needs-based approach to improve their services. Specifically, most organizations within the private sector deliver a consistently memorable and satisfying experience, like meeting the shareholders’ expectations, strengthening user loyalty, and expanding brand awareness. Due to the high flexibility of this sector, the organization directs its resources and efforts to customer knowledge management to improve organizational performance (Smith and Charles, 2018, p.412). Contrarily, public sector organizations find it hard to improve their service by meeting consumer needs due to various factors. According to D’Emidio et al. (2019, np), the presence of a monopolistic mindset, large customer base, lack of the necessary capabilities to assess gaps in customer experiences, and lack of sequential data makes it hard to meet consumer needs and expectations. Hence, the public sector uses fewer user-needs-based approaches than the private sector.

Citizen Empowerment Values in Decision-Making Process

Although both the private and public sectors understand the importance of decision participation in enhancing the decision maker’s effectiveness, the segments show different levels of citizen participation. Since the public sector relies on bureaucratic leadership, organizations are more likely to use participative decision-making than private firms. According to the World Bank (2022, np), citizen participation in the resolution-making process of government-owned firms is essential to promote the making of accountable, transparent, and effective decisions. The case is different for the private sector, which relies primarily on its top management to make significant decisions with less public involvement. Contrarily, the latter conducts in-depth market research to understand emerging trends and make decisions.


Overall, the private and public sectors differ in values that guide their decision-making processes. The government-owned businesses are bureaucratic, strictly follow the established budgets and rules, promote customer participation in the decision-making process, and use resource-based approaches. Contrarily, the private sector is less likely to directly involve the citizens in the decision-making process, focus on consumer satisfaction, adopt administration efficiency values, and are not rule-bound. The differences emerge from diverse corporate structures, customer base, and availability of resources to meet the set objectives.

List of References

Alqooti, A.A., 2020. Public governance in the public sector: a literature review. International Journal of Business Ethics and Governance, 3(3), pp.14-25.

D’Emidio, T., et al., 2019. “The public sector gets serious about customer experience.” Mckinsey Quarterly. Web.

Ohemeng, F.L., Darko, T.O. and Amoako-Asiedu, E., 2019. Bureaucratic leadership, trust building, and employee engagement in the public sector in Ghana: The perspective of social exchange theory. International Journal of Public Leadership.

Smith, T.A. and Charles, C.A., 2018. A decomposed CKM model for better explaining customer satisfaction in the Jamaican public sector. International Journal of Public Sector Performance Management, 4(4), pp.411-432.

Suzuki, K. and Hur, H., 2020. Bureaucratic structures and organizational commitment: findings from a comparative study of 20 European countries. Public Management Review, 22(6), pp.877-907.

The World Bank, 2022. “Citizen Engagement.” World Bank. Web.