|
Private Sector Organisation |
Public Sector Organisation |
| (1) Meaning |
Private enterprises are owned managed, controlled and financed by individuals or groups of individuals. Thus, ownership and management is with private organisations |
Public enterprises are owned, managed and controlled by the state on behalf of the people. |
| (2) Management |
It is managed by industrialists through board of directors and other specialized executives. |
It is managed by government officials or board of directors. |
| (3) Size of Entity |
They are usually of small or medium size depending on volume of operation. |
They are usually large in sized and they operate on large scale. |
| (4) Capital provider |
Capital is contributed by owner from their own resources and borrowings from financial institutions. |
The capital of public sector organisation is contributed by government. |
| (5) Decision making |
Decision making is quick as very few officials are involved in decision making process. |
Decision making is delayed due to bureaucratic hurdles. |
| (6) Business area |
It generally operates in industrial and commercial areas only. |
It operates in utility services areas like – railways, post, etc. and also in industrial and commercial areas. |
| (7) Main motive |
Main motive of private sector organisation is to earn a profit. |
Main motive of public sector organisation is to provide services to society. |
| (8) Flexibility |
They are more flexible in nature as their policies can be modified as and when the need arises. |
There is no flexibility in their operations as any change or modification requires the approval of thp Government. |
| (9) Political Interference |
In private enterprises, there is no political interference and therefore executive enjoys complete autonomy and freedom of operations. |
Public enterprises working is always affected by political interference. There is constant danger of undue interference by political parties and their leaders. |
| (10) Competition |
Private enterprises operate in cut throat competition. |
Public enterprises are generally monopolies or oligopolies (only two sellers in market.) |
| (11) Economic Equalities |
Private sector increases economic inequalities. |
Public Enterprises reduce economic inequalities. |
| (12) Regional Balance |
Private enterprise increase regional imbalance because it wants to enjoy the advantages of location of industries. |
Public enterprises tries to reduce the regional imbalance as it intends to bring about balanced regional development. |
| (13) Efficiency |
Private Enterprises are more efficient due to profit maximisation, division of labour and specialisation. |
Public enterprises lack initiative, flexibility and efficiency because profit motive is absent. |
| (14) Constituents |
Sole Trading Concern, Joint Hindu Family Firm, Partnership Firm, Joint Stock Companies, Co-operative Society are different forms private sector. |
Departmental Organisation, Statutory Corporations and Government companies are types of public sector. |
