Introduction

Performance in the public sector is always multidimensional. For example, though a teacher may wish to ensure that the students in her care do well at public examinations, she knows there is much more to her job than this. Among other things, she is likely to be pleased to see signs that they are developing into good citizens. Managers, executives and others who work in public agencies are well aware that much of their job involves balancing one competing demand against another. To some extent, the same is true of management in the private sector, however there are some very important differences. The first is that, when the chips are down, the financial bottom line will always take precedence in a for-profit organisation. It would be wrong to suggest that other factors such as reputation, social responsibility and the care of employees do not matter in business. However, unless a for-profit organisation produces profits it will fail or be taken over by competitors. Wilson (1989) points out a second important difference between managing in the public sector and managing in the private sector: most managers and executives in public agencies have much less freedom of action than their for-profit counterparts. For example, procurement rules in the public sector are typically more stringent than those in the private sector and often require open competition between suppliers. By contrast, many private sector organisations prefer to develop continuing relationships with specific suppliers in which mutual trust is very important.

Though both may be striving to gain the maximum value from minimum resources, it seems fair to say that, in general, public management often requires a rather different outlook from that needed in the private sector. It is, of course, possible to find individual counter-examples. For example, managers in agencies that approach Wilson’s idea of production organisations (discussed in Chapter 4) may only need to keep their eyes on a single ball, rather like archetypal for-profit businesses. Also, private healthcare providers in most countries are heavily constrained by government regulations and also by healthcare norms. Nevertheless, if the provider exists to make profit it must do that, which is not true of public healthcare providers. For example, publicly owned NHS Trusts in the UK have their performance assessed on a range of dimensions, of which finance is only one.