Comparing Public and Private Organizations

7/30/2019 Comparing Public and Private Organizations

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Comparing Public and Private Organizations

Author(s): Hal G. Rainey, Robert W. Backoff and Charles H. LevineSource: Public Administration Review, Vol. 36, No. 2 (Mar. - Apr., 1976), pp. 233-244Published by: Wiley on behalf of the American Society for Public AdministrationStable URL: http://www.jstor.org/stable/975145 .

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DEVELOPMENTSn RESEARCHH. GEORGEFREDERICKSON, ditor

Comparing P u b l i c a n dP r i v a t e OrganizationsHal G. Rainey, The Ohio State UniversityRobert W. Backoff, The Ohio State UniversityCharles H. Levine, Syracuse University

This article presentsa number of propositionsabout differences in public and private organiza-tions, which have implicationsfor their manage-ment.1 The propositions extend and refineconsideration of the questionwhich was recentlyaddressedby Michael A. Murrayin this Review(36). Murray suggests that public and privateorganizations are convergingand facing similarconstraintsand challenges,and that managementin all types of organizations hould be viewed as ageneric process. Yet our inquiry into this com-parativequestionpoints to the conclusion that it ispremature o discount the significanceof public-private differences and their implications formanagement rainingandpractice.Numerous scholars and observers, of con-siderable reputation and experience, haveaddressed hemselves o the comparativessue,andit is importantthat theirobservationsbe compiledand considered. Yet no systematic effort atintegration has covered relatively recentcontributions.2 In makingsucha review,we foundconsensuson a number of importantdistinctions,which are relevant to research, training, andpractice. Moreover,in addition to these specificpoints of agreement,there are generalreasonstoapproach he subjectof public-privateomparisonscarefully, and to avoid prematuredismissalof itssignificance:

1. Normative,PrescriptiveImplications.Therearewidely discussedconcernsoverwhether variousaspects of the convergenceof the two sectors aregood or bad. Solutions are proposed and argu-

ments made concerningthe appropriate oles andfunctions of the organizationsn the two sectors.A readyexample is the concernover"capture"ofthe regulatory agencies, and the proposal thatsome activities be deregulated.Generally, then,which techniques and attributes of public andprivate organizations should be preserved orabolished,exchangedor keptseparate?2. Implications for Knowledge and Under-standing.Prescriptionswill be no better than ourunderstandingof the phenomena. Deregulationproposals, for instance, will provide successfulsolutions only if their underlying assumptionsabout the effects of market competition areaccurate. To the extent, then, that there is still adivergencebetween public and private organiza-tions and theirmanagement,he divergence houldbe isolated and studied as a source of informationabout the workings of organizationsin an in-creasingly omplexsociety.

Robert W. Backoff is an assistantprofessorof publicadministration n the School of PublicAdministration,the Ohio State University. He previously taught at theUniversity of Pennsylvania.CharlesH. Levine is assistantdirector of the MaxwellMidcareerDevelopmentProgram t SyracuseUniversity.Previouslyhe servedon the faculties of MichiganStateUniversity and the University of Maryland, and heldadministrative nd researchassignmentswith the SocialSecurity Administration and the National Academy ofPublic Administration.Hal G. Rainey is a Ph.D. candidate in the School of PublicAdministration, the Ohio State University.

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PUBLICADMINISTRATION EVIEW3. Theoretical Implications. Considerationofthe comparativequestion involves some of thebasic issues in the effort to systematizeknowledgeabout organizationsand management, including

the choice of units and levels of analysisand ofmajorvariables.These choices are in turn relatedto the effort to deviseconcepts, testable proposi-tions, andmodels.Analysisof similaritiesand differencesbetweenpublic and private organizations raises majordifficulties of classification and definition whichwill not be quickly resolved. Nevertheless, aneffort must be made to clarify the issue bysuggesting resolutions to the classificatory

problems, before proceeding to the comparisonsthemselves.

Approaches o Classification nd DefinitionIdeally, an inquirysuch as this would involvetwo steps: (1) A clear definition of "public"and"private" sector organizations, which wouldspecify the essentialor basic differences and drawa clear line between the two. (2) Specificationofthe full rangeof variation,which is empiricallyand

logically related to the basic or "defining"dif-ferences.Unfortunately,successat the firststep iselusive or impossible,as one can see in the effortsat delineation of the subject matter of publicadministration (10)(27). This difficulty com-plicatesthe issue,but aswe will soon see, therearea numberof authorswho neverthelessget on withthe secondstep.The difficulty of saying precisely andthoroughly what we mean by "public" and"private" s reflected in a numberof methods ofhandling the issue which can be observedin theliterature, and which might be characterizedasfollows: (1) Commonsense approaches, n whichan authordiscussesthe relationshipof the sectorswithout explicit definitions, apparentlyassumingthat everyonehas an adequateidea of what he istalkingabout. Weidenbaum58) is concernedthatgovernment-by-contractwill cause some corpora-tions to lose their "essential privateness,"butnever explicitly defines his meaning.(2) Practicaldefinitions, in which unsubtlerules of thumb areapplied, due to the need for a definition. TheBureauof LaborStatistics,forexample,calculatesindices in which the Postal Service and TVA arecounted as privatesector activities.(3) Denotativeapproaches, in which a sector is delineated bysimply listing the activitiesor organizationswhich

fall within its purview (17). (4) Analyticapproaches, which attempt distinctions on thebasis of defining factors or sets of factors.Economists, for example, frequently base thedistinctionson the nature of the goods produced,i.e., the concept of "social"or "collective"goods.Yet none of these approachescan succeed indrawing a clear line between the sectors (25).Thereare alwaysintermediate ypes, and overlapson various dimensions. The wide, varied, andcontinuallyevolvingengagementof governmentnaspects of life in the United States formerlyconsideredprivate,or still predominatly o, causesa "blurring"or convergenceof the sectorswhichhas been frequently noted (9X10)(19). This"blurring" seems to involve two interrelatedphenomena. First, there is an interminglingofgovernmental and nongovernmental activities,which is observablein governmentregulationofvarious activities, and in various "mixed" under-takingssuch as public enterprisesandprovisionofgovernmentservicesby contractwith privatecor-porations.The other, relatedaspect is an increas-ing similarityof function, context, or role of theorganizationsin the two sectors. Gawthorp(19)argues that coping with environmental 'turbu-lence" will be sucha majorconcern of managersnboth sectors that differences on other factors willbe overshadowed.Weidenbaum58) observes thatsome corporationsare so dependent on govern-ment contracts hat they may take on certainattri-butes of government agencies. Galbraith (18)argues that many firms have so much marketpower and influenceon the public interest that itis no longer appropriate o regardthem as "pri-vate." Similarly,there are discussionsof the needfor greatersocialresponsibility ndpublicaccount-abilityon the partof privatecorporations37)(38)(44).This "blurring" certainly complicates thedelineationof the sectors,but the real questionishow much to make of it. A distinction can beblurred and still be meaningful; a number ofauthorsnote this difficulty in cleardifferentiation,yet go on to cite importantdifferencesbetweenpublic and private organizations (5)(9)(10)(25X57X58). It seems clear that one couldidentify large groups of organizations whichrepresent a hard core of public and privateorganizations, in that they are distinct on anumberof basic characteristicsand magnitudes).Even though no single organizationneed have allof these basic attributes, it seems reasonableto

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RESEARCHDEVELOPMENTS

speak of "typical" government and businessorganizations, n the fashion of Banfield(5) andWeidenbaum58), which share a largeproportionof this clusterof attributes 3).3Criteria f the Search

Having addressed these problems concerningdefinition and classification, one can turn to aconsiderable iteraturewhichaddresses he broaderquestion of the full set of possible distinctionsbetween public and private organizations andmanagement. In compiling these references, anumber of guidelineswere followed. The reviewcovered relativelyvisible and accessiblematerials(major texts, journals, and convention presenta-tions) which were for the most part relativelyrecent. Except in a few cases they were explicitlycomparativeof publicandprivateorganizations radministrative processes in the United States.Reportedbelow are most of the observationsandpropositionswhich were stated by severalauthorswith enough similarityin phrasingand intent tomake it seem reasonableto groupthem into one(see TableI for summaryof propositions).There were many problems encountered inmaking such a compilation,and inevitablysomeviolence was done to the phrasing, logic, andprioritiesof some of the authors.Nevertheless, hematerial that follows provides a reasonablesummaryof the majorpoints of consensusin theliterature.

FindingsThe points of consensus are grouped intoseveral categorieswhich are our own devices for

presenting he material.Weproceedfromwhat weinterpreted as environmental actors, to proposi-tions about transactions of organizationswiththeir environments, then to propositions con-cerningfactors within organizations,ncluding heindividualin the organization.The interrelation-ships mentioned are those cited in the literature,although numerousother relationshipsamongthefactorsandpropositionscould be proposed.I. EnvironmentalFactors

A number of the assertionsby authors can befairly characterizedas involvingfactors which areenvironmental,n the sense that they areexternalto organizations, and are largely out of theircontrol.Most of the relationshipsof these factors

with interal structures and processes will bementioned n followingsections.I. 1. MarketExposure. Many referencescitedifferences between public and private organiza-tions which are related to involvementor lack ofinvolvementwith the economic marketas a sourceof resources,information, and constraints.As asource of revenuesand resources, t is argued, hemarketenforcesrelativelyautomaticpenaltiesandrewards, and thus provides incentives to costreduction, operating efficiency, and effectiveperformance 2X9X12) (29X40)(46) (48)(52)(55)(57). On the other hand, organizationswhichobtain resources hroughan appropriations rocessin a political context are less subject to suchinfluences; cost reductions might be avoided ordeemphasized on a number of bases, such aspolitical influences or a numberof multiple, vaguecriteria of a "public interest"nature. Appropria-tions may be based largely on past levels, thuscreatingan incentiveto use up previousappropria-tions. Drucker(16) discounts the importanceofsome of the other distinctions mentioned in thissummary, yet stresses the tendencies to ineffec-tivenesson the partof organizationswhichacquireresources via "budget allocations" instead ofmarketperformance.It is frequently arguedthatmanagersof organizations inancedby appropria-tions will seek organizational rowthandpersonalaggrandizementby maximizing appropriations,and thus tend to deemphasizeoperatingefficiency(12X16) (40X52). Closelyrelated o this entiresetof propositionsabout the influenceof the marketmechanismon operatingefficiency and effective-ness are severalproposalsor improving dministra-tion of governmentprogramsby the introductionof market-type competition among programsproviding ervices 29X40) (48X52).A numberof authorsalsostressthe connectionbetweenexposureto economicmarketsandalloca-tional efficiency, in the economist's sense ofmaximizing satisfaction by matching supply todemand, reflecting consumer preferences, etc.(9)(13X40) (41X47X52). Ostrom (41), forexample, argues that public organizations aresubjectto a numberof dysfunctions, ncluding esssensitivity to diseconomies of scale, failure toproportion supply to demand, failure to ade-quately account for consumerpreferences,and anumber of other failings. A number of authors,particularly hose who might be characterizedas"publicchoice" enonomists,stressthe difficultiesand possible allocationalinefficiencieswhich are

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PUBLICADMINISTRATIONEVIEWTABLEI

SUMMARYOF LITERATUREONDIFFERENCESBETWEEN UBLICAND PRIVATEORGANIZATIONS:MAINPOINTSOF CONSENSUS

The following table presents a summary of the points of consensus by stating them as propositionsregardinghe attributesof a public organization, elative o those of a privateorganization

Topic PropositionI. EnvironmentalFactors

I. 1. Degreeof marketexposure(Relianceon appropriations)

I. 2. Legal, formal constraints(courts, legislature,hierarchy)

I. 3. Political influences

I. .a. Lessmarketexposureresults n less incentiveto cost reduction, operating efficiency,effectiveperformance.I. 1.b. Lessmarketexposureresults n lower alloca-tional efficiency (reflection of consumerpreferences, proportioning supply todemand,etc.)I. 1.c. Less market exposure means lower avail-ability of market indicatorsandinformation(prices,profits,etc.)

I. 2.a. More constraintson procedures,spheresofoperations (less autonomy of managersinmaking uchchoices)I. 2.b. Greatertendency to proliferationof formalspecificationsandcontrols.I. 2.c. More external sources of formal influence,and greaterfragmentationof those sources.

I. 3.a. Greaterdiversity and intensity of externalinformal nfluenceson decisions(bargaining,publicopinion,interestgroupreactions)I. 3.b. Greater need for support of "con-stituencies"-client groups, sympatheticformalauthorities,etc.

II. Organization-EnvironmentransactionsII. 1. Coerciveness "coercive,""monopolistic,"unavoidablenatureof manygovernmentactivities)II. 2 Breadthof impact

II. 3. Publicscrutiny

II. l.a. More likely that participation in con-sumption and financing of serviceswill beunavoidableor mandatory. Governmenthasuniquesanctionsandcoercivepowers.)

II. 2.a. Broader impact, greater symbolic signifi-cance of actions of public administrators.(Wider scope of concern, such as "publicinterest.")

II. 3.a. Greater public scrutiny of public officialsand their actions.

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II. 4. Unique public expectations II. 4.a. Greater public expectations that publicofficials act with more fairness, respon-siveness,accountability,andhonesty.III. Internal Structuresand Processes

III. 1.Complexityof objectives,evaluationanddecisioncriteriaIII. l.a. Greatermultiplicity and diversityof objec-tivesandcriteria.III. l.b. Greatervaguenessand intangibilityof objec-tives and criteria.III. I.c. Greatertendency of goals to be conflicting(more "tradeoffs").

III. 2. Authorityrelationsandtherole of the administrator

III. 3. Organizational erformance

III. 4. Incentivesand incentivestructures

III. 5 Personalcharacteristics femployees

III. 2.a. Less decision-makingautonomy and flex-ibility on the part of public administrators.III. 2.b. Weaker, more fragmented authority oversubordinates and lower levels. (1. Sub-ordinates can bypass, appeal to alternativeauthorities.2. Meritsystem constraints.)III. 2.c. Greater reluctance to delegate, more levelsof review, and greateruse of formalregula-tions. (Due to difficulties in supervisionanddelegation,resulting rom III. l.b.)III. 2.d. More political, expository role for topmanagers.

III. 3.a. Greatercautiousness,rigidity. Less innova-tiveness.III.3.b. More frequent turnoverof top leaders dueto elections and political appointmentsresults in greater disruptionof implementa-tion of plans.III.4.a. Greaterdifficulty in devisingincentives foreffective and efficient performance.III.4.b. Lower valuationof pecuniary ncentivesby

employees.III. 5.a. Variations in personality traits and needs,such as higher dominance and flexibility,higher need for achievement, on part ofgovernmentmanagers.III. 5.b. Lower work satisfaction and lower organiza-tionalcommitment.

(III. 5.a. and III. 5.b. represent results of individualempiricalstudies, rather than points of agreementamong authors.)

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PUBLICADMINISTRATIONEVIEWinherent in allocation via "social valuation"processes 6X26X41).Intermingledwith the foregoing ideas aboutoperatingand allocationalefficiency are frequentreferences to the importanceof the market as asource of relatively clear, quantitative demandindicators,goals, and performancemeasures i.e.,prices,sales, profits) (5)(9)(12) (14X20) (33)(51).Such relativelyclear information is conducive tooperatingefficiency and effectiveness, because itclarifiesobjectivesand performanceevaluation.Itaids in achievement of allocational efficiencythrough clearer indications of user preferences,economies of scale, and demand for particularservices.

I. 2. Legaland FormalConstraints.In positingdifferencesin public and private organizations nthe United States, a number of authors focus onthe impact of the formal, legal environment ofgovernmentorganizations,especially as it relatesto theirautonomyandflexibility.It is argued that while private organizationsneed only obey the law and the regulationsofregulatory agencies, government organizationstend to have their purposes,methods,andspheresof operation defined and constrainedby law andlegally authorized institutions to a much greaterdegree (5X31X33) (39)(51) (53)(61). One effectof these constraintsis that public managershaveless choice as to entry and withdrawal fromvariousundertakings5).Othersnote a tendency to "legalism" 31) and"legalhabit" (21) in the publicsector-a prolifera-tion of formal specifications and controls bystatute, court rulings, and hierarchicalsuperiors(8). Similarly, Dahl and Lindblom (12) attachsignificanceto the fact that public agencies aresubject to hierarchically or bureaucraticallyadministered xternal controls. Severalauthors, nciting the fragmentationof authority in govern-ment and governmentorganizations,see it as aresult of multiple formal checks and institutions(see III. 2. below). Finally, regularpopularelec-tions and political appointments, as formalmechanisms of leader selection, are cited as adisruptive influence on internal operations ingovernmentagencies 5)(7)(56).I. 3. Political Influences. Referenceto popularelections and political appointments brings upanother set of observations, those concerning"political" nfluenceson the operationsof govern-ment organizations (1)(20X21) (25)(31X33)(52X57) (59X61). These propositions are inter-

related with those concerningformal influences,but tend to be broader,encompassingnot only themultiple formal,institutionalconstraints,but alsothe less formalizedprocessesof influence,such asinterest group demands and lobbying, and inter-ventions by individualcongressmen.These asser-tions range romverybroadreferences o the more"political" characterof governmentwork (1) tosomewhat more specific observations about theeffects of greater diversity and intensity of in-fluences on governmentdecisionmaking 56). It isargued that these multiple, diverse interestsnecessitate bargaining 11 X12), and make objec-tives and decision-making riteriamore complex,due to greaterconcernfor "public opinion"(59)and the reactions of various interests (21X26)(31X33). Anotherconsequenceis the requirementthat agencies and their managersbuild supportfrom variousconsituencies, interests, and author-ities(34X57X61).II.Organization-Environmentransactions

A number of propositions are primarilycon-cernedwith characterizinghe relationshipof theorganization to the entities in its environment.Some of these assertionsare very similar, n theirimplications for internal operations, to some ofthose alreadynoted, but are sufficiently differentin approach o be listed separately.II. 1. Coerciveness.Sometimes the coercive,monopolistic, or "unavoidable"natureof actionsby governmentandgovernmententities is cited asa basic distinction between public and privateorganizations (5)(10X30) (31)(51)58). In-dividuals cannot avoid participation in thefinancingof most governmentactivities,andin theconsumption of many of the outputs of govern-ment. Obviously, his propositioncanbe relatedtothe absence of the market mechanism, whichprovidesfor individualchoice in the consumptionof goods and services.The coercivenatureof mostgovernment actions might be cited as a funda-mental justification for constitutionalchecks andbalancesand extensiveformal controlmechanisms.II. 2. Nature of Policy Impacts. There are anumber of propositionswhich might be roughlycategorizedas referencesto the greater nfluenceor impactof public sector decisions:Appleby(1)sees government as distinct due to its uniquebreadth of scope, impact, and consideration;Mainzer 31) notes the wider rangeof concerns npublic, as compared to private, administration;Wamsleyand Zald (57) cite the unique symbolic

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significanceof governmentactions; and Banfield(5) cites the opportunity to participatein largeaffairs,and to achievepower andglory, as incen-tives of greater importance in public than inbusiness organizations. At a more operationallevel, an administrator xperiencedin both publicand private organizations observed that govern-ment executives are involved in decisions whicharemoreimportantand influential 59).II. 3. Public Scrutiny. Closely related to anumber of propositionsunderpreceding ategoriesare general assertions that public administratorsare subject to greater public scrutiny (1)(33)(39)(51). In a similarvein,Banfield(5) argues hatgovernmentorganizationsare able to keep fewersecrets than businesses, and are more subject tooutside monitoring. Actually, a number of theearlierargumentsconcerningformal and politicalinfluences could be interpreted as relevant to"public scrutiny"; they refer to mechanisms ofoversight and accountability, and to the multi-plicity of representativesnvolved n the considera-tion of an agency'sactions.As noted earlier, there are indications ofincreasingpublic scrutinyof largeprivatecorpora-tions, and increasingconcernwith theirimpactonthe public interest. In view of the foregoingpropositions, however, it seems premature toassume that there are no differences in the publicscrutiny of governmentagenciesand privatecor-porations.II. 4. Public Expectations. Closely related to"public scrutiny" propositions are a number ofreferences to the unique role requirementsofpublic organizationsand public officials. Accord-ing to Wamsleyand Zald (57), a basic differencebetween public and privateorganizations s thatpublic organizationsare perceivedas being ownedby the state and citizens; citizens thereforehaverights and expectations they do not have inrelationto privateorganizations.Similarly,Caiden(10) feels that citizens expect more of publicadministrators n the way of "integrity, fairness,responsiveness, and] accountability no secrets)."II. 5. Natureof GoodsProduced.As basisfor anumber of the propositionsabout the effects ofmarket exposure (I. 1. above), economists notethat governmentandgovernmentorganizations reinvolved primarily n productionof "public"and"quasi-public" goods. With some variety inphrasing,they observe that the nature of publicgoods (in terms of "marketability," "exclu-dability," "rivalnessof consumption," etc.) pre-

cludes application of prices and the marketmechanism. Quasi-public goods are sufficientlypackageablefor the application of prices, usercharges,or some mechanism of individualchoicein consumption, but involve "significant exter-nalties" (26) and are providedat a cost to userswhich is lower than the cost of production(9X26).III. InternalStructuresandProcesses

A number of observations n the literaturearemore directly relevant to the internal operationsand structures of organizations, uch as decisionmaking, ndividualauthority,andmotivation.III. 1. Objectivesand EvaluationCriteria. rob-ably the most frequentlycited distinctionbetweenbusiness organizationsand governmentorganiza-tion is a difference in the nature of goals andperformance measures of the two types oforganizations.This difference s variouslyphrasedas a reference to goals, objectives, values, per-formance measures, decision criteria, etc.) Theobjectives and performance criteria of publicsector organizations end to differ from those ofbusiness organizations along at least threedimensions:

1. Multiplicity and Diversity (4)(5)(9)(12X21X26) (31)(35)(49) (56X57)(59). The mixof objectives and criteria is said to be morecomplex. In addition to multipleformal programobjectives,there are political feasibilityconsidera-tions. A number of less explicit criteria such asaccountability, openness, and fairness may beenforced through both formal and "political"mechanisms.2. Vagueness and Intangibility (5X7X12)(15X20X24) (26)(35) (48)(59). It is noteworthythat the references which were primarilycon-cerned with application of systematic andquantitativeanalysis n the publicsectorall madeapoint of the unique difficulties in specifyingandquantifying performancemeasuresin the publicsector (15)(26)35). Drake (15) in particular,presents an extensive list of differences,such asthe greaterdifficulty of actuallydefiningthe issuefor analysis,and the greaterdifficulty of applyinga quantitative model due to the complex inter-relationshipsamonggovernmentactivities.(Drakeapparentlysees the militaryas similarto businessin applicabilityof quantitative echniques.)3. Goal Conflict (5)(20X35) (49X59).Numerousreferencesto conflicts and"trade-offs"among objectives,values, and criteriashould not

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PUBLICADMINISTRATION EVIEWbe surprisingin view of the multiple, complexconstraints and expectations focused on govern-ment,noted earlier.Siffin(50) givesanexampleofthe pursuitof directly conflictingobjectives n thesame government organization.Another exampleis provided by the frequent observationthat ingovernment,operatingefficiency (especially n thenarrow sense of cost reduction) is often deem-phasized in relation to other criteria(1)(20X31)(47X49). One can cite origins of these "othercriteria" n a number of the propositionsalreadypresented,such as the unique public scrutinyandexpectationsof government.The aim in this section is not to suggest thatbusinessmen seek only more sales and profits.Clearlythey, too, arefaced with a complexmix ofobjectives,and with the frequentinadequaciesofquantitative measures as representationsof thequality of performance.Nevertheless, the litera-ture advances too many observationsconcerningthe greatermultiplicity,vagueness,and conflict ofobjectivesof public sector organizations or suchpropositionsto be brushedaside as not potentiallysignificant to the practice of management andpreparationor it.III. 2. HierarchicalAuthority and the Role ofthe Administrator.The multiplepoliticalandlegalinfluences on U.S. governmentorganizationsarerelatedto some particular ttributesof hierarchicalauthority in government,which have implicationsfor the role of the administrator.In general,observersregardhierarchicalauthority as weakerin the Executive Branch of governmentthan inbusinessorganizations.Sometimesthe weakness srelated very generally to the fragmentationandcomplexity of governmentsat all levels (5)(19)(61). More specifically, some authors relatethe "lack of control" (20) to the ability ofsubordinatesto bypass hierarchicalsuperiorsbyappealing to alternative formal authorities orpolitical constituencies(20)X21)(61), thus makingfor weaker, more fragmentedauthority than isusually found in business organizations (5)(21).Moreover,there are some assertionsthat publicadministratorshave less autonomy and flexibilityin makingtheir own decisions than their private-sector counterparts (5)(7)(8) (19)(21) (31X59).The multiple legal, statutory, and proceduralcontrols noted earlier are an obvious source ofthese limitations. For example, merit principleslimit the flexibility of public administrators nhiring, firing, and controlling the incentives oftheir subordinates (5)(7)(19). Constraints on

choice of methods and spheresof operationhavealreadybeen cited (I. 2. above). Otherreferencesnote unique difficulties in supervision,delegation,and subcompartmentalizationinto profit centers,for example)in the public sector due to the lackof specific objectives and performancemeasures(5)(6)(21) (32X48). Inability to specify clearobjectives and performance measures makes itharderto superviseand control subordinates,andresults in reluctance to delegate,in multiple evelsof review and approval,and in a proliferationofregulations(21)(58X48). The lack of specific andquantitativecriteria s saidto limit the tendencyofpublicadministratorso attemptinnovations,sinceit is difficult to evaluate he potentialimpactof aninnovation 6X20).There are suggestions that the necessity tomaintain constituencies, to deal with multipleexternal nfluences,andto seekappropriationsn apoliticalcontext have implicationsfor the rolesofthe high-level managerin a governmentorgani-zation. Nigroand Nigro(39) cite the requirementfor "exposition"as well as competence.Stockfisch(52) notes the requirement o combine "politicaladroitness"with professionalexpertise.Mintzberg(34) concludes from a study of managerialworkthat the requirement o deal with external coali-tions and to make politically sensitive decisionsmake the "liaison, spokesman, and negotiatorroles" more important for chief executives ofpublicorganizations.III. 3. PerformanceCharacteristics.A numberof authorshave made observationsconcerning heperformance of government organizations andadministrators,usuallyin comparisonto business,and have frequently focused on dysfunctions ingovernment organizations. Dahl and Lindblom(12) assert that "agencies" suffer more than"enterprises" from red tape, buck-passing,timidity, and rigidity. Downs notes tendenciesin"bureaus"to inertia, routinization, and inflexi-bility. Golembiewski(21) sees a greatertendencyto proceduralregularityand caution in govern-ment agencies, as comparedto businesses.WhenWeidenbaum58) worries that some corporationsare becoming so dependenton governmentcon-tracts that they are losing their "essentialprivate-ness," he apparently is referring to theirinnovativeness,their taking and bearingof risks.Schultz (48) says that the inadequacy of per-formance measuresin governmentresults in riskavoidanceby individualsand institutions;successcannot be recognizedeasily, but mistakes can be

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singled out and punished.Arguments concerningthe greater difficulty in evaluating a proposedinnovation are noted above (III. 2.). "Scheduleddisruptions" 7X20) in the form of elections andpolitical appointments end to interruptsustainedimplementationof plansand projects.Thus,thereare a number of propositionsto the effect thatgovernmentorganizations end to be characterizedby cautiousness, inflexibility, and lack ofinnovativeness.III. 4. Incentives. The literaturealso containssome propositions concerning differences in in-centive structures and employee valuations ofincentives in public organizations,which are ofpotential significanceto trainingfor managementand the practice of management (45)(46).Schultze (48) notes the greater difficulty indevising incentives for effective performanceofgovernmentprograms, argely as a resultof diffi-culties in performanceevaluationwhen objectivesare vague.A numberof proposals or introducingcompetition as an incentive to effective per-formancehavebeennoted above(I. 1.).There are also some indications of differencesin the kinds of incentiveswhich are available,andthe kindsto whichemployeesareresponsive 5)(7)(28)(42). Banfield (5) argues that the mostimportant incentives offered to private sectoremployees are material incentives, primarilymoney. In government, he says, nonpecuniaryincentives such as job security, involvement inimportantaffairs, and "power and glory," figuremore importantly. Lawler (28) cites extensiveevidencethat people who workin businessorgani-zations attach more importance to pay than dopersonsin nonprofit organizations; study of hisown indicated such a difference between em-ployees in industrial and government organi-zations. Recent findingsby Rawls,et al. (42) givesimilar indications. Thus, not only are theresuggestionsof greaterconstraintson the abilityofpublic administrators to manipulate incentives(merit system constraints contribute to theselimitations, of course), there are indications ofdifferences in individual valuations of variousincentives.III. 5. Individual Differences. A handful ofempiricalstudies suggest individualdifferencesinaddition to the differences in valuation ofincentivessuggestedjust above. Rawls,et al. (42)found that, as compared to students planningemploymentin the profitsector, studentsplanningnonprofit sector employmentwere more likely to

have played roles as change agentsin the school;their responseson personalityscales were higheron dominance,flexibility, and capacityfor status,and they placedlower value on economicwealth.Other studies have found indicationsthat govern-mentmanagers howlowerwork andneed satisfac-tion (7)(43), lower organizationalcommitment(7), higher need for achievement,and lower needfor affiliation (22). Although one should becautiouspendingfurtherreplicationandcorrobor-ation of these findings, they suggestdifferenceswith important implications for research andpractice, and at least provide justification forfurther inquiry into differences at the individuallevel.

ImplicationsConsensus s not "proof." Yet as much as wewould like to rely on extensive,conceptuallyclearempirical research, we are faced with theimmediatedecisionsas to whetherthe comparativequestion is worth pursuing,and whether therearenoteworthy differences in public and private"management"whichin turnhaveimplications ormanagement raining.Since space constraintspre-

clude elaboration of conflicts on some points(16)(53), and of possible paradoxesor conflictsamong some of the propositions themselves,pendingfurtherrefinement andcorroborationoneshould be cautious aboutassuming he accuracyofany individualpropositionand about overstatingits importance. With that disclaimer clearly inmind, we must do our best to answer theimmediatequestions.Implications for Research.The strong norma-tive concerns mentioned at the outset, togetherwith strong consensuson certainpoints of com-parison,justify further attention to the compara-tive question. For instance, Weidenbaum's 58)concernover loss of entrepreneurialharacteristicsby firms reliant on government contractsemphasizes the importance of comparative re-search on innovation(III. 3.a.) in the public andprivate sectors (45)(46)-is business really moreflexible and innovative than government?Even ifthe public-privatedistinction is, or proves to be,less important than other major variables fororganizationalanalysis, comparativeresearchcanprovide findings on those other variablesandissues. For example, investigationof the proposi-tions presentedabovecanprovide indingsrelevantto the effects of different environmental con-

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PUBLICADMINISTRATION EVIEWstraints on organizational processes and per-formance, to the effects of different incentivesystems, and to other issues of importance togeneralunderstanding f organizations.

Implications for Management. As a way ofbriefly suggestingthat there are some importantdistinctions between public and privatemanage-ment, one might apply some of the propositionslisted above to a few of the elements whichMurray 36) sees as common to all management.He offers a quotation (p. 365) to the effect that,among other things, managementalways involvesthe following: defining purposes and objectives,planning, selecting managers,managingand moti-vating people, and controlling and measuringresults. The points of agreementin the literaturesuggestthat theremaybe distinctionswithin thesecategorieswhichshouldbe furtherconsidered:1. Purposes, objectives, and planning. Publicadministrators may have less flexibility andautonomy in definingpurposes I. 2.a.). Objectivesmay be more diverse (III. l.a.) and harder tospecify (III. l.b.). Planning may involve a morecomplex set of influences(I. 3.a.), and long-termplanningmaybe moredifficult(III. 3.b.).2. Selection, management, and motivation.There may be greater constraints on a publicadministrator's ability to select and controlsubordinates III. 2.b. and II. 2.c.). He may needto considera differentset of employee needs andmotivationalproblems III. 5.), which must also beconsidered n selectiondecisions.3. Controllingand measuring esults. A publicadministratormay find it not only harder tomeasureresults(I. 1., III. 1.), but also, partiallyasa consequence of that difficulty, harder to attainresults and effective performance III. 2., III. 3.,III.4.).Thus, there are strong indications of uniqueproceduresand constraintswithin the broadpro-ceduralcategorieswhich characterizeall manage-ment. Educational implications of thesedifferences further underscoretheir significance.

Implicationsfor Training.It is difficult to seehow a core curriculum n "genericmanagement"could extend beyond a handful of joint courses,such as organization heory and basicquantitativeskills. Even in those courses,difficulties as to themix of readings,cases, and examplesmay arise.Drake (15), for example,discussesunique quanti-tative trainingneeds of public administration tu-dents, due to the "fuzzier"problems hey may en-counter.Beyondthese few subjects,optimal prepa-

ration for management n the two types of organi-zations would call for differentemphases, ome ofwhich readily come to mind-more emphasisonpolitical institutions andprocesses,on governmentbudgeting,on public policy analysis,and on ad-ministrative aw instead of business aw. Togetherwith a concentration in a functional area such ascriminal ustice or transportation, hese emphaseswould result in such divergence n course assign-ments that there seems no particularutility inestablishing 'generic" curricula. Moreover, onecould arguethe need for public service rainees odevote continuingconsideration o certainaspectsof public service, such as concern for the publicinterest,and the responsibilities f the governmentofficial. OnemightinterpretThePresident'sReportof Harvard24), which argues he need for publicservice training programsdue to the intangible,multiple goalsof publicprograms, s a reference othese unique considerations.It may be that suchan emphasis s most effective in a separate,or near-separate,environment.In sum, there are indicationsof a numberofimportantdifferencesbetween public andprivateorganizations,which cannot be ignored in con-siderationsof managementresearch, raining,andpractice. More importantly, there are reasonstocontinue public and private comparisons,not inrejection of efforts at general understandingoforganizationsand their management,but in theeffort to supplement t.

Notes1. Althoughwe take for grantedmany commonalitiesamong organizations53), we focusalmostexclusivelyon "differences," o specify points of contentionforfurtherinquiry. We continuallyrefer to public andprivate organizations,although we consider all thepropositions relevant to "management" n thoseorganizations. n closingwe make suggestionsas tothis relevance, but it is a matter for continuingconsideration.We sometimes ubstitute"government"for "public"where the literatureis specific in itsreferent,on the assumption hatgovernment rganiza-tions represent he majorcoreof publicorganizations,although"public"might be defined to includesome"third sector" or quasi-governmental rganizations.The term "sector" is a higher-orderanalytic termwhich refers to sets of organizations, nd we use itonly where appropriaten this way. Moreover, he

term is associatedmore closely with economic, thanwith social and political functions. However,alter-nativeconceptsarealso insufficientlycomprehensive,or are awkwardlyunfamiliar.Promisingalternativesare the terms"field"and"network,"usedby students

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RESEARCHDEVELOPMENTSof interorganizational relations. They have notexplicitly addressed public-private comparisons, butsuch efforts would be valuable extensions for theirresearch. See White (60) on the state of interorganiza-tional studies.

2. For a review of a number of references prior to theearly 1960s, see R.S. Parker and V. Subramaniam,"'Public' and 'Private' Administration," InternationalReview of Administrative Science, Vol. 5 (1964), p.30. Henry (25) and Roessner (46) also compile andcharacterize a number of recent references.3. Attention to efforts by organization theorists to devise

typologies and to choose major variables for organiza-tional analysis points to no clear resolution as to theusefulness of the public-private distinction. Generallythey have not attached major importance to thatdistinction, but neither have they resolved the choiceof typologies and central concepts (23, p. 78).

References

1. Paul H. Appleby, Big Democracy (New York: AlfredA. Knopf, 1945).2. Armen A. Alchian, "Cost Effectiveness of CostEffectiveness," in Stephen Enke (ed.), DefenseManagement (Englewood Cliffs, N.J.: Prentice-Hall1967), pp. 74-86.3. Kenneth B. Bailey, "Monothetic and PolytheticTypologies and Their Relation to Conceptualization,Measurement and Scaling," American SociologicalReview, Vol. 33 (February 1973), pp. 18-33.4. R. J. S. Baker, "Organization Theory and the PublicSector, "The Journal of Management Studies(February 1969), pp. 15-32.5. Edward C. Banfield, "Corruption as a Feature ofGovernmental Organization," Journal of Law andEconomics, forthcoming.6. Robert L. Bish and Vincent Ostrom, UnderstandingUrban Government (Washington, D.C.: AmericanEnterprise Institute for Public Policy Research,1973).7. Bruce Buchanan II, 'Government Managers,BusinessExecutives, and Organizational Commitment," PublicAdministration Review, Vol. 35, No. 4 (July/August1975), pp. 339-347.8. , "Red-Tape and the ServiceEthic: Some Unexpected Differences Between Publicand Private Managers," Administration and Society,Vol. 6, No. 4 (February 1975), pp. 423-488.9. Jesse Burkhead and Jerry Miner, Public Expenditure(Chicago: Aldine, 1971).10. Gerald E. Caiden, The Dynamics of Public Adminis-tration (Hinsdale, Ill.: Dryden Press, 1971).11. James C. Charlesworth (ed.), Theory and Practice ofPublic Administration: Scope, Objectives, andMethods (Philadelphia: The American Academy ofPolitical and Social Science, 1968).12. Robert A. Dahl and Charles E. Lindblom, Politics,Economics, and Welfare (New York: Harper andRow, 1953).13. D. G. Davies, "The Efficiency of Public vs Private

Firms, The Case of Australia's Two Airlines," Journalof Law and Economics (April 1971), pp. 149-165.14. Anthony Downs, Inside Bureaucracy (Boston: Little,Brown, 1967).15. Alvin W. Drake, "Quantitative Models in PublicAdministration: Some Educational Needs," in A.Drake, L. Keeney, and P. Morse (eds.), Analysis ofPublic Systems (Cambridge, Mass.: MIT Press, 1972),pp. 75-93.16. Peter Drucker, "Managing the Public Service Institu-tion," The Public Interest, No. 33 (Fall 1973), pp.43-60.

17. Herbert Emmerich, "Scope of the Practice of PublicAdministration," in Charlesworth, op. cit., pp.92-107.18. John Kenneth Galbraith, Economics and the Public

Purpose (New York: Houghton Mifflin, 1973).19. Louis C. Gawthorp, Administrative Politics and SocialChange (New York: St. Martin'sPress, 1971).20. , Bureaucratic Behavior in theExecutive Branch (New York: Free Press, 1969).21. Robert T. Golembiewski, "Organization Developmentin Public Agencies: Perspectives on Theory andPractice," Public Administration Review, Vol. 29,No. 4 (July/August 1969), pp. 367-368.22. James F. Guyot, "Government Bureaucrats areDifferent," Public Administration Review, Vol. 20,No. 3 (May/June 1960), pp. 195-202.23. Richard H. Hall, Organizations: Structure and Process(Englewood Cliffs, N.J.: Prentice-Hall, 1972).24. Harvard University, The President's Report,1973-1974.

25. Nicholas Henry, "Paradigms of Public Administra-tion," Public Administration Review, Vol. 35, No. 4(July/August 1975), pp. 378-386.26. Harley H. Hinrichs and Graeme M. Taylor, SystematicAnalysis (Pacific Palisades, Calif.: Goodyear Publish-ing Co., 1972).27. Martin Landau, "The Concept of Decision-Making inthe Field of Public Administration," in SidneyMailich and Edward H. Van Ness (eds.), Concepts andIssues in Administrative Behavior (Englewood Cliffs,N.J.: Prentice Hall, 1962), pp. 1-29.28. Edward E. Lawler, Pay and Organizational Effec-tiveness: A Psychological View (New York: McGraw-Hill, 1971).29. Robert A. Levine, "Redesigning Social Systems," inErich Jantsch (ed.), Perspectives on Planning (Paris:Organization for Economic Cooperation and Develop-ment, 1969), pp. 449469.30. Theodore Lowi, The End of Liberalism (New York:Norton, 1969).31. Lewis C. Mainzer, Political Bureaucracy (Glenview,Ill.: Scott, Foresman, 1973), pp. 14ff.32. Marshall W. Meyer, Bureaucratic Structure andAuthority: Coordination and Control in 254 Govern-ment Agencies (New York: Harper and Row, 1972).33. John D. Millett, Organization for the Public Service(Princeton, N.J.: D. Van Nostrand, 1966), pp. 10ff.34. Henry Mintzberg, The Nature of Managerial Work(New York: Harperand Row, 1973), p. 108.35. Philip M. Morse and Laura W. Bacon (eds.),Operations Research for Public Systems (Cambridge,Mass.: MITPress, 1967).

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PUBLIC ADMINISTRATION REVIEW36. Michael A. Murray, "Comparing Public and Private

Management: An Exploratory Essay," Public Admin-istration Review, Vol. 34, No. 4 (July/August 1975),pp. 364-371.37. Mark V. Nadel, "Corporate Secrecy and PoliticalAccountability," Public Administration Review, Vol.35, No. 1 (January/February 1975), pp. 14-23.38. Ralph Nader (ed.), The Consumer and CorporateAccountability (New York: Harcourt Brace, 1973).39. Felix A. Nigro and Lloyd A. Nigro, Modem PublicAdministration (New York: Harper and Row, 1973),pp. 14ff.40. William A. Niskanen, Jr., Bureaucracy and Repre-sentative Government (Chicago: Aldine, 1971).41. Vincent Ostrom, The Intellectual Crisis in AmericanPublic Administration (University, Ala.: University ofAlabama Press, 1973).42. James R. Rawls, Robert A. UUrich, and Oscar TivisNelson, Jr., "A Comparison of ManagersEntering orReentering the Profit and Nonprofit Sectors,"Academy of Management Journal, Vol. 18, No. 3(September 1975), pp. 616-622.43. J. B. Rhinehart, R. P. Barrel, A. S. Dewolfe, J. E.Griffin, and F. E. Spaner, "Comparative Study ofNeed Satisfaction in Governmental and BusinessHierarchies,"Journal of Applied Psychology, Vol. 53,No. 3 (June 1969), pp. 230-235.44. Rodman C. Rockefellar, "Turn Public Problems toPrivate Account," Harvard Business Review(January/February 1971), pp. 131-138.45. J. David Roessner, "Designing Public Organizationsfor Innovative Behavior," paper delivered at the 34thannual meeting of the Academy of Management,Seattle, Washington, August 1974.46. , "Incentives to Innovate inPublic and Private Organizations: Implications forPublic Policy," paper delivered at the 1975 annualmeeting of the Southern Political Science Associa-tion, Nashville, Tennessee, November 6-8, 1975.47. E. S. Savas, "Municipal Monopolies Versus Com-petition in Delivering Urban Services," in Willis D.

Hawley and David Rogers (eds.), Improving theQuality of Urban Management (Beverly Hills, Calif.:Sage 1974), pp. 473-500.48. Charles L. Schultze, "The Role of Incentives,Penalties, and Rewards in Attaining Effective Policy,"in R. Haveman and J. Margolis(eds.), Public Expendi-tures and Policy Analysis (Chicago: MarkhamPublish-ing Co., 1970), pp. 145-172.49. Harold Seidman, Politics, Position, and Power (NewYork: Oxford University Press, 1970).50. William J. Siffi, "Business Administration = PublicAdministration," Business Horizons, Vol. 5 (Winter1963), pp. 69-76.51. O. Glenn Stahl, Public Personnel Administration(New York: Harperand Row, 1971).52. J. A. Stockfisch, The Political Economy of Bureau-cracy (New York: General LearningPress, 1972).53. James D. Thompson, "Common and UncommonElements in Administration," Social Welfare Forum(1962), pp. 181-201.54. Victor Thompson, Organizations as Systems(Morristown, N.J.: General Learning Press, 1973).55. Gordon Tullock, The Politics of Bureaucracy(Washington, D.C.: Public Affairs Press, 1965).56. Dwight Waldo, The Study of Public Administration(New York: Doubleday, 1955).57. Gary L. Wamsley and Mayer N. Zald, The PoliticalEconomy of Public Organizations (Lexington, Mass.:D. C. Heath, 1973).58. Murray L. Weidenbaum, The Modern Public Sector:New Waysof Doing the Government's Business (NewYork: Basic Books, 1969).59. Herman L. Weiss, "Why Business and GovernmentExchange Executives," Harvard Business Review(July/August 1974), pp. 129-140.60. Paul E. White, "Intra and Interorganizational Studies:Do They Require Separate Conceptualizations?"Administration and Society, Vol. 6, No. 1 (May1974), pp. 107-152.61. Peter Woll, American Bureaucracy (New York:Norton, 1963).

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Comparing Public and Private Organizations