PRIVATE ADMINISTRATION: CHARACTERISTICS AND EXAMPLES - DUDAS - 2024

The private management is the activity that takes place within any organization for profit (corporation or company), which relates to the internal rules of operation.

Administration refers to the management of organizations in general, so that they can efficiently achieve the objectives that have been proposed. This can be interpreted from two different criteria: the formal, which corresponds to the simple presence of a regulatory entity, and the material, which refers to an administrative activity, where it must be ensured that the mission that is stipulated is executed.

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Private companies make up the private sector of a nation's economy. In general, they work in economic systems as their main pedestal, for which they demand excellent administration in order to compete and progress.

The private administration is responsible for a large number of activities, generally related to the deals and businesses that the company carries out. This means having to carry out a set of organizational activities, where a previously determined line of action predominates.

Characteristics of private administration

- Attend the management of a company, institution or non-governmental organization.

- It is an individualistic system.

- The member with the most authority is the director or manager.

- Its legal regime is based on the principles of Private Law and laws in general.

- You get income, benefits and profits.

The private administration has a set of advantages, such as the absence of many government regulations or government-related entities, except in certain cases where the law is being violated in some way or some procedures must be followed with respect to certain matters.

It is common for all the people involved to have a specific objective, generally being to obtain monetary remuneration.

Features

As the theorist Henry Fayol pointed out, private management can be conceptually described as the management of a business or organization. The functions of this administration are carried out within the company and not towards the external environment. Therefore, it does not deal with competitors or customers.

One of the main functions of private administration is to be in charge of employees in order to improve their performance. The workers of a company need to be directed and guided, as well as require motivation and training. These are private administration occupations.

If there is any discrepancy between the employees, the problem should be solved. By maintaining the happiness of the work team, the productive performance of each one of them will significantly improve, thus being a gain for all.

In addition, the private administration is responsible for meeting the objectives of the company, in addition to its planning and profitability.

General process

Private administration requires a process divided into several parts. These do not act independently, but related to each other. These are:

- Planning of objectives and goals.

- Organization to achieve the goals.

- Direction of activities and work personnel.

- Coordination to achieve the objectives.

- Control over planned activities.

Although planning is carried out by the entire work team, the decisions that are ultimately made are made by the manager.

Differences between public and private administration

In various issues the public administration is differentiated from the private one, some of them being:

- Private administration is based on private regulations and individual interest, while public administration is part of public legislation and is a social system.

- The private administration respects the decisions of managers and its activity is favored by economic income. On the other hand, the public administration is made up of a group of people who make decisions and do not generate profit from the activity they carry out.

Examples

Values

In private administration the profit of the company is valued more. The first concern you have is the survival and economic success of the business.

Public administration values ​​the public interest, public needs, and political commitment. Their main concern is the general welfare of society.

goals

It is easy for the private administration manager to set goals and measure success, because objectives can be defined and measured on the basis of profits.

For example, the manager of a notebook factory sets a quarterly cost reduction goal to maximize profits. To do this, he uses a cheaper ink supplier and buys a state-of-the-art conveyor belt.

In the public administration, a presidential decree may establish the goal of reducing homelessness, with the task of reducing "apathy." For this purpose a lot of programs are prepared, with their own objectives, agendas and facilitators.

For the public administrator the objectives are abstract, generalized and difficult to measure. This is because the objectives span a much broader jurisdiction than just one company.

Responsibility

The private administration operates without the controls of the public sector. Although entrepreneurs are not totally immune to public scrutiny, they are accountable only to a small group of shareholders and employees. Therefore, they can only focus on maximizing the bottom line.

In public bodies, managers are held accountable to many more people, always under public scrutiny.

Crisis management

When the 2008 financial crisis began, companies around the world suffered a significant blow. However, although private companies could decide to cut costs and lay off employees to survive, the public administration faced the resulting socio-economic consequences of this.

Private companies are exposed only to cross-cutting pressure from interest groups in the communities in which they operate. They should only deal with governments and unions, as well as with their customers.

However, as a result of their broad social mandate, public agencies are less insulated from external events.

Leadership

Franklin Delano Roosevelt served the longest term as president of the United States, for more than 12 years. On the other hand, Leslie Wexner has been the oldest Fortune 500 CEO, managing L Brands for 56 years.

This is because political processes ensure that leadership in public administration changes with some frequency, whereas in private administration managers can remain in leadership positions for an indeterminate number of years.

In many cases, a public manager can have great responsibility with very little authority. On the other hand, in private administration it is people with a lot of responsibility who also make decisions.

References

1. Definition and what it is (2014). Private Administration. Taken from: definicionyque.es.
2. Types of (2020). Private Administration. Taken from: typesde.com.
3. Administrative Process (2019). Concepts of Administration, Private Administration and Public Administration. Taken from: procesadministrativo2108.wordpress.com.
4. Get Smarter (2017). The difference between public and private sector management. Taken from: getsmarter.com.
5. I Expert (2020). How is private sector management different from public sector management? Taken from: management.yoexpert.com.