Roles of Administrators in the Private and Public Sectors
Public Sector- The public sector, sometimes referred to as the state sector is a part of the state that deals with either the production, delivery and allocation of goods and services by and for the government or its citizens, whether national, regional or local/municipal.
Examples of public sector activity range from delivering social security, administering urban planning and organizing national defenses (Carnevale, 2010).
The organization of the public sector (public ownership) can take several forms, including:
Direct administration funded through taxation; the delivering organization generally has no specific requirement to meet commercial success criteria, and production decisions are determined by government.
Publicly owned corporations (in some contexts, especially manufacturing, “state-owned enterprises”); which differ from direct administration in that they have greater commercial freedoms and are expected to operate according to commercial criteria, and production decisions are not generally taken by government (although goals may be set for them by government) (Lane, 1995).
Partial outsourcing (of the scale many businesses do, e.g. for IT services), is considered a public sector model.
A borderline form is
Complete outsourcing or contracting out, with a privately owned corporation delivering the entire service on behalf of government (Nigro, 1984). This may be considered a mixture of private sector operations with public ownership of assets, although in some forms the private sector’s control and/or risk is so great that the service may no longer be considered part of the public sector. (See the United Kingdom’s Private Finance Initiative.)
The role and scope of the public sector and state sector are often the biggest distinction regarding the economic positions of socialists, liberals and libertarian political philosophy. In general, socialists favor a large state sector consisting of state projects and enterprises, at least in the commanding heights or fundamental sectors of the economy (although some socialists favor a large cooperative sector instead).Social democrats tend to favor a medium-sized public sector that is limited to the provision of universal programs and public services (Nigro, 1984). Economic libertarians and minarchists favor a small public sector with the state being relegated to protecting property rights, creating and enforcing laws and settling disputes, a “night watchman state”. Anarchists favor no public sector at all, with these powers enforced by voluntary associations or private organizations which are hired to provide these services.
Private Sector- In economics, the private sector is that part of the economy which is both run for private profit and is not controlled by the state. By contrast, enterprises that are part of the state are part of the public sector; private, non-profit organizations are regarded as part of the voluntary sector. A variety of legal structures exist for private sector business organizations, depending on the jurisdiction in which they have their legal domicile. Individuals can conduct business without necessarily being part of any organization (Zhang, 2007).
The main types of businesses in the private sector are:
Partnership, either limited or unlimited liability
Private Limited Company or LTD-limited liability, with private shares
Public Limited Company – shares are open to the public. Two examples are:
Franchise – business owner pays a corporation to use their name, receives spec for the business
Workers cooperative – all workers have equal pay, and make joint business decisions
In countries where the private sector is regulated or even forbidden, some types of private business continue to operate within them (Zhang, 2007).
The private sector focuses on the needs of the shareholders.
Human resources is a term used to describe the individuals who comprise the workforce of an organization, although it is also applied in labor economics to, for example, business sectors or even whole nations. Human resources is also the name of the function within an organization charged with the overall responsibility for implementing strategies and policies relating to the management of individuals (i.e. the human resources). This function title is often abbreviated to the initials ‘HR’.
Human resources is a relatively modern management term, coined in the 1960s (McLean, 2006). The origins of the function arose in organizations that introduced ‘welfare management’ practices and also in those that adopted the principles of ‘scientific management’. From these terms emerged a largely administrative management activity, coordinating a range of worker related processes and becoming known, in time as the ‘personnel function’ (Nadler, 1984). Human resources progressively became the more usual name for this function, in the first instance in the United States as well as multinational corporations, reflecting the adoption of a more quantitative as well as strategic approach to workforce management, demanded by corporate management and the greater competitiveness for limited and highly skilled workers.
The early development of the function can be traced back to at least two distinct movements. One element has its origins in the late 19th century, where organizations such as Cadburys at its Bournville factory recognized the importance of looking after the welfare of the workforce, and their families (Lane, 1995). The employment of women in factories in the United Kingdom during the First World War lead to the introduction of “Welfare Officers”. Meanwhile, in the United States the concept of human resources developed as a reaction to the efficiency focus of Taylorism or “scientific management” in the early 1900s, which developed in response to the demand for even more efficient working practices within mechanical factories, such as the Ford Motor Company. By 1920, psychologists and employment experts in the United States started the human relations movement, which viewed workers in terms of their psychology and fit with companies, rather than as interchangeable parts.
During the middle of the last century, larger corporations, typically those in the United States that emerged after the Second World War, recruited personnel from the US Military and were able to apply new selection, training, leadership, and management development techniques, originally developed by the Armed Services, working with, for example, university-based occupational psychologists. Similarly, some leading European multinationals, such as Shell and Phillips developed new approaches to personnel development and drew on similar approaches already used in Civil Service training. Gradually, this spread more sophisticated policies and processes that required more central management via a personnel department composed of specialists and generalist teams (Kelley, 2001).
The role of what became known as Human Resources grew throughout the middle of the 20th century. Tensions remained between academics who emphasized either ‘soft’ or ‘hard’ HR. Those professing so-called ‘soft HR’ stressed areas like leadership, cohesion, and loyalty that play important roles in organizational success. Those promoting ‘hard HR’ championed more quantitatively rigorous management techniques in the 1960s.
In the later part of the last century, both the title and traditional role of the personnel function was progressively superseded by the emergence, at least in larger organizations, of strategic human resources management and sophisticated human resources departments. Initially, this may have involved little more than renaming the function, but where transformation occurred, it became distinguished by the human resources having a more significant influence on the organizations strategic direction and gaining board-level representation (Elwood, 1996).