Characteristics of Public Agencies

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The most basic distinction between public and private organizations is that the political community own public agencies whereas ownership of private organizations belongs to entrepreneurs or shareholders. However, there are many other differences between public and private organizations. The funding for public agencies derives mostly from taxation, which contrasts with private agencies receiving funds predominately from consumers in the form of fees. In the public sector, organizations are largely controlled by political forces, which also results in the imposition of constraints by the political system. Subjection to constraint results in frequent changes in policies within public organizations. The owners and shareholders of private organizations have a direct incentive to monitor the behavior of managers to promote better performance and financial gain. The managers would also benefit if they own company shares. In contrast, managers in the public sector typically do not financially benefit from a higher degree of organizational efficiency. Public organizations are more easily influenced by external events because they function as an open system and must be responsive to the needs of the public. Moreover, public agencies are subjected to few competitive pressures. Public agencies generally have few rivals and hold a dominant position within the market.

Distinctive goals, like equity and accountability, convey public agencies want to control behaviors and achieve a collective purpose for the organization. The use of such goals is said to be absent in private organizations. In order to successfully profit, private organizations pursue a single goal whereas public agencies are confronted with numerous goals. In the...

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