por The private administration It is the activity that is carried out within any for-profit organization (corporation or company), which is related to the internal regulations of its operation.
The 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 one, which corresponds to the simple presence of a regulatory entity, and the material one, which refers to an administrative activity, where it must be ensured that the stipulated mission is carried out.
Private companies make up the private sector of a nation’s economy. In general, they perform in the economic systems as their main pedestal, for which they demand to have an excellent administration in order to compete and progress.
The private administration is in charge of a large number of activities, generally related to the deals and businesses carried out by the company. This means having to carry out a set of organizational activities, where a previously determined line of action predominates.
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Characteristics of private administration
– Serves the address 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.
– Obtains income, benefits and profits.
Private administration has a set of advantages, such as the absence of many government regulations or government-related entities, except for certain cases where the law is being violated in some way or procedures must be followed regarding certain matters.
It is common for all the people involved to have a specific objective, which is generally to obtain monetary remuneration.
functions
As indicated by the theorist Henry Fayol, private administration can be conceptually described as the management of a company 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 the competition or customers.
One of the main functions of the private administration is to be in charge of the 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 management occupations.
In case there is any discrepancy between the employees, the problem should be solved. By maintaining the good fortune of the work team, the productive performance of each of them will significantly improve, thus being a benefit for all.
In addition, the private administration deals with meeting the objectives of the company, in addition to its planning and profitability.
overall process
The private administration needs a process divided into several parts. These do not act independently, but in relation to each other. These are:
– Planning objectives and goals.
– Organization to achieve goals.
– Direction of activities and work personnel.
– Coordination to achieve the objectives.
– Control over planned activities.
Although the planning is carried out by the entire work team, the decisions that are finally made are made by the manager.
Differences between public and private administration
On various issues, the public administration is differentiated from the private one, some of which are:
– 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 the 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 for the activity they carry out.
examples
Values
In private administration, the profit of the company is valued more. The first concern 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 goals can be defined and measured based on profit.
For example, the manager of a notebook factory sets a quarterly cost reduction target to maximize profit. To do this, he uses a cheaper ink supplier and buys a state-of-the-art conveyor belt.
In public administration, a presidential decree can set the goal of reducing poverty, with the task of reducing “apathy”. To this end, 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 targets cover a much broader jurisdiction than just one company.
Responsibility
Private administration operates without the controls of the public sector. Although employers are not entirely immune to public scrutiny, they are accountable only to a small group of shareholders and employees. Therefore, they can focus solely on maximizing the bottom line.
In public bodies, managers have to be accountable to many more people, always being under public scrutiny.
Crisis management
When the financial crisis of 2008 began, companies around the world took a significant hit. However, while private companies could decide to cut costs and lay off employees in order to survive, the public administration faced the resulting socio-economic consequences of this.
Private companies are exposed only to transversal pressures from interest groups in the communities in which they operate. They only have to deal with governments and unions, as well as their clients.
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 longest-serving CEO of the Fortune 500, managing L Brands for 56 years.
This is because political processes ensure that leadership in public administration changes with a certain frequency, while in private administration managers can remain in leadership positions for an indeterminate number of years.
In many cases, a public manager may have a lot of responsibility with very little authority. On the other hand, in the private administration it is the people with a lot of responsibility who also make the decisions.
References
Definition and what it is (2014). Private Administration. Taken from: definitionyque.es. Types of (2020). Private Administration. Taken from: tiposde.com. Administrative Process (2019). Concepts of Administration, Private Administration and Public Administration. Taken from: procesoadministrativo2108.wordpress.com. Get Smarter (2017). The difference between public and private sector management. Taken from: getsmarter.com. I Expert (2020). How is private sector management different from public sector management? Taken from: management.yoexpert.com.