Private administration is the activity that takes place in any for-profit organization (corporation or company), related to the internal rules of operation.
Administration refers to the management of organizations in general, so that they can efficiently achieve the proposed objectives. This can be interpreted based on 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 the fulfillment of the stipulated mission must be ensured.
Private companies make up the private sector of a nation‘s economy. In general, they operate in economic systems as their main pedestal, which is why they require excellent management to be able to compete and progress.
Private administration is responsible for a large number of activities, generally related to business and business carried out by the company. This means having to carry out a set of organizational activities, where a previously determined line of action predominates.
Characteristics of private administration
– Serves the management of a company, institution or non-governmental organization.
– It is an individualistic system.
– The most authoritative member is the director or manager.
– Its legal regime is based on the principles of Private Law and on the laws in general.
– Get income, benefits and earnings.
Private administration has a number of advantages, such as the absence of many government regulations or government-related entities, except in certain cases where the law is violated in some way or that certain procedures must be followed in relation to certain matters.
It is common for all the people involved to have a specific objective, usually obtaining monetary remuneration.
Resources
As theorist Henry Fayol has indicated, private administration can be conceptually described as the direction of a company or organization. The functions of this administration are performed within the company and not in the external environment. Therefore, it does not deal with competitors or customers.
One of the main functions of the private administration is to take care of the employees in order to improve their performance. A company’s workers need to be directed and guided, as well as requiring motivation and training. These are occupations of the private administration.
In case of any discrepancy between employees, try to resolve the issue. By maintaining the team’s fortune, it will significantly improve the productive performance of each of them, thus being a profit for everyone.
In addition, the private administration is concerned with meeting the company’s objectives, in addition to its planning and profitability.
general process
Private administration needs a process divided into several parts. These do not act independently, but are related to each other. These are:
– Planning of objectives and goals.
– Organization to achieve objectives.
– Management of activities and work team.
– Coordination to achieve the objectives.
– Control over planned activities.
While 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
Public administration differs from private administration in several topics, some of which are:
– Private administration is based on private regulations and individualistic interest, while public administration is part of public legislation and is a social system.
– Private administration respects the decisions of administrators and its activity is favored by economic income. On the other hand, the public administration is composed of a group of people who make decisions and do not generate profit with the activity they carry out.
Examples
Values
In private administration, the company’s profit is more valued. The first concern you have is business survival and economic success.
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 set and measured based on earnings.
For example, the manager of a notebook factory sets a quarterly cost-cutting goal to maximize profit. To do this, use a cheaper ink supplier and purchase a state-of-the-art conveyor.
In public administration, a presidential decree can set the goal of reducing poverty, with the task of reducing “apathy”. Many programs are designed for this purpose, with their own goals, agendas and facilitators.
For the public administrator, objectives are abstract, generalized and difficult to measure. This is because the objectives span a much broader jurisdiction than just one company.
Responsibility
Private administration operates without public sector controls. While employers do not entirely escape public scrutiny, they are only responsible for a small group of shareholders and employees. Therefore, they can just focus on maximizing the end result.
In public agencies, managers must be accountable to many more people, always under public scrutiny.
crisis management
When the 2008 financial crisis 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.
Private companies are exposed only to pressure from stakeholders across the communities in which they operate. They must deal only with governments and unions, as well as their customers.
However, as a result of their broad social mandate, public bodies are less isolated from external events.
Leadership
Franklin Delano Roosevelt served for over 12 years as President of the United States. On the other hand, Leslie Wexner is 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 some frequency, whereas in private administration managers can remain in leadership positions for an indefinite number of years.
In many cases, a public manager may 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.
