Introduction
There is a clear gap between private and public organizations, funded by the public and run by the state and local governments. On the other hand, private organizations are owned, operated, and funded privately. Leadership plays a vital role in Fordham University
the success of these businesses, which is described as the ability of an individual or a group to guide and influence their followers, teams, society, or members of the organization. Leadership is a skill that can be acquired and developed over time, playing a key role in the success of organizations through communicating their mission, vision, and goals while uniting the members to work towards those goals (Barney, 2022). When looking for success in any organization, the management and leadership styles come in as the first component.
Public and private organizations may sometimes display different management and leadership styles. It calls for accepting effective public management strategies and management in private entities to have the same basic entities in all organizations (Andersen, 2009). With the validity of this statement, we also tend to assume that the differences between these organizations with the different organizational structures, relationships, and systems contribute to the different management systems between the organizations. They present a set of motivational factors behind private and public organizations and the leadership factors that influence their leadership styles. In this case, in the public sector, the leaders follow specific rules often set by the higher authority bodies. In contrast, in the private sector, they are driven by specific goals and thorough financial obligations that ensure that the organization remains profitable and substantial in its operations. Therefore, the leaders from the public organizations can be said to be motivated by the time perspectives revolving around the political calendar and necessities.
Instruments of leadership in the private and public sectors and their contribution to leadership challenges.
The main concepts behind the leadership challenges in public and private organizations may sometimes appear mutually exclusive. Still, in reality, each of them has different aspects according to their organizations. Hvidman & Andersen (2014) wrote an article stating the main differences between private and public organizations, arguing that the significant differences between them affected their leadership challenges. Breaking down the differences between public and private organizations will enable us to define the challenges that exist among them. Andersen (2009) differentiates these organizations in terms of ownership, the source of funds, and the regulations, which leads to different leadership styles, decision-making styles, and motivational profiles. The organization’s environmental impact is also among the factors, and it is important to look at the instruments of leadership in these organizations (O’Toole & Meier, 2015).
Ownership- the primary difference between these organizations is ownership. Salim & Harun (2021) stated that allowing the organization’s ownership is important, considering that private companies are owned and managed through private finances, while public organizations use public finances. As such, we expect a difference in each function because each of them must adapt to the various environmental changes. It presents a difference in how this organization changes while they are private and public based on the degree of freedom the two have.
Funding- the source of funding for these organizations forms another main component of leadership in these organizations. Further away from the private sector, public organizations are often constrained by the missions that external stakeholders define. While being funded by the public sector, their mode of fundamental operations is very different from that of private organizations through the enhancement of their standard. We see that public organizations ‘ guidelines for leadership are often stricter with strict protocols than private organizations since they feel that the public is entitled to know how they run their day-to-day errands. Public organizations require transparency in all their processes, including finances and recruitment (McMahon, 2020).
On the other hand, the private sector gains its funds from the private funders, which comes from competitive markets. This enables them to invest in the right technologies, with the right employees, where they gain better working environments, reducing the weight of leadership on their leader (O’Toole & Meier, 2015). In these environments, there is more loyalty and involvement where the employees partake in leadership and are responsible for everything that happens in their organizations.
Regulations- regulations play a major role in defining whether the organization is classified in the public or private sector. In organizations owned and managed by the public, the regulations seem more strict than privately owned organizations (Cafaggi & Renda, 2022). These regulations call for the right procedures while following the correct procedures, policies, rules, regulations, and memos. These heavy regulations are subject to pressure from the public and the political aspects. The reverse is also true where there are fewer regulations, the degree of freedom and autonomy is greater, and therefore, less pressure is placed on their leaders (Federman, 2018).
Motivation refers to a passive motion, which is determined by several factors, answering the question of what motivates the employees, how to motivate them, and how they should be kept motivated. Varma (2018) stated that employee motivation is affected by factors such as age, gender, relationships among the employees, the employees, and the managers, and the quality of time spent in the organization. When comparing the factors between the private and the public sector, the level of each affecting factor is presented as inconsistent with the other. Buelens & Broeck (2007) stated that employees in the public sector provide their services as civil servants whose level of motivation is low as it is difficult to be motivated by the desire to serve the public. The community that the employees in the public sector serve cannot match that of the private sector. Financial and economic rewards, on the other hand, are great motivators of employees, which are more likely to be enjoyed by employees in the private sector than those in the public sector (Jurkiewicz & Massey, 1998). Unlike the people in managerial positions in the private sector, the public sector leaders are not notified by huge salaries and monetary benefits. In terms of their financial security, employees working in the private sector are more motivated than employees in the public sector. In terms of job security, public service employees tend to benefit more from the fulfillment that comes with serving the community.
In line with this, according to Buelens & Broeck (2007), the workers in the public sector are taken by their bosses, the government executives, to be more important than the perception of employees from the private sector. On the other hand, the employees in the public sector take the people-oriented approaches and leadership styles compared to the dictatorship-baed styles in the private sector (Hvidman & Andersen, 2014). The difference in motivation can be summed up as, in the private sector, people are motivated by financial motivation, while in the public sector, they are motivated by purpose. This puts different weights on the leaders of these organizations, where it is easier to lead the people motivated by money rather than by purpose, as money provides some substantial gains to the employees (Furnham, 2022).
Job satisfaction- several studies have been conducted to determine employees’ job satisfaction in the private and public sectors. These studies have reviewed the replies of the employees to these situations about the working environment and the management (Matei & Fataciune, 2016). Falcone (1991) stated that there are distinct reasons why employees in both sectors chose to remain loyal to their jobs. In the private sector, the differences were defined by the level of employment, where the level of employees depends on the job due to the benefits they acquire, the personal friendships they make, and overall, the loyalty to the organization. On the other hand, high-level employees remain in their jobs because of their work and the working environment, with the growth in their careers.
On the other hand, the employees in the public sector offered a reverse of the same, where they remained in their jobs due to the benefits they acquired, loyalty, and the hopes that one day, they will have a bigger position than their current job title. The aspect of job satisfaction for public employees was on their job security, with the social aspect of working leading to a higher rate of employee retention than private organizations. With these practices, we can see that the leaders in the private sector lead self-driven people, compared to those in the public sector, where their servants intend to retain their jobs and gain promotion.
Difference leadership approaches in the public and private sectors.
According to public management literature, leadership is traditionally explained by the characteristics managers and employees display on their jobs (Paul., 2020). There are different leadership skills, and each is coupled with different skills and work processes, including the democratic leadership style, transactional leadership, bureaucratic, autocratic, transformational, and coach-style leadership. Hansen & Villadsen (2010) stated that due to the nature of the management demand in public organizations, Public sector leaders use autocratic leadership, while private sector leaders use democratic leadership. Based on the nature of the leadership style, we shall look at each to see the difference in leadership challenges among the two sectors.
Autocratic leadership- the autocratic leadership style is mainly used in public organizations, where it tasks the leaders with the responsibility to present their organization to higher levels, which includes attracting investors’ interest for future business growth. The responsibility of attracting investors is not limited to the leaders, but it also extends to the other parties, like the taxpayers and the government. Therefore, it requires the leaders to control all the decisions that do not require much input from the employees. In most cases, the leaders make decisions based on their understanding and experiences rather than calling on groups to discuss a situation (Caillier, 2020).
In most cases, the autocratic leadership style is considered flexible. However, it does not take ideas from the workers easily. It is also characterized by leaders assigning roles to their employees, which is based on demand, and no encouragement is given to them, which makes the workplace seem more of a dictatorship zone.
Democratic leadership- democratic leadership is commonly used in the private sector, where the leaders collect every input from the employees. After an extensive analysis, the leader can make his decision. In the private sector, the leaders guide their employees while distributing responsibilities among them. It provides job satisfaction and security to their workers and fosters innovative solutions for their businesses. Normally, private sector employees carry on their days with much pressure. In these conditions, the employees might get demotivated in their jobs, giving rise to conflicts and creating desirable working environments. In this case, the democratic leadership style allows the leaders to encourage these workers to share ideas and their downsides in employment, an idea that each employee will feel motivated in decision-making.
To effectively apply the leadership style, employees should be aware of their organization’s responsibilities. In some instances, however, since leaders make the final decision, the employees might feel that their suggestions are taken for granted, which might cause mistrust between the employees and the leaders. Nonetheless, the democratic leadership style is used by the leaders in the private sector based on the nature of their challenges in the job environment that involve relieving the employees of their tedious and high-pressure job environment.
In this case, in terms of the leadership styles, we see that the leadership challenges behind these styles are different in private and public organizations. In public organizations, the first great task that the leader has is to place their organization where it attracts investors for the sake of the organization’s future growth. In the private sector, on the other hand, the leaders are tasked to cater to the differences among the employees while relieving them of the work pressure that comes with the private sector while involving them in leadership roles.
Behavioral expectations of leaders in the private and public sector.
Leaders in private organizations are more concentrated on their work than in the public sector. In a real sense, there is a lot of pressure on the leadership of private organizations that require them to provide good services to the organization that maintains the company’s reputation and provides work efficiency in terms of labor management. This requires them to have skills that will help them distribute the work among their employees while constantly encouraging them to do better in achieving their targets. The demands in the work output of the private sector keep changing, which requires leaders to place more pressure on employees to perform well and prevent habituation in one aspect of the work. Leaders in the private sector are expected to manage the confidence of their employees while ensuring that the company is heard and taking legal action where necessary (Larsson & Vinberg, 2010).
On the other hand, the leaders in the public sector also have work pressure to solve and a tone of employees to learn, but the complications come in the time it takes to resolve these pressures. The public sector takes a lot of time to get things done, where the lead is required to take the response from the government and the public. The work process is slow in the public sector, and the leaders can easily lose focus and make wrong decisions. The workers are not regarded, which affects their morale (Hoek & Groeneveld, 2021).
Conclusion
There is a clear distinction between the challenges faced by leaders in the private sector as well as in the public sector. A detailed background to the leadership role in each of these organizations has been provided, where we see the private sector leaders being involved in leading the employees as a whole, which requires them to involve them in the decision-making processes. In contrast, the public sector employees, on the other hand, must decide on behalf of the employees. This brings us to the leadership style in public and private organizations. democratic leadership is used in private organizations to cater to the challenges of leadership in these organizations. In contrast, autocratic leadership is necessary in public organizations, where leaders make decisions on behalf of their employees.
Along with it, the instruments of leadership that these organizations use bear unique challenges for each organization, including aspects like employee job satisfaction, motivation, ownership, and funding. Apart from this, the behavioral expectations of these leaders are examined in the study, which shows that private sector leaders are expected to lead and assist their employees in having a conducive work environment. In contrast, the leaders in the public sector are expected to fulfill the requirements of the government in public, a process that takes a lot of time, leading to the demotivation of these leaders.
The study analyses the challenges in these two sectors, and we should admit that the leadership roles are challenging. However, due to the nature of the public sector, their leaders will face more pressure than those in the private sector.
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