PUBLIC SECTOR The public sector is that portion of society that is controlled by the national, state or provincial and

local government. The public sector is composed of bodies that provide services for the government and for the citizens of the state also. For example in the USA the public sector encompasses universal critical services such as national defense, homeland security, police, fire services, urban planning, corrections, taxation and social welfare and health. It is sometimes referred to as the state sector and its 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, local or municipal. The public sector overlaps with the private sector in producing or providing certain goods and services. This overlap is most often seen in waste management, health care, security services, and shelter. Sometimes service providers from the public sector move to the private sector. This is known as privatisation and has been taking place in recent years throughout the world on a large scale. In other instances a service may shift from the private to the public sector and this is known as nationalisation, and this is less common. The health sector is one area where this has occurred where some governments are providing or experimenting with services previously furnished by private providers. The public sector includes government and publicly controlled or funded agencies , enterprises, and other organisations that deliver public programs, goods and services. Eg ZIMRA, ZINWA, ZESA, Registrars office,army, police, airforce among others. The public sector might provide services that encourage equal opportunity and services a non tax payer cannot be excluded from, which benefit all of society rather than just the individual who pays for them such as street lighting and public education. The organisations in the public sector can take several forms: Directly Administered organisations which are funded through taxation. This organisation generally has no specific requirement to meet commercial success criteria and their production decisions are determined by government. Publicly Owned Corporations or state owned enterprises. They differ from directly administered organisations in that they have greater commercial freedoms and are expected to operate according to commercial success criteria. Their production decisions are not generally made by government (but by appointed boards for day to day administration) although their overall goals maybe set for them by government. Eg ZBC, Air Zimbabwe. PRIVATE SECTOR The private sector is that part of the economy that is made up of private enterprises. It includes the personal sector (households) and corporate sector (companies) and it is responsible for allocating most of the resources within an economy.

It is that part of the economy that is not state controlled and is run by individuals and companies for profit. It encompasses for profit businesses that are not owned or operated by the government. In most free market economies the private sector is the sector where most jobs are held. This differs from countries where governments exert considerable power and influence over the economy eg peoples republic of china, Zimbabwe, Russia. The private sector is sometimes referred to as the citizen sector because because it is run by private individuals or groups, usually as a means of enterprise for profit. The private sector usually provides goods and services that the public sector cannot provide. A number of legal structures exist for private sector business organisations. The ownership in the types of private sector businesses is based around the capital input made by the contributories. The main types of businesses in this sector are : Sole Proprietor or sole trader partnership with either limited or unlimited liability. Private limited companies or limited liability with private shares. Public Limited Company where shares are open to the public. There are also variations to ths such as Franchises where a business owner pays a corporation to use their name and receives specifications for business eg Spar, or Workers cooperative, where all workers have equal shares in the business and make joint business decisions. In the case of sole ownership and partnership, the capital is solely the owners. In a private limited or public limited company, the ownership is through the ownership of shares. Differences between the public sector and Private sector Both public and private sector companies are required to produce goods and services and deliver them to the general public. The laws that govern the 2 sectors may be the same though in other cases the laws are specified to cover either the private or public sector. The major differences is in their motive to exist. The public sector is present to cater to the citizens of a country and the profit motive is generally not a motive for them to exist. The private sector firms on the other hand base their existence on making profits. Typically public sector facilities are cheap or free and vary quite widely in standard with most being quite basic. But the private sector is run by businesses who aim to make good profits from providing those facilities that they view can be profitable for their companies. Their products are typically of high quality and are at the upper end of the price range. Public sector Run by Government Paid for by the taxpayer & state loans Major changes require voter approval Not for profit Private Sector Corporations, small companies Privately funded Profit oriented Owners can vote for changes

Both public sector and private sector organizations have objectives and missions. But depending on the type of organization, there are differences between the public and private sectors of a country.

Public sector organizations are established by statute or a similar vesting document passed by the government or other law making bodies. Therefore, managers cannot change them according to the changing conditions. On the other hand, directors of a private sector organization may determine its objectives and change them whenever necessary. Output of a private sector entity can be valued by the paying customers and therefore can be incorporated in its objectives, missions and decision criteria. It may not be possible to allow the market to determine the income of a public sector entity. When a private firm fails to meet the aspirations of its stakeholders, it can result in serious consequences which can lead to even closure of the firm. In the public sector, disbelief can be suspended for long periods, with the result that some stakeholders aspirations are ignored. Private sector firms should earn a satisfactory return on investment otherwise the investors might withdraw the investment in the firm. Public sector organizations still consider that their capital is free and therefore, the need to earn a return is always ignored. Public entities do not expect profits. They are established not for profits but to achieve different objectives of the society.