A COMPARATIVE ANALYSIS OF PUBLIC & PRIVATE SECTOR IN NIGERIA

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This management comparison of the two different industries would begin by pointing out the various operational approaches that are used. In contrast, the public sector is said to be characterized by poor incentives to workers, corruption, extravagance, red tape, and inefficiency (Tonwe (1998), Imaga (2003)). Differential wage payment is used as an incentive to increase production and efficiency in the private sector, while in the public sector, this type of incentive does not exist.

The nature of the organizations that make up Nigeria’s public sector is bureaucratic; they are hierarchical, and the majority of their employees are permanent career officials. Employment and job stability are both assured, although advancement is primarily dependent on length of service and compensation levels are predetermined. The private sector, on the other hand, can be hierarchical at times, but hires employees based primarily on merit. This is because the private sector is primarily concerned with making a profit. Efficiency is what drives incentives, and people who are more efficient are rewarded with greater amounts of money. Performance has a significant impact on one’s chances of advancement (Osemeke, 2011).

 

For instance, when the Nigerian National Petroleum Corporation (NNPC) was founded, staff members were chosen from the Ministry of Mines and Powers rather than employing individuals with experience in that field (The Energy Regulatory Industry). Even if these employees had the necessary technical qualifications, the fact that they lacked the necessary expertise in managing a modern firm rendered them less appropriate for the roles in question. In a similar vein, the formation of the Nigeria Electric Power Authority through the merging of the Electric Corporation of Nigeria and the Niger Dam Authority met with the same unfavorable outcome (Oyeneye, 2004).

 

A point of comparison is the influence that political and societal pressure has on decision making in the organizations that make up the Nigerian public sector, as opposed to the influence that purely economic and efficiency-based measures have. Every year, businesses that fall under the category of the private sector, and public limited liability firms in particular, are required by law to report their performance in the form of a profit-and-loss statement and balance sheet in an article that is published in a national newspaper. Because of this, the decision-making process of organizations in the private sector is held accountable, and it is required that these decisions be based on the organization’s efficacy and efficiency (Osemeke, 2011).

 

Comparing the two in terms of financial control is also an essential topic. The Legislative Branch of the Nigerian Government is Critical to the Operation of the Public Sector since it Approves the Budget, Transmits It to the Executive Branch, and Monitors Its Execution to Ensure It Is Carried Out as Approved (by the same Administration). Both the finance and administrative departments of a private company are fully distinct from one another. Due to ineffective administration and reporting procedures, the National Programme on Immunization (NPI), which was an initiative undertaken by the public sector, had a limited impact on the prevention and treatment of infectious diseases. (W.H.O, 2013)

 

The monitoring of employee performance in the public sector is restricted to annual performance evaluations and monitoring of budgets, despite the fact that reports have proven that there is no connection between employee performance and financial statistics (Pollitt and Bouckaert, 2004). In the meantime, in the private sector, employee performance is linked with additional incentives. As a result, performance monitoring is carried out more regularly on an individual basis rather than on a companywide annual evaluation.

 

A comparison of chosen management techniques in the private sector and the public sector in Nigeria is shown in the following table in a manner that is both quick and concise:

 

MANAGEMENT PRACTICE PUBIC SECTOR

 (NIGERIA)

PRIVATE SECTOR (NIGERIA)
Operations Management Unclear Clear
Human Resource Management Bureaucratic, Politically Influenced. Based on Merit, Motivated by Efficiency.
Performance Monitoring Limited, Less Frequent. High, More Frequent.
Incentive/People Management Poor, Fixed, Motivated by Legislation. Motivated by Efficiency, Performance.
Decision Making Politically Motivated, Legislative Approval. Profit Driven, Motivated by Efficiency.
Financial Control Merged with Administration. Separated from Administration.

 

 

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