Business Objectives And Stakeholder Objectives: Differences In The Objectives Of Private Sector And Public Sector Enterprises (Copy)
Cheat Sheet: 1.5.3 Objectives of Private vs. Public Sector Enterprises
| Aspect | Private Sector Objectives | Public Sector Objectives | Example |
|---|---|---|---|
| Main Aim | Profit maximisation, growth, survival, market share | Provide services, welfare, accessibility, equality | Private: Coca-Cola / Public: NHS (UK) |
| Motivation | Owners/shareholders want returns on investment | Serve society, meet public needs | Private schools vs. state schools |
| Pricing | Market-driven, based on demand & competition | Affordable, sometimes subsidised | Private airline vs. state airline |
| Decision-making | Based on profit, efficiency, competitiveness | Based on public interest & govt. policy | Private bus company vs. city transport authority |
| Measurement of Success | Profit, dividends, share value | Service quality, accessibility, meeting social goals | Electricity firm profits vs. rural electrification scheme |
Written and Compiled By Sir Hunain Zia, World Record Holder With 154 Total A Grades, 7 Distinctions and 11 World Records For Educate A Change O Level And IGCSE Business Studies Full Scale Course
Key Differences
- Private sector: Profit motive, efficiency, competitiveness
- Public sector: Service motive, accessibility, long-term welfare
- Private firms succeed if profitable; Public enterprises succeed if meeting community needs
Examples of Conflict
| Case | Private Sector | Public Sector |
|---|---|---|
| Transport | Private airline aims to cut unprofitable routes | Govt. airline runs routes even if not profitable to serve rural areas |
| Healthcare | Private hospital = profit + high-quality care | Public hospital = affordable, accessible to all |
| Education | Private school = higher fees, profit | Govt. school = mass education, low/no fees |
Written and Compiled By Sir Hunain Zia, World Record Holder With 154 Total A Grades, 7 Distinctions and 11 World Records For Educate A Change O Level And IGCSE Business Studies Full Scale Course
Quick Revision Bullets
- Private sector = profit focus, Public sector = service focus
- Pricing differs → private = market, public = affordable/subsidised
- Success measured differently → private = profit/returns, public = service reach
- Mixed economies balance both for efficiency + welfare
Written and Compiled By Sir Hunain Zia, World Record Holder With 154 Total A Grades, 7 Distinctions and 11 World Records For Educate A Change O Level And IGCSE Business Studies Full Scale Course