Private Sector Services Essay

2570 words - 10 pages

Running Head: PRIVATE SECTOR SERVICES

Running Head: PRIVATE SECTOR SERVICES

Private Sector Services

[Name of the Writer]

[Name of the Institution]

Private Sector Services

Introduction

Private sector organisations have competition between individuals and ideas. There is confrontation and conflict within each department and between also over decisions that are made (Lawton and rose, 1994, 4). The main marketing objective of managers in the private sector is profitability. They market their goods and services in a bid to attract customers. Private sector managers distinguish between different customers and provide them with different services at different prices in order to maximise profitability (Flynn, 1997, 45). Private sector organisations are free from both political and legal constraints. Managers have the freedom to manage and have the ability to take risks and are driven by clear goals and responsibilities to their clients. The private sector has the ability to take long view of investment, as the management structure is not volatile (Lawton and Rose, 1994, 9). Fountain (2001, 55) observes strategic management within the private sector, which can be seen through manipulation, marketing and barriers to exit.

In the private sector only those who pay directly for a good or service receives the benefits of them (Flynn, 1997, 31). In fact Fountain (2001, 53) argues that there is a relationship between the quality of service provided and the socio-economic status of customers. Furthermore the private sectors work hard to keep their customers happy, as they are aware that it is more profitable to keep existing customers than to go in search of new ones. Firms supply a service at just above the satisfactory level in order to retain customers. Also if customers are willing to pay more they will receive a better more efficient service. This means that the level of service is improved for those who are willingly to pay. Therefore the private sector focuses on those who can afford to pay. Flynn (1997, 38) illustrates that the private sector does not rationalise as the public sector does but it rationalises by price i.e. if a customer doesn't have the money they can't purchase the good or service. Marketing in the private sector is designed to attract customers and increase profits, as profits are a measure of how well a firm is competing in the market.

New Public Management (NPM) involves the incorporation of private sector management principles into the public sector. The introduction of NPM has meant that managers are much more responsible for achieving efficiency and success and carrying out public policy (Horton, 1999, 3). The New Public Management describes together basic fragments of service management from the private sector (Fountain, 2001, 60). According to Farrell (2005, 90) NPM encouraged a shift from government to governance. The relevance of corporate governance stems from the...

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