Private management

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Private management is the set of operations and processes that are focused on managing the resources of a private entity.

The term private management refers to the administration of resources of a private entity. Although theoretically we could indicate in the definition that private management, like public management, is the "efficient" administration of resources, it would not be entirely correct.

A definition must describe a reality. And the reality is that in some cases private management is efficient and in other cases it is not. Being on one side or the other will depend on the people who carry out those operations and processes.

Objectives of private management

Among the objectives of private management are:

  • Efficient administration
  • Independence in decision making
  • Increase profits (not always monetary)

In other words, private management seeks to be efficient, independent and increase profits. Regarding this last point, we must emphasize that although private management is usually associated with an increase in monetary benefits, this is not always the case. For example, a foundation or private association may want to maximize the benefits of a group it helps.

Competitiveness of private management

Economic theory suggests that competition increases competitiveness. From this we could conclude, in principle, that private management is more competitive than public management.

Since public management does not usually have competition, this induces that competitiveness is reduced. At least from the theoretical point of view of efficiency. However, being correct, it cannot be said that private management is more efficient.

In this sense, the correct thing to do would be to affirm that private management could be more likely to be more efficient. But this is not always the case. However, and in any case, not everything is based on efficiency. Hence, some sectors are managed by the public and others by the private. A very clear example would be that of health. Citizens do not care whether the sector is efficient or not monetarily, what they want is to stay alive.

Private company

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