PUBLIC AND PRIVATE SECTOR MANAGEMENT: WHAT IS THE DIFFERENCE? A STUDY BASED ONTHE BANKING SECTOR IN SRI LANKA

Abstract

The movement of New Public Management claims that public organizations should import managerial processes and behaviour from the private sector. The counter argument to this claim is that government organizations cannot run like business organizations as it is impossible and even undesirable. These arguments raise several questions. Can government organizations be managed like private sector organizations? Can business management practices be imported to public management? What are the differences and similarities of the managerial roles and functions in both public and private sector organizations? The main purpose of this study is to answer these research questions and examine the validity of the main idea behind the New Public Management discourse in the context of the banking sector in Sri Lanka. For this purpose, the data was collected from a random sample consisting of 208 middle and senior managers (97 managers from the public banks and 111 managers from the private banks) in Sri Lanka. The statistical techniques employed for analyzing the data were mainly a frequency distribution. The Chi-square test also was used to examine whether there are any significant difference between public and private sector management practices and behaviour. The test suggests several conclusions; 1). There remains no significant difference in managerial roles and activities between the banks in the public sector and private sector, 2). Public banks can be managed like private banks, 3). Many business management practices used by the private banks can be imported to the management of the public banks and 4). The main idea behind the New Public Management discourse can be applicable to the public banks in Sri Lanka.

Key Words: Business, Effectiveness, Efficiency, New Public Management

For full paper: fmscresearch@sjp.ac.lk