Management Challenges: Government vs. Private Sector
The following matrix provides a comparison between the challenges faced by government managers and those encountered by their private sector counterparts.
Issue |
Private Sector |
Government |
| Budgetary
Constraints |
Budgets are tight at bottom of business cycle, but decisions can be flexible and rational based on the circumstances at any given time. | Budget process starts 2 years in advance. Very inflexible; difficult to reallocate resources or obtain additional funding. |
| Hiring | Managers can hire new staff quickly if business cycle dictates they need more personnel. | It can take 1-2 years to create and encumber a new position and several months to fill an existing position that has become vacant. In many agencies, managers are only allowed to interview the top 3 applicants (who are selected by OPM). |
| Firing | Anyone can be fired at any time; severance packages are a cost of doing business. Non-producers can be fired. | Separation for poor performance requires extensive documentation over a long period of time. |
| Bureaucracy | While bureaucracies exist in most large organizations, corporate bureaucracies tend to be smaller and less tradition-bound than those in government. | Job security, stability, and sheer size of organizations tend to foster strong bureaucratic attitudes and resistance to change. |
| Procurement | Companies can buy what they need, when they need it--provided they can afford it or obtain credit. | Government procurement rules have been streamlined in recent years for small purchases, but larger acquisitions/contracts must usually be put up for competitive bid. This tends to slow the procurement and/or contracting process significantly. |
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