tobyaw | Private sector

Over the past few months I’ve read various discussions, on LiveJournal and elsewhere, about privatisation, and about public sector versus private sector ownership of assets and provision of services. One thing that has become apparent is that some ardent supports of the public sector have, what seems to me, a greatly distorted view of what is meant by the private sector.

I’ve worked briefly in the public sector; as a student in the early ’90s I spent summers working at GCHQ, and from 2006–09 I worked part-time on a research project at the University of Dundee. From my direct and indirect experience, and from chatting to Andrew while I write this, I would characterise work in the public sector as working for large, bureaucratic organisations, with an air of inefficiency and overstaffing. The organisations are typically unionised, or unionisation is a significant issue. Pensions are notably better in the public sector, and early retirement on a full pension is a realistic option. There is room for deadwood in the organisation, and employees seldom have any contact with real decision making.

It seems to me that people with experience of the public sector often characterise the private sector as being large PLCs, perhaps international in ownership, with nothing driving them but the profit motive. Staff aren’t valued, employment is precarious, managers are evil, and the organisation behaves like companies do in BBC dramas.

That bears no relation to the private sector that I know. From my experience, private sector companies are likely to have some or all of the following characteristics:

Small companies. The majority of people employed in the private sector are employed by small businesses.
Human scale. As businesses are usually small, it is possible to know everyone who works for the company.
Ownership by employees. Most businesses are owned by people who also work for the company, or who have a close connection to the company. A significant number of businesses in the private sector are sole traders, but ownership models like partnerships and private limited companies (Ltd) both keep ownership closely connected with the operation of the business. Only public limited companies (PLC) — with their pension-fund shareholders — break this link.
Benevolent ownership. Because the owners of a business usually have a close connection to that business, and often work for the business, what is good for the owner is also good for the company.
Knowing the owner. It is possible for an employee have a personal relationship with the owner of the company they work for.
Cost driven. Most businesses are motivated by the need to control costs, rather than by a blatant desire to achieve greater profits.
Long-term thinking. Business owners are in it for the long run. They plan for the future, invest their time and money, and want to build a solid business.
Staff are treated as individuals; the person matters more than the role. Staff are valued for the skills they have, rather than for their qualifications.
Variety. The purpose, ethos, and culture of businesses is highly variable.
Failure has consequences.
Family. One often finds owners’ family members working in a small company. Nepotism is common; after all, they may be owners in the future.

How would you characterise the private sector?