| Private Sector Organisation | Public Sector Organisation |
| (1) Meaning | Private enterprises are owned managed, controlled and financed by individuals or groups of individuals. Thus, ownership and management is with private organisations | Public enterprises are owned, managed and controlled by the state on behalf of the people. |
| (2) Management | It is managed by industrialists through board of directors and other specialized executives. | It is managed by government officials or board of directors. |
| (3) Size of Entity | They are usually of small or medium size depending on volume of operation. | They are usually large in sized and they operate on large scale. |
| (4) Capital provider | Capital is contributed by owner from their own resources and borrowings from financial institutions. | The capital of public sector organisation is contributed by government. |
| (5) Decision making | Decision making is quick as very few officials are involved in decision making process. | Decision making is delayed due to bureaucratic hurdles. |
| (6) Business area | It generally operates in industrial and commercial areas only. | It operates in utility services areas like – railways, post, etc. and also in industrial and commercial areas. |
| (7) Main motive | Main motive of private sector organisation is to earn a profit. | Main motive of public sector organisation is to provide services to society. |
| (8) Flexibility | They are more flexible in nature as their policies can be modified as and when the need arises. | There is no flexibility in their operations as any change or modification requires the approval of thp Government. |
| (9) Political Interference | In private enterprises, there is no political interference and therefore executive enjoys complete autonomy and freedom of operations. | Public enterprises working is always affected by political interference. There is constant danger of undue interference by political parties and their leaders. |
| (10) Competition | Private enterprises operate in cut throat competition. | Public enterprises are generally monopolies or oligopolies (only two sellers in market.) |
| (11) Economic Equalities | Private sector increases economic inequalities. | Public Enterprises reduce economic inequalities. |
| (12) Regional Balance | Private enterprise increase regional imbalance because it wants to enjoy the advantages of location of industries. | Public enterprises tries to reduce the regional imbalance as it intends to bring about balanced regional development. |
| (13) Efficiency | Private Enterprises are more efficient due to profit maximisation, division of labour and specialisation. | Public enterprises lack initiative, flexibility and efficiency because profit motive is absent. |
| (14) Constituents | Sole Trading Concern, Joint Hindu Family Firm, Partnership Firm, Joint Stock Companies, Co-operative Society are different forms private sector. | Departmental Organisation, Statutory Corporations and Government companies are types of public sector. |
