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Human Resource Development (HRM-627)

Lesson 23

SECTORS OF A SOCIETY: SOME BASIC CONCEPTS

PUBLIC SECTOR

public sector is the part of economic and administrative life that deals with the delivery of goods and services

by and for the government, whether national, regional or local/municipal.

Examples of public sector activity range from delivering social security, administering urban planning and

organizing national defences.

The organization of the public sector (public ownership) can take several forms, including:

· Direct administration funded through taxation; the delivering organization generally has no specific

requirement to meet commercial success criteria, and production decisions are determined by

government.

· Publicly owned corporations (in some contexts, especially manufacturing, "State-owned enterprises");

which differ from direct administration in that they have greater commercial freedoms and are

expected to operate according to commercial criteria, and production decisions are not generally taken

by government (although goals may be set for them by government).

· Partial outsourcing (of the scale many businesses do, e.g. for IT services), is considered a public sector

model.

A borderline form is

· Complete outsourcing or contracting out, with a privately owned corporation delivering the entire

service on behalf of government. This may be considered a mixture of private sector operations with

public ownership of assets, although in some forms the private sector's control and/or risk is so great

that the service may no longer be considered part of the public sector. (See Britain's Private Finance

Initiative.)

In spite of their name, public companies are not part of the public sector; they are a particular kind of private

sector company that can offer their shares for sale to the general public.

The decision about what are proper matters for the public sector as opposed to the private sector is probably

the single most important dividing line among socialist, liberal, conservative, and libertarian political

philosophy, with (broadly) socialists preferring greater state involvement, libertarians favoring minimal state

involvement, and conservatives and liberals favouring state involvement in some aspects of the society but not

others.

PRIVATE SECTOR

The private sector is fundamental part of the economy that is both run for profit and is not controlled by the

state. By contrast, enterprises that are part of the state are part of the public sector; non-profit organizations are

regarded as part of the voluntary sector.

A variety of legal structures exist for private sector business organizations, the most common of which is the

limited company. However, there are many other structures available, such as partnerships and limited

partnerships. A significant part of the private sector consists of individuals who trade directly, without being

part of a company; these are known as sole traders.

Capitalism revolves primarily around the private sector controlling industry. The private sector is generally

largest in capitalist and mixed economies.

The private sector employs the majority of the workforce in some countries. In some countries such as the

People's Republic of China, the public sector employs most of the workers.

Even in countries where the private sector is regulated or even forbidden, some types of private business

continue to operate within the Black Market.

The private sector is also integrated into the workings of the public sector, with the use of outsourcing or

government contracts.

VOLUNTARY SECTOR

The voluntary sector of a nation's economy consists of those entities which are not for profit and yet, at the

same time, are not agencies of the state - e.g. charities, volunteer community centres and religious

organizations. They may, in some countries, be subject to state scrutiny if they wish to qualify for charitable

status.

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Human Resource Development (HRM-627)

The UK government sees the Third Sector as "the place between State and (the) private sector" : see Cabinet

Office - Office of the Third Sector Organisations within the Third Sector have social goals that are their main

reason for being. The term 'voluntary sector' is restrictive to the extent that it excludes certain activities such as

social enterprise, and social entrepreneurship, both of which are ways of addressing social problems.

CIVIL SOCIETY

Civil society is composed of the totality of voluntary civic and social organizations and institutions that form

the basis of a functioning society as opposed to the force-backed structures of a state (regardless of that state's

political system) and commercial institutions.

The term is often traced to Adam Ferguson, who saw the development of a "commercial state" as a way to

change the corrupt feudal order and strengthen the liberty of the individual. While Ferguson did not draw a line

between the state and the society, Georg Wilhelm Friedrich Hegel, a German philosopher, made this

distinction in his Elements of the Philosophy of Right. In this work, civil society (Hegel used the term "buergerliche

Gesellschaft" though it is now referred to as Zivilgesellschaft in German to emphasize a more inclusive

community) was a stage on the dialectical relationship between Hegel's perceived opposites, the macro-

community of the state and the micro-community of the family. Broadly speaking, the term was split, like

Hegel's followers, to the political left and right. On the left, it became the foundation for Karl Marx's bourgeois

society; to the right it became a description for all non-state aspects of society, expanding out of the economic

rigidity of Marxism into culture, society and politics.

Definition

There are myriad definitions of civil society. The London School of Economics Centre for Civil Society working

definition is illustrative:

Civil society refers to the arena of uncoerced collective action around shared interests, purposes and values. In

theory, its institutional forms are distinct from those of the state, family and market, though in practice, the

boundaries between state, civil society, family and market are often complex, blurred and negotiated. Civil

society commonly embraces a diversity of spaces, actors and institutional forms, varying in their degree of

formality, autonomy and power. Civil societies are often populated by organisations such as registered charities,

development non-governmental organisations, community groups, women's organisations, faith-based

organisations, professional associations, trade unions, self-help groups, social movements, business

associations, coalitions and advocacy groups.