What Is a Public Sector Organization?

What Is a Public Sector Organization?

A public sector organization is an organization that is publicly controlled or funded, according to the international Institute of Internal Auditors. The public sector consists of the government, as well as other public agencies.

Ways a Public Sector Organization Differs from a Private Sector Organization
The public and private sectors have different goals, with the former working to serve the general public and the latter focusing on earning profits. Because public sector organizations are controlled by the public, their goal is ultimately to look after the public's interests, whether in terms of improving access to services such as medical care or otherwise addressing the public's concerns. Private sector companies must answer to their customers and investors, while the public sector is governed by structured checks and balances and kept in check by different public interest groups.

Public sector organizations are often funded by taxpayer dollars, which means that all the members of the general public may have an interest in how the organization operates. Government involvement means that certain processes, such as hiring or procurement, may proceed more slowly than in the private sector, where companies don't need to gain approval from various governing parties before obtaining or using funds. Organizations within the private sector are able to make changes to their operations or use funds they've earned as needed, whereas public sector organizations must follow government policy for each step they take.

Similarly, public sector organizations must work towards goals set by government departments and officials or by other public interest groups. Private companies are able to determine their own objectives, but a public agency's goals may be influenced by various elected officials and legislative mandates.

Examples of Public Sector Organizations
Public sector organizations can be found throughout the world and provide a wide range of services. The public school system, for example, provides education to members of the general public, while the police ensure the public's safety and enforces a country's laws. Though the composition of every country's public sector is unique, most countries have services such as military, infrastructure and public transit, with a variety of organizations working within those categories to serve the public.

How Does a Public Sector Organization Benefit the Public?
Though some public services require fees--for example, buying a pass to use public transportation--many organizations benefit everyone regardless of their citizenship status or ability to pay. Street lamps, which are commonly maintained by a public sector organization, provide lighting to any member of the public who ventures out after dark, while public libraries are accessible by anyone within their communities. Organizations involved with infrastructure maintain the integrity of roads and public spaces, and shelters provide housing and food to members of the public who may not otherwise have access to either.

Many public sector organizations are governed by regulations that ensure equal opportunities for everyone. Because these organizations are funded by the government or the public, they're answerable to everyone within the community and are often overseen by both government agencies and public interest groups. This helps make sure that the public sector organizations continue to work for the good of the public and benefit all of society.