Answer
Competition is usually beneficial within any enterprise, including private or public organizations, provided there are personal and organizational rewards for improvements. Competition for rewards drives improvement; improvements that are gains in efficiency and/or effectiveness typically mean more profits, a greater market share, etc. However, competition is like other economic principles – it has a bigger impact in private than public organizations. Principles like supply and demand, merit pay and customer choice are usually muted in public enterprises because their reason for existence is the greatest public good, not the greatest private profit.
Work Step by Step
Competition within public or private organizations generally has beneficial outcomes, but competition between public and private organizations often has negative consequences. The competition between public and private sectors is not fair. Public enterprises, for example, can operate without the limits of customer feedback, alternatives in the market and other market forces (e.g., if you are unhappy with your city’s snow plowing or public utilities like electrical service, you cannot switch suppliers; you can do little more than complain to an elected official). Private organizations like schools can ‘cherry pick’ the smartest, most-likely-to-succeed kids and choose to serve only them; public schools must serve all the rest of the kids and do the best they can.
