Differences In Budgeting Process Between Public And Private Sectors - 550 Words

The Major Differences In The Budgeting Process Between The Public And Private Sectors (Essay Sample) Content: NameInstructors nameCourseDateThe Major Differences in the Budgeting process between the Public and Private sectorsBudgeting is used as an instrument that sets a target and assigns funds according to the requirement of the target put forth, evaluate the on movement of a target, and single out shortcomings in firms and administration it supervises and combine all activities (Lee, Johnson, and Joyce 2). Budgeting is necessary in our day to day life so as to ensure accountability of our actions. This paper examines the major differences in the budgeting process between the public and the private sector. It brings out the difference between public and private sector by using the budgeting process as a tool for differentiation.Public and private sector have different purpose. The purpose acts as a determinant to the amount of asset that is needed. Public and private environment differs in that the sums of assets accessible for distribution in the budget are difference thus they are both restrained by obtainable assets irrespective of their size. Private sector has limited input hence less or equal output. To enlarge the level of manufacture and labor so as to increase the level output several means can be employed such as obtaining money from lenders or taking up another task though chances for income increment are less. Government on the other hand is more limited to the use of assets since it is not allowed to fully utilize the assets unless there is crisis. (Lee, Johnson, and Joyce 2).The force that results to budget decision differs in private and public sector. Private sector is distinguished by profit motive as government can get involve in things that are not profitable. Private sectors consider successful resolutions to be the ones that are beneficial. In some cases they may run at a loss so as to be able to compete with other firms or protect their business from being taken over. Government success is gauged according to end product and resu lts for example the case of tropical disease eradication program conducted by U. S. A. due to public demand can be used to gauge the competence of performance and the degree of achievement (Lee, Johnson, and Joyce 3).The way both private and public sector provide services, as Lee, Johnson, and Joyce (5) posits, also differs in that government services are used by the society at large while private services are utilized by firms and particular people. Everybody gains from public good willingly or unwillingly free of charge and one persons use do not reduce another persons use for example a countrys army will defend the entire nation irrespectiv...