Effects of Public and Private Sectors

Updated: Jul 31, 2019

By Alvin Codner:

April 15, 2018


How Conflict Between Sectors Affects Nonelites:


Throughout the years, organizations within the public sector and private sector have had their effects upon each other, but the most impactful effects are the ones applied to the nonelites in our society. In today's world, we commonly see opposite organizations in controversial realms such as democrats vs. republicans, for-profit businesses vs. non-profit organizations, lower/middle class vs. upper class, government organizations vs. corporate companies, and etcetera. Even though certain organization’s tactics and notions affect others, no matter what organization benefits at the moment…nonelites almost always are affected the most. This essay will present key results when public and private sectors clash, depict the major effects some organizations…from each sector…has on nonelites, and display how top elites or the “elite class” of each sector play a vital role on how much nonelites are impacted whether in a negative or positive way.


Defining the Terms:


Before we get deep into the topic, let's first briefly describe and define the four main terms that will be used throughout the essay…which are public sector, private sector, elite, and nonelite. The public sector consist of organizations controlled by the core government on all levels (local, state, federal), publicly funded agencies, public enterprises, some state businesses, and some public contractors (Dube & Danescu, 2011). Secondly, the private sector is basically every organization not controlled by the government. The private sector consist of sole proprietors, partnerships, small/medium-sized businesses, large corporations such as fortune 500 companies, professional/trade associations, and trade unions ("privacysense.net," 2016). Thirdly, in general terms, if you are considered “elite” then that means you are amongst the crème de la crème or superior within a specific task or group. When it comes to modern organizations, there are various levels, definitions, and versions of the term “elite”, which we will explore later throughout the essay. Forth and finally, the term nonelite is basically the exact opposite of elite…a person(s) who is not actively amongst the “elite” group. Nonelites are usually the ones who aren’t in power or control of a number of events that occur to them and their environment. Now that terms have been elaborated, let’s get into what happens to nonelites when the private sector and public sector clash and or don’t see eye to eye.


Since both sectors are very broad and vague topics to cover everything that consist in them, this essay will present several examples from major organizations in each sector that has the substantial impact on the nonelites. No matter what sector an organization is in…the constituents always trickles down nonelites. When organizations within sectors get tied up in controversy they tend to forget about the overall impact they are having on the nonelites. Let’s use an example of how elites in private organizations affected nonelites.


Big Corporations vs. Government Agencies:


Starting off with probably the most noticeable feud happening in the United States till this day, which is between big corporations in the private sector and agencies within the government (public) sector. These two entities consistently go through battles against each other for supposedly the public’s interest but… the public (nonelites) are usually the ones who get the worse impact from the battle. According to Liz Kennedy “America faces a crisis of corporate capture of democratic government, where the economic power of corporations has been translated into political power with disastrous effects for people’s lives” (Kennedy, 2017, para. 1). The conflict occurs when the government is overpowered by corporations, due to, what most people call the root of all evil…money. Money distribution and allocation plays a vital role in any economy but the people in control of the money plays an even bigger role. For instance, big time corporation leaders save and grow their funds by avoiding certain laws by set by the government. According to Vexen Crabtree:

  • “Modern large corporations can outmaneuver governments and therefore evade the law. If one country tightens up quality control, industrial regulation or raises employee benefits, modern companies can easily move production abroad. Governments are under pressure to not improve legislation. The heads of large companies have massive power over staff, employment, industry, national economies and the environment and yet are not elected nor publicly accountable for their actions (which are sometimes damaging to large numbers of people).

”(Crabtree, 2006, para. 1)


When this happens…nonelites get affected the worse. While the government is attempting to set regulations for organizations in the private and the public sector, organizations begin to avoid obeying those laws by moving jobs outside of the country…which lead to the working class (nonelites in this case) left suffering while being unemployed.

In another instance, even when nonelites assumes justice would be served in their favor at the supreme court level, they tend to get let down if the big businesses and corporations are involved in the case. In the recent presidential terms, the Chambers of Commerce (usually a local association that supports business interest within a community) won 11 out of 15 cases against them at the supreme court level (Winkler, 2017). In one of the cases, the supreme court sided with the Chamber of Commerce and came to a verdict that “debt-collection companies do not engage in a false, deceptive or unfair practice by filing stale, unenforceable claims against a person in bankruptcy”… which Winkler argues “…the whole point of those claims is to fool people into paying money they are not legally obligated to pay” (Wrinkler, 2017, para. 4). In another case involving the U.S Chambers of Commerce, the supreme court “limited the ability of states to protect residents of a nursing home from being states to protect residents of a nursing home from being forced into arbitration; erected new hurdles for people seeking to bring class actions; and restricted the ability of the Securities and Exchange Commision to force people convicted of securities fraud to pay back their ill-gotten gains” (Winkler, 2017, para. 5). There are speculations that those 15 cases were ruled and swayed by supreme justice Neil Gorsuch, who is a Republican nominated by Donald Trump, and always sides with big corporations and it’s entities… but that is a complex topic to discuss in a short manner. If you would like to look into Neil Gorsuch and those cases, refer to Zephyr Teachout’s article titled “Neil Gorsuch sides with big business, big donors, and big bosses” (Teachout, 2017, title).


NRA Elites vs. Government Elites:


To use a more recent case, the actions from a relationship feud between the National Rifle Association (NRA) and the public sector has created a few concerns/issues for nonelites. To briefly describe, the NRA is considered as a nonprofit organization, within the private sector, whose mission is to “protect and defend the Constitution to acquire, possess, collect, exhibit, transport, carry, transfer ownership of, and enjoy the right to use arms”(Chilson, 2014, para. 2) and also focuses on “promoting public safety, training in safe and and efficient handling of small arms, hunter safety, and shooting sport promotion”(Chilson, 2014, para. 2). Recently, there was a mass high school shooting in Florida to which created an uproar of students across the nation…demanding change in gun laws here in the United States. These issues assumably starts with the elites in the governmental sector, which is part of the public sector.


According to Dr. Ali Farazmand, “the elitist democratic politics…asserts that a few individuals or groups make the most commanding decisions in society, and they do this outside of the formal governmental structures” (Farazmand, 2002, p. 104). These “elitist politicians” are ones who tend to receive funding from private organizations during their campaigning…for a return of some benefit for the private organization in some form. Over the years, the NRA has funded legislators and politicians to keep, influence, and or sway laws in their favor and also to keep politicians who support the NRA in power (office/congress). The NRA is funded by membership dues, program fees, and contributions for sporting events, gun safety education, and training programs (Elis & Hicken, 2015).


The nonelites, in this case, would be the victims/survivors of the recent Florida shooting and all supporters of the movement that followed after that, which is the “March for Our Lives” organization. These nonelites have been at a disadvantage since the first few mass school shootings. The reason being is because whenever a mass shooting occurs, the nonelites demand gun law or gun control policies changed…the top leaders in government (the power elite) either don’t make any gun law changes and or evade/delay/procrastinate on any process of making changes…because the of the top leaders of the NRA (the ruling class elite) fund the politicians to stay in power to make sure the gun laws remain in the NRA’s favor…which would classify both entities (power and ruling class elite) as the plural elite model. To briefly elaborate, summarized below describes the elite forms stated above:


In government, the “power elite” model consist of government officials that are a part of the two highest levels in the political field that separate their powers to control or make decisions. Per CharlesWright Mills perspective, “the first group of uppermost elites generally sets the broad parameters and boundaries of the political and governmental systems, allowing the secondary level of non-inner circle elites to interact and function on the plural model…the first group of uppermost elites includes the boundary setters, the second elites groups are the operational decision makers and implementers of the directives of the former” (Farazmand, 2002, p. 108). The “ruling class” elite model consist of top leaders in the business field and some within the political arena, who “position those uppermost elites who are present in most significant decisions, and choices of non-decisions, made in society” (Farazmand, 2002, p. 109). The “plural elite” model consist in organizations, such as the NRA, and “the prominent leaders or elite groups present in the interaction networks located on different decision centers”…who “depends on prominent positions and involvement in significant policy-making areas” (Farazmand, 2002, 107).

As for the series of unfortunate events for nonelites, first… the NRA receives major contributions from famously known companies and elite individuals within the gun industry whose overall goal… is to sell guns. Secondly, the NRA uses those funds to supply political candidates, who support NRA’s mission, throughout the election year, so they can become or remain in power of the gun control policies. Thirdly, a mass shooting happens and nonelites then demand gun law reform from political leaders, in which a minority of political leaders attempt to but the majority do not because they support how the current gun laws already are (NRA effect). Fourth, in which resulting in, multiple mass shootings continue to occur, dozens of nonelites lose their own life or a loved one, political leaders don’t change any gun policies, and gun sales in the gun industry stay consistent or rise.


To add on statistical facts, according to Chris Morris, in the 2016 presidential race, “the NRA spent $11,438,118 to support Donald Trump—and another $19,756,346 to oppose Hillary Clinton” (Morris, 2018, para. 3). At that time, Trump was a NRA supporter and Hilary Clinton was not. Also, according to Aaron Williams data collection, the top senators and representatives elected in office now are all Republicans and received, if not hundreds of thousands, millions of dollars in support from the NRA (Williams, 2018). Also, currently there is an petition out to revoke the NRA’s 501c4 Tax Exemption status because they are “lobbying activity not explicitly related to the 2nd amendment and their for profit magazines” (Abraham, 2018, p. 1).


GREEN Buildings vs. Traditional Buildings:


Moving on to another example of how public and private sectors conflicts affects nonelites…the process of establishing a sustainable city and ultimately creating and healthier environment. One of the main issues or dilemmas in achieving the goal of a healthy environment is climate change, or what majority may refer as, “Global Warming.” As time goes by, global warming is becoming a controversial topic whether it’s in reference to politics, economy, and or society in general. According to Marya N. Cotton, the term climate change “is an extremely understated way to describe humans increasingly suffering from…weather events like intense/frequent hurricanes, food shortages, and a spike in diseases like malaria and cholera”(Cotton, 2012, para. 1). Advocates who are in the fight against global warming…are major supporters of the whole LEED movement. According to the U.S. Green Building Council (USGBC), the acronym “LEED” stands for Leadership in Energy and Environmental Design but is more known as a “Green Building.” Per the United States Environmental Agency, the term “Green Building” is the “practice of creating structures and using processes that are environmentally responsible and resource-efficient throughout a building’s life-cycle fro sitting to design, construction, operation, maintenance, renovation and deconstruction” (Green Bldg., n.d., para. 1). The overall purpose of Green buildings is to decrease the negative impact that traditional man-made buildings have upon our human health and the natural environment. The USGBC achieve this goal by “efficiently using energy, water, and other resources, protecting occupant health and improving employee productivity, and reducing waste, pollution, and environmental degradation” (Green Bldg, n.d., expression 1). Even though the initiative to improve our environment is there…the conflict between the government sector and within the for-profit sector affect the nonelites.


So, when it comes to the actual cultivation of a “green building” and or any LEED project, it’s known for the use of sustainable materials utilized for its’ creation. For an example, the United States EPA discloses that green buildings will use “reused or recycled-content” for construction, “create healthy indoor environments with reduced product emissions, and feature landscaping that reduces water usage…such as… using native plants that survive without extra watering” ("Green Bldg.," n.d., para. 2). The conflict occurs when green buildings and LEED projects dips into certain organization’s (within in the for-profit and government sectors) financials because the USGBC (non-profit sector) is pursuing to recruit their constituents (nonelites) to use LEED tools instead of traditional ones to do constructing of buildings…because the LEED tools are cost-efficient in the long run and perform better than traditional tools. What the U.S. Green Building Council is doing here is using the transaction-cost theory model, in which “transaction costs determine the organizational context in which transactions occur. Transaction cost are the cost associated with carrying out two-sided transactions—e.g., the exchange of goods or services from one individual to another agreed-upon payment for performance” (Farazmand, 2002, p. 37).

The conflict started when historical/traditional building owners attempted to adopt the green building tactics…but was unable to. According to Adam Shankland, “the current rating systems initiated by the LEED point systems with respect to historical structures does not properly take into account the specific challenges that are required to renovate and maintain an historical property” (Shankland, 2011, para. 11). This created the split between building owners being able to use LEED and those not in support of it. Regardless of whether the property owners had LEED buildings or not…their constituents and contracted employees were contractors/builders (construction firms). Now based on data provided by the USGBC, the top members are contractors/builders, which means whenever these construction firms persuade the professional firms, property owners, or any organization to “go green” (use LEED tools), contractors/builders only purchase more green building products and less (if any) traditional building products. Since contractors/builders are now stepping outside of the normal tools they use to buy, that brings up another transaction-cost trait because, according to Hal G. Rainey, transaction cost theory “analyze managerial decisions to purchase a needed good or service from outside, as opposed to producing it within the organization” (Rainey, 2014, p. 96). According to Kim Slowey, “contractors are typically the ones who order materials for a project… contractors are in a position to influence how green a project can be, both during construction and after completion” (Slowey, 2017, para. 1-2). This is what leads to the main conflict, which is between elites in the government sector and LEED advocates.


As we know from earlier, political leaders are supported by private organization in order to benefit them in some form or fashion…same scenario in this case. Some scholars say the higher government has the power to stop the LEED movement by “outlawing specific activities after declaring them dangerous” (Hosey, 2014, para. 8). According to Lance Hosey, there are numerous states in the U.S that have “banned LEED in public buildings, due to the well-funded lobbying efforts of timber, chemical, and plastics industries, whose products do not measure up to the most rigorous green standards” (Hosey, 2014, para. 8). As for the financial conflict…Hosey states that in the year 2012, “a group of Congressmen, many of whom reportedly have received significant political contributions from the industries above, declared, “We are deeply concerned that the LEED rating system is becoming tool to punish the chemical companies and plastic makers.” (Hosey, 2014, para. 9).


Meanwhile, as they those sectors are going through conflict, nonelites health is being put at risk. On one side, privately owned businesses and companies that have commercial and residential buildings (as well as entities in the industrial and transportation sectors), that used traditional/historical building tools, in largely populated cities or urban areas, were known for producing pollution (CO2 emissions) in the air…from the “manufacture and transport of building construction and demolition materials…” ("Bldg & Clim. Change," n.d., para. 4) in which affected the health of citizens living throughout those areas. On the other side, LEED buildings are “failing to protect against toxic indoor environments” (LeBard, 2010, para. 2). Katharine Schwab reported that researchers from Silent Spring (an institute staffed by researchers dedicated to science that serves the public interest), found various harmful chemicals in LEED-certified buildings (Schwab, 2017). According to the Silent Spring Institute, the researchers tested for approximately “100 chemicals which include phthalates, flame retardants, pesticides, antimicrobials, fragrances, formaldehyde, and chlorinated solvents. Exposure to these chemicals has been associated with numerous health effects such as hormone disruption, asthma, reproductive disorders, lower IQ, and cancer” ("SSI Air Quality," 2018, para. 4).


Organization Theories: Effects Placed Upon Nonelites:


Moving on to a topic that examines how these conflicts happen and why it affects nonelites…modern organization theories and practices. There are tons of organization theories but, in reference to the examples discussed above, the Marxist Theory and the scientific management theory (Taylorism) are the theories that are most relevant and elaborate the effects previously disclosed.


To elaborate the first theory, according to Farazmand, the Marxist Theory is based on three principles, which are… “the mutual interpretation (struggle or unity) of opposites, the negation of the negation, and the transformation of quantity into quality” (Morgan, 1986, p. 258). To define these principles as a collective group, Farazmand states “the constant changing nature of organizations as a result of continuous tensions and contradictions between opposites and as a consequence of developmental changes rejecting changes leads to a transformation of quantitative changes to qualitative changes in society and its systems of governance as well as its economic and social relations” (Farazmand, 2002, p. 21). Another focus of Marx’s analysis of organization theory is capitalism. From his perspective, this form of capitalism of modern organization impacts the working class the most… or more so known as the middle class. Farazmand states the following:

  • “There is a system of domination of labor—whether blue collar or white collar middle class—by capital, which own the means of production. The modern organization of capitalism promotes hierarchy and domination, for it is capitalist who hold the authority and power and, therefore, dominate the rest of society… modern organizations are instruments of exploitation, domination, control, and repression of the working and middle class who are dependent on the capitalist ruling class”

(Farazmand, 2002, p. 22).


To summarize, from my perspective, the Marxist Theory is a theory that views modern organizations as a dominating, chain of command type, need for power from the top… to control the bottom instrument for the “ruling class” and or the “power” elite as stated earlier. The nonelites who are most affected in this theory model would be considered those within the working/middle class and the elites… are the capitalist.


As for the scientific management theory, the developer (Federick Taylor) believed that employees should get rewarded by the employer when they accomplish work duties or production in a sufficient manner for the organization. To compliment, Rainey stated, Taylor argued that if management were to “reward workers with fair pay for efficient production… workers can increase their well-being through productivity” (Rainey, 2014, p. 15). From Taylor’s perspective, in order to effectively accomplish duties of an organization, “the only motivator managers can and should use in achieving these goals is material rewards offered to workers” (Farazmand, 2002, p. 26).


The conflict in this theory occurs, first, when employees don’t feel as if they are getting paid the appropriate amount based on how much work they conducted for an organizations. Secondly, the employees of the organization then feel overworked and underpaid and demand a raise in their pay rate. Thirdly, the government nor the business elites don’t make any changes towards raising the minimum wage so workers can substantially provide for their family. Fourthly, resulting in, a workers strike occurs which places lower/middles class (non-elites) in high poverty. Critics have argued that “Taylorism was fundamentally a managerial strategy to monopolize the workplace authority during the labor struggles of the industrialization period, 1880-1920, and to establish organizational control and worker exploitation by capitalists”(Farazmand, 2002, p. 26). To add on, “the results was growing labor opposition to Taylorism and scientific management leading to numerous worker strikes” (Farazmand, 2002, p. 26).


Both of these organization theories have the potential to lead towards Karl Marx’s Theory of Alienation. Marx’s theory emphasizes on both “self and work alienation”, in which he views organizations characterized by bureaucratic traits… “alienates workers and employees who…cannot identify themselves with the outcome of their labor has profound impacts on modern social and philosophical thoughts” (Farazmand, 2002, p. 23). To relate, the bureaucracy presented by the power elites and ruling class elites… makes nonelites feel robotic and dehumanizes the aspect of work life, as well as social life, to the point where it affects the employee and their family in a negative way.


Conclusion:


This all leaves us with the current and main issue of today, which is that “the domination of big money over our public institutions prevents government from being responsive to Americans” (Kennedy,2017, para. 2). So…is there ultimately a solution for nonelites to overcome the negative effects placed upon them? Per my perspective, there is no concrete solution that will eliminate the negative impact nonelites due to the complexity of the current conflict between both sectors…but there may be solutions to decrease the impact. Studies show that a majority percentage of Americans believe that corporations have an exceeded amount of political power/influence and when corporation leaders, from the private sector, invest in political spending…it drowns out the voices of the nonelites (Liz Kennedy, 2017).

The solution that I believe that could decrease the negative effects placed on nonelites are based around the indicators of power. According to William Domhoff, “there are three primary indicators of power, which can be summarized as (1) who benefits? (2) who governs? and (3) who wins…”(Domhoff, 2012, para. 11). As we can see based on the information provided earlier, the one who benefits is the elite(s) who wins the battle between the private and public sector. The ones who governs, indefinitely, are those who are consider as political elites…and the ones who win… are those within the plural elite groups.


The beginning stages of the solution will first occur once nonelites are on the receiving end of one of the indicators. In reality, the first indicator (who benefits) is suppose to be for the nonelites for two reason. First reason…we as nonelites are the customers and the entry-level employees of the private sector and secondly… the public sector’s main goal is to serve the public. Idealistically, the first indicator would be the first indicator of power nonelites could receive, which would form the phrase commonly used… “power to the people.” This happens when nonelites come together, become advocates demanding of a cause, and create a change of the status quo. Historically, social groups have created change with leaders like Martin Luther King, Bayard Rustin, Cesar Chavez, etc… who all brought awareness to major effects placed upon their targeted nonelite group…and ultimately forced the power elites and ruling class elites to be involved and practice groupthink… in which led to the present nonelites to have the rights they have today…such civil rights, LGBT rights, etcetera. Fast forwarding to now, you have organizations, such as Black Lives Matter and March for Our Lives, that are filled with nonelites who came together to works towards changing the status quo again to the point where they can receive the benefits of living in the United States aka “power to the people.”


The second step of the solution is for those young millennial and centennial nonelites who are in the organizations such as the ones above… get into elected into office and began to govern. Since the second indicator of power is “who governs,” if nonelites get into those positions they would be able to use their power to benefit the nonelites. Usually, here in the United States, the higher the governmental position… the older you have to be qualified but, in my opinion, in the future… generation Y and generation Z will figure out a way to get into office…and be influentially involved in organizations groupthink. Just to clarify, groupthink is developed when members within a group organization has to make a decision that is a neutral or general opinion that accommodates everyone’s point of view...with an attempt not to bring about controversial opinions, topics, and issue…while being under stress. To add on, Rainey states that the groupthink members “sometimes adopt the role of “mind guards”—withholding information that might shake the group consensus—and engage in self-censorship, stifling their own impulse to disagree” (Rainey, 2014, p. 389)…which is something young millennials/centennials most likely would not adopt that role of “mind guards.”


Of course, my proposed solution has tons of potential barriers from both sector elites and is highly optimistic, but overall I do truly believe millennials does have a chance to change the status quo in both private and public sectors. It will take a collective group of charismatic leaders to achieve positive effects upon nonelites…which this generation is capable of doing. According to Rainey, leaders who obtain these charismatic leadership traits are “most likely to emerge during a crisis or in situations in which the leader’s exceptional behaviors and skills are a good match with a particular context” (Rainey, 2015, 352). These leaders are usually victims or have close ties to the crisis which then reciprocates in the followers support. For example, the leaders of organizations like March For Our Lives are survivors of the Parkland shooting and the leaders of Black Lives Matter organizations are victims to injustice against the African American community here in the United States. To compliment my statement, Rainey states, “leaders have charismatic effects on followers when the followers (1) feel that the leader’s beliefs are correct,(2) willingly obey the leader and feel affection for him or her, (3) accept high-performance goals for themselves,(4) become emotionally involved in the mission of the group and feel that they contribute to it, and (5) regard the leader as having extraordinary abilities” (Rainey, 2014, p. 252).

There is no concrete solution of what will eliminate or decrease the negative effects placed upon nonelites…produced by the conflicts between the private and public sector…but charismatic leadership maybe only hope to the start of decreasing that negative impact for the nonelites.

References


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Williams, A. (2018). Have your representatives in Congress received donations from the NRA? Retrieved from https://www.washingtonpost.com/graphics/national/nra-donations/?utm_term=.14c838bca9b8


Winkler, A. (2017). Why big business keeps winning at the Supreme Court. Retrieved from https://www.washingtonpost.com/news/posteverything/wp/2017/06/26/why-big-business-keeps-winning-at-the-supreme-court/?noredirect=on&utm_term=.2a22cfa3eddb

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 Political advertisement paid for and approved by Alvin Codner, for City of Kissimmee Commissioner Seat 5