There are significant differences between how governments andcommercial organizations handle their projects. The unique attributesof governments and commercial firms directly impact how theseentities manage their operations and projects. Some commercial firmsare better adapted to running projects by utilizing the method as amanagement approach. Therefore, their employees are well trained andfamiliar with project management approaches. The concept may berelatively new to governments that have traditionally lagged behindthe private sector in implementing new knowledge in their management.Therefore, governments face unique challenges that may not exist incommercial organizations in project management. It is important forgovernments to acknowledge the aspects that hinder them from enjoyingthe benefits of project management approaches similar to commercialorganizations.
There exist many fundamental differences between government andcommercial projects. These differences are brought about by theownerships structures, employee skill level, attitudes towardsgovernment projects, funding, and resource utilization, and publicperception, control, market influence, and external interference,among others. Such differences impact how soon and how well projectmanagement teams operating under the government as opposed to thecommercial sector achieve results within the stipulated timeline andbudget. This paper thus explores the various ways in which projectmanagement varies between the government and commercial sector underdifferent concepts.
The Private Sector: The private sector is usually made up oforganizations or business entities that are confidentially owned.Ownership can be in the form of family, partnership, joint venture orlisted at the bourse. Ideally, for a firm to be private, thegovernments must not be listed as an owner, either directly orthrough one or several of its departments. The private industryusually includes both profit and non-profit firms.
Commercialsector: These are firms whose core function in the market is tomake profits and generate returns on investments.
Public Sector:The sector is usually composed of organizations that are owned andwholly operated by the government.
Public-privatepartnerships (PPP): in some cases, governments link with privateentities in owning and running organizations. Such organizations arenot considered in the assessment.
Project: acollective term for the work and performed in moving from a currentstate (as-is state) to a future desired state (to-be state).
Projectmanagement: The application of processes, methods, knowledge,skills, and experience to achieve the project objectives.
Commercialvs. Government Projects: Areas of Divergence
Government projects are more complex as indicated by scope, monetaryvalue, sources of funding, people involved, etc. One of thechallenges facing government projects is the scope and managingexpectations. For government projects, especially those involvinginfrastructure, there are very many considerations. One of them isstakeholder involvement that often complicates and even lengthens theperiod of project completion. Government projects also tend toinvolve numerous departments that require consolidation of goals andobjectives of each entity. Another issue is the source of funding.Many financiers of government projects attach their funding to somestringent conditions that must be met and assessed throughout theproject lifetime (Morphet 2015). Some of these circumstances might becontrary to state interests and thus parties have to negotiate acompromise.
On the other hand, commercial entities are restricted by size, scope,and resources, which make their projects relatively straightforwardand short-term. Nonetheless, this does not mean that the task to bepursued is simple. In fact, private firms better acknowledge theimportance of project management and their objectives and, therefore,break down long-term goals into simple incremental tasks (Mares2013). This makes the larger project measurable and manageable.
Measures ofProgress or Objectives
PM in government has fewer measures of progress or success than theprivate sector. Ideally, governments have relied on outdatedapproaches to project management that impact on their success. Someof the early scholars on the subject discovered that most governmentsrely on aggregated measures of progress for their projects. Theyrecommend a new approach that identifies primary and secondaryobjectives of a project and assist in allocating resources (Ward &Deren 1991). However, with time, governments have gradually changedtheir approach to project management by embracing new methodsinformed by research or directly borrowed from the private sector.Here in the US, the federal government has sought to increase successrates in projects by embedding some provisions in the law. TheGovernment Performance and Results Act of 1993 require statesagencies to be actively involved in managing project performance byamong other means, setting objectives, managing results, andreporting progress (GPRA 1993). In spite of such progress, there isstill a lot to be achieved.
In light of this weak performance measurement, the drivers, andmotivations for initiating projects in governments come into focus.Public needs and politics drive Governments` quest for projects. Asthe legitimate source of power in a given society, a government ismandated to ensure the welfare of the people is catered for at alltimes. In so doing, the government can be assured of moral,political, and social support by the public. However, due to a widerange of issues such as the personality of the people in government,competing interests, and unavailability of resources, governments maynot always be in a position to provide all public needs. Again, thecomplex nature of governments coupled with the nature of public needsmakes it difficult to serve interests of all people. Therefore, thereis no urgency in meeting public needs or identifying how someprojects directly benefit governments (Morphet 2015).
On the contrary, commercial entities are pushed into launchingprojects by market-based forces while politics and public needs drivegovernment projects. For commercial entities, change is a criticalcomponent, which if well managed, enables firms to gain competitiveadvantage and increase profitability. For instance, for retailcompanies, projects on establishing their online presence wereprimarily driven by the growing acceptance of e-commerce. Otherprivate firms have changed their business models using the projectmanagement approaches to respond to competition and market dynamics.
PM under commercial entities is more flexible than in governmentprojects. Practitioners in the commercial sector are more interestedin creating added value for goods and services for publicconsumption. This requires the ability and skill to change and adaptto fluctuating market environments. In most cases, the projectmanagers in the commercial sector are given freedom to incorporatetheir creativity in performing their work. For firms operating in thetechnology field, flexibility and creativity are highly encouraged.In fact, these firms, including Apple, Google, Facebook, IBM, andothers invest heavily in research and development with individualteams given significantly high levels of independence and flexibilityin creating unique products. For instance, Lehman (2016) notes thatApple had to change company policy and re-do phone packaging for theiPhone 5 and 5C in the last minute to allow for the efficient spaceutilization for logistical purposes. This is the level of flexibilitythat commercial firms are expected to maintain.
On the contrary, project managers serving in governments often knowwhat needs to be done and desire to do it well but have to work inrigid environments. The rigidity is brought about by strict laws andpolicies, often made years earlier to serve in differentcircumstances. Such requirements stifle creativity and innovationgiven that there are long processes of authorization, verification,and assessment of ideas. These tedious processes prevent projectmanagers from taking prompt actions to respond to market needs. Thislack of flexibility contributes highly to “white elephant projects”given that their usefulness surpasses them during the developmentphase and the environment does not allow flexibility to meet shiftingpublic needs (Mares 2013).
Authority andpower structures
An organization’s structure determines how project teams fit intothe larger framework and way of doing things. In most governments,there is no clarity on how project management teams fit into existingstructures of power and authority. There are two basic structures:functional structure and pure project structure. The functionalstructure utilizes the vertical hierarchy of power and is common inbig organizations and governments. Under such structures, projectteams are usually internal as opposed to being external. Internalproject teams (also called non-executive project teams) are mainlyconcerned with performing semi-repetitive tasks while the internalteams (also known as executive project teams) are common in smallerorganizations and usually engage consultants.
Non-executive project teams, as used in governments, provide theirunique benefits and challenges. First of all, this kind of structureoffers a precise and reliable reporting system as it works within theexisting vertical hierarchal structures. This approach to powermirrors the traditional practices in management. The method alsoprolongs the lifetime of project teams given that a bulk of the tasksperformed are repetitive and enable members to develop a library ofspecialist knowledge. However, the approach is also undermined by itsrigidity. The approach also discourages cross-functional activitiesthat challenge the existing hierarchal power structure. Thehierarchal power structure in such organizations is likely to beexported to project teams thereby limiting consultations and groupdynamics. Morphet (2015) indicates it is important for project teamsto recognize and value all members equally as opposed to taggingtheir relevance on their positions in the organization.
Commercial organizations are most likely to apply the executive teamproject structure. This type of project team operates on the shortterm i.e. disbanded after project completion. Again, the projectmanagement team enjoys some degree of flexibility and does notfunction within the traditional organizational structure. In fact, inmost cases, such teams are made up of in-house employees workingalongside professional consultants in a designated field. Even thoughthe approach is synonymous with commercial entities, governments aregradually embracing the approach, especially in large infrastructuraldevelopment projects. For instance, in constructing roads andseaports, governments enlist the services of consultants to enrichthe skill level and efficiency of in-house teams charged withassessing the feasibility of such projects. This way, the governmentbenefits directly from the efficiencies of the commercial sector.
Although government project teams have a longer lifetime, they faceuncertain futures with changes in political regimes. In line withdemocracy in the US and other countries, elections offer the publicthe chance to vote in new governments through general elections. Eachgovernment is mandated to develop its individual policies to enableit to implement its manifesto as promised to voters. Therefore, withthe election of new political leaders, government priorities change.Some projects may be shelved and even new ones introduced. Financingof existing projects may also suffer, especially for long termprojects that have not yet received full funding. Again, governmentsrotate cabinet secretaries and departmental heads on various grounds.Such heads might be serving in different project teams, and thustransferring such members will impact the attainment of setobjectives.
Unlike governments, teams in the commercial sector enjoy morecontinuity of purpose. The consultants involved in these teamspossess some degree of authority that ensures continuity. Forinstance, a client firm receiving consultation services from anothercompany has the right to request to be allowed to work with employeesthat they choose. The same case applies to the consultants working inteams who may demand to work with selected in-house employees of theclient company. In short, project managers in the commercial sector,as opposed to the government have more control of team membership(Lehmann 2016). Empowering members to influence the group means thatthey have greater control of team continuity. Furthermore, teams witha longer lifetime are likely to be more efficient as they an extendedperiod to develop beneficial work relationships.
Whistleblowing is not specific to project management but remainsrelevant in running organizations. In general, whistleblowing refersto informing appropriate authorities about unlawful or unproceduralactivities going on in an organization. Some of these activities maybe related to violating labor laws, endangering lives of employees,theft, corruption, and poor working conditions among others.Recently, one of America’s largest banks, Wells Fargo, was accusedof illegally assigning clients unapproved debit cards so as tofalsify sales figures. Although this issue only came into the publiceye recently, some of the firm’s employees had blown the whistleover this matter a few years ago. The bank responded by firing themand some of them filed suits that they lost (Egan 2016). In projectmanagement, such unwanted practices should be reported to relevantauthorities whenever they occur.
However, attitudes towards whistleblowing determine whether employeesor team members can report unlawful incidences. Such attitudes arelargely influenced by how firms have treated whistleblowing in thepast. Again, the organizational culture and ethical standards play asignificant role. For instance, in the Wells Fargo case, theemployees in question first reported the issue to their bosses, andthey were fired. It thus emerges that the commercial sector may notwelcome whistleblowing as more trust is placed on the in-housecontrol measures put in place such as internal auditing processes.Some government departments have also responded negatively towhistleblowing as shown by the case of Edward Snowden (Blusiewicz2014).
In spite of such cases, governments have been more welcoming towhistleblowing. In fact, the federal government enacted theWhistleblower Protection Act of 1989 that seeks to protect bothpublic and private employees from the wrath of managers and employerswho wish to retaliate against them. In fact, there are highlypolarized views on the issue of whistleblowing. Some entities arguethat whistleblowing should be restricted to the involved firms andnot made public. In a 1973 arbitrator case involving whistleblowing,an employee was told that he cannot “bite the hand that feeds youand insist on staying on for the banquet” for making awhistleblowing case public (Ravishankar 2003). For most commercialorganizations, incidences that violate the law or are likely toportray the firm negatively should be handled internally. A famouscase involves an internal auditor at WorldCom who was discouraged byhis managers to desist from going public with his whistleblowing.However, going public serves the greater public good.
Nonetheless, whistleblowing might be discouraged in some specialcases. In India for instance, only government whistleblowers areprotected by law. This means that private and commercial entities canhandle whistleblowing in any manner (First Post 2016). Consequently,projects in the private sector cannot enjoy the benefits ofwhistleblowing that are meant to discourage wastage of resources andmalpractices. Again, it is clear that commercial entities entertainwhistleblowing only within their walls to preserve their image.
In most cases, project management teams are answerable to theirparent organization as the financiers. The amount of resourcesaccessible to the teams is influenced by the funding available. Themajority of government projects involve an enormous amount of money.Governments can fund such project or seek the input of funding bodiesand donors. When this happens, it implies that the project team isnot only answerable to the home government but also the donors(Goodman 1991). This approach complicates the management of suchteams and projects.
On the contrary, there is strict control in commercial entities withmany checks and balances put in place. Furthermore, where commercialfirms borrow money from financial institutions, there is minimalinterference by these agencies in the management of projects. On theother hand, PPPs explore various sources of funding (Young 2013).This implies that the control and management of PPP projects are moredynamic compared to government and commercial ones.
Government projects feature a diverse mix of stakeholders whose viewsmust be incorporated in any given project. The manner of collectingviews of stakeholders differs from one project to the other and fromone region to the other (Lam & Liu 2005). In the US, the inputsof Indian Americans where projects touch on their community land aregiven priority. On the other hand, non-indigenous Americans can maketheir view heard through various forums created for collecting publicinput.
In the commercial sector, the involvement of stakeholders isapproached from two angles. One of them perceives the stakeholders asclients depending on the type of project. For instance, aninfrastructural project will require the input of users of thatproject, local government, and leaders among others (Young 2013). Theother angle views stakeholders’ involvement as only a legal andethical requirement. However, commercial firms develop unique methodsto manage such stakeholders to minimize costs and broaden input.
PM in the government sector is prone to malpractices and corruptiondue to poor control. Misappropriation of funds, fund embezzlement,and actual stealing of resources by individuals working on differentprojects are commonly reported in government project initiatives.Furthermore, there are rampant cases of bribery as well as externalpolitical influence on the decision-making process in project teams.For instance, various American firms operating in the internationalmarket stand accused of engaging in bribery to influence the outcomeof tendering procedures in various countries. Again, politicalleaders may take a cue from such activities and even influence theleadership and decision-making in project teams for selfish gains. Inmost cases, the tendering process, misappropriation of funds andbribery are some of the most common challenges facing projectmanagement in the public sector.
Given the points raised above, it is clear that the management ofgovernment projects is more challenging than commercial ones. Theseproblems include foreign and political influence, technicalincompetence, low motivation, financing conditions, and corruption.Based on these differences, it is evident that project managers needto be adequately prepared to deal with unique challenges arising outof working in each environment. In the case of managing governmentprojects, team leaders must be prepared to resist external influenceas well as deal with the complexity of their task. At the same time,project managers in the commercial sector must be prepared to workstrict constraints and under pressure. The findings also imply thatthere is a need for further research in the field to identify morecompetent methods to manage government projects. This way, the publicwill enjoy better services while governments will attain efficiencyin managing projects.
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