The public sector operating in the modern business environment is exposed to the impacts of global business, social and cultural changes to the same extent as the private sector and is, therefore, equally adjusting to the existing socio-economic requests. The general objective of the public sector is, in alignment with the private sector, to improve society, create predispositions to social growth and development, influence the positive determination of national economies and business entities in order to create new values. With the notion of a ˝public service˝, the public sector ensures timely engaged, high quality and content realization of citizens' public interests. Therefore, it is necessary to define and develop models of public management that will adapt to changes in the social environment and effectively manage various aspects of the public sector's internal functions. The aim of this paper is to explore modern aspects of the public sector and to determine adequate public management modalities. The research methodology is based on analysis of the public sector structures in the Republic of Croatia, accompanied with a review of current public governance relationships. Respectfully, the public sector is divided into the general government (public administration) and public (social) companies. Each level of the public sector has its own sub-sectors with different activities, specific goals and requirements. This also requires public management to set the conditions for specialization, multidisciplinary approach and interactivity with different subjects from the business environment. Research results indicate the development of a public management model intended to increase public sector responsiveness to contemporary changes in the social and business environment. The main conclusion states that developing transparent public management is a prerequisite for developing an efficient public sector that can successfully meet the needs of all its users in the 21st century.