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Private, Public And Global Enterprises

Question

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Why is the government company form of organisation preferred to other types in the public sector ?

Solution

The Government company form of organisation is preferred over other forms of public sector companies because:-

Freedom from bureaucratic control

Though it owes its formation to the government, a government company is relatively free from much of bureaucratic interference.

Flexibility of operations

A government company can easily modify or alter its form or style of business in line with the prevailing situation.

Freedom from political interference

In several respects, a government company functions independently of the parent ministry or department.

Benefit of Expertise

By inviting equity participation by private investors, the government company can reap the benefits of technical and managerial know-how perfected by the private sector.

Best of both the worlds

Partification by private investors naturally leads to efficient management of the government company resulting in increased profits.

Some More Questions From Private, Public and Global Enterprises Chapter

Why is the government company form of organisation preferred to other types in the public sector ?

How does the government maintain a regional balance in the country?

Explain how joint ventures can be established.

Give the primary objectives of privatising public sector enterprises.

Explain government's policy regarding treatment of sick units.

Explain the rationale of Public Enterprises.

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