What after all are the Problems of Public Enterprises?
“Many problems in a public enterprise are related to the routine working of the organization whereas some relate to the policy framework and management. ”
It is commonly said that public enterprises are a hotbed of inefficiency and problems. What’s the reason behind this state of affairs? Let’s ponder over a bit.
Many problems in a public enterprise are related to the routine working of the organization whereas some relate to the policy framework and management. It is common knowledge that the working of an enterprise entirely depends upon the form of its organization.
A number of forms such as departmental form, public corporation, joint stock companies etc. are used for managing state undertakings. Departmental type is used for tactical industries and public utilities. Public corporations are useful for managing large enterprises and joint stock companies are helpful for running concerns on business lines.
Before taking any decision regarding the form of a public enterprise it is necessary to consider the nature of work, resources required, requirement of human resources and the statutes of state policy.
This is the very basic stage that is the main source of ills in a public enterprise as much thought is not put into it. Political considerations and vote-garnering tactics rule the roost in such matters.
In theory, a self-governing management manages the state enterprises but in practice state intervention always remains a big cause of concern. Civil servants occupy all the key positions and these persons are directly under governmental control. Public corporations and government companies also have civil servants on principal posts.
Public enterprises are funded by public money and they are first and foremost created for public service. Public ought to be conscious of the functioning of these enterprises. Government should present all the particulars about the running of state enterprises to the legislature or the parliament.
Pricing procedure of public enterprises has always remained a topic of debate. The question whether these undertakings should keep profits or should work on no- profit no loss basis, has constantly been debated. A sound pricing policy should focus on earning some profits so that these public units can become economically feasible.
The working conditions of the staff, fixation of wages, salaries, etc. should be made comparable in all public undertakings. This would help government concerns to use services of qualified and capable persons.
There should be some mechanism for settling the employee-management disagreements. Workers are the lifelines of any enterprise. So, they should be persuaded to perform better by the way of perks and incentives.
Author - DeeKay
Tags - Finance, Economy
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