Establishment of Public Enterprises

Introduction: Establishment of Public Enterprises

Different institutions have different goals and responsibilities and different forms of governance have been developed to reflect this fact. One of the most important distinctions in organizational structure and type of governance is that between public and private enterprises. This paper examine the reasons for the establishment of public enterprises, the guidelines that should be used by public enterprises, and how to measure the performances of public enterprises.

We should begin with a basic definition of public enterprise, which (although called by different names) is a form of organization that exists in most modern developed nations as well as many developing ones. Public enterprises are business organizations that are owned by the state (either wholly or in part) and that are controlled through a specifically designated public authority. The primary reason that the state (which, in democracies, is standing as a proxy for the people at large) owns certain enterprises is that political leaders and the citizenry at large believe that it is advantageous to society as a whole that a certain service or product should be provided by a state monopoly.

This concept may be a little difficult to visualize in the abstract, so let us provide some common examples. The highway system and basic utilities (gas, electricity, water, sewage) are under state control because no private enterprise has sufficient resources to provide unif

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lished are summarized below: Essential services can be provided at a fairer cost to all when not left to the whims of the marketplace Social and environmental responsibility are part of the bottom line when private profit is not the driving motivation. Full financial accountability is part of the structure of crowns and public services but sadly lacking in major corporations (http://www.votenga.ca/Common%20Pages/BackgrounderTextFiles/Public_Services_Crowns.htm). Guidelines For Public Enterprises It is the goal and purpose of private enterprises to make money for their owners and (if any) their stockholders. Because of this it is foolish to criticize such companies for putting profits first in the same way that it would be foolish to criticize a cow for munching on new spring grass in a pasture. However, the goal of a public enterprise is to serve the public good and so all aspects of the organization must be geared to that end. However, this is easier said than done - not only because most things are more easily accomplished in the abstract that in the particular but because "the public good" is itself a complex and ambiguous concept. There is never any single public good, and one of the roles of the agencies that overs

Category: Government - E