PUBLIC CORPORATIONS

• What is productivity?

  the rate, time, money and amount of goods produced
• What are public corporations?

  business organisations owned and controlled by the state/government
• What are some features of a public corporation?

  • it is government owned
  • created by law
  • state-funded
  • provides public services
• What is a portfolio?

  a collection of business interests or products
• What is infrastructure?

  basic systems and structures that a country or organisation needs in order to work properly
• What are the reasons why the public may take ownership of a business?

  • to save jobs
  • to fill the gaps left by the private sector
  • to serve unprofitable regions
• What is natural monopoly?

  a market where it is more efficient to have just one organisation meeting total market demand
• What does it mean to subsidise?

  to pay a part of the costs - often by the owner in business
• What are the reasons against the public ownership of a business?

  • costs to the government
  • political interference
  • difficult to control
• Why may the public ownership find it difficult to control a business?

  public corporations can be very large, this might make it difficult to co-ordinate different parts of the business and run it effectively
• Why may there be political interference when the public owns a business?

  because different governments have different views about the way public corporations should operate
• Why may it be costly to the government when they have public ownership of businesses?

  any losses have to be met by the taxpayer, if losses get bigger and more frequent, tax payers may object to financial weight
• What is privatisation?

  when a business transfers from the public sector to the private sector
• What are the different ways of privatisation?

  • selling public corporations
  • deregulation
  • selling land and property
• What is the sale of public corporations?

  selling shares in the business to anyone that wants them
• What is deregulation?

  lifting legal restrictions that prevented private sector competition
• Why does privatisation take place?

  • to generate income
  • to reduce inefficiency in the public sector
  • as a result of deregulation
  • to reduce political interference