Public Enterprise Forms in Management (4 Arrogant Forms)

Regarding the management of the public enterprise forms, no question arises in a socialist economy. The problem arises mainly in the field of a mixed economy. Any specific pattern of organization is controversial here. Thus, prescription of any form of the organization is difficult and risky because the viability of public enterprises in the mixed-which, in turn, depends upon the country’s socio-economic condition.

Management of Public Enterprises Forms:

There are mentioned the management of public enterprise forms through the world. The most prominent public enterprise forms are four. Such as:-

  1. Department
  2. Public Corporation
  3. Joint Stock Company
  4. The Operating Contract

1. Department:

The departmental management of public enterprise form is the traditional form of government intervention in the economy. An ordinary government department can at least keep going with the help of familiar unimaginative slow-moving routines. It may operate the public in general, and it hints in particular, but never the less it can keep going and does not collapse. But an enterprise cannot keep going in this way. It becomes a permanent liability to the state, but many enterprises’ essential purpose is not to be a liability but to be an asset. The basic tow requirements for efficiency are:-

  • Firstly, competent and responsible management free to run an enterprise within limits drawn by the constitution, legislation, and government policy decision;
  • Secondly, this is the consequence of the first that the enterprise should possess personnel and financial systems that are sufficiently similar to those prevailing in the best organized private enterprise no to place it at any significant disadvantage.

The traditional departmental management of public enterprise forms got some severe limitations. Some of its characteristics limit management flexibility and efficiency. The restrictions are:-

  1. Permanent staff is subject to rules and regulations applicable to civil servants, thereby preventing both promotion on merits and prompt disciplinary action where necessary.
  2. Cash receipts have to put into a government account and cannot take out without special sanctions.
  3. The system of accounting purchase.
  4. The department methods of purchase of raw materials and sale production and so on.

2. Public Corporation:

Sure, it isn’t easy to find out any universal definition of a public corporation. In its general sense, a public corporation is a body corporate owned by the state commercial in nature. It creates an act of parliament or an instrument having the force of a lawyer charged with such functions given such power and subject to such controls as the said act or instrument many prescribe? It is merely a means to an end. According to Rangoon Seminara, the public corporation is:-

  1. Wholly owned by the state
  2. A legal entity
  3. Self-supporting and
  4. Subject to individual non-departmental controls over budgets, expenditures contracts, purchases, and personals.
  5. Not subject to the budget procedures, accounting, and audit laws applicable to non-corporate agencies.
  6. The recruitment policy is quite different from that of the civil servants.

The acts of parliament which create public corporation vary from county to county. In many countries, public corporations often call ‘statutory authorities,’ and in African countries, they call ‘Parastatles.’

3. Joint Stock Company:

The Joint Stock Companies is a management of public enterprise form, generally established under a county’s regular company’s Act, which provides for the creation and operation of companies. The state companies are more convenient for a ‘mixed’ enterprise in which the state owns major shares, and private investors own the rest. The Joint Stock companies or the Stat companies don’t regard government corporations even though they are entirely state-owned. But they are similar to government corporations, except.

  1. Firstly, the government and the public, respectively, own the majority and minority shares.
  2. Companies are more autonomous than public corporations.
  3. The government expects to transfer its ownership to the private sector eventually.
  4. Financially independent.
  5. More independent from direct political control by the government or independent regulatory commission.
  6. Free from governmental recruitment policy.

There are some practical advantages to create a company form of management than to create a public corporation. A company can quickly register under the county’s company law, but the creation of any public corporation must require the enactment of the parliamentary mandate. Therefore to set up any public corporation, parliament must pass a law about this. But regarding the state-owned companies, legislative control is clearly defined. Parliament controls the company through annual reports and auditing accounts, through qualified and independent persons, and the minister’s responsibilities clearly defined in his capacity as a shareholder.

4. The Operating Contract:

This management of public enterprise form is when the government runs the public enterprise through a contract with a private company or contractors. In this system, the company manages the federal enterprise, and the government pays them a fixed fee for their services based on the contracts signed between them. The contractor runs and manages the enterprise on behalf of the government. The operating contractor for running the enterprise maintains his recruitment policy, employs his own personal, and enjoys greater freedom in operating the enterprise.

There is a higher degree of flexibility found in the management of public enterprise by an operating contract. It provides greater flexibility in procurement, planning recruitment, and staffing than other management types.

This form of a contract of public enterprise is only used in a technical and limited sense. This type of contract is short-term, restricted, and routine in nature.

These are the management of public enterprise forms (Department, Public Corporation, Joint Stock Company, and the Operating Contract), which describes here shortly for better understanding the management of public enterprise forms — and improving the Strategic Management.

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  1. Hey! This is my 1st comment here so I just wanted to give a quick shout out and tell you I genuinely enjoy reading your posts. Can you suggest any other blogs/websites/forums that deal with the same subjects? Appreciate it!

    1. Thanks for inserting your first comment under this article. However, you can check the Wikipedia, Wikimedia, Chron, etc. they are tried to cover the same topic, in the governance section.

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