What are the advantages associated with the privatization of state managed industries?

Answer 1

privatetization can 1 the business or firm could be managed wisely 2 the firm will also be effecient and effective on its operation 3 they will be felxable to wad the public 4 productivity per person increase 5 price will depend on monopoly and undersanding your rivals

Answer 2

countries privatize because ownership is signficant determinantof enterprise performance.In both developed and developing countries,good SOE performence has been very difficult to bring about,and even harder to sustain. Governments facing financial crisis often try to improve performance by bringing in new and dynamic mangers, and paying them incentive salaries. and they grant managers autonomy to set prices and hire and fire, and agree to overdue tariff increases and payment of past due bills. These measures often have a positive effect, but as the crisis dissipates, so does political resolve.

Answer 3

The advantages of bank privatization and denationalization allow for them to be compete and theoretically offer consumers better products. Privatization also removes bureaucratic and regulatory dead-weight to banking systems, allowing for efficiency and innovation. The negatives come from situations and scandals as related to the Global Financial Crises since 2007 with governmental bailouts of American private banks.

Answer 4

Privatization is favored in cases when the government feels that the company is not achieving its goals. Some advantages of privatization include efficiency in service delivery, better profits, good management, and increase in investment.

Answer 5

Answer

*ADVANTAGES OF PRIVATISATION

·Privatisation places the risk in the hands of business or Private Enterprise.

·Private enterprise is more responsive to customer complaints and innovation.

·The Govt. should not be a player and an umpire.

·Privatisation provides a one off cash boost for Govt. This can be spent on Hospitals etc...

·Privatisation leads to lower prices and greater supply.

·Competition in privatization increases differentiation.

*Disadvantages of Privatisation

1. Privatisation is expensive and generates a lot of income in fees for specialist advisers such as banks.

2. Public monopolies have been turned into private monopolies with too little competition, so consumers have not benefited as much as had been hoped. This is the main reason why it has been necessary to create regulators (OFWAT, OFGAS etc). This is an important point. It partly depends on how the privatisation took place. For example, the railways were privatised in bit of a rush and there might have been other ways to do it so that more competition was created. It partly depends on the market. Some markets are 'natural monopolies' where competition is difficult. For example, it would be very wasteful and expensive to build two sets of track into Liverpool Street just to create some competition. Natural monopolies create a special justification for public ownership in the general public interest.

3. The nationalised industries were sold off too quickly and too cheaply. With patience a better price could have been had with more beneficial results on the government's revenue. In almost all cases the share prices rose sharply as soon as dealing began after privatisation.

4. The privatised businesses have sold off or closed down unprofitable parts of the business (as businesses normally do) and so services eg transport in rural areas have got worse.

5. Wider share ownership did not really happen as many small investors took their profits and didn't buy anything else.

Answer 6

Privatization causes the business to expand independently. The work and the progress are increased very much.

Answer 7

Competition results in low prices, maximum employment, innovation, rising standard of living.

Answer 8

there is no stop of makeing of profits