BUSINESS ENVIROMENT — OCM STD 12 Commerce — Question
Gujarat BoardEnglish MediumSTD 12 CommerceOCMBUSINESS ENVIROMENT3 Marks
Question
What is privatization? Write a note on advantages and disadvantages of privatization.
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Answer
Privatization:
The transfer of control and management of public sector enterprise to private sector or say, the process of passing on the ownership and management of public sector unit to private firms is called privatization.Advantages and disadvantages of privatization:
$(A)$ Positive effects of privatization:
Rise in production efficiency
Absence of political interference
Improved quality goods and services
Systematic marketing
Use of modern technology
Hierarchical set-up for accountability
Creation of competitive environment
Advancement in research and development
Advancement in modernization and innovation
Maximum utilization of factors of production
Growth of infrastructural facilities
$(B)$ Negative effects of privatization:
Exploitation of employees
Misuse of powers by top management
Unequal distribution of income and wealth
Absence of job security
Priority to profit
Consumer exploitation, etc.
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