Public Enterprises II

Back to: COMMERCE SS2

 

Welcome to Class !!

We are eager to have you join us !!

In today’s Commerce class, We will be learning about Public Enterprises. We hope you enjoy the class!

 

 

ADVANTAGES OF PUBLIC ENTERPRISES

1. They ensure a steady supply of essential services
2. They prevent exploitation of consumers
3. They provide employment opportunities for people
4. They generate revenue for the government
5. They enhance the provision of infrastructural facilities
6. They check duplication of the facilities and wasteful competition
7. They ensure the development of critical capital intensive projects eg. Steel industry.
8. They provide essential services at reasonable costs
9. They check foreign domination of the economy
10. They uphold and strengthen national security
11. They are accountable to the public – they have to submit their annual reports/accounts to the Parliament
12. They ensure the availability of enough capital for projects

 

 

DISADVANTAGES OF PUBLIC ENTERPRISES

1. Their operations involve very large capital requirements.
2. Very slow decision-making process, bureaucracy and red-tapism
3. Prevalence of large scale fraud, corruption and mismanagement.
4. Frequent government/political interference of its activities and management
5. The politicization of appointments.
6. The inefficiency of its operation e.g. poor and irregular services.
7. Poor and epileptic funding by the government.
8. Dis-economies of large scale production
9. Nonchalant attitude, lack of commitment, laziness, negligence on the part of workers.
10. Dependency on the public treasury for funds. Public enterprises are usually chronic loss-makers and as such constitute a drain on public funds.
11. It lacks privacy.

 

 

SOURCES OF CAPITAL/FINANCE FOR PUBLIC ENTERPRISES

1. Grants and subvention from the government.
2. Grants from foreign countries or international organizations.
3. Internally generated revenue/retained profits
4. Loans from banks or other financial institutions
5. Trade credits (i.e. credit purchases)
6. Hire purchase
7. Equipment leasing
8. Sale of Assets

 

 

EVALUATION

1. Explain five difference between public limited companies and public corporations
2. State six disadvantages of public corporations

 

 

GENERAL EVALUATION QUESTIONS

• State three uses of capital as a factor of production
• State four uses of land as a factor of production
• State five features of a partnership business
• Explain five reasons why government participate in business
• State five advantages of a public limited company

  

THEORY

1. List the sources of finance available to a Public corporation.
2. State four advantages and two disadvantages of public corporations

 

READING ASSIGNMENT

1. Essential Commerce for SSS by O. A. Longe Page 173 – 177
2. Comprehensive commerce for SSS by J. U. Anyaele Page 311 – 316

 

 

 

We have come to the end of this class. We do hope you enjoyed the class?

Should you have any further question, feel free to ask in the comment section below and trust us to respond as soon as possible.

In our next class, we will be learning about Trade Associations / Chambers of Commerce. We are very much eager to meet you there.

 

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