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FORMS OF PUBLIC ENTERPRISES - Coggle Diagram
FORMS OF PUBLIC ENTERPRISES
Public enterprises are those organizations that are managed by the government with the aim to fulfil and serve the public interest. Usually, these organizations are either fully controlled by the government or most of them is under the authority of the government. From a legal point's perspective, the public enterprises could be
incorporated
or
unincorporated
. It is key to have these organizations under the incorporated category to be registered under the various organizations, while the unincorporated organizations could be started without registrations.
DEPARTMENTAL UNDERTAKINGS
Public enterprises that are run as a part of government department under the supervision of minister that is related to the enterprise. Usually, there will be one ministry that take charge of supervising the enterprise as it is concerned to their purpose and focus. EXAMPLE: Hospital Umum Sarawak is under the supervision of the Ministry of Health.
FEATURES
The Government has formed the Departmental enterprises as a government department. Each department is related to a special ministry based on its focus and functions.
Ownership: Lies compulsorily with the Government.
Management: The ministry in charge will manage these departments. The Secretary of the department will be acting as their Chief Executive Officer (CEO).
Financing: The Government fully support their financial through the general budget. They are not given the right to make loan or borrow from the public. They would withdraw money from the government budget for their daily expenses which includes the employees incomes.
Appointments: All of the appointments for these undertakings are done through the Union Public Service Commission (UPSC) and Staff Selection Board (SSB). Normally, the departments would have their own staff selection board.
No Separate Existence: These departments could not exist on their own. So, they could not have any property in their own name. They are also unable to file any court cases against anyone without the permission of the government and they could not be sue by anyone.
Administrative Autonomy: They do not have any administrative autonomy as they are recognized as government departments. In this case, there is a regular political interruption in their daily operation; decision-making.
MERITS
Easy to Form
An Effective Control
Generates Government Income
Reduces the Tax Burden
Financing is easy to manage
The funds are utilized properly with the approval of the Government.
CONS/LIMITATIONS
Actions taken could takes more time as it require the approval from the Government and have red tapes.
Lack of flexibility as it adhere to the strong Government rules.
They have very limited powers hence lacking in incentives as they could not do anything to maximize their incomes.
As it is a non-profit organization, it is lacking in competitive feelings and spirits. This has also causes them to lack interests in fulfilling the consumers needs and requests.
Tax burden increases due to the heavy losses of the departmental undertakings.
There are more political interference in its operation as it is supervised by a ministry office. Due to this, sometimes the priority are given towards fulfilling the party benefits and needs rather than the public needs.
High amount of red tapes which is time consuming.
UTILITIES
Complete control of the government is crucial for the public welfare.
It is important to have secrecy policy especially in regards of the country's Defense Industry.
It is crucial to ensure that the services for the public utility are available and the contributions of the public sector are not monopolizing.
Heavy investment is involved without any guarantee.
STATUTORY/PUBLIC CORPORATION
GOVERMENT COMPANY