In Class Assignment # 11
Professor Miguel Carasatorre
Feng Xia Florence Chen (300758281)
Pao Hung Sophia Lo (300761890)
Qitong Ren (300752952)
Kaiyi Zeng (300768636)
Lalit Bhartola (300759011)
March 26, 2015
State ownership is the business or a firmed owned and controlled by the government (state). The profit in the company is given to the state or reinvested in the company.
State ownership can provide essential services which enable people affordable to purchase products in lower price. (Advantages and Disadvantages Of State Owned Enterprises, 2013) For example, the water and electricity can be cheap in state ownership company than private ownership company which aims to make profit. Also, State owned business can create employment opportunity for people. State ownership helps government to monitor and control the economic in case of the serious operational risks to public.
However, state ownership can lead to heavy tax and inefficient work performance in the company. Also, it can become the monopoly and corruption since there are too many control and interruption from government. The bribe and corruption is worse in underdeveloped countries around the world, people can bribe the manager before the job which can lead to slow growth for the company and state. Government takes advantages of resources and technology, and restrained private business. Also, government limits the opportunity and cannot fully understand, anticipate or regulate the company what it really need. State ownership lacks work motivation which triggers negative work attitude when employee feel like the company is not belong to them and do not care about what happens in company. For example, employee can become dishonest, lazy and lack of efficiency in the workplace.
On the other hand, private ownership is the legal ownership and property privately owned and controlled by the non-government enterprise. (Private business)
Private ownership can control over the company privately. For example, the owner can sell or maintain the stocks to fund the operation without any interventions in the