Question

What are the advantages and disadvantages of a public corporation?

Answer 1

Advantages:

1. Bold Management due to Operational Autonomy:
A public corporation enjoys internal operational autonomy; as it is free from Governmental control. It can, therefore, run in a business-like manner. Management can take bold decisions involving experimentation in its lines of activities, taking advantage of business situations.

2. Legislative Control:
The affairs of a public corporation are subject to scrutiny by Committees of Parliament or State Legislature. The Press also keeps a watchful eye on the working of a public corporation. This keeps a check on the unhealthy practices on the part of the management of the public corporation.

3. Qualified and Contented Staff:
The public corporation offers attractive service conditions to its staff. As such it is able to attract qualified staff.

Disadvantages:

1. Autonomy and Flexibility, Only in Theory:
The autonomy and flexibility advantages of a public corporation exist only in theory. In practice, there is a lot of interference in the working of a public corporation by ministers, government officers, and other politicians.

2. Misuse of Monopolistic Power:
Public corporations often enjoy a monopoly in their field of operation. As such, on the one hand, they are indifferent to consumer needs and problems; and on the other hand, often do not hesitate to exploit consumers.