'explain what privatisation is and what are the important issues for business world'?

Answer 1

The general rule-of-thumb is that the marketplace will provide the public sector with all goods and services that a society would need.

This 'fails' under certain circumstances with modern society. If roads need to be built across state lines, or a telphone system, then the costs and cooperation needed end up being too prohibitive, for any one company to perform.

Hence the government steps in and creates a govn't agency, or a quasi-govn't entity to get the job done. Typically these organizations are beyond the normal supply and demand and competiveness features found within the private sector for lowering prices, and enhancing services (aggressively).

The idea of "privatization" is to move these quasi-govn't 'things' to the private sector and reap the benefits that come with better mgmt. and lower prices.

Answer 2

The above are correct. To put it simply ; selling government enterprises to the private sector.

Whilst these enterprises are in the public sector (owned by the government) they can run at a loss and be subsidised by tax payer funds.Private businesses in the same industry find it hard to compete so don't enter or have to be good at providing that service/good to make a profit.

Privatisation means that all businesses are put on the same footing and competition occures in that industry.

Answer 3

Privatisation means taking something out of public ownership and selling it off to private individuals...For example, the viable assets of the Soviet union were sold off to influential Party members, who then became very rich...In the UK, commodities such as the water companies were allowed to stagnate (scuse the pun) then were sold off to private companies who milked them of profits but didn't reinvest much...before re-selling them...basically, whatever money was being squandered under public ownership is usually perfectly balanced by the excess profits made when a commodity comes under private ownership..and they say perpetual motion doesn't exist?