Reasons for the establishment of public corporation

[Mastergp]

They are things that warrant government participation or ownership of business enterprise they include the following:

High capital requirements:
Public corporation usually require heavy capital outlay, which may not be affordable by private enterprises.

Generation of revenue:
Publics corporations help the government to generate revenue needed to finance other government projects.

To prevent foreign dominance of the economy:
Government can venture into some enterprises in order to prevent or reduce foreign control of the economy by foreign investors.

To provide infrastructural facilities:
Government establishes certain enterprises to provide infrastructural facilities like roads and railways on which returns may not be forthcoming and which may, therefore, not attract investment by the private sector.

To prevent monopolistic tendencies:
Public corporations are set up to prevent monopolistic tendencies resulting in very high prices or charges if undertaken by private enterprises.

 

[King bell]

Public cooperation are organizations that are not owned by one individual or a small group of people. Businesses often work in this way, but they are not the only type. There are many benefits to private companies over public corporations that is why governments often establish these corporations and their use contrasts greatly with private ones. More often than not, public corporation are found in developing countries where the lack of private capital is an issue and there needs to be a way for businesses to be established without being funded by several investors.

Some other reasons for the establishment of public corporation include: creating jobs, providing basic services such as water and electricity, market regulation, etc...

People are often skeptical of private companies as they believe that individuals looking to make a profit will compromise their morals. Public corporations don't have this same problem as they are controlled by the government and in the interest of the public good. This is yet another reason that public corporations are established.

Generally, when a country is expanding, it is common for them to establish public corporations to ensure that many citizens have access to necessities such as food and water because these necessities could not be provided for by private companies.

 

[Jasz]

The reasons for the establishment of public corporation are:

First, to promote market efficiency. The government has the right to establish a public corporation since it is an instrument to promote market efficiency. For example, the state-owned enterprises have been playing an important role in promoting economic development and should be given more freedom to operate.

Second, to protect the interests of citizens. Public corporations are established by the Constitution which aims at protecting the interests of citizens. For example, if a private company or individual commits illegal act against others through his/her own means, he/she may be fined but if he/she commits illegal act by using public funds or other means he/she will be punished according to law. So public corporation is established by law and its owners need to obey law just like any other citizen does.

To provide financial aid to poor people, who cannot afford to pay their tuition fee at private universities and to encourage innovation by making research and development projects more affordable for small companies and startups.

 

[Holicent]

The establishment of public corporation was a result of the extensive growth of the economy. The government had to take over this responsibility to manage the public business.

The main reason behind establishing public corporations was to provide greater services and improve quality of life for the people. It was also supposed to be part of a reform movement aimed at making government more efficient and accountable.

In addition, there were several other reasons that could have led to the establishment of public corporations.

To improve productivity through increased efficiency and output; To reduce corruption through increased transparency; To increase transparency by enhancing accountability; To facilitate access to information by making it available on-line; To create jobs for the masses by creating new industries; To reduce crime by improving law enforcement; To promote national unity by providing jobs for locals instead of foreign workers. Public corporations must also fulfill their duties according to law and regulations set by government agencies responsible for regulating those companies.