Impact of Privatization on Organization’s Performance
Impact of Privatization on Organization’s Performance
Abstract
The proposed research is intended to assess the impact of Privatization on Organization’s Performance. The main theme is to examine its impact on profitability, output, efficiency and employment. It will be analyzed to compare the performance of public and private sector organization in Pakistan.
Keywords: Privatization, profitability, output, efficiency and employment
Introduction
Despite frequent changes in the governments since 1985, five regularly elected and six care takers, there has been consensus on the continuation of privatization policy and as such it is expected to be cornerstone of all the future government policies, at least in the near future. Instead of arguing the merits or demerits of the privatization policy, we explore its impact on the levels of efficiency.
A large number of public sector units have already been divested and a number of other public enterprises including telecommunications and thermal power stations have been placed on the privatization list. Nevertheless, serious doubts have been expressed about transparency of the bidding process and the impact of privatization on efficiency, investment, production, prices, employment and fiscal deficit. Accordingly, there is a need to identify constraints in realizing various objectives of privatization with a view to suggesting concrete policy measures that may be taken to overcome the constrain and to improve the performance of the organization.
Divestiture of assets is not new to Pakistan though the motivation for divestiture has not been the same in different time periods. During the 50s and the 60s, public sector used to invest in non-traditional activities especially where the gestation period was long and private sector was reluctant to invest. While a large number of private sector units were nationalized and public sector expanded at a rapid rate in the 70s, an effort to divest
Abstract
The proposed research is intended to assess the impact of Privatization on Organization’s Performance. The main theme is to examine its impact on profitability, output, efficiency and employment. It will be analyzed to compare the performance of public and private sector organization in Pakistan.
Keywords: Privatization, profitability, output, efficiency and employment
Introduction
Despite frequent changes in the governments since 1985, five regularly elected and six care takers, there has been consensus on the continuation of privatization policy and as such it is expected to be cornerstone of all the future government policies, at least in the near future. Instead of arguing the merits or demerits of the privatization policy, we explore its impact on the levels of efficiency.
A large number of public sector units have already been divested and a number of other public enterprises including telecommunications and thermal power stations have been placed on the privatization list. Nevertheless, serious doubts have been expressed about transparency of the bidding process and the impact of privatization on efficiency, investment, production, prices, employment and fiscal deficit. Accordingly, there is a need to identify constraints in realizing various objectives of privatization with a view to suggesting concrete policy measures that may be taken to overcome the constrain and to improve the performance of the organization.
Divestiture of assets is not new to Pakistan though the motivation for divestiture has not been the same in different time periods. During the 50s and the 60s, public sector used to invest in non-traditional activities especially where the gestation period was long and private sector was reluctant to invest. While a large number of private sector units were nationalized and public sector expanded at a rapid rate in the 70s, an effort to divest
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