Pedap » business

Worker buyouts

peda — Wed, 13 Jan 2010 09:27:17 +0000

Worker buy-outs almost always fail. First of all, workers rarely own or can borrow sufficient money to buy the enterprise, much less to replace antiquated machinery. And they tend to be inexperienced in those areas in which businessmen specialise – borrowing money, issuing shares, insuring their company and marketing their products. Entrepreneurship is an unusual and demanding skill, and most workers – indeed most human beings – do not have that skill. So turning a company over to its workforce is often the cruelest strategy, because then the company dies a slow, lingering death as workers struggle to do something beyond their capabilities.

The same can be said of privatising companies to the current crop of cooperatives. Today these tend to be public sector enterprises, which have most of the shortcomings of other SLPEs. Of course, if cooperatives were converted into Mutually Aided Co-operative Societies and developed a proven track-record of commercial success, then they might well be equipped to rescue a former government-owned company.

Benefits

peda — Fri, 14 Aug 2009 07:22:33 +0000

Privatisation is the best way to resuscitate and rebuild weakened State Level Public Enterprises (SLPEs).

Privatisation :

* Stops loss-making SLPEs from adding to government debt;

* Depoliticises SLPEs, remove governmental pressures for over-manning and the sub-optimal use of resources;

* Gives new owners a strong incentive to turn around failing SLPEs into successful businesses;

* Gives new businesses access to investment capital that government cannot provide;

* Raises more money for government through taxing former SLPEs;

* Expands an enterprise and an industry, in the long run creating more jobs and generating wealth for the country.

Public enterprises

peda — Mon, 29 Jun 2009 01:12:36 +0000

Public enterprises, privatisation