QS Study

Advantages or Arguments in Favor of State Enterprise

If the state gets the ownership on continual at any business directly or indirectly incest it that business is called as the state enterprise. The business controlled or operated by the government is known as a state enterprise. It can be either formed by the government or the government may take the ownership and custody of any private company.

In the modern business world, besides private enterprises, state enterprises are also playing important roles in developing countries economic condition. We can see state enterprises more or less in every country. The advantages or arguments in favor of state enterprise are given bellows:

Public welfare: State enterprises are established and operated for the public welfare, that’s why people get the chance to take more services from state-owned enterprises. People can get more benefits if state enterprises are established in the reduction of essential needs like electricity and distribution water supply etc.

Dissolve monopoly: Few people manage to make and keep a lot of money in their hand which is harmful to any country state enterprises are established to disable monopoly business. By dissolving these harmful profit-making business people get more benefits.

Preservation of Wealth: State organizations take the responsibility to protect country’s wealth such as minerals, forests, fisheries, and wild wealth etc. If maintenance of these resource to the hand of private owners, then wastage will increase. Someone can use these resources for personal benefits.

Employment opportunity: By establishing state enterprises, government ensuring employment opportunities for the unemployed peoples of the country. A huge number of people can get employment because of its large size. This will help to remove the unemployment problem.

Industrialization: Because of the shortage of capital one person can’t establish a big industry. It is impossible for one individual to gather so much money for these kinds of industries. On the other hand, there is a huge capital to be needed for establishing a state enterprise which is provided by the government for rapid

Public accountability: For the success and failure of state enterprise, public accountability is the must. Employees have to give an explanation to the people about all the activities included in the state enterprise. That’s why employers cannot operate this organization at their own willingness. The employees are always alert to their work.

Research and Development: Research is needed for invention, developing products quality expansion of the market, development of technology etc. These research activities are very costly and time bounded. Only state enterprise can give the facility of research and development.

At last, we can say that these enterprises have huge advantages for the country but sometimes it may create a negative impact on the free market economy. It is possible to get financial prosperity and social prosperity by operating state enterprise. But for the development of state enterprise the proper planning, good management, and active supervision are indispensable.