Theory question 106
Business OrganisationsSection B (answer four questions only from this section)
(a) What are public corporations?
(b) State any four merits of public corporations
Show the model answer
Model answer
(a) Public corporations are business enterprises set up by an Act of parliament or decree, owned, financed and controlled by government and run by a board appointed by government, mainly to provide essential services, e.g. power, railways.
(b) Any four: provide essential services at affordable prices; prevent private monopolies exploiting consumers; can undertake projects too large for private firms; create employment; profits go to government for public use; encourage balanced development (services in rural areas); protect national security in strategic industries.
Explanation
Four distinct merits are needed.