Meaning of Commercialization, Purpose, and Demerits
What is Commercialization?
Commercialization is the process of running a previously publicly owned and managed enterprise in such a way as to make it operate as a profit-making venture and more efficient.
In Commercialization, the ownership or government shareholding is not transferred to private ownership rather the enterprise is reorganised in such a manner that will improve its efficiency, and effectiveness and maximize profit. The enterprise is subjected to market discipline, while still remaining a public enterprise.
Reasons for Commercialization:
(i) The need to pull the economy out of economic recession necessitates the commercialization of public corporations. There are so many wastages associated with public enterprises. As the economy dwindles, there is a need to take a bold step to rescue the economy.
(ii) Efficiency: Commercialization will create a more conducive market environment for effective, efficient, and profit-making public enterprise.
(iii) To reduce undue red-tapism that delays the speed of actions and services among public enterprises.
(iv) To remove political interference that stifles management initiatives and results in poor performance.
(v) To restructure and reorganize the economy, reduce wastages, improve efficiency, high quality of goods and services, and increase profit margin.
(vi) To reduce government annual grants to public corporations. Such funds will be put to better use in diversifying the economy.
Demerits of Commercialization:
(i) The consumers (the public) may have to pay more for goods and services.
(ii) There may be To use someone or something unfairly for your own advantage. More of the people for still poor quality goods and services.
(iii) Consumer Sovereignty is a political concept that refers to dominant power or supreme authority. In a monarchy, supreme power resides in the "sovereign", or king. In modern democracies, sovereign power rests with... More is jeopardized. Their complaints about poor quality service delivery are not adequately attended to.
(iv) There is an arbitrary increase in the prices of goods and services. These increases are not commensurate with the quality of goods and services provided.
(v) It can increase the gap between the poor and the rich.