Business 1.1 Flashcards
What is the definition of Privatisation?
The act of selling state-owned and controlled businesses to private investors
What are some Arguments for Privatisation?
-Profit motive for private firms -> higher efficiency -> compared to state owned businesses
-bureaucracy in state owned firms -> slow decision making
-increased motivation -> for workers and managers -> responsibility on their hands
-Sale of state owned firms -> raise financing -> for other gov projects
-Financial reasons (Eg: keep electricity price down)
Arguments Against Privatisation
-Break up nationalised industries -> reduce opportunities -> for cost save through EOS
-Strategic industries -> when privatised -> act as monopolies
-many private firms-> harder to achieve coordinated policy->to benefit whole country
-state owned firms -> can be held accountable to country
What is the definition of nationalisation?
Transfer of privately owned business to state control
What are some arguments for Nationalisation
Government have control of major industries
Integrated industrial policy (eg: water supply) is possible
Prevents private companies being monopolies and exploiting consumers
EOS can be achieved -> merging private businesses into one nationalised firms
What are some arguments for Nationalisation
Government have control of major industries
Integrated industrial policy (eg: water supply) is possible
Prevents private companies being monopolies and exploiting consumers
EOS can be achieved -> merging private businesses into one nationalised firms
What are some arguments against nationalisation
Less profit motive -> less incentive to operate efficiently
Government give subsidies -> loss making industries -> more expensive for gov
Gov intervene too much on decision making for political reasons
Cost of gov buying firm is high
Removes abilities to raise finance from private source (stocks)
How does Government use laws for employment practices
To control the relationship between employees and employers by:
-Prevent exploitation of workers
-Prevent loss of industrial output and national income: due to excessive use of trade unions
What do legal constraints cover?
-Recruitment, employments contracts and termination
-Health and Safety of work
-Minimum wage
-Trade union rights
What is included in a written contract during employment
Pay
Working condition
Disciplinary measure
Holiday and pension entitlements
Minimum age that can work
Discrimination is illegal
When can unfair dismissal be claimed?
Pregnancy
Refusal to work on holiday
Refusal to work overtime if exceeds 48 hours per week
Incorrect dismissal procedure
Member of trade union
