Privatization Flashcards
What are ‘monopolies’?
One dominent seller in the market
What is ‘privatization’?
it’s the act of selling a company or activity controlled by the government to private investors
What does it mean to be ‘bankrupt’?
not having enough money to repay your debts
What are ‘nationalized industries’?
public corporations previously part of the private sector that were taken into state ownership
What are ‘natural monopolies’?
A situation that occurs when one firm in an industry can serve the entire market at a lower cost than would be possible if the industry were composed of many smaller firms
What does it mean to be ‘accountable’?
being responsible for the effects of your actions and willing to explain or be criticized for them
What’s an ‘incentive’?
It’s something that is used to encourage people to do something, especially to make them work harder, produce more, or spend more money
What does it mean to be ‘diversified’?
if a company or economy diversifies, it increases the range of goods or services it produces
What’s a ‘hostile takeover’?
it’s a takeover that the company being taken over does not want or agree to
What are ‘takeovers’?
It’s the act of getting control of a company by buying 50% of its shares
What is a ‘trade union’?
It’s an organization representing people working in a particular industry or profession that protects their rights
Why does privatization take place?
Privatization takes place to generate income for the government, improve the efficiency of public sector organizations, and reduce political interference in business operations.
How does privatization affect consumers?
It is hoped that consumers will benefit from privatization as businesses in the private sector are under pressure to meet consumer needs and return a profit for the owners, leading to efficiency and quality improvements
How does privatization affect workers?
Privatization can lead to job losses and increased pressure on workers to raise their productivity and adopt more flexible working practices, which may weaken companies through the loss of experienced staff
How does privatization affect businesses?
Once in the private sector, firms face competition and profit becomes an important objective, leading to increased investment, mergers, takeovers, and diversification into new areas.
How does privatization affect the government?
Privatization generates revenue for the government but can be expensive, with criticisms of sales being conducted too cheaply and with excessive advertising costs. It allows the government to focus more on its core functions and avoid interference in business operations.
What is the significance of natural monopolies in the context of privatization?
Natural monopolies occur when one firm in an industry can serve the entire market at a lower cost than would be possible if the industry were composed of many smaller firms. Privatization of such industries can lead to more efficient operations under private ownership.
Describe contracting out in the context of privatization.
Contracting out involves allowing contractors to bid for services previously provided by the public sector, such as school meals and hospital cleaning
What are the implications of privatization for trade unions?
Privatization may lead to job losses and changes in working conditions, affecting the role of trade unions in representing workers’ rights.
