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Privatization has been experienced by various organizations throughout the world over a long period of time. Various organizations that were owned and controlled by the government sector have been privatized due to the several benefits associated with privatization. One of the main reason due to which government’s tend to choose to privatize a previously state owned business is the failure of the government to operate the business in a an effective and efficient manner. This is mainly because government’s end up operating the business for the interest of politicians that are ruling the government and not working in the favor of the public of particular nation. This writing will focus on the various benefits that have experienced by organization due to privatization while debating the other side of the coin. Body Benefits of Privatization There have been various theories that favor privatization and there have been various practical incidences when privatization has resulted in huge benefits to organizations and even nations. Privatization is pursued by organizations because the public sector has failed to operate in a profitable manner and the management of public organizations has not done their job in a proper manner. Governments themselves favor privatization and this happens as a result of the increased burdens experienced by government because of state ownership of organizations. When organizations are controlled by the government, governments tend to provide goods and services to the public in shape of subsidies, the management of such organizations work for the benefit of the overall population rather than meeting the demands of individual groups due to which organizations fail to meet the demands of the public and the unions in state owned organizations exercised higher amount of power than unions of organizations that are controlled by the private sector. Due to failure of the government sector to address the needs and wants of the individual groups, individuals experienced dissatisfaction. According to surveys conducted by Donahue, in the region of United States organizations have experienced lower operating cost when they were privatized as compared to the period when they were under the control of the government (Holzer 88). Another reason due to which organizations become privatized is that governments do not operate with the main aim of maximizing profits for the organization and the shareholders of the organization. There tends to be ample amount of changes in the governance of organizations due to which these organizations become inefficient. Lastly, the pressure on governments is low as they do not have to worry about the bankruptcy of the organization as these organizations are never allowed to fail and they are financed by the tax money. Another reason due to which organizations are privatized is because this process helps the government in increasing their revenue. When organizations are owned by the public sector, organizations do not pay taxes and become a burden on the tax payers to continue operating as they even do not work to attain profits. When organizations are privatized, they are obliged by the regulations to pay taxes on the profits they make and the profits they earn are used to fund the operations of the organization. Due to increase in the amount of taxes obtained through private enterprises, government is able to decrease its budget deficit as they do not need to obtain loan for operating the nation and they operate the nations with the revenue earned
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Privatization of public enterprises has been a much debated subject over the years. To define, “privatization is the procedure of transferring possession of a business, enterprise, agency, or public service from the public sector to the private sector” (Times of Switzerland).
According to Dominguez’s report on Social Security and Medicare future funding, it has been postulated that both programs are expected to run out of funds sooner than anticipated. While the government’s health insurance for the elderly is predicted to come in 2024, Social Security will be depleted 12 years later; with both predictions associated with the increasing aging population coupled with the sagging economy.
Water Privatization in Argentina.
Globalisation has sparked a concern that spurs a new insight in provision of water and sanitation services; especially in cases where a government runs short. There exists enormous demand for efficient water systems whose aspects include the supply of clean water as well as the removal and treatment of sewage.
In America, private prisons started in 1984 when the federal and state government granted Correction Corporation of America permission to run a prison facility (America Civil Liberties Union 10-13). Hence, in 2009 there was booming number of private prison facilities in United States.
To a great extent such aspirations are valid, considering the fact that various researches and papers have time again decried the inefficiency, financial irregularities and the lack of accountability rampant in the state run facilities and institutions. Besides the privatization of the public institutions leaves the governments less burdened, thus leaving them with ample time and resources at their disposal, to take care of more pressing responsibilities and obligations.
Airport privatization is a significant part of the aviation industry and the participation of private sector in the development and operation of airports is quite a conventional notion world-wide. This approach for privatization of airport and facility development is increasingly relied upon countries who find it intricate to develop and maintain their own airports.
As the benefits of modern medical practices percolated through the system, more and more people looked to medical care as a right. This made medical care a socio-economic issue, forcing the government to take responsibility for medical services under various schemes such as Medicare and the National Health Service (NHS).
For administrative leaders, benefits include gubernatorial approval and support (Gill and Rainey, 1998). Yet the rhetoric of capturing market efficiencies through privatization and contracting often masks the reality of administrative "load shedding" and the management challenges that accompany the transition" (Johnston, and Romzek 383)"
The term Privatization has several meanings. It is the transfer of some sort from the government to the private sector. It is the transfer of government-owned organizations to the private sector, either to a business making profits or even not-for-profit organizations. This term also refers to the sale of shares in government-owned industries.
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