Privatization in developing countries Assignment

Privatization in developing countries - Assignment Example They start to register losses and the management fails at delivering their goals (Gianaris 57). Each of the management cycle and rules comes with certain advantages and disadvantages; likewise the concept of privatization also comes with certain advantages and disadvantages. If we look at the pros we would conclude that privatization places its operations in the ownership of private enterprise, these are more responsive to customer services because they deal with great competition in the industry and they have to perform well to gain market share. The Government cannot take undue advantage of the industry and they are not bound to perform under limitations. Privatization also provides a one off boost of cash flows to the government and the same money can be invested in other projects or to meet short term liabilities. Privatization of the industry loses its monopoly and that is why the same product could be sold at a much competitive price with enough supply to meet the demand. Another advantage of the concept is it leads to innovation in the product and other features that le ads to a better understanding of the customer needs and requirements Few of the disadvantages that are related to privatization are the cost of transaction is too high, the public monopolies are now private monopolies and the competition is still less in few of the industries, Government privatizes its industries because they are short of cash flows or are high on debt and for that reason they sell their industries for a much cheaper cost and value than it would have been sold under normal circumstances, the private business closes down the operations which are performing well and so a lot of jobs are lost and sections are closed and the investment goes in the hand of few even though it is sold to a huge majority. Margaret Thatcher was one of those people who introduced