Pros And Disadvantages Of Privatization And Its Advantages On Some Business

1625 Words7 Pages
Privatization may have advantages on some business, but it also brings out some problems in another categories. Firstly, it actually reduces government revenue in long run. The government originally owned some shopping centres and carparks before the privatization of them to The Link, these shops actually make profit. Operating them require operation cost but the revenue generated by selling the products to people and renting spaces for shop owners can cover the cost. Profit could be made if they operate well. All revenues and expenditures will be taken charge by Link REIT after the privatization. In short run, the cost and expenditure of running the shopping centres and carparks are reduced so it can save government’s money. But in long run, the government will lose the profit generated by these shopping malls that could be originally earned by it if it does not privatize these centres to The Link.…show more content…
As privatization shift the original state owner to a new owner who focus more on earning profits, the working system may change so as to increase efficiency. Managers may want to hire new employees who are more qualified with higher skills to increase the quality of work. Some old or low-skilled workers may be fired or decrease their working hours. If the owner decided to change the working system, employees may need to learn how to do the new work and their job nature will be changed. And as there is a new system, employees may not keep on having their current employment welfare like medical welfare, holidays, etc. (Lau, 2014). Privatization emphasis on the business performance and is different from the government.(Parikh, 2013). As it focuses on employees’ performance, this will cause pressure to them. They may have worked for many years without such pressure, so they may not adapt to such changes and will then end up resigning their jobs or receiving lower income due to decreasing working hours or
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