Bold Management due to Operational Autonomy
A public corporation enjoys internal
operational autonomy; as it is free from Governmental control. It can,
therefore, run in a businesslike manner.
Management can take bold decisions involving experimentation in its lines of
activities, taking advantage of business situations.
Affairs of a public corporation are
subject to scrutiny by Committees of Parliament or State Legislature. The Press
also keeps a watchful eye on the working
of a public corporation. This keeps a check on the unhealthy practices on the
part of the management of the public corporation.
Qualified and Constented Staff
Public corporation offers attractive
service conditions to its staff. As such it is able to attract qualified staff.
Because of qualified and contented staff, industrial relations problems are not
much severe. Staff has a motivation to work hard for the corporation.
The special Act, by which a public
corporation is created, can be tailor-made to meet the specific needs of the
public corporation; so that the corporation can function in the best manner to
achieve its objectives.
Not Affected by Political Change
Being a distinct legal entity, a public
corporation is not much affected by political changes. It can maintain
continuity of policy and operations.
Lesser Likelihood of Exploitation
The Board of Directors of a public corporation
consists of representatives of various interest groups like labour,
consumersetc. Nominated by the Government. As such, there is lesser likelihood
of exploitation of any class of society, by the public corporation.
Reasonable Pricing Policy
A public corporation follows a
reasonable pricingpolicy, basedoncost-benefitanalysis. Hence, public are
generally satisfied with the provision of goods and services, by the public
Autonomy and Flexibility, Only in Theory
Autonomy and flexibility advantages of a
public corporation exist only in theory.
In practice, there is a lot of
interference in the working of a public corporation by ministers,
government officers and other politicians.
Misuse of Monopolistic Power
Public corporations often enjoy monopoly
in their field of operation. As such, on the one hand they are indifferent to
consumer needs and problems; and on the other hand, often do not hesitate to
The constitution of a public corporation
is very rigid. It cannot be changed, without amending the Statute of its
formation. Hence, a public corporation could not be flexible in its operations.
Low Managerial Efficiency
Quite often civil servants, who do not
possess management knowledge and skills, are appointed by the government on the
Board of Directors, of a public corporation. As such, managerial efficiency of
public corporation is not as much as found in private business enterprises.
Problem of Passing a Special Act
A public corporation cannot be formed
without passing a special Act; which is a time consuming and difficult process.
Hence, the scope for setting up public corporations is very restricted.
Clash of Divergent Interests
In the Board of Directors of public corporation,
conflicts may arise among representatives of different groups. Such clashes
tell upon the efficient functioning of the corporation and may hamper its