Intl Business Essay

379 words - 2 pages

1. For private enterprise there a few pros and cons. Starting off with the pros is the increased profitability with more benefits due to the increased control of the company. A private enterprise is open to a free market with new resources and equipment with the opportunity for higher wages. However, the cons include a large amount of risk for investment. Alongside the loss of government own benefits and lastly the non guaranteed employment protection.

When looking at the state own benefits and losses there are more objectives to consider. The losses outweigh the ...view middle of the document...

While both enterprises have their beneficial aspects it's important to look for the one that best fits it's environment.

2. . No state can either privatize or nationalize 100% of the operations of companies without negatively effecting the the welfare of its citizens . while it can improve productivity, and increase efficiency it does however have negative effects. Primarily because it causes outreach, lack of concern, and job depletion. Outreach is often seen when companies impose their rules and regulations of their companies which can lead to riots and chaos against the beliefs of their citizens. The lack of concern can easily be implemented since companies can't adhere to all of the wants, needs, and demands of their citizens. Lastly, employees will not have the opportunity to grow and develop higher position in the company nor will they have the incentive to improve their work.

3. Moral hazard refers to a situation in which one party gets involved in a risky event knowing that it is protected against the risk. Pertaining to the benefit of having moral hazards is the security it brings knowing that if anything were to happen the company would be covered. However, the reputation of the company which pays a huge role amongst other companies and citizens will begin to deflate. The more a company risks everyone else's money the more everyone else with dislike them.

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