Megawatt building. Image credit newsday.co.zw

Megawatt building. Image credit newsday.co.zw

ZIMSEC O Level Commerce Notes: Advantages and disadvantages of Public corporations/ Parastatals

Advantages

  • The government controls the provision of strategic products.
  • Provides products at cheap prices.
  • Provides employment to people.
  • Reduces duplication of resources .
  • Enjoy limited liability.
  • Implement government policies i.e. in terms of setting the prices of products.
  • Provide a source of income for the government thus reducing the tax burden.
  • Enjoy economies of large scale operation.

Disadvantages

  • Operate at below full capacity , oftentimes at a loss.
  • They are oftentimes inefficient and waste resources.
  • Tend to provide poor quality products since they are monopolies e.g. ZESA and its frequent power cuts.
  • There is political interference in their operation.
  • They are expensive to maintain and run.
  • There is a lot of bureaucracy which lead to further inefficiency.

To access more topics go to the Commerce Notes page.

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