Divorce of ownership and control and other business concepts
Powertel is an example of a Public corporation being run on a commercial basis. Image credit techzim.co.zw
ZIMSEC O Level Business Studies Notes: Divorce of ownership and control and other business concepts
Divorce of ownership and control-as businesses grow from say sole traders, partnerships, public limited companies control becomes increasingly separate from ownership i.e. those who run the business (the Board of Directors) are usually not the same people as the shareholders.
Merger-the joining of two or more entities to form one entity. Mergers are a form of growth.
Commercialization– this is when a public corporation is run along the principles of privately owned businesses in a bid to make it more efficient. This usually involves the corporation being run with a profit motive. For example Powertel a subsidiary of ZESA is run along commercial principles.
Privatization-involves taking a government owned business and converting it into a privately owned industry. For example Dairiboard was turned into a private limited company.
Deregulation– is the reduction or removal of laws and regulations that hinder free competition in the supply of goods and services. For example the Zimbabwean government has deregulated the Fuel and meat markets which were previously the monopoly of NOCZIM and CSC.
Nationalisation-this is when strategically important private businesses are appropriated by the government into public corporations. This is usual in the case of Oil companies and mines such as Hwange and industries such as ZISCO. Nationalization is the opposite of privatization