26 Outline two potential problems of a state-owned business

[Hajra]

[kn] One of the problem is lack of efficiency since these firms are not driven by profit they may have less incentive to cut costs or improve services.
[ap] For example, a government run railway service may continue to operate unprofitable routes leading to financial losses. This can result in higher taxes or reduced investment in other public services creating an economic burden.
[kn] A second issue is political interference
[ap] Governments may prioritise political goals over business logic such as keeping a failing steel plant open to save jobs in a key region.
[an] While this may be popular with voters, it can prevent necessary restructuring and lead to long term financial inefficiency.

[Abdullah Mohsin]

[KN] A state owned business may suffer from inefficiency.
[APP] For instance, a govt. owned airline would keep excess staff in order to reduce unemployment and fly out-dated planes with poor fuel consumption as the business does not have to worry about reducing costs.
[AN] As a result, this leads to waste of resources and poor productivity, reducing the revenue of the business and the income of the government.

[Qasim_Mahmud]

Kn: State owned business are owned and runned by the government
App:For example a government owned airline may overstaff to reduce employment
Analysis:This can result in wastage of resources lower productivity and financial losses

[Mahnoor satti]

[KN] Political interference
[APP] For instance, to gain more votes and support a government would keep the prices low to keep the people satisfied.
[AN] Thus this will lead to the businesses not making profit making it inefficiency, also the quality may fall over time leading to finance issue and losses.

[M huzaifa jillani]

(Problem1)
(KN)
State owned businesses may be inefficient because they donot face strong competition.
(APP)
For example Pakistan railways is often criticised for delay and poor service.
(AN)
This means resources may maybe wasted and customers may not get good value.

(Problem 2)
(KN)
Political interference can affect how the business is run .
(APP)
For instance government might keep prices of electricity from WAPDA low to win votes.
(AN)
This reduces profits and may stop the business from investing in better services.

[Ruqyia Salman]

[KN] One problem is lack of efficiency since profit is not the main objective.
[APP] For example, government-run transport services may have slow decision-making and higher costs.
[AN] This can lead to wasted resources and lower quality of service for the public.

[KN] Another problem is political influence.
[APP] For instance, decisions about hiring or investment may be made to win votes rather than improve performance.
[AN] This reduces competitiveness and may create financial losses for taxpayers to cover.

[Uqbah hadeed kayani]

[kn] Two potential problems of a state-owned business are inefficiency and political interference.
[app] For example, a government transport company might face poor service quality and leadership changes based on politics.
[an] These issues reduce productivity, slow decision-making, and lower customer satisfaction since profit and efficiency are not the main focus.

[Haiderabbas]

KN: The first problem is inefficiency.
APP: e.g in a foreign office an amendment has to go though multiple stages before it is accepted leading to bureaucratic muddle.
AN: Due to this, decisions take a lot of time to be accepted, so people are left annoyed and a lot of funding is decreased due to corruption.

KN: The second problem is political influence.
app: e.g Major decisions in a state owned school may be made due to political pressure from a large induvidual doner.
AN: This leads to ineffective steps being taken which leads to a decline in productivity, in turn making the business a failure.

[sarah_naeem]

[KN]: One problem of a state-owned business is lack of efficiency since the main objective is not profit.
[APP]: For example, a government runs transport company which might face higher costs and poor service quality since the main objective isn't profit.
[AN]: Thus, this would lead to slow decision making and would also reduce productivity and would further lose people's trust in government services.

[KN]: Another problem would be political interference.
[APP]: For example, a government might reduce prices to gain votes by satisfying people.
[AN]: Thus, this would lead to poor financial stability which would further lead to decline in the quality of service making the business fail and not survive for a long time.

[Areeba Arshad]

[KN] State-owned businesses are controlled by the government, which can create certain management and performance issues.
[APP] For example, a government transport company might face inefficiency due to lack of competition and political interference in decision-making.
[AN] These problems can lead to poor productivity and higher costs, reduce service quality or innovation and cause financial losses if decisions are made for political gain rather than efficiency.

[Tuqwa]

KN:A state-owned business is controlled by the government, and this can create certain management and performance problems.
APP:One problem is inefficiency, as the lack of a profit motive may lead to higher costs, waste, and lower productivity. Another issue is political interference, where decisions are made to gain public approval or votes rather than to improve business performance.
AN:As a result, resources may be misused, and the business may fail to operate effectively or compete with private firms.

[Daris]

KN: One potential problem of a state-owned business is inefficiency.
APP: For example, because there is no profit motive, a government-owned factory may not try to reduce costs or improve productivity.
AN: This can lead to higher operating costs and wasted resources. Over time, the business may deliver lower-quality services and struggle to compete with private companies, reducing overall effectiveness.