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List out the strategic issues which arise out of disinvestment of publ

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List out the strategic issues which arise out of disinvestment of public enterprises. 


Posted on : 2022-03-31 15:09:13 | Author : IGNOU Academy | View : 25

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Word Count : 620

The disinvestment of public enterprises is a complex process that involves the sale or reduction of government ownership in state-owned companies. While this strategy has potential benefits, it also gives rise to several strategic issues that must be carefully managed. Here is a detailed exploration of the strategic issues associated with the disinvestment of public enterprises:

1. Political Sensitivity:
   Disinvestment is often a politically sensitive issue as it involves a shift from government control to private ownership. Public enterprises are viewed as national assets, and any move to privatize them can trigger political resistance. Managing public perception and gaining political support becomes a critical challenge for policymakers.

2. Employee Concerns:
   The privatization of public enterprises can lead to workforce downsizing, changes in employment terms, and concerns about job security. Labor unions and employees may resist the disinvestment, leading to strikes and protests. Managing these concerns and ensuring a smooth transition for employees becomes a critical aspect of the disinvestment strategy.

3. Valuation Challenges:
   Determining the fair market value of public enterprises can be challenging. Overvaluation or undervaluation can have significant financial implications. The government must employ robust valuation methods and ensure transparency to avoid criticism and legal challenges.

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Degree : MASTER DEGREE PROGRAMMES
Course Name : Master in Business Administration
Course Code : MBA
Subject Name : Management of Public Enterprises
Subject Code : MS 92
Year : 2022



IGNOU MS 92 Solved Assignment 2022
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