Topic B
B1 - Firms
Key points 1 - Public Copportaions & Government Departments:
- Public ownership = ownership of a government body w/ the right to…
- possess
- control
- use
- dispose of properties
- There are 2 forms of public ownership
- Government departments
- Branches of a gov. org. that is completely owned, managed, financed by the gov
- E.g.: Fire Service Department, Water Supplies Department
- Public coporations
- Firms that are incorporated by statue
- Owned by gov but independenly financed (excluding initial financial capital investment)
- Gov appoints board of directors to manage it
- E.g.: HK Int. Airport managed by the Airport Authority & Ocean Park managed by the Ocean Park Coperation
Key points 2 - Public Copportaions > Government Department:
- Public coporation operations are more flexible
- Has higher incentive to lowr production cost
- Can efficiently use resources to avoid wastage
- Employer can have better control over employees
- Public corporations responses better to consumers demand (i.e. be more innovative)
Key points 3 - Public Copportaions > Private companies:
- Public Coporation can have lower interest rates on loans borrowed since it’s financially backed up by gov.
- Has better overall planning in transportation services
- Gov. can recevies dividends from these corporations
Key points 4 & 5 - 2 types of private ownership:
- Owners with unlimited liability
- 1 person in charge = sole proprietorship
- Owners with limited liability
- 2-20 ppl in charge = partnership
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