COMMERCIALISATION | Definition, Reasons, Merits and Demerits
This is a state policy of making its companies, enterprises, parastatals, etc, more efficient and even more profit oriented. It will also make these organisations come up with efficient management resources.
Reasons for Commercialisation
Efficient management: Commercialisation makes for efficient management of most industries.
Collective or individual ownership of enterprises: Opportunity is created for collective or individual’s participation in the country’s economic activities.
Revenue generation: More revenues are generated for the government through commercialization.
Extinction of enterprises: Commercialisation creates the opening for the economy to experience the extinction or exit of enterprises that are unproductive.
Profit-oriented: Efficient and effective management of industries, enterprises, etc could result in making them more profit oriented.
High cost of goods produced: This may be out of the reach of the consumers. This is because the high cost of produced goods is passed to consumers as a result of the company’s set objective which is profit maximization.
Fall In people’s standard of living: Commercialisation in most cases leads to a drastic fall in people’s standard of living. This is a result of most organizations policy of profit maximization over and above the economic well being of the people, even by exploiting them.
Laying off workers: There is always a reduction ofworkforee in many industries as a result of cemmereialisation.
Consumers’ welfare scheme under threat: Consumers’ welfare scheme are mostly neglected owing to commercialisation.
Uneven distribution of income: Income is unevenly distributed as a result of the policy of commercialisation. Few people now control the means of production of goods and services in the system.