Autonomy in Public Enterprises

Autonomy denotes to freedom in internal day-to-day actions and organizational management. It is a state of being free from any kind of pressure in operational and financial matters of the organization. The aim of advocating about the autonomy is to get the freedom in such matter which can drive the public enterprises in maximum social welfare. Autonomy does not mean to be completely free from government intervention but it refers to be independent form politics and any undue pressure from the side of government. It means to be independent in tiny matters. Government should only evaluate the overall performance of the enterprises but not the daily activities.   BBC English Dictionary defines autonomy as ‘autonomy is the control of organization by itself’. Defining autonomy Prof. Shyam Joshi (Public enterprises Management, 2060 BS p. 66) states “autonomy means full freedom of internal management unhindered by pressures from state agencies but subject to social objectives adopted by the state” (cited from a report of India).

This is always a debatable issue that whether Public Enterprises should be given complete autonomy or not. Some scholars argue that the autonomy leads to higher productivity, more public accountability and maximum social welfare where as some other scholars are against the opinion. Advocating autonomy in public enterprises R. K. Sapru writes, “Public enterprises should be given sufficient autonomy so that they may be run on commercial lines efficiently and they may achieve their objectives”.  Due to the low level of autonomy in departmental public organizations, public corporations and public companies were established, as a result of search of autonomy in working.   But they, too, are not getting complete autonomy.

                                                                                            

Operational Autonomy: - Operational autonomy denotes to the freedom in day-to-day administrative functions.  This includes running day to day activities as by need of the public enterprises to achieve the organizational goals. Operational autonomy also includes the autonomy in the activities like; appointing employees, their deployment, transfer and promotions.

Financial Autonomy: - This is a state where public enterprise can have its own financial mechanism apart from the government budget. Public enterprises are not directed directly by the limits of government budget. There is commercial auditing system and PE is free from government audit. Public enterprises have autonomy regarding the collecting the revenue, expending from its own sources.

 Why Autonomy?

As discussed above autonomy is essential for the smooth run of the public enterprises. They need operational autonomy and financial autonomy for attainment of the organizational goals. When government hooks public enterprises in operational and financial matters, public enterprises can’t operate for optimum performance.  Emphasizing  on autonomy of Public enterprises, Laxmi Narain (principles and Practices of Public Enterprises Management, 1994, p.225) says, “the assumption is that they need a larger degree of flexibility and informality in the decision-making and should not be held accountable like a department of the government for each and every action, but only for the achievement of objectives set out for them” He further emphasizes that individual business decision should not be scrutinized and the corporate personality should be respected. Hence, scholars advocate autonomy in public enterprises for:-

• Maximization of general welfare of the people
• Maximization of organizational performance
• Running enterprises in business line and commercial principles
• Increasing efficiency and responsibility
• Professionalization of management
• Attainment of organizational objectives
• Motivate management and employees for maximum performance
• Having quick decisions

Implementation of Autonomy

Government or ministers or line ministry should not interfere into daily activities. But they are liable to interfere in policy matters or in any serious matters through systematic channels or in written form.  Board of directors should be authorized to perform activities like essential goal setting and recruiting employees. Employees should be trained in such a way that they can perform as per need of the organization. Professionals should be hired into the organizations with related expertise.  Public enterprises should be completely free form civil servant influences. People and parliament should not directly look into the tiny issues but must evaluate overall performance of the public enterprises in a specific period of time.

Hence, public enterprise must be evaluated in performance sense, in overall performance, but should not be interfered in tiny issues. Managerial level must look into the tiny issues and must have authority for.
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