Definition of Corporatization:
Process of reorganizing government owned organizations to reflect the structure of a publically owned corporation. The restructuring of the government entity is generally not publicly traded with the government being the sole shareholder.
Corporatization refers to the restructuring or transformation of a state-owned asset or organization into a corporation. These organizations typically have a board of directors, management, and shareholders. However, unlike publicly traded companies, the government is the company's only shareholder, and the shares in the company are not publicly traded.
The main goal of corporatization is to allow the government to retain ownership of the company while allowing the company to run as efficiently as its private counterparts. Government departments are often inefficient due to internal bureaucratic conventions. Additionally, the government may consider that joining the private sector might improve a company's performance. If this is the case, the government might conduct an offering on the stock market to divest the organization.
How to use Corporatization in a sentence?
- Corporatization is often applied to utilities such as electricity or water providers.
- Corporatization occurs when a government attempts to reorganize the structure of a government-owned entity into one that resembles a private entity.
- Corporatized companies tend to have a board of directors, management, and shareholders but the government is the only shareholder, and the shares in the company are not publicly traded.
- The goal of the government is to retain ownership while allowing the entity to operate efficiently and competitively.
Meaning of Corporatization & Corporatization Definition