A Study for Improving the Financial Adminstration of the Governmental Department-Type Enterprises in Korea

Abstract

The purposes of public enterprise activities and the varieties of ways in which government conduct them virtually defy classification. In some cases commercial-type activity may be so mingled with traditional departmental activity that its enterprise character is lost. Conversely, enterprise activity may be endowed with governmental authority but may in all other respects remain private in nature; without political control, without budgetary control, conducting programs with no discernible relation to other government programs. At considerable risk of oversimplification, three organizational forms of public enterprise may be distinguished. First are the undertakings controlled by departmental administration, which may loosely be described as incidental commercial activities. These may be almost wholly integrated with departmental finances, or may be partially isolated and financed by means of a working capital fund. A second organizational type is the joint stock company, which is established under general incorporation statutes with shares of common stock as evidence of ownership rights. The shares of stock may be owned by government, in whole or in part. Control over the company may be exerted through exercise of the ownership rights attaching to the common stock; or the government may refrain from exerting its ownership rights, and control may, for all wholly private as if government had simply loaned funds to a private corporation.