welcome back to learn skn and today we'll continue looking at unit 1 of management of business so we would have covered a whole number of topics on the unit 1 software and so even under this section private sector organizations we have covered the partnership the sole traded the private company the franchise and so we are the last one to cover under this stock Top This heading the joint venture right we're going to call it joint venture today and we'll see we will get from there so before we jump into it remember to like subscribe hit the Bell also don't forget we have the the past papers and textbooks and slides and stuff for sale for certain subjects in the description all right so let's just jump into it so what is a joint venture now as the name suggests joint venture we're doing this thing together where we're coming together to achieve a certain goal and so a joint venture is a business that is jointly owned by two or more parties or firms in order to undertake an economic activity so this is these are two separate companies huh two separate companies coming together for just a specific reason they're not merging one isn't buying the other they are independent of each other but yet they're coming together to still do a certain thing right so both parties continue their original operations separately but pull the resources to carry out the purpose of the venture there should be an arranged agreement to contribute Capital to The Entity and to share revenues expenses and the control of the business while a joint venture is similar to a partnership it is usually formed for a short time with a limited or specific purpose and I have some examples here for example in 2001 that's way back when way back when price match announced its joint venture arrangement with restaurant of Jamaica to establish a store in Jamaica in 2008 Production Services Network PSN formed a joint venture with cancer Production Service limited based in Trinidad other famous ones you might know those who are into cars those are in 2005 I think where Toyota and Subaru decided to you know come together and build different cars with different you know using similar Technologies and so that Venture created two different Vehicles using similar Technologies I think one was the Subaru what was it the BRZ sport Cam and the Toyota 86 sport car so those those who are into cars know about this right the Toyota 86 and the Subaru B is the sport car they were a part of a joint venture between Toyota and Subaru and next famous one would be Hulu some of you I know what Hulu is when Netflix was rising up you know threatening all the cable networks and stuff like that a bunch of them decided to come together namely namely ah Disney and also a news cop I think Fox had a patented too but it came together and they started a business Hulu in order to compete with Netflix in terms of streaming I think there's one there was one more company NBC Comcast NBC so NBC Universal so all of them came together and they operated Hulu the streaming company I think today they would have um some comments with about or more you know but that was the whole idea joint venture to try to combat the threat of Netflix and so this is what a joint venture is independent companies coming together for a specific purpose a specific purpose the reason for firms enter into Adventure Arrangement may include fast twin expansion by utilizing another company's resources again back to the Subaru and Toyota example I think they have a joint venture in terms of developing electric cars too right they're coming together putting the resources together to develop electric cars to try to get a hole in electrical market so to make use of other firm established distribution channels and dealerships you know cars there's diversification of product line to gain access to Advanced Technology and expertise to share cost and risk involved with the establishment of the Venture the part is involved in the Venture should draft a written agreement including but not limited to the following objects of the venture path is involved in the Venture amount of funding each party will contribute responsibilities for each party and management of the Venture so you have to outline exactly what this joint venture entails right because you don't want any confusion any confusion with them right good so advantages of joint ventures so of course you can see just from the outline that there are some advantages to a joint venture for example practice Shia assets which leads to fixed costs being spread over production therefore lowering costs of production imagine Toyota and super went into producing engines and so they use you know different Technologies the boxer engine that from Subaru and those things and so they were able to Mix and Match Technologies to get overall production costs down it doesn't make sense to go back actually to do r d and develop these things when you could work with someone and reduce the cost right uh faster specialization seems labor and management are shared between patties easily deserved right so if when things done you easily walk away from that because you don't have much commitment after that after whatever you're set out to do has ended there's a great access to resources including technology firm's benefit from expansion some disadvantages of the joint venture parties may have disagreements naturally that's just part of anything and so that can lead to falling out differences in culture and strategies may lead to poor integration so maybe different companies have different corporate culture they might even be located in different areas and so there must be a clash of cultures Clash of ideas Clash of styles Clash of leadership and so that might lead to problems decision making process may be long and tedious loss of Independence so all those advantages of the joint venture and so that's it for the joint venture right and so that's it basically for most of these private companies now I wouldn't even say companies per se but that's just the end of the private somebody private sector um type of companies no the next thing we're going to look at is going to be the public sector right the public sector organization like public corporation and statutory boards those are part of the public sector government side of the the economy so what we look at before is the private sector now we're going to look at some public sector organizations such as public corporations and statutory boards now what is the public sector as you say most mixed economies they have two different sectors the private sector the public sector the private sector is controlled by individuals or groups of individuals and they make the economic decisions the public sector is controlled by the government or the state our local Authority until the government is in charge of all the organizations under the public sector so the public sector includes businesses that are owned and controlled by the government or local authorities of a country the main purpose of these businesses business businesses is to provide some form of benefit to society and not make profits so the main aim is to basically for the benefit of the public for the country they don't really need to make profit there are certain things that if the economics you know you have certain Goods that the market would not produce so it goes in Market would not produce and so the government would take it upon themselves to produce those particular goods and so we have the public sector right here we have a number of different types of organizations under the public sector we have public corporations nationalized Industries statutory boards government departments local authorities we look at those in short order so public corporations public corporations are owned and controlled by the government they are usually formed by an arc of the parliament as a separate legal entity the capital outlay and financial of these corporations come from government funds acquired mainly through taxation unlike private sector organization public corporations are not aimed at making profits but rather at providing efficient Public Services service at the lowest possible price so again this is like a business but it is owned by the government and it operates for the main aim not to make a profit but to basically service the citizens right so like I said before if the private sector is not producing something at an optimal level or at a expensive level the government might be able to farm public operation and you know sort out that thing like you know you get things like Solid Waste Management corporations or things like that that deal with those kind of things right I might have some electric companies some utilities might be in charge under the care of the government man features of public corporations funny comes more funding comes mostly from Grants main aim is not to make profit and the accounting records are sent to the auditor general managed by directors appointed by the state right so those are some of the the the features of the public corporation public corporations are controlled by a minister of government who will appoint a board of directors to deal with the debt to the operations the business has unlimited liability and the status to Bear the debts State Corporations are often found in areas of Transportation telecommunication Postal Services utilities companies example electricity electricity and water as I said before some possible objectives of the corporations are to create employment for citizens to provide goods or services that are needed in the country to keep prices affordable to all profits are usually put back into the country through infrastructure development and other government spending right so that's a public corporation right there and as I said before you have things like your utilities your transportation system those things are run by the government and the main aim is to not make a profit but ensure that certain services and goods are provided for the citizens at a reasonable cost that the private sector might not be willing to to to to to to to to to to handle and so you can see that the it is run it is controlled by the minister of government and is run by a board appointed by the government right to run a day-to-day operations of that particular corporation then we have the nationalized industry and so that's a very different to the public corporation right the public corporation starts out as a government entity right but the nationalized industry uh firms are companies that were once private but were taken over by the government so the government say yeah we're gonna run this from now on so they take over certain Runnings of that particular company so yeah you nationalize it no right so this can be good or bad based on a receipt because some people might have invested a lot into the company and the government come true and just take it over and start running it right and nationalized industries are in this enter Enterprises that have been taken over by the government from private sector organization in order to nationalize an industry the government will purchase the majority majority of the company's shares the government will then appoint a board of directors which will deal with the management of the company our private sector Enterprise may be nationalized for a number of reasons including the following to save an essential Enterprise that is in danger of closure right so certain companies might be private but they're not making any money they might not be making any money but yet they employ a lot of people and they play a significant role in the economy as if they close there might be a major hit to the economy right and so the government might say okay the private ended account anymore let me take it over so I can give these people their jobs you know um service on the debts keep it up and running for the benefit of the economy right for the benefit of the economy so that's one then the government may want to provide certain goods and services that would not otherwise be produced by the private sector or might be limited in the production this is evident in most carbon territories transport services and provision of roadways and next reason why it might be nationalized where consumers interests are in danger of being violated through the formation of monopolies the government May nationalize the industry in an attempt to prevent this from happening there is a common view that public monopolies will be better able to cater for customers consumers interest than private monopolies so again if something is going to be a monopoly the government said okay instead of having a monopoly and the golden people they're ripping off people and things like that because a monopoly means that there's only one supplier of that particular good or service one supplier and so if they are allowed to run rampant they might you know be disingenuous they might be dishonest they might you know go they did price go genetic things like that and to prevent that from happening the government might say okay we're going to take over this particular company and run it in a way that would benefit our citizens remember we might not run it as a profit but we weren't running it in a way that would benefit the citizens and so they might end up nationalizing that particular Monopoly nationalizing certain industries may offer social benefits to citizens of the country a public transportation sector may be able to offer subsidy subsidized fees for disabled elderly people children and public sector workers these benefits may not be possible with private sector ownership so that's why they might take over the transportation system the nationalization of certain resources and industries ensure that profits remain in the country unlike the case of multinationals which repatriate profits the profits from nationalized firms are are revenue for the government and can be plowed back into the country's fund so they're saying here that some companies some companies they are multinationals and any money they make leaving the country they just send their money back up back up back out and so the government might nationalize that particular industry that particular company to keep the money in the country keep the money within the economy instead of having it sent back to motorbase or the wherever so you keep it back into the company because that's not benefited in the country if the money is leaving right so that's the next reason why they might want to do that so advantages of Corporations and nationalized industries the products and services offered usually are lower in price because you know government is all about helping the citizens not for profit The increased employment opportunities because some of them are actually started are saved just to reduce unemployment essential services that may be very expensive may be undertaken by the government products are standardized and uniform struggling firms can be taken over by the government resources are used in ways to benefit the community but of course of course some people say that the government should never be in business because they are highly inefficient and so some disadvantages of State Corporations and National Industries we have state all companies are monopolies there is a little choice for the consumers well we got that one one supplier that's it live deaths may cause a burden on taxpayers some State when Enterprises suffer from gross inefficiencies right I mean it's government um government run and so you know government want the votes and they want you know people to support them and so they might hire more than a need over staff because the one votes or they might reduce the price solo the world at a major loss and I might bring down you know increase national debt things like that so these companies tend to be run rather inefficiently because of the whole political aspect to it right politics May interview the running of these businesses one big political thing is bullets a lot of people want to be on boards and so basically if your path is in power you might get to be on a board even though you're not qualified you don't know anything about this particular industry politics you vote for me you support me I give you a reward and so politics has a big part to play in these kind of uh Industries and such as a major disadvantage right there so let's take a quick look at statutory boards statutory boards these are controlled by the state but operate with a board of directors partially appointed by the central government each board is answerable to a particular Minister Ministry in the government each entity is given specific responsibilities for the aspect of the country these are common in CARICOM in areas of housing water scientific research Agriculture and transport examples of statutory boards are the Jamaica tourism board the Statistical Institute of Jamaica most storyboards are similar to public corporations in terms of formation structure of management and objectives so a lot of these boards again very famous in the Caribbean especially the tourism aspect of it because a lot of countries have what we call the tourism board the tourism Authority right these statutory boards are set in place to over see certain aspects of the country where it is tourism water housing they have a lot of housing Boards out there so they have to look over who might get the house who might not uh they have the tourism board that kind of have to develop the stores and product in the country you have agriculture boards transport boards transport boards you know you know make sure that the transportation system is being running at an optimal level efficient level those kind of things statutory boards most of these boards tend to make money on their own that they can sustain themselves right so those are some examples of entities or organizations in the public sector secretary boards are controlled by the state and they are the boards are appointed by the central governments well partially appointed by the central government and they are given the responsibility of certain aspects of a country like tourism water housing those kind of things as a statutory board so if we go back to our syllabus we see that they're only asking us to outline the public corporations and the statutory boards and so we'll also look at not-for-profit organization like Charities and non-governmental organizations I will also got privatization and we are a look at nationalization already right so what we're not going to look at from this from from the textbook would be government departments because that's not part of what they are asking us to look at right so we're not going to look at government departments even though it's in the textbook and so the next one we're going to look at would be not-for-profit organizations or charities in some case in most cases so I I think that a charity is pretty much self-explanatory so you don't have to go too in-depth with it you know what a charity is it's an organization that is dear for certain purpose uh to basically help people uh but they're not there to make a profit as I said not for profit they just deal with the main aim which is normal to assist to help right so that's what a charity is normally for so there are a number of charity organizations in the Caribbean and around the world these businesses are formed for the main purpose of helping the less fortunate or disadvantage in society while the Charities are run based on business principles they rely heavily on donations from businesses Community government International Organization some of these organizations also raise Finance from hosting benefit concerts our players or many others do any kind of fundraising effort some examples of such charges in the Caribbean are the Red Cross the food for the poor the Jamaica Cancer Society and there are many others you can think of in your own country your own Island so you know what a charity is all about the legal requirement for the formation of Charities may not be overbearing but these organizations must be established based on a framework outlined by relevant companies office in Jamaica for example the charity must be registered with the company's office of Jamaica it must register its name and also submit Articles of Incorporation to the office in Barbados the charity has to be to abide by the explorations as mentioned in the country's charity act other Caribbean countries may have their own requirements for formation of charitable organizations these organizations are often exempt from certain obligations such as paying taxes or duties on input the examples may vary depending on the territory in which the charity is located so that's a charity in a nutshell we don't have to go too deep into a charity we know what it is you know there are four right to help people even though they have a structure still a legal structure legal um whatever head whatever they still are not-for-profit and so the rules that govern the charity are not as stringent as a company that might be owed to Gold somebody are take advantage of clients and things like that Charities for the most part are there to help and so you have to keep a close eye on some of these Charities because sometimes they are front for certain things and so that is when people have to really focus and pay attention that's why they have to register still and you know submit articles and things like that so that we know it's legit you can't just come see a guy charity and that's it you have to show the paperwork and things like that so close to Charities Charities will have what we call ngos or non-governmental organization these two are there to help right the idea to help the country help you know the less fortunate help different help and development right so these organizations are commonly referred to as ngos and are not influenced by the government ngos are non-profit making voluntary citizen groups which are formed at local National artificial Levels by individuals or institutions with common interests they are usually formed to provide humanitarian functions labor governments on the behalf of citizens offer Aid and relief especially in the time of disaster adjust issues such as education and health care different ngos may also provide a number of other services however engines are not formed by the government neither do they answer to government or the government of a country some example of ngos are United Nations Jamaica uh for justice Barbados nursing association Trinidad and Tobago Association of psychologists and so you understand what an NGO is does require more in-depth explanation it's not for profit is not controlled by the government and their main aim is to provide humanitarian to provide relief to help right to Lobby to help the less Fortune similar to a charity the last thing we're going to look at is what we call privatization privatization normally privatization and nationalization go hand in hand but they are still different right they're still different so what is a what is privatization privatization is almost like the opposite of nationalization right it is where the government once ran a business and then they decide to sell it to the private sector so it was once in the control of the government and then they decided to sell it to the private sector so no the private sector is in charge of that entity right so privatization is a change of ownership of a firm from the state to private individuals privatization may take different forms including direct sale of nationalized Industries or public corporations to individuals in the private sector removal of barriers that prevent public corporations from competing this is referred to as directly deregulation and has happened in for example telecommunications and back in the day uh like from where I live there was just one company that was just keep them Wireless just one Monopoly then all of a sudden they allow for Digicel to come in and Chip it to come in and so they had competition and things like that right so that's what perfect privatization entails so again other other reasons other Farms it might take Contracting out services that would otherwise be rendered by the public sector such as cleaning services the government May privatize public corporations for different reasons such as to generate much needed income to fund projects or take off budget shortfall so you know the government running a company they might be running it into the ground too much debt and things like that and so to alleviate some of the debt they might end up to sell that particular company because it is too get ridden are too hard for the government to continue to improve efficiencies in these businesses which may benefit consumers so again remember we said that most government businesses tend to be inefficient because you know politics and votes and people coming in later and they want people do whatever why you can't they mean nothing like voting for you that kind of thing when the Predator is no that's a private company and you can't do as it like or else the bus run your home you have Stakes now and so you might you might shape up now and be more efficient it can no longer afford to finance the operation and operate these entities to share ownership of resources and encourage competition privatization offers benefits to the country and the government but it also has some disadvantages such as may cause private monopolies to develop which may expect customers that you said all the time income generated from the sale of nationalized Industries is a one-off receipt and cannot be repeated in future needs arise so let's say it's a one-time thing you sell it and that's it you can minimum money from it gone already hands at the government that done if private firms are not regulated then they might be due degradation of the environmental through overproduction private individuals main aim of course is to make profit and so they might not keep the best interest of the citizens I've had and if it's not making a profit they might end up closing down that business so those are some disadvantages of the privatization okay all of this objective in module one right the economic sectors and legal structures have completed that and we're going to study it for now and we come back we're gonna look at business objectives all right so that's it for now you know what to do like subscribe hit the Bell Cinema alert ask and drops another video right share this stuff share the content thanks for watching thanks for listening