Privatization of Companies

Privatization, mergers and acquisition are commercial terms used with respect to large companies. Privatization is used to refer to a process by which an organization transfers its ownership from the government to the local citizens. Government transfers majority share holding to the public in this process. This is advocated for especially when there is a problem of service delivery as a result of such factors like corruption, lack of competition, bureaucracy etc. it is a decision meant to foster efficiency. Merger occurs when two or more companies undertaking business activities of similar nature come together and combine their operational activities, management and every service delivery tasks. This is usually aimed at improving service delivery and creating competitive advantage. By merging with other companies, resources become more available hence production capacity can go higher. Acquisition is yet another strategy which means a larger company purchasing another one, either fully or partially, as a way of increasing its investment. Joint venture is closely related to merger. However, in joint venture companies mobilize resources together to undertake a common venture. This strategy is regarded necessary if the companies are like minded and the nature of business venture will considerably involve large capital investment. For instance, we have the case of EBG which acquired Pancevo, and other breweries in Moldova, Chisinau, Ufa in 2003. We also learn that Pancevo underwent nationalization over the era of Tito, which transferred its ownership interest to a given family. Again, this organization which now operated like a company was privatized following poor operating conditions prior to 1991. All these strategies have legal, social and economic implications to the society and the state at large. In our case study, we undertake to look at the legal and social aspects that arise with respect to the above strategies, considering multinationals like Pancevo, Eden Group of Companies, EBG and others that operate in Asian market and other countries.

Discussion

Generally immaturity of the political body has led to stifling of the institutional pluralism development. While in the area of higher education, appointments of senior academic are still being conducted by the state, a picture similar to that arises in the agency of Serbian privatization where senior employees as well as their policies are seen as the subject of great transmutation. It is without doubt that the major reason behind widespread feeling of anxiety and fear has been the pauperization of the community of Serbia which is faced with a challenge of around 30% unemployment with average wages being marginally higher than subsistence levels. The interference of the system of social benefits that were well established by the administration of Tito, which meant non material and material needs were all guaranteed by the government, has contributed to feelings of isolation and insecurity among the citizens. Living standards deteriorated immensely because under Milosevic business enterprises were maintained open, usually with passive workforces, meant to create means of supporting the regime and keeping social peace.

The significant challenge threatening the programs of workers in Serbia is the privatization enactments that were made in a series of laws from the start of 1980s. From 2001, radical ownership restructuring has taken place. This has shocked many nationalities especially the workforce, whose livelihood is pegged into those enterprises. These laws have seen into it that social and state owned business enterprises are transferred into the hands of private sector. These enterprises employed 150000 workers, and their social security future was now at risk. Such is the case with the employees of the Pancevo Bretion wearies company which forms part of these enterprises that were privatized. Although privatization is meant for good course, it often comes with its pressing challenges and so it did in the case of Pancova. Other than the brewing industry, other sectors that were heavily affected by the new laws included cement, steel works, petrol stations, and tobacco. In fact, plans for the privatization of the industry of oil and the related products is underway. With patterns and structures of ownership of enterprises becoming more diffuse and less central and interests of foreigners gaining a foothold in the economic matters of the state, workers in Serbia are for the first time under exposure to what is seen as ravaging modernization programs of the capitalists which have by far caused adverse effects to their global counterparts.

However, there has been multiple effects of what is termed as oppression perpetrated by the political regime and international isolation years which have established a competence climate at workplace level. In instances of privatization representatives of workers have been subjected to resignation from taking and administering rearguard actions, bargaining severance packages and tokens for those who have suffered only retrospectively, and this involves the Pancova Breweries. It is asserted that the trade unionism of Serbia is one of the few special cases, being greatly disadvantaged by the governance stance of out rightly rejecting reforms that are market oriented in the late 1990s and 1980s, and the employment of nationalism as a tool of aggressively pacifying labor. While in Slovenia there was a political agenda broader enough to permit airing of labor voices and negotiating their demands in the enterprises, in Serbian it was a completely different thing with the so called anti- democratic trajectory being offered only one option of exit for laborers and collective identity being deconstructed. Consequently, workers from Serbia remain marginali9zed and disorganized beyond the control power of the formal institutions there is.

Mergers and acquisitions have major impact to the performance of human resource in any organization. With Eden acquiring major shares of the Pancova, this meant that the company has now become global. Internationalization of the human resource places some implications to the human resource management. During the past years, recognition and appreciation of the usefulness of human resource in the success of any business enterprise. Employees form an integral part of the assets of organization and are therefore termed as valued assets. Marger, acquisition, privatization and nationalization of business enterprises have implications on the human resource and hence attainment of the goals of the business enterprise.

References

RICHMOND, L., & TURTON, A. (1990). The Brewing industry: a guide to historical records. Manchester, Manchester University Press.

FROST, L., & GRIFFITHS, A. (2002). Plants of Eden. Penzance, Alison Hodge

DÖRRENBÄCHER, C., & GEPPERT, M. (2011). Politics and power in the multinational corporation: the role of institutions, interests and identities. Cambridge, Cambridge University Press.