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Business activities do not operate in a vacuum - Leaving Cert Business - Question 2(A) - 2002
Question 2(A)
Business activities do not operate in a vacuum. It is important to understand the interaction between the various types of business organisations with the local comm... show full transcript
Worked Solution & Example Answer:Business activities do not operate in a vacuum - Leaving Cert Business - Question 2(A) - 2002
Step 2
Contrast the importance of state owned companies
Answer
State owned companies (SOCs) also play an essential role in the Irish economy, serving to complement private sector initiatives. However, their importance shows distinct characteristics:
- Essential Services: SOCs often provide crucial services which may not be profitable for private companies, such as public transportation (e.g., Aer Lingus) and utilities.
- Economic Stability: They contribute to economic stability by ensuring that essential services are available and accessible to all citizens, especially in times of economic downturn.
- Public Interest: Unlike TNCs motivated by profits, SOCs have a mandate to serve the public interest, prioritizing social outcomes over financial returns.
- Job Preservation: They can help protect jobs during economic transitions, often offering job stability in sectors vulnerable to market fluctuations.
- Investment in Underdeveloped Areas: SOCs can invest in regions lacking private sector interest, thus promoting regional development.
In conclusion, while both TNCs and SOCs contribute significantly to the Irish economy, their focus, operational goals, and impacts on society differ. TNCs are driven by global competitiveness, while SOCs prioritize local needs and public welfare.