ABSTRACT
The chapter deals with the requisites of evaluation, ranging over objectives, appropriate accounting, and performance indicators. The success of evaluation depends on the accuracy of accounting allocations within the enterprise. In the case of a monopoly enterprise it would be necessary to be assured that the cost level represents a state of efficiency: or else reaching a financial target has little meaning. An overall surplus at the apex level of a large enterprise - and many public enterprises are large - is of limited value. The precise cost basis of pricing is a point that merits enquiry in the context of an enterprise not exposed to competition. Further, there is ample scope for cross-subsidisations by many public enterprises as organised today in most countries. A financial target might be met by the enterprise operating at different levels of output; and the enterprise operations might be neutral to the notion of the "socially" good option among them.
