ABSTRACT
The form of organisation simulating the private law company adopted for public enterprises obscured the need for new measures of performance and decision-taking criteria, obscured the need for a new and distinctive pattern of disciplines and incentives, and obscured the difference in the relationship of the boards to their residual risk bearers. Failure to provide an appropriate organisational structure was followed by failure to provide any basic remedy for the consequential disorders that time brought to the notice of all concerned. The public enterprises’ low rate of return on capital and undue dependence on the savings of the rest of society led in 1961 to the introduction of the policy of financial objectives. Relations between the state and public enterprises were disordered when the Select Committee on the Nationalised Industries came, in 1967, to examine the question of ‘ministerial control’. The illusion that public and private enterprises are undertakings fundamentally identical in character is certainly not confined to Britain.
