ABSTRACT
This chapter discusses the concept of extra-enterprise objectives of public enterprises. It analyses the nature of their impacts on the finances of the enterprise. There are two exceptions to the net revenue reduction element in the definition of an extra-enterprise objective. The first is where it only shifts an output from one market to another or shifts the employment of inputs from one region to another, but is net-revenue neutral. The other exception is where an enterprise enjoys the benefit of the ‘cost-plus’ formula in pricing its output. An extra-enterprise objective that raises its costs will have no adverse effect on its net revenue. Certain budget policies can present financial disadvantage to a public enterprise. Considerations of national security apply to all enterprises. Private enterprises have progressively undertaken actions that reflect their growing awareness of ‘social responsibilities’.
