Can You Describe Some Disadvantages Of Nationalization?

The nationalization of industry is not considered desirable on the following grounds


1. Costly management. The management of the nationalized industry is complicated and unwieldy. There are numerous departments and paid persons i.e. directorate, regional office conduct it management.

2.     Lack of decision-making. All the necessary matters are decided by various                   officials and committees. In case of conflicting views, quick decision cannot be made for the urgent matter, which is dangerous in business.
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Lack of efficiency. Nationalized industries are managed by salaried persons who are generally found less efficient as compared with privately owned concerns. There is also lack of flexibility and adapt ability which are assets of private ownership.
3. Bureaucracy. There is extensive and rigid procedure of the state machinery by which event is dealt. Such stridulated rules has made the process of work very complicated which results in daily and loss of initiative.
4. Chance of loss. The loss of the nationalized enterprises is regarded as the loss of the nation. So the structure of nationalized economy will greatly be affected by the failure of such scheme.
5. Limited investment. Inverters hesitate to invest large some of money due to risk of nationalization. There for the volume of investment remains limited in private sector.

The nationalization of industry is not considered desirable on the following grounds:-
1. Costly management:
                                      The management of the nationalized industry is complicated and unwieldy. There are numerous departments and paid persons i.e. directorate, regional office conduct its management.
2. Lack of decision making:
                                             All the necessary matters are decided by various official and committees. Incase of conflicting views, quick decision cannot be made for the urgent matters which is dangerous in business.

3. Lack of efficiency:
                                    Nationalized industries are managed by salaried persons who are generally found less efficient as compared with privately owned concerns. There is also lack of flexibility and adaptability which are asset of private ownership.

4. Bureaucracy:
                           There is extensive and rigid procedure of the state machinery by which event is dealt. Such stipulated rules has made the process of work very complicated which results in delay and loss of initiative.
5. Absence of profit motive:
                                              The salaried persons are not concerned with profit. Therefore, nationalized undertaking hardly run successfully due to lack of personal interest
6. Chances of loss:
                                The loss of the nationalized enterprises id regarded as the loss of the nation. So the structure of nationalized economy will greatly affected by the failure of such scheme.
7. Limited investment:
                                      Investors hesitate to invest large sum of money due to risk of nationalization. Therefore the volume of investment remains limited in private sector.

A look into the dictionary would tell you that by nationalization mean "To convert from private to governmental ownership and control." This means that a private organization is bought by the government and run by it. Though some may consider it to be beneficial for the country, this is not the case. There are many disadvantages that nationalization can bring to the country.

First of all, a country that is run on the principles of nationalization doesn't attract investment; a country without an investment is like a man without a job. Investment brings jobs, money and technology into the country just as a job would do in a man's life.

So why would investors refrain from investing? To answer this question, we need to understand the fact that an investor invests money for profits, to gain profits as much as possible, when an investor knows that his money at some point of time would be transferred to another entity, it is least likely that he would take a risk.

If foreign investment is not coming, neither do the citizens of the country invest either. Since they know, their hard-work would lead them to nowhere.
Recent countries that have opted for nationalization include Venezuela whose president has nationalized some of the key oil companies.