Public Services International Research Unit

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FOCUS To examine the implications of public and private companies operating across sectors To consider the different implications of 'cross-subsidy' in public and private companies To consider the organisational issues arising from diversification TASKS: In the private sector, energy multinationals have diversified into waste management and telecomms; water companies have diversified into energy, waste management, telecomms, and media. In the public sector, municipal companies also often cover a number of services eg water, gas, electricity, public transport. Discuss the implications of this diversity. What are the possibilities of cross-subsidy of prices - eg using profits from electricity and gas to subsidise loss-making fares on public transport? What are the possibilities for cross-subsidy of investment eg using profits from water to invest in telecomms? What are problems and advantages for public service policies? What are the problems and advantages for multinational companies? What are problems and advantages for workers? RESOURCES: Competitive public enterprises Multinational strategies TIME 2 hours Notes for tutor The discussion should bring out how diversity can be an instrument of public policy for subsidising some loss-making public services, but private companies can use profits from one sector to invest in another. Workers in the different sectors may be affected differently by cross-subsidies.