Is the Way of Managing Working Capital for Public and Private Sector Enterprises Different?: 'Discussion Based on Comparative Case Studies of TISCO and RINL'

Abstract

Revealing factors responsible for the creation of difference in management of current assets between public sector and private sector enterprises is a complex task. However pattern of decision making at miscellaneous junctures differs in a great way between the two. Apart from the above mentioned cause work culture, atmosphere and environment within the organizations etc. are few aspects which are not identical in many ways within the public and private sector enterprises. Hence its impact can be observed in operating activities too. Taking a glance over vivid distinguishable factors like movement of inventory, changes in the level of cash and extent of dependence over current liabilities etc. one may get guidelines to point out the causes liable for creating difference in managing working capital between two types of enterprises. Although it is assumed that the pattern of utilization of current assets and exploitation of current liabilities differs between the two enterprises, it becomes a must to check the validity of the statement. Further analysis is confined to Indian Iron and Steel Industry. Tata Iron and Steel Company (TISCO) and Rashtriya Ispat Nigam Limited (RINL) represent private and public sector enterprises respectively.