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Why Sri Lankan State-Owned Enterprises Continue to Make Losses: A Special Case Study on a State-Owned Enterprise in Sri Lanka

Abstract

This is a qualitative study that mainly focuses on the loss incurred by the Ceylon Electricity Board (CEB) during the past few years. It mainly focused on identifying how the CEB has utilised their management functions and developing trends while identifying their impact on the performance of the CEB during the past few years. At the same time, it focused on identifying the factors that are contributing to the loss through the inefficiencies in the management functions and the developing trends relevant to their industry. Further, the data relevant to this study has mainly been gathered through various primary data generation methods like semi-structured interviews and non-participatory observations in relation to nine managerial employees representing the financial management, human resource and the corporate strategy division of the CEB. Also, the above sample was selected based on the purposive sampling technique as well. Also, this study has used some secondary sources like journal articles related to inefficiencies of the state-owned enterprises, newspaper articles and the CEB websites as well. The data generated through the primary and secondary data sources have been analysed using the thematic analysis which is considered to be popular among qualitative research. Having tariff stagnation since 2013 which caused to increase the generation cost compared to its revenue, unavailability of low-cost power plants, not implementing the low-cost power plants, improper planning of the internal processes, unavailability of proper political leadership for the CEB are some of the factors that have highly contributed to the loss of the CEB through their management functions during the past few years. Also, the continuous debts carried out by various state-owned enterprises like the army, navy, hospitals and various religious places have high had a high impact on this loss during the past few years.

Keywords: State-Owned Enterprises, Ceylon Electricity Board, Inefficiency, Management Functions, Developing Trends

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