Question

F. When was self-employment allowed? Was private business considered as honorable as employment in SOE’s? By 1981, how many people were in business for themselves? Were they successful? (review pages 57-68)

Answer 1

Self-employment is the state of working for oneself rather than for an employer. Although the common perception is that self-employment is concentrated in a few service sector industries like insurance agents. Small business administration research has revealed that self-employment occurred across a wide segment of the US economy. Also, the industries which were not naturally fit for self-employment such as manufacturing has shown to generate a great proportion of self employed individuals and home-based businesses.

In the United States, any person is considered self-employed for tax purposes if that person is running a business as a sole proprietorship, as a member of a partnership etc. In addition to income taxes, these individuals must pay Social security and Medicare taxes in the form of an SECA( self-employment contributions act) tax.

State-owned enterprises often have been in the spotlight over the performance of managers and their employees. As business organization owned by the government, state-owned enterprises face with the bureaucratic work pattern. It caused the state-owned companies to face challenges in the procedure. As a new paradigm of better performance, SOEs must improve their internal control in accordance with the working condition of the environment.

Since SOEs prioritize goals such as social welfare and full employment differently than do the privately owned enterprises (POEs). The difference between SOEs and POEs influence their sources and use of slack due to nature of their ownership, budget constraint and agency relation. As SOEs are not all same and have different organizational goals, by focusing individually on an economic and social performance we can have an improved understanding of the effect of different categories of slack on firm performance.

Note that slack is defined as actual or potential resources that enable firms to adapt to internal and external pressures and allows the pursuit of goals that are outside the organization's main strategy.