Globally, privatization is usually perceived exclusively in relation to eastern and central Europe. Contrary to this view and popular opinion of many people, privatization is a common scene and socio-economic activity being undertaken in different parts of the world. Regardless of whether a country practices socialism or capitalism or whether it is developing or developed, and regardless of its location in the world, privatization is today an epicenter of economic development. Due to the fact that privatization has become a global practice, its institutional environment and nature can only be understood by the larger and broader global views.
The different global perspectives of privatization highlight the different impacts or influence that this practice has on local, regional and national developments. Managers in charge of global corporations for example are now being economically directed by the rules of the worldwide competition and not by their allegiance to their specific nation. They work towards the enhancement of the worldwide performance of the corporations they are in-charge of despite the fact that such corporations may not bring any economic success to their own countries.
Privatization has contributed to cross border ownership of enterprises as globalization continues to increase. Mergers and acquisitions of privatized companies across borders are increasing leading to regional and international economic integration (Iatridis and June pp 4). Privatization takes on different approaches depending on the form of governance approach in operation in a country. In central and eastern European countries for example, privatization entails societal shifts, a move from the state monopoly and a planned economy to a more market oriented economy characterized by private ownership.
On the other hand, on traditionally capitalist economies, privatization occurs in from of substitution or change of management structures for corporations owned by the public with an aim of improving public service delivery. In central and Eastern Europe countries, it is thus imperative to balance private ownership and public ownership during privatization practices. Mass privatization that have been occurring in these countries have so far not promoted equal distribution of income, power and wealth and neither have they been fair. The living standards of the citizens as well as the well being of the nation have not been improved.
Given these undesirable outcome, the initial strong support by the public for the privatization process has drastically declined as a result of the unfair results which the citizens of these countries had not earlier anticipated (Iatridis and June pp 11). For privatization to be embraced and be beneficial to an economy, it must center around or result to fair distribution of power, lead to economic development and progress of a country and also bring about social justice to the citizens. It should also act as an avenue of societal reconstruction.