THE NECESSITY OF BUSINESS RESTRUCTURING OF STATE-OWNED AND PUBLIC ENTERPRISES IN BOSNIA AND HERZEGOVINA

Abstract

The restructuring of state-owned and public enterprises has attracted the attention of numerous researchers in the transition and post-transition period. The goal of restructuring as a business philosophy is to change and establish a new business philosophy, a new way of thinking. The correct interpretation of this term goes beyond its narrow and misleading translation, which equates to restructuring with a measure of change in structure. This paper examines the situation with the state-owned enterprises in Bosnia and Herzegovina. Although Bosnia and Herzegovina is characterized by the presence of two completely separate systems of corporate governance (corporate governance is regulated at an entity level without any common grounds at the level of Bosnia and Herzegovina), the symptoms of the situation are identical in both entities: state enterprises are commercially inefficient in both entities, and the reasons for their inefficiency are identical. The paper attempts to identify the symptoms and causes of such a state with a set of recommendations for the restructuring of state-owned enterprises, with clear definitions that, considering the trend of expansion of state-owned enterprises in highly developed countries, state-owned enterprises are needed here. It turns out that the privatized companies do not take into account the state interest. Following the logic of the OECD Guideline No. 2 (Ownership of State), first, it is considered how the state should manage the state-owned companies, and then by following the logic of the OECD Guideline no. 6 (Responsibilities of Committee) the complete corporation of state-owned enterprises is advocated in the way that state-owned enterprises have all the prerogatives of corruption, and are sufficiently distanced from political parties in power. Such an approach will significantly contribute to the improvement of corporate governance rating in Bosnia and Herzegovina that shows the atrophy of the system.