The state-owned manufacturing enterprises (SMEs) played a crucial role in Taiwan’s economic development during the 1950’s and 1960’s. However, as a result of free competition, the proportion of economic activity contributed by the island’s private enterprises has outweighed that of the SMEs since the late 1960’s.
SMEs possess a large portion (about 50%) of the total assets of public enterprises, equivalent to about 13% of the national total. In recognition of the importance of the vast resources under their control, the author is attempting a performance-based evaluation of their managerial efficiency.
Both intra-industry and inter-group comparisons show that the SMEs are relatively poor performers. Perhaps due to the lackluster showing of the SMEs, the Commission of National Corporations (CNC) of the Ministry of Economic Affairs has launched a great number of efficiency-enhancing programs in the past fifteen years. Surprisingly, however, these programs have failed to achieve the goal of improving the managerial efficiency of the SMEs. After completing his analysis, the author presents his conclusions and policy recommendations.
