Formation of Business units of Local Administrative Organizations in Thailand

Abstract

The business unit of the local administrative organization is a business organization established by the local administrative organization according to Local Administrative Organization Establishment Act. Its objective is to provide public services in industrial and commercial sectors and it is under the governance of the local administrative organizations. However, it is independent in terms of finance, human resource management, and business operation as same as the state enterprise which is the business unit of the central government. Nowadays, the business unit of the local administrative organization consists of two types: limited companies and commercial ventures.

According to the studies, the local administrative organization in Thailand unusually establishes a business unit even though it has authority given by the Local Administrative Organization Establishment Act to establish a business unit. There are important reasons due to restrictions imposed by legal measures and other measures such as financial and budgetary measures, personnel measures and the measures of the political and local administration. Therefore, the suggestions from studies consist of two parts ; The first part is the suggestion on laws which can be divided into 2 periods; the first period is to improve and amend the law to solve existing problems and limitations and the second period is to issue the law on the methods and criteria to establish a business unit of the local administrative organization. Moreover, the second part is the suggestion on policies that will help supporting the improvement, amendment, and legislation of laws. These will lead to increasing numbers of the business unit of the local administrative organization.