This is a process by which the executive arm of government exercises control over the activities of public enterprises through the supervising or parent ministries, it influences the structure and management practices of the enterprises. These the responsibility of the ministries to the public enterprises and they as follows:
- They supervise the draft and cope of each enterprises
- Recommending to government the appointment of some person as chairman and members of the enterprises board of directors
- Participating in the selection of the chief executive and the top management team of the enterprises
- They equally serve as a channel of communication between the government and its agencies on one hand and the enterprise on the other hand.
- Firstly, the supervising ministry has the opportunity to control the enterprises at the inauguration stage. These means, at the time when ideal is coming to emerge as to the desirability for establishing a public enterprises. However, apart from examining the ideas and collection of data, they equally have the responsibility of ensuring that enabling laws is drafted. After a public enterprises has been established finally, its management would wish to amend the enabling laws to reflect changes in circumstances, and this implies that supervising ministry could have to be closely involved.
- Ministerial control does not stop at framing of enabling laws; they equally exercised control on the appointment of the chairman and member of each public enterprise. On the political side, the primary interest of pure political appointees is likely to be the material benefits of incumbency (contracts, fringe, benefits, and jobs for kinsman).
Instead of providing the much –needed leadership in the area of policy formulation, the political appointees are apt to cover the career managers authority and functions.
The political element, have there vital function apart from the strategic planning function they perform, they both represent the interest of their enterprises at the highest level of government.
Secondly, their mere presence on the board confers political legitimacy on decision taken by management and as agent of the government. They are in a position to ensure that the decision taken by the board and the management are inline with government general policy.
Government also controls the enterprise by determining the composition of the top management. At times certain categories of appointment area classified as political.
They are said to be political since the politicians decides who holds such appointments, and issues of political sensitivity, loyalty, ethnic balance etc have to be taken into account.