1.Lack of flexibility : Excessive control and rigid rules of the ministry reduce the flexibility of operations in these undertakings.
2.Delay in decision making : These enterprises fail to take prompt decisions because for each and every decision they have to obtain the approval from the concerned ministry. Employees and even heads of these enterprises are not allowed to take independent decisions.
3.Bureaucracy hinders benefits of business opportunities : These enterprises are not able to take the full benefits of business opportunities. Bureaucratic and conservative approach of the concerned ministry hinders their initiatives.
4.Red tapism : Departmental undertakings suffer from red tapism in its day-to-day working. Actions are taken only after following proper channels of authority.
5.Political interference : The political interference hinders the efficient working of these undertakings. Most of the time is elapsed in attending political meetings, implementing their recommendations, etc.
6.Consumer needs are ignored : These enterprises are insensitive to consumer needs and do not provide adequate services to them.