Plus One Business Studies Chapter Wise Previous Questions Chapter 3 Private, Public and Global Enterprises

Kerala Plus One Business Studies Chapter Wise Previous Questions Chapter 3 Private, Public and Global Enterprises

Question 1.
Classify the following public sector enterprises under the heads departmental undertaking, public corporation and government companies. (June – 2008)
a) Oil and Natural Gas Commission
b) Postal Department
c) Unit Trust of India
d) Kerala Minerals and Metals Ltd.
e) Integral Coach Factory
f) Kerala State Handloom Development Corpn.
Answer:

Question 2.
The operations of a Multinational Corporation (MNC) extends beyond the country in which it is incorporated. So MNCs are known by some other names also. State any four such names. (June – 2008)
Answer:
1) Transnational company
2) Transnational corporations
3) Global enterprises
4) Foreign company

Question 3.
Match the following: (June – 2008)

Answer:

Question 4.
“The economic soundness of a nation is judged by the prevalence of the public section”. Write the rationale of the public sector in the light of new economic crisis. (March – 2009)
Answer:
Role and importance of Public Sector

1. Development of infrastructure: It is the responsibility of the Government to provide infrastructural facilities to the core sector which requires huge capital investment, complex and upgraded technology etc.

2. Regional balance: The government is responsible for developing all regions and states in a balanced way and removing regional disparities.

3. Economies of scale: Public sector enterprises are large in size and are, able to avail the advantages of large scale operations.

4. Check over concentration of economic power: The development of public enterprises prevents concentration of economic power and wealth in the hands of private sector.

5. Employment opportunities: Public sector enterprises helps to generate a large number of employment opportunities.

6. Import substitution: It is also necessary for the economic progress of the country that industries which can decrease imports and increase exports are only promoted. Public enterprises also ensure promotion of such industries.

Question 5.
We know that Multi National Companies (MNCs) produce and market goods to suit the world market. Can you name two MNCs? (August – 2009)
Answer:
Coca Cola, Pepsi

Question 6.
LIC is an example of a ………. organisation. (August – 2009)
a) Multinational company
b) Departmental undertaking
c) Statutory corporation
d) None of these ,
Answer:
Statutory Corporation

Question 7.
The newly appointed Secretary of a Co-operative Society happened to meet the chief executive of a public sector etnerprise in an orientation programmed organised by the Government. The co-operative society secretary asked him about the different forms of public sector enterprises. Mention the possible reply. (August – 2009)
Answer:
The different forms of public sector enterprises are:-

• Departmental undertakings
• Public Corporation / Statutory Corporation
• Government Company.

Question 8.
Computech Help Ltd., is a software company established in India during 2004. They extent their operations to China in 2005 and U.K. in 2006, by establishing corporate offices in these countries.(August – 2009)
a) Which type of company is this?
b) Explain any three features of this type of companies.
Answer:
a) Multi National Company (MNC)
b) Global enterprises (Multi National Companies)

Global enterprises are huge industrial organisations which extend their industrial and marketing operations through a network of their branches in several countries. Their branches are also called Majority Owned Foreign Affiliates (MOFA). They are characterised by their huge size, large number of products, advanced technology, marketing strategies and network of operations all over the world. Eg. Pepsi, Coca Cola, Cadbury, Sony, Susuki etc.
Features of MNCs

1. Huge capital resources: Multinational companies have the ability to raise huge funds from different sources such as equity shares, debentures, bonds etc. They can also borrow from financial institutions and international banks.

2. Foreign collaboration: Global enterprises usually enter into agreements relating to the sale of technology, production of goods, use of brand name etc. with local firms in the host countries.

3. Advanced technology: Multinational companies can possess latest and advanced technology so that they can provide quality products.

4. Product innovation: Multinational companies are able to conduct sophisticated research so that they can develop new products.

5. Marketing strategies: They use aggressive marketing strategies in order to increase their sales in a short period. Their advertising and sales promotion techniques are normally very effective.

6. International Market: They operate through a network of subsidiaries, branches and affiliates in host countries. Due to their giant size, they occupy a dominant position in the market.

7. Centralised control: They have their headquarters in their home country and exercise control over all branches and subsidiaries.

Question 9.
INFOSYS is a major software company in India. They also have operations in Canada, USA etc. (March – 2010)
a) Which type of company is ‘INFOSYS’?
b) Explain its features.
Answer:
a) Multinational Company Features of MNCs are :-

1. Multinational companies are generally operated on a large scale.
2. It has branches and subsidiaries in many countries.
3. It has its headquarters in the home country and controls everything.
4. It possess advanced and latest technology.
5. They have vast access to international market.
6. They are monopolistic by the concentration of economic power.

Question 10.
A multinational company (MNC) is an organisation that operates in more than one country. Can you give two examples of such companies? (March – 2011)
Answer:
General Motors, Pepsi, Coco- Cola, Sony, Suzuki

Question 11.
“Public sector enterprises enjoy a unique position in the Indian economy”. Support the above statement by highlighting any five merits of public sector enterprises (March – 2011)
Answer:
Role and importance of Public Sector

1. Development of infrastructure: It is the responsibility of the Government to provide infrastructural facilities to the core sector which requires huge capital investment, complex and upgraded technology etc.

2. Regional balance: The government is responsible for developing all regions and states in a balanced way and removing regional disparities.

3. Economies of scale: Public sector enterprises are large in size and are, able to avail the advantages of large scale operations.

4. Check over concentration of economic power: The development of public enterprises prevents concentration of economic power and wealth in the hands of private sector.

5. Employment opportunities: Public sector enterprises helps to generate a large number of employment opportunities.

6. Import substitution: It is also necessary for the economic progress of the country that industries which can decrease imports and increase exports are only promoted. Public enterprises also ensure promotion of such industries.

Question 12.
Suppose your friend Haseena is preparing for a competitive examination. She told you that public sector enterprises are owned and managed by the Government. But she wants to know the different forms of public sector undertakings. Mention to her, the three different forms of public sector undertakings. (March – 2011)
Answer:
Departmental Undertaking
2. Public Corporation / Statutory Corporation
3. Government Company

Question 13.
Disinvestment of PSUs implies : (March – 2011)
a) Sale of equity shares
b) Floatation of debentures
c) Winding up of a company
d) Diversification of products
Answer:
Sale

Question 14.
Classify the following enterprises into departmental organization, statutory corporation and Govt, company. (March. 2012)
a) Indian Railways
b) Food Corporation of India
c) Hindustan Machine Tools
d) Chittaranjan Locomotive Works
e) Bharat Heavy Electricals
f) Unit Trust of India
Answer:
a) Indian Railway – Departmental Organization
b) Food Corporation of India – Statutory Corporation
c) Hindustan Machine Tools – Govt. Company
d) Chittaranjan Locomotive Works – Departmental Organization
e) Bharat Heavy Electricals – Govt. Company
f) Unit Trust of India – Statutory Corporation

Question 15.
Recently, the Central Government decided to sell 9.5% of its shares in N.T.RC. through a public offer. Can you mention the Government policy referred to here? Explain it. (March-2013)
Answer:
Disinvestment / Privatisation. Outright sale of government shares in public sector undertaking is called disinvestment.

Question 16.
Do you welcome the opening of the Indian retail market to multinationals like Walmart, McDonald’s etc. Justify your answer. (March. 2013)
Answer:
Yes
Merits of MNC
a) It provides quality products at lowest prices.
b) It generates more employment opportunities.
c) It possess latest and advanced technology .
d) Increases standard of living of the people.

Question 17.
Suppose, a public enterprise is established in your district. As a commerce student, can you compare the various features of the three forms of public enterprises? (March. 2013)
Answer:
Comparison of public enterprises –

Question 18.
More than 60% of the paid up capital of a company is held by Government of Kerala. Identify the type of public sector enterprise indicated here. Also give any two limitations of this company. (September – 2013)
Answer:
Government Company.
1. It evades constitutional responsibility as it is not directly answerable to parliament.
2. They are autonomous only in name. Company is operated by the controlling ministry.

Question 19.
Eventhoqgh public sector is considered to be a powerful tool of economic development, many of the public enterprises have become a burden to the government by incurring huge losses. Elucidate the statement. (September – 2013)
Answer:
Limitations of public enterprises:

1) Lack of Initiative : The management of government companies always have the fear of public accountability.

2) Lack of Business Experience: The management of these companies is generally put into the hands of administrative service officers who often lack experience in managing the business organization.

3) Change in Policies and Management : The policies and management of these companies generally keep on changing with the change of government.

Question 20.
LIC is an example of a ……… (September – 2013)
a) multinational company
b) departmental undertaking
c) statutory corporation
d) none of these
Answer:
Statutory Corporation

Question 21.
Suppose, Kerala Pharmaceuticals Ltd., registered under the Companies Act, 1956, was started with a paid up capital of ? 25,00,000. 40% of this paid up capital is in the hands of private individuals and the balance is held by the Government of Kerala. Kerala Pharmaceuticals Ltd. belongs to which form of Public Sector Enterprise? Explain its two merits. (September -2013)
Answer:
Government Company. Merits of Government Company:

• It has a separate legal entity, apart from the Government;
• It enjoys flexibility and autonomy in all management decisions
• These companies by providing goods and services at reasonable prices are able to control the market.
• The formation of a Government company is easy as compared to other forms of Government enterprises.
• It can appoint professional managers on high salaries.

Question 22.
Krishna Ltd. is a company established in India. They extended their operations to the UK and the USA by establishing places of business in these countries. (September – 2013)
a) Identify which type of company is Krishna Ltd.
b) Explain its four features.
Answer:
Global enterprises (Multi National Companies)

Global enterprises are huge industrial organisations which extend their industrial and marketing operations through a network of their branches in several countries. Their branches are also called Majority Owned Foreign Affiliates (MOFA). They are characterised by their huge size, large number of products, advanced technology, marketing strategies and network of operations all over the world. Eg. Pepsi, Coca Cola, Cadbury, Sony, Susuki etc.

Features of MNCs

1. Huge capital resources: Multinational companies have the ability to raise huge funds from different sources such as equity shares, debentures, bonds etc. They can also borrow from financial institutions and international banks.

2. Foreign collaboration: Global enterprises usually enter into agreements relating to the sale of technology, production of goods, use of brand name etc. with local firms in the host countries.

3. Advanced technology: Multinational companies can possess latest and advanced technology so that they can provide quality products.

4. Product innovation: Multinational companies are able to conduct sophisticated research so that they can develop new products.

5. Marketing strategies: They use aggressive marketing strategies in order to increase their sales in a short period. Their advertising and sales promotion techniques are normally very effective.

6. International Market: They operate through a network of subsidiaries, branches and affiliates in host countries. Due to their giant size, they occupy a dominant position in the market.

7. Centralised control: They have their headquarters in their home country and exercise control over all branches and subsidiaries.

Mention the limitations of government companies as public sector undertakings. (August – 2014)
Answer:
1) It evades constitutional responsibility as it is not directly answerable to parliament.
2) They are autonomous only in name. Company is operated by the controlling ministry.
3) The law relating to the companies, in general is meaningless for the government companies.

Question 24.
Draw a chart showing the structure of business. (August – 2014)
Answer:
as it requires fulfillment of various formalities.

Question 25.
Discuss the limitations of departmental undertakings as business ventures. (August – 2014)
Answer:
Limitations of departmental undertakings:

• Departmental undertakings lack flexibility because its policies cannot be changed instantly.
• The employees are not allowed to take independent decisions, without the approval of the ministry concerned.
• This leads to delay in decision making.
• These enterprises are unable to take advantage of business opportunities.
• There is red tapism in day-to-day operations.
• There is a lot of political interference through the ministry.
• These organisations are usually insensitive to consumer needs and do not provide adequate services to them.

Question 26.
Read the news given below and answer the following questions. (August – 2014)
“Some of the PSUs incur heavy losses, so the government of India recomends closing the same. Meanwhile, the government plans to disinvest the share of some other PSUs.
a) Expand the term, PSU.
b) What do you mean by ‘disinvestment’ of shares?
Answer:
a) Public Sector Unit/Undertaking
b) Selling the shares of Government company to private sector.

Question 27.
K.M. Chemicals Ltd., registered under the Companies Act 1956, was started with a paid – up capital of ?20,00,000/-. 40% of this paid-up capital is in the hands of private individuals and the balance held by the Government of Kerala. The board of directors consists of four government nominees and two representatives of private entrepreneurs. (August – 2014)
a) Identify the type of company.
b) Write any three merits of this type of company.
Answer:
a) Government Company
b) 1) It has a separate legal entity, apart from the Government;
2) It enjoys flexibility and autonomy in all management decisions
3) These companies by providing goods and services at reasonable prices are able to control the market.

Question 28.
Indian Railways in an example of ………. (Say – 2015)
a) departmental undertaking
b) statutory corporation
c) government company
d) none of these
Answer:
Departmental undertaking

Question 29.
Make the correct pairs from the following: (Departmental undertaking, Government Company, Coal India Ltd., Indian Railways) (March – 2016)
(Departmental undertaking, Government Company,. Coal India Ltd., Indian Railways)
Answer:
Coal India Ltd – Govt. Company Indian Railways- departmental undertaking.

Question 30.
In Power Grid Ltd., majority shares are held by the Central Government of India. List any three features of such companies. (March – 2016)
Answer:
Any three features of Govt. Company.

1. It is registered under the Companies Act, 1956.
2. It has a separate legal entity. It can sue and be sued, and can acquire property in its own name.
3. The management of the company is regulated by the provisions of the Companies Act.

Question 31.
Kochi Metro Rail Corporation Ltd. engaged in the construction of Kochi Metro by joining togetherwith Government of Kerala.
What are the advantages of such venture? (March – 2016)
Answer:
Any 3 advantages of joint ventures :

1. increased resources and capacity:- Since two or more firms join together to form a joint venture, there is availability of increased capital and other resources, able to face market challenges and take advantage of new opportunities.

2. Access to new markets and distribution networks: A foreign company gain access to the vast Indian market by entering into a joint venture with Indian Company. They can also take advantage of the established distribution channels.

3. Access to technology: It provides access to advanced techniques of production which increases efficiency and then helps in reduction in cost and improvement in quality of product.

Question 32.
Match column A with colurrins B and C. (March – 2016)

Answer:

Question 33.
ABC Ltd., is a public company in which 45% of paid up capital is held by the Government of India and 14% by the Kerala Government.  (March – 2016)
a) In which category of public sector will ABC Ltd., be included?
b) State any three features of this category.
Answer:
a) Government Company
b) 1. It is registered under the Companies Act, 1956.
2. It has a separate legal entity. It can sue and be sued, and can acquire property in its own name.
3. The management of the company is regulated by the provisions of the Companies Act.

Question 34.
Government decided to sell the shares in telecom department to private sector. This is an example of (March – 2017)
a) disinvestment
b) memorandum of undertaking
c) reconstruction
d) rehabilitation
Answer:
Disinvestment

Question 35.
Explain any four characteristics of a Government company. (March – 2017)
Answer:
A Government Company is established under the Indian Companies Act, 1956. According to the Indian Companies Act 1956, a government company I means any company in which not less than 51
Features
a) Formed by Special Act of Parliament
percent of the paid up capital is held by the central government, or by any state government or partly by central government and partly by one or more state governments.
Features

• It is registered under the Companies Act, 1956.
•  It has a separate legal entity. It can sue and be sued, and can acquire property in its own name.
• The management of the company is regulated by the provisions of the Companies Act.
• Employees are recruited and appointed as per the rules and regulations contained in Memorandum and Articles of association.

Question 36.
Correct the table given below, if there is mistake. (March – 2017)

Answer:
a) Statutory Corporation/Public Corporation
b) Department undertaking

Plus One Business Studies Chapter Wise Previous Questions