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

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

Plus One Bussiness Studies Private, Public and Global Enterprises One Mark Questions and Answers

Question 1.
Environmental protection can be best done by the efforts of the
(a) Business people
(b) Government
(c) Scientists
(d) All the people
Answer:
(d) All the people

Question 2.
Reconstruction of a sick public sector unit is taken up by
(a) MOFA
(b) MoU
(c) BIFR
(d) NRF
Answer:
(c) BIFR

Question 3.
Disinvestment of PSE’s implies
Answer:
Sale of equity shares to the private sector

Question 4.
Enterprises owned and managed by private individuals is known as_________
Answer:
Private enterprises.

Question 5.
The enterprises which are wholly owned and controlled by Government are known as
Answer:
Public enterprises

Question 6.
Enterprises which are partly in the private sector and partly in the public sector are known as__________
Answer:
Joint sector enterprises

Question 7.
Which among the following type of organization is not a public sector enterprise?
(a) Indian Railways
(b) IFCI
(c) SBI
(d) MRF Tyres Ltd.
Answer:
(d)MRF Tyres Ltd.

Question 8.
Which among the following type of organization has no separate legal entity?
(a) Public corporation
(b) Government company
(c) Departmental organization
(d) Private company
Answer:
(c) Departmental organization.

Question 9.
Indian Railway is an example of__________
Answer:
Departmental undertaking

Question 10.
Which of the following is formed by a special Act of parliament?
(a) Bharat Heavy Electricals Ltd
(b) L.G. Electronics India
(c) The East India Company
(d) The Reserve Bank of India
Answer:
(d) The Reserve Bank of India

Question 11.
LlC is an example of one type of govt, organization. Identify its name and give another example.
Answer:
Public corporation. Another example of public corporation is SBI.

Question 12.
_________are the organisations, which are incorporated
under the special Acts of the Parliament/State Legislative Assemblies.
Answer:
Statutory Corporations

Question 13.
A government company is any company in which the paid up capital held by the government is not less than
(a) 49 percent
(b) 51 percent
(c) 50 percent
(d) 25 percent
Answer:
(b) 51 percent

Question 14.
The company which operates in more than one country.
Answer:
MNC

Question 15.
Coco Cola is an example of_________companies
Answer:
MNC

Question 16.
Outright sale of public enterprises is called _________
Answer:
Disinvestment

Plus One Bussiness Studies Private, Public and Global Enterprises Two Mark Questions and Answers

Question 1.
What is meant by public sector and private sector? (2)
Answer:
The economy may be classified into two sectors viz., private sector and public sector.
1. Private Sector:
The private sector consists of business owned by individuals or a group of individuals. The various forms of organization are sole proprietorship, partnership, joint Hindu family, cooperative and company.

2. Public Sector:
The business units owned, managed and controlled by the central, state or local government are termed as public sector enterprises or public enterprises. These are also known as public sector undertakings.

Question 2.
What is a Multinational Company? (2)
Answer:
Global enterprises are huge industrial organizations 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 characterized 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, Suzuki etc.

Question 3.
What is a Joint venture? (2)
Answer:
When two or more independent firms together establish a new enterprise by pooling their capital, technology and expertise, it is known as a joint venture. The risks and rewards of the business are also shared. The aim of the joint venture is business expansion, development of new products or moving into new markets, particularly in another country. Benefits

1. Increased resources and capacity:
Since two or more firms join together to form a joint venture, there is the 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 gains access to the vast Indian market by entering into a joint venture with an 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 a reduction in cost and improvement in the quality of a product.

4. Innovation:
Foreign partners can come up with innovative products because of new ideas and technology.

5. Low cost of production:
Low cost of raw materials, technically qualified workforce, management professionals, excellent manpower etc. helps to reduce the cost of production and it results in increased productivity.

Established brand name :
When one party has well-established brands and goodwill, the other party gets its benefits.

Question 4.
What do you mean by Disinvestment? (2)
Answer:
The outright sale of Government shares in public sector undertaking is called disinvestment. Eg. Maruthi Udyog Ltd, Indian Petro Chemicals Ltd., etc. Government company

Question 5.
What is meant by Public sector? (2)
Answer:
Business units owned, managed and controlled by the central, state or local government are termed as public sector enterprises or public enterprises. These are also known as public sector undertakings.

Plus One Bussiness Studies Private, Public and Global Enterprises three Mark Questions and Answers

Question 1.
What are the various types of organizations in the private sector? (3)
Answer:
The private sector consists of business owned by individuals or a group of individuals. The various forms of organization are sole proprietorship, partnership, joint Hindu family, cooperative and company.

Plus One Bussiness Studies Private, Public and Global Enterprises Four Mark Questions and Answers

Question 1.
Identify the following public sector enterprises. (4)

1.  Business Organisation established by the government and controlled by the Ministry concerned.
2.  Organizations incorporated under a special Act of Parliament or state legislatur
3.  1t is managed by the government and is subject to budgetary, accounting and audit control
4.  Organisation established by the government and registered under the Companies Act

Answer:

1.  Departmental undertaking
2.  Statutory corporation
3.  Government company

Question 2.
Some organizations are directly attached to a particular ministry of the Central or State Government and are under the direct control of concerned Minister. The business decisions are, thus, influenced by political consideration. (4)

1. State the type of enterprise coming under this category.
2. give four examples of such enterprises.

Answer:

1. Departmental undertaking
2. Railways, Communications, Post & Harbours, Electricity etc.

Question 3.
Match the column ‘A’ with column ‘B’ and ‘C’. (4)

Answer:

Plus One Bussiness Studies Private, Public and Global Enterprises Six Mark Questions and Answers

Question 1.
“Public sector enterprises have been chosen as a means for having a socialistic pattern of society”. Do you think so? If yes, state the reasons. (6)
Answer:
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 2.
Some organisations are directly attached to a particular ministry of the Central or State Government.
State the type of enterprise comming under this category.
Explain its merits and demerits. (6)
Answer:
This is the oldest and most common form of organization. These are established as departments of the ministry and are financed, managed and controlled by either central govt, or state govt.. They are managed by government employees and work under the control of a minister. Eg. Railways, Post & Telegraph, All India Radio, Doordarshan, Defense undertakings etc.

Features:

1.  The enterprise is financed by annual appropriation from the budget of the Government and all revenue is paid to the treasury.
2.  The enterprise is subject to accounting and audit control.
3.  It is subject to the direct control of the ministry.
4.  Its employees are govt, employees and are recruited and appointed as per govt, rules.
5.  They are accountable to the concerned ministry.

Merits:

1. These undertakings facilitate the Parliament to exercise effective control over their operations.
2.  These ensure a high degree of public accountability.
3.  The revenue earned by the enterprise goes directly to the treasury and hence is a source of income for the Government.
4.  Where national security is concerned, this form is most suitable since it is under the direct control and supervision of the concerned Ministry.

Limitations:

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

Plus One Bussiness Studies Private, Public and Global Enterprises Eight Mark Questions and Answers

Question 1.
Kerala Pharmaceuticals Ltd. registered under the Companies Act of 1956, was started with a paid-up capital of 15 lakhs. 40% of paid-up capital is in the hands of private individuals and the balance is held by the Govt, of Kerala.
(a) Identify the type of enterprise.
(b) Explain its merits and demerits. (8)
Answer:
A Government Company is established under the Indian Companies Act, 1956. According to the Indian. Companies Act 1956, a government company
means any company in which not less than 51percent 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.
• These companies are exempted from the accounting and audit rules and procedures.
• The government company obtains its funds from government shareholdings and other private shareholders.

Merits

• It has a separate legal entity, apart from the Govt.
• 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.

Limitations

• It evades constitutional responsibility as it is not directly answerable to parliament.
• They are autonomous only in name. Company is operated by the controlling ministry.
• The law relating to the companies, in general is meaningless for the government companies, as it requires fulfillment of various formalities.

Question 2.
It is an organisation which is formed by a special Act of Parliament.
(a) Identify the type of organisation.
(b) Explain its merits and demerits. (8)
Answer:
Statutory corporations are public enterprises brought into existence by a Special Act of the Parliament. The Act defines its powers and functions, rules and regulations governing its employees and its relationship with government departments. Eg. LIC, IFCI, RBI, SBI, ONGC, UTI, Air India etc.

Features:

1.  Statutory corporations are set up under an Act of Parliament and are governed by the provisions of the Act.
2.  It is wholly owned by the state.
3.  It has a separate legal entity, i.e it can sue and be sued, enter into contract and acquire property in its own name.
4.  It is usually independently financed.
5.  It is not subject to budget, accounting, and audit laws.
6.  The employees of these enterprises are not government or civil servants.

Merits:

1. They enjoy independence in their functioning and a high degree of operational flexibility
2. It enjoys administrative and financial autonomy
3. Since they are autonomous organizations, they can frame their own policies and procedures
4. A statutory corporation is a valuable instrument for economic development

Limitations:

1. A statutory corporation does not enjoy as much operational flexibility
2. Government and political interference has always been there in major decisions
3. Where there is dealing with public, rampant corruption exists
4. Commercial principles are ignored in the operation of public corporations which leads to inefficiency.

Question 3.
Cyclone Ltd. is a software company established in India, during the year 2002. They extended its operations to UK and USA in May 2005, by establishing corporate offices in these countries.(8)

(a) What type of company is this?
(b) Explain the features of these type of companies?
Answer:
(a)MNC

(b) 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. Centralized control:
They have their headquarters in their home country and exercise control over all branches and subsidiaries.

Question 4.
What are the benefits of entering into Joint ventures? (8)
Answer:
When two or more independent firms together establish a new enterprise by pooling their capital, technology and expertise, it is known as a joint venture. The risks and rewards of the business are also shared. The aim of joint venture is business expansion, development of new products or moving into new markets, particularly in another country.

Benefits:
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.

4. Innovation:
Foreign partners can come up with innovative products because of new ideas and technology.

5. Low cost of production:
Low cost of raw materials, technically qualified workforce, management professionals, excellent manpower, etc. helps to reduce cost of production and it results in increased productivity.

Established brand name:
When one party has well-established brands and goodwill, the other party gets its benefits.

One Business Studies Chapter Wise Questions and Answers