Public, Private and Global Enterprises
Q. Describe the meaning
of Private Sector Enterprise
Ans. A private sector
enterprise or a private enterprise is one, which is owned, managed and
controlled by an individual or group of persons (individuals) jointly.
Q. What is the meaning of
multinational companies (MNC)?
Ans. A multinational
company is that company which is incorporated in one country but hasits goods
produced, assembled and sold in many countries.
Q. Describe the four
features of Private Sector Enterprise
Ans. Its features
It is owned by private individual or groups
It is managed by owners or managers appointed by them.
Its main objective is to earn profits.
are accountable for its financial result to its owners.
Q. Describe the benefits
of Joint Ventures.
Ans. Benefits of
Joint Ventures are as follows:
(1) Joint venture makes it possible to undertake a big project
requiring huge capital.
(2) The risks involved in the new project are shared by the
partners in the joint venture
(3) It allows a company to expand its operations in forcing
(4) The local partner is benefited as the foreign partner
contributes foreign capital and foreign technology.
(5) The foreign partner is benefited from local
partner’sdistribution/marketingset up and knowledge of economic social and
political environment of the host country.
(6) The competitive strength of a smaller firm is increased by
entering into a joint venture agreement with multinational corporations.
Q. What is the meaning of
Ans. A public corporation,
known as Statutory Corporation, is an autonomuscorporate body set up under a
special act of the Parliament or of State Assembly.The Life Insurance
Corporation of India, Air India, Indian Airlines, Food Corporation of India,
Oil and Natural Gas Commission and Central Warehousing Corporation are few of
the prominent public corporations in India.
Q. What do you mean by
Ans. A departmental
undertaking is a public enterprise, which is organized, financed and controlled
by the government as a government department. E.g. in India railways, post and
telegraph and ordinance factories have been established as government
Q. What is the meaning of
Ans. Joint Venture is a
contract between two or more parties, with each party contributing their equity
share, to undertake an economic activity subject to joint control. No single
venturer can unilaterally control the activities.
is a common method for foreign companies to enter Indian markets by creating a
joint venture with an Indian company.
Q. Explain the features
of Multinational Company.
multinational company has the following features:
(1) It is of huge size and has control over large assets. It
operates in more than one country
It attempts to maximize profits world over by eliminating competition
Its operations are controlled from its headquarters of the company's home
It carries out production, marketing and research activities in a number of countries.
Policies are consumercentric and production techniques are more efficient
Q. Describe all the forms
of organization of Public Enterprises.
Enterprises are organised under three forms:
Undertakings such as Posts and Telegraph, Railways, Defence
or PublicCorporations such as Life Insurance Corporation of
India, Food corporation of India etc.
Companies such as Hindustan Machines Tools Ltd (HMT), Bharat
Heavy Electrical Ltd. (BHEL).
Q. Describe the role of
Public Sector in India.
Ans. Role of
Public Sector in India:
(1) Rapid economic development
(2) Provision of infrastructure
(3) Sound industrial base
(4) Development of backward
(5) Generation of surplus
(6) Creation of employment
(7) Take over of sick industrial
(8) Serving of strategic national
(9) Control of monopoly and
restrictive trade practices.
Q. What do you understand
by the Government Company?
Ans. Government Company
means any company in which at least 51 per cent of the paid up share capital is
held by the Central Government or State Governments or partly by central
Government and partly by one or more of the State Governments.
Q. Classify all the
forms of business enterprises.
Ans. Business enterprises
or business undertakings may broadly be classified into two categories on the
basis of ownership:
Q. List out the
limitations of a Government company.
Ans. Limitations of
a Government company:
(1) Autonomy in name only.The company is subject to government
control in matters of policy as well as operations.
(2) Lack of initiative on part of the directors and officers as
they do not gain or loose anything by the company's performance.
(3) Political considerations - Change in the political system or
the rules directly affect the companies.
(4) Evasion of constitutional Responsibilities of the government
Q. What are the
advantages of Multinationals?
Ans. Advantages of
(1) Foreign Capital Investment: With the setting
up of multinational companies foreign capital inflow is automatic. These
companies bring in much needed capital for establishment and development of
industries, production facilities and the market.
Generation: Multinationals create large scale employment
opportunitiesfor local population in host country and set new standards of
employment in terms of salaries, facilities and quality.
competition: Coming up of MNCs increases competition and
there by break domestic monopolies and compel domestic employers to improve
and technological Growth: By employing their high capital,
advanced technology and high managerial skills for theits own growth the MNCs
automatically generategrowthfor the host country
Q. How will you define
features or characteristics of joint sector
Ans. The main
characteristics of joint sector are as follows:
Ownership: The Government, private entrepreneurs and the
investing public jointly own a joint sector enterprise
Management: the management and control of a joint sector
enterprise lies with the nominees or representatives of the Government, private
entrepreneurs and the public
– Economic objectives: Such enterprises are guided by both
the profit and social objectives
Accountability: Such enterprises are accountable both to
the private entrepreneurs and the government .