CLASS 11 BUSINESS STUDIES CHAPTER 3 REVISION NOTES PRIVATE, PUBLIC, GLOBAL ENTERPRISES

   CLASS 11 BUSINESS STUDIES CHAPTER 3 REVISION NOTES
PRIVATE, PUBLIC, GLOBAL ENTERPRISES


Role of Private Sector Vs. Public Sector

Immediately after Independence government allotted a dominant role to public sector enterprises but these enterprises could do very little for economic development of the country .That is why in 1991 the government of India adopted a new industrial policy of globalization and liberalization. Under the new policy the dominant position of public sector was restricted and many doors were opened for private and foreign companies. 

Types of Public Sector Enterprises.

 The public sector enterprises are formed in following different forms: 

1. Departmental undertaking 
2. Public corporations 
3. Government company.

Departmental Undertaking-  This form of public sector enterprise is just like the departments of government. The main features of departmental undertakings are: 

1. Overall control of government 
2. No separate legal entity 
3. Fully financed by government 
4. Revenue gets deposited in government treasury 5. Operated by civil servants 
6. Direct control of concerned ministry 
7. Can be sued by the procedure of suing the government. 

Merits of Departmental Undertakings are: 

1. Easy formation 
2. Optimum utilization of resources 
3. Effective control 
4. Accountability 
5. Secrecy. 
6. Public revenue 

The Drawbacks or Demerits of Departmental Undertakings are: 

1.inflexibility
2. Lack of motivation 
3. Inefficient management 
4. Lack of financial autonomy 
5. Red tapism. 

Public Corporation- It is a body corporate formed by passing a special Act of Parliament or State Legislature. Main features of a public corporation are: 

1. Formation by passing an Act 
2. Control by Government 
3. Separate legal entity 
4. Management by Board of Directors 
5. Powers and objectives are defined in the Act only 
6. Own staff 
7. Administrative autonomy 
8. Accountable to Parliament.


Merits of Public Corporation are: 

1. Administrative autonomy 
2. Quick decision 
3. Service motive 
4. Efficient staff 
5. Professional management. 


Demerits of Public Corporation are: 

1. Theoretical autonomy 
2. Lack of initiative 
3. Rigid structures 
4. Unfair practices. 


Government Company- A company in which at least 51% of paid-up share capital is held by government of India is known as government company. Features of government company are: 

1. Compulsory registration 
2. Managed by Board of Directors 
3. Ministerial control 
4.Efficient staff 
5.Owned by the government 
6.Separate legal entity 
7.Financial autonomy 
8.Accountability. 


The main Advantages of Government Company are: 

1. Administrative autonomy 
2. Efficient staff 
3.Greater flexibility 
4. Collaboration.


The Demerits of Government Company are: 

1. Autonomy on paper only 
2. Political interference 
3. Board packed with yes men 

Govt. policy towards the public sector since 1991 

(a) Reduction in number of industries reserved for public'sector 
(b) Disinvestment 
(c) Policy regarding sick units 
(d) Memorandum of Understanding (MOU).


Global Enterprises. A company operating in more than one country is known as multinational company or global enterprise. Features of MNCs are: 

1. Giant size. 
2. International operation. 
3. Professional management. 
4. Centralized control. 
5. Monopolistic powers. 
6. Sophisticated technology 
7. International market. 


Joint Venture 

Meaning- It refers to partnership between two firms. 

 Features :-

 1. Reduce competition 
 2. Reduce risk 
 3. Protection for small company 
 4. Advanced technology 
 5. Better competence 
 6. Reduction in cost 
 7. Large capital 

 Features of Public Private Partnership 

 1. Contract between public sector and private party 
 2. Cost of using service
 3. Provision of capital subsidy 
 4. 4. Problem with PPP.

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