Public and Global Enterprises

 

PUBLIC SECTOR REFORMS :

In the industrial policy 1991, the govt. of India introduced four major reforms in public sector.

    1. Reduction in no. of industries reserved for public sector - This no. is reduced from 17 to 8 and to 3 industries only in 2001. These three industries are atomic energy, arms and rail transport.

    2. Memorandum of Understanding (MOU) - Under this govt. lays down performance targets for the management and gives greater autonomy to hold the mgt. accountable for the results.

    3. Disinvestment - Equity shares of public sector enterprises were sold to private sector and the public. It was expected that this would lead to improved managerial performance and better financial discipline.

    4. Restructure and Revival :- All public sector sick units were referred to Board of Industrial and financial Reconstruction (BIFR). Units which were potentially viable were restructured and which could not be revived were closed down by the board.

MULTI NATIONAL COMPANIES :

Multinational Company may be defined as a company that has business operations in several countries by having its factories, branches or offices in those countries. But it has its headquarter in one country in which it is incorporated. Example :- GEC, IBM, PHILIPS, COCA-COLA etc.

FEATURES :

  1. Huge Capital Resources :- MNCs possess huge capital resources and they are able to raise lot of funds from various sources.

  2. International Operations :- A MNC has production, marketing and other facilities in several countries.

  3. Centralized control : MNCs have headquarters in their home countries from where they exercise control over all branches and subsidiaries. It provides only broad policy framework to them and there is no interference in their day to day operations.

  4. Foreign Collaboration :- Usually they enter into agreements relating to sale of technology, production of goods, use of brand name etc. with local firms in the host country.

  5. Advanced technology - These orgs possess advanced and superior technology which enable them to provide world class products & services.

  6. Product Innovations :- MNCs have highly sophisticated research and development departments. These are engaged in developing new products and superior design of existing products.

  7. Marketing Strategies - MNCs use aggressive marketing strategies. Their brands are well known and spend huge amounts on advertising and sale promotion.

JOINT VENTURES :

Meaning :- 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.
Example : Hero Cycle of India and Honda Motors Co. of Japan jointly established Hero Honda. Similarly Suzuki Motors of Japan and Govt. of India come together to form Maruti Udyog.

BENEFITS :

  1. Greater resources and Capacity - In a joint venture the resources and capacity of two or more firms are combined which enables it to grow quickly and efficiently.

  2. Access to advanced 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.

  3. Access to New Markets and distribution network - A foreign co. gain access to the vast Indian market by entering into a joint venture with Indian Co. It can also take advantage of the well established distribution system of local firms.

  4. Innovation - Foreign partnets in joint ventures have the ideas and teachnology to develop innovative products and services. They have an advantage in highly competitive and demanding markets.

  5. Law cort of production - Raw material and labour are comparatively cheap in developing countries so if one partner is from developing country they can be benefited by the low cost of production.

  6. Well known Brand Names :- When one party has well established brands & goodwill, the other party gets its benefits. Products of such brand names can be easily launched in the market.

VERY SHORT ANSWER QUESTIONS (1 MARK) :

  1. Name the sector which consists of business organizations owned & managed by government.
  2. Give two examples of Multinational Companies.
  3. Write the name of system by which management of a public enterprise is granted more autonomy but held accountable for specific results.
  4. Write the name of enterprise that operate in several countries.
  5. What is departmental undertaking?
  6. Name the type of public enterprise which requires a special Act of parliament

SHORT ANSWER QUESTIONS (3 MARKS) :

7. What is memorandum of understanding?
8. How does the govt. maintain a regional balance in the country?
9. Write three difference bet’ Departmental undertaking and Government Co.

LONG ANSWER QUESTIONS (5/6 MARKS) :

10. Define joint venture and explain its major benefits.
11. Write main features of multi national company.
12. Why is the government company form of organization preferred to other types in the public sector?
13. Explain the changing role of public sector in India.
14. What is statutory corporation? Explain its features.
15. Explain three merits and three limitations of Departmental undertaking.

 

CBSE Business Studies Class XI ( By Mr. Kailash Gururani )
Email Id : [email protected]

Business Studies - Mr. Kailash Gururani

 

 

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