CBSE Class 11 Business Studies Public Private and Global Organizations MCQs Set B

Question: Statutory corporations are ____________
a) Private enterprises
b) Sole Proprietorship
c) Public enterprises
d) None of the options
Answer: c 

Question: Which of the following comes under the private sector?
a) Joint Hindu Family
b) Partnership
c) Sole Proprietorship
d) All of the options
Answer: d

Question: 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

Question: Which among these is a benefit derived from a joint venture of both of the companies:
a) Increased resources and capacity
b) Established brand name
c) Access to technology
d) All of the options
Answer: d

Question: _______ came under the 8 PSUs in 1991:
a) Food industry
b) Atomic energy industry
c) Clothing industry
d) Design industry
Answer: b

Question: Government companies have ________ status.
a) legal
a) artificial
a) natural
a) None of the options
Answer: a

Question: Departmental undertakings are financed through
a) Budgetary Allocation.
b) Public loans
c) Loans from financial institutions.
d) Issue of shares and debentures.
Answer: a

Question: Which industry is not reserved for public sector :
a) Sugar industry
b) Nuclear energy
c) Weapons
d) Rail transport
Answer: a

Question: Private enterprises invest their funds in ________
a) Any area
b) areas where return is maximum
c) any area
d) Secures money for long term with minimum risk
Answer: b

Question: The Industrial Policy Resolution took place in the year:
a) 1991
b) 1947
c) 1956
d) 1963
Answer: c

Question: Which one of the following is the disadvantage of MNCs?
a) Disregard national Priorities
b) Bringing foreign exchange
c) Improved standard of living
d) Bringing Advanced Technology
Answer: a

Question: Which is Japanese MNC :
a) Sony
b) Pepsi
c) Ponds
d) Wipro.
Answer: a 

Question:Multinational corporations have a network of subsidiaries in ________.
a) several countries
b) home country
c) state only
a) None of the options
Answer: a

Question: Which is not private undertaking :
a) Partnership
b) Departmental undertaking
c) Joint stock company
d) Sole trade.
Answer: b

Question: What step did government took for the growth and development of the backward areas after independence:
a) Four food based industries were set up in backward areas
b) Two coal mines were set up in the backward regions
c) Four steel plants were set up in the backward regions
d) None of the options
Answer: c

Question: Which among these are the major reforms in the PSUs made in the new Industrial Policy in 1991:
a) Protecting the interest of workers
b) Closing down the PSUs which cannot be revived
c) Restructure and revive potentially viable PSUs
d) All of the options
Answer: d

Question: Atleast ________ of the capital of Government company is held by the Government.
a) 51%
b) 71%
c) 95%
d) None of the options
Answer: a

Question: Disinvestments of PSE’s implies
a) Investing in new areas
b) Closing down private sector/public operations
c) Sale of equity shares
d) Buying shares PSE’s
Answer: c

Question: Public sector enterprise is owned, managed and controlled by the ________.
a) Individuals
b) Government
c) Board of directors
d) None of the options
Answer: b 

Question: Which one of the following is NOT a public sector undertaking?
a) Partnership
b) Departmental undertaking
c) Government companies
d) Statutory corporation
Answer: a

Question: _________ consists of business owned by individuals or a group of individuals
a) Public Sector
b) Private Sector
c) Service Sector
d) None of the options
Answer: b

Fill in the Blanks:

Question: “ MNC’S have their headquarters in their home country and exercise control over all branches and subsidiaries”. Name these feature______________ .
Answer: Centralised control

Question: The agreement in a partnership is referred to as a Partnership Deed while that in a Joint Venture is referred to as a/an ______________
Answer: Memorandum of Understanding

Question: These kinds of businesses are typically found in transport infrastructure such as highways, airports, railroad, hospital etc. Such businesses are often formed as______________.
Answer: Public Private Partnership

Question: Public sector can be classified into ______________ divisions.
Answer: three

Question: Huge investment which only global enterprises can afford is ______________ research.
Answer: qualitative 

True and False:

Question: Indian economy is a mixed economy.
Answer: True

Question: the branches of Global Enterprises are also called majority owned foreign affiliates.
Answer: True

Question: Public enterprises are owned by public.
Answer: False

Question: A joint venture may be the result of an agreement between businesses in different countries.
Answer: True

Question: The main objectives of public sector is to accelerate the rate of economic growth and industrialization.
Answer: True

Question: The private sector consists of business owned by individuals or a group of individuals.
Answer: True

Match the following:

Question: identify the features of MNC on the basis of the following.
             A                                                                                                                     B
1. Investors and banks of the host country are willing to invest in them            a) Product innovation
2. Global enterprise usually enter into agreements with Indian c
ompanies pertaining to the sale of technology,production of goods etc.            b) Marketing strategies
                                                                                                                            c) Advance technology
                                                                                                                            d) Huge capital resources
                                                                                                                            e) Foreign collaboration
Answer: 1-d, 2-a

Question: Match the following with the appropriate features.
         A                                                        B
1. The products produced are                a) Foreign collaboration
    able to conform to
     international standards
    and quality specifications .             
2. Qualitative research requires            b) Advanced Technology
    huge investment which only
    global enterprises can afford.        
                                                              c) Product innovation
                                                              d) Huge Capital resources
Answer: 1-b, 2-d

Question: Match the following with the appropriate options:
          A                                                                                    B
1. Huge industrial organisations which                             a) Departmental Undertaking
    extend their industrial and
    marketing operations through a
    network of their branches in
    several countries.                                             
2. Even investors and banks of the host country              b) Global enterprises
    are willing to invest in
    Global enterprises because of this feature.        
                                                                                          c) Statutory Corporations.
                                                                                          d) Huge capital resources
Answer: 1-b, 2-d

Question: Match the following with the appropriate terms:
                      A                                                                                             B
1. The business organization owned and managed by the government.      a) Global enterprises
2. The business enterprises which operate in more than one country.         b) Public sector
                                                                                                                      c) Joint Venture
                                                                                                                      d) Private sector
Answer: 1-b, 2-a

Very Short Answer Type Questions

Question. Which committee was formed to reconstruct the sick public units?
Answer: All public sector units were referred to the Board of Industrial and Financial Reconstruction to decide whether a sick unit was to be restructured or closed down. The Board has reconsidered revival and rehabilitation schemes for some cases and winding up for a number of units.

Question. What is Joint venture?
Answer: A joint venture is a business arrangement in which two or more persons give their consent in pooling their resources for the purpose of completing a particular task. This task can either be a new project or any other business pursuit. In a joint venture (JV), each of the participant is accountable for profits, losses and costs related with it.

Question. Mention the types of business enterprise which operates in more than one nation.
Answer : Companies that operate business in more than one nation are called as Multinational Companies (MNCs). However, such companies have their headquarters in one country where all the primary business activities take place. For instance, Capgemini, Amazon, etc.,

Question. Provide 2 features of a public-private partnership.
Answer: - The private sector’s role in the partnership is to make maximum use of its skills in managing tasks, innovation and operations to run the business effectively
- The public partners in a public-private partnership (PPP) are the government organisations, i.e., municipalities, government departments, ministries or state-owned enterprises. The private partners can be either local or international and include businesses or investors with financial or technical skills that are relevant to the project.

Question. Name the type of business enterprise which operates in more than one country
Answer: Multinational company may be defined of a company that has business operations in several countries by having its factories, branches or offices in those countries. But is has its headquarter in one country in which it is incorporated. Examples :- PHILIPS, Coca Cola etc.

Question. Mention any two objective of public sector enterprises
Answer:
1. To prevent the growth of monopoly and concentration of economic power in a few private hands.
2. To achieve rapid economic development through industrial growth in accordance with the development plans

Question. It is a public sector enterprise in which Govt. holds at least 51% share. Name the company
OR
How much paid up capital should be at least held by a government company?
Answer: According to the section 2(45) of the Companies Act 2013, a government company means any company in which not less than 51 per cent 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 and includes a company which is a subsidiary of a government company.

Short Answer Type Questions

Question. How does the govt. maintain regional balance in the country
Answer:
- The government is responsible for developing all regions and states in a balanced way and removing regional disparties.
- Attention would be paid to those regions which were lagging behind and public sector industries were deliberately set up
- Four major steel plants were set up in the backward areas to accelerate economic development, provide employment to the workforce and develop ancilliary industries

Question. Write three important steps of forming a joint venture
Answer: Three important steps of forming a joint venture are as follows:
1.Two parties, (individuals or companies), incorporate a company in India. Business of one party is transferred to the company and as consideration for such transfer, shares are issued by the company and subscribed by that party. The other party subscribes for the shares in cash.
2.The above two parties subscribe to the shares of the joint venture company in agreed proportion, in cash, and start a new business.
3.Promoter shareholder of an existing Indian company and a third party, who/which may be individual/company, one of them non-resident or both residents, collaborate to jointly carry on the business of that company and its shares are taken by the said third party through payment in cash.

Long Answer Type Questions

Question. What was the role of public sector before 1991?
Answer:

- Indian economy consists of both privately owned and government owned business enterprises

- The private sector consists of business owned by individuals or a group of individuals

- The public sector consists of various organisations owned and managed by the government.

- These organisations may either be partly or wholly owned by the central or state government.

- They may also be a part of the ministry or come into existence by a Special Act of the Parliament

- In the Industrial Policy Resolution 1948, the Government of India had specified the approach towards development of the industrial sector.

- The Industrial Policy Resolution, 1956 had also laid down certain objectives for the public sector to follow so as to accelerate the rate of growth and industrialization

- The 1991 industrial policy was radically different from all the earlier policies where the government was deliberating disinvestment of public sector and allowing greater freedom to the private sector.

- At the same time, foreign direct investment was invited from business houses outside India.

- Thus, public sector units, private sector enterprises and global enterprises coexisting in the Indian economy.

Question. Write the main features of multinational companies
Answer:

Features:

Huge capital resources:

- They possess huge financial resources and the ability to raise funds from different sources.

- They are able to tap funds from various sources.

- - They may issue equity shares, debentures or bonds to the public.

They are also in a position to borrow from financial institutions and international banks.

- They enjoy credibility in the capital market

Foreign collaboration:

- - They enter into agreements with Indian companies pertaining to the sale of technology, production of goods, use of brand names for the final products, etc.

- They may collaborate with companies in the public and private sector.

There are usually various restrictive clauses in the agreement relating to transfer of technology, pricing, dividend payments, tight control by foreign technicians, etc.

- foreign collaborations have given rise to the growth of monopolies and concentration of power in few hands

Advanced technology:

- These enterprises possess technological superiorities in their methods of production.

- They are able to conform to international standards and quality specifications.

- This leads to industrial progress of the country in which such corporations operate since they are able to optimally exploit local resources and raw materials 

Product innovation:

- These enterprises are characterised by having highly sophisticated research and development departments engaged in the task of developing new products and superior designs of existing products.

Qualitative research requires huge investment which only global enterprises can afford

Marketing strategies:

- They use aggressive marketing strategies in order to increase their sales in a short period.

- They posses a more reliable and up-to-date market information system.

- They already have carved out a place for themselves in the global market, and their brands are well-known, selling their products is not a problem.

Expansion of market territory:

- Their operations and activities extend beyond the physical boundaries of their own countries.

- Their international image also builds up and their market territory expands enabling them to become international brands.

- 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.

Centralised control:

- They have their headquaters in their home country and exercise control over all branches and subsidiaries.

- This control is limited to the broad policy framework of the parent company.

- There is no interference in day to day operations

Question. What are the benefits available for two businesses agree to join together for a common purpose and mutual benefit?
Answer: Joint Ventures
- When two businesses agree to join together for a common purpose and mutual benefit, it gives rise to a joint venture.
- Joint venture is the pooling of resources and expertise by two or more businesses, to achieve a particular goal.
- The risks and rewards of the business are also shared. The reasons behind the joint venture often include business expansion, development of new products or moving into new markets, particularly in another country
- Examples of Joint Ventures are AVI Oil India Pvt. Ltd., Green Gas Ltd etc
- A joint venture must be based on a memorandum of understanding signed by both the parties, highlighting the basis of a joint venture agreement.
- Negotiations and terms must take into account the cultural and legal background of the parties.
- The joint venture agreement must also state that all necessary governmental approvals and licences will be obtained within a specified period

Benefits:
- Teaming up adds to existing resources and capacity enabling the joint venture company to grow and expand more quickly and efficiently
- When a business enters into a joint venture with a partner from another country, it opens up a vast growing market
- They have Access to Advance technology. Advanced techniques of production leading to superior quality products saves a lot of time, energy and investment as they do not have to develop their own technology.

- Joint ventures allow business to come up with something new and creative for the same market.
Especially foreign partners can come up with innovative products because of new ideas and technology
- International corporations invest in India, they benefit immensely due to the lower cost of production. They are able to get quality products for their global requirements
- One of the parties benefits from the other’s goodwill which has already been established in the market.

Question. It is a public enterprise established under Indian Companies Act and conducts business in competition with companies in private sector.
(a) Identify the type of public enterprise.
(b) What is the minimum investment Govt. has to make in such companies.
(c) In whose name shares of this type of company are purchased.
(d) Explain any two advantages and limitations of such companies.
Answer:
a) It is a Government Company. According to the section 2(45) of the Companies Act 2013, a government company means any company in which not less than 51 per cent 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 and includes a company which is a subsidiary of a government company
b) Minimum investment of 51% of paid up capital is to be made by central government, or by any state government or partly by Central government and partly by one or more State governments and includes a company which is a subsidiary of a government company
c) The shares of the company are purchased in the name of the President of India.
d) Advantages are as follows:
- It has a separate legal entity, apart from the Government;
- It enjoys autonomy in all management decisions and takes actions according to business prudence
Limitations are as follows:
- The Government is the only shareholder in some of the companies, the provisions of the Companies Act does not have much relevance
- It evades constitutional responsibility, which a company financed by the government should have