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Private,​ ​Public​ ​and​ ​Global​ ​enterprises 

 

There​ ​are​ ​all​ ​kinds​ ​of​ ​business​ ​like 

Private​ ​Sector​ ​and​ ​Public​ ​Sector: 
There​ ​are​ ​all​ ​kinds​ ​of​ ​business​ ​organisations​ ​small​ ​or​ ​large​ ​organisation,​ ​privately​ ​owned​ ​or 
government​ ​owned​ ​existing
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​ ​These​ ​organisation​ ​affect​ ​our​ ​daily​ ​economic 
life​ ​and​ ​therefore​ ​become​ ​part​ ​of​ ​the​ ​Indian​ ​Economy
...
​ ​it
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Form​ ​of​ ​Public​ ​Sector​ ​Enterprises: 
Public​ ​sector​ ​organisations​ ​are​ ​formed​ ​in​ ​three​ ​different​ ​forms 
(i)​ ​Departmental​ ​undertaking 
(ii)​ ​Public​ ​corporation/Statutory​ ​corporation 
(iii)​ ​Government​ ​company 

Departmental​ ​Undertakings: 
​ ​This​ ​is​ ​the​ ​oldest​ ​form​ ​of​ ​public​ ​sector​ ​considered​ ​as​ ​enterprises
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​ ​It​ ​has​ ​is​ ​no​ ​separate​ ​existence​ ​than 
government
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(b)​ ​They​ ​are​ ​financed​ ​from​ ​the​ ​annual​ ​budgets​ ​of​ ​the​ ​government
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(d)​ ​They​ ​can​ ​be​ ​sued​ ​in​ ​the​ ​same​ ​manner​ ​as​ ​one​ ​can​ ​file​ ​a​ ​suit​ ​against​ ​the​ ​government
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​ ​It​ ​is​ ​fully​ ​financed​ ​by​ ​the​ ​government
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(b)​ ​The​ ​powers,​ ​objectives​ ​and​ ​limitations​ ​of​ ​public​ ​corporation​ ​are​ ​defined​ ​in​ ​the​ ​out​ ​only
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(d)​ ​It​ ​is​ ​managed​ ​by​ ​the​ ​board​ ​of​ ​directors​ ​who​ ​are​ ​nominated​ ​by​ ​the​ ​government
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(f)​ ​The​ ​Accounts​ ​of​ ​Public​ ​Corporation​ ​are​ ​generally​ ​audited​ ​by​ ​the​ ​Controller​ ​and​ ​Auditor 
General
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For​ ​example,​ ​Steel​ ​Authority​ ​of​ ​India 

Features: 

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(a)​ ​Registration 
(b)​ ​Ownership 
(c)​ ​Management 
(d)​ ​Separate​ ​legal​ ​entity 
(e)​ ​Ministerial​ ​control 
(f)​ ​Financial​ ​autonomy 
(g)​ ​Efficient​ ​staff 
(h)​ ​Accountability 

Merits: 
(a)​ ​Administrative​ ​autonomy 
(b)​ ​Greater​ ​flexibility 
(c)​ ​Efficient​ ​staff 
(d)​ ​Collaboration 

Demerits: 
(a)​ ​Autonomy​ ​on​ ​paper​ ​only 
(b)​ ​Political​ ​Interference 
(c)​ ​Board​ ​packed​ ​with​ ​government​ ​representatives, 

Role​ ​of​ ​Public​ ​Sector: 
(i)​ ​Development​ ​of​ ​Infrastructure:​ ​The​ ​infrastructure​ ​consists​ ​of​ ​services​ ​like 
transportation
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​ ​The​ ​infrastructure​ ​is​ ​considered​ ​as​ ​the 
backbone​ ​of​ ​economic​ ​growth
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(ii)​ Regional​ ​Balance​​ ​The​ ​government​ ​tries​ ​to​ ​locate​ ​new​ ​public​ ​sector​ ​enterprises​ ​in​ ​the 
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backward​ ​areas​ ​so​ ​that​ ​the​ ​people​ ​of​ ​that​ ​area​ ​get​ ​opportunity​ ​to​ ​work​ ​and​ ​these​ ​can​ ​also 
be​ ​developed​ ​ensuring​ ​balanced​ ​regional​ ​development
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(iv)​ Check​ ​Over​ ​Concentration​ ​of​ ​Economic​ ​Power​​ ​The​ ​public​ ​sector​ ​can​ ​invest​ ​in​ ​heavy 
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sector​ ​and​ ​thus​ ​income​ ​does​ ​not​ ​go​ ​in​ ​a​ ​few​ ​hands​ ​of​ ​private​ ​sector​ ​but​ ​it​ ​gets​ ​shared​ ​by​ ​a 
large​ ​number​ ​of​ ​employees​ ​and​ ​workers
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(v)​ ​Import​ ​Substitute​​ ​These​ ​enterprises​ ​are​ ​making​ ​us​ ​self-reliant​ ​and​ ​saving​ ​huge 
amount​ ​of​ ​foreign​ ​exchange
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​ ​“A​ ​multinational​ ​corporation​ ​owns​ ​and 
manages​ ​business​ ​in​ ​two​ ​or​ ​more​ ​countries 

Features 
(a)​ ​Giant​ ​size 
(b)​ ​International​ ​operations 
(c)​ ​Professional​ ​management 
(d)​ ​Centralised​ ​control 
(e)​ ​Oligopolistic​ ​powers 
(f)​ ​International​ ​market 

Merits 
(a)​ ​Employment​ ​opportunities 

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(b)​ ​Advanced​ ​technology 
(c)​ ​Foreign​ ​capital 
(d)​ ​Growth​ ​of​ ​domestic​ ​firm 
(e)​ ​Foreign​ ​exchange 
(f)​ ​Standard​ ​of​ ​living 
(g)​ ​Healthy​ ​competition 
(h)​ ​Managerial​ ​revolution 

Demerits 
(a)​ ​Obsolete​ ​technology 
(b)​ ​Creation​ ​of​ ​monopoly 
(c)​ ​Restrictive​ ​clauses 
(d)​ ​Excessive​ ​remittance 
(e)​ ​Threat​ ​to​ ​national​ ​sovereignty 
(f)​ ​Depletion​ ​of​ ​National​ ​resources 

Joint​ ​Venture: 
When​ ​two​ ​or​ ​more​ ​firms​ ​join​ ​together​ ​to​ ​Establish​ ​a​ ​new​ ​enterprise​ ​then​ ​it​ ​is​ ​known​ ​as 
joint​ ​venture

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