NCERT Solution For Class 11 Business Studies Chapter 3 – Private, Public and Global Enterprises

A broad variety of definitions and introduction to the topic are offered by NCERT Solutions for Class 11 Business Studies, which includes all the questions provided in the NCERT books.

Economics is a social science concerned with the production, distribution (allocation) and expenditure or utilization of goods and services. It is a study of how individuals, trades, governments and countries make choices on the distribution of resources in order to convince their needs and to try to determine how these categories should combine and coordinate efforts to achieve maximum output. Economic analysis generally advances through analytical processes, more like mathematical logic, where the inferences of distinct human pursuits are reflected in the “means-ends” substructure.

NCERT Solutions of the 11th Std Business Studies has been provided to ace up your preparation. Access and use the direct links available for Chapterwise Class 11 NCERT Solutions whenever you want. The detailed approach used to explain the NCERT Solutions of the 11th Std Business Studies makes it easy for you to understand the concepts behind them.

NCERT Solutions is said to be an extremely helpful book during the preparation of the CBSE Class 11 Business Studies Exams. This study material has deep knowledge, and the solutions collected by the subject matter wizards are not separate.

NCERT Solution For Class 11 Business Studies Chapter 3 – Private, Public and Global Enterprises provides us with all-inclusive information on all concepts. As students would have to learn the basics about the subject of economics in class 11, this curriculum for class 11 is a comprehensive study material, which explains the concepts in a great way.

Short Questions

1. Explain the concept of private sector and public sector?

Private Sector: The private sector comprises of businesses that are owned by one or a group of individuals. The sole purpose of a private sector enterprise is to earn profit. There are many types of organisations under private sector and they are:

1. Sole proprietorship
2. Partnership
3. Joint Hindu Family
4. Cooperative societies
5. Company (LLP, LLC)

Public Sector: The public sector includes organizations that are partially or wholly owned by the government. The government may hold a 51% controlling stake in the organization. Such organizations may come into existence by some special Act of Parliament. By connecting with the public sector, the government participates in the economic activities of the country.

2. State the various types of organisations in the private sector.

The sole purpose of a private sector enterprise is to earn profit. There are many types of organisations under private sector and they are:

1. Sole proprietorship
2. Partnership
3. Joint Hindu Family
4. Cooperative societies
5. Company (LLP, LLC)

        3. What are the different kinds of organisations that come under the public sector?

The public sector consists of organisations that are either wholly or partially under government control. The following are the various forms of public sector organisations.

1. Public corporations or statutory corporations
2. Departmental undertakings
3. Government company

         4. List the name of some enterprises under the public sector and classify them.

• Departmental Undertaking: Indian Post and Telegraph
• Government Company: Steel Authority of India Limited (SAIL)
• Statutory Corporation: Life Insurance Corporation (LIC) of India

         5. Why is the government company form of organisation preferred to other types in public sector?

Government company form of organisation is preferred because of the following benefits it offers:

1. A government company can be easily formed because there is no need to pass a bill in Parliament. It is created by following the procedure outlined in the Indian Companies Act, 1956.2. There is maximum autonomy in the way all decision-making takes place in a government company.3. There is greater efficiency in the management of the business as the government company is more accountable than other public enterprise forms and the annual report is presented in both houses of Parliament.4. Provides a good competition to private sector businesses and thus ensures that goods are available at a reasonable price.

6. How does the government maintain a regional balance in the country?

Government maintains regional balance in the following ways:

1. The Government of India established major steel plants in rural areas with a view to developing backward areas and made the people living there a source of employment.2. Similar to steel plants, there are many other industry setups that provide employment opportunities.3. Other sectors related to the development of industries also developed, which helped bring prosperity in the country.4. The setting up of industries had a direct impact on the development of the region resulting in better roads, infrastructure development, bridges and rail connectivity, connecting all parts of India.

7. State the meaning of public private partnership.

It refers to an arrangement where a partnership is formed between the public sector and the private sector. Such partnerships allocate obligations, responsibilities, functions and risks between the public and private sector. Public partners include government departments, organizations, and private partners may include local business houses or foreign organizations.

Long Questions

1. Describe the industrial policy 1991, towards the public sector?

Following reforms were introduced in the Industrial Policy, 1991 for the public sector.

1. Dereservation: In 1991, only 8 industries were reserved for the public sector including arms and ammunition, defense, nuclear power, mining and railways. All other sectors were opened to participate in the private sector.

2. Disinvestment of Public Sector Enterprises: The process involved selling equity to the general public and the private sector or controlling part of the stock. The motive behind such a decision was to encourage the participation of private enterprises and the general public for the ownership of public enterprises.
3. Policy to deal with Sick units: This policy is mainly associated with the reorganization or termination of sick public sector units. To determine which units should be restructured and which to close, they were sent to the Board of Industrial and Financial Reconstruction (BIFR), and a National Renewal Fund (by the government to help the workforce or employees) NRF) was created. Also to provide compensation to employees who retire from a sick unit and seek voluntary retirement.
4. Memorandum of Understanding: This process helped provide greater autonomy to public sector units and also made them accountable for the results produced. A memorandum of understanding was signed between the public sector entity and the concerned ministries. Public sector units were given clear set targets and fully operational autonomy to achieve that goal.

2. What was the role of the public sector before 1991?

The role of the public sector before 1991 was as follows:1.      Development of heavy industries and infrastructure: The country’s infrastructure was not developed before 1991. There were fewer industries and heavy industries were also lacking. The government took the initiative to initiate such projects as public sector industries.2.      Maintaining Regional Balance: After the establishment of the Planning Commission, the government started focusing on the development of rural and backward areas and as a result four steel plants were set up in rural areas to encourage economic growth of the area And provide employment to the population.3. Maintaining economies of scale: When produced in bulk the cost of production will be lower, but bulk production requires a larger amount of capital. Electricity, natural gas and petroleum were the industries chosen by the government for mass production. This helped to balance economies of scale.4. Economic power: Some industries existed after independence and large capital was needed to start a new enterprise, in which case if public sector units were not established, money would have been concentrated in few hands, which Gives rise to growth. The public sector ensured that a large number of people benefited.5. Self-reliance: Heavy machinery was needed for a strong industrial base. The government helped selected enterprises like STC to expand and manufacture heavy machinery and metal industries domestically. This caused a huge reduction in imports and created a self-sufficiency for goods.

3. Can the public sector companies compete with the private sector in terms of profit and efficiency? Give reasons for your answer.

The public sector and the private sector operate separately and therefore it would be difficult for the public sector to reconcile benefits and efficiency for the following reasons:1. The public sector works for social welfare while the private sector works for profit maximization, so it will be harder to compete2. As ownership increases with the government, many decisions will be based on political ideas rather than getting more benefits. 3. Employees are less efficient in public sectors because it involves many rules and laws, whereas it is more performance oriented in the private sector.4. The public sector is slow to adopt new technologies, while the private sector is a fast mover.

4. Why are global enterprises considered superior to other business organisations?

Global enterprises enjoy the upper hand over all other business organization due to these reasons:1. Broad market: As global enterprises expand between continents, they have access to a larger geography and resources.2. Reducing Risk: By working in different countries and setting up joint ventures with organizations in that country, multinationals can reduce the risk because the losses incurred in one country are offset by gains from another country May go. 3. Funds: These enterprises have good financial resources, they raise funds from many sources and take money from banks with international presence.4. Research and Development: They have a more organized R&D network that is well funded which develops new products quicker than others.5. Marketing: Global companies have a more aggressive style of marketing that increases sales, and they reinvent marketing techniques resulting in higher sales volumes.

5. What are the benefits of entering into a joint venture and public private partnership?

A joint venture is a type of business agreement where two organizations join together to achieve mutual benefit and profit. Organizations share business risks and profits in addition to resources and finance. Here are some benefits of joint venture:

1. When a joint venture is formed the available resources and related operational activities of the business are pooled. It helps in the development of business.
2. This association helps in expanding business by expanding geographical reach which helps in reaching new markets.

3. By forming a joint venture, companies get access to the latest technologies with minimal investment.4. In a joint venture, technical know-how is shared between companies that bring innovation to the product5. The cost of production is reduced because raw materials are available in plenty.There is a public private partnership, where all the risks of the business are distributed equally. The risk of the investor in such a partnership is low.Some of the benefits of PPP are:1. Risk sharing is reduced as it is shared with the public2. Sharing of tasks and responsibility ends the project faster.