Case-Based Questions: Private, Public and Global Enterprises | Business Studies (BST) Class 11 - Commerce PDF Download

Carefully read the following case studies, which present real-world business scenarios, and answer the question(s) that follow each case to test your understanding and application of business studies concepts.

Case 1: Mr. Gajendra’s Business and Family
Mr. Gajendra is a businessman dealing in the sale of electronic items. His daughter Gauri works at Kotak Mahindra Bank, and his son Sarvesh is employed by the State Electricity Board. Mr. Gajendra applied for a home loan from Kotak Mahindra Bank and was impressed by the bank’s efficient work culture, receiving the loan much faster than expected. However, when he applied for an electricity connection from the State Electricity Board, he faced significant delays, receiving no satisfactory response even after six months. Gauri explained to her father that the public sector’s work culture differs from that of the private sector, noting that the public sector often lags in efficiency and profitability.

Q1: 'His daughter Gauri is working in Kotak Mahindra Bank.' Identify the sector in which Gauri is working.
(a) Public sector
(b) Private sector
(c) Both (a) and (b)
(d) Neither (a) nor (b)

Correct Answer: Option (b)
Kotak Mahindra Bank is a private sector organization, as it is a for-profit business run by individuals or companies, not controlled by the government. The private sector is characterized by efficiency and profit-driven motives, as seen in the quick loan processing for Mr. Gajendra. Public sector organizations, like the State Electricity Board, are government-controlled, while non-profits belong to the voluntary sector.

Q2: ‘It could not compete with private sector in terms of efficiency and in terms of profits as well.’ The reason for this is their:
(a) Motive
(b) Autonomy
(c) Management
(d) All of these

Correct Answer: Option (d)
The public sector, like the State Electricity Board, struggles to match private sector efficiency and profitability due to differences in motive (public welfare vs. profit), autonomy (bureaucratic constraints vs. flexibility), and management (red-tapism vs. streamlined processes). These factors collectively hinder the public sector’s ability to compete, as seen in the delayed electricity connection process.

Q3: ‘...his son, Sarvesh is working in State Electricity Board.’ Identify the form of business organization the State Electricity Board is related to:
(a) Departmental Undertaking
(b) Statutory Corporation
(c) Government Company
(d) Private Sector Company

Correct Answer: Option (a)
The State Electricity Board operates as a Departmental Undertaking, a public sector organization directly controlled and financed by the government, typically under a ministry. These entities focus on public utility services, like electricity distribution, but often face inefficiencies, as evidenced by the six-month delay in Mr. Gajendra’s connection request.

Q4: What is the reason behind the delay in decision-making in the form of business employing Sarvesh?
(a) Red-tapism
(b) Employee absenteeism
(c) Mismanagement
(d) Conflict of interest

Correct Answer: Option (a)
The delay in decision-making at the State Electricity Board, a Departmental Undertaking, is due to red-tapism, characterized by excessive bureaucratic procedures and rigid adherence to rules. This hinders timely action, as seen in Mr. Gajendra’s prolonged wait for an electricity connection, unlike the efficient private sector processes at Kotak Mahindra Bank.

Case 2: Techzuka Computer Ltd.
To pool resources and expertise, Tech Top Computer Ltd. (India) and Shizuka Computers Ltd. (Japan) signed an agreement to form a new business entity, Techzuka Computer Ltd., in India. Both companies subscribed to shares of the new company in an agreed ratio. This alliance has been mutually beneficial, enabling both firms to capitalize on new opportunities by combining their resources. Tech Top Computers benefits from India’s cheap and abundant raw materials, while gaining access to Shizuka Computers’ professional management practices and technically qualified workforce. The joint venture allows Techzuka to access markets in both India and Japan, offering innovative products at competitive rates.

Q5: Identify the kind of business enterprise formed by Shizuka Computers Ltd. and Tech Top Computers Ltd.
(a) Cooperative Society
(b) Partnership
(c) Joint Venture
(d) MNC

Correct Answer: Option (c)
Techzuka Computer Ltd. is a Joint Venture, formed by two companies (Tech Top and Shizuka) pooling resources to create a new entity for mutual benefit. Unlike a partnership, which involves individuals, or a cooperative society, which focuses on member welfare, a joint venture is a strategic alliance between firms, as seen in the shared ownership and market expansion.

Q6: ‘Both the business parties have subscribed the Shares of the new company in agreed ratio.’ The type of business venture formed is a ______ venture.
(a) Equity-based
(b) Contractual
(c) Human-resource-based
(d) Technology-based

Correct Answer: Option (a)
The venture is an Equity-based Joint Venture, as both companies (Tech Top and Shizuka) have invested capital by subscribing to shares in an agreed ratio. This distinguishes it from contractual ventures (based on agreements without ownership) or ventures focused solely on human resources or technology.

Q7: Which of the following benefits of such type of partnership is not mentioned in the above passage?
(a) Increased resources
(b) Access to new markets
(c) Established brand name
(d) Innovation

Correct Answer: Option (c)
The Case highlights benefits like increased resources (pooled raw materials and expertise), access to new markets (India and Japan), and innovation (innovative products). However, it does not mention an established brand name, which would imply a pre-existing market reputation not discussed in the context of the new entity.

Q8: ‘Both the business parties have subscribed the Shares of the new company in agreed ratio… benefitted by learning professional management practices and technically qualified workforce of Shizuka Computers Ltd.’ This has resulted in which of the following:
(a) Access to new market
(b) Established brand name
(c) Low cost of production
(d) Both (b) and (c)

Correct Answer: Option (c)
The collaboration, leveraging Shizuka’s management practices and workforce alongside India’s raw materials, results in low cost of production, enabling competitive pricing. Access to new markets is mentioned separately, and an established brand name is not referenced in the passage.

Case 3: Role of Public Sector Enterprises
Rachit, a Class XI student, was tasked by his Business Studies teacher to write an article on the ‘Role of Public Sector Enterprises in the Indian Economy,’ where both private and public sectors coexist. While researching, he learned about various Public Sector Undertakings (PSUs) that help the government achieve a socialistic pattern of society. Some PSUs, like those in Defence and Railways, operate under direct ministerial control, while others, created for public utility services, function autonomously through special parliamentary acts. To compete with private sector companies, PSUs like ONGC and BHEL operate commercially, with up to 49% private sector ownership, but the government retains majority control. Government policies for PSUs evolve based on economic and industrial needs.

Q9: ‘…in Indian economy where both private sector and public sector exists.’ Identify the nature of the Indian economy.
(a) Capitalistic Economy
(b) Socialistic Economy
(c) Mixed Economy
(d) Developed Economy

Correct Answer: Option (c)
The Indian economy is a Mixed Economy, combining elements of both private sector (market-driven) and public sector (government-controlled) enterprises. This structure supports socialistic goals, as seen in PSUs, while allowing private sector participation, unlike purely capitalistic or socialistic economies.

Q10: What is the minimum percentage of the paid-up capital that must be held by the government in Government Companies?
(a) 51%
(b) 49%
(c) 75%
(d) 100%

Correct Answer: Option (a)
In Government Companies like ONGC and BHEL, the government must hold at least 51% of the paid-up capital to maintain majority control, while the private sector can own up to 49%, as stated in the passage.

Q11: ‘Public Sector Enterprises formed by the government in strategic areas like Defence, Railways, etc. under the direct control of ministry.’ Name the type of PSEs stated here.
(a) Departmental Undertakings
(b) Statutory Corporation
(c) Government Company
(d) Public Company

Correct Answer: Option (a)
These PSEs are Departmental Undertakings, directly managed by government ministries, focusing on strategic sectors like Defence and Railways. They are fully government-owned and controlled, unlike Statutory Corporations (formed by special acts) or Government Companies (with shared ownership).

Q12: ‘PSE to work as an autonomous body by passing a Special Act in the Parliament.’ Which of the following PSE is an example of such Public Sector Undertakings?
(a) Hindustan Aircrafts
(b) Unit Trust of India
(c) Hindustan Machine Tools
(d) Maruti Udyog Ltd.

Correct Answer: Option (b)
Unit Trust of India is a Statutory Corporation, established as an autonomous PSE through a special act of Parliament. This distinguishes it from Departmental Undertakings (e.g., Railways) or Government Companies (e.g., Maruti Udyog), which operate under different structures.