Public Private and Global Enterprises Test - 22

Shares of a Government Company are purchased in the name of the President of India. This is because the President of India holds the shares of Government Companies in trust for the people of India. As the head of state, the President represents the sovereignty of India and holds certain assets, including shares of Government Companies, on behalf of the nation. Therefore, when shares of a Government Company are purchased, they are registered in the name of the President of India to signify governmental ownership and control over these entities.

When two businesses agree to collaborate and join together for a common purpose and mutual benefit, it gives rise to a Joint Venture. A Joint Venture is a business arrangement where two or more parties, typically companies, pool their resources, expertise, and capabilities to undertake a specific project or venture together.

In a Joint Venture, each party contributes assets, shares risks, and shares in the profits or losses of the venture. It allows companies to leverage each other's strengths, access new markets, share costs and risks, and pursue opportunities that may be beyond their individual capacities.

Departmental Undertakings, also known as government departments or government agencies, are suitable in cases where national security is a primary concern. These undertakings are directly owned and operated by the government, enabling tight control and supervision over operations related to national security. Examples include defense production units, intelligence agencies, and border security forces. By keeping such operations within the purview of government departments, the government can ensure strategic control and alignment with national security objectives.

Industrial Policy Resolution of 1956 (IPR 1956) is a resolution adopted by the Indian Parliament in April 1956. It was the first comprehensive statement on industrial development of India. This comprised 17 industrial areas which were strictly under the Central Government. In the 1956 resolution on industrial policy 17 industries were reserved for public sector.

Centralized control in multinational corporations (MNCs) means decision-making authority is primarily held by the headquarters. This entails key strategic decisions, policies, and management direction being determined centrally rather than by individual subsidiaries or branches. The headquarters sets goals, formulates strategies, manages finances, and coordinates activities across the organization. While subsidiaries or branches may have some autonomy, significant decisions affecting the entire corporation are made by the headquarters to ensure consistency and alignment with corporate objectives.

When the government grants autonomy to a Public Sector Undertaking (PSU) to enhance its performance while holding it accountable for specified results, it often enters into a Memorandum of Understanding (MoU) with the PSU.

A MoU is a formal agreement between two parties, in this case, the government and the PSU, that outlines mutual objectives, expectations, and commitments. It serves as a tool for setting performance targets, defining roles and responsibilities, and monitoring progress towards achieving specific outcomes. Under the MoU, the government outlines the level of autonomy granted to the PSU and the performance parameters it is expected to meet. The PSU, in turn, agrees to adhere to these parameters and deliver the specified results within the agreed-upon timeframe.

Multinational Corporations (MNCs) may disregard national priorities by prioritizing their own profit motives over social, environmental, and economic concerns of the countries they operate in. This can lead to conflicts with local regulations, exploitation of labor, and tax avoidance practices. Such behavior may exacerbate inequalities and hinder sustainable development efforts, posing a notable disadvantage of MNCs.

A key feature of a departmental undertaking as a form of public sector enterprise is direct control by the government department or ministry. Departmental undertakings are entities directly owned and operated by government departments or ministries to fulfill specific functions or deliver essential services. This direct control allows the government to closely oversee the operations, management, and decision-making processes of the undertaking in alignment with its policies and objectives. 

A key feature of global enterprises is that they engage in business activities across national borders. Unlike businesses that are limited to operating within a single country or primarily focused on local markets (options A and B), global enterprises expand their operations internationally, establishing subsidiaries, partnerships, or operations in multiple countries. This allows them to access new markets, resources, and opportunities, contributing to their global reach and presence.

Departmental undertakings refer to organizations that operate directly under government departments, without a separate legal entity status. These entities are fully owned and controlled by the government, and their operations are funded through government budgets. Post and Telegraph Department is the correct example of a departmental undertaking, as it aligns with the definition of being directly operated and funded by a government department.