Class 11 OCM Chapter 5: Forms of Business Organisation - II (Public Sector)

Key concepts: Forms of Business Organisation - II (Public Sector)

Meaning

Organisations owned, financed, managed and controlled by government or a combination of governments (e.g. HPCL, BPCL).

Aim

Private sector aims at profit maximisation; public sector aims at providing reliable service to customers.

Forms

Departmental organisation, statutory corporation and government company.

Departmental organisation

Run as a department of a ministry, e.g. Indian Railways, Post and Telegraph.

Statutory corporation

Created by a special Act of Parliament or State Legislature, e.g. LIC, Air India (historically).

Government company

A company in which the government holds at least 51% of share capital, e.g. BHEL.

Quick revision: important points

• After independence the public sector grew as part of the Industrial Policy, 1956.
• Before independence: post and telegraph, airlines and railways were in the public sector.
• BHEL = Bharat Heavy Electricals Limited.

Practice MCQs with answers

1. Public sector organisations are owned by the:

   1. Government
   2. Individuals
   3. Foreign firms only
   4. Employees
   Show answer

   Answer: A. Government
   They are owned and controlled by the government.

2. Which is a form of public sector organisation?

   1. Statutory corporation
   2. Sole proprietorship
   3. Partnership
   4. HUF
   Show answer

   Answer: A. Statutory corporation
   Departmental organisation, statutory corporation and government company are public forms.

3. Indian Railways is an example of a:

   1. Departmental organisation
   2. Private company
   3. Partnership
   4. Co-operative
   Show answer

   Answer: A. Departmental organisation
   It is run as a government department.

4. BHEL is a:

   1. Government company
   2. Sole proprietorship
   3. Partnership firm
   4. HUF business
   Show answer

   Answer: A. Government company
   The government holds the majority stake.

5. Public sector primarily aims at:

   1. Providing services
   2. Maximising profit only
   3. Avoiding regulation
   4. Ending trade
   Show answer

   Answer: A. Providing services
   Reliable service to customers is the main aim.

All Class 11 OCM chapters

• Chapter 1: Introduction of Commerce and Business
• Chapter 2: Trade
• Chapter 3: Small Scale Industry and Business
• Chapter 4: Forms of Business Organisation - I (Private Sector)
• Chapter 5: Forms of Business Organisation - II (Public Sector)
• Chapter 6: Institutes Supporting Business
• Chapter 7: Business Environment
• Chapter 8: Introduction to Management

Class 11 OCM notes: all chapters