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Business Studies QA Chapter 3

The document differentiates between public and private sector companies. Public sector companies are owned and managed by governments and exist to provide basic public services at reasonable cost, while private sector companies are owned by individuals or groups and exist primarily for profit-making. Public sector companies are subject to greater government interference and accountability, while private sector companies have relatively less interference. Some forms of organization in each sector include government departments and companies for public and sole proprietorships, partnerships, and companies for private. Redtapism refers to excessive adherence to rules and regulations that delays decision-making, especially in public sector undertakings due to political interference and rigid procedures.

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Gehna Jain
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159 views2 pages

Business Studies QA Chapter 3

The document differentiates between public and private sector companies. Public sector companies are owned and managed by governments and exist to provide basic public services at reasonable cost, while private sector companies are owned by individuals or groups and exist primarily for profit-making. Public sector companies are subject to greater government interference and accountability, while private sector companies have relatively less interference. Some forms of organization in each sector include government departments and companies for public and sole proprietorships, partnerships, and companies for private. Redtapism refers to excessive adherence to rules and regulations that delays decision-making, especially in public sector undertakings due to political interference and rigid procedures.

Uploaded by

Gehna Jain
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Question 1. Differentiate between private and public sector companies.

Answer-
Basis Public Sector Private Sector
Definition Public Sector refers to the The private Sector refers to
part of the Country’s overall the part of the Country’s
economy which is overall economy which is
controlled by the controlled by Individuals or
Government or various group of individuals.
Government bodies.

Ownership Public sector companies are Private sector companies


owned and managed by are owned and managed by
Government/Ministries/Stat Private Individuals or group
e Govt./Govt. Bodies of individuals.

Primary Purpose Public Sector entities are The purpose of Companies


driven by the purpose of in the Private Sector is
providing the basic public profit-making by operating
services to the common within the rules and
public at a reasonable cost compliances of the
respective country.

Government Since Public Sector Private Sector entities are


Interference companies are owned by relatively less exposed to
Government, therefore they Government interference.
are subject to the
uncertainties related to
unfavorable Government
decisions and larger
Government interference.

Accountability Public enterprises are


accountable to the public
through the parliament.

Forms of organization 1. Departmental 1. Sole Proprietorship


Undertakings 2. Partnership
2. Government 3. Joint Hindu family
companies business
3. Statutory 4. Cooperatives
corporations 5. Companies
(a) Public
(b) Private
6. MNCs
Question 2- What is redtapism?

Answer- Redtapism means follow up of excessive rules and regulations for taking an
action. It delays the decision-making process. The decisions of departmental
undertaking usually get delayed due to political interference and rigid procedures.
These undertakings are excessively centralised that results in redtapism.

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