Scales Of Business
Business is an activity undertaken to earn profit and the profit refers to the scale at which business operates. Scale of business refers to the size of the organization which may be micro, small, medium, Large, MNC etc.
A small business that employs a small number of employees. A microenterprise will usually operate with fewer than 10 people and is started with a small amount of capital. Most microenterprises specialize in providing goods or services for their local areas.
• Micro enterprise in developing countries is the most frequent or common one.
• Micro enterprises require small amount of capital to enter market.
• Micro enterprises use local product and skills.
• Micro enterprises are labour intensive therefore create jobs.
• Micro enterprises rely or depend on “micro loans” or “micro credit”.
SMALL SCALE ENTERPRISES
Basically, the industries which are organized on a small scale and produce goods with the help of small machines, hired labour and power are called as small scale industries.
An industrial unit can be categorized as a small-scale unit if it fulfills the capital investment limit fixed by the Government of India for the small-scale sector.
LARGE SCALE ENTERPRISES:
Large scale enterprises are those industries which require huge infrastructure, man power, and more capital assets. All heavy industries of India like the iron and steel industry, textile industry, and automobile manufacturing industry fall under the large scale industries.
MULTINATIONAL CORPORATIONS (MNCs)
A Multinational corporation (MNC) or Multinational enterprise (MNE) is a corporation enterprise that manages production or delivers services in more than one country.
MERITS OF MUTINATIONAL COMPANIES (MNCs)
ADVANTAGES TO HOST COUNTRIES
• Raise the rate of investment
• Facilitate transfer of technology
• Accelerate industrial growth
• Promote exports and reduce imports
• Provide services to professionals
• Provide benefits of R&D activities
• Support enterprises in host countries
• Break domestic monopolies
ADVANTAGES TO HOME COUNTRIES
• Facilitate inflow of Foreign exchange
• Promote global co-operations
• Ensure optimum utilization of resources
• Promote bilateral relations
Business activities were left mainly to individual and private organizations after privatization, and the Government was taking care of only the essential services such as railways, electricity supply, postal services etc. But it was observed that private sector did not take interest in those activities where the gestation period (period of development) was long, investment was heavy and the profit margin was lo. This led to emergence or entrance of public enterprises.
Public enterprises are not only owned by central , state government but also managed and controlled by them and are termed as public sector enterprises.
These online MCQ Mock tests and MCQ questions includes all main concepts of the chapter in CS foundation Business Environment and Entrepreneurship