8th Standard, Social Science, Business Studies, CHAPTER–30
LARGE SCALE BUSINESS ORGANISATIONS
Exercises
I. Fill in the blanks with suitable words:
1. The formation of co-operative societies is regulated as per The Indian Co-operative Act of 1912.
2. The first co-operative society in the world was started by Robert Owen in England (country).
3. The First co-operative society was stated in Karnataka at ‘Kanaginahala’ in Gadag.
4. The Multinational corporations were first started in U.S.A country.
5. The examples of multinational corporations with Indian origin are Tata and Birla.
6. The first share market was started in India at Mumbai.
II. Answer the following questions:
7. Mention the characteristics of co-operative societies.
Answer: The characteristics of Co-operative Societies are as follows.
1. They are voluntary organizations.
2. The membership is open to all adults (above 18 years) irrespective of caste, religion, creed and gender.
3. There is no upper limit for membership.
4. There is democratic management. All the members attend the General Body Meeting and each member has one vote irrespective of share of capital invested.
5. Profit is distributed in proportion to the share of their capital equally among all the members not less than 6.25%.
6. One portion of the profit is transferred to general fund.
7. Their status and management are supervised by the Government.
8. What are the different types of co-operative societies?
Answer: The different types of Co-operative societies are as follows.
1. Credit Co-operative societies.
2. Marketing Co-operative societies.
3. Producers Co-operative societies.
4. Consumers Co-operative societies.
5. Farmers’ Co-operative societies.
6. House building Co-operative societies.
7. Co-operative societies for different services such as – supply of drinking water, improvement of education, etc.
9. List out the advantages and disadvantages of co-operative societies.
Answer: Advantages of Co-operative societies are as follows.
1) It is easy to form Co-operative societies.
2) There is no need of heavy capital.
3) There is no discrimination among the members.
4) All the members have equal rights and responsibilities. It runs on democratic principle.
5) Each member has one vote.
6) The liability of the members is limited.
7) They help the members to develop habits of savings.
8) The Co-operative societies are via media arrangements between capitalism and socialism.
9) The main motto of the Co-operative societies is “One for all and all for one”
Disadvantages of Co-operative Societies:
1) The societies have limited capital resource. So large scale business is not possible.
2) It is very difficult to get suitable staff.
3) There are chances of mismanagement.
4) There are chances of misuse of money
5) There are chances of corruption and favouritism.
10. What are the advantages of multinational corporations to home country?
Answer: The Advantages of multinational corporations to home country are as follows.
1. They obtain raw materials from host countries at low prices.
2. They may also obtain the technological and administrative skills from host countries.
3. They export raw materials and finished products to host countries thus their profit is more.
4. It is possible to earn ample income through profit, royalty and through administrative agreements with host countries.
5. They create more employment opportunities in the home country.
11. What are the important functions of stock exchanges?
Answer: The capital of a joint-stock company is divided into small units called shares. The joint stock companies can also raise capital through issue of debentures. There is a provision to sell and buy these shares and debentures. The share or debenture holders can sell their shares or debentures at any time. For this purpose Stock Exchanges are established.
Nowadays Kolkata and Bengaluru stock exchanges facilitate to carry out their business through electronic media. All the stock exchanges are controlled by a Board called Securities and Exchange Board of India (SEBI).
Additional Questions and Answers:
1. Describe the Co-operative Movement in India.
Answer: The Co-operative Movement was started in India by passing the Co-operative Act in 1904. An act was passed in 1912 and registration was made compulsory. After independence under Five Year Plans the Co-operative societies came to prominence. Today we have about eight lakh Co-operative societies in our country. In Karnataka state the first Co-operative society was started at ‘Kanaginahala’ in Gadag Taluk now a District. The Bengaluru City Central Co-operative society was started in 1905. Dharwad district of our state gave more importance for top prominence to Co-operative movement and hence Dharwad district is called ‘The cradle of Co-operative movement’.
2. Define Joint Stock Company.
Answer: Joint Stock Company is defined as a business organization created by law, having a separate legal entity with a perpetual succession and a common seal. Haney defines Joint stock companies as “a voluntary organisation of individuals for profit having its capital divided into transferable shares. The ownership of which is the condition of membership”
A joint stock company is a business that is owned by its investors. The shareholders buy and sell shares and own a portion of the company. The percentage of ownership is based on the number of shares that each individuals own in the company.
3. Explain the Meaning and explanation of Multinational Corporations.
Answer: A Multinational corporation owns and manages business in two or more countries. According to ILO (International Labour Organisation) report, the essential management of the multinational enterprises lies in one country and they carry on their business in a number of other countries e.g. Sony (Japan) Coca-cola (USA), Samsung (S. Korea),
Hindustan unilever (U.K), Philips (Holland), Glaxo Smith Kine (U.K), etc. The nation with the Headquarters is called Mother country. The nations come under its jurisdiction are called patron Nations.
4. What are the features of multinational corporations?
Answer: The features of multinational corporations are as follows.
1. They are large Corporations. Their assets and transactions are also of large scale.
2. They operate their business at least in six countries.
3. They produce goods even in the countries where they operate their business.
4. They have centralised control from head office.
5. They have production, marketing and other facilities in several countries.
6. They play an important role in International Trade.
7. They provide technological facilities in the countries which come under their preview.
5. What are the advantages of multinational corporations to host country?
Answer: The advantages of multinational corporations to host country are as follows.
Advantages for depending or host countries (Patron countries)
1. The capital investment increases even in host countries.
2. If the host countries are developing countries, the home country provides technology and through administrative procedures, it causes a revolution.
3. The host countries are helped by the increase of exports and decrease of imports.
4. It is possible to produce high quality products.
5. The important opportunities to increase in host countries, research and developments are promoted in host countries.
6. They help the utilisation of internal resources.
6. What are disadvantages of Multinational Corporations?
Answer: The disadvantages of Multinational Corporations are as follows.
1 . Home country gets lion’s share in the profits. They develop dominance in host countries. 2. The competition in host countries may vanish and monopoly of multinational corporations may increase.
3. There are many complaints against these corporations that they are not respecting human rights.
4. There is a chance for reduction of natural resources in host countries.
5. Many a time they follow unscrupulous methods to avoid paying taxes.
6. They exploit the labour force in host countries. Many a time they do not transfer technology in a proper way.
7. They try to interfere in the political affairs of the nation.
III. Activity:
1. With the help of your teachers start a co-operative society in your School.
