12. Distinguish between the following : (a) Commerce and industry (b) Outsourcing and Offshoring (c) Line Organisation and Functional Organisation (d) Delegation and Decentralisation
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Free IGNOU Solved BCOC–132 Assignments Business Organisation and Management Solution English 2019-20
ASSIGNMENT REFERENCE MATERIAL (2019-20)
BCOC-132
Business Organisation and Management
Section-A (50 Marks)
(This section contains five descriptive questions of 10 marks each.)
Q1. Compare the company form of organisation with the statutory corporation. Which of the two would you recommend for managing public enterprises and why?
Ans:- The features and limitations of each of the three forms of organisations i.e., departmental organisation, statutory corporation, and government company. Now let us compare the features of these three forms and evaluate which form is suitable in a given situation.
The comparison of the features of the three form of organisation clearly shows that the accountability to legislature and the government control are maximum in departmental organisation and minimum in government company. In the matters of staffing, financing and day-to-day operations, the departmental organisation has the least autonomy while the company form enjoys the maximum autonomy. Similarly, departmental form of organisation is the least textable while company form enjoys the maximum flexibility. The main features of the public corporation and government company are about the same.
‘There is hardly any difference in the working of these two forms of organisation. For example, the Life Insurance Corporation of India is a statutory corporation, but the General Insurance Corporation of India is a government company. But both of them function alike in respect of their working and management.
The main difference, however, is that the public corporation is established by a special Act of legislature while the government company is incorporated under the Companies Act without referring to legislature. There is scope for private participation in capital and management in the case of government company whereas there is no such scope in a public corporation. Then the company form of organisation is able to evade parliamentary control.
From this relative assessment of the features of these three forms of organisation, it should be obvious that company form of organisation is best suited to industrial and commercial undertakings, while statutory corporations should be preferred in the case of public utility undertakings. To run efficiently the Industrial and commercial enterprises must have maximum autonomy of management and manned by professional managers so as to ensure their functioning on business lines. For such enterprises, it is essential that there is least interference from the Ministry or Parliament in their day-to-day affairs. Besides, there should be adequate flexibility with regard to formulation of policy and strategy. With the company form of organisation, these requirements are substantially fulfilled because of the juristic entity of companies and there being no need for getting parliamentary approval for changes in strategy or policies. On the other hand, public utilities are best organised as statutory corporation in view of their monopoly character and the necessity of strict regulation of their rates by government.