Question

Class 11 Business Studies Red Tapism is one of the limitations of departmental undertakings. Explain.

Answer 1

Red Tapism refers to excessive rules and regulations. It include obtaining various licensees and seeking approvals from concerned authority.

Departmental Undertaking is a big form of business organisation. There is red tapism in day to day operation of departmental undertaking because of following reasons:

1. Part of government:- Departmental Undertaking is a part of government organisation. It is in direct control of government.

2. Government Financing:- These undertaking are financed by government organisation. Therefore, they have to follow proper rules and regulation framed by the government.

3. Accounting and Auditing:- Departmental Undertaking involve complete accounting and auditing of accounts which effect day to day operation of business.

Answer 2

Answer:

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What are the Demerits of Departmental Undertakings?

Rigidity: Because of the centralisation of activities, the control measures become rigid and not suitable for changes easily. ...

Delay in decision-making: ...

Constant political interference: ...

Limited managerial ability: ...

Limited scope:

Explanation:

Due to red-tapism and bureaucracy, decision making is delayed and the organization is not able to capitalize on new opportunities. 6. It is unsuitable to run commercial undertakings because of lack of autonomy and flexibility.