Many countries across the globe have acquired the policy of privatization and global business. It has gained a lot of attention over the years. For the growth and improvement of any nation, all the three private, public, and global enterprises should go hand in hand as only one sector cannot lead the country into success.
Let’s now understand in detail the meaning of these concepts.
What is the Private Sector?
The private sector includes business which is controlled, owned, and managed by an individual. These companies are classified according to small, medium, and large enterprises that are traded privately or sometimes publicly. The business in this sector is formed by establishing a new enterprise or privatizing a public firm.
The main goal of a private company is to make profits and recruit more employees than in the public sector. They focus on providing quality services to society and win goodwill and trust from them to sustain in the market for a longer run and compete with the competitors. They have to abide by the rules and regulations of the government.
Types of Private Sector Enterprises
It is a diversified sector and contributes a considerable part to the country’s economy. The entities that provide to the private sector are:
- Sole proprietor
- Small and mid-sized enterprises
- Large and multinationals companies
- Professional and trade associations
- Trade unions
What is the Public Sector?
The public sector comprises of business owned and managed by the government whether it is state, central, or local government. They are engaged in ventures to provide government goods and services to society.
The public sector organization is formed when the government fully finances the firm or when the government has 51% or more of the firms share capital. The government fund these companies from the collection of revenues such as taxes, fees, duties, etc. The primary motive of these enterprises is established with the purpose of kindness.
Types of Public Sector Enterprises
Public sector organizations are established in three various forms:
- Departmental undertakings – This is the earliest and ancient kind of public sector enterprises and is considered as one of the government’s departments. It doesn’t have an individual existence than the government and operates under one government department or ministry. For instance, post & telegraph, broadcasting, railways, telephone service, etc.
- Public corporations/statutory corporations – It is a body found by the state or central legislature or by a special act of parliament. It is entirely government-funded, and the act of the legislature determines all the decisions, objects, limitations, powers, etc.. Such as the State Bank of India, Indian Airlines, Life Insurance Corporation of India, Air India, Oil & Natural Gas Corporation, and Food Corporation of India, etc.
- Government company –The central or state government holds 51% of the paid-up share capital in such companies. However, the government companies are controlled, governed, and registered under the companies act, 2013. For example, Hindustan Machine Tools, Steel Authority of India, and State Trading Corporation, etc.
What is a Global Enterprise?
Global enterprises are firms that function across the globe and also commonly known as International Trade. These enterprises are categorized based on their size, several products, technology advancement, marketing & strategy, and operational network around the world.
The central vision of the global enterprise company is to operate across many countries to earn international currencies. They have different books of accounts in several countries, which are merged at the end of the financial year, according to its usage.