Organisation Commerce Notes of H.S.C.

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ORGANISATION OF COMMERCE
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ORGANISATION OF COMMERCE PAPER PATTERN
1.(A)FILL IN THE BLANKS WITH OPTION(5x1) (B)MACTH THE PAIRS(5x1) (C) FILL IN THE BLANKS WITHOUT OPTION(5x1)
2. WRITE SHORT NOTES (ANY 3)(5x3=15) 3.DISTINGUISH BETWEEN(ANY 3)(5x3=15) 4. TRUE OR FALSE WITH REASONS(ANY 3)(5x3=15) 5.SHORT NOTES (ANY 2.)(5x2=10) 6.(A)ANSWER THE FOLLOWING(1x10=10) OR (B)ANSWER THE FOLLOWING 7.(A)ANSWER THE FOLLOWING(1X10=10) OR (B)ANSWER THE FOLLOWING 8. ANSWER THE FOLLOWING(1X10=10)
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ORGANISATION OF COMMERCE CONTACT DETAILS:8268545939 CONTENT
1) .BUSINESS ORGANISATION 2). SOLE TRADING CONCERN

3). PARTNERSHIP FIRM 4.) JOINT HINDU FAMILY BUSINESS 5.) JOINT STOCK COMPANY 6). CO-OPERATIVE SOCIETY 7.) SECTORAL ORGANISATION OF BUSINESS 8.)BUSINESS ENVIRONMENT 9.) CONSUMER MOVEMENT AND PROTECTION 10).MANAGEMENT 12)PRINCIPLES OF MANAGEMENT
13)FUNCTIONS OF MANAGEMENT 14)NEW TRENDS IN MANAGEMENT
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TOPIC:- BUSINESS ORGANISATION Q1) What is business organization ?what are the basic features of business organization? Ans ) Meaning :- The mechanism or a system which brings all the resources such a land, labour, capital and entrepreneurship together to obtain quality work from them is call organisaiton If the goal is to earn profits by conducting industrial and commercial activities, the organization is called business organization . The basic features of business organization (1) Dealing in goods and services :- Business organization engages itself in the production and distribution of goods and services. (2) Satisfaction of human wants:-The purpose of production and distribution of goods and services is to satisfy human wants.A business organization creates time place, form and possession utilities to various type of goods and for satisfying human wants (3) Profit motive:- The aim of business organization is earning profit margin (4) Continuity and regularity:-A business organization survives and grows as long as it earns adequate profit . therefore, business organization conduct their activities regularly and continuously. (5) Risk bearing:-Although motive of business organization is to earn profit , for that it has to bear business risks, may be natural risk such as earthquake, fire, drought, floods etc. or man-made risk such as faculty decisionmaking, speculation, etc, oir environmental risk such as change in fashion , government policy, etc. (6) Social responsibility:-Main aim is to earn profit but in modern world business organization possess some social responsibility towards creditors, customer , government and society. {education is movement from darkness to light} Topic:2 sole trading concern
Answer the following Q1) define sole trading concern and explain its merits/advantage and demerits/disadvantage of sole trading concern?(march 08,sept 09,) Ans) meaning:-A sole trading concern is an oldest form of commercial organization.where only one person is the sole owner, investor, as well as manager and above all the sole riskbearer of his business.so, it is also known as one man business. Definition :- sole trader is a person who trades on his own account rather then in partnership or as a member of a company. (Michael Greener) The merits of sole trading concern are as follows:(1)Easy to start:- it is very easy to start , due to minimum legal formalities are involved. And the sole trader may also close as per his own will. (2)limited government control:- there is no special law to establish sole trading concern and control its operation and functions.It need not be registered under the provisions of any special law as such, hence it is easy to start and shut down the business. (3)complete control:-The sole trader can have complete control over business operations. He can take his own decision regarding the business activities. No need to consult with any one (4)secrecy:- The sole trader can maintain complete secrecy . He is neither required to publish his annual accounts nor he is accountable to anyone.Thus the competitors cannot easily get business secrets and information of the sole trader activities (5)flexibility:- It possess high degree of flexibility because the owner can change his plans according to business and market condition.It may involve expansion or curtailment of existing business, diversification, adding new products, etc,its very essential to tackle business threats and dangers. (6)quick decision and prompt actions:-since sole trader is the only owner of the business ,so there is no need to consult with any one, as a result he can take quick decision , and he can implement it too.
(7)lower cost:-Soler trader possess full control and supervision over the employees.This results in better control and reduction in wastages. Which ultimately brings down the cost of productions.which results in low price of product and increases the profit. (8)self employment:-In these days of rising unemployment this form of business is suitable for young unemployed persons with business skill and necessary qualification can easily start sole trading concern,he may also get government incentives and subsidy too. Following are demerits/disadvantage of sole trading concern. (1)limited capital :- A sole trader can raise a limited capital. His personal savings are bound to be limited.further, his capacity to borrow from outside sources such as banks, friends relatives is also limited, which restricts from expansion of business. (2)limited managerial skills:- He may be an expert in one particular field but cannot be efficient in all the fields of business management, since now a days there is a need of specialized managerial staff.and sole trader cannot appoint skilled mangers are staff due to his limited capital. (3)lack of continuity:- Sole trader and his business are identical, the continuity of the business is affected or come to and end due to certain events such as death, insolvency, or physical disability of the proprietor. (4)limited bargaining power:- The sole trader often lacks bargaining power. This is because he purchases on a small scale from the wholesalers, secondly, he may not have the skill of bargaining. Thus he may not be able to obtain competitive terms from this suppliers. (5)No legal status:- Legally, the sole trader and his business concern are one and the same in the eyes of law. The sole trader and his business cannot be separted from each other. So the sole trader lacks legal status. (6)unlimited liability:- sole trader and business are identical and liabilities of his business become automatically the liabilities of sole trader, in case in loss of his business, if the assets of the business are not enough to pay the debts of the business ,sole trader will have to pay from his private property , so it is said that sole trader had unlimited liability.
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(7) limited supervision:-Sole trader is owner and manger of the business thus he cannot efficiently and effectively supervise and control all the activities of the business, as well as all the employees in the organization. (8)unprofessional decision:-A sole trader takes all decision by himself.his decision may not have scientific or professional base.it may be hasty or wrong decisions which results in poor quality and may lead to heavy loss to the business. Q2) define sole trading concern. And its features? Ans)meaning:- :-A sole trading concern is an oldest form of commercial organization.where only one person is the sole owner, investor, as well as manager and above all the sole risk-bearer of his business.so, it is also known as one man business Definition :- sole trader is a person who trades on his own account rather then in partnership or as a member of a company. (Michael Greener) The following are features of sole trading concern (1)single ownership:-the sole trader is a single owner of the organization. The sole trader owns all the assets and property of the business. It is often referred as one man show (2)unlimited liability:-sole trader and business are identical and liabilities of his business become automatically the liabilities of sole trader, in case in loss of his business, if the assets of the business are not enough to pay the debts of the business ,sole trader will have to pay from his private property , so it is said that sole trader had unlimited liability. (3)minimum government control:- there is no special law to establish sole trading concern and control its operation and functions.It need not be registered under the provisions of any special law as such, hence it is easy to start and shut down the business (4)absence of legal status:- Legally , the sole trader and his business concern are one and the same in the eyes of law. The sole trader and his business cannot be separated from each other. So the sole trader lacks legal status. (5)No sharing of profits and loss:-There is a direct relationship between efforts and rewards. This results in best possible efforts on the part of sole trader. Therefore , he can enjoy all the profits of his business.
(6)complete control:- The sole trader can have take his own decision regarding the business activities. No need to consult with any one (7)business secrecy:- The sole trader can maintain complete secrecy . He is neither required to publish his annual accounts nor he is accountable to anyone.Thus the competitors cannot easily get business secrets and information of the sole trader activities (8)close contacts with customers and employees:-a sole trader develops personal contacts with his customers and personal relationship with his employees.He uses his personal skills for the satisfaction of consumers.thus, the personal element dominant in this form of organization. Answer the following with reasons (1)The liability of a sole trader is limited ? Ans) This statement is false. Reason. 1.The sole trader and business are one and the same in the eyes of the law. 2.As sole trader and his business are identical or same,the assets and liabilities of his business become the assets and liabilities of the sole trader 3.sole trader is the single owner of the business, so no need of sharing profits or losses with anyone in case of loss, if the assets of the business are not enough to pay off the business liabilities, the sole trader will have to pay business liabilities from his own private property. 4.so liability of a sole trader is not limited only to his investment in his business. {note if the statement asked isThe liability of a sole trader is unlimited the answer isTrue but reasons are same} 2.A sole trader has a weak bargaining power?(sep 08) Ans) This statement is True. Reasons.
1.on account of limited capital and managerial power, a sole trader cannot run his business on a large scale.Therefore, he cannot influence the market trends. 2.He cannot bargain with the wholesalers, because he purchases on a small scale from the wholesalers , secondly he may not have the skill of bargaining. Thus he may not be able to obtain competitive terms from his suppliers. 3.He cannot take the benefit of favorable market situation due to limited resources and warehousing capacity .he cannot extend credit period to his customer due to limited working capital. 4.His business can be affected even by the small change such as price, demand, supply etc.on account of this factors, the bargaining power of sole trader is generally weak. (3)The activities of sole trading concern are confined to international market OR. Sole trader operates in international market OR. Sole trader operates in local market Ans. First and third statement is false, second is true, Reason. 1.Due to limited capital , he operates in small scale, and due to limited managerial skill, he cannot undertake activities beyond the local area 2.liability of sole trader is unlimited , which prevents him from undertaking bigger risk 3.The existence of sole trading concern is unstable due to events such as death or insolvency of the sole trader, it does not possess legal status , 4.Since limitation of capital, supervision, warehousing capacity and bargaining capacity, he operates in local market only. Fill in the blanks 1.The oldest form of business organization is sole trading concern 2.The liability of a sole trader is unlimited 3.A sole trading concern has maximum one owner 4.The formation of a sole trading concern is easy 5.A sole trading organization has a high degree of flexibility
6.A sole trading organization suffers from lack of continuity 7.A sole trading concern usually operates in local market 8.sole proprietorship is a personal organization 9.the form of organisaiton which is suited for self employment is sole trader 10.A proprietorship is the oldest and simplest form of organisaiton 11.A proprietorship has single owner 12.For flexibility the sole trading form of organization is best 13.A sole trading concern ensures maximum business secrecy 14.A sole trader does not have a separate legal status 15.there are managerial and financial restriction on the type of businss which may be conducted by proprietorship
Match the following Sole traders liability Maximum business secrecy Sole trading concern(march 09) Self employed person Sole proprietorship
unlimited Sole proprietorship One man show/single ownership Sole trader Oldest form of business.
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Topic :- partnership firm Answer the following question 1.Define partnership organization ,Explain the merits and demerits of partnership organization? (march 10)
Ans. Meaning: partnership firm is a voluntary association of two or more who contribute their capital and services, and share the profits and losses in an agreed proportion. Definition: partnership is the relation between person who have agreed to share the profits of a business carried on by all or any of them acting for all( section 4 of the Indian partnership act,1932) The following are the merits/advantage of partnership firm 1. easy formation: The formation of a partnership firm is quite easy. An oral or written agreement is sufficient to start a lawful business. Registration of a partnership firm has been made compulsory in Maharashtra since April 1985. 2. business secrecy: Business secrecy can be maintained because the annual accounts are not required to be published. Business secrets are known to partners only. Hence, there is a chance of maintaining maximum business secrecy. 3.limited government control: partnership is based on mutual trust, confidence and co-operation, registration is not compulsory. Therefore interference from government in partnership business is limited 4.partnership is an association of several persons. Large amount of capital can be raised through large number of partners, as compared to sole trader the partners, they can collect or generate huge funds from banks and other financial institution, and they also wish to provide funds, due to unlimited liability of partnership firm. 5.flexible organization: The working of a partnership firm is flexible there are no statutory restrictions on the management of business. 6. easy dissolution: Events like retirement, death, insolvency, insanity of a partner may cause dissolution of partnership firm. and in case of completion of specific period or objectives, the firm may be dissolved. When any partner serves 14 days notice to dissolve the partnership firm on other partners ( in case of partnership will). 7. personalised contact: partners give personal attention to their business up to the fullest satisfaction of the customers by supplying them goods and services of better quality at reasonable rates , and they maintain cordial relationship with customer and employee and earn reputation in the market.
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8.effort reward relationship: There is direct relationship between effort and rewards. Each partner put best effort and active partner puts more effort and earn more reward then others. The following are the demerits/disadvantage of partnership firm 1. limited membership: There is a limit to the number of partners in a partnership firm. A maximum of 10 members can run a banking business and a maximum of 20 members are permitted in case of an ordinary partnership 2. unlimited liability: The liability of the partners is joint, several and unlimited. It means partners will be held responsible to pay off debts and obligations of the firm even out of their private estate. 3.limited resources: The scope for raising funds is limited due to limited number of partners(i.e. maximum 10 partners in banking business and 20 in non-banking business)thus it prevent from expansion and also posses limited managerial resources 4.difficulty in transfer of share: The partners cannot easily transfer share or interest to an outside party prior consent is required to be obtained from all other partners. Often the other partners do not allow for such transfer of interest to an outside party. 5.lack of public confidence: A partnership firm is not required to publish final accounts, sales returns etc. due to this, public confidence is limited towards this type of partnership firm. And as such, public may not lend money to partnership firm. 6. disputes among partners: Difference of opinions, conflicting views, clashes of interest, etc. may affect smooth running of the business. Thus, disputes among partners and lack of co-ordination and team spirit result into inefficiency, losses and ultimately dissolution. 7.no legal status: A partnership firm does not have separate legal personality distinct from its members. It is not corporate body to get benefits and concessions from the government. Q2) define partnership. Explain its features/character tics? Ans) Meaning: partnership firm is a voluntary association of two or more who contribute their capital and services, and share the profits and losses in an agreed proportion.
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Definition partnership is the relation between person who have agreed to share the profits of a business carried on by all or any of them acting for all( section 4 of the Indian partnership act,1932) 1. joint ownership: The partnership firm is jointly owned by the partners. Therefore, the assets and the property cannot be used by any single partner for his personal gain. 2. Agreement: Partnership is an outcome of an agreement between two or more person to conduct a business with a view to earn profit. The agreement may be oral or written. It is always advisable to have written agreement. 3. lawful business: The purpose of a partnership should be a crry on business activities. The business undertaken must be lawful, common and for common advantages and profits. It cannot be used for anti-social activities like smuggling or gambling. 4.number of partners: It is an association or union of 2 or more persons. It requires a minimum of 2 persons and a maximum of 10 persons 5.ulimited liability: The liability of all the partners except minor partners is unlimited, joint and several. If business property is not sufficient to pay the claims of the creditors, then the creditors can claim and recover their dues from the private property of the partners. Creditors can recover from all, some, or one of the partners. If one of the partner is insolvent or minor then liability is borne by remaining partner. 6. Business secrecy: In this type of firm there are several partners and some partners may leak out the business information to outsiders. 7.sharing profits and losses: The partners agreed to share profits among themselves in a certain proportion .The agreed proportion depends upon the amounts of capital contributed 8.Registration not compulsory: registration is not compulsory except state of Maharashtra. In Maharashtra registration is compulsory under partnership act 1932, Since April 2005. Answer the following with reasons 1. partnership agreement can be verbal or written. Ans) This is statement is True
Reason 1.As per the provisions of the Indian contract act, 1872, an agreement can be either oral or written. 2.And according to Indian partnership act 1932, even a verbal agreement is perfectly valid 3.A written agreement of partnership is called Deed of partnership. It contains terms and conditions as mutually agreed upon between the partners. 4.Though the verbal agreement is valid, is required to be proved or is inferred by the conduct of parties to avoid any future conflicts. 2.Reckless business decisions are taken in a partnership firm. Ans. This statement is false . Reason. 1.Major decision in partnership firm is taken by mutual consent of all partners. Where by the partners hold meetings, they discuss from all angles on a particular matter on which a decision to be taken.so decision cannot be reckless. It is generally balanced one 2.Every partner is interested in a share of profits. So any wrong decision may lead to loss to business 3.Moreover every partner is well aware that his liability is unlimited and his personal property may be attached by the creditors for settlement of their claims. on account of these factors the decisions in a partnership firm cannot be reckless. 4.The partners are generally experienced in their respective fields of work.so their decision may be sound one , thus their cannot be reckless decision . 3.The liability of partnership is limited. Ans. This statement is false. Reason.
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1.The partners and the partnership firm are identical in the eyes of law. So if firms assets is not sufficient to meet the dues of the creditors, then it should be met by the private estate of the partners. 2.Therefore the liability of partnership firm becomes liability of the partners themselves 3.The creditors are free to decide from whom and in what proportion the debts are to be recovered. {note: if the statement asked is The liability of a partner is unlimited the answer is true, but reasons are same} Fill in the blanks 1.The agreement signed between partners is called partnership Deed 2.The registration of partnership firm is voluntary except in the state of Maharashtra 3.The maximum number of partners in a partnership firm running banking business is 10 4.The maximum number of partners in a partnership firm running non banking business is 20 5.For the partnership organization minimum 2 number of persons are required 6.A partner is regarded to be the owner of the business 7.The liability of partners is joint and several 8.The maximum number of partners in the partnership firm running the banking business is ten 9.The Indian partnership act passed in 1932 10Registration of partnership firm is compulsory in Maharashtra 11.Partnership does not enjoy a separate legal status different from its partners 12.The capital brought in by a partnership firm is larger as compared to sole trading concern. 13The liability of partner is unlimited
14.every partner is the principal as well as the agent of the firm 15.All partners are collectively called as a firm 16.At least two persons are required to form a partnership firm 17.The liability of partner is several and joint 18.Members in partnership are individual called partners 19.written agreement between partners in partnership is called partnership deed which states the share of profits and loss . Match the following: Partnership act (march 08) Deed of partnership Registration of partnership firm in Maharashtra Maximum number of partners in a banking business Maximum members in non banking business in partnership firm is 1932 Written constitution of firm compulsory ten Twenty
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Topic:- joint Hindu family business Answer the following question Q1. Define a joint Hindu family business and its features?(march 09&08)
Ans. Meaning: The joint Hindu family business firm is distinct form of business organization existing only in India. It come into existence by the operation of Hindu law, via Hindu succession act, 1956.The business of joint Hindu family is controlled and managed by the eldest male member of the family , who is known as karat and other member of the family are called as co-parcener Definition:-A business organization owned by the co-owners or co-paceners of an estate belonging to a Hindu family which jointly owns it and has not yet been partitioned is called joint Hindu family business or firm The features of joint Hindu family business are as follows: 1. Joint ownership: The business is jointly owned by all the members of a joint Hindu family. Three successive generations inherit the business by reason of their birth in the family. 2. Limited liability of co-pacener : The liability of each of co-pacener is limited to the extent of his share in the joint Hindu family business. 3. Ulimilited liability of karta:It implies that if the property of HUF is insufficient to pay off debts of HUF , his(karta)personal property is also used to pay off debts of the business. He is the head of the business; he has full authority to manage the business. 4. Minimum government control: This type of business is subject to less government control . This is because there is less legal formalities are required. Hence, the karta can start a new business or close down the exiting one without much legal formalities. 5. Profit sharing ratio: The Hindu law does not mention the ratio in which profits or losses of the business are to be divided among its members, including karta. The profit sharing ratios vary according to the number of births and deaths in the family. 6. Quick decision making: The karta being the single manager, decision maker and controller of the business, can take quick decision on various matters relating to business and implements them immediately. 7. Flexibility: The working of the joint Hindu family firm is flexible because the karta on his own can promptly modify or change his decision so as to suit the changing business environment and conditions.
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8. Business secrecy: There is a great deal of business secrecy. This is because the joint Hindu family business need not have to publish accounts and other data to any outside persons. 9. Partition: The co owner has no rights to question the decision of karta or to inspect the books of accounts. if they have difference of opinion they have rights for partition of business. Q2) define joint Hindu family business and its advantage/merits/needs ? Ans. Meaning: The joint Hindu family business firm is distinct form of business organization existing only in India. It came into existence by the operation of Hindu law, via Hindu succession act, 1956.The business of joint Hindu family is controlled and managed by the eldest male member of the family , who is known as karat and other member of the family are called as co-parcener Definition:-A business organization owned by the co-owners or co-paceners of an estate belonging to a Hindu family which jointly owns it and has not yet been partitioned is called joint Hindu family business or firm The merits of joint Hindu family business are; 1. Easy formation: Formation of joint Hindu family business is very easy. Because it does not require any legal formalities to form. it came from the existence under the Hindu succession act 1956.It does not require any written agreement nor registration 2.quick decisions: The karta takes all the decisions of the business. He need not consult other co parceners while taking business decisions. Therefore quick decisions and prompt action are ensured in this form of organization. 3. Flexibility:The working of joint Hindu family firm is flexible because the karta can bring about necessary changes in the business as per the changing business environment or conditions. 4. Continuity and stability: The joint Hindu family firm has greater continuity and stability of existence as it is not effected by the death, lunacy or insolvency of a co parcener. It survives as long as family is undivided .if all karta death occurs the minor takes the place of karta. 5. Limited liability of co-parceners: : The liability of each of co-pacener is limited to the extent of his share in the joint Hindu family business.
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6. Business secrecy: There is a great deal of business secrecy. This is because the joint Hindu family business need not have to publish accounts and other data to any outside persons. 7. Personal contact with customers; on account of operating in small scale in local market, it facilitates personal contact with the customer. 8. Good relations with the employee. Usually joint Hindu family firm conducts business on small scale like sole trader. so as a small number of employee is required ,which facilitates to have good relations with the employee. What are the demerits, disadvantage of the joint Hindu firm? The following are the demerits/limitations of joint Hindu firm. 1.Limited funds: The resources of a joint family are limited. The firm may not always be in a position to raise funds whenever needed due to limited liability of coparceners. Hence the growth of the business is adversely affected. 2. Ulimited liability of karta: :It implies that if the property of HUF is insufficient to pay off debts of HUF , his(karta)personal property is also used to pay off debts of the business. Thus he is may be more caution and he may not take any risk. 3. Less motivation: All the members of the family are entitled to a share in profit whether they put in work or not. The fruits of the hard work of the sincere member are shared by others who may remain idle in the family. Thus motivation level of sincere and hard working family member, comes down. 4. Restriction expansion: On account of limited financial and managerial resources, unlimited liability of the karta, lack of involvement of coparceners in the management of business etc. prevents from expansion of business. 5.no legal status: It lacks legal status, as the registration of this type of business is not compulsory. The members and the firm do not have separate entity. 6. No entry for non family members; Only family members can get entry in to the business. Outsiders are not allowed to interfere in the family business. So there is less scope for increasing the capital of family members.
7. Break of joint family: In theory there is continuity and stability of existence of the firm. But in real if there existence of good relations among the members of family , then only there will be stability in the business otherwise its not. Answer the following with reasons: 1. There is no limit for membership in join Hindu family business Ans. This statement is true. Reason. 1. The joint Hindu family business comes into existence by the operation of Hindu law. The male as well as female members of a hindu undivided family extended to three generations are the joint owners of the business. 2. As soon as child is born in the family he/she becomes the member of the family business. 3. The business is conducted by the family out of the inherited property (i.e. ancestral property which can be inherited up to three generations) 4. Membership in the joint Hindu business firm can be obtained either by birth or by adoption of child. There is no limit of membership in the business. 2.The liability of karta in joint Hindu family firm is limited . Ans. This statement is false. Reason. 1.In a joint Hindu family firm, the karta has the sole right to conduct the business of the firm the way he likes. 2. He has all the propretorial and managerial rights in respect of the business of the firm. For example he can borrow money, issue receipts, make contracts, mortgage or sell the property of the family. 3.he takes decision on his own without consulting co owners 4.Thus his rights are unlimited, thus according to provision of the Hindu law, his liability is also unlimited, but liability of of co-owners is limited. {if statement is asked as karta has unlimited liability ans is true but reason is same}
3. The maximum number of members in a joint Hindu family business is twenty (march 09) Ans. This state is false. {For answer refer to reason {1}}. 4. Joint Hindu family business emerges out of an agreement between coparceners. Ans. This statement is false. Reason. 1. The owners of a joint Hindu family firm are the male members of three generations next to the holder of the family property as per the provisions of Hindu law. 2. Membership is obtained by birth or by adoptions 3. The rights duties and responsibilities are of the co owners are governed by the provisions of the Hindu law and the Hindu succession act 1956.and not by any agreement among the co owners 4. It comes in existence by the operation of Hindu law and not by any agreement or contract among the members of the same family. Distinguish between. Points meaning Joint Hindu family Its a form of business organization which is ancestral business continued and conducted by the members of a Hindu undivided family ,under the direction of the senior most member for earning profit The minimum and maximum number of co owners is not regulated by Hindu law; it changes with the Sole trading concern A sole trading concern is a form of business organization which is owned, managed and controlled by one individual called sole trader for earning profit. Its is owned controlled by one person only
membership
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ownership liability
Financial resources
number of birth and death in the family. All members are joint owner of ancestral property The liability of each co owners is limited to the extent of his share in the business Financial resource are relatively more then sole trading concern Profit and loss is shared by all co owners it is varied according to birth and death of the person in family Joint Hindu family Its a form of business organization which is ancestral business continued and conducted by the members of a Hindu undivided family ,under the direction of the senior most member for earning profit The joint Hindu family firm comes in to existence by the operation of Hindu law. it is created by status. The minimum and maximum number of coparceners is not regulated by Hindu law. It changes with the
The business assets are entirely owned by sole trader The liability of sole trader is unlimited Financial resources is very limited compared to joint Hindu family firm Here it is enjoyed by sole trader only since its the one man show
Profit and loss
points Meaning
creation
Membership
Paternership firm A partnership firm is a business which is jointly carried by 2 or more persons. make an agreement and they contribute required capital, undertake common and lawful business to earn and share profit. A partnership is formed by agreement among the person to conduct business for profit. It is created by contract Minimum number of partners is 2 and maximum number of partners is 20 and in case of banking it is 10.
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Management
Registration
number of births and deaths in the family Karta, the senior most member or head of the family manages the entire affairs of the business There is no provision for registration of the joint Hindu family firm The liability of karta is unlimited but that of co-paceners is limited to the extent of their share in the business Continuity of existence is not affected by death lunacy or insolvency of coparcener
All partners have equal rights to participate in management A partnership firm can be registered under the provision of the Indian partnership act 1932 The liability of all partners is unlimited. They are jointly and severally responsible for the acts of the firm. Continuity is affected by death, lunacy or insolvency of a partner, unless there is contrary provision in the agreement.
Liability of partners
Continuity
Fill in the blanks: 1. The joint Hindu family comes into existence by the operation of Hindu law 2. The joint Hindu family firm business in existence only in India 3. A firm based on family status and not on contract is joint Hindu family firm 4. The maximum number of coparceners in the joint Hindu family firm unlimited 5. The shares of coparceners are fluctuating 6. The joint Hindu family firm is subject to Hindu succession act 7. The senior most person in the joint Hindu family is known as karta 8. The organization which comes into existence by law of inheritance is known as joint Hindu family firm
10. The members of Hindu undivided family business are called joint Hindu family firm 11. The business organization which controlled by the Hindu succession act is know as joint Hindu family firm 12. The joint Hindu family firm is only found in India 13. The liability of karta is unlimited and copaceners are limited 14. The joint Hindu family firm can be dissolved by the partition of family 15. The coparceners have no right to participate in management 16. The life of joint Hindu family firm is continuous 17. The joint Hindu family firm does not have separate legal existence or legal entity. Match the following Joint Hindu family Karta Coparcener Liability of karta Liability of coparcener Hindu succession act Senior most member of the Hindu undivided family Male as well as female member of the Hindu undivided family Unlimited Limited
{There is a brilliant child locked inside every student.}

Topic: joint stock company. Answer the following question: Q1.define joint stock company and explain its features?(march09) Ans. Meaning: A joint stock is an incorporated(registered)association which is an artificial person, having independent legal status with a perpetual(long life) succession, a common seal, a common capital of transferable shares carrying limited capital. In other wards, joint stock company is a business
organization organized and owned by shareholders but managed by directors . But the directors must have purchase the qualification shares with in two months form the date of his admission. Definition:A voluntary association of individuals for profit having its capital divided into transferable shares, the ownership of which is the condition of membership H.L. HANEY The following are features of Joint Stock Company 1. Artificial person: As soon as a company is incorporated. It is separated from its shareholders and receives independent statutory status. It is recognized as a person in the eyes of law through it has no physical existence. That is why; it is called an artificial person. 2. Separate legal entity: A registered company, in the eyes of law, is an independent legal entity distinct from the members who have formed it. A company can acquire or dispose property, or enter in to contracts and borrow money; it can file a suit against 3rd party and can be sued in court of law. 3. Limited liability: The liability of the members of the joint stock company is limited to the extent of the face value of shares purchased by them. if the shares fully paid , the member is not liable for any debts of the company. 4. Perpetual succession: it means the existence and continuation are not effected by death retirement, insolvency or insanity of it member or members. That is even if all members die the company still exist. 5. Transferability of shares: The owned capital of the company when divided into a number of equal parts, each part thereof is called share. In case of public limited companies, the shares can be sold in open market that is in stock exchange where company share is listed, whereas in private limited companies are not transferable. 6. Voluntary association: A company is a voluntary association of persons. Any person irrespective of caste, creed, color, religion and economic status can become a member of the company by purchasing its shares. However the member ship is not compulsory but voluntary 7.Membership:- In a private limited company, the minimum membership is two and maximum is fifty and in public limited company minimum is seven and maximum is unlimited.
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8. Common seal:- A company is an artificial person, and as such it has to sign, documents and other papers. However, it cannot sign as a human being and, therefore, the common seal serves as its signature. The common seal remain in the custody of the Board of Directors. Q2.define joint stock company and discuss in detail about the merits/demerits/positive/negative/advantage/disadvantage? Ans. Meaning: A joint stock is an incorporated (registered)association which is an artificial person, having independent legal status with a perpetual(long life) succession, a common seal, a common capital of transferable shares carrying limited capital. In other wards, joint stock company is a business organization organized and owned by shareholders but managed by directors. But the directors must have purchase the qualification shares with in two months form the date of his admission. Definition:A voluntary association of individuals for profit having its capital divided into transferable shares, the ownership of which is the condition of membership by-H.L. HANEY The following are merits of Joint Stock Company. 1. Large capital: - A joint stock company can raise large amount of funds by way of shares, debentures, public deposits, loans and advance from bank and financial institution.People are encouraged to invest in joint stock Company because of the limited liability, transferability, easy liquidity and smaller denomination of the shares. 2. Scope for expansion: Due to availability of huge funds, Expert management, stables and continues existence, public confidence is created. it enables the company to make progress and expand its activities. 3. Transferability of shares. The shares of public limited company are freely transferable. They can be easily bought and sold in the stock exchange. The investment in the shares is liquid investment. However in a private limited company shares are not freely transferable. 4. Specialised management: A joint stock company can afford to appoint specialized experts in the fields of production and distribution. Specialized management brings in higher returns to the company and as such the company can further expand diversifies its activity 5. Democratic management: A companys business affairs are management and governed by board of directors and board of directors is elected from
among its shareholders, and board of directors is answerable to the shareholders. The shareholders have the right to remove directors if they do not like the performance of the directors 6. Statutory regulations: the formation of companies is regulated by the provisions of the Indian companies act 1956.The working of a company is fully regulated by the company act. Sending report regularly to the registrar of companies, maintenance of statutory books, this will help to create public confidence in this form of organization 7. Limited liability: The liability of the shareholders in a private and public limited company is limited to the face value of the shares held by them. Shareholders are not personally liable to pay the debts of the company. This encourages the investors to invest in the company. 8. Expert services: A company is in a position to emply professionals by paying them attractive remunerations. Although general business policy is laid down by a companys board of directors, the work of day to day administration is entrusted to the professional experts. 9.public confidence :statutory controls, publication of audited accounts, filling of returns, creates confidence among the public.
The following are demerits of Joint Stock Company 1. Difficult in formation:-The procedure for the formation of a joint stock company involves many legal formalities. They are lengthy, costly, time consuming and complicated. 2. Lack of secrecy: In a company, the business decisions are the results of discussions in the board meetings. Their may be chance of leaking out of company secret by the board of directors, not only that the annual reports and accounts is required to be published. Thus the competitors may took advantage of these loop holes. 3. Slow decision making: in a joint stock company for taking various decisions and getting approval for such decisions from shareholders, and board of directors has to hold a board meeting and shareholders. Which is lengthy and time consuming procedure, thus it delays the decision making.
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4. Conflicting interest:-It is difficult for the company to reconcile the conflicting interest of the management the shareholders, the employees, and the consumers. The share holders expect the board of director work for their interest, whereas workers and employees expect higher salaries, then consumer except better quality of product in a reasonable price. 5. Excessive control of law: The joint stock companies are subject to excessive government control. A company suffers from too much of unrealistic controls over its working through government interference. Excessive controls create a lot of obstacles in the smooth working of the company. 6. High cost of management: The management of Joint Stock Company is costly due to high cost of formation, maintenance, higher remuneration paid to professionals and experts, high cost of dissolution etc. 7. Problem of flexibility: A joint stock company is less flexible as compared to sole trading and partnership firm, this is because it cannot change or take immediate decisions Again if they want their line of business may require the approval of the shareholders. Q3. Discuss various forms of companies? Ans. The different types of companies are as follows 1. Chartered company: it is a company established under a special charter (Royal charter) issued by the head of the state like the King or Queen such companies were popular in England and in olden days. Eg. East India Company, Bank of England. 2. Statutory company: It is a company formed by a special law or statute passed by the central or state legislative for a particular type of commercial activities. The objectives, privileges, etc of the statutory company are laid down by the special Act.eg. Reserve bank of India, Life insurance Corporation of India etc. 3. Registered company: A company registered under companies act 1956 or under the previous companies acts is called registered or an incorporated company. The formation, functioning and management of such companies are governed according to the provisions of the companies act 1956.All existing companies in India, except statutory companies, are registered companies.
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(a)Unlimited company: A company in which liability of members is unlimited is called company with unlimited .i.e. if the debts of the company more then the assets of the company then the members private assets are utilized for settlement of companies depts. (b) Limited company: A company in which liability of members is limited is called limited company. It is classified as 2 categories. (i) Company limited by guarantee: A company in which its members give guarantee to pay fixed or specified sum of money in the event of its liquidation is called company limited guarantee. (ii) Company limited by shares: A company in which liability of its members is limited or restricted to the extent of their share investment is called company limited by shares. But liability of directors is unlimited. it is classified as 2 categories (a) Private limited company: it restricts the right of its members to transfer the shares, limits the maximum number of members by 50, prohibits an invitation to the public to subscribe to its hares or debentures. (b) Public limited company: According to Indian companies act its not its a public company where members have right to vote, and transfere of shares, and company invite public to subscribe to its shares and debentures. Government Company: As mentioned in section 617 of the companies act 1956 any company which not less then 51% of the paid up shares capital is held by the central or state government. Is known as government company.eg.BHARAT HEAVY ELECTRICALS LTD (BHEL), HINDUSTAN MACHINE TOOLS (HMT)STEEL AUTHORITY OF INDIA LTD(SAIL). Answer the following with reasons. 1. Company form of organization has developed before the industrial revolution. Ans. This statement is false. 1. Industrial revolution facilitated mechanized production of goods, there is a need of heavy and expensive machinery for installation, which requires huge amount of capital, and thus it was difficult for sole trader and partnership firm, so Joint Stock Company came into existence to fulfill the needs.
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2. Thus increased scale of production necessitated division of labour and managerial responsibilities. These functions would not undertake by the sole traders or partnership firm. 3. Thus the companies form of organization can take these functions effectively. 4. In case of sole trader and partner hip firm the risk of loss is shared by few owners only and their liability remained unlimited, this prevented from ventures etc.thus large membership organization came into existence where loss is shared by mass people, with limited liability. 2. Joint stock company can raise huge capital. Ans. This statement is true Reasons. 1. They raise capital, by issue of share and debentures, accept public deposits, form mass people. 2. Smaller denomination of shares, limited liability, easy liquidity, transferability etc. encouraged people to invest in Joint Stock Company. 3. As company enjoys creditworthiness, in them money market, it can raise borrowed capital by taking short, long , medium term loan from banks. 3. A joint stock company ensures perpetual succession Ans. This statement is true Reason. 1. Joint stock company is an artificial person and enjoys legal entity from distinct shareholders. It can dispose of property, enter into contract, file a suit against 3rd party and can be sued in court of law. 2. Since the company is legal artificial person, existence and continuation of company is not affected by death, retirement insolvency insanity of its members. 3. The share of joint stock company except private company , its fully transferrable . 4. Shareholders can manage the business of the company by themselves. Ans this state is false
Reasons. 1. The share holders is member of company, are owners of the company but they do not interested in day to day activities of company. 2. Share holder stay at different places far away from, each other. The members are busy with their own jobs or business or professions and many of them do not have sufficient time and ability to look after the business of the company. 3. They are mainly interested in earning dividend on the shares held by them. Shares are fully transferrable thus membership goes on changing from one person to another. 4. Share holders elect their representative called directors, directors manage and control business affairs, and they appoint professionals and managers to run the routine business of the company. 5. The ownership and management are not separate in the joint stock company. Ans. This statement is false. Reason. 1. Shareholders are joint owners of the joint stock company, they elect their representative called directors they form themselves in to a board. 2. After incorporation of company, company receives separate statutory entity, all business affairs are managed by board of directors 3. The shareholders are scattered wide areas they are interested in earnings the returns on their holdings 4. Share holders have no direct control over the affairs of the company .thus in a joint stock company; the ownership is separated from the management. 6. All members in Joint Stock Company have voting rights. Ans. This statement is true Reasons. 1. A share holders becomes member of a company only when his name is recorded in the register of members of the company
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2. Every member has a right to vote in general meetings of the shareholders. The members have votes in proportion to the shares held by them. 3. All members do not have equal voting rights. The principal of allotting voting rights is one share one vote, so the member who hold many shares they have many vote to caste. 4. Share holders have no direct control on business affairs of the company its the board of the director looks in to the matter. 7. The registration of stock company Is optional. Ans. This statement is false. Reason. 1. A joint stock company is defined as a incorporated association . it means it is an association registered under the Indian companies act. Thus registration is compulsory in Joint Stock Company 2.Company comes into existence when it get certificate of incorporation from registrar of companies. 3. By registration it gets a independent legal existence, its like birth of a company. Thus it possess corporate existence. 4. An un registered organization have no corporate existence. {Note: the registration of joint stock company is compulsory ans is same but statement is true} 8. The liability of the shareholders of Joint Stock Company is limited. Ans. This statement is true. Reasons. 1. Joint stock company is registered under companies act 1956, thus company becomes a distinct body independent of the members (shareholders) who have formed it. 2. Joint stock company possess a legal entity, it is distinct from the member, it possess a corporate body. The company and the members are not identical 3.The liabilities of the company cannot become a liability of the shareholders
4. The debts of the company is repaid out of the assets hold by the company, the creditors have no right to recover their dues from the shareholders private estate. Fill in the blanks. 1. A company is an artificial person 2. Registration of a joint stock company is compulsory 3. A joint stock company has a long life 4. The organization which enjoys a separate legal existence is known as Joint Stock Company 5. The share holders are the owner of the company. 6. The liability of share holder is limited 7. The management of the company is vested by board of directors 8. The common seal acts as the signature of the company 9. The minimum number of members required for the registration of a private limited company is two 10. The minimum number of members required for the regist4ration of a public limited company is seven 11. A public company can start its business on getting TRADING CERTIFICATE 12. The minimum number of directors in public limited company is THREE 13. A government company is the one in which the share capital contributed by the government is not less then 51% 14The minimum number of directors in private limited company is 2 15. A company incorporated under a special act of parliament is called a statutory company 16. The maximum number of members required for the registration of private limited company is fifty 17. A joint stock company is an artificial person created by law 18. Registration of Joint Stock Company is compulsory
19. Joint stock company should be registered under companies act 20 In a joint stock company there is a separation of ownership from management Match the following Private company Public company Common seal Registration of a company Government company Maximum 50 members Minimum 7 members Symbol of the company Compulsory 51%share capital
{It's not what is poured into a student, but what is planted.}
Topic:-Co-operative society. Q1.what is co-operative society? Explain the features of co-operative society. (March 08, 09) Ans. Meaning: A Co-operative society or organization is a voluntary registered association of the people.It is established for conducting business through mutual help for common benefit. It is service oriented organization formed by a group of people for the economic welfare of its members.
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Definition:-a society which has its objectives the promotion of the economic interests of its members in accordance with co-operative principles by the cooperative societies act, 1912(section 4-c)
1. Open membership the membership is open to all irrespective of their caste, creed, religion, and they are free to leave the society as per their wish, that is, its free to enter and exit from the society. And if any member wishes to exit from the society he is entitled to get back his capital contribution 2.equal voting rights: Each member has single vote, irrespective of number of shares held .example For example In a village credit society a small farmer having one share have equal voting rights as that of landlord having 2o shares. 3. Service motive: The main objective of the co-operative society is to provide service to its members and others and not to maximize profits. The profit earned by the society is called as a surplus. 4. State control: To protect the interest of the members cooperative society are placed under state control through registration. While getting registered the company has to submit the list of members and business it is to be undertake.It has to maintain books of accounts and it is audited by government auditors 5. Limited liability: As the co-operative society is not identical with its members, the members have no responsibility to pay off the debts of the society. Therefore the liability of members is limited to the face value of share hold by them. 6. Democratic management: Each member has right to vote and express his views. The principle of one member one vote is followed by the management. The general body meeting is held where the members elect their representatives. The decisions in the general body meeting with majority consensus of the members. 7. In cooperative society the members receive the maximum dividend of 15% on the shares held by them. Members also get bonus on the basis of the purchases they make from the organization 8. Independent existence: According to the provisions of the co-operative societies act 1912, a co-operative society has an independent legal
existence distinct from its members. it enjoys corporate body, it also enjoys perpetual or long term existence. Q2 define a co-operative society? Explain the merits and demerits of the cooperative society?(sept 08) Ans. Meaning: A Co-operative society or organization is a voluntary registered association of the people..It is established for conducting business through mutual help for common benefit. It is service oriented organization formed by a group of people for the economic welfare of its members. Definition:-a society which has its objectives the promotion of the economic interests of its members in accordance with co-operative principles by The cooperative societies act, 1912(section 4-c) The following are the demerits 1. Easy to formation:-formation of co-operative society is very easy, as compared to Joint Stock Company. Any ten adults can voluntarily form an association and get it registered with the registrar of cooperative society. 2. Open membership:-The people have common interest can form a cooperative society. Any competent person can become a member at any time he/she likes can leave the society at will. 3. Democratic control: A co-operative society is controlled in a democratic manner. It follows one member one vote; the member cast their vote to elect their representative to form a committee that looks after day to day administration. This committee is accountable for all members of the society. 4. Limited liability: The liability of members of the co-operative society is limited to the extent of capital contributed by them, therefore the private property of the member is not attached to pay off the dues of the creditors of the society. 5. Stable Life: A co-operative society has a fairly stable life and it continues to exist for a long period of time. Its existence is not affected by the death, insolvency, lunacy or resignation of any of its members. 6. State Assistance: Both Central and State governments provide all kinds of help to the societies. Such help may be provided in the form of capital
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contribution, loans at low rates of interest, exemption in tax, subsidies in repayment of loans, etc. 7. Registration:-As per the provision of the co-operative societies act of the respective state, registration is compulsory for cooperative society. For example in Maharashtra it is registered under Maharashtra state cooperative societys act.1960. Cooperative society cannot be formed without registrations. 8. Low price:-Because of savings of costs due to elimination of middle man and eligibility to tax concessions, thus price charged by society is reasonable. The demerits of cooperative society 1. Limitation of capital: - Limited Capital: The amount of capital that a cooperative society can raise from its member is very limited because the membership is generally confined to a particular section of the society. Again due to low rate of return the members do not invest more capital.Goverments assistance is often inadequate for most of the cooperative societies. 2. Lack of Motivation: Every co-operative society is formed to render service to its members rather than to earn profit. This does not provide enough motivation to the members to put in their best effort and manage the society efficiently. 3. Lack of business secrecy: - business secrecy is not maintained since it gives wide publicity to its activities and operations .Its accounts are made available to its members, auditors, and outsiders for inspection and it also sends various statements to the state government from time to time. 4. Lack of Co-operation: The co-operative societies are formed with the idea of mutual co-operation. But it is often seen that there is a lot of friction between the members because of personality differences, ego clash, etc. The selfish attitude of members may sometimes bring an end to the society. 5. Problems in Management: Generally it is seen that co-operative societies do not function efficiently due to lack of managerial talent. The members or their elected representatives are not experienced enough to manage the society. Again, because of limited capital they are not able to get the benefits of professional management
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6.Lack of public confidence:-Many cooperative organizations have completely failed to achieve their objectives due to unnecessary interference by the political parties, corrupt officials, lack of incentives, lack of direct effort reward relationship, etc. As a result, many co-operative organizations do not win the confidence of the public. 7. Limited scope for expansion:- On account of limitation on financial and managerial resources , a co-operative society cannot expand its activities and business beyond a certain limit. Q3. Explain the different types of cooperative society? Ans. The following are the types of consumer cooperative society. 1. Consumers Co-operative Society: These societies are formed to protect the interest of general consumers by making consumer goods available at a reasonable price. They buy goods directly from the producers or manufacturers and thereby eliminate the middlemen in the process of distribution. Kendriya Bhandar, Apna Bazaar and Sahakari Bhandar are examples of consumers co-operative society. 2. Producers Co-operative Society: These societies are formed to protect the interest of small producers by making available items of their need for production like raw materials, tools and equipments, machinery, etc. Handloom societies like APPCO, Bayanika, Haryana Handloom, etc., are examples of producers co-operative society. 3. Marketing cooperative society:-Its an voluntary association of producers such as farmers, artisans, small producers, etc.to eliminate the services of middlemen from the distribution system and sell their products at remuneration prices. Thus enables centralized sales, also perform the functions like assembling, standardisation, grading, packing, branding, advertising, financing, transporting etc. 4. Co-operative credit society:- : These societies are formed to provide financial support to the members. The society accepts deposits from members and outsiders and grants them loans at reasonable rates of interest in times of need. The loans are given for productive and non productive activities. Village Service Co-operative Society and Urban Cooperative Banks are examples of co-operative credit society. 5. Co-operative Farming Society: These societies are formed by small farmers to work jointly and thereby enjoy the benefits of large-scale
farming. Lift-irrigation cooperative societies and pani-panchayats are some of the examples of co-operative farming society. 6. Housing Co-operative Society: These societies are formed to provide residential houses to members. They purchase land, develop it and construct houses or flats and allot the same to members. Some societies also provide loans at low rate of interest to members to construct their own houses. The Employees Housing Societies and Metropolitan Housing Cooperative Society are examples of housing co-operative society. Answer the following with reasons. 1. The membership of co-operative society is voluntary. Ans. This statement is true Reasons. 1. Its an association of individual with common economic interest .Members come together voluntarily on the basis of unity and equality there is no compulsion. 2. Its aim is to serve the members and others rather then exploit them. 3. Membership is open to all irrespective of caste creed, religion, language etc. 4. Any body having the same common interest can join the society. Any member can at any time leave the society by surrendering their shares by withdrawing his capital. 2. Co-operative society differs from other forms of commercial organization?(march 09) Ans this statement is true. Reasons. 1. In commercial organization have maximization of profit as their main motto, but in cooperative society service to members and others as its main motto. 2. In commercial organization voting rights are in proportion to the shares held by the members, but in cooperative society follows the principle of one member one vote irrespective of their share holdings.
3.In commercial organization the membership is closed as soon as required capital is collected, but in cooperative society usually it is open .and there is a ceiling of 15% rate if dividend whereas in commercial organization there is no ceiling 4.In cooperative society, the part of surplus is given to members, in the form of bonus, and part of surplus is spent on general welfare of the members and the community in large. Whereas in commercial organization it is not done. 3. Maximisation of profit is the main motto of co-operative credit society (sept 09) Ans this statement is false. Reasons 1. its formed by the group of people for the economic welfare of its members and others. its an voluntary association of a group of people usually belonging to weaker section of the society. 2. Members come together voluntarily on the basis of unity and equality there is no compulsion. They put their resources and efforts and thereby promote their common economic interest. 3. Its an service oriented not profit oriented 4. It is formed to provide service to its members, the service may be to provide consumer goods or credit or transport or banking services etc. at a reasonable rates . Points Meaning Co-operative society Joint stock company Joint stock company is A co-operative society is incorporated and a voluntary association voluntarily association, of individuals having to conduct the business common needs to make profit and who join hands for the distribute it among the achievement of members common economic interest Here formation is Its rather difficult, relatively simple, less lengthy, involving rigid, less costly and numerous legal
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Formation
less complicated
formalities, complicated, rigid and more costly. Main motive is making profit, and service is secondary objective. Minimum 2 and maximum 50 in private limited company and minimum 7 and maximum no limit for public limited company It is managed by board of directors, elected by shareholders. And management is very effective since experts are appointed to manage the business affairs. Every share has one vote, the principle of one share one vote. Shares are freely transferable in public company. They are listed in stock exchange The company is regulated and controlled by Indian companies act 1956.
motive
Its is service oriented ,and profit making is secondary objective Minimum member is ten and maximum no limit
Number of members
Management
It is managed by managing committee elected by members, management is usually not very effective
Voting rights
Here one member one vote principle is adopted Transferability of shares Shares are not transferable , but it can be surrendered to a cooperative organization for encashment Regulatory statute Co-operative organization is regulated and controlled by the provisions of the cooperative societies act 1912 Capital rasing There is law rate of dividend and no capital
Here there is higher rate of dividend and

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appreciation which prevents from raising large amt of capital
benefit of capital appreciation .it can raise large amt of capital. Cooperative organization A co-operative society is a voluntary association of individuals having common needs who join hands for the achievement of common economic interest Here service is main objective Minimum ten and maximum is unlimited Shares can be surrendered or transferred in favour of the society itself at any time for encashment. It has separate legal existence distinct form its members It has perpetual existence. Its existence is not effect by death insolvency insanity of any member from the society It is regulated and controlled by cooperative societies
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Points Meaning
Partnership firm Its an organization of 2 or more person to conduct a lawful business to earn profit and share it among themselves is called partnership firm
Motive
Main objective is to maximize profit Membership Minimum 2 and maximum 10 in banking and maximum 20 in non banking Transferability of shares No partner is allowed to transfer his share in favor of others persons without the prior consent of other partners Leagal status It does not have separate legal existence distinct from its members Continuity It does not enjoy long and stable life, its existence comes to an end by death , insolvency, insanity of any partner in the firm Regulatory status It is regulated and controlled b the Indian partnership act 1932
act 1912 and by laws of the society. Points Meaning Sole proprietorship Co-operative organization An organization which is A co-operative society is owned and managed by a voluntary association an individual for making of individuals having profit is called sole common needs proprietorship who join hands for the achievement of common economic interest Its an one man show, Here minimum ten here owner does not members is required have any partner to and maximum unlimited share his profit and losses The sole proprietor The liability of its liability is unlimited members is limited It is regulated and It is regulated by controlled by any cooperative societies special act or legislation act. Registration is not Here it is compulsory compulsory The main motive is to The main motive is to earn profit render profit Its does not have It has separate legal separate legal status status distinct from its distinct from a sole members . proprietor It is dissolved with the A cooperative society death, insolvency or has perpetual insanity of a sole existence. Its not proprietor effected by death insolvency or insanity Its formations and Its dissolution is dissolution are very difficult complicated, easy. There is no legal lengthy and difficult formalities
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Membership
Liability Regulatory statute Registration Motive Legal status
Stability and continuity
Formation and dissolution
Points Meaning
Membership
Liability
Ownership
Joint Hindu family Its an business organization which is owned by the members of the Hindu undivided family and it is managed by karta, the senior most person of the family karta The membership (coparceners) is not regulated by Hindu law. it changes with the number of births and deaths in the family Here all coparceners liability is limited to the extent of their share in the business , but kart liability is unlimited Its jointly owned by the family members with the head being the karta. Its is managed and control by karta( head of the family)other members can assist him, but cannot participate in management Ancestral property is the capital of joint Hindu family firm. Capital raising is very limited compare to
Co-operative society A co-operative society is a voluntary association of individuals having common needs who join hands for the achievement of common economic interest Minimum and ten members is required and maximum is unlimited The liability is limited, since society is distinct legal unity. Here it is jointly owned by its members..the owners of cooperative society need not to be members of the same family. Here business is managed and controlled by the managing committee consisting of elected representative of the members. its managed on the principle of democracy. Here the capital is contributed by members and by shares.
Management
capital
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cooperative society Registration No provision for registration of joint Hindu family firm As per the provisions of the cooperative societys act of the respective state, registration is compulsory for cooperative society .
Fill in the blanks 1. The cooperative societies act was passed in India in 1912 2. The minimum number of person required for the registration of a cooperative society as a ten 3.A cooperative has independent legal existence 4. The membership of a cooperative society is local 5. Every member has one vote in a cooperative society 6. The nature of cooperative organization is service oriented 7. A consumer cooperative generally sells goods on cash basis 8. Consumers cooperative society is the organization formed eliminate middlemen 9. Management of a cooperative organization is democratic 10. The highest rate of dividend in a cooperative society can be 15% 11. The cooperative societies act was passed in India for the first time in 1904 12. Minimum ten members are required to form a cooperative society 13. The membership of a cooperative society is voluntary 14 registration of cooperative society is compulsory 15. Each for all and all for each is the principle of cooperative society
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16. All the members of a cooperative society together constitute the general body 17. One member , one vote is the distinguished feature of a cooperative society 18. In a cooperative organization voting is done on the principle of one member one vote 19. To provide maximum service to its members and others is the motto of a cooperative 20Industrial or producers cooperative societies are formed by the artisans and craftsman 21 The consumers cooperative societies are run by the members themselves through an elected body known as managing committee 22. In a cooperative organization the liability of members is limited Match the following Cooperative society Consumers cooperative society Producers cooperative society Credit cooperative society Shares of cooperative society Service motto Eliminates middlemen Craftsmen,artisans and industrial workers Loan facilities Not transferability
{A mind is a fire to be kindled, not a vessel to be filled.}
Topic ; sectoral organization of business Answer the following question 1. What is (public corporation) statutory corporation? Explain its merits and demerits. (Note:- public corporation and public sector are different)(march 09)
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Ans.Meaning:- A statutory corporation is an organization created by a special act of parliament or state legislature. Thus the act defines the powers and functions and relationship with the government department concern. The merits of public corporation are: 1.internal autonomy;( Independent in government; having the right or power of selfgovernment. )Being an autonomous organization a public (statutory corporation ) is free from the rigid rules and regulations of the government. It can follow commercial practices while performing business activities and free from politics and department interference.
2. Service motive: Public corporation are basically established to provide some special or
important public utility services to the public as large
3. Sevices at lower cost: The primary objective of public corporation is to provide public services ate lowest possible cost to the public at large. 4. Welfare of public: The public corporation is been established for welfare and to protect the interest of the public, though it earns profit, but its the secondary objective only. 5. Prompt decisions: It have autonomy in decision making. They are free from prohibitory rules and no need of consult governments officials or ministers before taking any decisions, thus it enables to adjust with change in technology and market conditions by taking prompt actions. 6. Financial independence: its possess considerably financial autonomy. it borrow funds from public ,no need of taking approval form the government financial decisions..it can utilize his earnings to meet public expenditure. 7. Economies of scale: It enjoys monopoly power. It conducts business activities on a large scale. Therefore, it can easily get the benefit of the economies of large scale operations.. 8. Efficient management: The directors and top executives are highly experienced and knowledgeable in their respective fields and not only that they can appoint qualifies managers and competent staff on attractive terms..Thus professional efficiency and integrity in the management are possible. Which leads to efficient management in the public corporations? 9. Initiative: The management of a statutory corporation can take initiative and also be enterprising in its day to day management. 10. Public accountability: The functions of public corporations are subject to discuss in the parliament .The management is always conscious of its responsibilities towards the public .Decisions are taken on the interest of the public. 11. Continutity. It is established by special act of parliament /Legislature, so change in government, or change in government policies or change in political alliance in running government, etc does not effect the public corporation. thus public corporation is stick to RAJAN CLASSES SUCCESS STARTS HERE Page 48
Rajan classes contact ;8268545939 their policies within the frame work of the provisions in their acts and can take long term decisions too.. Q2.What is private sector? Explain its importance. Ans2) meaning: Private sector organization which is owned managed financed and controlled by private entrepreneurs. The government does not participate in this sector. The following are importance of private sector 1. Rational allocation of resources: These units try their level best to minimize or avoid wastage of scarce and valuable resources .As a result, there is rational allocation of resources. 2. Equilibrium price: Under private sector, there is a tendency of selling and buying goods and services at competitive prices which are definitely less then monopoly prices .The competitive price is not determined by any agency. It is automatically fixed at that level of price where demand for and supply of goods and services equalize..Thus equilibrium price is achieved. 3. Variety in production: In private sector there is free competition among different units of private sector. They conduct research and development and innovation which lead to production of better quality and variety of products. Thus people gets benefits of the better quality and variety of products. 4. Efficiency: Under the private sector, in order to achieve more profit, they compelled to minimize cost and wastage. Every resource is used up to its optimum level. This result in low cost and higher profit and ultimate higher efficiency. 5. Generates employment:-The growth and development of private sector organizations generate more employment opportunities in different capacities in the economy.eg: MNCs big joint stock companies, malls, private institutions etc. provide jobs to large people. 6.Imporvement in standard of living: Efficient private sector organization provide quality and variety of goods at a reasonable price ,they provide jobs to many people and increases individual and family incomes, As a result there is more consumption of different varieties of goods and services which in turn improves the standard of living. 7. Capital formation: It facilitates capital formation in the economy. The private sector organization such As co-operative banks, private insurance companies, mutual funds institutions, private companies, foreign banks, etc. collect scattered savings from the general public and provide medium term and long term loans to industries and services .Thus savings lead to investment, which in turn leads to capital formation. 8. Consumers sovereignty: In private sector consumer is treated as king. Thus all resources, investments and production of goods and services are diverted to satisfy the needs of the consumers. And the production is undertaken as per the needs of consumers. Thus there is consumer sovereignty. RAJAN CLASSES SUCCESS STARTS HERE Page 49
Rajan classes contact ;8268545939 9. Economic development: The developing countries require huge capital investment for their economic development through industrialization, this is provided by MNCs ,big stock companies etc.are in position to provide financial , technical and other resources for industrialization and rapid economic development. 10. Foreign exchange earnings: Private sector units manufacture number of different products and services. This brings sizeable amt of foreign exchange earnings. Such foreign exchange is useful to import foreign technology and further growth and development of economy.
Q3.What is public sector? And discuss its importance? Ans. Meaning: All the industrial commercial undertakings owned, managed and controlled by the central government or by the state government are called public sector organizations. Eg. Departmental organization, statutory corporations, government companies etc. The following are importance/needs/merits/features as follows. 1. Government ownership and control/employment guarantee: These enterprises are owned by the central government or the state governments or some public authority, singly or jointly. Thus it creates employment guarantee 2. Service motive: The primary objective of the public sector enterprises is to provide service to the public at large. They do not aim at maximizing profits. 3. No problem of finance: The public sector sector enterprises are financed by government treasury, public subscriptions, and investment, ploughing back of profit, borrowings from financial institutions, etc. 4. Annual budget: (f) The major financial requirements of public sector organizations are met by the government, mainly through allocations made in the annual budgets. 5. Public accountability: Since the public sector organizations are owned managed and controlled by the government, they are answerable for their performance to parliament and state legislature. They are subject to government audit.
6. Bureaucratic management: The management of the organization enjoys little discretion. They cannot take independent decisions without consulting higher authority of the government or without referring to by laws, governments circulars, etc. 7. Delay in decision making (f) In public sector organization there is delay in decision taking due to complicated or complex and lengthy procedures and centralization of authority.
8. Employment opportunities (AD): Public sector has created millions of jobs to tackle the unemployment problem in the country. Thus it creates mass employment opportunities.
9 .create
confidence in the minds of people(ad): since public sector is owed by the government thus people are well confidence to invest in the public sector since their can not be chances of any losing of capital Q4. What is departmental organization? Explain its importances. Ans. Meaning: A departmental organization or undertaking by the central or the state government and organized as a department under a ministry is called a departmental organization. It is controlled by cabinet minister of the department, and he is answerable to the parliament .eg Railways,Post,All India Radio, Doordarshan,defence, atomic energy etc. The following are the importance of departmental organization 1. easy to form: These undertakings come into existence by an administrative order of the government. As per its requirements order of the government. It needs not to be registered under any Act. No other legal formalities are required .Thus; they are very easy to form. 2. Easy financing: These undertakings need not make any efforts to raise finance, because the required finance is supplied by the government through direct allocation of funds from the budget of the ministry concerned . 3. Source revenue to the government: These undertakings are actually business organizations. Their earnings are deposited in the government treasury. Thus, they are a source of revenue to the government. 4. Direct government control: These are directly controlled by the concerned ministry .They are more effective in achieving the objectives and are useful to the government in implementing its policies and programmes. 5. Public accountability: They are accountable to parliament, thus it ensures proper allocation of funds, if any thing went wrong , the concern minister is answerable to the parliament ,thus it keeps the management alerts. RAJAN CLASSES SUCCESS STARTS HERE Page 51
Rajan classes contact ;8268545939 6. Proper use of money: These undertakings are subject to strict budgetary, accounting and audit controls. thus risk of public money misuse are minimized . 7.Regional development: Such undertakings facilitates regional development. For example, the department of railways facilitates easy movement of the people and goods from the developed regions to the backward regions and vice-versa. 8. Generating employment: Such undertakings directly generate direct employment in the country.eg. Department of Railways, postage etc provide mass employment in the country. Q5..What are government companies? And its feature. Ans.Meaning:A government company is an enterprise set up under the Indian companies Act 1956, in which the government owns minimum/at least 51% of the paid up share capital. The following are features of government companies 1. Creation: It is created by the virtue of provisions made in the Indian Companies Act, 1956.For this purpose there is no need for any special Act of parliament or Legislature. 2. Incorporation: A government company is incorporated under the Indian companies Act, 1956 and as such it is a registered or corporate body having the usual features of a registered company. 3. Staff recruitment: The company can recruit personnel as per its requirements and according to the rules and regulations set by the company. The employees are not a government servants. Their terms and conditions of services are determined by the Board of Directors. 4.The government company is governed by the provisions of the companies Act,1956.Its functions,objectives,powers, are defined in Memorandum of Association and Articles of Association .its an principle document where rules and regulations of internal management is defined. 5. Legal entity: It can enter in to contract acquire and own property in its name, thus it possess a legal entity. It can sue and can be sued , in any court of law. 6. operational autonomy:- It can frame its own rules and regulations for its internal management like any other company in the private sector.tat is it can prepare its own budget and can appoint auditor for annual audit of accounts. RAJAN CLASSES SUCCESS STARTS HERE Page 52
Rajan classes contact ;8268545939 7. Annual accounts:-Every year audited annual report is presented in parliament and state legislature 8. Raising capital:- 51% or more of its paid up capital is contributed by the government and the remaining by the public 9. Borrowing power: The company can raise additional capital by borrowing funds in the form of bonds from the government and public. Q6) what is multinational company? And its feature Ans) Meaning: A company which is incorporated in one country and has business units in several other countries is called as multinational company. Definition:Multinational corporations or companies are those enterprises whose managements, ownership and controls are spread in more then one foreign country Features: 1. Huge capital: They raise capital through shares debentures ,accepting public deposits from several countries and borrowings from international financial institutions. 2.Financial strength;-They survive under all circumstances, due to there large financial strength .They operate in a host country in different forms such as franchise, turnkey projects, joint ventures , subsidiaries, branches etc. 3. Foreign collaborations: They usually collaborate with the companies in the public and private sectors ,to achieve cooperation and assistance from the host countries. 4. Product innovation: They have up to date and well equipped research and development facilities. Their product are backed by strong quality based research and innovation, which needs huge capital, which they posses. 5. Use of advance technology: They use advance technology in production mand services thus they have lions share in progress of many countries. 6. Marketing: They use aggressive and effective marketing strategies to expand their sales. Their art of marketing the product and sales promotion techniques are very effective and result oriented. 7. Efficent management:-They in concept of total quality management, it is managed by professionals and experts in various fields ,thus they can easily handle advanced technologies, efficiently use of financial resources and manage the business affairs. RAJAN CLASSES SUCCESS STARTS HERE Page 53
Rajan classes contact ;8268545939 8. Head office and branches: Branches are well established in several developing countries .and head quarters in respective developed countries. 9. Centralised control: They are controlled centrally by policy framework of the headquarters. for example nokia manages its global network from the Chennai. Distinguish between points Meaning Statutory corporation/company It is formed by passing a special act of parliament or state legislature It has a separate legal existence distinct from government and shareholders Paid of capital is 51%contributed by government and rest by private sector It is managed by board of directors appointed by government and shareholders Controlled by government and shareholders It enjoys autonomy in decision making to a considerable extent STEEL AUTHORITY OF INDIA LIMITED, BHARAT HEAVY ELECTRICALS LIMITED, STATE TRADING CORPORATION OF INDIA LIMITED, INDIAN OIL CORPORATION LIMITED Government companies A government company is formed as a corporate body registered under the Indian companies act 1956 It has no separate legal status distinct from the government. Entire capital is provided by the government through budget appropriations. It is managed by government official of concerned ministry. Controlled by concerned ministry It has no autonomous status RAILWAYS, POST, ATOMIC POWER PROJECTS ORDANANCE FACTORIES, ETC.
Legal status
capital
Management
control autonomy examples
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Rajan classes contact ;8268545939 Points Meaning Private sector Business organization which is owned and controlled by individual or a group of individual are called private sector. To earn profit Public sector Here which is owned managed and controlled by central or state government. The main objective is to provide essential services to the people and thereby promote social welfare. Profit making is secondary. They are managed by employees known as bureaucrats (government officials)or by board of directors. They are less efficient then private sector Here government contribute the capital 51% or more of the share capital is contributed by the govnment and the rest by the public They are rigid because change in the policy requires approval of the government Here there is lot of political interference
Objective/purpose
ownership
Owned by individual, or a group of individuals or corporate bodies They are more efficient than the public sector enterprises The capital is mainly supplied by the sole proprietors partners members or share holders Organizations is more flexible in their functioning and operation ,because they can easily bring changes in their policy The private sector enterprises are usually free from government interference Statutory corporation An organization which is formed or created by passing a special act of
efficiency capital
Flexibility
Political interference
points Meaning
Departmental store An enterprise which is owned wholly by the central or the state Page 55
Rajan classes contact ;8268545939 parliament or the state legislature is called a public corporations. government and organized as a department under a ministry is called a departmental organization Departmental organization does not have a separate legal status distinct from the government Here it is managed by government officials of the concerned ministry It has no autonomy status Here government interference is maximum It is suitable for strategic industries like defense, railways atomic energy , public utilities etc.
Legal status
Public corporation has a separate legal existence distinct from the government Managed by board of directors nominated by government It enjoys autonomy in decision making Free from government interference Suitable for industrial and commercial enterprises
Management autonomy Government interference Suitability
Give answer with reason 1. The main aim of public sector is to earn profit Ans) This statement is false Reason. 1. All industrial and commercial undertakings owned, managed and controlled by the central and state government or by both is called public sector enterprises. 2. Public sector provide public utility ,they are service oriented profit is secondary eg; transportation education health etc. 3. They also operate in industries requiring long gestation period and heavy investment and industries of national importance such as defence atomic energy etc.
4. They may even earn profit that is surplus, primary objective is to provide essential service and promote social welfare , profit making is secondary. 2. Public enterprises are owned managed and controlled by the public Ans) This statement is false. Reason. 1. Public enterprises is managed and controlled by central and state government 2. It is established under special statute, 3.Government company that is a company having 51% or more paid capital held by the government,eg Hindustan machine tools. 4. Board of commission such as the khadi board the oil and natural gas corporation, 3. Multinational companies have branches throughout the world Ans). This statement is true Reasons. 1. Any company having its origin and head office in one country and business activities in other countries is called multinational company 2. This company operates in many countries through its branches 3. It has a massive control over world economy because they have huge capital resources, latest technology, good will, marketing strategy and network of operations all over the world 4. They adopt aggressive advertising and sales promotions techniques. They face no difficulty in selling their products all over the world. Thus they ensures greater availability of products and services to domestic customers 4. Government company is registered under special legislation. Ans) This statement is False. Reason.
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1. Government company is enterprises formed under the Indian companies Act, 1956, where government owns at least 51% of paid up capital and rest from private sector 2. Their is no need of any special Act of parliament of Legislature. it comes into existence by an executive decision and action of the government 3. It is registered or corporate body having the usual features of a registered company. 4. Government possess separate legal entity distinct from the government. it can enter in to contract ,acquire and own property. It can be sued and it can sue anybody. 5. Public enterprises have public accountability. Ans.this statement is true Reason 1. All the industrial and commercial undertakings owned managed by central r state government .are called public sector organization. Eg; departmental stores, public corporations, government companies, 2. These enterprises are financed by government though shares debentures bonds loans subsidies etc and revenue goes to government treasury 3. They are subject to normal budgeting, accounting and audit procedures. 4. They are answerable to the parliament if anything goes wrong , the concern minister is answerable to the parliament. 6. Departmental organization right to borrow. Ans) This statement is False Reason; A departmental organization is a public enterprises organized, financed controlled by the government under the supervision, direct and ultimate control of the ministry of the government 2. It does not have power to borrow funds from any source, except with the consent of the government. 3. Funds are allocated by annual budget no need of raising funds 4. And all revenue earned by these enterprises goes to government treasury
7. Statutory corporations need not follow the companies Act1956 Ans. This statement is true Reasons. 1. It is created by special act of parliament or state legislature 2. It possess separate legal entity distinct from the government, initial capital is provided by the government and can borrow funds from public also 3. The special act prescribes its aims, objectives, functions, powers; duties etc.it also prescribes relationship of public corporation with government departments and ministers. 4.It prepares own budget and recruits employees, terms and conditions determined by board of directors and regulated by provisions made in a special act of parliament and state legislature. 8. Government enjoys legal status This statement is true Reason 1. it is registered under companies act 1956 , and 51% paid up capital is from government and rest from private sector 2. it is separate legal existence distinct from the government and the shareholders 3. It is managed by board of directors nominated by government and some elected shareholders, just controlled by shareholders and directors 4. It has financial autonomy. it is free from direct government control , it is governed by the provisions of the Indian companies act 1956,objectives functions powers ect.are defined in the documents prepared under the Indian companies act, 1956 9. Government interference is more in private sector Ans).This statement is false 1. Business organizations which are owned managed, financed and controlled by an individual or a roup of individuals are called private sector enterprises.
2. These enterprises are run financed and controlled by the private entrepreneurs 3. They are required to follow government policies rules and regulations more strictly 4. It may in the form of sole proprietor, partnership firms, joint hindu family etc. Objectives Fill in the blanks 1. Public sector enterprise is oned managed and controlled by the government 2. Private enterprises invest their funds in areas where returns is maximum 3. At least 51% of the capital of the government company is held by the government 4. Government company is registered under Indian companies act 1956 5/government Company has legal status 6. Departmental organization are accountable to parliament for all their actions 7. A government company may be pvt Ltd or public Ltd Company 8. Maltinational company fills the technological gap between developed and developing countries 9. Post and telegraph is an example of departmental undertaking 10. Statutory company is created by special act by parliament
Match the following Departmental of post Profit maximization Government company Ministerial control Multinational corporation
Departmental undertaking Private sector enterprises More then 51% share held by the government Indian railways Branches in several countries.
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(Some students drinks from the fountain of knowledge others just gargle)
Topic business environment Answer the following 1. What is business environment and its importance and features Ans) meaning; It refers to sum of total of all conditions events forces and influences that surround and effect the business. Definition: business environment consists of all external and internal factors that influence the complex interaction of the market, production
and finance. These are three components of our business world. BY J.KRIZ AND C.DUGGAN. Importance: 1. provides opportunities; Proper study of environmental factors, helps to plan suitable strategies to tap business opportunities instead of losing them to the competitors .Eg; Maruti udyog ltd ,is top seller of small cars ,since it consumes less petrol and most economical., TATA introduced small car called nano for higher middle class people 2. . identification of threats: Business environment indicates threat or a warning signal.eg; Maruti Udyog ltd got the information that there will be an entry of more foreign car manufacturing companies in india.They took it as a warning and increased their production capacity of their esteem car from 65 per day to 180 per day and increased their sales from 25,400 per year to 42,000 cars per year. 3. Sensitizing the management; knowing of the environmental changes sensitses the management to make changes in the organization or introduce new strategy to cop with the emerging problems. 4. Suitable policy as per dynamic changes: Todays world is dynamic, changes in the business environment is taking place at a faster speed..Their is more competition, more demanding customers, and changing in market conditions and less of brand loyalty so in order to cope up with this problem , it is necessary to have suitable policy as per dynamic changes. 5. Identification of threats; business environment creates a warning signal about the future threats to the business and helps to act accordingly 6. 6.Qualitative information: Understanding and analyzing the environment helps to plan and frame suitable policies and strategies for the future course of activity 7. Continuous monitoring: By scanning business environment, it provides continuous learning to the planers and administrator who formulates the policies and plans, thus they make suitable policies accordingly. Eg: in Reliance company , those days decisions are taken by consulting the ambani brothers only, but now each and every departmental managers is empowered to take decisions, since it is the essence of the todays market 8. Identification of strength: Good personal policies in respect of transfer training promotion ect of employee indicates strength of the organization.
9. Identification of weakness: Proper analysis of internal environment helps the organization to identify its areas and take immediate measures in correct them.Eg; if suppose particular department shows is poor performance, then proper steps is taken accordingly. 1. 2. Features: Changes from time to time: Business environment is dynamic concept. certain environment such as economic ,social, demographic ,market forces, etc. are always changing Complex phenomena: Business environment is complex phenomena. There are many dimension factor, each works with different frequency and intensity. It makes the business environment complex phenomena E.g.: government invention, and social awareness etc. in todays situation Unlimited factors: Business environment is composed of many factors, The factors are not confined to national boundaries it is beyond the national boundaries. Thus business environment consider and analyze only those factors which affect their business. Long term impact: A decision made are takes place have long term impact, it effects the profit and efficiency and development and growth of business..The effect may be positive or negative. Eg: liberal economic policy which was introduced in 1991. Beyond the control of management: Business environmental factors are mainly external to the business environment which is uncontrollable by management .eg, change in government policy, change in customers taste, change in fashion and technology etc. Inter-related to one another: A change in one factor element makes changes in another factor, eg change in price of petroleum product effect the price of all products .
3.
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Q2) what is world trade organization? Explain its importance and needs Ans)MEANING :An international body which regulates control and encourage international trade is called world trade organization.WTO is established in 1995, prior to that it was GATT, (general agreement on tariffs and trade) it was established in 1948 to reduce the tariffs .GATT organized Uruguay Round trade talks which concluded in 1994 by setting up the WTO. Importance and needs 1. Trade without discrimination: :International trade does not grow if some countries are give concession and others denied .Trade should be
without discrimination, This is possible by the most favored nation clause . 2. Settlement of disputes: Disputes can be settled by consultation, conciliation or through dispute settlement procedure determined by WTO 3. Raising standard of living :WTO is necessary so that relations among the member countries in the filed of trade and economic activities are conducted to raise their standard of living 4. Optimum use of worlds resources: Member countries would like to ensure optimum use of worlds resources and thereby expand world production and trade of goods and services. 5.Growth of less developed countries: It helps to secure better share for less and low developed countries 6.Full employment: It generate full employment and growth in the volume of real income and effective demand. 7. Increasing world production and trade; It aims at increase in production and simultaneously to increasing world trade of goods and services FUNCTIONS OF WTO 1.Administering WTO trade agreement: WTO has been set up to maintain foreign trade activities as smooth as possible.WTO informs rules and regulations to the importers, exporters and members of countries .Trade agreements finalized by WTO should be implemented by all member countries 2. Forum of negotiations: WTO makes forum available for all member countries for trade negotiations. Trade agreement is signed after long discussion and controversies.
3. Handling trade disputes of WTO: The WTO provides mechanism for amicably handling and settling disputes between member countries though consultation. if it is not settled then disputes settled body takes care of it. In 10 yrs WTO settled 324 disputes 4.monitoring national trade policies; The trade policies and practices of the member countries are monitored by trade policy review body.This review
helps the WTO to know national policies of member countries Between jan 2004 &march 2005 21 trade Policy monitored by Trade Policy Review Body 5. Assisting developing countries: The members of WTO are mostly developing or under developed countries .WTO helps them by giving more time limit of implement the clauses of the agreement, increasing the trade opportunities for them. Providing technical and training etc.and many technical training assistance activities were undertaken jointly. by WTO and other international agencies. 6. Co-operation with other international organizations: The WTO cooperates with the international institutions like the international monetary fund the World Bank for establishing coherence in the universal economic policy administration. 7. Implementaion and functioning of agreements: The general council creates 3 bodies (1) council for Trade in services(2)council for Trade related aspects of intellectual property rights(3) council for Trade in goods. All these 3 bodies .supervises the implementation of functioning of various agreements. 8. Examination of members trade policies: The WTO though its bodies regularly examines the foreign trade policies of the member countries to confirm that such policies confirm that such policies conform to the WTOs guidelines 9. Collecting statistics regarding foreign trade: The WTO collects information on the export import trade, various trade measures and other statistics of the member countries Q2) what is globalization? What are the advantages and disadvantages and features? Ans) meaning: Its the integration of national economy with that if world economy. It means increasing internationally the production, distribution and marketing of goods and services. ADVANTAGES /NEEDS/POSITIVES POINTS/BENEFITS 1. Better utilization of resources: Globalisation enables business organization to fully utilize the available resources in a better manner by expanding markets all over the world.
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2. Spreading of risk of loss: It becomes possible to spread the risk of loss between domestic market and global market means the loss incurred in domestic market can be compensated from the profit made in the global market. 3. Achievement of goals: As the field activities is spread world over, it become possible for a business organization to achieve its goals regarding production, sale, and profit, because of opportunities created globalization 4. Government incentives: government provide various incentives to enter in to global market, in the form of reduction in taxes, duties concessions in customs. Duties, pre-shipment and post shipment finance. 5. Transfer of modern technology: Because of globalization it is possible to make the transfer of modern technology from the developed countries to the developing countries. 6. Export stimulation and import substitution: When a country adopts globalization policy, exports are promoted and imports are minimized. Thus, the globalization helps to earn foreign exchange. 7. Increase in employment generation: Globalization, through expansion of production and marketing of goods and services, generates opportunities of employment. 8.Faster economic development: The ever widening scale of production and marketing of goods and services in the global market leads to faster economic development of the country also improves the standard of living of the people. 9. Foreign investment: Globalization enables the companies in various countries to attract the investors from all over the world. Thus. Free flow of investment is encouraged. DISADVANTAGE/NEGATIVE/NON BENEFIT/IMPACT/

Globalization causes unemployment n industrialized countries because firms move their factories to places where they can get cheaper workers. Globalization may lead to more environmental problems. A company may want to build factories in other countries because environmental laws are not as strict as they are at home. Poor countries in the Third World may have to cut down more trees so that they can sell wood to richer countries.
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Globalization can lead to financial problems . In the 1970s and 80s countries like Mexico, Thailand, Indonesia or Brazil got a lot of money from investors who hoped they could build up new businesses there. These new companies often didnt work, so they had to close down and investors pulled out their money. Some of the poorest countries in the world, especially in Africa, may get even poorer. Their population is not as educated as in developed countries and they dont have the new technology that we do. Human, animal and plant diseases can spread more quickly through globalization.
FEATURES OF GLOBALISATION 1. Free Trade: Globalization permits anyone to buy goods and services from any part of the world and sell goods and services to any country. 2. Reduces difference: Globalization erases or narrows the difference between domestic market and international market. 3 Freedom: Globalisation offers freedom to entrepreneurs and traders to establish, operate and conduct their business in any part of the world 4.Facilities:Globalisation introduces and establishes production and distribution facilities in any part of the world 5.Foreign direct investment Globalization helps to expand foreign direct investment, especially in the developing countries. Thus it enables foreign companies to make investment in India 6Economic development Globalization facilitates rapid economic development of developed as well as developing countries 7. Transfer of technology:Globalisaiton helps to exchange new ideas and technology across the countries 8.Market conditions: Globalization assists the economy to consider the market conditions in the world before planning production
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9. Factors of production: Globalization assists the entrepreneurs in exploring the factors of production from different countries 10. Development of business: Globalization facilitates business strategies, organization structure and culture, work culture and managerial expertise to be developed from global point of view. What is privatization? Benefits/needs of privatization ? Ans) Meaning: Implies reduction in the role of public sector by transferring full or part of the ownership of a business enterprise, agency or public service from the public sector to the private sector The need of privatization is explained below: 1.More efficiency: The public sector has been facing several problems since its inception, such as inefficiency in administration, delay in decision making red tapism corruption underutilization of capacity, industrial sickness etc.As it incur heavy losses every year.so to make the public sector more efficient it is privatized, since private sector are more efficient in order to earn profit 2. Less political interference: Once the public enterprises are privatized, they become free from political, ministerial and government interference. It facilitates faster decision and high degree of transparency. 3. Accountability: In private sector organization, powers, rights, duties, responsibilities and accountability are well defined and explained to the employees .Thus greater accountability results in more efficient performance. 4. Reduction in labour problems: The labor and personnel problems such as excess staff recruitment, unproductive activities, strong unions, frequent strikes, at work, etc are not seen in private sector 5. Capital market discipline: The private sector enterprises sell their equity shares debentures and other similar securities in stock exchange to raise funds. They also buy equity shares, bonds and other securities issued by the government .The performance of private sector are always reviewed by the financial experts periodically.
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6.profit:They introduce rational decision making process in their activities to achieve their main motto , profit, this process improve efficiency, saving in cost and wastage and higher profit to the enterprises . 7. Efficient business management : They appoint highly qualified ,experienced and expert staff to manage the business affairs .They also offer incentives for their excellent performance..on account of this the private sector enterprises are more efficient, result oriented ,since they also provide free lunch, free medical facilities, free transport facilities etc. 8.creation of more jobs: The private sector enterprises crate a large number of employment opportunities and increase production capacities. They also bring development in the other sectors of the economy and thus help to create job opportunities. Thus privatization is need to solve the burning problem of unemployment . What is liberalization? Meaning: Liberalisaiton is described as deregulation. It refers to the removal of undue restrictions and elimination of bureaucratic control on the productive activities. (Briefly explain in future class notes) Distinguish between the following Points Meaning Liberalization Liberalization is described as deregulation. It refers to the removal of undue restrictions and elimination of bureaucratic control on the productive activities Main purpose is to abolish unnecessary restrictions and controls and encourage private sector and accelerate the speed of economic development 1.reducing the rate of export, Privatization Privatization means inducing private ownership, management and control into public sector under takings through disinvestment (1)Reduce the inefficiency and losses in PSU (2)to make optimum use of available resources(3)to increase the competition in economy(4) to a achieve economic progress. Selling the shares and Page 69
Purpose
measures
import, corporate tax,2.increase the limit of FDI(foreign direct investment)3.Abolishing industrial licencses,scrapping the MRTP ACT(monopolies restrictive trade practices ) Consequences Liberalizations reduce the unnecessary restrictions, hurdles and controls in the process of development Autonomy is granted on the larger proportion to the multinational companies and private sector enterprises to expand the business activities in economy
transferring the ownership and possession of public sector undertakings to private sector entrepreneurs,etc
Here the state enterprises is taken over by the public enterprises, as a result ,the speed of economic development accelerates rapidly Here the management, control ownership and possession of the public sector enterprises are transferred from the government to private sector institutions
Nature of activities
Points
Globalization
Liberalizations
Meaning
Globalization means increasing internationalization of production, distribution, and marketing of goods and services
Liberalizations is described as deregulation. It refers to the removal of undue restrictions and elimination of bureaucratic controls on the productive activities
purpose
The main purpose is to strength the economy to acquire entry in the global market,creat global competitiveness and rap the
Main purpose is to abolish unnecessary restrictions and controls and encourage private sector and accelerate the speed Page 70
benefits competitiveness and interdependence Measures Acquiring membership of WTO ,eliminating trade barriers, relaxing the FERA(foreign exchange regulation act),providing tax concession and other incentives to foreign investments, automatic approval of foreign technology, are the measure adopted in the process of globalization consequences
of economic development
1.reducing the rate of export, import, corporate tax,2.increase the limit of FDI(foreign direct investment)3.Abolishing industrial licencses,scrapping the MRTP ACT(monopolies restrictive trade practices
It facilitates transfer of resources, Liberalizations reduce the capital, goods, services and expansion of market, optimum use of resources. Advance technology and valuable foreign exchange are made available to developing countries unnecessary restrictions, hurdles and controls in the process of development
Nature of activities
In globalization, business activities are conducted throughout the world. By granting autonomy growth in trading activities, foreign direct investment is accelerated
In the liberalization autonomy is granted on the larger proportion to the multinational companies and private sector enterprises to expand the business activities in the economy
points
Economic environment
Social environment
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Meaning
The factors related to the means of production and distribution of wealth which have an impact on the business are called economic environment
Factors such as customs ,traditions, value, social trends, societys expectations from the business etc, which have impact on the business are called social environment. Important aspects are 1.level of literacy 2.educational system 3.cultural heritage . 4.customs and traditions 5.beliefs 6.life style and standard of living
Important aspects
Important aspects are 1.market situation 2.sources of capital 3.income level of the masses 4.economic policies of the government 5.changes in the income tax rate
7.caste structure , and social institutions and social values
Influence on the business
Economic environment creates and exercises direct and most significant influence on the business because business is an economic institution
Social environment creates with the concerned with the characteristics of the society in which the organization or enterprise exists.
Involvement
Economic environment concerned with economic policy of the governe3mnt and the economic system prevailing in the country
Social environment is concerned with the characteristics of the society in which the organization or enterprise exists.
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Essential features
Liberalization privatization and globalization (LPG) are essential features of the economic environment of any developing country
Social reforms chaining attitudes and modernization are essential features of the social environment of any country
Points Meaning
Political environment It refers to political system , political parties, government agencies ,and pressure groups that have an impact on the working of a business
Legal environment It refers various legislations, government administration, rules, regulations, court judgments, etc. that have impact on the working of a business
Coverage
It covers, political system, political stability, and government attitude towards business
It consists of frame work of laws, regulations and court judgements,which guide and controls business activities on the different level Net result of legal and regulatory environment is laws, rules, regulations, regarding the formation and operation of business To avoid industrial accidents, pollution of all kind (air water and sound) misuse of resources(financial physical, Page 73
Net result
Net result of political system is constitutional provisions ,party system and taking of political events in country
Objective
To have some control on business activities ,provide incentives, encourage business and to promote them to act in a
particular way for achieving certain planned objectives Examples An example of impact of political environment on business is that I.T. companies have concentrated in Bangalore and Hyderabad due to supportive political climate of the state government
natural, human) and protect and preserve the ecological balance. An example of impact of the legal environment is that adoption of prohibition Act by few states in India like Gujarat forced the liquor and wine factories to shift their business to other states.
Answer the following with true or false and give reasons 1. India does not get any benefit from WTO ? Ans) This statement is False Reason 1. An institution or organization established at global level with a view to regulating and expanding international trade and relations among the trading nations is called WTO 2. India is a founder member since 1991,by adopting new economic policy, india has been implementing trade liberalization programme and open market policy based on WTO Principle 3. Indian economy has bee opened and Indian goods and services have got access to global markets 4. India established trade link with member countries of WTO without separate bilateral agreement, 2. Privatisation of the public sector requires some precautions to be taken by the government. Ans.This statement is True Reasons. 1. Privatisaiton of the public sector is not a sure remedy for all the ills of the public sector. Such a step must be taken very cautiously. RAJAN CLASSES SUCCESS STARTS HERE Page 74
2. The business environment must be analyzed before taking any decision 3. Goverment should not privatize the public sector, simply for raising funds or for financing deficit budget..it should be done for building competitive strength and industrial development. 4. Privatisation can lead to concentrate of wealth in a few hands, or it may lead to invite multinational s to act as a threat to domestic entre-preneurs. 5. privatisation can lead to unemployment so government should ensure that that by disinvestment the employees are not deprived of their jobs. 3) Globalization results into unequal competition? Ans.This statement is true. Resons;The process of globalization leads to unequal competition due to the following reasons; 1. Indian enterprises by and large work on a small or medium scale. They suffer from size disadvantages. 2. Indian corporate sector operates in protectionist environment due to high subsidies, concessions, etc., Hence they produce poor quality goods and services because the sale is assured. such a firm face problem of competition from global manufacturers 3. Capital cost of Indian enterprises is much higher then multinational companies 4. Indian enterprises suffer from handicaps developed under the control imposed earlier. in some case government brings policies ,favorable to the multinational companies 4. Social environment consists factors related to the management of public affairs? Ans.This state is False. Reasons 1. Social environment consists of various character tics of society in which business organization exists 2. Environmental factors such as customs, traditions, values, social trends,societysexpectations from the business, etc,which have an impact on the business are called social environment of business organization 3.it consists of factors related to human relationships within a society, not the factors related to the management of public affairs RAJAN CLASSES SUCCESS STARTS HERE Page 75
4.Social environment of business organization basically affects the strategic management process within the organization in the areas of decisions related to products and markets 5. External factors of business environment are controllable factors? Ans.This statement is False Reason 1.Factors which effects the business policy can be divided into internal and external factors. 2. Environmental factors such as social customs, traditions, values, economic policies of the government, economic forces in the market, technological development in the manufacturing process, political ups and downs, legislations and amendments and so on are external to business unit. These factors are called external factors of business environment. 3. External factors influence the working business units in an economy. They cannot be modified or altered to suit the organization 4. External factors are uncontrollable and internal factors such as plans, policies, and resources are controllable. 6.Privatisaiton is the transformation of public sector into priate either fully or partially? Ans. This statement is true Reasons. 1. Privatization means to bring most of enterprises under the ownership and management control of the private sector. Thus to finish or to minimize the monopoly of the government in many industries 2. It implies disinvestment in public sector units and passing of managerial rights to private entrepreneurs 3. In a narrow concept, privatization means transfer of ownership from the government to private sector, wholly or partly, means opening up of the areas to the private sector which were earlier reserved for public sector. 4. New industrial policy 1991, has been dereserved industries from 17 to 8 in 1991, now there are only 3 industries reserved for public sector. Railways, Atomic Energy OBJECTIVES RAJAN CLASSES SUCCESS STARTS HERE Page 76
FILL IN THE BLANKS 1. 2. 3. 4. 5. 6. 7. 8. Changes on the fiscal policy of the government is an aspect of political environment World trade organization was established in the year 1995 Changes in the judicial system is an aspect of legal environment Privatization implies reduction in the role of public sector Level of literacy is an aspect of social environment Business environment has tremendous impact business Changes in the rulling government is an aspect of political environment The new industrial policy formulated in 1992
9. Government awareness provide warning signal 10. Globalization is concern with world market 11. 12. 13. 14. 15. 16. 17. 18. 19. 20. 21. 22. Globalization means linking national economy to the world economy World trade organization was established in geneva The gatt was replaced by the WTO on 1.1.1995 India has adopted the policy of liberalization globalization and external Since privatization India has been going through a process of econom8ic reforms The new industrial policy was formulated in 1991 Freedom to business enterprises from government controls implies liberalization Factors like customs traditions etc constitute a part of external environment of business World trade organization was established in 1.1.1995 Business environment consists of internal and external factors Interdependency and integration of individual countries of the world is called globalization Business environment is the macro frame work within which a business firm a micro unit operates
Match the following 1. Liberalistion delicensing 2. globalisation-Free trade at international level 3. Social environment-customs 4. Political environment-socialism 5. Internal environment-management 6. privatisaiton-disinvestment RAJAN CLASSES SUCCESS STARTS HERE Page 77
7. globalisaiton- world economy 8.economic liberalization-reforms in banking sector 9. Legal environment- judicial system 10. WTO international economic relations TOPIC: SOCIAL RESPONSIBILITIES OF BUSINESS AND BUSINESS ETHICS Answer the following questions 1. What is mean by social responsibility? And need for social responsibility of business? Ans. Social responsibility of business refers tp the obligation of business enterprises to adopt policies and plans of actions that are desirable in terms of the expectation, values and interest of the society. it ensures that it does not effect adversely to different groups of the public, by the decisions and policies of the business The need for social responsibility is as follows 1. Public image. The activities of business towards the welfare of the society earn goodwill and reputation for the business. thus it creates the public image and attracts many people to work with such a honest and competent organization. And it also attracts many customers. 2. Governemnt regulations: To avoid government regulations business men should discharge their duties voluntarily. Example: If any business pollutes environment, it comes under strict government rules, such a business firm should engage it maintaining pollution free environment. 3. Survival and growth: Every business is a part of the society. So for its survival societys support is essential, since business utilizes available resources like land , power , water roads, etc of the society, so in return business should spent part of its profit to the society 4. Employee worker satisfaction: The employer should try to fulfill all the expectation of the employees, such as accommodation, transportation, education and training, besides good salary and healthy atmosphere, since employees satisfaction directly related to productivity. 5. Consumer awareness: Now a days consumer is very conscious about their rights, This made it obligatory for the business to protect the interest of the consumers by providing quality products at the most competitive price. RAJAN CLASSES SUCCESS STARTS HERE Page 78
6. Concept of Trusteeship: According to this principle, business must be held in trust legally and morally for the benefit of the people whom the business wants to serve, 7. Optimum Utilization of Resources: Business enterprise must make use of the available resources to the maximum possible extent which will result in lost cost and minimum wastage of resources. 8. Long term business Interest: Business organization can survive for a long period only when it fulfills its obligations towards different groups of the society 9. Pressure of trade union: Trade union plays a important role in maintaining peace and stability, company should understand its responsibilities towards its employees by paying fair wages and better environment working conditions. 10Broader attitude: A business enterprise should extend its responsibility to various interest groups, such as society, shareholder, employees and suppliers, etc. rather than serving just its own interest. 2) Explain social responsibilities towards consumers and the government ? (March 08, 09) Ans.(A)Social responsibilities towards consumer are as follows: 1. Regular supply of goods and services: Business organization should ensure the regular supply of goods and services needed by the consumers at the right time and at the right place. They should not create artificial shortage by hoarding or cornering the goods . 2. Better quality products at reasonable price: It is the responsibility of business organization to produce better quality and strive to improve the quality, this ensures customers loyalty to products. 3. Avoid adulteration and wrong wrong: The business organization should avoid adulteration, under weighing products dishonest advertising , poor packaging cheating customers, etc 4 Redressal of complaints: The business organization must attend to the complaints regarding, defective products, faulty repair work delay in delivery, on compliance of guarantee or warranty, these complaints should be attended without delay. 5Observance of laws: The business organization should comply with the laws enacted by the government for the protection of consumers, it should ensure that the product should not have RAJAN CLASSES SUCCESS STARTS HERE Page 79
adverse effect on the life and health of consumer, and genuine product manufacturer must warn about the inferior product in the market. 6Effective after sales service:Efficent and effective after sales service leads to the consumers satisfaction and helps to establish favorable ties between customers and the organization. 7Imporvement in distribution and net work: Business organization should improve distribution network so that products are easily made available in the market or nearby the consumers residence 8. Provide product related information: All the information related to products such as their uses, advantages, disadvantages, price and place where it is Available, should be communicated to consumers through advertisements, publicity,etc. 9Measures to satisfy consumers needs: Business organization should Endeavour to understand customer needs and try its level best satisfy those needs 10Long term satisfaction: Business organization should always make attempt to provide long term satisfaction to the consumers in terms of serviceability, sufficient supply of goods, spare parts, replacement. Parts, 11. Fair trade practices: Business organization should adopt and encourage fair trade practices in the market (B) Social responsibilities towards governments. 1. Follow the guidelines of government :The business organization is required to follow guidelines laid down by the government while establishing the business. 2.Lawful business: The business organization should undertake lawful business and conduct it in a lawful manner 3. Not to indulge in corruption: The business organization should not undertake any unlawful or illegal activity so that it may be required to pay certain bribe to the government directly or indirectly get itself involved in any unlawful or illegal activity RAJAN CLASSES SUCCESS STARTS HERE Page 80
4. Observance of laws: The business organization should comply with the laws enacted by the government to protect the rights and interest of various constituents of the society. Such compliance should be fo4r betterment of the society 5. Constructive suggestions: The business organization should make constructive suggestions for the formulation of policies or to modify the rules if they are in the interest of the business and the society as a whole. 6. Assistance in implementation of socio-economic policies: business organization is excepted to assist the government in implementing soci-economic programmes of the government 7. Regular payment of taxes: the business organization should honestly pay their sales tax, income tax, excise duties etc.Tax revenue helps the government to undertake developmental plans. 8. Support to improve standard of life: organisaiton should voluntarily help the government in taking measures aimed at improving the standard of life of people. 9. Financial assistance during natural calamities: Business organization should provide funds in relief works during the times of emergency, like natural calamities such as cyclones, floods drought floods etc. 10. Regional balance development: The business organization is expected to balance and set up new ventures in rural and backward areas with a view of bring regional balanced development as per the guidelines of government. 11. Avoid monopolistic and restrictive trade practices: The business organization should not indulge in monopolistic and restrictive trade practices. Q3.What are the social responsibilities of business organization towards employees and share holders? Ans. The social responsibilities of commercial organization towards employees are as follows. 1. Decent treatment: The commercial organization must give a fair and decent treatment to all its employees. It should treat the employees with dignity and respect. 2. Fair remuneration and fringe benefits: The commercial organization must pay adequate wages or salaries to the employees based on the nature of work and other fringe benefits and incentives like bonus, overtime allowance, medical allowance, leave-travelling allowance, etc to its employees
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3. Good working conditions: It relates to safety, lighting, ventilation, drinking water, canteen, housing, medical facilities , etc. 4.Workers participation in the management: Workers must be encouraged to participate in the management, such as, representation in works committees, inviting suggestions for improving efficiency and the saving of costs, thus it ensures the cordial relationship between labour and management. 5. Recongnition of employees rights: The commercial organization should recognize and consider the employees rights to freedom of speech, safety, privacy etc, While taking management decision effecting employees. 6. Ensuring safety for workers: Work which is hazardous to human health, such as working in coal mines, working in electricity ,or working in chemical factories etc, which may cause serious health problem to the employees, so its the organization responsibilities to provide safety materials to the workers, which would prevent them from direct contact with these hazardous chemical. 7. Working standards and norms: The commercial organization must fix proper working hours and norms, with due course lunch break, tea intervals etc. 8. Reward for deserving employees: The commercial organization must offer adequate monetary as well as non-monetary rewards with due recognition to the working and intelligent employees. 9. Recognition of employees union: Trade unions must be recognized by the organization and any problems with workers should be sort out with negotiation with the trade unions 10. Job security: Some organization keeps some workers on temporary basis for years together. In order to encourage employees to work with commitment and dedication the organization must frame rules for confirmation of their services and strictly adhere to them. (B)social responsibilities of business organization towards shareholders . 1. Maximise shareholders wealth: The company may strive hard to maximize shareholders wealth. By undertaking new ventures, diversification,expansion etc,which leads to steady appreciation in value of shareholders wealth. 2. Protect shareholders interest: To protect the interests of the shareholders, an ethics committee of the board is created. Code of ethics is established, promulgated and made a living document to protect shareholders and others interest. RAJAN CLASSES SUCCESS STARTS HERE Page 82
3. Proper use of shareholders funds: The utilization of shareholders funds and other resources in the most profitable manner, which helps the business to run more efficiently. Share holders loose faith on company directors if funds are used in improper ways. 4. Periodic accurate and complete information: Company should furnish accurate and complete information about functioning of the business and also inform them about the future plans and activities of the company . 5.proper disclosure of financial information: company should maintain proper books of accounts and it should be audited by the qualified auditors, and copies of accounts like Directors Reports Auditors Reports profit and los account and balance sheet must be send to shareholders. 6.Recognisation of shareholders rights: rights such as participate in policy decisions, right to vote, right to question in general meetings etc.should be recognized ,directors are responsible ,so their should give satisfactory answer to the question of shareholders 7. Assurance to shareholders about the achievement of objectives: The company is also expected to reassure its shareholders in respect ot achievement of its stated objectives. 8. Disclosure of full and factual information: The management of the company should present the full and factual information to the shareholders through meeting, e-mails letters, telephone etc. 9. Appreciation in the value of shares: In addition to payment of dividends to the shareholders, the company ahs to see to it hat the market value of shares appreciates on the stock exchanges. 10.Timely conducting board meetings: The company should conduct board meetings and general body meetings as prescribed by the law, and it should be informed timely to the shareholders and it should also ensures free and fare election. Q4) what are the social responsibilities towards suppliers and creditors ? Ans.social responsibilities towards suppliers are as follows. 1. Timely payment: Timely payment of dues is the prime responsibility of the business organisaiton.The prompt payment helps the business organization to win the confidence of the suppliers . 2. Credit period: Good relations and prompt payment of credit amount enable the business firm to avail of reasonable credit period from the suppliers .
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3. Fair standard of trading: Their should be fair standard of trading between business organization and suppliers, which ensures the supply of better quality from the suppliers. 4. Honour terms and conditions of trading: Business organization should honor terms and conditions of trading determined between the business organization and suppliers 5. Respect the settlement date: Business organization should respect the settlement dates, i.e. payment of dues on their respective due dates. It should not delay settlement of dues. 6. Regular orders of purchase of goods: Business organization is expected to place regular orders for purchase of goods with the suppliers. This is for prompt delivery of goods . 7. Fair terms and conditions: The firm is expected to extend co-operation to the suppliers on fair terms and conditions. Suppliers are also expected to extend their co-operation to the business organization. Mutual understanding helps both the parties. (B) Social responsibilities of business organization towards creditors. 1. Regular and prompt payment of interest: Its the prime duty of business organization to pay the interest at time, by issuing post dated cheque,which wins confidence of the creditors . 2. High degree of transparency: To win the confidence of the creditors, the business firms are expected to maintain high degree of transparency in their business operations. 3. Periodical Report: Business organization should inform to the creditors about the utilization of funds raised from them, and other policy matters affecting the interest of the creditors. 4. No misuse of funds: It is the moral duty of the organization to use the amount of creditors for the purpose for which it is borrowed . 5. Timely redemption: The amounts of the creditors must be repaid to them on time as per the terms and conditions decided at the time of taking the amounts by way of loans. In case of conversion option, they must be converted into equity shares in the pre-determined ratio 6. Meetings: The organization must convene meetings of the creditors in case any situation arises causing any variation in the terms of the agreement or any other matter affecting their interest. Q5)What all the social responsibilities towards competitors and society/community? Ans. Social responsibilities of business organization towards competitors are RAJAN CLASSES SUCCESS STARTS HERE Page 84
1. Avoiding offering exceptionally high commission; The business firm should not give very high sales commission to distributors , agents ,etc.to increase his sales and crush down the competitors. 2. Avoid giving heavy discounts: The business organization should not give heavy discounts or free products to the customers at every sale. This will affect the business of competitors. 3. Do not give misleading advertisement :The business organization should not give misleading/ambiguous advertisement to defame the competitors .It should avoid waste of money, merely to face the competitors 4. Avoid unfair practices: The business organization should not resort to unfair trade practices. It should not imitate or copy the brands of the competitors 5. Respect the competitors: The business organizations should respect competitors, who should not be treated as enemies, but as a genuine competitors . (B) Social responsibilities of business organization towards society/community 1. Protection of environment: Business organization should must take possible measures to prevent, air, sound,noise,water pollution, and every business organization should assist the organization which are engaged in pollution control. 2. Avoid discrimination in employment: The business organization should not discriminate the candidates who are applying for various posts on the basis of religion, race , caste,colour,sex,etc.while providing jobs. 3. Safety measures: The business organization must take adequate safety measures for production of unsafe or hazardous products,e.g,such as installation of fire extinguishing equipment in the factory 4. Avoid fake advertisements: The business organization should not give fake advertisements or deceive the people about its products and activities. 5. Participation in social activities: Providing financial assistance to the institutions which undertake social activities, such as educational. night shelters, hospitals ,orphanages, etc 6. Promotions of cultural activities: providing financial assistance to the institutions which indulged in cultural activities 7. Promotion in arts and sports :The business organization expected to provide financial assistance to the institutions which indulged in arts and sports. RAJAN CLASSES SUCCESS STARTS HERE Page 85
8. Uplift weaker section of the society: The business organization is expected to contribute towards the upliftment of weaker or backward section of the society 9. Optimum use of conservation resources: The organization should make use of scarce resources in the larger interest of the society and conserve them for future generation. The resources like fuel, water must be economically used. 10. Promotion of small-scale industries: The business organization should contribute to the promotion of ancillary and small scale industries 11. Rehabilitation of people displaced by operation of business .The business organization are expected to rehabilitate people displaced by the accident that has taken place while they were performing their duties . Q6) What you mean by business ethics, and its need and importance of business ethics?(march 08,10) Ans.Meaning:The word ethics is derived from Greek word ethikoswhich refers to human character and conduct. Ethics is the branch of social science, the term business ethics refers to a system of moral principles or rules of conduct applied to business operations. Definition:Business ethics refers to business mans integrity so far as his conduct or behavior is concerned in all fields of business as well as towards the society and other business NEEDS AND IMPORTANCE OF BUSINESS EHTICS ARE AS FOLLOWS . 1. Protection of consumer interest: Consumer satisfaction is ultimate end of every business activity, but unfortunately it is neglected. Business ethics will warn the businessman to refrain from malpractices like adulteration and other unfair trade practices. 2. Social responsibility: Business ethics makes the organization socially responsible for its actions. Compliance with ethical rules will ensure protection of the consumer rights and workers interests Proper utilization of natural resources and public accountability.
3. Concept of socialism: socialism requires that the profits of a business must be shared by all and not just by the actual owners of the business .Profit is result of group efforts, such as, employees, shareholders, consu-mer and others.
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4. Interest of small-scale industries: Large companies generally dominate the market and adopt cutthroat tactics to drive away the small-scale industries. By reducing the prices intentionally to such an extent that small scale industries will not be able to sell their goods below such prices and thus they are adversely affected. Thus small sale industries do not survive. 5. Better relations with the society: Business ethics are necessary to establish good relations between the business organization and consumers, distributors, competitors, employees shareholders and the government. 6. Growth of consumer movement: A consumer is becoming very conscious of these rights. Consumer movement and the various laws meant for safeguarding the rights of the consumers have made the business community to follow business ethics in their commercial activities. 7. Beneficial to business and society: Business ethics foster (implies) the principles of honesty,sincerity,fairness, justice in the business dealings. It creates healthy atmosphere, also educate the public opinion about the high social values and promote cultural values, thus it is a tool for social transformation 8. Creating good image: Business cannot survive without the support of the society. It must serve the community to improve and maintain respectable image of the business. 9. Global competition: Business ethics are needed to strengthen business organization for long run survival of business in world wide or global competition.
Give answer with perfect reasons 1. Business organization have no social responsibilities (sept 08) Ans; this statement is false Reasons: 1. Every business organization is indebted to the society. It has to use the scarce natural resources most economically and with due priority to produce consumer goods. 2. It cannot undertake any activity which can cause environmental pollution and ecological imbalance. it cannot neglect the employees rights, nor ignore the rights of the consumers, since consumers are the back bone of the business . RAJAN CLASSES SUCCESS STARTS HERE Page 87
3. In times of natural calamities, like droughts, floods cyclone,etc. The business organization is expected to come forward for help, since government efforts alone cannot be adequate 4. Business organization are expected to act in a larger public interest and serve the objectives of mankind and society. 2. The sole aim of business organization should be to earn maximum profit. Ans; this statement is false. Reasons: 1. The main aim of business organization is to make profit .since profit is essential for survival, but it is not the sole objective .This is because the attainment of this objective may lead to the exploitation of the people. 2. Business organization depends upon various constituents of the society such as employees, consumers, investors, suppliers, government, and the society. it earn profit because of direct or indirect participation of these constituents. 3. Thus it has social responsibilities towards these constituents, such as producing and supplying quality goods to consumers, providing fair wages to the employees, paying fair returns to investors, and taxes and duties regularly to the government.. 4. If profit maximization could be the only motto of a business organization, it would not be possible to fulfil its social commitments. 3. Business enterprises are concerned with their welfare and not with social welfare. Ans: This statement is false. Reasons; 1. Social welfare refers to the total well-being of a community. It is not measureable 2. business organization cannot function well unless they get whole hearted support from their employees, owners and management. Therefore it is the prime responsibility of the business organization to satisfy the expectation of their employees, owners and management. 3. Every business organization is indebted to society. It needs support from the society for its survival and growth. RAJAN CLASSES SUCCESS STARTS HERE Page 88
4. Business enterprises are expected to fufil obligations or expectation of the different interest groups. Unless business enterprises take care of their own interest groups and society at large, they will not survive and continue to do their business. 4. Business ethics give the idea of fair trade practice to the business men. Ans: This statement is true. Reasons; 1. Business is a code of conduct evolved for regulating the activities of business towards the society and others.Honesty, truthfulness,sympathy,compassion, feeling of brotherhood,etc are ethical values which business men have to adopt for fair trade practices . 2. It calls for the importance of fair treatment with the consumers,workers,government and community at large. 3.It protects the interests of all the constituents of the society and creates healthy and competitive business atmosphere. 4.Business ethics guide the businessmen to run the business without adopting unfair practices, being honest and truthful about quality of goods and services, charge fair prices, obey the laws, pay taxes, fees and duties to the government, pay fair wages to the employees etc.. Objectives: Fill in the blanks: 1. Business ethics deals with morality in business organization 2. Fulfilment of social responsibilities brings good image to the organization 3. Regular and prompt payment of taxes is the responsibility of business towards government 4. Business is a soci0-economic activity. 5. Business are trustees of the society. 6. The business organization should try to promote welfare of the customers 7. A business organization is a part of society RAJAN CLASSES SUCCESS STARTS HERE Page 89
Rajan classes contact ;8268545939 8. To maintain economic and social stability is the social responsibility towards government 9. Commercial organization adopt the responsibility to pay fair wages to their employees 10The main objective of business organization is to create a customer 11. The business organization should supply goods of good quality. 13. The ultimate objective of business is to earn profits 14. The workers must be provided with good working conditions. 15. Ethics is the discipline that deals with what is good and bad 16. Business ethics is a branch of social science 17Approach of modern business is service oriented 18. To maintain industrial peace is the responsibility of businessmen
19. Social responsibility is voluntary concept

20. To provide jobs on a massive scale is the responsibility of business towards employees 21.To prevent the environment pollution is the social responsibility of business 22. Buisness organization and society are independent 23. The trade union protects the rights of employees. 24. To earn maximum profit should not be the sole aim of business organization 25. Profit making is the main and inevitable economic objective of a business organization. 26. Business should be always service oriented rather than profit motivated. 27. Values and norms laid down by the society are termed as social values 28. For business concern profit should be the means and not an end. 29To provide good quality of goods towards consumers Match the following RAJAN CLASSES SUCCESS STARTS HERE Page 90
1. Fair return on investment---social responsibility towards shareholders.
2. Code of conduct------------ethics 3. Fair prices--------consumers 4. Consumers in market mechanism--------king 5. Economic objective----------to earn profit
Topic:-consumer movement and protection Answer the following question 1. Define consumers. What are the rights & responsibilities of consumers? Meaning: The word consumer derived from the French word consumer which means to eat or drink Definition: The term consumer implies a person whose wants are satisfied by producer; a person who consumes the products and services that he buys and who does not resell them. The rights of the consumer are as follows: 1.Right to safety: Rights to be protected against the marketing of goods and services, which are hazardous to life and property ,if consumer is conscious of this rights, he can take precautions to
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prevent the injury, if injury is caused, spite of precaution he can complaint against dealer and even claim compensation. 2. Right to information: The right to be informed about the quality, quantity, potency, purity, standard and price of the goods and services as to protect the consumers against unfair trade practices. 3. Right to choice: Every consumer has the right to choose the goods needed from a wide variety of similar goods wide variety of goods and services to be made available to consumers at competitive prices. 4. Right to heard: The right to be heard implies that the consumers interest will receive due consideration at appropriate agencies. 5.Right to seek redressal: The right to seek redressal against unfair trade practices and exploitation of the consumers. Consumers can take help of consumer organization in seeking redressal of the grievances against unfair trade practices, like higher price, poor quality, unsafe products, etc. 6. Rights to consumer education: This right made it clear that every consumer has a right to acquire knowledge and skill throughout his life. i.e, educating relevant laws which are aimed at preventing unfair trade practice. 7.Right to basic needs: The rights to basic needs is a recent addition to consumers rights and as per this right, consumers need to be assured about adequate food supply, safe and permanent place for living and other basic amenities like sanitation potable water and power supply . 8.Right to safe environment: This right has stressed the importance of safe environment for consumers to protect their rights. The responsibilities of consumers are as follows; 1. Critical awareness: It is the responsibility of a consumer to be alert and question about the price and quality of the goods and services he buys and uses. Consumer should look, listen and ask questions. He should asses value for money, value for people, value for environment. 2. Action:The sonsumer4 should be alert while dealing with trader. He should also ensure that he gets fair deal with the trader. Unless he remains active, he will continue to be exploited. He should not compromise his culture and customs while dealing with traders .
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3. Social concern: The consumer is expected to make himself aware that his consumption does not create any adverse impact on the common citizens. He is expected to ensure that the products or services he consumes are not produced in a situation that may be harmful to our environment . 4. Environment concern: The consumer should understand the environmental and other consequences of this consumption. He should recognize his individual and collective responsibility to conserve natural resources and protect the earth for future generations. He should make sure that the production and disposal does not harm environment . 5. Sustainable consumption: The consumer before buying goods or before availing service should satisfy himself about the need for the same and also should consume only up to him requirement and should not let goods or services wasted . 6. Working together; The consumer should shoulder the responsibility to promote and protect the interests of consumers . It is essential to stand with others who are working for the causes of consumers. One should organize the consumers and make them work together for the welfare of consumers 7.use of product: The consumer is expected to use or operate the product as per the instructions and directions given in the user manual. If required demonstrations should be asked if any fault is found it should be informed to dealer or the traders Q2.What all the problems faced by the consumers? Meaning: The word consumer derived from the French word consumer which means to eat or drink Definition: The term consumer implies a person whose wants are satisfied by producer; a person who consumes the products and services that he buys and who does not resell them. 1. Adulterated products: Adulteration may be done by the traders by removing substances which are nutritious and in that place adding substances which are injurious to health. Products may be adultered by lowering their norms of standard quality. 2. Misleading advertsing: misleading advertising such as tall claims about the benefits of the products but do not disclose the drawbacks or any other vital information in the advertisements, and testimonials by professionals or personalities, who do not use the product at all.
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3variations in the contents: The consumers also face the problem of variation in quality and contents of goods. They do get same contents or quality if same product is purchased second or third time. 4. Supply of duplicate sgoods:The consumers also face a mojor problem of duplicate goods. some trader duplicate the popular brand and cheat the consumers by supplying them duplicate/defective goods such as medicines, eatables ,edible oils etc. 5Selling products above maximum retail price(MRP) Many traders illegally fix MRP or sell the products at a price higher then MRP . During the restive seasons when demand increases many traders sell their products at higher rates. 6. False weights:Many a time the consumers are cheated by the traders by using false or substandard weights and measures. This happens generally in unorganized markets, but also in the organized markets such as departmental stores and shopping malls. 7.poor after sales service: consumer also face poor after sales services , even the big companies dont provide effective after sales services. 8. Unauthorised sale: Many traders sell the essential products such as medicines eatables etc to ignorant consumers even after their expiry dates are over. 9.No issue of cash memo: many traders do not issue cash memo for sale of many articles. As a result the tax does not reach the government. If all the customer insist he gets only kacha bill. Q3.Short notes on consumer protection Act 1986. Ans. The UN (united nations) unanimously adopted general guidelines to protect the interests of the consumers in 1985,based on this law was passed in parliament under the leadership of Late Rajiv Gandhi in 1986.Thus consumer protection Act came in to force in july1987. The consumer protection act is explained below( features) 1.Direct complaints: consumer protection Act gives necessary power to consumer to make a direct complaint, that is if consumer has problem he can approach the manufacturer , if all it is not solved he can approach to district forum . 2. Consumer association: This Act provides powers to the consumer association to fight on behalf of consumer or consumers in his or their interests. This Act has give power to consumers to register
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their complaints or grievances thought their associations. This gives popularity and prestige to the consumer associations. 3. complaint/rights against public sector companies: This Act give full freedom to express their grievances against the public sector companies or public utilities services for their inferior services. Consumer can lodge a complaint against public enterprises such as railways telephones etc. 4. Quick and simple procedure: The procedure for redressal of complaints of the consumers against the traders in corporate in this act is quick,easy,free of cost and very simple. I.e. consumer can complaint on any language ,district forum listen both the parties views and gives decisions which is binding on both the parties. 5.Check malpractices: malpractices carried by different organization which not acceptable in welfare society. Checking malpractices is very much necessary for the protection of interests of unorganized, poor, illiterate and helpless consumer. 6. Self regulation: Complaints made by consumer against traders through business organization association about them malpractices. This is the self regulation to control the malpractices. 7.consumer protection councils :The act powers the central and state government to establish consumer protection council at the state and central level. (Functions) 8. Agencies for speedy redressal of consumer disputes: The act provides quasi-judicial machinery for the speedy and simple redressal of consumer disputes. The machinery consists of 3 levels. i)CONSUMER DISPUTES REDRESSAL FORUM: It is known as district forum established at district level by the state govt.for each district. ii)CONSUMER DISPUTES REDRESSAL COMMISSION: It is known as state commission established at state level by the govt. of the state. iii)NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION: It is established at national level by the central govt. 9. Rights of the consumer: i.right to safety: Rights to be protected against the marketing of goods and services, which are hazardous to life and property ,if consumer is conscious of this rights, he can take precautions to RAJAN CLASSES SUCCESS STARTS HERE Page 95
prevent the injury, if injury is caused, spite of precaution he can complaint against dealer and even claim compensation. ii.Right to information: The right to be informed about the quality,quantity,potency,purity,standard and price of the goods and services as to protect the consumers against unfair trade practices. iii.Right to choice: Every consumer has the right to choose the goods needed from a wide variety of similar goods. A wide variety of goods and services to be made available to consumers at competitive prices. Iv.Right to heard: The right to be heard implies that the consumers interest will receive due consideration at appropriate agencies. V.Right to seek redressal: The right to seek redressal against unfair trade practices and exploitation of the consumers. consumers can take help of consumer organization in seeking redressal of the grievances against unfair trade practices, like higher price, poor quality, unsafe products, etc. vi.Rights to consumer education: This rights made it clear that every consumer has a right to acquire knowledge and skill throughout his life. i.e, educating relevant laws which are aimed at preventing unfair trade practice. vii.Right to basic needs: The rights to basic needs is a recent addition to consumers rights and as per this right, consumers need to be assured about adequate food supply, safe and permanent place for living and other basic amenities like sanitation potable water and power supply . Viii.Right to safe environment: This right has stressed the importance of safe consumers to protect their rights environment for
10. Arranging lectures/seminars: that is educating the consumer by making aware of unfair trade activities by some traders. 11. Safeguarding interest of consumer:safteguarding and guiding them about the rights and duties bring the attention of the consumer about the malpractices and injustice. What is role of consumer movement? Ans.( i.)Fighting for protection:i.e fighting against malpractices, injustices, monopolistic, tendencies by the businessmen. ii) Educating consumers: About rights, duties, marketing procedures qualities standards of products etc. RAJAN CLASSES SUCCESS STARTS HERE Page 96
iii) Production and distribution of essential commodities: The consumer movement is necessary to undertake certain activities such as setting up consumer stores, production and distribution of essential goods and services on co-operative basis. It also encourage consumer to join such co-operatives for their benefits . Iv.consumer legislation: It represents consumers at different levels and pressurizes the govt to pass suitable laws relating to protecting of consumers and take measures for their protection. V.Liaison with government: It assists the government in framing business policies, passing laws, and implementation of the laws made for the consumer protection Vi.measures against malpractices: consumer movement takes certain steps against malpractices and anti consumer policies of the govt. Distinguish between: 1. State commission and national commission Points meaning State commission A consumer disputes redressal agency at state level established by each state govt. Qualification of members President should be current or retired high court judge. The 2 members, which include at least one women, should be well educated and having long experience in different fields. Appointment of president President is appointed by state govt,after consultation with chief justice of high court. National commission A consumer disputes redressal agency at the national level established by the central govt. President should be current or retired supreme court judge and other 4 member, which include atleast one women, should be well educated and having long experience in different fields. The president is appointed by central govt.after consultation with the chief justice of india.
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Area of jurisdiction
It has jurisdiction over a particular state Compensation is done between 2 lac to 1 Cr.
It has jurisdiction over the entire nation Compensation is done above 1.Cr.
Amount of compensation
Points Meaning
District forum Established by state govt,in each district ,to settle the disputes of consumers against manufacturers or traders
National commission A consumer disputes redressal agency at the national level established by the central govt
Composition
It consist of 1 president and 2 members appointed by state govt. President should be working or retired judge of district court and 2 members ,at least 1 women, should be well educated and having long experience in different fields
It consist of 1 president and 4 members appointed by central govt. President should be current or retired supreme court judge and other 4 member, which include at least one women, should be well educated and having long experience in different fields.
Qualification of members
Appointment of president
It is done by state govt, on the recommendation of selection committee
The president is appointed by central govt.after consultation with the chief justice of India.
It has a jurisdiction over a particular district
It has jurisdiction over the entire nation
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Compensation does not exceed 20 lac If the person is not satisfied he can appeal to state commission within 30 days
Compensation is done above 1.Cr. If the person is not satisfied he can appeal to supreme court within 30 days
Appeal against order
Points Meaning
District forum Established by state govt,in each district ,to settle the disputes of consumers against manufacturers or traders
State commission A consumer disputes redressal agency at state level established by each state govt
Qualification of members
President should be working or retired judge of district court and 2 members ,at least 1 women, should be well educated and having long experience in different fields
President should be current or retired high court judge. The 2 members, which include at least one women, should be well educated and having long experience in different fields.
Appointment of president
It is done by state govt, on the recommendation of selection committee
President is appointed by state govt,after consultation with chief justice of high court
It has a jurisdiction over a particular district
It has jurisdiction over a particular state
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Compensation does not exceed 20 lac
Compensation is done between 2 lac to 1 Cr
True or false with reasons; 1. consumer movement aims at the protection of consumer interest. Ans. This statement is True. Reasons; 1. Consumer movement is collective endeavor of the consumers to protect their rights and promote their interests. Indian govt passed the law called consumer protection Act 1986.the act recognizes the six rights of the consumers. 1.right to safety: that is protecting the consumer against marketing of hazardous goods ii.right to be informed: about quality,quantity,standard, price of the goods etc. iii.right to be assured, wherever possible access to goods and services at competitive prices. iv.right to be heard and assured,that consumer interests will receive due consideration at appropriate agencies v.right to seek redressal against unfair trade practices vi.right to consumer education vii.right to have clean and healthy physical environment and act also provide quasi-judicial machinery. 2.consumer is considered as king of india. Ans. This statement is True. Reason; 1.Indian constitutions is democratic and gives importance to people and their fundamental rights. and consumer is member of the society, enjoy all rights granted by constitution. RAJAN CLASSES SUCCESS STARTS HERE Page 100
2.consumer is center point, sales takes place since consumer buys, if he stops buying the production and distribution comes to standstill. Thus consumer is king of market economy. 3.india excepted mixed economy, to prevent economic explotation,certain laws are passed eg.Drugs control Act1950,Standard of weights and Measures Act1952,Prevention of Food and Adulteration Act 1954,Monopoly and Restrictive Trade practices Act 1979,kept consumer in center point. 4.The consumer protection Act 1986 has recognized 6 rights.(a)right to safety(b)right to be informed(c)right to choose(d)right to be heard(e)right to redress(f)right to consumer education. and consumer courts has been set up for redressal of consumer grievances. 3.The seller has to recognize the rights of the consumer Ans. This statement is True. Reasons; 1. .The consumer protection Act 1986 has recognized 6 rights.(a)right to safety(b)right to be informed(c)right to choose(d)right to be heard(e)right to redress(f)right to consumer education. 2. Press media and print media make aware the consumer their rights so it is difficult for seller to ignore. 3. Consumer court have been established to register consumers complaints and conduct proceedings against the seller,and concern seller is found guilty he is punished or fined 4. Earlier seller use to apply principle of caveat empto(i.e, let buyer be aware) and put the condition, once sold will not taken backBut not consumer protection Act 1956 expressly provides, if goods doesnt met the required needs then it is the responsibility of seller to replace it. Now the principle iscaveat venditor(i.e, let seller be aware).
Objectives: Fill in the blanks: 1.consumer movement wass started in india in 1920 2.As per the Consumer protection Act,1986,there is a three-tier system for solving the complaints of consumer. 3.In modern competitive market, consumer is regared as king RAJAN CLASSES SUCCESS STARTS HERE Page 101
4.The claim up to 20 lac can be entertained by district forum. 5.The right to need is the basic right of consumers 6.Consumer in actual practice are at the mercy of sellers 7.The aim of monopolices and restrictive trade practice Act is to control the growth of private monopolies in the ineterst of consumers. 8.The central consumer council was established by central govt. 9.The District forum is formed at the heard quarters of district by the state gobt asp er the consumer protection act 1986. 10.The chairman of the national commission is a superme court judge 11.The term consumerism came into existence in the 1960 12.The father of consumer movement is Ralph nader 13.The consumer protection Act was passed in the year 1993. 14.The number of members in district forum state commission and national commission are 3,3,5, 15.Penalty for the violation of the orders of the forum commission is imprisonment 16.The former president of the USA Mr. John F.Kennedy summed up the basic consumer rights are Right to safety and right to informed 17.Consumer is person he purchase goods for consideration 18.consumer is center point of market economy 19.consumer have right to safety 20.The tenure of central consumer protection council is three years 21.The maximum period of membership of the district forum is five years 22.Any appeal against an order issued by the district forum shall lie in state commission 23.Essential commodities act passed in 1954.
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24. Drugs control Act1950 25.Standard of weights and Measures Act1952, 26.Prevention of Food and Adulteration Act 1954, 27.Monopoly and Restrictive Trade practices Act 1979, 28.24th December is celebrated as consumer day 29.complaint bookis the result of the right to heard 30.World consumer day is 15th march
TOPIC;-MANAGEMENT Q1.What is management and its features/characteristics? March 08,09
Ans. Meaning management means handle the work or activities of the organization through the efforts of other people. Definition:To manage is to forecast, to plan, to organize, to command, to co-ordinate and to control BY-HENRY FAYOL. Features/characteristics are as follows:1.management is goal oriented: management is goal oriented ie,maximum production at the minimum cost, maximum production at minimum cost, maximization of profit, increased
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productivity, improved quality production etc.management has to concentrate on their activities to achieve these goals. 2. Management is group activities: A manager directs, leads,co-ordinates and controls the efforts of a group to accomplish the common goals of the organization ,so wherever there are group efforts for a common goal, management is necessary. 3. Management is continuous process: It is continuous process, which keeps the organization functioning .It involves identifying the problems and finding appropriate measures for regular basis. Every organization strive to achieve goals, as soon as it is achieved, new goal is set up and efforts are made to achieve that new goals. 4.management is universal in nature: It is not restricted to business organization it is applied to all type of organization .eg,govt,educational,finanacial,ecomic,social,religious,political etc.management is essential for every activity ,which has to be performed in group. Because, planning,organizing,coordinating and controlling are common for every group effort. 5. Management is intangible: management function is not seen physically but its presence can be felt by seeing the orderliness and co-ordination between the various departments. management is seen in the form of increased productivity, reduced wastage, and cordial relationship between employee and employer ,cordial relationship between organization and customer. 6. Management is social process: Management takes place through people. An organization cannot ignore the importance of human element .A business is a part of the society . it has to fulfill its social fulfillment its social obligation. A successful organization should satisfy the interest of share holders. Employees, government, consumers 7. Management is different from ownership: Owners invest their capital into the business, managers look after the business on behalf of the owners. Owners get profit for investing capital in the business. Managers get remuneration for their services 8. Management is dynamic: Management has to adjust itself according to the various environmental forces. It cannot remain static. It has to revise its theories, principles and course of behavior suited to the changing circumstances. It has to equip with latest techniques and principles in human behavior and industrial psychology. 9.Management is need at all levels of organization: Management is needed at all levels of an organization at top level the manage may be involved in planning for the entire organization whereas at the operational level a manager may have to plan for managing the day to day activities. RAJAN CLASSES SUCCESS STARTS HERE Page 104
10. Management is art as well as science: Management is similar to art as manager uses his creativity and innovative ideas while discharging his duties. Management is similar to science as it is a systematic body of knowledge. The principles of management are universally accepted. Q2)what is management explain its significance/importance/merits?(march 08) Meaning management means handle the work or activities of the organization through the efforts of other people. Definition:To manage is to forecast, to plan, to organize, to command, to co-ordinate and to control BY-HENRY FAYOL. The significance of management are as follows: 1. Achievement of goal: In an enterprise group of people perform various activities to achieve the common goal of the organization. Effective management brings about harmony and co-ordination in efforts of all groups. A manager creates a feeling of team spirit among the members of the group, This helps in beinging group effect. 2. Optimum utilization of resources: Effective management is all bout proper utilization of available resources in the organization. Proper allocation of resources and work to right person results in higher output.It also reduces wastages and cost. Maximization of output by reducing cost is ultimate objective of every enterprise. 3. Division of work: An efficient manger understand the need of division of labour. The entire work is divided into smaller lots. Each job is given to a particular employee who has right skills and capabilities to carry out the required activity .This leads to specialization of work and completion of the work in the stipulated time period. 4. Motivation:Division of labour leads to specialization of work. Specialization enhances efficiency of an employee, leading to more output. A manager can motivate employees through financial and non financial incentives for increasing productivity. A feeling of them work also encourages employees to put their best efforts in achieving goals of the organization. 5.Better Relation: Different groups work at different levels in an organization. The employer and the employees have different sets of demand from each other. Effective management ensures that employers fulfill their social obligation towards their employees and employees contribute towards higher productivity. This helps in establishing cordial relation among different groups in an organization RAJAN CLASSES SUCCESS STARTS HERE Page 105
6.Reducing the labour turn over: Many times employees leave their job ,if they get higher salary from another organization, and some employees stay absent for particular day, if they get better paid job in that particular day. These problems can be prevented by providing better rewards and incentives. Thus the organization can over come from large labour turn over 7.Fulfilment of social obligations: An enterprise is a part of the society . It uses physical human resources of the society. It was to fulfill its social obligations towards the society. In order to enhance its corporate image, it makes an attempt to satisfy interest of different groups of the society.It makes available goods at fair price, and pay fair tax, and fair interest to shareholders and fair wages to workers. 8.Survival and growth: Every enterprise is part of the society. enterprise is effected by social , legal, political, and economical areas. such development provide new opportunity and threat.organisation should take advantage of new threat, and take suitable steps to face new threat. 9.Economic development: Economic development takes place due to optimum utilization of resources. Such resources are optimally used by business organization. They also contribute to national income of the economy and also help in generating employment opportunities 10. Facing competition: Modern business organization face stiff competition. In order to survive the competition every organization strives to achieve higher productivity coupled with reduced cost. Efficient management plans its activities in desired manner to make best allocation of the available resources . Q3.What is management? Explain various levels of management?oct08 Q4.what all the functions of top level? march 09 The functions of top level are 1. Deciding of objectives of the organization: that is deciding and formulating the main objectives of the organization. 2. Making plan and policies for achieving the objectives ;that is framing appropriate plans and policies to achieve the objectives. 3. Desinging organisazation structure It designs the organizational structure for various departments, sections and regions to carry out the activities of the organization smoothly
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4. Organisazing physical and human resources to achieve the objectives: that is making arrangement of important physical resources such as materials machinery and human resources etc.
5. Selecting and appointing key executives for managing the organization: that is recruiting qualified, experienced, and capable candidates for executive officers/managers posts for managing the affairs of organization 6. Providing direction to middle level executives for achieve4 the targets of the organization: that providing direction or assigning jobs to different executives or managers working at the middle level. 7. Controlling and monitoring the activities of the business: top level controls and monitor the middle level managers and activities and thus controls the wastages and reduce the over all cost . 8. Developing evaluation process to check the performance :that is check the employees performance and making sure that plans are executed in the right directions The function of middle level management 1. Interpretation of policies; middle level acts as a link between top and lower level management .They interpret and explain the polices framed by top level . 2. Formulating of policies: The middle level management frames appropriate plans and policies for each department under it control on the lines of top managements plan 3. Organizing physical and human resources: They prepare the organizational set up for each department under its control with available physical and human resources for executing the plans and policies. middle level managers are head of some departments 4. Recruitment of staff: The middle level management selects and appoints suitable, operative and supervisory personnel and assigns duties responsibilities to them for the execution of the plans of the concerned departments 5. Motivating the personnel: The middle level managers have to motivate the personnel to perform to their best ability. They offer various incentives and rewards for raising productivity, efficiency, capacity and caliber.
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6. Periodical reports: The middle level manager keep a watch on the activities of the personnel in their respectively department collect the reports with the statistical information and other records .They send these reports at periodical intervals with observations to the top management . The functions of lower level management 1. The lower level management prepare plans for day to day operational activities. that is plans regarding their works and allot work to their workers. 2. Organisation of resources: The lower level management organizes the different available resources such as raw material spare parts, tools and other equipment for the worker and other operative staff. 3. Assigning jobs: According to day to day planning and organization al set up the lower level management assigns jobs to the worker and other staff. 4. Periodical maintenance of machinery: To avoid the stoppage of work due to break down of machinery, the lower level management keeps the machinery and other equipment in proper working condition through periodical maintence. 5. Looking to the safety of workers: The supervisory level manager provide safe and secure work environment for the workers by proper fencing and putting safety guards at all critical points for avoiding accidents. 6. solving problems and grievance: The lewer level management solve the problems and grievance of the workers and forwards same to the middle level management to further action and justice. 7.Condfuct quality check: The lower level management has to make sure that their is steady flow of output and that the quality standards are maintained by the workers Answer the following with reasons: 1. Management is universal process Ans this statement is true Reasons] 1. Management consists of a series of functions such as planning,organisaing, staffing, directing and controlling. These functions performed systematically, thus makes a management a process. RAJAN CLASSES SUCCESS STARTS HERE Page 108
2. Management is not restricted to business organization, it is applied to all type of organizations, such as political, educational, social, religious etc. 3. Management is necessary for every activities which is performed by group .This is because planning, organisaing ,coordinating and controlling are common for every kind of group effort. 4. Management is universal and multi-disciplinary phenomenon. Its principals are universally accepted only thing is that it may be modified according to situation arise 2. Management as a process has no significance for an organization. Ans this statement is false. Reasons (REFER TO SIGNIFICANCE OF MANAGEMENT) 1. Management process undertaken by managers to attain various objectives of organization. such as planning,organising,staffing ,directing, controlling etc. 2. systematic performance of these operations in an orderly manner and proper sequence by management in very organization are essential for its success. 3. Sound and efficient management is the key to achieve the business objectives and goals, that is an administrator or owner can accomplish right job at right time and at right place with right method 4. Modern business is highly complicated. Such that ,mass scale production, change in technology, complexities in human relationship, changing soci-economic situations, change in govt. policies etc. to face these their should be efficient management . 3. Management is an art, science and a profession. March 08 sept 09 Ans this statement is true. Reasons 1. Several authorities on management studies have called management as the art of getting things done through people Art is the systematic application of skills and knowledge for getting the desired result. 2.its theories and fundamental concepts are universally acceptable .It hasa a scientific approach, management theories clearly indicate cause effect relationship e.g. motivation and efficiency. Principles are tested and verified and it is applied on different types of fields. RAJAN CLASSES SUCCESS STARTS HERE Page 109
3. Management is considered as a science. however it is not exactly a science because it deals with human behavior which is highly unpredictable and cannot be put to laboratory test. Hence it is rightly called as branch of social science 4. Management is specialized of body knowledge, it is necessary that mangers are properly trained by the specialized management insititutions.i.e managers should have professional skills and professional experience 3.We cannot make any changes in the field of management.Oct08 Ans: This statement is false. Reasons; 1. Management refers to process which involves different functions to be performed for getting the work completed through others to achieve organizational objectives. 2. Management is dynamic, and It has to adjust according to the environment forces that is it has to revise his theories and principles and course of behavior suited to changing situation. 3. Management has to equip itself with the latest techniques and principles in human behavior and industrial psychology. 4. Management is on going process, that is fixing the goals, finding the problems which prevents to achieve the goals then finding the solution to it, then achieving the goals. After that fixing another new goal ,so it is ongoing process .
Write short notes 1. Management is art.
Ans. 1.Several authorities on management studies have called management as the art of getting things done through people Art is the systematic application of skills and knowledge for getting the desired result 2. Different people behave differently in different situations. Mangers have to come up with new ideas or measures to handle situations. There is no set pattern for a particular situation. Therefore manager must be innovative . RAJAN CLASSES SUCCESS STARTS HERE Page 110
3.practice makes the man perfect, Managerial efficiency is developed through regular partice, business situation is changing from time to time, if the manger is experienced then only he can face such situation, for that regular practice is needed . 4. Like artist every manager has distinct way of executing the work according to his skills, ability understanding, initiatives, judgement, tactfulness and experience. 5. Result oriented: Every good manger like a artist, is result oriented. Managerial activities aim at achieving a definite goal i.e. reduction in wastages achieving the sales target, maximization of revenues and satisfying the interest of stakeholders and employees and all other persons who are directly or indirectly related to business . 2. Management is a profession Ans. A person is said to be professional when he undergone certain training to develop certain required skills with a view to providing services to community at large. The main feathers of profession are explained as follows: 1. Formal education: Minimum formal education from a recognized institution is essential for every professionals 2. Expertise knowledge: professional must have expert knowledge and skill in the concerned field for discipline. With specialized skills and experience, professional acquires mastery in his respective field. 3. Code of conduct: There is a code of conduct fixed by every organization which is binding on all the members of that professional body.Example: characted accountant should follow the code of conduct fixed by the institute of chartered accountants of India 4. Fees: professional charge fee for their service, fee depend on the nature of service and financial status of the clients, professional work for number of client rather then one client. 5. Registration: The professional have to register themselves with their respective professional body before commencing practice.eg: lawyer has to register in bar council, doctor requires certificate from medical council for practice. 6. Specialization The professionals can specialize themselves in a particular field .for example doctors specialize in child care, ENT specialist etc. 7. Independent office: Normally the professionals have their own independent offices from where they treat their clients. RAJAN CLASSES SUCCESS STARTS HERE Page 111
8. social responsibility: The professionals render their services not exclusively for making money. There is an element of social service of social responsibility towards their clients. 3. Management is science: Science is a systematized and organized body, based on observed findings facts and events, which comprises exact principles which can be verified and universally acceptable. 1.Systematice body of knowledge: Management is similar to science, which is organized and systematized body of knowledge which consists of certain rules and principles.managment undertakes the process of collection of data, classification and drawing inferences from them, this process helps the management to take correct decisions 2. Universally accepted principles: Management as a subject has fundamental theories and concepts which are applicable in the real situation of the business .management process is universal in nature,eg.division of labour, unity of command and direction. 3. Cause effect relationship: Management principles clearly indicate cause effect relationship. Example: the relationship between motivation and efficiency is proved when the management finds that a motivated person gives more output then a worker who is non motivated . 4. Identical result may not be obtained : Management is social science, human behavior is unpredictable, management principles are universally accepted so identical result may not be obtained under different situations. 5.verfiability of the principles: Management principles is basis of scientific enquiries and analysis .They are used in real practical life and result may be tested and verified. Distinguish the following . Points Management Administration
Meaning
Management is concerned with getting the work done from others in the most effective and efficient manner to accomplish its objectives .
Administration is concerned with the formulation of plans policies and objectives for an organization
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Level of management
Management is more relevant at Administration is more relevant the lower levels of an organization at the top level and middle of an organization Admistration requires conceptual and analytical skills as it involved with framing of the policies.
Skills required
Management required technical skills as it is involves implementation of formulated plans
Nature of function
Management is an executive function as it involves implementation of formulated plans. It has more significance in business enterprise. It is more widely used in a business organization
Administration is an analytical function as it involves framing of the plan an policies.
Significance/importance
It has more significance in nonprofit or government organization. It is more widely used term in government organization
Decision making
Management answer the questions of how to do it and who shall do it
Administration answer the questions of what is to be and when it should be done.
ownership
Management is the implementation part of the policy therefore it is related to the employees of the organizations
Administration is the formulating the policy therefore it is related to the owners of the organization
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Designations
Middle and lower personnel are involved in management departmental heads foreman and supervisor and junior executive
Top level personnel are involved in administration Board of directors ,Chief executive officer etc.
Distinguish between (1)Top level(2)Middle level(3)lower level of managements.
TOP LEVEL MANAGEMENT
MIDDLE LEVEL MANAGEMENT
LOWER LEVEL MANAGEMENT
1.MEANING; It refers to higher level of authority in an organization. consist of Board of Directors, Managing Directors, president. Etc. It refers to the intermediary level of management consists of departmental heads such as finance manager, production manager, sales manager etc. It refers to supervisory or it operational level of management. It consists of foreman, superintendent supervisor and junior executives.
2.Nature of function It is concerned with framing of policies for the entire organization It is concerned with implementation the policy formulated by the top management It is concerned with executing the policies and achieving goals on behalf of the organization
3.Skills Required It requires more of analytical and conceptual skills It requires more of human skills and mix of conceptual and technical skills It require more of technical and operative skills
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4.Accountability Top management reports to the Middle level reports to the top level management shareholders government agencies Lower level management reports to the middle level management
5.Main function It is mainly involved in framing of policies and organizing required resources 6.Span of period Formulating policies is a time consuming affairs as it requires more time to analysis situation and formulate plan to achieve the target Implementing the policies may require comparatively lesser time than formulating the same Executing the plans may require lesser time as it the operational aspect of the policy. It is involved in implementing policies and directing the lower It is involved in operational activities of the organization management
TOPIC:Principles of management ANSWER THE FOLLOWING QUESTION 1Explain any five management principles of Henry fayol.(march 08.sept 09) HENRY FAYOL: He is French Engineer, most influential contributors to modern concepts of management, in 1916 he published book ADMINISTRATION INDUSTIELLE ET GENERAL. Where 14 principles are explained. 1. Specialization of Division of Labour: NO need of division of labour, which is dividing the work into smaller lots, instead assigning the work to employees depending on their capabilities and
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willingness to do the work. Division of labour or work leads to concentration of work and thus employees doing same job for longer period leads to acquire skill, ability, and accuracy. 2. Authority and Responsibility: Authority is the right to give orders and responsibility is the duty to complete the assigned work. When the manager is assigned authority for some work, he should be made responsible for the completion of the some work .Their should be balance between authority and responsibility, excess of authority will demotivate the subordinates. Additional responsibility will delay the completion of the work 3. Discipline :Fayol believed that discipline is essential for the smooth working of an organization , in context of organization, means adhering to given set of orders or instruction of the superiors. Following the rules and discipline leads to consistency in the action , growth and prosperity of the organization 4. Unity of command: According to this principle. One employee should receive a set of instructions from one superior and should report back to same superior. This lead to consistency in the action. Thus reduces the confusion and lead to greater responsibility, if an employee receives instructions from different superior , it lead to confusion and effect the discipline and stability of organization . 5. Unity of Direction: Fayol advocates one head for one plan Which means that a group of employees working on similar activities should have common objectives and must work under one head (senior).All the objectives of different group should be in line with the objectives of the organization ,thus leads to effective coordination of the individual efforts and energies. 6. Subordination of individual interest to general interest: Greater importance is given to organization interest then the group of individual interest .If employee interest is given more importance then organizational, leads to conflict of interest with organization interest .it is said that employee should surrender his goal before the goals of organization, he can accomplish his goals along with goals of organization . 7. Remuneration of personnel: Remuneration is the price of the service rendered. Wages or salary paid to the employees should be fair skill of the employee. Fair remuneration boosts the morale of the employees, results in greater productivity, leads to harmony in relationship between employer and employee
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8. Centralisation:Refers to concentration of power or authority, in smaller organization centralization is essential, but in large organization there are many levels of management so there must be decentralization of some authority for smoothing functioning of the organization 9 . Scalar chain; Scalar chain means reporting relationship from the ultimate authority to lowest rank employee. It also means the chain of authority and communication from the highest rank to the lowest rank.It suggests that communication or instructions must follow a proper chain of authority. If this chain is broken there will be communication gap in the organization sometimes following the scalar chain is the lengthy process so fayols insisted short cut chain which is called Gang-Plank is the temporary arrangement between two points to facilitates quick and easy communication(future explanation is needed ) 10.Order:This principles states there should be right place fore every thing and every man in an organization .It states there must be a proper place for the material and men in an organisaiton.Social order means, right man in right place. This principle gives importance to making right selection of the personnel . 11. Equity: Equity means equality in treatment of employees. It relates to justice and kindness. It also states that a manager must be free from any bias and prejudices . 12. Stability of tenure: A new employee takes time to adapt himself to the new work and perform it efficiently. In order to motivate the employee job security must be offered it should be followed stability of job. Instability of tenure may effect efficiency performance of employer 13. Initiative: Initiative is the power to think and execute.. Management should take steps to
encourage worker initiative, which is defined as new or additional work activity undertaken through self direction. 14. Esrit DE Corps: employees. Management should encourage harmony and general good feelings among
2.) What are the importance /Need of principles of management (march10?) Ans.Meaning:The word principles means a basic fundamental truth which is universally accepted and followed by every one everywhere without unreasonable like or dislike. In general it is the guidelines used as a base for formulating certain code of conduct. Definition: principle is general proposition(statement ) sufficiently applicable to the series of phenomena under consideration to provide a guide to thought Importance/significance of principles of management are
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1.Better understanding: Principles of management serve as guidelines to the managers. As they are tried and tested over period of time, manager gets a better understanding of managing his organization. He can plan his activities in the desired manner to achieve the goals of this organization. Such principle is guidelines to handle a rising situation in organization. 2.Increases efficiency: The aim of any business organization is to improve output and productivity by reducing wastage and cost .Principle of Division of Labor leads to assigning a job to an employee based on his skill and expertise. 3.boost morale of the employees: increased efficiency and productivity adds to moral of the employees. Increased productivity is also linked with financial or non-financial incentives plus fair remuneration. This helps in increasing morale of the employees who would put their best possible Efforts to increase the overall efficiency of the organization 4. Social Responsibility: A business enterprise is a part of the society. It draws its resources from the society. Therefore it has certain moral and social responsibilities towards the society. By adopting principle of fair remuneration and principle of equity, it acts as responsible organization of the society. 5. Helps in coordination and control: Principle of unity of direction emphasizes on coordination o f departmental goals with the goals of the orgnaisazaition. All activities of all the departments should be directed towards achieving the common goal of the business enterprise. 6. Acts as a guide for research and development: principles of management are evolutionary in nature. They have evolved with the passage of time. They have undergone changes with practice and experimentation. They also serve as guidelines for conducting research. Further changes can introduced to suit the demands of the changing time Distinguish between
Points Meaning
Principle
Unity of command Unity of command implies that every employee is supposed to receive orders and instructions from one boss and in return answerable and accountable to the same boss This principle insists on one boss for one subordinate It helps in avoiding duplication overlapping and confusion and to establish good relationship between subordinate and superior It stresses the need for the
Unity of direction Unity of direction implies that a group of employees perfuming similar jobs or activities must have common objectives and must work under one superior This principle insists on one unit or divisions for one plan and one head It helps in providing better co-ordination and direction to the efforts of employees of one department in achieving the objectives of that department. It emphasis the attainment Page 118
Aims
Needs
Rajan classes contact ;8268545939 subordinate to be accountable to one superior by avoiding duplication of instruction from two superior This principle is related to the functioning of the employees with clarity in mind This principle results in systematic work, improves efficiency, by removing confusion and conflict among the subordinates on the need of unity of action, co-ordination of efforts of different groups to achieve common goals of the organs ion This principle is related to the functioning f the organization as a whole or as one unit This results in co-ordination of activities of different of groups of activities
Relationships
Advantages
Objectives: Fill in the blanks 1.Managmenet principles are nature of universal 2.Mangment principles establish relationship cause and effect 3.one plan one head is stated in principle of direction 4.according to the principle of equity all employees must be give equal treatment 5.according to team spirit employees should work as a group 6.according to unity of command every employee should receive orders from one boss 7.Gang-Plank is an exception to the principle of scalar chain 8.Delegation of authority is allowed under the principles of centralization 9According to the principle of order there should be a fixed place for every one and every thing 10Division of work is the principle of specialization 11According to the principle of stability of tenure 12.According to the principle of unity of direction certain activity should be directed with the help of a single plan. 13.According to the principle of esprit de corps union is strength. 14.According to the principle of subordination of individual interest the goal of organization must be sacrificed 15.henry Fayol has suggested 14 principles of management
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Topic FUNCTIONS OF MANGMENT
What all the functions of management and explain its importance in management?
Ans: Meaning: Planning may be defined as deciding in advance what is to be done

in future. It is the process of thinking before doing. It involves determination of goals as well as the activities required to be undertaken to achieve the goals.
Definition of planning Management planning involves the development

of forecasts, objectives, policies, programme, procedures, schedules and budgets.
Importance of planning:
1. Minimal the Risk: Planning tries to predict future problems and away to reduce them. In the first step of planning forecasting is done. Potential risks are forecasted and necessary protective devices are decided well in advance, which minimized the risk in business. 2.Leads to Economics: Planning leads to economies by preventing waste. It aims at maximum utilization of resources for the achievement of predetermined objectives. Planning reduces wastages of time, money and material. It minimizes costs of performance by making better utilization of available resources. 3.Encourages innovation: The planning process encourages creative thinking which leads to innovative ideas. The innovative ideas cause for increase in competitive strength of an organization innovation brings advancement and positive change in any area. Planning reduces the risk factor behind innovation. 4. Facilitates to co-ordination: Planning is an integrated activity . Planning of any organization is successful only if the departmental plans have proper harmony among them. The overall planning of any organization depends upon the success of all plans within the organization while implemented coordinately. 5. facilitates to organization Planning helps a manger to organize the resources properly. Manager make arrangement for human resource and all other factors of production in advance though planning . Depending upon the targets, the manger makes the arrangement of all necessary resources in time 6. Facilitates control: Planning provides standards against which actual performance can be compared. Such comparison helps to find out deficiencies in the plans. Such deficiencies are make up by mangers by improving actual or by revision of plans 7. Helps in Decision Making : Mostly , the planner has to frame many alternative plans. After necessary analyses of the plans, the best plan is selected. This is the decision making activity. Planning facilitates the choice of the best plan, the best organization of people and direction to all resources.
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Rajan classes contact ;8268545939 8. Generates efficiency: Due to planning all the resources. i.e physical financial and human resources are put to their best use.The optimum use of resources enables the company to achieve highest possible results with lowest cost. This increases the efficiency and competitiveness of any organization. 9. Motivates to personnel: A good manager frame his plans with the proper involvement of his subordinates. Where the subordinate are consulted, they are highly committed in implementation of plans successfully. This indirectly motivates to people to work out plans successfully. 10Focus on goals: Planning is goal oriented. Every activity is performed in systematic and smooth manner, directed towards achieve goals There is no confusion, and all departments work in same direction to achieve common goals. 11.Improves competitive strengths: Planning is a fexible activity, with the change in environment in market or in technology or as per the demand form the customer there is need to change in planning and revision of budgets ,schedules etc. 12. Facilitates Delegates: Due to planning the scalar chain of authority and delegation of responsibility is possible. Plans direct middle level management regarding division of work and delegation of authorities and responsbibilities.Thus reduce the stress of work in different level of work.
II.ORGANISING MEANING: It refers to process of putting together various activities, resources and people in
to a system so that people work together for a common purpose.i.e arranging every thing orderly form and making most efficient use of the different resources like money, machinery materials manpower and other physical resources for the accomplishment of desired goals .
Definition: organization as a structure is an identifiable group of people contributing their efforts towards the attainment of goals. Importance
1. Defines jobs: organization is a function in which the division of work and appointment of person for a specific work is done. It defines the job as well as expectation from a person on the job. This helps the people while working in any business unit. 2. Specifies Authority and Responsibiity:An organizational structure defines and clarifies authority responsibility relationship among all the managers and the subordinates in the enterprise. Such explanation of authority and responsibility relationship make clear the limitation is of every past helps in smooth functioning and creates sound human relations in the organization . RAJAN CLASSES SUCCESS STARTS HERE Page 122
Rajan classes contact ;8268545939 3.Optimum utilization of resources :An organization is a function related with bringing together all physical resources like men power machinery materials etc. It specifies the use of resources for a particular job upto what extent, in this way the maximum use of resources is possible 4.Increases Managerial Efficiency: Sound organization helps the development of manger. Managers are provided with training and development programs at different stages. The decent realization and delegation of authority help to develop the efficiency of management 5.Facilitates to coordination: Due to good organization structure coordination is possible among the team member./Coordination refers to interlinking of actions of all the subordinates by the superior. The efforts of all departments as well as all people with in every department are put together for common goals 6.Motivates personnel: A sound organization avoids confusion misunderstanding and duplication of work . It motivates to employees to show the best results of their efforts . This is possible only because of good relations existing between the superiors and their subordinates 7. Encourages initiative and innovative: Due to sound organization the subordinates are encouraged to express their skills. Effective delegation of authority provides them full freedom at work . Employees try to express their creativity and innovations while working for overall growth of business organization. 8.Techonological improvements: In the sound organizational system the research and development work go on side by side . This helps for taking initiative for adoption of new technology, new machineries and new methods. 9.Facilitates growth: The overall development of business mainly depends upon a sound organization function. Appointment of right person at right job, clarification of authority and responsibility division of work and specialization, maximum use of all human and non-human resources etc. Leads towards a rapid growth. 10Tool to Attain common objectives: The well defined organization structure specifies the posts with in organsation very clearly. It clears every job. Its responsibi9lity and authority. It creates healthy relationship between and subordinates etc. Which helps to attain the common goals of the unit. 11. Effective communication: The sound organization helps in developing sound relations between superior and subordinates. It also helps to develop effective communication among employees and managers at all levels of management
III.STAFFING MEANING: Staffing is that part of the process of management which is concerned with acquiring,
developing, employing, appraising, remunerating and retaining people so that right type of people are available at right positions and at right time in the organization
DEFINITIONS: Staffing is the process involved in identifying assessing,placing,evaluating and

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IMPORTANCE OF STAFFING: 1.Helps to Achieve Objectives: Staffing helps to achieve business objectives. Staffing helps in selecting, motivating and setting policies related to employees so that all other factors of productions are put in to efforts to achieve business objectives . 2.Improves efficiency: Staffing includes training and developing programme for type employees continuous training process helps the organization to adopt advance technology. This is increases the efficiency of the employees . 3.Job satisfaction: Staffing provides an opportunity to a right person to work at right place. It enables the people to put their team efforts to achive targets. This indirectly job satisfaction to employees . 4.Best Utilization of Human factor: Staffing function of any organization is related with human factor. It tries to utilize human resources more efficiently and effectively. Thoroughly training and development programme the employees are made the best for their work 5.Healthy Industrial Relations ;Sound staffing leads to create healthy interpersonal relations among employees and management superiors and subordinates among the employees themselves etc. 6.Optimum use of Resources: All the factors of production like machinery material and money can be used at their optimum level with the help of efficient man power. Staffing attempts to use all factors at highest level. 7.Human Resources Accounting: Human resource accounting is related with the record of expenses and incomes concerned to human factor . Human is treated as an asset in business organization. This new branch of accounting is best tool for control. 8.Reduces Absenteeism and Employees Turn over; Staffing includes selections, taining , promotions of the employe3es in any organization. Staffing develops the job-satisfaction among the employees. This helps to reduce labour in absenteeism and employees turnovers. 9.Managerial Development: Staffing is a function related with all level of management. It includes selection, recruitment , training, motivation and promotion etc. of employees. This develops the managerial skills at top and middle level.
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IV.DIRECTING : Meaning : Directing as a function of management is concerned with instructing, guiding

and inspiring people in the organization to achieve its objectives.it creates a harmonious balance between individual interest and organizational objectives.
DEFINITION
Directing is telling people what to do and seeing that they do it to the best of their ability IMPORTANCE OF DIRECTING 1.Direction initiates action: Good plans are put into actual performance through the sound direction . Sound planning, organizing and staffing get actual acceleration through proper and in time instructions and guidance. 2.motivates employees : Directing facilities motivation of employees in the organization . Manager motivates the subordinates to perform effectively through proper guidance. Manager motivates to employees through monetary and non monetary incentives . 3.Facilities changes : Advance technology , new methods of productions, new management techniques etc. are required to be adopted in this new changing business scenario. Due to directing superiors motivate to subordinates to accept these new changes . 4.Team work: Directing develops team spirit in the organization. Superior ,guide, lead and motivate and subordinates ,co-operate and co-ordinate to each other. It helps to perform work most effectively and achieving organization objectives 5. Reduction of wastages ; Sound directing leads to increase morale and work efficiency among the employees which enhance quality of work and reduce wastages . 6.Increases efficiency: Direction follows the planning of an organsiating to achieve goals. It guides to employees to adopt all new techniques, methods and procedures whole performing their work .
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7.optimum use of resources: This functions helps to utilize physical and human factor up to optimum level. Thus by proper direction ,guided by supervised and motivated in right way, reduces the wastages and time and material. 8.Maintain Discipline: Direction helps to maintain discipline among the staff which is very essential for the success of any business organization 9.Stale work force; Good leadership, supervision and motivation, reduces absenteeism and creates loyalty and leads to stable and sound labour force for the organization 10.Facilities co-operation: While providing instructions and guiding to subordinates full cooperation from top to bottom level is necessary. Without coordination ,higher efficiency is not possible .
Coordinating Meaning: coordinating means development harmony between various departments of the
organization and also integrating the group efforts. Its, an task of binding activities of various departments sections and the personnel for the achievement of the diesired objectives .
Definitions ::Co-ordination is an act of harmonies all the activities of a concern so as to

facilitate its working and its success by henry fayol. Importance of coordinating 1.Integration of group effects: coordinating involves integration of group efforts. It reduces confusion and is order in the organization. As it tries to intend the effort of all groups, sections and departments in balanced form towards common goal of organization 2.Based on Mutal Dependence: Co-ordination facilitates mutual dependence in the organization . It helps to sysnchronise interactions among the different departments or units in the organization e.g, productions department produce as per the demand from marketing department . 3.Resolve conflicts: There may be conflict of interest in the organization among different departments. The disputes among the departments can be resolved through proper co-coordinating by higher authority.
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4.Reduces Wastages: Effective co-ordination enables to reduce wastages of resources in the organization. Wastages of time due to duplication of work, wastage of resources and money due to confusion can be reduced through proper co-ordination. 5.Team spirit: The function of co-ordination is related with link between various departments of the organization and also bringing out harmony and integrating the group efforts. That is all department employees cooperate each other to achieve organizational goals. 6.Motivates to subordinates: The subordinates are motivated by the superiors by providing them monetary and non monetary incentives. The superiors encourage the subordinates to put all best of their efforts to achieve the objectives . 7.Corporate image: Reduces wastages, avoid duplication of work, and confusion and results in optimum utilization of resources ,which creates corporate image 8.higher efficiency: Efficiency is measured in terms of returns to cost ratio. that is more returns at low cost leads to higher efficiency. 9.optimum use of resources: co-ordination facilitates optimum use of resources. Both physical and human factors can be used in balanced way within all departments. That is resource is put to the best possible use by the members.
CONTROLLING
MEANING ;controlling is the process of comparing actual activities and results with planned
activities and results
Definitions : contol is the process of taking steps to bring actual results anddesired results
coming together
Importance of controlling 1.Ensures attainment of objectives: Controlling process helps the mangment to achieve the predetermined objectives .It focus on plans or standards and tries to give direction to actual as per the plans.
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2.Facilities performance Appraisal: Due to control system actual performance is measured in the light of the plans. This facilitates employees appraisal and provide performance feedback from superiors to subordinate. 3.Improve Moral: Controlling improves morale of employees. As employees are aware that their performance is reviewed periodically. They will put in their best efforts to prove better performance. Thus employees morale improved and so better performance. 4.Faciliates Growth and Expansion: Controlling improves the performance of each and every person as well as department. Facilitates to adopt new changes and growth and expansion of business . 5.facilitates Decentralisation:control is a process followed at all levels of management. every superior should control their subordinates so for that decentralization of authority is essential . 6.Improves performance:Contorlling indirectly ensures the discipline in organizational life. That is following the rules, norms and policies of organization in order to achieve planned targets. 7. Optimum utilization of resources: When there is a gap between making goals and their accomplishment. At this situation use of human and physical resources are closely watched by management. 8. Prevents undesirable trends : Control is a function which prevents to undesirable trends in any organization . It sets goals and standards which conform to certain norms and discipline for an organization . 9. Applied to all managerial functions. All managerial functions whethere planning, organizing directing or co-ordination etc. all aims at achieving certain desired objectives. If the actual performance deviates from the desired controlling helps to achieve the desire goals 10Facilitates co-ordination: Controlling becomes easy when the activities of different sections, units or departments are properly co-ordianated. Every manager has to co-ordinate the activities of this subordinates towards the process of controlling Objectives Fill in the blanks. 1.Planning is forward looking 2.Planning is essential for controlling RAJAN CLASSES SUCCESS STARTS HERE Page 128
3.Division of work is involved in organizing 4.harmonisaiton of activities iscalled co-ordinating 5.Staffing is concerned with human factor 6.The function which creates a frame work by identifying and grouping of activities delegation of authority for implementation of plans is called organizing 7.A management function concerned with ascertaining whether the activities are carried on as per plans and taking corrective actions is called controlling 8.The last function in managerial process is controlling 9.More direction is required at level lower 10.Gudiing inspiring , inspiring instruction and overseeing people towards desired goals is called directing 11.The process of management starts with planning function 12.thinking before doing is called planning 13.Harmonisaiton of activities is called co-ordiantion 13.Manning organisaiton structure is the main objectives of organizing 14.Recruitment training and promotion of the employees are the steps of staffing 15.Budgetary control standard costing ratio analysis ect are some of the controlling techniques of control 16.provision of right perosnel for right job at right time is the main function of staffing 17.comparision of actual performance with plans and taking corrective actions is called controlling 18.Analysis of employees performance performance appraisal is called. 19.An effort to bring uniformity in the work or various departments is called co-ordination Staffing management fucnitons is concerned with human resources of the organsiaotn
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The objective of staffing function is to obtain the most competent and efficient staff for the enterprise Controlling refers to monitoring of actual performance and taking corrective measures. Distinguish between points meaning planning Planning is deciding in advance what to do,how to do it, when to do it and who is to do it. objectives Making best use of available resources, improve efficiency and encourage innovation Controlling Controlling the process of comparing actual result with the planned one. Create a atmosphere of order and discipline, evaluate actual performance, increase overall efficiency. In the sequence of managerial functions, controlling is the last functions of the management
sequence
In the sequence of managerial functions, planning precedes all other managerial functions
Steps involved
1.analyse environment 2.establishing objective 3.deciding and checking alternative 4.preparing a master plan and derivative plan 5.implementation and review of planning 1.determination of standard 2.measurment of performance3.comparision of standard and actual performance4.finding causes of deviation 5.taking corrective action.
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Levels of management
Plans prepared by top level sent to middle level and implemented by lower level
Middle and lower level management are required to impose control over the organization as per the standard laid down by the top level management
points meaning
staffing Is the process of involved in identifying, assessing , placing, evaluating and directing individuals at work
directing Directing means instructing, guiding inspiring and motivating the subordinate employees so that their efforts result in the achievement of goals Directing ensure that the employees at differnet levels accomplish their tasks according to plans.
objectives
Staffing is to obtain the most competent and efficient staff to improve the overall performance
Nature of activity
Staffing functions enable the organization to palce the right person in the right position
This funcitons enables the managers to activate the appointed person to put their efforts in right direction to achieve objectivews of the organsation Direction fucntion helps to maintain discipline among the Page 131
outcome
Staffing helps to select right person for right job, at right
time steps Recruitment ,selection, training and development placement,promotion,packages
staff Consists of communicating with subordinates, leading the subordinates, motivating the employees and maintaining discipling in the organsiation
NOTE;REMAINING DISTINGUISH ON CLASS
TOPIC: NEW TRENDS IN MANAGEMENT ANSWER THE FOLLOWING QUESTIONS 1.State the features of professional management Ans.1. Formal education: manager should be formally educated and trained in a specialized fields like marketing, financial, materials, human resources or operations management. 2.Merit based promotion system:Organisaiton with professional management follow merit as main criterial for promotion. other factor like seniority, super specialization is not much significant. 3.Delegation of Authority: Day to Day and repetitive matters in the organization are delegated to subordinates. Only important matters are handled by superiors. 4.Social responsibility: apart from profit, professional management give due weight age to social responsibility, this includes consumer awareness, grievance redressal system. 5.Managment by participation: professional management creates comfortable atmosphere so that employee take participate in decision making, and employee can gave innovative ideas for implementation, good idea is rewarded.
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6.change management: The change in only stable phenomenon in the business world. professional management encourages people to accept changes willingly to cope up with automation modernization. 7. Decentralisaiton :It is necessary to decentralize the routine matters to avoid time lag. Professional managements not only accept but implement in reality. 8.democratic leadership style: The democratic approach that is views of employee is considered before taking any decisions
2.State the importance of disaster management Ans1. Forecasting of disasters: Disaster management team can forecast probable disasters and can take action well before its occurrence eg.terrorist attacks, floods, forest fires etc. 2.Undertaking rescue operations: Rescue operations can be undertaken by the disaster management team effectively. Trained team members can rescue the people from landslides, fires earthquakes floods etc. 3.Providing relief measures: The team can provide relief measures to the disaster victims. Eg earthquakes, floods etc. 4.undertkaing rehabilitation programmes: different rehabilitation programmes can be implemented successfully in disaster affected area by disaster management team et. Construction of buildings in earthquake affected area. 5.co-ordinating with different agencies: Disaster management team can successfully co-ordinate with other agencies for financial , medical and legal assistance so that disaster can be managed effectively. 6. releasing tension: disaster management team can assure total assistance before and after the disaster. The tension developed due to disaster can be released though psychological, financial and material suport by the disaster management team. 7. protecting environment: disaster management team helps in preserving and protecting environment losses due to disaster. For instance environmental loss due to fire can be diluted by quick asctions like social forestation. It can insist for banning the use of non decaying substance like plastic.
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3.State the importance of TOTAL QAULITY MANAGEMENT and features
ANS.meaning:TQM is a management approach that emplhassi on continuous improvement in quality in the interest of organisation and customers Importance of TQM 1.Important in customer satisfaction;TQM concentrates on satisfaction of both, internal and external customers . It includes timely supply of goods and services to meet the needs of customers 2.assistance to face competitions: The high quality product produced at the lowest cost strengthens ability of manufacturer to ace the tough competition in business circumstances. 3.creation of goodwill: TQM is very effective tool that generates reputation and goodwill of organization in the market. This is psosible beacues of constant efforts for improvement in quality of product and service. 4.motivates for committed group of employees; Dedication and discipline is encouraged among the employees quality improvement and wastage elimination activities are promoted . 5.reduces effective production scrap and rejections:TQM initiates techniques like quality circle , just in time, process control etc. which checks the probabilities of failure, scraps and rejections concept of zero defect can be implemented through TQM. 6. Minimizes customs complaints; As production is targeted for zero defects, very few number of complains from customers may be raised . This will help in improving the rate of customer satisfaction 7.provides better facilities to employees TQM results in better performance of the organization ,good profit, employees are facilitated to training, better working conditions transport, health, and other facilities . 8.accelerates expansion and diversification; TQM generates higher returns which is used for expansion and diversification of organization. Features of TQM are as follows:
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1.Customer focus; TQM is an integrated approach to meet the needs of both internal and external customers. It ensures customer satisfaction. 2.continuous process: Efforts are made to improve the quality and reduce the cost continuously Quality improvement are necessary to sustain in competitive atmosphere. 3.Zero defect approach; There should be defect free production. This demand perfection in the work. It may not possible always to achieve the zero defect target but mind set to work always for perfection is important. 4.employee involvement; Every one is the organization is responsible for producing quality goods and services and reducing costs.The employee suggestion system can be implemented to increase involvement of employees in quality improvement approach. 5. Rewards and recognition: The reward and recognition system provides positive reinforcement in this direction. Achievements are acknowledged through recognition while performance are capitalized through rewards 6. synergy(team work) : Formation of synergy groups will improve the total quality. In this concept different members of group come together to form a team. Team work is useful for continuous improvement of quality. 7.techniques: Use of certain techniques for improving the quality. These techniques are benchmarking, outsourcing ,speed, ISO 9000 etc. 8.system approach:TQM is the the philosophy resulted from integrated efforts of different components working in the organization. Total commitment of leader and other employees leads to continuous improvement in the quality. 4.state the importance of event management? Ans .The importance of event management are as follows: 1.provides career opportunities: Event management accelerates career opportunities in the field of entertainment, logistics, event co-ordination, sponsorship management, security co-ordination etc. 2.new marketing tool: Event management provides a platform for marketing of goods and services provided by manufacturers and service providers. In the present computational environmental customers can be attracted through managing different events.
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3. develops leadership qualities: Event management develops leadership qualities like motivation innovation and effective communication which are necessary for performing successful events
4. develops corporate image: proper event management is useful in developing corporate image of an organization. Well managed event yields greater success which is required to build brand image.
5. encourages creativity: mangers need to be dynamic ,creative and innovative for carrying out events successfully . 6. facilitates crowd management: Destroying attitude of crowd can be controlled through event management skills, overcrowding leading to misbehavior needs to be managed properly to avoid serious social disaster.
7. ensures safety; event management ensures security and safety of people during the event . proper safety arrangement provided by event management team prevents adverse impacts of incidents like fire gas leakages etc. 8.manages financial aspects of event; event management team concentrates on financial planning, It includes budget preparation and cash flow analysis and implements different cost reduction measures 5.Total quality management is continuous process?give reasons Ans This statement is true: Reasons: 1.TQM is comprehensive and integrated way of managing an organisation to meet consumer satisfaction and to achieve continuous improvement in every aspects of organisation. 2.TQM is a continuous activity which begins from selecting the appropriate sources of inputs and continues up to the stage f inal consumption of the product/service 3.TQM is continuous research towards the maximum consumer satisfaction through best quality with the minimum cost.
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4.TQM STRIVES TO ATTAIN PERFECTION AT EVERY STAGE. TQM HAS TO CHANGE WITH CHANGES IN THE STATE OF THE ART. IT HAS TO BE A CONTINUOUS DEVELOPMENT PROCESS 6.Profession means acquisition of some special skills set. Or professional management is a full fledged profession Or a professional manager does not need special knowledge and skill Ans. This statement is true 1. Professional management must have sound educational background such as post graduate degree in management such M.BA. MMS ETC. 2.professional managers should be specialized in different fields such as marketing, finance, human resources, computer information technology.etc. 3.most of professional manager should be members of professional bodies such as INSTITUTE OF CHARTERED ACCOUNTE of India, INSTITUTE OF COMPANY SECRETARIES of India etc. 4. Professional managers must have the ability to analyze the business situation and problems. They are required to take rational decision with the help of new techniques.
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SYJC PAPER SOLUTIONS Q1.(a)Select the proper option from the choices given below and rewrite the sentences: 1.In a government company minimum 51%share capital is invested by the government 2.Business organization should supply goods of good quality 3.The maximum period of membership of the District Forum is five 4.Management principles are universal in nature 5. Globalisation means linking national economy to the world economy 6.The oldest and simplest form of business organization is sole trading concern 7.World Trade organization was established in the year 1995 8.The tenure of central consumer protection council is three years 9.Division of work is the principle of specialization 10.Regular and prompt payment of taxes is the responsibility of business towards Government 11.Public sector enterprise is owned, managed and controlled by the Government 12.consumer movement is social in nature 13.The process of management starts with planning functions 14.Business are Trustees of the society RAJAN CLASSES SUCCESS STARTS HERE Page 138
Rajan classes contact ;8268545939 15.Henry Fayol has suggested 14 principles of management 16.The liability of a sole trader is unlimited 17.Globalisation means linking National economy to the World economy 18.To maintain industrial peace is the responsibility of Business men 19.National commission is established by central government 20.Management principles are universal in nature 21.For partnership organization minimum two number of persons are required 22.The world trade organization is established in Geneva 23.Business men are the Trustees of the society 24.The consumers protection Act was passed in the year 1986 25.Management means to co-ordinate 26.The liability of a sole trader is Limited 27.Regular and prompt payment of taxes is the responsibility of business towards Government 28.The consumer protection Act was passed in 1986 29.henry fayol recommended 14 principles of management 30.Internal factors of business environment can be controlled 31.The maximum number of members for a partnership organisaiton running banking business is ten 32.A company in which minimum 51% share capital is held by the government such company is known as Government company 33.globalisation is related with international market 34.Business organization adopt the responsibilities to pay to their employees fair wages 35.Management motivates the employees to work hard 36.The responsibility of sole trading is unlimited 37.The senior most member of the joint hindu family business is known as karta 38.The Indian government has declared the new industrial policy in 1991 39.The business organization should supply the goods of good quality 40.Management creates team spirit RAJAN CLASSES SUCCESS STARTS HERE Page 139
Rajan classes contact ;8268545939 41Indian partnership Act was passed in the year 1932 42. Business organization should supply goods of superior quality to their customers 43.In the modern competitive market, consumer is regarded as a king 44. Management is a social science 45. Formulating a plan is the main function of top level management (b).Match the pairs : Partnership act Top level management Consumer protection Act Father of modern management Staffing Multinational companies Fair prices Consumer protection Act Managing Director Floods Globalization Single ownership Employees Wedding ceremony Protection of environment Co-operative society Consumer movement Administration Discipline Staffing Private company State commission Direction and control Henry fayol Natural disaster Indian companies Act Head of district forums Top level management Principle of division lof work planning Multinational companies Consumer protection Act Utility of command Planning Common seal Partnership act Consumer movement Division of labour RAJAN CLASSES SUCCESS STARTS HERE 1932 Policy determination 1986 Henry Fayol Promotion and transfer Operates globally Consumers 1986 Top level management Natural disaster Free trade at international level Sole trader Fair wages Event management Responsibility towards society Service motive 1920 Board of directors Application of rules Right man for right job Maximum 50 members Compensation upto 20,000 Top level management 14 principles of management Earthquakes 1956 District judge Head of department Division of work Management for the future Branches in several countries 1986 Order from one boss Deciding future course of action Easy identification of organsiation 1932 Started in england Work allotment to the workers Page 140
Rajan classes contact ;8268545939 Organizing Private company Sole trader Globalizations District forum Private company Total quality management TQM is developed in Adminstrative management approach is stressed by carter TQM Maximum members of partnership firm for banking business Maximum members of partnership firm for general business Father of scientific management Minimum members co-operative society Minimum members for public Ltd Joint stock company has Co-operative society act For partership firm minimum members Highest rate of divident for co-perative society Shares of coparcener (c).fill in the blanks and rewrite the sentences: 1.Registration of joint stock company is fixed 2.The main objective of consumer Movement is to protect the rights of consumer 3.planning is the primary function of management 4.Approach of modern business is service oriented 5.business environment has tremendous impact on business 6.A public company can commence its business after getting Trading or commencement certificate 7.A business organisation is the essential part of society 8.State commission is established by state 9.The concept of scientific management was introduced by Federic Taylor or F.W. Taylor 10.Planning or management involves all aspects of business 11.Main object of a co-operation organisation isto provide service Departmentalisation Maximum 50 members Maximum secrecy International market Compensation up to 20 lacs Minimum 2 members Dr.Deming japan Henry fayol TQM SYSTEM APPROACH 10 20 F.W.Taylor ten 7 Perpectual life 1912 2 15% Flutuating
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Rajan classes contact ;8268545939 12.Business organisaiton are responsible to give Dividend as fair returen on investment to the shareholders 13.Central consumer protection council is established by Central govt. 14.planning is the first process of business 15.Earth quakes ,storms,floods,volcanoes are the examples of natural disaster 16.one member one vote is the distinguished feature of co-operative society organisation 17.Business men or Trustees of the society 18.consumer is the king of the market 19.management is an art of getting things done through others 20Disaster are the extreme events which cause greate loss to life and property 21.The minimum number of persons required for registration of a private company is two 22.To earn profit should not be the sole aim of business organisaiton 23.An effect to bring uniformity in the work of various department is called co-ordination 24.management is social/behavioural science 25.principles of management are flexible in nature 26Maximum number of partners in partnership firm running banking business is ten 27.Staffing management fucntion is concerned with human resources of the organsiaiton 28.Generally there are three levels of management 29.For a business concern profit should be means and not the ends 30.15th march is the international consumers days 31.At the top level management personnel are few 32.disaster are the extreme event which cause great loss to life and property . 33.The minimum number of directors in a private compnay is 2 34.Businessshould always respect consumer 35.Staffing is mainly related with employee 36.To provide quality goods is the social responsibility of business organization towards consumers RAJAN CLASSES SUCCESS STARTS HERE Page 142
Rajan classes contact ;8268545939 37.WTO is established in 1995 38.Minimum ten members for co-operative society 39.Business ethics is the branch of social science 40.The number of members in state forum is 2 41management principles are universal in nature 42.There are 3 levels of management (d).Write a word or phrase or a term which can substitute each of the following statements 1.The form of organisaiton which comes into existence by law of inheritance Ans .Joint hindu family 2.An organization designed to liberalize and supervise the international trade Ans. Multinational companies 3.The function of management relates to harmonization or balancing of group efforts Ans.co-ordination 4.The principle of management relates to justice e and kindness Ans. 5.A company which is incorporated under special act of parliament Ans.statutory corporation Write short notes: 1.Need of privatisation Ans. (a).FULL capacity utilisation: Write shorts notes(.Minimum 5 points is needed) 1.Need of privatization : (a).More efficiency: The public sector facing many problems such as inefficiency in adminstration,delay in decision-making,red tapism,corruption,under utilization of capacity, industrial sickness, etc.as a result incurr losses every year,as main aim is to maximize profit so directors of company do their best in improving the efficiency. (b).Less political interference: Political interferences major cause for not performing so once its privatized, it is free from political interference and it brings high degree of transparency and competitiveness . RAJAN CLASSES SUCCESS STARTS HERE Page 143
Rajan classes contact ;8268545939 (c).Reduction in labour problems: In india, the public sector has been suffering from the labour and personnel problems, i.e is excess labour ,leads to unproductive activities ,strong unions, frequent strikes at work etc.by privatization, helps to over come from all these problem . (d).Accountability: In private sector organization powers, rights, duties, responsibilities and accountability are well defined and explained to the employees. The greater accountability results in more efficient performance , it is absent in public sector so public sector are privatized to have greater accountability (e).Capital market: Private sector sells shares, debentures and also purchase bonds and other similar securities ,issued by govt. and other institutions and private sectors performance is reviewed .all these things lack in public sector, it is essential to privatise the public sector. (f).Profit: Rational decision making leads to good profit, which lacks in public sector. Rational decision making leads to improve efficiency, saving cost,and wastage and higher profit to the enterprises. For this privatization is necessary. (g).Efficient business management: Private enterprise appoint qualified ,experienced and expert staff to manage the business affairs, and provide handsome salaries and free lunch to, since they earn good profit due to their efficient management ,thus it is possible for them to provide all these activities. so it is good to privatize the public sector (j).Creation of more jobs: By investing huge finance in private sector , creates employment opportunities and increase production, which leads to development in sector and create jobs so privatization is recommended. (2)Concept of business ethics are Meaning: ethics is derived from Greek word ethics which means human character and conduct. Business ethics refers to moral principles or rules of conduct applied to business activities or operations. Business ethics are a code of conduct for regulating the activities of business towards business and others. It is the fare treatment to the customers, workers, suppliers, shareholders, competitors, government and the community at large . Need/objective for business ethics: (a).Checking Business malpractices: Business ethics is needed to make business activities fair to consumers. It checks business malpractices and offers protection to consumers. (b).Improving consumer confidence: Business ethics is indeed in order to improve the confidence of consumers as regards quality, price and reliability of goods and services supplied (c).Making Business men conscious of social Responsibility: Business ethics is needed in order to make businessmen conscious as regards their duties and responsibilities towards consumers and other social groups . (d).Protecting consumer rights and social welfare: business ethics is needed for the protection of rights of consumers. It is also needed for raising social welfare. RAJAN CLASSES SUCCESS STARTS HERE Page 144
Rajan classes contact ;8268545939 (e).Protecting social Groups: Business ethics is needed to protect the interest of employees, Shareholders, dealers, and suppliers. It avoids their exploitation through unfair trade practices (f)Developing cordial Relations between business and society: Business ethics is needed in order to develop cordial/friendly relations between business and society. It is also needed for social recognition and support to the business (g).creating goods image of business: Business ethics is needed in order to create good image of business in society and also for avoiding public criticism. Ethical business gets public support while unethical business is criticized by all . (3).Importance of directing (a).Direction initiates action: It activates employees to put in their best efforts to achieve the goals. Without effective directing other functions planning, organizing and staffing is ineffective .managers have to stimulate action by issuing instructions to the subordinates and by supervising them. (b).Motivates employees: Proper directions help leads to motivation of employees to put their hearts and minds in their work. Thus maximum efforts are contributed to perform their jobs. (c).Facilitates changes: It enables the enterprises to adopt advance technology, new methods of production, modern techniques of management, etc. (d).Team work: The supervisors through proper direction can guide, lead and motivate their subordinates to co-ordinate their activities. Thus team spirit is created . (e).Reduction in wastage: Efficient direction helps to increase morale and overall efficiency of the employees. This reduces the wastage of resources .constant instructions given to subordinates to make the maximum utilization of resources (f).increases efficiency: Efficient direction leads to better performance, it also enables the managers and other superiors to guide the subordinates to adopt new methods, advance technology and procedures while performing jobs (g).Maintain discipline: Effective direction through supervision,communication,motivates,instructions and leadership facilitates management to control and activities of employees and to maintain the discipline (4).Importance of TQM. Ans.meaning:The concept of TQM was developed by Dr.W.F.Deming in 1960s in japan.TQM is strategic approach that focuses on production of best possible product or services through constant innovation and timely action. it places emphasis on prevention of errors rather than on rectification. The need and importance of TQM can be stated with the help of its advantages 1.customer satisfaction:TQM ensures customer satisfaction through production of quality products at competitive costs. The cooperation of all levels of the organization, is the secret to a successful organization. Quality must be produced and demonstrated in each and every section .
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Rajan classes contact ;8268545939 2.Helps to face competition:TQM enables a company to face competition successfully in the market. Through high quality produce by dedicated work-team the company can increase its market share its sales and thereby its profits and goodwill. 3.Good will :TQM generates name and reputation to the company in the market. This is because of its constant efforts in bringing the improvement in the products design,variety,shape,size,colour,shade and other features . 4.Highly motivated personal:TQM develops a sense of dedication and discipline in the employees. There is willingness on the part of the employees to identify quality improvements and waste elimination opportunities.The employees become aware of their importance in the companys performance and progress. This leads to greater involvement and participation of the employees 5.Lower rejection rate: Internal rejection rate gets reduced considerably over a period of time .Various initiatives such as quality circles,process control,right first time approach, just in time approach etc., enable the company to reduce rejection rate. 6.Reduction in customer complaints:TQM results in less or no customer complaints. This is because the products are build to specification with zero defects.Again,efforts are made to improve upon the customer specification so as to provide complete satisfaction. 7.Better facilities to employees:TQM results in less or no customer complaints. This is because the products are build to specification with zero defects.Again,efforts are made to improve upon the customer specification so as to provide complete satisfaction. 8.Expansion and Diversification:TQM generates a good name in the market. It also brings in higher returns. This enables a company to expand and diversify. (5)Rights of consumers Introduction:In 1962,the American president John.F.Kennedy, in his consumer message to U.S. congress had specifially mentioned four consumer rights and opened the door for consumerism. Definition :-Philip Kotler & G.Armstrong define:-Consumerism is an organised movement of the citizen and government to impose the rights and powers of buyers in relation to seller 1.Right to choose:Quality suffers when a single oranisaiton or compnay has the entire market itself.Choice ensures abolition of monopoly.Competition makes a company improve on the quality level and provide optimum products to the consumer.So a consumer has the right to choose a product out of the many available. 2.Right to safety:It is the right of every consumer to get a product or services that is safe and does not endanger life.A customer has the right to expect a safe and comfotable journey via plane or train. 3.Right to be informed:A consumer has a right to be protected against fraudulent, miss leading information, advertising,labelling or other practices and to be given facts needed to make proper choice.
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Rajan classes contact ;8268545939 4.Right to be heard. This right permits the consumer to register his dissatisfactio nor complaint with the company and govt.The right to heard also includes legal hearing to get redress of their complaints.This right can be exercised effectively only when the consumers are properly organised. 5.Right to redress:Many times , it so happends that the acutal performance or quality of product does not match with what is advertised or stated on package.This right enables the consumers to get his claims settled, if he becomes a victim of exaggerated claims. 6.Right to consumer education:This is another important right aims at supply information and educating consumers regularly.It is continues process and works to update consumers knowledge about the developments in business and industry, and changes made in laws affecting consumers rights (6)Features of professional management :MEANING: professional management refers to the professinal approach in managing the organisation.Professional management is vital in todays competitive business world .The importance of professional management explained as follows. Features/charactertics of professional management 1.Formal education:Professional managers are formally educated and trained to run the business organisation.They place great emphasis on training and development of managers.Most of the professional managers have either degree or diploma in management 2.Merit the basis of promotion:Professionally managed companies follow merit as the basis of promotion at higher levels.Family neither ties ,nor biased as the basis of promotions is normally not followed in such organisations. 3.Delegation of authority:The senior managers delegate authority to the subordinate managers.Routine andrepeitive activities aregiven in the charge of subordinates.Only important and crucial matters are decided by the superiors. 4.social responisbility :professional managers give thedue consideration to the concept of social responisbility . In fact they try to bring reconciliation or balance between profit motive and social responsibility.They go for consumer oriented products.They try to improve the quality thorugh research and development , and so on. 5.Employees participation:The top management not only secures theactive pariticipation of subordinate managers in planning and controlling activities , but they also encourage initiative and innovative ideas from the employees.Valuable suggestion are implemented and those who provide ideas are often rewarded. 6.Automation and modernisation:Professional managers adovocate the need for automation and mdoernisaiton.They recognise the change brought in by changing situations and are ready to accept that change.They also encourage their subordinates to willingly accept the automation and modernisaiton plans of the organisations.
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Rajan classes contact ;8268545939 7.Decentralisation:Professional management believes in balance between centralisaiton and decentralisation.Important matters are centralised and other matters are decentralised.Thetop management believes that involvement of lower level managers is vital to the success of the organisation. 8.Style of leadership:professional managers follow the situation style in managing their business activities.They are more of democrats rather than autocrats (7)Importance of controlling Meaning: Controlling is comparing the acutal performance with the expected performance .It finds out deviations between the two,their causes and suggests corrective measures to prevent their recurrence. Necessity/importance of controlling 1.Ensures attainment of objectives:The controlling functions ensures that the activities take place according to the plans and if there is any deviation, timely action is taken.When all the activities are conducted sucessfully,according to pllan the organisational goals can be achieved as desired. 2.Facilitates performance appraisal:The control system facilitates the appraisal of employees, by comparing the acutal performance with the targeted one,thus the managers can measure the individual,departmental,and overall performance of the organisation and providethem necessary feedback. 3.Improves morale:A person is likely to give better performance if he is aware fo the fact that his performance is going to be rewarded. This control system shows positive effect on the behavior of employees and they become more cautious.such a healthy attitude keeps their morale at a high level 4.Facilitates growth and expansion :-Controlling functions improves the performance of every employee, sectiom and department .It helps to adopt new changes in technology and methods of production,leads to rapid growth and expansion of organization. 5.Facilitates decentralisation:control management function is carried out at all levels.For taking remedial measures, it is necessary to decentralise authorities to middle level and lower level management.It is the control which can suggest thetype and extent of authorities to be decentralised at different levels. 6.Improves performance:Controlling functions induces and motivates the employees to follow norms,rules,and policies of the organisation more strictly to achieve planned targets.It enables the management to reduce the wastage and have higher efficiency for the entire organization. 7.Optimum utilization of resources: There is a time lag between the formulating of goals and their accomplishment.During this period managers can keep a close watch over the utilisation of human, physical and financial resources.it prevents misuse or wastage of resources and ensure optimum utilisation of resources. 8.Applied to all managerial functions: Every management functions namely planning ,organising,directing,staffing,co-ordinating aims at achieving certain desired objectives. if the actual performance of these functions deviates from the expected peformance,the management has to adopt certain remedial steps called controlling measures RAJAN CLASSES SUCCESS STARTS HERE Page 148
Rajan classes contact ;8268545939 9.Facilitates co-ordination: controlling reveals the weak points where co-ordination falls short,so that management can take timely action.Every manager or superior co-ordinates the activities of subordinates towards the process of controlling. (8)Need for privatisation (refer to 1) (9).problems of consumers: Meaning:The consumer is the start and he success point of any business .The survival and success of business depends on the consumers support.consumer is a king of market . Definitions: peter drucker There is only one definition of business purpose to create customer Problems of consumers are 1.False weights and measures: Consumer in india are cheated by traders and others with false weights and measures in unorganised as well as organised markets. 2.poor after sale-service: in India, after sale-service is very poor.even in the big companies also do not provide effective after sale services to its customers. 3.Problem of duplicate goods: In india, the customer face a major problem of duplicate goods .Unethical producers duplicate popular brand names and thereby customers get cheated. 4.Problem of artificial shortage: Unethical dealers, some traders or shopkeeper indulge in artificial shortages . The purpose is to inflate(increase) prices.Therefore,customer have to pay high due to artificial shortage of goods. 5.problem of health and safety hazards: another problem faced by customers in india is the problem of health hazards. There are several such examples are: (a)duplication of health related products as medicines (b)shopkeepers or traders may also sell products even after the expiry date 6.Unethical Advertising: Customers are cheated with false advertising.There are several examples of unethical advertisements: (a)Tall claims or Exaggerations (b)Testimonials by professional s or personalities who do not even use the product 7.problem of delivery of goods : customers also face the problems of delivery goods on a specific delivery date. 8.sale Gimmicks: Many firms spend excessive money on advertisement, free gifts, discounts sales etc.But they collect such expenditure from consumers by charging hidden prices. thus consumers are altimate victim of such sale Gimmicks.
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Rajan classes contact ;8268545939 9.Lack of Govt.support:Government has taken a very few efforts in the direction of spreading awareness. Adequate steps are not taken by the govt.to arrange trade fairs, exhibitions ,seminars and debates to spread consumer educations. 10).Importance of disaster management Meaning:-According to Oxford Dictionary a crisis is a decisive moment a time difficulty, a disaster,or a catastrophe. It is a turning point that changes the destiny of an individual or a group or a company or a government.Therefore,the term crisis and disaster are used as synonymous.However,usually crisis is considered as made and a disaster as a natural calamity. Importance of disaster management 1.To avert a disaster:-Disaster management teams can help to avert a disaster before it occurs. The Disaster management team may examine the possible causes of disaster, and may take appropriate measures to avert a disaster.For instance, forest firs, or even terrorists bombings can be averted through effective planning and pre emptive action. 2.To undertake rescue operations: Disaster management personnel can undertake rescue operations effectively. Trained disaster management personnel can rescue people effectively at the time of floods, major firs, buildings collapse and so on. 3.To provide relief measures: Disaster management team is responsible to provide relief measures to the victims, for instance, the team can make arrangements for food, clothing and relief camps, medicines and so on. Sucj measures would reduce the misery of the disaster victims. 4.To undertake rehabilitation programmes:Disaster management team can work effectively to undertake rehabilitation programmes in the affected areas. For instance, in the earthquake affected areas, rehabilitation programmes include; a. Construction of dwellings b.schools and other infrastructure. 5.to undertake liaison work: The disaster management team undertakes liaison work relating to the disaster .The liaison work is required with various agencies-private and government(including hospitals) in order to obtain funds and donations and other resources or services so as to manage and over come the disaster. 6.To reduce trauma and tension: The disaster management team can help to reduce the trauma and tension before and after the diaster.For instance, before a disaster, the team ca properly guide the people to face or handle the diaster such as floods. Also after the disaster, the team can provide not only material or financial support, but also psychological support to overcome the traumatic effect of disaster. 7.To protect the environment: Disaster management team can help to protect and preserve the environment. For example , a disaster management team can plan pre-emptive action to avert forest fires Etc. RAJAN CLASSES SUCCESS STARTS HERE Page 150
Rajan classes contact ;8268545939 8.To minimize losses: Disaster management teams can help to minimize loss of life and property. This is because, the Disaster management team can take pre-emptive actions to a very a disaster. 11).Importance of organizing for functions Ans.(a).Administrative efficiency: An organization lays foundation for the management. it is an effective mechanism which co-ordinates with different levels of management and implement the comprehensive plan.It keeps a vigil on the over all activity and keeps the entire administrative machinery under its control (b).Optimum utilization of resources:Organisation puts all possible efforts to assure maximum utilization of human and other resources. it guides and motivate employees. It creates a strong mutual understanding between different person working at different levels. Such a mechanism helps in bringing about the best utilization of the skills and abilities of employees. 12).need of business environment Ans(a) To ensure optimum utilization of resources: Optimum use of available resources for the business enterprise is possible by studying the business environment.It enables the enterprises to take full advantage of the policies harmed by the government. (b).To exploit business opportunities to the maximum possible(extent: Study of environment is necessary to discover and exploit new opportunities for business expansion broad strategies and long term planning enable the development of a formidable business wait. (c). To keep the business flexible and dynamic: Changing environmental factors should be appraised from time to time. So as to keep the business flexible and dynamic. The new opportunities and threats created by the environment can be appraised by the corporate planners to make the most of it. (d).To understand future problems and prospects: Study of business environment enables a business enterprises to visualize future problems that can arise as also future business prospects in advance. Deriving benefit from honorable business opportunities is possible as also it can face the problem boldly. (e).To make business socially acceptable: Environment study makes it possible for the business to expend and to make it acceptable and agreeable to different social groups. By fulfilling its social obligations towards different groups of society, business can create good will and reputation for itself. (f).To maintain adaptability to socio-economic changes: A business organization needs to show its keen intentions towards adapting with to the socio-economic changes. 13.social responsibility of business organization towards share holders. Ans .The shareholders are the owners of the company. They have invested their funds for higher returns. They expect certain responsibilities on the part of the management (a).Fair return on investment: The shareholders expect a fair return on their investment. After all they have invested their valuables resources.
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Rajan classes contact ;8268545939 (b).Expansion and Diversification: The shareholders expect that the management should undertake expansion and diversification programmes.This will result in more returns to the shareholders. (c).Proper use of shareholders funds: The shareholders expect optimum utilization of their funds. They will not tolerate the management ,if it spends their funds in unproductive manner (d).proper conduct of share holders meetings: The shareholders want fair conduct of meeting. There should be fair conduct of meetings. There should be fair elections at company meetings. (e).Proper disclosure: The management should make a proper disclosure regarding the affairs of the business. The accounts must be properly maintained and audited from time to time. The share holders should allowed getting the copies of the audited report sheets of the company. (f).Good public image: The shareholders expect that the management should develop and maintain a good public image. A company that enjoys name and good will commands a lot of respect and trust in the share market, consumer market , and so on. (g).Periodic information: The shareholders expect the company to inform them about important happenings in the company ,either at company meetings or through correspondence. The shareholders have a right to be informed of the development in the company. (13).Importance of co-coordinating Ans.(A).Nature of co-ordination. (a).Harmonization of group effects: Co-ordination involves the harmonization or balancing of group efforts. due to co-ordination every individual of employee knows the responsibility and area of work. (b).Helps in achieving common objectives: It is possible only when there is proper co-ordination among individuals in a group among sections in a departments and among the departments with in an organisation. (c).Continuous process: Proper plans, sound organisation and effective control is possible through coordination of all functions and activities within the organization (d).Pervasive functions: Co-ordination function is performed by all the superiors at the different levels of the organization right from top executive to down to the foremen. This functions is related with all level of management. (e).Inclusive functions: The management is a chain of many functions performed sequencly like planning, organization, staffing, directing and controlling etc.These all functions are co-ordinate properly for overll success. So co-ordination is an integral part of all managerial functions (f).co-ordination is different from co-operation: Co-operation means only helping to each other but coordination includes co-operation plus the deliberate efforts to synchronize the group efforts by management towards common goals co-ordination is wider co-operation (g).system concept: system is a set route for any activity. Co-ordination needs proper channels and routes set to perform activity within a department. All group efforts divided into sub-sections are RAJAN CLASSES SUCCESS STARTS HERE Page 152
Rajan classes contact ;8268545939 interdependent . Coordination set the route timing and channel to perform all activities within an organization (B)signification of co-ordination a. Primary task of management: The management of an enterprises primary a taks of co-coordinating the efforts of the various departments, section and people of enterprise. Hence it is the essence of management. b.Binding force and actions: It is the binding force of almost all the actions of management like planning, organizing staffing directing and controlling. Unless there exists a strong co-ordination ,the other functions cannot be performed. c.Cordial personnel relations: It leads to the creation of cordial human relations by eliminating the difference disputes among the different employees, departments and sections in the organisaiton d.morale of employees; Good co-donation gives job satisfaction to the employees by promoting a team spirit among them. It raises their morale and enhances their loyalty to organisation.it is the key to the success of various other functions of management inefficiency and economy: it promotes efficiency and economy in the organization by improving the productivity it is improved by smoothening the operations, avoiding delays, eliminating omissions or duplication of efforts securing savings ect.Through proper co-ordination. 14.importance of TQM(included) 15.Features of business mangement a. Changes from time to time:The business environment is a dynamic concept. The environmental factors differ over a time in the same place. certain environmental factors such as , economic,social,demographic,market force,etc.are always changing .business environmental is totally different from what it was in past. b.complex phenomena: There are many factors which works with different frequency and intensity, this makes business environment a complex phenomena i.e difficult to understand.eg.govt.intervention in economic sphere, growing social awareness. Etc. c.Unlimited factors :-Business environment is composed of large factors ,which not only confined to national boundaries but even extend beyond natinal frontiers. so business environment should consider those factors which closely related to business environment d) long term impact: Any change in the important environmental factos has a long term impact on business, such change may affect the profitablity,efficiency, and development of business .eg.liberal economic introduced in 1991 by indian govt. e.Beyond the control of management: The changes in technology, government policies, consumers preferences, strategies of competitors etc.cannot be influenced by the management of a business house. The only thing it can do is to work out its strategy to adopt the change. RAJAN CLASSES SUCCESS STARTS HERE Page 153
Rajan classes contact ;8268545939 f.Inter related to one another: All environmental factors are inter related so change made in one factors effects the other factor too.eg.increase in price of petrol increase the price of all goods and services. 16.Need of principles of management Ans.Principles of management are very important for success and provide guideliness to the management and help the management in real situtation. a. Better understanding:Mangement principle are tested and applied over a period of time, thus it provides the knowledge and experience and helps to arrange the activities in systematic manner to achieve the goals, and also guides the mangers to sort out the problem and take decisions confidently. b.Increase in efficiency: These principles of management provide guidelines to management as to adopt systematic and scientific approach towares the solution of their problem and thereby increase the efficiency of operation. c.Act as Ready Reference: The role of managers become more conceret due to management principles/.Principles act as ready reference for the mangers to check whether their decisions are appropriate. Principles focus on managerial attention and also what managers are expected to do while at work. d.identifies nature and scope: How the organization should achieve its objectives are provided by these principels which provide the management process and indicate what mangers should do. Thereby the principles highlight and indentify the true nature and scope of management e.Help and Guide and Research work: Researchers examine principles, justify their utility and suggest changes in order to make these principles more meaningful. f.Achieving social objectives: Management principles are helpful in attainment of social and cultural goals by making its principles play important role in improving the standard of living and quality of life of people. 17Features of TQM Definition: Total quality management is that aspect of the overall management functions that determines and implements quality policy and such is the responsibility of top management Features a. Quality process: It involves understanding of who the customer is, what his needs, expectation and preferences are and how they can be satisfied. b.continuous improvement TQm involves a continuous process of improving the product quality and its delivery. The PDCA (Plan Do-Check-Act) cycle involves policies ,objectives and methods to achieve goals, education and training to employees implementation courses for low quality taken actions etc. c.People process; It involves team work, oriented process, and every employee should actively involved ,by proper training and education and commitment among the employees.
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Rajan classes contact ;8268545939 d.Materials,technology and methods: The quality of output can be improved through the improvement in quality of raw materials, update its technology reform its methods and procedures of working at all levels. e.preventive actions:it ensures failure do not occur, by taking preventive action rather than corrective.heathly and positive environment is created which leads to continuous improvement F.Commitment of management:Theree may be some organizational barriers in the form of lack of support for TQM .it can be practiced successfully only when it has support of all levels of management. 18. Business ethics (included) 19.Internal factors of business environment Ans .The internal factors of business environment are employees market financial institutions, customers, competitions and suppliers. The internal factors helps the business environment to conduct a SWOT analaysis.This SWOT analysis can help to identify the strength,weakness,opportunities and threats. This analysis is done to know their strength weakness. This helps the organization to work on strength and take advantage of the competitors weakness. Internal factors also helps the business to flourish and change its objectives according to the strengths, weakness, opportunities and threats 20.social responsibilities of business organizations towards customers Definitions;H.R.Bowen defines social responsibility of business refers to the obligation of business to pursue those policies to make those decisions or to follow those lines of actions, which are desirable in terms of objectives and values of our society The survival and growth of a business depends upon customers satisfaction services and support .The company should win over the confidence of the customers 1.Quality:The company should produce quality goods.The company should always strive to improve its quality.At no time quality can be 100% and as such there is always a room for improvement 2.Fair price:The consumers will not take if they are being cheated. After all the company will not abe able to fool the consumer all the time. 3.honest advertising: The consumer expect true facts of the product, its uses merits and side effects and so on.They will not like exaggerated and tall claims, The company should also refrain from vulgar and unethical advertisement 4.Availablility of goods:- The consumers should be made available the goods regularly as and when they need it.The company should not create artificial shortage and hoard the goods in cooperation with unethical dealers 5.After sale service:The consumer expect efficient and effective after sale-service especially in the case of consumers durables
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Rajan classes contact ;8268545939 6.Redressal of complaints: The complaints of the consumers must be immediately dealt with. Valid suggestions of the consumers must be taken into consideration 7.Research and Development: The consumers expect the company to conduct research and development for the purpose of improving the quality and reducing the cost of the product 21.improtance of co-coordinating(included) 22.Characteristics/needs/features of event management Meaning: events play an important role in our society. Any happening or an activity can be referred as an event .examples;(1).Celebration of a festival (2).A football match between two clubs or countries etc. Defintion Dr.J. Gold Blatt: defines special event as A unique moment in time celebrated with ceremony and ritual to satisfy specific needs Character tics a. Creative process: Event management is a creative process .The event management team must be creative or dynamic. it must come up with new ideas to manage and deal with the event. Creative ideas will enable the success of the event b.Objective oriented:Event management focuses on objectives.Every event has certain goals or objectives to be achieved. Therefore, all the activities will be directed to achieve the objectives unwanted activities or unnecessary formalities may be done away with. c.Requires effective leadership: Event management requires effective leadership on the part of event managers. The Event managers have to influence and motivate the employees in order to undertake the event successfully.Therefore,there is a need to have effective leadership skills on the part of event managers to manage the event successfully d.Requires effective promotion: Event management requires effective promotion .The event promotion involves; 1.publicity of the event 2.Advertising of the event 3.Maintaining good public relations 5.Planning and control:The event management team has to plan and control the activities relating to the event the planning and controlling activities involve: 1.Developing a mission statement for the event 2.Establishing the objectives of the event RAJAN CLASSES SUCCESS STARTS HERE Page 156
Rajan classes contact ;8268545939 3.preparation of event proposal 4.evaluating the performance of the event 5.Taking corrective measures for the future event 6.Deals with different event: To manage event successfully ,there is a need professionalism on the part of event management .Professionalism involves Mega event such as Olympics or world cup football Local events such as carnival in Goa or Boat-race in Kerala Organizational events such as launch of a new product etc. 7.Requires professionalism: To manage an event successfully there is a need for professionalism on the part of event management .Professional involves: Systematic planning and control activities Proper training of manpower Proper compensation to the employees
23.Features of disaster management 1.Disaster management teams:World wide governments, business and non-business organization are setting up disaster or crisis management teams in order to manage the disaster.The disaster management teams are broadly divided into three parts namely(1)The policy Team(2)The management Team(3)The Liaison Team 2.Systematic planning:Disaster management involves suystematic planning to prevent disaster and if it occurs then systematic planning is required in order to over come the crisis arising out of disawster, manage and over come the problems of disaster. 3.organisaing of resources; Disaster management requires proper organizing of resources such as man power, materials funds etc.in order to deal with the calamity, proper organizing of resources will help the disaster management personnel to over come the problems caused by the calamity or disaster 4.Training to manpower : To manage a disaster effectively ,there is a need to provide proper training to the disaster management personnel. The training will help to develop and improve Disaster management skills in the personnel. Training may help to avert a disaster effectively 5.Suitablity:-Disaster management is require before and after a disaster. it is suitable before a disaster in order to avert disaster, or to caution the people and to take proper appropriate measures before the disaster strikes. Disaster management is also very much required after a disaster takes place in order to undertake resuce,relief and rehabilitation measures at the time of floods earthquakes RAJAN CLASSES SUCCESS STARTS HERE Page 157
Rajan classes contact ;8268545939 6.stability:Normally disaster management teams lack stability. They are formed just prior to a disaster in order to avert it, whenever possible . however, in advanced countries like USA UK JAPAN etc. some organization form more or less permanent disaster management teams 7.Organisation structure Robert F.Little jhon in his paper on Crises Management suggested a matrix organization structure to deal with disaster or crisis in the organization or in the city or country .The disaster management team is to be headed by a crisis manager . Importance of co-ordination(included) Problems of consumer (included) 24.Event management a. Analytical and problem solving:An event manager must understand the problem and provide suitable remedies b.customer service oriented; The services of the event manager must be customer oriented c.Good negotiation skills ;An event manager must develop sharp skills of communication and he should be able to negotiate and make himself successful. d.Ability to work under pressure: he must have the ability to work under stress and pressure .he should be able to handle deadliness and unforeseen contingencies and crisis e.team work and co-operation: An event management should be such that he works as a good team leader and the co-operation. There is o place of personal egos in event management f.planning co-ordination and organization :The event manager must have the ability to plan,co-ordinate and organize i.e he should manage the three stages 1.pre-production 2.production 3.post production 25.Need of liberalization a.To accelerate the growth rate: Rapid growth of any economy depends upon rapid development of 3 sectors primary secondary tertiary sector.liberalisation means liberalizing the various restrictions and controls is necessary to stimulate the economic and business activities within and outside the country and put them on the path of sustainable development . b.To expand the foreign trade and foreign investment :Liberalization measures remove the restrictions on imports and import duties and reduce controls on the foreign exchange ,both current and capital accounts As a result the foreign trade expands and grows rapidly. c.To improve Indias share in global market: In 1991, the government of India adopted the new economic policy, prior 1991 Indias share is negligible i.e import is more then export ,foreign situation is RAJAN CLASSES SUCCESS STARTS HERE Page 158
Rajan classes contact ;8268545939 unsatisfactory so to improve this condition India introduced economic policy in 1991.improving Indias share in global market is one of the important objectives of liberalization d.To improve performance of public sector. In eighties public sector growth is very slow. Thus to improve public sector, liberalization measures remove restrictions deficiencies and hurdles or obstacles of the public sector and make it free to play its role in the economy e.To liberalize industrial sector: Several regulatory act made possible to govt to control the industries and commerce.govt also controlled indirect ways in the form of quantitative and qualitative credit control measures ,fiscal ,monetary measures etc.By removing hurdles, controls, restrictions, deficiencies ,rigidity, liberalization facilitates rapid growth of industrial sector f.intergration of Indian economy with the world economy:-world class technologies are imported as a result good quality of products is produced with low price and Indian market is opened up to the outside world .Thus liberalization helped the economy to come close to the world economy. 26.Features of multinational companies Meaning: A company which is incorporated in one country and has business units in several other countries is called as multinational company. Definitions:W.H.Moreland Multinational corporations or companies are those enterprises whose management, ownership and controls are spread in more than one foreign country. Features: a.Huge capital resources: Multinational companies can raise huge capitals by its shares,debentures,accepting public deposits from several countries and borrowings from international financial institutions. Some of multinational companies turnover is more than the GNP of developing countries b.Financial strength: Multinational corporations survive in all circumstances ,on account of huge capitals. c.Foreign collaborations: To achieve cooperations and assistance from the host countries, the multinational corporations many a time enter into a number of agreements with host countries. Multinational companies usually collaborate with the companies in the public and private sectors. d.Product innovation: They strive hard for research, development and innovations of products .Usually their products are backed by strong quality based research and innovations . e..use of advance technology: Due to huge financial strength they are in capable to have advance technology and they even contribute lions share in many nations income. f.marketing:Many multinational companies engaged in fast moving goods like soaps, detergents, powders, etc.they use aggressive and effective marketing strategies to expand their sales .Their art of marketing is very effective and result oriented .
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Rajan classes contact ;8268545939 g.Reliablility: Their bands are popular in many countries so they dont face any difficulties in selling their product. they are generally oligopolistic in nature. There is concentration power in giant company which enable them to capture the global market h.Professional management: It is managed by professionals and experts of various fields they easily handle the new technologies effectively and financial resources are put in right path. i. Head office and branches: Multinational corporations have their braches well established in several developing as well developed countries and head office in developed countries. k.centralised control: The operations of the various units spread in several countries are controlled centrally by the policy framework of the headquarters.Nokia manages its global marketing from Chennai. 27Functions of WTO a.Administraion of agreements :-It looks after the administration of the 29the agreements (signed at the conclusion of Urguay round 1994) plus a number of other agreements ,entered into after the uruguay round. b.implementation of reduction of trade barriers:It checks the implementation of tariff cuts and reduction of non-tariff measures agreed upon by the member nations at the conclusion of the Uruguay round c.examination of member trade policies:It regularly examines the foreign trade policies of the member nations to see that such policies are in line with WTOS guidelines d.Coillection of foreign trade information: it collects information in respect of export-import trade, various trade measures and other trade statistics of member nations e.settlement of disputes; it provides conciliation mechanism for arriving at an amicable solution to trade conflicts among member nations f.consultancy services:it keeps a watch on the development in the world economy and it provides consultancy services to its member nations g.forum for negotiation :WTO is a forum where member nations continuously negotiate the exchange of trade concession.Themember nation also discuss trade restrictions in areas of goods, services ,intellectual property rights etc i.Assistance of IMF AND IBRD: it assists IMF and IBRD for establishing coherence in universal economic policy administrations . 28functions of lower level management 1.preparing plans:They prepare plans regarding their work and allot the work to the workers 2.Represeting the problems of workers:The supervisory level managers come to know the problems and grievances of the subordinates and pass them on to the middle level management
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Rajan classes contact ;8268545939 3.maintaining good working conditions ;The supervisory managers provide good working conditions such as adequate lighting, ventilation, etc and provide other amenities to the staff 4.looking to safety of workers;The supervisory level managers provide safe and secure work environment for the workers by proper fencing and putting safety guards at all critical points for avoiding accidents 5.helping the middle level management: The supervisory level managers guide and help the middle level managers in the selection training, placement, and the promotion of the workers 6. welcoming suggestions : the supervisory level managers encourage the workers to take initiative in their work. They invite suggestions from the workers for better production and reducing the wastages 7.maintaing quality standards: The supervisory level managers have to make sure that there is steady flow of output and that the quality standards are maintained by the workers 8.boosting the morale:Thesupervisory level managers need to boost the morale of the employees in order to get the work done from them effectively and efficiently. 29.Importance of staffing 1.Helps to achieve objectives :- Staffing facilitates in right selection of personnel,motivating the employees and establishing suitable personnel policies so that all other factors of production(land,capital, and organisaiton) can be used most efficiently to achieve aims. 2.improve efficiency:Staffing helps to improve the efficiency and prodcutivity of the organisation.Proper placement,timely confirmation of the staff in their posts, regular payment of salaries,provision medical and other facilities , timely promotions etc motivate the workers to put in their best efforts . 3.Job satisfaction:proper placement of individuals according to their knowledge experience and aptitude,timely promotionsw, etc give job satisfaction 4.best utilisation of human factor :Staffing function of management is mainly concerned with human factor of production.Efforts are made to utilise the human factors more efficiently.Training ,orientation, and developemnt programe make employees capable to perform their jobs 5.healthy industrial relations:Proper staffing policy helps to create good interpersonal relations between superiors andsubordinates , management and employees, among managers at different levels and employees themselves etc. 6.optiumum use of resources:Sound staffing system enables and efficient manpower appoint most capable and efficient manpower This power akes optimum use fo all the factors of productions(land,labour, capital etc) 7.Human resources accounting:it relates to maintianing the expenses incurred in traning and income earned by trained personnel.Human resource accounting is a tool to see and take necessary steps if it turns to be negative results 8.reduce absenteesim and employees:The habit of the workerstoremain absent from theduty and changing theorganisaiton frequently affect the working of the enterprise.A good staffing policy is very RAJAN CLASSES SUCCESS STARTS HERE Page 161
Rajan classes contact ;8268545939 esential to develop job satisfaction among the employees to avoid absenteeism and turnover.it inculculate feeling of loyality.
Distinguish between the following Points Meaning Joint stock company Joint stock company is a volutary association of members formed for the purpose of undertaking a business Partnership firm It is a form of commercial organisaiton in which two ro more persons cometogether to run a business for common purpose For a private limited company The minimum number to form a the minimum number is 2 and partnership firm is 2 ,the maximum is 50.For public maximum is 10 in case of limited company minimum is 7 banking business and 20 in case and maximum is unlimited. of non banking business The formation is a complicated The formation is the simple process as many legal formalities process as less legal formalities are required are required The liabliity of the memebers in The liability of the parteners is a joint stock compay is limited unlimited.They are jointly and to the extent of unpaid value on serverally responsible for the shares debts of the firm A joint stock company enjoys The continuity of a partnership continued existence.The death of firm depends upon the mutual shareholders or director does not trust among partners.Again due affect the existence of a company to death or retirement of partner,the partnership may have to be closed down It can raise large capital because It can raise limited capital of huge membership Page 162
Number of members
Formation Liability
Continuity and stability
Capital
Rajan classes contact ;8268545939 Publication of accounts Scale of operation Points Meaning Memebership A company must publish its annual accounts for the benefit of members, creditors etc A company is suitable for huge scale business organisation State commission It is a state level redressal agency to be established by the state govt. It consists of a sitting or a retired judge of a high court and two other memebers one of whom shall be a woman It can deal with complaints where the value of goods and services and the compensation claim exceeds Rs 20 lakhs but does not exceed Rs 1 Cr. Any person not satisfied with state commision order may appeal to national commission within 30 days The state commission has administrative control over all the district forums in the state Every order made by the state commission is enforced by the state commission itself A firm need not publish its annual accounts A firm is suitable for small scale operations. National commission It is a national level redressal agency to be established by the central govt. It consists of a setting or a retired judge of thesuperme court and four other members one of whom shall be a woman It can deal with complaints where the value of goods and services and the compensation claim is more than Rs 1 Cr. Any person not satisfied with national level commision order may appeal to superme court within 30 days of theorder The National commision has administrative control over all the state commision in thecountry Every order made by the national commission is enforced by the national commission itself
compensation
Appeals
Admistrative control
Enforcement
points Meaning
Level of management
Management Management involves getting the work done from the others in order to accomplish the objectives Management is related to the
Administration Administration is concerned with framing plans and policies and objectives for enterprises Administration is related to Top, Page 163
Rajan classes contact ;8268545939 lower level of management Management requires technical skills as it is involved with implementation the policies Management is an executive functions as it involves implementation of formulated plans It has more significance in business enterprise. it is more widely used in a business organization Management answers the question of how to do it and who shall do it Management is the implementation part of the policy therefore it is related to the employees of the organizations Middle level of organization Administration requires conceptual and Analytical skills as it involved with framing of the policies Administration is an analytical functions as it involves framing of plan and policies It has more significance in non profit or government organization .It is more widely used term in government organization Administration answer the questions of what is to be and when it should be done Administration is the formulating part of the policy therefore it is related to the owners of the organization
Skills required
Nature of functions
Significance
Decision making ownership
points Definition
objectives Levels of management
Planning Planning is the process of establishing goals and a suitable course of action for achieving those goalsBY JAMES STONER Planning is goal oriented .It is done to achieve pre-determined objectives Plans are prepared by the top level management and such well prepared plans are sent to the middle and lower level for implementation Planning is first and foremost functions of management Planning is an intellectual
Controlling control is the process of taking steps to bring actual results and desired results coming togetherBY PHILIP KOTLER Controlling ensures desired results The executives at the middle and lower level managments are required to impose control over the organisation as per the standard laid down by the top level management Controlling is the last functions of management Controlling is a physical activity Page 164
Leguence Nature of activity
Rajan classes contact ;8268545939 activity In the sequence of managerial functions, planning precedes all other managerial functions
sequence
In the sequence of managerial functions, controlling is the last functions of the management
points Meaning purpose Efficiency Decision making Business area
Private sector enterprises Private enterprises are started by private persons The main purpose is to earn profit There is more efficiency in private enterprises There is quick decision making The private sector organization operate in industrial and commercial areas The management of private sector organisation remains with the owners or their appointed or elected representatives Companies like Godrej ltd,Hindustan Lever ltd, Tata motors,
Management
Examples
Public sector enterprises Public enterprises are started by the government The main purpose is to provide service to the public There is less efficiency in public enterprises There is delay in decision making The public sector operates in defence,public ulitilities etc like railways, and also industrial and commercial undertakings The management of public sector organisation is in the hands of government officials or Board of directors LIC ,INDIAN OIL CORPORATION, RAILWAYS, ETC.
ADMINSTRATION AND MANAGEMENT INCLUDED
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POINTS MEANINGS
objectives
ORGANAISING Organizing refers to the process of putting together various activities, resource and people into a system so that people work together for a common purpose. The main objective of organizing is to make the optimum utilization of the available physical and human resources Organizing has a wider scope as it involves making use of the physical and human resource Organizing functions defines and divides enterprises activities and creates jobs 1.preparing list of activities 2.classification and grouping these activities 3.Assigning responsibilities 4.Delegating authority 5.Establishing superior and subordinate relationship
STAFFING Staffing is a management function which ensures jobs to be tolled with right people , with right knowledge, skill and attitudes The objective of the staffing is to obtain the most competent and efficient staff for the organization to improve to overall performance. Staffing has comparatively narrow scope as it involves selection and the use of only human resources/ Jobs created through the functions of organising are filled by staffing functions 1.Man power planning job analysis 2.Recuritment 3.selection of competent and efficient candidates 4.placement & orientation 5.Training 6.performance appraisal 7.promotion & transfer 8.Pay of compensation for service offered.
scope
Job creation steps
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Rajan classes contact ;8268545939 points Meaning District forum An agency established by the state government in each district to give relief or settle the disputes of consumers who complain against manufacturers or traders is called district forum It consists of a president and two other members The president is appointed by the state government on the recommendation of the selection committee It has jurisdiction over a particular district As per consumer protection Act 1986,goods and services do not exceeds Rs 20 lac Any person not satisfied with order of the District Forum can appeal against such order to the State commission within 30 days of the order State commission A consumer disputes redressal agency at the state level established by state govt. is known as state commissions It consists of a president is and two others members The president is appointed by the state govt. after consultation with chief justice of high court It has jurisdiction over a particular state As per the amendment made to the consumer protection Act,1986 compensation if any exceeds Rs 20 lac to 1Cr. Any person not satisfied with the order of the state commission can appeal against such order to the National commission within 30 days of the order.
Composition Appoint ment of president
Area if jurisdiction Amount of compensation
Appeal against court
Points Meaning Member ship
Sole trading concern It is a business run by a single person for his exclusive benefit The sole trading concern is carried on by one person
Capital
The capital contributed by a sole
Partnership firm It is business run by two or more persons as per deed for their personal benefit The partnership firm must have at least two partners.The maximum number of partners is 10 in the case of banking business and 20 in the case if ordinary business The partners can raise large Page 167
Rajan classes contact ;8268545939 trader is comparatively less as compared to partnership firm Formation Agreement Business secrecy Sharing profits Formation of sole trading concern is very easy, simple and less costly As there is single owner the question of agreement does not arise A sole trader can maintain 100% business secrecy , because of his single ownership A sole trader enjoys all the profits of the firm. He need not share with any one capital as compared to a sole trader. This is because the partners are more in number Formation of partnership firm is comparatively less easy, simple quick and more costly Agreement is necessary between two or more person to do business I.e oral or written In a partnership firm, there can not be 100% secrecy, because of more number of partners In a partnership firm, there is sharing of profits among all the partners either equally or in an agreed proportions
STATE COMMISSION AND NATIONAL COMMISSION( INCLUDED )
points Meaning
PLANNING It means deciding in advance what is to be done, how to do it, when to do it and who is to do it. In the sequence of managerial functions planning is the first and foremost function /.It precedes every other functions planning is deciding in advance what to do, how to do it, when to do it and who is to do itBYKOONTZ AND ODONNELL Planning is based on the available and potential human, physical and financial resources of the organization
Position
Definition
Basis
ORGANISING Organizing refers to the process of putting together various activities, resources and people into a system so that people work together for a common purpose In the sequence of managerial functions, organizing is the second important function. Although it precedes other functions, it is however performed after planning Organizing is an identifiable group of people contributing their efforts towards the attainment of goalsBY-MC FARLAND Organising is based on ever changing external business environment(political, social economical factors)and internal factor which exist at different levels of management and their Page 168
Rajan classes contact ;8268545939 sublevels 1.preparing list of activities 2.classification and grouping these activities 3.Assigning responsibilities 4.Delegating authority 5.Establishing superior and subordinate relationship
Steps
1.Analysis the environment 2.Establishment of objectives 3.deciding and checking alternatives 4.preparing mater plan and derivative plans 5.implementation and reviews of planning.
points
Meaning
Nature of functions
Middle level management It refers to the intermediary level of management which comprises functional Managers ,departmental Heads such as ,production purchase Finance sales managers It is concerned with execution of policies formulated or decided by the top level management Requires human and persuasive skills and combination of technical and conceptual skills Middle level management is accountable to the top level management authorities Implementing the policies needs lesser time comparatively formulating the same Implementing the policies directing the lower level
lower level management It refers to supervisory or operational level of management. Comprises Junior executives etc.
Skills required Accountability
It is concerned with implementing policies and achieving targets of the organization It requires persuasive technical and operative skill Lower level management is accountable to the middle level management Executing the plans may require lesser time as it the operational aspect of the policy It is involved in operational activities of the organization
Span of time
Main functions
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points Meaning membership
liability Stability Publication of accounts Scale of operation
Joint stock companies It is a voluntary association of persons of some business for profit Minimum 2 and maximum 50 for private and minimum 7 and maximum no limit on membership for public company The liability of shareholders is limited to the extent of shares owned by him Death or retirement of shareholder does not affect the stability of company A company must publish its annual accounts for the benefit of members ,creditors A company is suitable for huge scale business operations
Partnership firm It is a business owned and managed by two or more persons as per an agreement Minimum 2 and maximum 10 for banking and 20 for non-banking business Liability of partners is unlimited moreover joint and several Due to death or retirement of any partner ,the partnership is dissolved A firm need not publish its annual accounts A firm is suitable for small scale operations
DISTRICT FORUM AND STATE COMMISSION (INCLUDED) ADMINSTRATION AND MANAGEMENT (INCLUDED) CONTROLLING AND PLANNING (INCLUDED)
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Rajan classes contact ;8268545939 points MEANING JOINT HINDU FAMILY BUSINESS Joint Hindu family firm is a business organization which is connected on from one generation to another by a joint Hindu family CO-OPERATIVE SOCIETY Co-operative society is an association of persons usually of limited means, who have voluntarily joined the organisation,making equitable contribution to the capital required and accepting a fair share of risk and benefit of organization Minimum 10 person there is no maximum The members of the co-operative society has limited liability The ownership is in the hands of the members but management is by the managing commitee Co-operative society collects its capital from its members who too are from limited means Work is divided among all the memebers.There is specialisation of work and division of labour.
Number of Members Liability Ownership/Management
capital Division of work
No restriction to the number of member as membership is derived by birth in the family. Two types of liability limited for co-parceners unlimited for the karta Joint Hindu family is owned by all the members of the family.The management is done by karta Limited capital it is raised form the savings of the family members Work is divided among the coparceners if the karta is efficient
Points Meaning
Lower level management It refers to supervisory or operational level of management. Comprises Junior executives etc. It is executor It is moderately concerned It is less difficult to evaluate their performance It involves moderate number of persons It has intermediate period Joint hindu family business
Nature Determination of policy Evolution Persons Span of period points
Top level management It refers to the highest level of authority of an organization . it consists of Board of Directors, managing directors, and president It is administration It determines policy It is difficult to evaluate their performance It involves few persons It has a long span of period Sole trading concern Page 171
Rajan classes contact ;8268545939 meaning Legal control Liability Sharing of profits conflicts It is owned and managed by members of joint hindu family It is owned and managed by single person for his exclusive benefit It is subject to provisions of It is not controlled by any special hindu succession act .1936 act for the sole traders Karta liability is unlimited and Liability of sole trader is co-parceners is limited unlimited Profits or losses are shared by Entire profits or losses are the co-parceners owned by the proprietor There is possibility of conflicts There is no scope of conflicts as among the coparceners and karta it controlled by a single person
points Meanings Legal status Management
Statutory corporation It is formed by passing a special act of parliament It is a separate legal entity distinct from the government It is managed by the board of directors nominated by the govt
Government departments Government company is formed as a corporate body registered under the Act 1956 It has a separate legal existence from the govt.and the shareholders
control Capital
It is managed by the board of directors appointed by the govt.and shareholders It is controlled by the parliament It is controlled by the govt and shareholders Share capital is owned by govt. it 51% or more of the paid-up can borrow funds from the govt capital is contributed by the govt and the public and rest is contributed by private sector. Top level management It refers to the highest level of authority of an organization . it consists of Board of Directors, managing directors, and president It is administration Middle level management It refers to the intermediary level of management which comprises functional Managers ,departmental Heads such as ,production purchase Finance sales managers It is concerned with execution of policies formulated or decided by the top level management Page 172
points Meanings
Nature
points meaning
District forum It is established by state govt in each district to give relief or settle the disputes of consumers who complain against manufacturers or traders One president and 2 other members to be appointed by the state govt. President should working or retired judge of district court and other 2 members includes atleast one women Appointed by state govt. by recommendation of selection committee It has a jurisdiction over a particular district Compensation does not exceed 20 lac .as per amendments made to the Consumer Protection Act of 1936 If a person is not satisfied with district forum order, he can apply to state commission within 30 days of the order
National commission A consumer disputes redressal agency at the national level established by the central government is known as national commission President and 4 other members appointed by central govt. The president should be current or retried supreme court judge .and other 4 members, should include at least one women, should be well educated and experienced in different fields Appointed by the central govt after consultation with the chief justice of india It has a jurisdiction over the entire nation Compensation does not exceed 1 Cr. As per amendments made to the Consumer protection Act of 1936. If the person is not satisfied with the order of national commission he can appeal to supreme court within 30 days of order
composition Qualification
Appointment of president Area of jurisdiction Amount of compensation
Appeal against orders
Points Meaning
Professional management Professional management means managing the affairs of the business organization by professionally qualified persons
Event management Event management is getting the desired events actually materialized to achieve certain objectives. it is the Page 173
Rajan classes contact ;8268545939 at all the levels of management Activity necessity planning,organisaing and executing the plans of performing the event It is professional activity It is technical activity requiring requiring administrative and special skills and leadership technical skills qualities Professional management is need Event management is necessary in large size organisaition,which to ensure safety and security of use modern techniques ,due to the visitors and the staff during globalization and increasing the events. its necessary to market competition it is essential manage big event which attract large crowds and to avoid loss of life To serve the public of To serve the visitors and staff organization through through communication, stage instructions, guidance or advice shows, background music, to solve their problems snacks, drinks etc. It creates platform for employees Event management provides to accept changes willingly to platform fro marketing of goods cope up with automation, and services provided by the modernization and other related manufacturers and service changes of recent trends providers
Motive
Basis
Points Meaning
Effect Which companies require it? purpose
Order
Incorporation certificate It is a certificate issued to a joint stock company by the registration of companies signifying the birth of company On obtaining this certificate the company gets legal status All joint stock companies i.e private as well as public company need such certificate It is a proof or evidence of the fact that the company is incorporated and a private company can start its business operations immediately on receiving such certificate This certificate must be obtained
Commencement certificate It is a certificate issued to public company by the registrar, giving a signal to commence the business On obtaining this certificate the company starts its business Only public limited company with a share capital needs such certificate It enables the public company to start its business operations immediately on the receipts of such a certificate This certificates obtained only Page 174
Rajan classes contact ;8268545939 first All companies need to obtain it.In case any company operates without it, then it will be termed as illegal association and company can be wound up under the act after incorporation certificate The public company with a share capital must obtain it. otherwise it will not be allowed to commence business
Implication for not obtaining
points Meaning
Equity shares Equity shares are those shares which enjoy rewards as well as bear risks of the company.They provide permanent capital to the company. They do not enjoy preference over preference shareholders in terms of receiving dividend and repayment of capital They normally get higher dividend .They get dividend after making payment to preference shareholders They equity shareholders enjoy normal voting rights Normally equity shares are issued for a face value of Rs 10/Equity shareholders are eligible for bonus shares, if issued by the company
Nature of preference
Dividend
Voting rights Face value Bonus share
Preference share Preference shares are those shares which enjoy certain preferences ,as to payment of dividend and repayment of capital ,.over the equity shareholders They enjoy preference over equity shareholders in terms of payment of dividend and repayment of capital They get a regular dividend. They enjoy a preference for payment of dividend over the equity shareholders They donot enjoy voting rights except on those matters which effect their interest Normally preference share\s are issued for a face of of Rs 100/Preference shareholders are not eligible for bonus shares , if issued by the company/.
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Points CONCERN Level Focus emphasis Personality
TAYLORS CONTRIBUTION TO MANAGEMENT Taylors technique and principle are concerned with workers Taylor started his studies and approach from lowest level in the organization Taylor laid focus on eliminating wasteful movements Taylor laid great emphasis on standardization of work Taylor developed a personality of scientist and became famous as father of scientific principles Main contribution is development of scientific techniques and scientific principles
Main contribution
FAYOLS CONTRIBUTION TO MANAGEMENT Principles are concerned with management efficiency Fayol started his studies and approach from the highest level oin the organization Fayol laid focus on development of principles for better management Fayol laid great emphasis functions of managers Fayol developed the personality of a researcher and practitioner.ge become famous as father of general management. Main contribution was development of 14 principles of general management
GOD IS GREAT
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