Organisation Commerce Notes of H.S.C.

Rajan classes contact ;8268545939

RAJAN CLASSES ORGANISATION OF COMMERCE

RAJAN CLASSES

CONTACT DETAILS:8268545939

EMAIL ID:[email protected]

Web address: http://rajanclasses.blogspot.in/

WEBSITE: http://www.rajanclass.in/

RAJAN CLASSES “SUCCESS STARTS HERE”

http://rajanclasses.blogspot.in/

mailto:[email protected]


ORGANISATION OF COMMERCE

NAME:-

STANDARD:- S.Y.J.C

CLASSES :- RAJAN CLASSES

“THE MAN WHO MAKE HARD THINGS EASY IS THE EDUCATOR”




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)





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





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 organisaitonIf 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 decision-making, 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 concernAnswer 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 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 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.

(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 businessDefinition :- “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 trader3.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 is”The liability of a sole trader is unlimited” the answer is”True” 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 marketAns. 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 area2.liability of sole trader is unlimited , which prevents him from undertaking bigger risk3.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 concern2.The liability of a sole trader is unlimited3.A sole trading concern has maximum one owner4.The formation of a sole trading concern is easy5.A sole trading organization has a high degree of flexibility6.A sole trading organization suffers from lack of continuity7.A sole trading concern usually operates in local market8.sole proprietorship is a personal organization9.the form of organisaiton which is suited for self employment is sole trader 10.A proprietorship is the oldest and simplest form of organisaiton11.A proprietorship has single owner12.For flexibility the sole trading form of organization is best 13.A sole trading concern ensures maximum business secrecy14.A sole trader does not have a separate legal status15.there are managerial and financial restriction on the type of businss which may be conducted by proprietorship

Match the following Sole trader’s liability unlimitedMaximum business secrecy Sole proprietorshipSole trading concern(march 09) One man show/single ownershipSelf employed person Sole trader Sole proprietorship Oldest form of business.

{Learning is a treasure that will follow its owner everywhere.}



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.

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.

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.

1.The partners and the partnership firm are identical in the eyes of law. So if firm’s 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) 1932Deed of partnership Written constitution of firmRegistration of partnership firm in Maharashtra

compulsory

Maximum number of partners in a banking business

ten

Maximum members in non banking business in partnership firm is

Twenty



{Education is simply soul of the society as it passes from one generation to another }

Topic:- joint Hindu family business


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.

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.

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 .


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.




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 Joint Hindu family Sole trading concernmeaning It’s 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

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.

membership The minimum and maximum number of co owners is not regulated by Hindu law; it changes with the number of birth and death in the family.

Its is owned controlled by one person only

ownership All members are joint owner of ancestral property

The business assets are entirely owned by sole trader



liability The liability of each co owners is limited to the extent of his share in the business

The liability of sole trader is unlimited

Financial resources Financial resource are relatively more then sole trading concern

Financial resources is very limited compared to joint Hindu family firm

Profit and loss Profit and loss is shared by all co owners it is varied according to birth and death of the person in family

Here it is enjoyed by sole trader only since it’s the one man show

points Joint Hindu family Paternership firmMeaning It’s 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

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.

creation The joint Hindu family firm comes in to existence by the operation of Hindu law. it is created by status.

A partnership is formed by agreement among the person to conduct business for profit. It is created by contract

Membership The minimum and maximum number of coparceners is not regulated by Hindu law. It changes with the number of births and deaths in the

Minimum number of partners is 2 and maximum number of partners is 20 and in case of banking it is 10.



familyManagement Karta, the senior

most member or head of the family manages the entire affairs of the business

All partners have equal rights to participate in management

Registration There is no provision for registration of the joint Hindu family firm

A partnership firm can be registered under the provision of the Indian partnership act 1932

Liability of partners The liability of karta is unlimited but that of co-paceners is limited to the extent of their share in the business

The liability of all partners is unlimited. They are jointly and severally responsible for the acts of the firm.

Continuity Continuity of existence is not affected by death lunacy or insolvency of coparcener

Continuity is affected by death, lunacy or insolvency of a partner, unless there is contrary provision in the agreement.

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 Hindu succession actKarta Senior most member of the

Hindu undivided familyCoparcener Male as well as female member

of the Hindu undivided familyLiability of karta UnlimitedLiability of coparcener 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.

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 company’s 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 company’s 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.

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.

(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 member’s 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 it’s 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.


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.

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


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.


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.


Reasons.

1. A share holders becomes member of a company only when his name is recorded in the register of members of the company

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 it’s the board of the director looks in to the matter.



7. The registration of stock company Is optional.


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 Maximum 50 members



Public company Minimum 7 membersCommon seal Symbol of the companyRegistration of a company CompulsoryGovernment company 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.

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 co-operative 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 co-operative 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 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 society’s 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.Goverment’s assistance is often inadequate for most of the co-operative 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

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 Co-operative Society are examples of housing co-operative society.

Answer the following with reasons.

1. The membership of co-operative society is voluntary.


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. it’s 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 Co-operative society Joint stock company Meaning

A co-operative society is a voluntary association of individuals having common needswho join hands for the achievement of common economic

Joint stock company is incorporated and voluntarily association, to conduct the business to make profit and distribute it among the members



interestFormation Here formation is

relatively simple, less rigid, less costly and less complicated

Its rather difficult, lengthy, involving numerous legal formalities, complicated, rigid and more costly.

motive Its is service oriented ,and profit making is secondary objective

Main motive is making profit, and service is secondary objective.

Number of members Minimum member is ten and maximum no limit

Minimum 2 and maximum 50 in private limited company and minimum 7 and maximum no limit for public limited company

Management It is managed by managing committee elected by members, management is usually not very effective

It is managed by board of directors, elected by shareholders. And management is very effective since experts are appointed to manage the business affairs.

Voting rights Here one member one vote principle is adopted

Every share has one vote, the principle of one share one vote.

Transferability of shares

Shares are not transferable , but it can be surrendered to a cooperative organization for encashment

Shares are freely transferable in public company. They are listed in stock exchange



Regulatory statute Co-operative organization is regulated and controlled by the provisions of the co-operative societies act 1912

The company is regulated and controlled by Indian companies’ act 1956.

Capital rasing There is law rate of dividend and no capital appreciation which prevents from raising large amt of capital

Here there is higher rate of dividend and benefit of capital appreciation .it can raise large amt of capital.

Points Partnership firm Cooperative organization

Meaning 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

A co-operative society is a voluntary association of individuals having common needswho join hands for the achievement of common economic interest

Motive Main objective is to maximize profit

Here service is main objective

Membership Minimum 2 and maximum 10 in banking and maximum 20 in non banking

Minimum ten and maximum is unlimited

Transferability of shares

No partner is allowed to transfer his share in favor of others persons without the prior consent of other partners

Shares can be surrendered or transferred in favour of the society itself at any time for encashment.

Leagal status It does not have separate legal

It has separate legal existence distinct



existence distinct from its members

form 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

It has perpetual existence. Its existence is not effect by death insolvency insanity of any member from the society

Regulatory status It is regulated and controlled b the Indian partnership act 1932

It is regulated and controlled by cooperative societies act 1912 and by laws of the society.

Points Sole proprietorship Co-operative organization

Meaning An organization which is owned and managed by an individual for making profit is called sole proprietorship


Membership Its an one man show, here owner does not have any partner to share his profit and losses

Here minimum ten members is required and maximum unlimited

Liability The sole proprietor liability is unlimited

The liability of its members is limited

Regulatory statute It is regulated and controlled by any special act or legislation

It is regulated by cooperative societies act.

Registration Registration is not compulsory

Here it is compulsory

Motive The main motive is to The main motive is to



earn profit render profit Legal status Its does not have

separate legal status distinct from a sole proprietor

It has separate legal status distinct from its members .

Stability and continuity

It is dissolved with the death, insolvency or insanity of a sole proprietor

A cooperative society has perpetual existence. Its not effected by death insolvency or insanity

Formation and dissolution

Its formations and dissolution are very easy. There is no legal formalities

Its dissolution is difficult complicated, lengthy and difficult

Points Joint Hindu family Co-operative society Meaning 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”


Membership The membership (coparceners) is not regulated by Hindu law. it changes with the number of births and deaths in the family

Minimum and ten members is required and maximum is unlimited

Liability Here all coparceners liability is limited to the extent of their share in the business , but kart liability is unlimited

The liability is limited, since society is distinct legal unity.

Ownership It’s jointly owned by Here it is jointly



the family members with the head being the karta.

owned by its members..the owners of cooperative society need not to be members of the same family.

Management Its is managed and control by karta( head of the family)other members can assist him, but cannot participate in management

Here business is managed and controlled by the managing committee consisting of elected representative of the members. its managed on the principle of democracy.

capital Ancestral property is the capital of joint Hindu family firm. Capital raising is very limited compare to cooperative society

Here the capital is contributed by members and by shares.

Registration No provision for registration of joint Hindu family firm

As per the provisions of the cooperative society’s 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

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 consumer’s 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 Service mottoConsumers cooperative society Eliminates middlemenProducers cooperative society Craftsmen,artisans and industrial

workersCredit cooperative society Loan facilitiesShares of cooperative society Not transferability

{A mind is a fire to be kindled, not a vessel to be filled.}

Topic ; sectoral organization of business


1. What is (public corporation) statutory corporation? Explain its merits and demerits. (Note:- public corporation and public sector are different)(march 09)

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 self-government. )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.


http://ardictionary.com/Of/869

http://ardictionary.com/Power/10093

http://ardictionary.com/Or/1924

http://ardictionary.com/Right/6465

http://ardictionary.com/The/2611

http://ardictionary.com/Having/1349

http://ardictionary.com/Government/3418

http://ardictionary.com/In/1915

http://ardictionary.com/Independent/3008


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 it’s 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 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.

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, government’s 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 importance’s.

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.

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.

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.

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 Statutory corporation/company

Government companies

Meaning It is formed by passing a special act of parliament or state legislature

A government company is formed as a corporate body registered under the Indian companies act 1956

Legal status It has a separate legal existence distinct from government and shareholders

It has no separate legal status distinct from the government.

capital Paid of capital is 51%contributed by government and rest by private sector

Entire capital is provided by the government through budget appropriations.

Management It is managed by board of directors appointed by government and shareholders

It is managed by government official of concerned ministry.

control Controlled by government and shareholders

Controlled by concerned ministry

autonomy It enjoys autonomy in decision making to a considerable extent

It has no autonomous status

examples STEEL AUTHORITY OF INDIA LIMITED, BHARAT HEAVY ELECTRICALS LIMITED, STATE TRADING CORPORATION OF INDIA LIMITED, INDIAN OIL CORPORATION LIMITED

RAILWAYS, POST, ATOMIC POWER PROJECTS ORDANANCE FACTORIES, ETC.

Points Private sector Public sector Meaning Business organization

which is owned and controlled by individual or a group of individual are called private sector.

Here which is owned managed and controlled by central or state government.

Objective/purpose To earn profit The main objective is to provide essential



services to the people and thereby promote social welfare. Profit making is secondary.

ownership Owned by individual, or a group of individuals or corporate bodies

They are managed by employees known as bureaucrats (government officials)or by board of directors.

efficiency They are more efficient than the public sector enterprises

They are less efficient then private sector

capital The capital is mainly supplied by the sole proprietors partners members or share holders

Here government contribute the capital 51% or more of the share capital is contributed by the govnment and the rest by the public

Flexibility Organizations is more flexible in their functioning and operation ,because they can easily bring changes in their policy

They are rigid because change in the policy requires approval of the government

Political interference The private sector enterprises are usually free from government interference

Here there is lot of political interference

points Statutory corporation Departmental store Meaning An organization which is

formed or created by passing a special act of parliament or the state legislature is called a public corporations.

An enterprise which is owned wholly by the central or the state government and organized as a department under a ministry is called a departmental organization

Legal status Public corporation has a separate legal existence distinct from the government

Departmental organization does not have a separate legal status distinct from the government



Management Managed by board of directors nominated by government

Here it is managed by government officials of the concerned ministry

autonomy It enjoys autonomy in decision making

It has no autonomy status

Government interference

Free from government interference

Here government interference is maximum

Suitability Suitable for industrial and commercial enterprises

It is suitable for strategic industries like defense, railways atomic energy , public utilities etc.

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.

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


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 Departmental undertakingProfit maximization Private sector enterprisesGovernment company More then 51% share held by the

governmentMinisterial control Indian railwaysMultinational corporation Branches in several countries.



(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: Today’s 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 today’s 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.

Features:1. Changes from time to time: Business environment is dynamic

concept. certain environment such as economic ,social, demographic ,market forces, etc. are always changing

2. 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 today’s situation

3. 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.

4. 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.

5. 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.

6. 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 .

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 world’s 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 co-operates 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 WTO’s 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: It’s 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.

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.

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 didn’t 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 don’t 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

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.

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 Liberalization Privatization

Meaning Liberalization is

described as

deregulation. It refers to

the removal of undue

restrictions and

elimination of

bureaucratic control on

the productive activities

Privatization means

inducing private

ownership,

management and

control into public

sector under takings

through disinvestment

Purpose Main purpose is to

abolish unnecessary

restrictions and controls

and encourage private

sector and accelerate

the speed of economic

development

(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.

measures 1.reducing the rate of

export, import,

corporate tax,2.increase

the limit of FDI(foreign

direct

investment)3.Abolishing

industrial

Selling the shares and

transferring the

ownership and

possession of public

sector undertakings to

private sector

entrepreneurs,etc



licencses,scrapping the

MRTP ACT(monopolies

restrictive trade

practices )

Consequences Liberalizations reduce

the unnecessary

restrictions, hurdles and

controls in the process

of development

Here the state

enterprises is taken

over by the public

enterprises, as a

result ,the speed of

economic development

accele-rates rapidly

Nature of activities Autonomy is granted on

the larger proportion to

the multinational

companies and private

sector enterprises to

expand the business

activities in economy

Here the management,

control ownership and

possession of the public

sector enterprises are

transferred from the

government to private

sector institutions

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 Main purpose is to



strength the economy

to acquire entry in the

global market,creat

global competitiveness

and rap the benefits

competitiveness and

interdependence

abolish unnecessary

restrictions and controls

and encourage private

sector and accelerate

the speed of economic

development

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

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

consequences It facilitates transfer of

resources, capital,

goods, services and

expansion of market,

optimum use of

resources. Advance

technology and valuable

foreign exchange are

made available to

developing countries

Liberalizations reduce

the unnecessary

restrictions, hurdles and

controls in the process

of development

Nature of activities In globalization, In the liberalization



business activities are

conducted throughout

the world. By granting

autonomy growth in

trading activities,

foreign direct

investment is

accelerated

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

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, society’s

expectations from the

business etc, which

have impact on the

business are called

social environment.

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

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



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.

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 Political environment Legal environment

Meaning It refers to political

system , political

parties, government

agencies ,and pressure

groups that have an

impact on the working

of a business

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 Net result of political

system is constitutional

provisions ,party system

and taking of political

events in country

Net result of legal and

regulatory environment

is laws, rules,

regulations, regarding

the formation and

operation of business



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

To avoid industrial

accidents, pollution of

all kind (air water and

sound) misuse of

resources(financial

physical, natural,

human) and protect and

preserve the ecological

balance.

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

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.

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,societys’expectations 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

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?


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

FILL IN THE BLANKS



1. Changes on the fiscal policy of the government is an aspect of political

environment

2. World trade organization was established in the year 1995

3. Changes in the judicial system is an aspect of legal environment

4. Privatization implies reduction in the role of public sector

5. Level of literacy is an aspect of social environment

6. Business environment has tremendous impact business

7. Changes in the rulling government is an aspect of political environment

8. The new industrial policy formulated in 1992

9. Government awareness provide warning signal

10. Globalization is concern with world market

11. Globalization means linking national economy to the world

economy

12. World trade organization was established in geneva

13. The gatt was replaced by the WTO on 1.1.1995

14. India has adopted the policy of liberalization globalization and

external

15. Since privatization India has been going through a process of

econom8ic reforms

16. The new industrial policy was formulated in 1991

17. Freedom to business enterprises from government controls

implies liberalization

18. Factors like customs traditions etc constitute a part of external

environment of business

19. World trade organization was established in 1.1.1995

20. Business environment consists of internal and external factors

21. Interdependency and integration of individual countries of the

world is called globalization

22. 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

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 society’s 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.

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 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 consumer’s 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 consumer’s 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

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

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 it’s 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.

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 .

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: It’s 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

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.

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

“ethikos”which 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 man’s 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.

4. Interest of small-scale industries: Large companies generally dominate

the market and adopt cut-throat 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 .

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.

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

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

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


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 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 .

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.

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 don’t 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 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 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 environment for consumers to protect their rights

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.

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 State commission National commission

meaning A consumer disputes

redressal agency at

state level established

by each state govt.

A consumer disputes

redressal agency at the

national level

established by the

central 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.

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.

Appointment of

president

President is appointed

by state govt,after

consultation with chief

justice of high court.

The president is

appointed by central

govt.after consultation

with the chief justice of

india.

Area of jurisdiction It has jurisdiction over a

particular state

It has jurisdiction over

the entire nation

Amount of

compensation

Compensation is done

between 2 lac to 1 Cr.


above 1.Cr.

Points District forum National commission



Meaning Established by state

govt,in each district ,to

settle the disputes of

consumers against

manufacturers or

traders

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.

It consist of 1 president

and 4 members


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

supreme court judge

and other 4 member,

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

The president is


govt.after consultation

with the chief justice of

India.

Area of jurisdiction It has a jurisdiction over

a particular district

It has jurisdiction over

the entire nation



Amount of

compensation

Compensation does not

exceed 20 lac


above 1.Cr.

Appeal against order If the person is not

satisfied he can appeal

to state commission

within 30 days

If the person is not

satisfied he can appeal

to supreme court within

30 days

Points District forum State commission

Meaning Established by state

govt,in each district ,to

settle the disputes of

consumers against

manufacturers or

traders

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

Area of jurisdiction It has a jurisdiction over

a particular district

It has jurisdiction over a

particular state

Amount of

compensation

Compensation does not

exceed 20 lac


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.


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.

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


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 back”But not

consumer protection Act 1956 expressly provides, if goods doesn’t met

the required needs then it is the responsibility of seller to replace it.

Now the principle is”caveat 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

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.

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 book”is 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 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,politic

al etc.management is essential for every activity ,which has to be

performed in group. Because, planning,organizing,co-ordinating 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.

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

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

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.

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.

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.

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 .

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.

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

Level of management Management is more

relevant at the lower

levels of an

Administration is more

relevant at the top

level and middle of an



organization organization

Skills required Management required

technical skills as it is

involves

implementation of

formulated plans

Admistration requires

conceptual and

analytical skills as it

involved with framing

of the policies.

Nature of function Management is an

executive function as it

involves

implementation of

formulated plans.

Administration is an

analytical function as it

involves framing of the

plan an policies.

Significance/importance It has more significance

in business enterprise.

It is more widely used

in a business

organization

It has more significance

in non-profit 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



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


implementation the

policy formulated by

the top management


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

4.Accountability

Top management

reports to the

shareholders

government agencies

Middle level reports to

the top level

management

Lower level

management reports

to the middle level

management

5.Main function

It is mainly involved in

framing of policies and

organizing required

resources

It is involved in

implementing policies

and directing the lower

It is involved in

operational activities of

the organization

management

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.

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 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

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: Management should encourage harmony and general good feelings among employees.

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

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 Unity of command Unity of direction Meaning 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

Unity of direction implies that a group of employees perfuming similar jobs or activities must have common objectives and must work under one superior

Principle This principle insists on one boss for one subordinate

This principle insists on one unit or divisions for one plan and one head

Aims It helps in avoiding duplication overlapping and confusion and to establish good relationship between subordinate and superior

It helps in providing better co-ordination and direction to the efforts of employees of one department in achieving the objectives of that department.

Needs It stresses the need for the subordinate to be accountable to one superior by avoiding duplication of instruction from two superior

It emphasis the attainment on the need of unity of action, co-ordination of efforts of different groups to achieve common goals of the organs ion

Relationships This principle is related to the functioning of the employees with clarity in mind

This principle is related to the functioning f the organization as a whole or as one unit

Advantages This principle results in systematic work, improves efficiency, by removing confusion and conflict among the subordinates

This results in co-ordination of activities of different of groups of activities



Objectives:Fill in the blanks1.Managmenet principles are nature of universal2.Mangment principles establish relationship cause and effect 3.one plan one head is stated in principle of direction4.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 chain8.Delegation of authority is allowed under the principles of centralization9According to the principle of order there should be a fixed place for every one and every thing 10Division of work is the principle of specialization11According to the principle of stability of tenure12.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



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 plans7. 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.

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 .

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 directing individuals at work”

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.

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 .

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.

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 pre-determined objectives .It focus on plans or

standards and tries to give direction to actual as per the plans.

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

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

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 planning Controlling

meaning Planning is deciding in

advance what to

do,how to do it, when

to do it and who is to

do it.

Controlling the process of

comparing actual result

with the planned one.

objectives Making best use of

available resources,

improve efficiency and

encourage innovation

Create a atmosphere of

order and discipline,

evaluate actual

performance, increase

overall efficiency.

sequence In the sequence of

managerial functions,

planning precedes all

other managerial

In the sequence of

managerial functions,

controlling is the last

functions of the



functions management

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.

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 staffing directing

meaning Is the process of involved in

identifying, assessing ,

placing, evaluating and

Directing means

instructing, guiding

inspiring and



directing individuals at work motivating the

subordinate

employees so that

their efforts result

in the achievement

of goals

objectives Staffing is to obtain the most

competent and efficient staff

to improve the overall

performance

Directing ensure

that the employees

at differnet levels

accomplish their

tasks according to

plans.

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

outcome Staffing helps to select right

person for right job, at right

time

Direction fucntion

helps to maintain

discipline among

the staff

steps Recruitment ,selection,

training and development

placement,promotion,package

s

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.

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.

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:

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.

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.

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


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.



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

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

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 1932Top level management Policy determination Consumer protection Act 1986Father of modern management Henry FayolStaffing Promotion and transfer Multinational companies Operates globallyFair prices Consumers Consumer protection Act 1986Managing Director Top level management Floods Natural disaster Globalization Free trade at international levelSingle ownership Sole trader Employees Fair wages Wedding ceremony Event management Protection of environment Responsibility towards society Co-operative society Service motive Consumer movement 1920Administration Board of directors Discipline Application of rules Staffing Right man for right jobPrivate company Maximum 50 members State commission Compensation upto 20,000Direction and control Top level management Henry fayol 14 principles of management



Natural disaster EarthquakesIndian companies Act 1956Head of district forums District judgeTop level management Head of department Principle of division lof work Division of work planning Management for the future Multinational companies Branches in several countriesConsumer protection Act 1986Utility of command Order from one bossPlanning Deciding future course of actionCommon seal Easy identification of organsiationPartnership act 1932Consumer movement Started in england Division of labour Work allotment to the workersOrganizing DepartmentalisationPrivate company Maximum 50 membersSole trader Maximum secrecyGlobalizations International market District forum Compensation up to 20 lacs Private company Minimum 2 membersTotal quality management Dr.Deming TQM is developed in japanAdminstrative management approach is stressed by

Henry fayol

carter TQMTQM SYSTEM APPROACHMaximum members of partnership firm for banking business

10

Maximum members of partnership firm for general business

20

Father of scientific management F.W.Taylor Minimum members co-operative society

ten

Minimum members for public Ltd 7Joint stock company has Perpectual lifeCo-operative society act 1912For partership firm minimum members

2

Highest rate of divident for co-perative society

15%

Shares of coparcener Flutuating

(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

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

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 .

(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.

(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 1960’s 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 .

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 company’s 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.

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 today’s 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.

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



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.

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.

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.



(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 co-ordination 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 co-ordination 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 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.

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.

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

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

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

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 India’s share in global market: In 1991, the government of India adopted the new economic policy, prior 1991 India’s share is negligible i.e import is more then export ,foreign situation is unsatisfactory so to improve this condition India introduced economic policy in 1991.improving India’s 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 cooperation’s 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 lion’s 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 .

g.Reliablility: Their bands are popular in many countries so they don’t 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 WTO’S 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

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 esential to develop job satisfaction among the employees to avoid absenteeism and turnover.it inculculate feeling of loyality.

Distinguish between the following

Points Joint stock company Partnership firm Meaning Joint stock company is a

volutary association of members formed for the purpose of undertaking a business

It is a form of commercial organisaiton in which two ro more persons cometogether to run a



business for common purpose

Number of members For a private limited company the minimum number is 2 and maximum is 50.For public limited company minimum is 7 and maximum is unlimited.

The minimum number to form a partnership firm is 2 ,the maximum is 10 in case of banking business and 20 in case of non banking business

Formation The formation is a complicated process as many legal formalities are required

The formation is the simple process as less legal formalities are required

Liability The liabliity of the memebers in a joint stock compay is limited to the extent of unpaid value on shares

The liability of the parteners is unlimited.They are jointly and serverally responsible for the debts of the firm

Continuity and stability A joint stock company enjoys continued existence.The death of shareholders or director does not affect the existence of a company

The continuity of a partnership firm depends upon the mutual trust among partners.Again due to death or retirement of partner,the partnership may have to be closed down

Capital It can raise large capital because of huge membership

It can raise limited capital

Publication of accounts A company must publish its annual accounts for the benefit of members, creditors etc

A firm need not publish its annual accounts

Scale of operation A company is suitable for huge scale business organisation

A firm is suitable for small scale operations.

Points State commission National commissionMeaning It is a state level

redressal agency to be established by the state govt.

It is a national level redressal agency to be established by the central govt.

Memebership It consists of a sitting or a retired judge of a high

It consists of a setting or a retired judge of



court and two other memebers one of whom shall be a woman

thesuperme court and four other members one of whom shall be a woman

compensation 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.

It can deal with complaints where the value of goods and services and the compensation claim is more than Rs 1 Cr.

Appeals Any person not satisfied with state commision order may appeal to national commission within 30 days

Any person not satisfied with national level commision order may appeal to superme court within 30 days of theorder

Admistrative control The state commission has administrative control over all the district forums in the state

The National commision has administrative control over all the state commision in thecountry

Enforcement Every order made by the state commission is enforced by the state commission itself

Every order made by the national commission is enforced by the national commission itself

points Management AdministrationMeaning Management involves Administration is



getting the work done from the others in order to accomplish the objectives

concerned with framing plans and policies and objectives for enterprises

Level of management Management is related to the lower level of management

Administration is related to Top, Middle level of organization

Skills required Management requires technical skills as it is involved with implementation the policies

Administration requires conceptual and Analytical skills as it involved with framing of the policies

Nature of functions Management is an executive functions as it involves implementation of formulated plans

Administration is an analytical functions as it involves framing of plan and policies

Significance It has more significance in business enterprise. it is more widely used in a business organization

It has more significance in non profit or government organization .It is more widely used term in government organization

Decision making Management answers the question 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 part of the policy therefore it is related to the owners of the organization



points Planning Controlling Definition “Planning is the process

of establishing goals and a suitable course of action for achieving those goals”BY JAMES STONER

“control is the process of taking steps to bring actual results and desired results coming together”BY PHILIP KOTLER

objectives Planning is goal oriented .It is done to achieve pre-determined objectives

Controlling ensures desired results

Levels of management Plans are prepared by the top level management and such well prepared plans are sent to the middle and lower level for implementation

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

Leguence Planning is first and foremost functions of management

Controlling is the last functions of management

Nature of activity Planning is an intellectual activity

Controlling is a physical activity

sequence In the sequence of managerial functions, planning precedes all other managerial functions

In the sequence of managerial functions, controlling is the last functions of the management



points Private sector enterprises

Public sector enterprises

Meaning Private enterprises are started by private persons

Public enterprises are started by the government

purpose The main purpose is to earn profit

The main purpose is to provide service to the public

Efficiency There is more efficiency in private enterprises

There is less efficiency in public enterprises

Decision making There is quick decision making

There is delay in decision making

Business area The private sector organization operate in industrial and commercial areas

The public sector operates in defence,public ulitilities etc like railways, and also industrial and commercial undertakings

Management The management of private sector organisation remains with the owners or their appointed or elected representatives

The management of public sector organisation is in the hands of government officials or Board of directors

Examples Companies like Godrej ltd,Hindustan Lever ltd, Tata motors,

LIC ,INDIAN OIL CORPORATION, RAILWAYS, ETC.

ADMINSTRATION AND MANAGEMENT INCLUDED



POINTS ORGANAISING STAFFINGMEANINGS 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.

Staffing is a management function which ensures jobs to be tolled with right people , with right knowledge, skill and attitudes

objectives The main objective of organizing is to make the optimum utilization of the available physical and human resources

The objective of the staffing is to obtain the most competent and efficient staff for the organization to improve to overall performance.

scope Organizing has a wider scope as it involves making use of the physical and human resource

Staffing has comparatively narrow scope as it involves selection and the use of only human resources/

Job creation Organizing functions defines and divides enterprises activities and creates jobs

Jobs created through the functions of organising are filled by staffing functions

steps 1.preparing list of activities2.classification and grouping these activities3.Assigning responsibilities 4.Delegating authority5.Establishing superior and subordinate relationship

1.Man power planning job analysis2.Recuritment3.selection of competent and efficient candidates4.placement & orientation5.Training 6.performance appraisal7.promotion & transfer8.Pay of compensation for service offered.



points District forum State commissionMeaning 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

A consumer disputes redressal agency at the state level established by state govt. is known as state commissions

Composition It consists of a president and two other members

It consists of a president is and two others members

Appoint ment of president

The president is appointed by the state government on the recommendation of the selection committee

The president is appointed by the state govt. after consultation with chief justice of high court

Area if jurisdiction It has jurisdiction over a particular district

It has jurisdiction over a particular state

Amount of compensation

As per consumer protection Act 1986,goods and services do not exceeds Rs 20 lac

As per the amendment made to the consumer protection Act,1986 compensation if any exceeds Rs 20 lac to 1Cr.

Appeal against court 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

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.



Points Sole trading concern Partnership firmMeaning It is a business run by a

single person for his exclusive benefit

It is business run by two or more persons as per deed for their personal benefit

Member ship The sole trading concern is carried on by one person

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

Capital The capital contributed by a sole trader is comparatively less as compared to partnership firm

The partners can raise large capital as compared to a sole trader. This is because the partners are more in number

Formation Formation of sole trading concern is very easy, simple and less costly

Formation of partnership firm is comparatively less easy, simple quick and more costly

Agreement As there is single owner the question of agreement does not arise

Agreement is necessary between two or more person to do business I.e oral or written

Business secrecy A sole trader can maintain 100% business secrecy , because of his single ownership

In a partnership firm, there can not be 100% secrecy, because of more number of partners

Sharing profits A sole trader enjoys all the profits of the firm. He need not share with any one

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 PLANNING ORGANISING Meaning It means deciding in

advance what is to be done, how to do it, when to do it and who is to do it.

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

Position In the sequence of managerial functions planning is the first and foremost function /.It precedes every other functions

In the sequence of managerial functions, organizing is the second important function. Although it precedes other functions, it is however performed after planning

Definition “planning is deciding in advance what to do, how to do it, when to do it and who is to do it”BY-KOONTZ AND O’DONNELL

“Organizing is an identifiable group of people contributing their efforts towards the attainment of goals”BY-MC FARLAND

Basis Planning is based on the available and potential human, physical and financial resources of the organization

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 sublevels

Steps 1.Analysis the 1.preparing list of



environment2.Establishment of objectives3.deciding and checking alternatives4.preparing mater plan and derivative plans5.implementation and reviews of planning.

activities2.classification and grouping these activities3.Assigning responsibilities 4.Delegating authority5.Establishing superior and subordinate relationship

points Middle level management

lower level management

Meaning

It refers to the intermediary level of management which comprises functionalManagers ,departmental Heads such as ,production purchaseFinance sales managers

It refers to supervisory or operational level of management. Comprises Junior executives etc.

Nature of functions It is concerned with execution of policies formulated or decided by the top level management

It is concerned with implementing policies and achieving targets of the organization

Skills required Requires human and persuasive skills and combination of technical and conceptual skills

It requires persuasive technical and operative skill

Accountability Middle level management is accountable to the top level management authorities

Lower level management is accountable to the middle level management

Span of time Implementing the policies needs lesser time comparatively formulating the same

Executing the plans may require lesser time as it the operational aspect of the policy

Main functions Implementing the policies directing the lower level

It is involved in operational activities of the organization



points Joint stock companies Partnership firmMeaning It is a voluntary

association of persons of some business for profit

It is a business owned and managed by two or more persons as per an agreement

membership Minimum 2 and maximum 50 for private and minimum 7 and maximum no limit on membership for public company

Minimum 2 and maximum 10 for banking and 20 for non-banking business

liability The liability of shareholders is limited to the extent of shares owned by him

Liability of partners is unlimited moreover joint and several

Stability Death or retirement of shareholder does not affect the stability of company

Due to death or retirement of any partner ,the partnership is dissolved

Publication of accounts A company must publish its annual accounts for the benefit of members ,creditors

A firm need not publish its annual accounts

Scale of operation A company is suitable for huge scale business operations

A firm is suitable for small scale operations



DISTRICT FORUM AND STATE COMMISSION (INCLUDED)

ADMINSTRATION AND MANAGEMENT (INCLUDED)

CONTROLLING AND PLANNING (INCLUDED)

points JOINT HINDU FAMILY BUSINESS

CO-OPERATIVE SOCIETY

MEANING 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 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

Number of Members No restriction to the number of member as membership is derived by birth in the family.

Minimum 10 person there is no maximum

Liability Two types of liability limited for co-parceners unlimited for the karta

The members of the co-operative society has limited liability



Ownership/Management Joint Hindu family is owned by all the members of the family.The management is done by karta

The ownership is in the hands of the members but management is by the managing commitee

capital Limited capital it is raised form the savings of the family members

Co-operative society collects its capital from its members who too are from limited means

Division of work Work is divided among the co-parceners if the karta is efficient

Work is divided among all the memebers.There is specialisation of work and division of labour.

Points Lower level management

Top level management

Meaning It refers to supervisory or operational level of management. Comprises Junior executives etc.

It refers to the highest level of authority of an organization . it consists of Board of Directors, managing directors, and president

Nature It is executor It is administrationDetermination of policy It is moderately

concernedIt determines policy

Evolution It is less difficult to evaluate their performance

It is difficult to evaluate their performance

PersonsIt involves moderate number of persons

It involves few persons

Span of period It has intermediate period

It has a long span of period

points Joint hindu family business

Sole trading concern

meaning It is owned and managed by members of joint hindu family

It is owned and managed by single person for his exclusive



benefitLegal control It is subject to

provisions of hindu succession act .1936

It is not controlled by any special act for the sole traders

Liability Karta liability is unlimited and co-parceners is limited

Liability of sole trader is unlimited

Sharing of profits Profits or losses are shared by the co-parceners

Entire profits or losses are owned by the proprietor

conflicts There is possibility of conflicts among the coparceners and karta

There is no scope of conflicts as it controlled by a single person

points Statutory corporation Government departments

Meanings It is formed by passing a special act of parliament

Government company is formed as a corporate body registered under the Act 1956

Legal status It is a separate legal entity distinct from the

government

It has a separate legal existence from the

govt.and the shareholders

Management It is managed by the board of directors

nominated by the govtIt is managed by the board of directors appointed by the govt.and shareholders

control It is controlled by the parliament

It is controlled by the govt and shareholders

Capital Share capital is owned by govt. it can borrow

funds from the govt and the public

51% or more of the paid-up capital is

contributed by the govt and rest is contributed

by private sector.



points Top level management Middle level management

Meanings It refers to the highest level of authority of an organization . it consists of Board of Directors, managing directors, and president

It refers to the intermediary level of management which comprises functionalManagers ,departmental Heads such as ,production purchaseFinance sales managers

Nature It is administration It is concerned with execution of policies formulated or decided by the top level management

points District forum National commissionmeaning It is established by state

govt in each district to give relief or settle the disputes of consumers who complain against manufacturers or traders

A consumer disputes redressal agency at the national level established by the central government is known as national commission

composition One president and 2 other members to be appointed by the state govt.

President and 4 other members appointed by central govt.

Qualification President should working or retired judge of district court and other 2 members includes atleast one women

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



Appointment of president

Appointed by state govt. by recommendation of selection committee

Appointed by the central govt after consultation with the chief justice of india

Area of jurisdiction It has a jurisdiction over a particular district

It has a jurisdiction over the entire nation

Amount of compensation

Compensation does not exceed 20 lac .as per amendments made to the Consumer Protection Act of 1936

Compensation does not exceed 1 Cr. As per amendments made to the Consumer protection Act of 1936.

Appeal against orders If a person is not satisfied with district forum order, he can apply to state commission within 30 days of the order

If the person is not satisfied with the order of national commission he can appeal to supreme court within 30 days of order

Points Professional management

Event management

Meaning Professional management means managing the affairs of the business organization by professionally qualified persons at all the levels of management

Event management is getting the desired events actually materialized to achieve certain objectives. it is the planning,organisaing and executing the plans of performing the event

Activity It is professional activity requiring administrative and technical skills

It is technical activity requiring special skills and leadership qualities

necessity Professional management is need in large size organisaition,which use modern techniques ,due

Event management is necessary to ensure safety and security of the visitors and the staff during the events. its



to globalization and increasing market competition it is essential

necessary to manage big event which attract large crowds and to avoid loss of life

Motive To serve the public of organization through instructions, guidance or advice to solve their problems

To serve the visitors and staff through communication, stage shows, background music, snacks, drinks etc.

Basis It creates platform for employees to accept changes willingly to cope up with automation, modernization and other related changes of recent trends

Event management provides platform fro marketing of goods and services provided by the manufacturers and service providers

Points Incorporation certificate Commencement certificate

Meaning It is a certificate issued to a joint stock company by the registration of companies signifying the birth of company

It is a certificate issued to public company by the registrar, giving a signal to commence the business

Effect On obtaining this certificate the company gets legal status

On obtaining this certificate the company starts its business

Which companies require it?

All joint stock companies i.e private as well as public company need such certificate

Only public limited company with a share capital needs such certificate

purpose It is a proof or evidence of the fact that the It enables the public



company is incorporated and a private company can start its business operations immediately on receiving such certificate

company to start its business operations immediately on the receipts of such a certificate

Order This certificate must be obtained first

This certificates obtained only after incorporation certificate

Implication for not obtaining

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

The public company with a share capital must obtain it. otherwise it will not be allowed to commence business

points Equity shares Preference shareMeaning Equity shares are those

shares which enjoy rewards as well as bear risks of the company.They provide permanent capital to the company.

Preference shares are those shares which enjoy certain preferences ,as to payment of dividend and repayment of capital ,.over the equity shareholders

Nature of preference They do not enjoy preference over preference shareholders in terms of receiving dividend and repayment

They enjoy preference over equity shareholders in terms of payment of dividend and repayment of



of capital capitalDividend They normally get

higher dividend .They get dividend after making payment to preference shareholders

They get a regular dividend. They enjoy a preference for payment of dividend over the equity shareholders

Voting rights They equity shareholders enjoy normal voting rights

They donot enjoy voting rights except on those matters which effect their interest

Face value Normally equity shares are issued for a face value of Rs 10/-

Normally preference share\s are issued for a face of of Rs 100/-

Bonus share Equity shareholders are eligible for bonus shares, if issued by the company

Preference shareholders are not eligible for bonus shares , if issued by the company/.

Points TAYLORS CONTRIBUTION TO MANAGEMENT

FAYOLS CONTRIBUTION TO MANAGEMENT

CONCERN Taylor’s technique and principle are concerned with worker’s

Principles are concerned with management efficiency

Level Taylor started his studies and approach from lowest level in the organization

Fayol started his studies and approach from the highest level oin the organization

Focus Taylor laid focus on eliminating wasteful

Fayol laid focus on development of



movements principles for better management

emphasis Taylor laid great emphasis on standardization of work

Fayol laid great emphasis functions of managers

Personality Taylor developed a personality of scientist and became famous as father of scientific principles

Fayol developed the personality of a researcher and practitioner.ge become famous as father of general management.

Main contribution Main contribution is development of scientific techniques and scientific principles

Main contribution was development of 14 principles of general management

GOD IS GREAT


Organisation Commerce Notes of H.S.C.

Documents

Transcript of Organisation Commerce Notes of H.S.C.