Full Unit 2

K.VIDHYA / MBA / IEM / U2 2.
UNIT-II
DEFINITIONS OF MANAGEMENT
1. Management is an art of getting things done through others

2. According KOONTZ, management as an art of getting things done through
formally organized groups.
Manager directs the efforts of other people rather than performing the task
himself.
3. D.J.CLOUGH: Management is the art and science of decision making and
leadership. This definition highlights both practical (art) and theoretical
(science) aspects of management.
Management as an Art:
Art involves practical application of personal sills and knowledge to achieve

concrete skills.
Main elements of an art

1. Personal skills,
2. Creativity,
3. Practical know how,
4. Constant practice aimed,
5. Result oriented
Management as a science
1. Systematized body of knowledge to particular field of enquiry
2. contain principles and theories developed through continuous observation,
experimentation and research.
3. principles applied under different situation
4. knowledge taught and learnt in classroom and outside (physics,
mathematics, economics, chemistry etc.)
DIFFERENCE BETWEEN ADMINISTRATION & MANAGEMENT
Administration Management
1. Legislative and determinative 1.executive function
function. 2.Implementation of policies
2. Determination of objectives 3.provides the entire body
and policies 4.influenced mainly by
3. Provides a sketch of the administrative decisions
enterprise.
4. Influenced mainly by public 5.mainly a lower level function
opinion and other outside forces. 6.involves doing and acting
5. Mainly a top level function
6. Involves thinking and planning
K.VIDHYA / MBA / IEM / U2 2.2
ELEMENTS / FUNCTIONS OF MANAGEMENT
The management functions are as follows.

• 1. Planning, 2. Organising 3. staffing 4. directing & 5. controlling
1. PLANNING
• Planning is the management function anticipating future and conscious
determination of a future course of action to achieve the desired results.
• It involves the formulation of what is to be done, who is to do and hat
results are to be evaluated.
Major components part of planning:
1. Initial planning which concerned with determination of objectives

2. Subsequent or route planning concerned with best alternative course of
action.
3. Final or operational planning to analyze technical, financial, personal and
other aspects.
Nature of Planning
1. Goal oriented
2. Planning is reference in future
3. It is primary function
4. Involves choice and intellectual process
5. Planning is continuous, long term or short term,
6. It is actionable, flexible, an integrated system and efficient for future
activities to
Increase the productivity, to avoid labor turnover and to reduce the cost.
PLANNING LEVELS
STRATEGIC PLANS TOP

Objective Long-
Long-range plans range
Policies plans
ADMINISTRATIVE PLANS
Organisastion MANAGEMENT
Motivation
Managerial control
OPERATIONAL PLANS MIDDLE
Rules
Method Medium
Procedure range
plans
MANAGEMENT
LOWER LEVEL
MANAGEMENT
Short
range
plan
STEPS IN PLANNING
BEING AWARE OF COMPARING ALTES

OPPORTUNITY IN LIGHT OF GOALS
in light of The market SOUGHT Which alter
Competition will give us the best
What customers want chance of meeting our
Our weaknesses goals at the lowest cost
And highest profit?
CHOOSING AN
SETTING OBJECTIVES ALTERNATIVES
OR GOALS Selecting the course
Where we want to be and
of action we will
What we want to
accomplish purchase
And when
CONSIDERING FORMULATING
PLANNING SUPPORTING PLANS
PREMISES Such as-Buy equipment
In what environment- But materials
internal Hire and train workers
Or external-will our plan
Develop a new product
operate
ITENTIFYING NUMBERING PLANS BY

ALTERNATIVES MAKING BUDGETS
What are the most Develop such budgets as:
promising Volume and price of sales
Alternatives to accomplish Operating expenses necessary for
Objectives?
plans.
Although the steps in planning are presented here in connections with major
programs, such as the acquisition of a plant or a fleet of jets of product,
managers would follow essentially the same steps in any through planning. In
practice, however, manager must study the feasibility of possible courses of
action at each stage.
All managers should know where they stand in the light of their strength and
weaknesses, understand what problems they wish to solve and why, and know
what they expect to gain. Setting realistic objectives depends on this
awareness. Planning requires realistic diagnosis of the opportunity situation.
2) ORGANISING
It involves establishing an intentional structure of roles for people to fill in an
organization. It is intentional sense of making sure that all the tasks necessary
to accomplish goals are assigned to people who can do their best.
• The purpose of Organization structure is to help in creating an
environment for human performance. It is an management tool not an
end itself.
• After determining the course and make-up of action the next stop, in order
to accomplish the task, to distribute the necessary work among the
working groups.
• It is the process of by which the structure and allocation of jobs is
determined in which responsibilities are defined and authorities and laid
down.
The process of organizing involves
1. Divide the work into component activities

2. Define responsibilities
3. Delegate authority and
4. Establish structural relationship.
3) STAFFING
The Managerial function of staffing involves manning the organization

structure through proper and effective selection, appraisal and development of
personnel to fill the roles designed into structure. The essence of staffing is the
place of the right man on the right job and at the right time.
STAFFING PROCESS
Primary phase Secondary Phase
1. Manpower planning 1. Training and Development

2. Recruitment 2. Compensation and Integration
3. Selection’ 3. Promotion, demotion and
Transfer
4. Placement 4. Personal welfare
5. Induction 5. Performance Appraisal
6. Human Relation.
• Staffing is the process by which managers select, train, promotes and
retire their subordinates
• It involves the developing and placing of qualified people in the various
jobs in the organization.
• Staffing is a continuous process. The aim is to have appropriate persons
to move into vacated positions newly created in the enterprise.
• Function of staffing is from Recruitment to Retirement.
4) DIRECTING
• Directing is the process by which actual performance of subordinates is

guided towards common goals of the enterprises. It includes:
1. Giving instructions to subordinates

2. Guiding the subordinates to do the work
3. Supervising the subordinates to make certain that the work done by them
is as per the plans established.
a. Leadership: is the quality of the behavior of the persons whereby
they inspire confidence and trust in their subordinates, get
maximum cooperation from them and guide their activities in
organized effort.
b. Communication: It is the process by which ideas are transmitted,
received and understood by others for the purpose of effecting
desired results.
c. Motivation: Motivating means inspiring the subordinates to do a
work or to achieve company objectives effectively and efficiently.
d. Supervision: supervision is necessary in order to ensure, 1. the
work is going on as per plan established and 2. the workers are
doing as they ere directed to do so.
5) CONTROLLING
- Controlling is the process that measures current performance and guides it

towards some predetermined goal.
- Controlling means checking up to ensure that the planned work is
progressing as per schedule and if not then to apply corrective action to
achieve the pre-determined objectives.
The process of controlling involves:
a. Observe continuously and study the periodic results of performance.
b. Compare this performance with the present standards.
c. Pinpoint deviations if any
d. Ascertain the exact caused of deviations.
e. Initiate and implement the corrective actions.
Controlling is the last phase in the management process. Control completes the
whole sequence of the management process.
Nature of controlling
1. Controlling makes for a bridge

2. Planning is the basis of controlling
3. Controlling is pervasive managerial exercise
4. It is the continuous process, aims at future.
5. It based on information feedback
TYPES OF MANAGEMENT
1. Development Management -- Research into materials, m/c,

process
2. Distribution Management -- Marketing, advertising, sales
3. Financial Management -- Economic forecasting, costing, accounting
4. Maintenance Management -- Up keeping of buildings, equipment
5. Purchase Management -- Tendering, buying, store keeping, stock
control
6. Production Management -- Analysis, Planning, scheduling, routing,
quality control
7. Transport Management -- Packing, warehousing, transport by air,

rail, water and road
8. Personnel Management -- Employee section, placement, training,
safety, health & welfare, etc.
9. Office Management -- Planning and control of office,
keeping records.
LEVELS OF MANAGEMENT
The different levels of management may be classified into three categories
Management /industrial management has got the following activity levels.
1. Top-level management:
Top level management includes a) Board of Directors b) Managing Director, c)
Chief executive, d) General manger, e) Owners, f) Shareholders.
• Setting basic goals and objectives.
• Expanding or contracting activities
• Establishing policies
• Monitoring performance
• Designing/Redesigning organization system
• Shouldering financial responsibilities etc.
2. Upper Middle Management

Upper Middle Management includes a) sales executive (manager),
production executive, financial executive, R&D executives, Accounts executive
- Establishment of the organization.
• Selection of staff for lower levels of management
• Installing different departments
• Designing operating policies and routines
• Assigning duties to their subordinates etc.
3. Middle Management
It includes a) Superintends, Branch manager, General foreman, etc.
- To cooperate to run organization smoothly
- To understand interlocking of departments in major policies
- To achieve coordination between different parts of the
organization
- To conduct training for employee development
- To build an efficient company team spirit
4. Lower Management
It includes a) Foremen, Supervisors, or charge-hands, office
superintendent, inspectors, etc.
- Direct supervision of workers and their work
- Developing and improving work methods and operations
- Inspection function
- Imparting instruction to workers
- To give finishing touch to the plans and policies of top
management
- To act as a link between top management and the operating force

(i.e workers)
- To communicate the feeling of workers to the top management.
5. Operating Force
It includes a) Workers, rank and file workman, skilled, semi-killed and
unskilled.
- To do work on machines or manually, using tools, etc
- To work independently (in case of skilled worker) or under the
guidance of supervisor.
MANAGEMENT SKILLS
By managerial skills, we mean the skills or qualities desired in managers, the

possession of which would enable them to act better as practicing managers.
1. Technical skill
- Technical skill might be termed as technical expertise.
- It is an imperative sill for managers at the lower level management.
Because it is actually these people who guide and supervise work of
operators under their subordination.
- Accordingly, it may range from knowledge regarding operation and repair of
a machinery, storage of materials, to training of subordinates.
2. Human skill
- By human skill we mean the ability to tactfully deal with human
beings and mould their behavior at work in the desired manner to
help attain the common objectives of the enterprise-most effectively
and efficiently.
- A manager has to provide effective supervision, motivation and
leadership that part of his subordinates.
- A human skill is equally needed by all manages- from highest to
the lowest authority in the management hierarchy.
- Application of human knowledge and skill may involve motivating
the sales force to achieve revised targets, or persuading the
subordinates to effect economies, and so on.
3. Conceptual skill
- It is concerned with concepts or ideas.
- It is imperative for top management level, necessary for the
middle management level and desirable for the lower level
management
- Application of conceptual knowledge and skills may involve
formulation of a plan to introduce a new product, to explore new
markets, or trying out new methods of production.
PRINCIPLES OF MANAGEMENT
Henri Fayol published certain principles for the soundness and good working of
mgt. According to him, the principles of mgt should be
o Flexible and not absolute
o Used with intelligence and with a sense of proportion
He listed 14 principles which are
1. Division of Labour / work
-- Dividing work on the principle that different workers are best fitted
for different jobs based on its capacity. The advantage/disadvantage is that
it leads to specialization.
2. Authority and Responsibility

-- Both should go hand in hand. An executive can do justice with his
responsibility only if he has authority.
3. Discipline
- This is required for efficient functioning of the organisation.
Discipline is described as respect for agreements that are directed at
achieving obedience, application and the outward of market respect.
4. Unity of Command
-- This essentially means that only one Boss should give the
instructions. This avoids confusion, mistakes and delays.
5. Unity of Direction
-- Like the previous one which concerns for personnel, this one deals
with the functioning of the body as a Corporate. It also implies that there
should be one plan and one head for each group of activities.
6. Subordination of Individual to General Interest

-- Interest of Individual should not be permitted or superseded. This is
necessary to maintain unity.
7. Remuneration
-- It’s the price paid to the employee for the services rendered by him
to the enterprise. It can be fair to bring maximum satisfaction to both the
employers and the employee.
8. Centralizations of Authority
-- This means that the Centre has the authority. This is required for
the best overall performance of the organisation. Centralization depends
upon nature, size and the prevailing complexity.
9. Scalar Chain
-- Managers may be regarded as chain of Superiors. This Chain of
Superiors when short-circuited and following it strictly will be detrimental to
performance.
10. Order
-- It implies that everything and everyone has his place in the
organisation. It should be arranged in such a way so that the
person/material should be in the right place at the right time.
11. Equity of Treatment

-- A Manager should treat his subordinate equally and with kindness
and justice. This makes the employees more royal and devoted towards the
enterprise.
12. Stability
-- A stable and secure workforce is an asset to the enterprise, because
unnecessary Labour turnover is costly. When instability occurs it will be
mainly due to bad mgt.
13. Initiative
-- It is one of the keenest satisfaction for an intelligent employee. A
manager should sacrifice his own personnel vanity in order to let his
subordinates exercise their own initiative. Also, he should encourage them
to take initiatives.
14. Esprit De Corps

- This principle emphasizes the need for teamwork.
TAYLOR’S SCIENTIFIC MANAGEMENT
Scientific Management consists in knowing what the management want the men
to do exactly and seeing to it that they do it in the best manner.
Principles of Scientific Management:

1. Science: not the rule of thumb:
The basic principle of S.M is the adoption of scientific approach to
managerial decision making.
2. Harmony- not discord:
Harmony refers to the unity of action, while discords refer to differences in
approach.
3. Co-operation-not individualism:
Co-operation refers to working on the part of people towards the
attainment of group of objectives.
4. Maximum production: in place of restricted production:
His view, the most dangerous evil of the industrial system was a
deliberate restriction of output. He encourage the maximum production to
increase the productivity.
5. Development- of each person to the greatest of his capabilities:
Management must endeavor to develop people to the greatest of their
capabilities to ensure maximum prosperity for both employee and
employers
6. A more equal division of Responsibility between management and workers:
This principle of S.M recommends a separation of planning from execution
7. Mental Revolution- on the part of Management and worker:
It involves a complete mental revolution on the part of both sides to
industry viz workers and management.
Contribution to SM by:
Henri Fayol:
Fayol believed that if any kind of business was to operate successfully, the
following six functions has to be performed. If any one was neglected, the
enterprise would suffer accordingly. The six functions are:
1. Technical Activities such as production and manufacturing
2. Commercial Activities such as buying and selling
3. Financial Activities such as capital
4. Security Activities such as protection of property and persons.
5. Accounting Activities such as Stock taking, balance sheets and costs.
6. Managerial or Administrative Activities such as planning, organizing and
command
Elton Mayo:
His idea was that logical factors were far less important that emotional
factors in determining production efficiency. He also concluded that work
arrangements in addition to meeting the objective requirement of production
must at the same time satisfy the employee’s subjective requirement of social
satisfaction at his work place.
Gilberth:
He suggested the first definition of ‘Motion Study’. He defined it as the
science of eliminating wastefulness resulting from unnecessary ill directed and
inefficient motions. According to him, the purpose of motion study was to
discover and establish the scheme of least waste methods of labour.
Gantt:
He developed the daily balance chart, known as Gantt chart. It shows the
graph of Output vs. Time. This proved to be revolutionary in the area of
Production planning and control. The Gantt chart is still being used and is the
fore runner of some of the commercial scheduling techniques.
ORGANIZATION
Organization involves the grouping of activities necessary to accomplish
goals and plans, the assignment of these activities to appropriate departments
and the provision for authority delegation and co-ordination. Organisation is the
form of every human association for the attainment of a common purpose.
Organizing consisting of the following steps:
1. Determination of the total workload and division of work

2. Grouping and sub-grouping of activities i.e., (Departmentation)
3. Assignment of duties
4. Delegation of authority
FORMAL AND INFORMAL ORGANISATION

Formal organisation Informal organisation
1. Origin
-achieving the objectives of the -It is a ‘self-generating process’.
enterprise. -certain socio-psychological factors
2. Objectives
-different departments have -No specific objectives
specific objectives
3. Functioning
-pre-planned rules, polices, -no such rules and procedure
procedures and programmes.
4.Authority-responsibility
relationships
-clear-cut and properly defined, -no such specific relationships
authority and responsibility
relationship shown in the
organizational chart.
5. Leadership
-group manager, is a leader with -Personal power.
official status and authority.
6. Communication system
-communication through the - grapevine in nature
scalar-chain. - spread from any person to any
person
7. Stability
-It is most stable
-It is least stable.
8. Political domination
-away from political domination.
-possible politically dominated.
PRINCIPLE OF ORGANISATION OR FEATURES OF ORGANISATION
1. Unity of objective: - common objectives

2. Efficiency: - objective at minimum possible cost
3. Division of work: - tasks are divided with efficient breakdown
4. Span of control: - effective number of employees under the superior
5. Scalar principle: clear unbroken line
6. Delegation: - lowest possible level
7. Functional definition: clearly defined duties and authority
8. Correspondence: - proper correspondence
9. Unity of command: - orders from only one superior
10. Unity of direction: - group of activities towards the same objectives.
11. Balance: - none of the functions should be given at the cost of others.
12. Exception principles: - decisions within the scope of his authority
13. Coordination: - secure unity of effort.
14. Flexibility: - free from complicated procedures
15. Continuity: - structured, continuity of operations
TYPES OF ORGANISATION
I. Line, Military or Scalar Organisation

• This is the oldest type of organisation.
• Direct vertical relationships.
• No provision for staff specialists.
• Simple, Direct instructions the subordinates.
• Decisions within the authority.
Shareholders
Authority
Flow Directors
M.D
Production Finance Marketing Personnel

Manager Manager Manager Manager
Works accounting advertising Training

Manager officer section section
Workers clerk salesman HR executive
Line Authority
Advantages of line organisation

1. Simplicity:
• Simple and old.
• Easy to establish and operate.
• Easy to explain to the workers.
2. Flexibility
• Changes can be made quickly and easily.
• Adjustments can be easily made to suit the changing conditions.
3. Quick decision:
• Decisions quickly and promptly.
4. Unified control:
• There is unity of command and control.
• Orders by one superior only.
• Activities are under the control of one executive.
5. Fixed responsibility:
• Every person knows responsibility.
6. Effective discipline:
• Strong discipline among the employees.
7. Economy:
• Less expensive in terms of overhead costs.
8. Speed action:
• Decisions can be made and executed promptly.
Limitation of line organization:

1. Overburdening:
• Overloaded with administrative work.
• Top executives have to be ‘superman’
• Business grows in size, needs staff assistance.
2. Instability:
• Success and survival depends upon a few individuals.
3. Lack of specialization:
• No scope for specialization.
• Over dependence lower efficiency of operation.
4. Autocratic control:
• Complete control of one executive, there is danger of authoritarian.
5. Delayed communication:
• Subordinates hesitate to offer suggestions.
II. LINE AND STAFF ORGANISATION
Line authority:
• Work is not delegated. But authority can be delegated, indicate the “line
of authority”.
Staff authority:
• Staff authority denotes a supportive and advisory work to the line
authority.
Board of Members
Board of Director
Personnel manager Private

Secretary
Taxation expert Chief Executives PRO
Labour expert Account

Officer
Production manager finance manager marketing

Manager
Subordinates subordinates subordinates
LINE
STAFF
Advantages of Line and Staff Organisation:

1. Discipline:
• Unity of command is maintained, as staff is not given executive authority.
2. Expert advice:
• Line executives get expert advice and guidance by the staff officers.
3. Balance decisions:
• Line executes can take better and more sound decisions.
4. Relief to line executives:
• Big relief to the line officers.
Disadvantages of line and staff organization:

1. Conflicts:
• Conflict between Line and Staff.
2. Advice ignored:
• Line executives may ignore staff advice.
3. Expensive:
• Expensive in terms of overheads.
4. Conflict between line and staff:
• Allocation of responsibility may not be very clear.
• Staff advice may be confused.
Line and Staff authority:

Line authority Staff authority
- responsibility and authority - provide advice
- primary objectives - supportive activity
- communication through - expert and specialized
scalar chain knowledge..

- make the salient decisions -
by
- exercising command
authority.
III. COMMITTEE ORGANISATION
“A committee is a group of people who meet by plan to discuss or make a
decision for a particular subject”.
Eg.: executive committee, finance committee, audit committee, bonus
committee, grievance committee, etc.
CHARACTERISTICS
1. Group of persons - at least two
2. Dealing specific problems
3. Constituted at any level
4. Go into details of the problems.
TYPES OF COMMITTEE
1. Standing or Ad Hoc committee:

• Standing: it exists continuously for indefinite period.
• Ad hoc committee: specific purpose or to solve a specific problem.
2. Decision-making committee:
• Making and executing decisions.
3. Line and staff committee.

• Line committee: Controlling and coordinating functions within a chain of
command.
• Staff committee: Advisory capacity, to implement its decisions.
4. Formal and informal committee:

• Formal: Constituted by organizational rules, regulations with specific
authority.
• Informal: Not as per any policies or rules of the organization.
Advantages of committee organisation:

1. Pooling of knowledge and experience.
2. Facility of coordination
3. Motivation through participation
4. Easy communication
5. A tool of management development
6. Consolidation of authority.
Disadvantages of committee organisation:

1. High cost
2. Slowness in decisions
3. Dividend responsibility
4. Misuse of committee.
IV. MATRIX ORGANISATION

• When an enterprise undertakes a large number of small projects; a matrix
organisation is more suitable. A matrix organisation is characterized by
two major features:
i. It undertakes a large number of small projects;
ii. There is a dual line of command, in a matrix organisation.

• Matrix organisation = Dual line of command + matrix culture + matrix
behaviour.
• “Matrix organisation represents a combination of functional departmental
organisation and project organisation”.
• Different project managers share resources and authority with functional
heads.
• When one project is over; its personnel and resources are diverted to
some new project.
General Manager
Production Finance marketing

personnel
Manager Manager Manager
Manager
Project
Mgr 1
Project
Mgr 2
Project
Mgr 3
Project
Mgr 4
-- Authority of project manager --- Authority of functional head.
Advantages:
1. It is oriented toward end results
2. Professional identification is maintained
3. Pinpoints product-profit responsibility
Disadvantages:
1. Conflict in organisation authority exists
2. Possibility of disunity of command exists
3. Requires manager effective in human relations.
V. STRATEGIC BUSINESS UNIT (SBUs)
• Companies have been using an organizational device generally referred to

as a strategic business unit (SBU).
• SBUs are distinct little businesses set up as units in a larger company.
• In some cases companies have also used the device for a major product
line.
• Eg. Chemical Company, used such products as phosphates, alkalies, and
resins.
• An SBU, for example must:
1. Have its own mission, distinct from the mission of other SBUs,
2. Have definable groups of competitors,

3. Prepare its own integrative plans, fairly distinct from those of others
SBUs,
4. Manage it resources in key areas, and
5. Have a proper size- neither too large nor too small.
General
Manager
Business manager
Production accounting Marketing sales product

Manager Manager Manager Manager development
Works man works works

Manager manager manager
Altanta Chicago dallas
Regional Regional Regional

manager manager manager
new york chicago los angeles
Product product product

Manager manager manager
A B C
INDUSTRIAL OWNERSHIP
(BUSINESS ORGANISATION / TYPES OF INDUSTRY)
Every business based on any one or other accepted legal form. Such legal form
gives the organization distinct states and helps the outsider to determine its
identity. Ownership can be divided into
1. Single ownership
2. Partnership
3. Joint Stock Companies
4. Co-operative Organisation
5. State and Central Government owned.
A) SINGLE OWNERSIP
Ownership means title to possession of assets of the enterprise. Individual
enjoy and exercise all rights of his own interest. One man business, one person
responsible for providing capital and bearing risk of undertaking and
management of the business.
Example: Printing Press, auto repair shop, wood working plan, Furniture mart,
small fabrication shop etc;
Advantages:
• Easy to establish, does not require complete legal formality.
• Flexible, owner enjoy profit, personal motivation.
• Minimum legal restriction and can maintain secrecy of business.
B) PARTNERSHIP
As the size of the business enterprise grows, it needs more capital and
inadequate a single owner. At this stage, the individual owner may wish to
associate with his more persons who have either to invest or to possess special
skill, knowledge to make business more profitable.
Partnership is defined as the relationship between persons who have agreed
to share the profits of a business carried on by all or any of them acting for all.
• It is association of two or more (minimum 2 and maximum=20 and 10 in
case of Bank) persons carry on as co-owners of a business for profit
earning.
Features are: Run through agreement by written or oral
• agent Principal relationship
• business carried on by all or any of them acting for all
Kinds of Partnership
1. Active Partners 2. Sleeping Partner

(Take part in management) (Do not take active part)
General Duties of Partners

1. Faithful to one another
2. Render true accounts for information
3. Co-operate and accommodate each other
4. Have confidence in each other
5. Mutual understanding
6. Respect the views of one another
TYPES
1. General partner
2. Limited partner
General Partner: each partner have full agency of power and each act as
individual proprietor.
Advantages: Large capital is available and posses much better talents,
judgment skills etc;
• G.P easy to form, inexpensive in cost
• Incentive for success is high
• There is definite legal status
• Partners have full control and posses full rights to all profits
• Partners associate tax advantage with it and can borrow quite easily
from bank
• Loss – shared by all partners.
• Unlimited liability , can suffer if wrong steps or decision taken
Application: General partnership dies very well in Law firms, Retail Trade,
Medical Clinics, Small engineering Firm etc;
Limited Partnership: It have one or more general partners

• Liability is limited and limited partners share the profit
• Limited partners do not interfere with control or management of the firm.
C) JOINT STOCK COMPANY
A Joint Stock Company is an association of individuals called shareholders who

join together for profit and agree to supply capital divided into share.
• J.S.C overcomes many advantages,
• Difficulties in raising capital and lack of facility for centralized
management
• Unlimited liability
• Death insolvency, insolvency, disablement, lunacy does not affect the
business of J.S.C
• It consists more than 20 persons
• Persons give name to the company and register it
• Managing body is Board of Director (BOD) elected by shareholders to
make policies, take decision and runs the company efficiently.
Types of Joint Stock Company
Private Limited
- In Private Limited capital is collected from the private partners, restricted
right to transfer shares.
- No of members 2 to 50 excluding employees.
- The company not file document such as list of directors with the Registrar of
Joint Stock Company and need not obtain certificate from Registrar for
commencement of business.
Public Limited
Capital collected from public in the form of shares, face value Rs.10, 100/.
Number of shareholders should not be less than ‘7’ and maximum –no limit.
The company has to Registrar list of directors, documents, and has to get
consent of Directors, Memorandum of Association.
1. Public Limited has to issue a prospectus to public and has to allot shares
within 180 days,
2. It start business only after receiving certificate to commence business.
3. Hold statutory meeting, Report to all members
4. No restriction to transfer of shares
5. Have accounted audited every year by registered auditors.
6. It hold general meeting every year.
7. Managing agents gets fixed percentage of Net Profit as remuneration.
Advantages
Huge amount raised, Limited liability, share transfer is possible, Company life not
affected due to death, risk or loss divided by partners. Examples are Steel Mills
(SAIL, POPSCO at Orissa), Fertilizer Factories and Engineering Concerns etc;
D) CO-OPERATIVE ORGANISATION
It is the forms of Private ownership contain features of large partnership, aims

to eliminate profit and to provide goods and services to members of co-operative
at cost. Members pay fees or buy shares. Special laws for formation and
Taxation. It based on ideal of co-operation and formed by persons to satisfy
common needs through mutual co-operation and collective efforts.
Forms
1. Consumers Co-operatives (in retail trade)

2. Producers Co-operatives service (Buying & selling-dairy, grain, fruit)
3. Co-operative farming(good quality forms)
4. Co-operative Housing
5. Co-operative Credit Society (provide loans)
E) PUBLIC SECTOR (Public enterprise)
It owned, managed and controlled by state and operated by the Government.

Public Sector accountable in terms of their results to parliament and State
Legislature. Example: Hindustan Steels, Hindustan Machine Tools, BHEL, Indian
Airlines, Life Insurance Corporation of India (LIC)
Objectives:
1. to provide infrastructure facilities

2. to promote economic development and create employment opportunity
3. to earn foreign exchange to export commodities (petroleum, oil, weapon)
4. to look after well being and welfare of public.
F) PRIVATE SECTOR
Serve personal interest, non-government sector. Constitutes mainly consumer’s

goods industries where profit possibilities are high, does not undertake risk-
having low-profit margin. Capital is collected from Private Partners.
Merits:
• Efficiency is high, wastage of material and labor minimum.

• Decision making is very important
• No interference of political or government
• Competent persons occupy –high levels (M.D, GM, CEO).

Full Unit 2

Uploaded by

Document Information

Original Description:

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Full Unit 2

Uploaded by

Copyright:

Available Formats

K.VIDHYA / MBA / IEM / U2 2.

1. Management is an art of getting things done through others

Art involves practical application of personal sills and knowledge to achieve

Main elements of an art

DIFFERENCE BETWEEN ADMINISTRATION & MANAGEMENT

ELEMENTS / FUNCTIONS OF MANAGEMENT

The management functions are as follows.

Major components part of planning:

1. Initial planning which concerned with determination of objectives

STRATEGIC PLANS TOP

BEING AWARE OF COMPARING ALTES

ITENTIFYING NUMBERING PLANS BY

The process of organizing involves

1. Divide the work into component activities

The Managerial function of staffing involves manning the organization

Primary phase Secondary Phase

1. Manpower planning 1. Training and Development

• Directing is the process by which actual performance of subordinates is

1. Giving instructions to subordinates

- Controlling is the process that measures current performance and guides it

1. Controlling makes for a bridge

1. Development Management -- Research into materials, m/c,

7. Transport Management -- Packing, warehousing, transport by air,

The different levels of management may be classified into three categories

Management /industrial management has got the following activity levels.

2. Upper Middle Management

- To act as a link between top management and the operating force

By managerial skills, we mean the skills or qualities desired in managers, the

2. Authority and Responsibility

6. Subordination of Individual to General Interest

11. Equity of Treatment

14. Esprit De Corps

TAYLOR’S SCIENTIFIC MANAGEMENT

Principles of Scientific Management:

Organizing consisting of the following steps:

1. Determination of the total workload and division of work

FORMAL AND INFORMAL ORGANISATION

PRINCIPLE OF ORGANISATION OR FEATURES OF ORGANISATION

1. Unity of objective: - common objectives

I. Line, Military or Scalar Organisation

Production Finance Marketing Personnel

Works accounting advertising Training

Workers clerk salesman HR executive

Advantages of line organisation

Limitation of line organization:

II. LINE AND STAFF ORGANISATION

Personnel manager Private

Labour expert Account

Production manager finance manager marketing

Subordinates subordinates subordinates

Advantages of Line and Staff Organisation:

Disadvantages of line and staff organization:

Line and Staff authority:

scalar chain knowledge..

1. Standing or Ad Hoc committee:

3. Line and staff committee.

4. Formal and informal committee:

Advantages of committee organisation:

Disadvantages of committee organisation:

IV. MATRIX ORGANISATION

ii. There is a dual line of command, in a matrix organisation.

Production Finance marketing