PRINCIPLES OF MANAGEMENT

& DECISION MODELING

Subject code: 13.701

S7 Mechanical Engineering

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 MODULE-1
EVOLUTION OF SCIENTIFIC
MANAGEMENT

PRESENTED BY,
VINEETH.V
ASST. PROFESSOR
DEPT. OF ME
CCET
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 INTRODUCTION
• Management is the creation and maintenance of
an internal environment in an enterprise where
individuals working together in groups, can
perform effectively and efficiently towards the
attainment of organizational goals.
• Management is the act of doing and getting
things done by others.
• Management is responsive to many elements of
social, ethical, economic, political environment
which affects its area of operation.

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 INTRODUCTION
• Management is the process of managing 6M’s.
They are:
1. Men
2. Material
3. Money
4. Machinery
5. Market
6. Methods

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 DEFINITIONS: MANAGEMENT
DEFINITIONS:
• According to Mary Parker Follet “Management is an
art of getting work done through people”, to achieve
the company goals or objectives, with satisfaction
for employer, employees and the public.

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 DEFINITION: MANAGEMENT
• According to Henry Fayol “to manage is to
forecast and plan, to organise, to command, to
coordinate and to control”.

• According to Harold Koontz and Heinz

Weihrich “Management is the process of
designing and maintaining an environment in which
individuals, working together in groups, efficiently
accomplish selected aims”.
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 MANAGEMENT
• Lack of proper management results in:
– Wastage of time
– Wastage of money
– Wastage of other resources.
• Management is needed in various areas:
– Our house
– Schools
– Hospitals
– Restaurants etc

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 IMPORTANCE OF MANAGEMENT
• Management helps in achieving group goals as
well as personal goals.
• It helps in achieving organisational goals, social
and personal goals.
• It increases efficiency.
• It helps in development of society.

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 ADMINISTRATION
• It is a decision making function (thinking).
• It is concerned with formulation of broad
objectives, plans and policies.
• More important at higher level of
management.
• It decides:
– What is to be done?
– Where is to be done?

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 ORGANISATION
• Organisation is the framework of management.
• It is the function of putting together 6M’s to
different parts of an enterprises into working
order.

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 SCIENTIFIC MANAGEMENT
• It refers to application of scientific methods to
management practices in decision making
process for solving management problems
rather than depending on Rule of thumb.
• Scientific method consist of research and
experimentation, collection and analysis of
data and formulation of certain principles on
the basis of analysis.

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 SCIENTIFIC MANAGEMENT
What is a 'Rule Of Thumb‘?
• A rule of thumb is a general principle that
gives practical instructions for accomplishing
or approaching a certain task.
• Typically, rules of thumb develop as a result of
practice and experience rather than from
scientific research or theory.

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 SCIENTIFIC MANAGEMENT
It consist of :-
a. Observing and analysing each task.
b. Determination of standard of work.
c. Selecting and training men to perform their
jobs.
d. Ensuring the work is done in most efficient
manner.

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 Objectives: MANAGEMENT
Objectives:
• To improve performance in the organisation.
• To yield higher production per resources.

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 Features: MANAGEMENT
Features:
• Planning & training workers for effective
result.
• Improved work and work efficiency.
• Increased labour productivity.
• Reduced wastages.
• Monitoring work and offering appropriate
instructions and supervisions.
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EFFECTS OF: SCIENTIFIC MANAGEMENT
• Rationality at work place improved as logic, how
to work and measure production.
• Effective work ethics yield more respect, morals,
and values in relationship towards working
personnel, administration, community and
company rules and regulations.
• Has standardized best practices.
• Made knowledge transfer possible between
workers.
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ADVANTAGE: SCIENTIFIC MANAGEMENT
• Enhanced teamwork
Co-operation between managers and workers
• Specific solutions
Management based on observation and experiment for
context
• Better planning and decision making
• Improved democracy in workplace
• Improved physical working conditions for employees
• Increased opportunities for workers to acquire scientific
training

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DISADVANTAGE: SCIENTIFIC MANAGEMENT
• Suitable for small organisations only;
unsuitable in big firms.
• Managerial decisions may involve strictness
and stress for managers due to need for
complete control over the workplace.
• Influences feelings of pressure among
workers may de-motivate workers.

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 EVOLUTION OF SCIENTIFIC
MANAGEMENT

• Frederick Winslow Taylor (F W Taylor…1856-1915)

• Henry Fayol (1841-1925)

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 Taylor’s 6 Principles of SCIENTIFIC
MANAGEMENT
1. Replacement of ‘rule of thumb’ work method with method
based on scientific study of task
 Decisions are made by the application of scientific method to the problem
concerned
 Scientific method consist of research and experimentation, collection and
analysis of data and formulation of certain principles on the basis of
analysis.

2. Scientific selection and training of workers

 According to Taylor, the selection of workers should be such a way that the
right person for right job and selected workers are to be trained

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Principles of SCIENTIFIC MANAGEMENT
3. Labour- management co-operation
 Developed through mutual understanding and change in thinking
 Provide detailed instruction and supervision for each worker in the given task

4. Equal division of responsibility

 Divide the work equally between managers and workers
 Manager apply scientific management to plan and organise the work
 Workers should be responsible for the execution of the work with the
management instruction

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Principles of SCIENTIFIC MANAGEMENT
5. Maximum output (no restricted output)
 Scientific management involves continuous increase in production and
productivity instead of restricted production.

6. Harmony in group action (no conflict)

 There should be mutual give and take situation and proper understanding
so that group as a whole contributes to the maximum.

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Henri Fayol’s 14
Principles Of
Management

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 HENRY FAYOL’S 14 PRINCIPLES OF
MANAGEMENT
SI No: 14 Fayol’s principles of management
1 Division of Worker
2 Authority & Responsibility
3 Discipline
4 Unity of Command
5 Unity of Direction
6 Subordination of Individual interest to General interest
7 Remuneration of Personnel
8 Centralisation
9 Scalar chain
10 Order
11 Equity
12 Stability of worker / tenure
13 Initiative
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14 Espirite de corps
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CONTIBUTIONS OF : F W Taylor &
Henry Fayol

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 Functions of Management
1. Planning
2. Organising
3. Staffing
4. Directing
5. Controlling
6. Decision making

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 1. PLANNING
• Planning is the initial task of management.
• Planning is the act of deciding advance
– What to do?
– When to do?
– Where to do?
– How to do?
– Who will do a particular job?

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 PLANNING
• It helps in determining future course of action
to achieve organisational goals.
• It involves think before doing.
Eg.. Mobiles like Samsung, Apple, Redmi etc

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 2. ORGANISING
• It refers to process of making orderly
determination and arrangement of the task to
achieve certain company goals.
• It involves organise of physical facilities,
capital, personnels.
• Establish a framework in which responsibility
are defined and authority are laid down.

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 2. ORGANISING
• IT INVOLVES:
– Divide the work into component activity
– Assign work to individuals
– Delegate authority and responsibility
– Co-ordinate the activity

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 3. STAFFING
• It is the process of selecting, training, promoting
and retire of workforce.
• It involves developing & placing right people in
right place at right time in an organisation.

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 4. DIRECTING
• It is the process by which the plans are guided
and performed into operation.
• It involves motivating, guiding and supervising
subordinates towards company objectives.

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 5. CONTROLLING
• It is to match actual performance with the
plans and to point out defective work to
rectify them and prevent re-occurrence.
• It sets standards to measure the performance
and task corrective action if required.
Eq.. Quality control, cost control, Inventory
control

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 6. DECISION MAKING
• It is the process by which a course of action is
chosen from available alternatives for the
purpose of achieving desired results.
• Good decision making ability is key to
successful carrier in managemnt.

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 LEVELS OF MANAGEMENT
• Levels of management is the arrangement of
managerial positions in an organisation.
• In every organisation, there is a chain of superiors
and subordinates from highest to the lowest. This
chain is known as chain of command or
management hierarchy.
• The hierarchy of management positions from top
to bottom is called as Levels of Management.

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 LEVELS OF MANAGEMENT
• It refers to a line of command between
various managerial positions in an
organisation.
• It determines the size of business and number
of workforce in the organisation.

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 3 LEVELS OF MANAGEMENT
• Levels of management are classified into
3 levels:
1. Top level management
2. Middle level management
3. Lower level management

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LEVELS OF MANAGEMENT

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 1. TOP LEVEL MANAGEMENT
• It is the head of an organisation.

• It consist of Board of Directors (BOD) and Chief

executive officer(CEO) like Chairman, President,
Managing Directors (MD).

• It is the ultimate source of authority and it

manages goals and policies of an organisation.
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Functions: TOP LEVEL MANAGEMENT
• Lays down the overall long term objectives of the
organisation.
• Formulates broad policies and strategic plan.
• Organises the business into various departments
and appoints departmental heads.
• Provide direction and leadership to the
organisation as a whole.
• Co-ordinates and control the activities of
different department

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 2. MIDDLE LEVEL MANAGEMENT
Middle level consist of:
• Branch managers,
• Heads of functional department such as
purchase manager, marketing manager,
finance manager, personnel manager etc.

• They are responsible for the proper

functioning of their respective departments.
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Functions: MIDDLE LEVEL MANAGEMENT
• Execute plans of the organisation in accordance with
policies of top managers.
• Transmit orders and issues detailed instructions to
lower level management
• Communicate the problems and suggestions of
supervisory management upwards.
• Plan activities of various work units within the same
department
• Serve a link between top level and lower levels
management.
• Take departmental decisions.
• Guide and inspire lower level managers to attain goals.

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 3. LOWER LEVEL MANAGEMENT
• It is also known as Supervisory or operative
level of management, ie. Section officers,
Superintendent, supervisors, foreman, sales
officers and so on.
• It is concerned with the control of the
performance of the operative employees.

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Functions: LOWER LEVEL MANAGEMENT
• Planning of day to day life work.
• Assignment of work and issuing offers and instructions.
• Arranging materials, machinery, tolls etc.
• Supervising the workers and assisting them by
explaining work procedure.
• Maintain close contact with workers to ensure
discipline
• Evaluating operating performance.
• Taking corrective actions if needed
• Sending reports to higher authority.
• Communicating grievances and suggestions to higher
authority
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 SKILLS OF MANAGEMENT
• To perform various management functions
effectively, management must posses 3 types
of primary skills identified by “Robert Katz”.

• 3 types of skills are:

1. Technical skills
2. Human skills
3. Conceptual skills
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 1. TECHNICAL SKILLS
• It involves specialised knowledge and proficiency
in executing work related techniques and
procedures.
• It is concerned with “What is done” with specific
tools and techniques in specialised field.
• It is learned by accountants, engineers and are
developed by actual practice on the job.

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 2. HUMAN SKILLS
• It refers to work effectively with others on a
person to person basis and to build up co-
operative relation to achieve organisational
objective.
• Human skills are required to motivate and
lead people in the organisation to achieve
personal satisfaction as wells as company
objectives.

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 3. CONCEPTUAL SKILLS
• It refers to ability to see the organisation as a
whole
• It is concerned with “why a thing is done”
• It is required to formulate plans.

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 SKILLS OF MANAGEMENT
Thus,
• Technical skills deals with ‘things”
• Human skills deals with “people”
• Conceptual skills deals with ‘ideas”

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SKILLS OF MANAGEMENT

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ORGANISATION STRUCTURE

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 ORGANISATION STRUCTURE
• Organisation structure is the network of
relationship between the various positions in
the organisation.
• An organizational structure defines how
activities such as task allocation, coordination
and supervision are directed toward the
achievement of organizational aims.

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 ORGANISATION STRUCTURE
• Organisation fixes the responsibilty and authority
to the workers and managerial people and makes
them linked in a particular structure called
organisation structure.
• The structure of one industrial organisation
depends on:
– Size of organisation
– Nature of product
– Complexity of problems being faced.
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 Types: ORGANISATION STRUCTURE
Organizational structure is classified into 7:

1. Line & Staff Organization*

2. Project Organization*
3. Matrix Organization*
4. Line or Military or Scalar Organization
5. Functional Organization
6. Divisional Organization
7. Free-Form Organization
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 1. LINE & STAFF ORGANISATION
• It refers to a pattern in which staff specialist
advice line managers to perform their duties.
• In large organization operating on a big scale,
managers can not give careful attention to every
part of the management.
• Managers are unable to think & plan due to busy
schedule in ordinary task of production & sales.

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 1. LINE & STAFF ORGANISATION
• Hence some task is deputed to do the work of
investigation, recording & research & finally
advice to managers.
• Thus staff provides or brings specialisation by
assisting the line officers.
• The line maintains the discipline & stability.

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 1. LINE & STAFF ORGANISATION
• Staff provides expert information & helps to
improve overall efficiency.
• The staff are the thinkers & the line are doers.
• Usually staff report to the executive & gives
advice on subject of his speciality.

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 ADVANTAGES
• Planned specialized System
• Quality decision
• Less wastage of men, machine hours & material.
• Discipline problem is solved
• No confusion.
• Prospect for personal growth
• Training ground for personnel

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 DISADVANTAGES
• Line & Staff conflicts
• Lack of well defined authority
• Product cost will increase

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 APPLICATION
• It is very common among medium & large enterprises

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 2. PROJECT ORGANISATION
• It is a popular organizing structure
• The structure can be changed rapidly
according to the environmental changes &
project basis in the organization.
• It adds the required one’s & deletes the
unnecessary one’s.

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 2. PROJECT ORGANISATION
• It is suitable for taking small number of larger
projects with long duration.
• When a particular project is completed, the
concerned division may disappear.
• It is created for only one time completion of
project.

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 2. PROJECT ORGANISATION
• The project manager are responsible for
completion of the project. He co-ordinates the
activities of the project.
• It is one time task.
• It is unique an unfamiliar to present
organization.
• It is complex & calls for a high degree of
interdependence among the project task.

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 ADVANTAGES
• Provide more flexibility for the utilization of
resources.
• Adopted to environmental demands.
• It allow maximum use of specialised
knowledge & skills which can be transferred
from one project to another.

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 DISADVANTAGES
• It creates feelings of insecurity & uncertainity
among people.
• Less loyalty of people with the organization.
• Lack of clarity of their role among members in
the organization.

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 3. MATRIX ORGANISATION
• It is applied when the organization has the large
number of more projects.
• The activities of the various projects can be
accomplished through temporary departments.
• When one project is completed, its resources are
directed to other project work.
• The project manager is usually not completely
responsibility for resources, instead he shares
them with others in the organization.
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3. MATRIX ORGANISATION

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 3. MATRIX ORGANISATION
• Personnels are drawn from respective
functional departments.
• Upon completion of projects these people
may return to their original departments.
• Each functions has two bosses;
– administrative head &
– project manager.

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 APPLICATION
• Manufacturing industries
• Aerospace
• Chemicals
• Electronics
• Banking

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 ADVANTAGES
• Better planning & control to meet project deadline.
• It is quite flexible structure.
• It improves motivation among people to complete the
project.
• Share resources with the rest of the organizations.
• Decentralised decision making

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 DISADVANTAGES
• At initial level it becomes quite costly because of top
heavy management. (high administrative cost)
• There is always power struggle.
• Confusion over authority and responsibility

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 AUTHORITY
• Authority is the power or right of superior to
give orders to sub-ordinates & make decisions.
• Henry Fayol defined authority as “the right to
give orders & power to exact obedience”.
• Authority flows from top to bottom.

Top management  Bottom management

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 Two types of authority:

1) Official authority
2) Personal authority

• Official authority is the authority which

derived from a person on account of his
position in the organization.
• Personal authority is derived by a person or
account of his intelligence, knowledge, skill &
experience.
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 RESPONSIBILITY
• It is an obligation to perform the assigned duty or
order.
• According to Davis, the Responsibility is defines
as “an obligation of individuals to perform
assigned duties to best of his ability under the
direction of his executive leader”
• It is originated from superior-subordinate
relationship.
• It is the ability to follow orders.
• It always flows upward from bottom to top level.

Bottom management  Top management

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 ACCOUNTABILTY
• It is the obligation or liability to carry out
responsibility and exercise of authority in
terms of performance of standard established.
• A subordinate have to answer his superior
from whom he received authority
• One is thus accountable to his boss for his
actions.

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AUTHORITY, RESPONSIBILITY &
ACCOUNTABILITY

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 AUTHORITY & RESPONSIBILITY
DISTINCTION AUTHORITY RESPONSIBILITY
Meaning It is the power of superior It is an obligation to perform
to give orders to others the assigned duty or order
Requires Ability to give orders Ability to follow orders

Source of orgin Emerges from formal Emerges from superior

position in organisation subordinate relationship
Direction of It flows to downward level It flows to upward level
flow
Purpose To make decisions and get it To execute the duties assigned
executed by the superior.
Duration Continues for long period Ends as soon as the task is
accomplished
Delegation Can be delegated Cannot be delegated

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AUTHORITY & RESPONSIBILITY

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 SPAN OF CONTROL
• It is the no: of subordinates that a
superior(manager) can directly control
• It has implication for work flow, communications
& opportunities for promotion in a company.
• It suggest how the relations are designed
between a superior & a sub ordinate in an
organization.
Eg: A manager with 5 direct report has a span of
control of 5.
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SPAN OF CONTROL

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 SPAN OF CONTROL
Factors affecting span of control:
• Nature of organisation
• Nature of job
• Skills and competencies of manager
• Employees skills and ability
• Kind of interaction between superior and
subordinates.

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 SPAN OF CONTROL
Two types of span of control:

1)Narrow span of control.

2)Wide span of control.

1)Narrow span of control.

• It means a single manager or supervisor oversees few
subordinates.
• Give rise to a tall organisation structure.
• More expensive due to more number of superiors.
• More opportunity for growth as number of levels are
more.
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 SPAN OF CONTROL
2)Wide span of control.
• It is a single manager or supervisor oversees a
large number of subordinates.
• Give rise to flat organisational structure
• Easy for managers to in touch with subordinates
and to subordinates them
• More flexible, effective communication, prompt
decision making.

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 SPAN OF CONTROL
• Modern concept :
Span of control is 15-20 subordinates per manager
• Traditional concept :
Span of control is 6 subordinates per manager

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SYSTEM CONCEPT OF MANAGEMENT
• A system is an set of distinct parts that
interact with or without environment to form
a complex whole.
• An organisation is also a system with parts
such as employees, assets, products,
resources and information that forms a
complete system.

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SYSTEM CONCEPT OF MANAGEMENT
A system can be:
1. Closed system
2. Open system
1. Closed system
• A system which are not affected by its
environment
• It is self contained and self maintained
• It is static and rigid
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SYSTEM CONCEPT OF MANAGEMENT
2. Open system
• It is a system which interact with environment
• It is dynamic and flexible
• It has feedback mechanism
• It have to be adjusted according to
environment

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SYSTEM CONCEPT OF MANAGEMENT
3 elements of open system:
1. Input : resources like employee, equipment
etc
2. Throughputs : inputs are transformed
3. Output : yield product or services

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SYSTEM CONCEPT OF MANAGEMENT
• A management system is framework of
policies, processes and procedures used by
organisation to ensure that it can fulfill at the
tasks required to achieve its objectives.

Limitations:
• Lack of universality

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FEATURES OF MANAGEMENT SYSTEM
• Management as a social system
• Management as an open system
• Adaptive
• Dynamic
• An integrated approach
• Probabilistic
• Multilevel and multidimensional
• Multivariable

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FORMATION OF COMPANIES /
OWNERSHIP OF THE FIRM

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 FORMATION OF COMPANIES /
OWNERSHIP OF THE FIRM
• The Ownership of a company is represented
by the right of an individual or a group to
acquire legal title to assets and to enjoy the
profits from such possessions and controlling
them
• This right is vest in private individuals or group
of people or government sector or private
sector bodies

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 FORMATION OF COMPANIES
• The formation of a company involves 4 main
stages;
1. Promotion
2. Incorporation
3. Raising of capital
4. Commencement of business

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 FORMATION OF COMPANIES
• The important of formation of company
ownership are ;
1. Individual or sole proprietorship
2. Partnership organization
3. Joint stock company
a) Private limited company
b) Public ltd company
4. Cooperative society/ organization
5. Government organisation

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 1. PROPRIETORSHIP
• It is a business owned by a single man
• The owner invests capital , employees and
machines, hence he enjoys all the benefits
• The owner has the right to determine the
plans and policies of operation
• The owner is fully liable for all debts
associated with the business

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 ADVANTAGES
• Easy formation
• Owner is free to make any decisions
• Simplicity in the organization and expenses in
starting are minimum
• Owner can taste coustomer needs directly and
can meet it
• Secrecy can be maintained
• Minimum legal restrictions
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 DISADVANTAGES
• The owner cannot be master of all techniques
like management, sales, engineering etc
• Unlimited liability for debts and losses is involved
• Firm may stop with the death of the propreietor

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 APPLICATION
• Enterprises requiring a small capital, single owner,
less risk

Example :
• Auto repair shop
• Wood working shop
• Printing press

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 2. PARTNERSHIP ORGANISATION
• It is the relationship between the person who
have agreed to share profit of a business
carried out by all or any one of them acting for
all.
• It is the association of or more person to carry
on as co-owners of business for profit. (upon
20 person incase of non banking business and
upto 10 person in case of banking business)

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 2. PARTNERSHIP ORGANISATION
• It depends on mutual confidence, adjustments
and cooperation between the partner.
• Every partner is liable for the acts of partners
• To avoid any complication in future, the
constitution of the company may be written in an
agreement form known as “partnership deed”

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 2. PARTNERSHIP ORGANISATION
Partnership Deed consist of following 8 information's:
a) Name of the firm
b) Name of the business
c) Date of starting business
d) Money contributed by each partner
e) Allotment of management functions among partners
f) Salary if any, allowed to manage partners
g) Rate of interest on capital invested, if any.
h) Basis for the introduction of any new partner.

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 2. PARTNERSHIP ORGANISATION
6 kinds of partner
1. Active partners
2. Sleeping partners
3. Nominal partners
4. Secret partners
5. Minor partners
6. General partners

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 ADVANTAGES
• Large capital can be collected
• Firms posses different skills from his partners
• There is a definite legal status
• Can borrow money easily from various functional
or financial institution
• Incentives for success is high
• It associate tax advantage with it
• Not subjected to strict govt. supervision
• For losses, more than 1 person to share
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 DISADVANTAGES
• Mistake of partner may cause a big loss to all
partners
• Risk involve is more
• Chance of misunderstanding among partner is
more
• It comes to an end if a partner dies.
• Lack of stability

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 APPLICATIONS
• Medium engineering firms
• Cinema theatres
• Education institutions
• Medical clinics
• Retail traders etc

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 3. JOINT STOCK COMPANY
• It is an association of several persons called
shareholders, who joined together for profit
and agree to support capital divided into
shares that are transferable for carrying a
specific business.
• It comes into existence only after registration
under Indian Companies Act or under special
act of legislation.

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 JOINT STOCK COMPANY
• Shareholders are the owners of the company.
• The member of company are not held liable for
the debts hence limited liability of members.
• Only few elected directors can manage the
company.
• No maximum limit to memerbership in a public
company.
• Govt has statutory control over company for
protection of shareholders, creditors, society etc

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 JOINT STOCK COMPANY
2 types of Joint stock company:
• Private limited company
• Public limited company

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 a. PRIVATE LIMITED COMPANY
• It resembles much with partnership and has the
advantage of big capital can be collected than
partnership.
• Capital is collected from private partners.
• Maximum member is 50 and minimum 2.
• Some of them are active others are sleeping.
• Auditing of accounts should be done.
• Members only receive a copy of balance sheet and
auditors report.
• Govt does not interfere in working of this company

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 b. PUBLIC LIMITED COMPANY
• Capital is collected from public by small shares
of values of Rs 50,20,10,5 etc
• The no. of shareholders should be minimum 7
but there is no upper limit.
• The affairs of company are managed by an
elected body known as Board of directors.
• The directors of company maximum 7 directors
are subject to rotation.

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 PUBLIC LIMITED COMPANY
• It has to issue a prospectus to public and it
should send the financial statement to all
members and to the registrar.
• It must get it accounts audited every year by
registered auditors.
• It can start only after receiving the
“Certificate to commence business”

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PRIVATE LIMITED vs3 PUBLIC LIMITED
Private ltd company
1. No. of members
-Minimum 2 members
-Maximum 50 members
2. It can start after getting
“Certificate of incorporation’
3. Share are not transferable
4. No limit of directorship
5. No statutory meeting required
Public ltd company
No. of members
-Minimum 7 members
-No upper limit
Commencement of business can be
done after getting second certificate
‘Certificate of commence business”
shares are free transferable
20 Director is limited
It has to hold statutory meeting
within specific period after start of
business
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 ADVANTAGES
• Liability being limited
• Shares are transferable
• Specialist services can be utilized
• Risk or loss is divided among many shareholders
• Not affected by death of shareholders

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 DISADVANTAGES
• Purchase or sale of share is possible
• Team spirit is lacking
• Difficult to preserve secret

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 Application
• Fertilizer factories
• Steel mills
• Heavy duty engg concerns

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 4. COOPERATIVE SOCIETY
• It is an association of persons who have voluntarily
joined together to achieve a common economic
objectives, irrespective of caste, creed, religion etc
• They may be agriculturist, artisans, consumers,
laborers etc
• It is registered and regulated by Cooperative
society act of concerned state 1912

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 Aim : COOPERATIVE SOCIETY
• It does not aim at maximization of profit
• Main aim is to self–help and mutual help.
• The idea is to stop exploitation of customers,
workers, society and money lenders,
• Service to society
• No profit maximization
• Working together
• Equality of opportunities

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 COOPERATIVE SOCIETY
• Slogan for corporation is “one for all and all for
one”.

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 Principles features
• Voluntary association
• Democratic management
• No profit motive, service motive
• Self help and mutual help
• Distribution of surplus
• Registered under cooperative society act 1912
• Minimum 10 person needed and maximum 100
• Limited liability
• “One man one vote” rule

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 ADVANTAGES
• Easy to form
• Fully democratic management
• Limited liability
• Governmental patronage
• Internal financing
• Lower operating cost
• Social welfare aspects

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 DISADVANTAGES
• Limited capital
• Insufficient management
• Rifts among management
• Rigid rules and regulations
• Political interference
• Lack of motivation

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 GOVERNMENT ORGANISATION/AGENCY
• It is a permanent or semi permanent organization in
the machinery of government, that is responsible for
the oversight and administration of specific function
such as intelligent agency, appointed by commission
• A govt or state agency may be established by either a
national government or a state government within a
federal system.
• It can be established by legislation or executive powers.

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 GOVERNMENT ORGANISATION
• It is a legal entity that undertakes commercial
activities on behalf of an owner government.
• Their legal status varies from being a part of
govt to stock companies with a state as a
regular stockholders.
• Eg.. BSE, NSE, Indian railways, IREL, KMML.

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THANK U

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