Amul co-operative

Name :- Panchal Nitin Gopal

Class:- F.Y.BMS
Roll no.:- 24
Subject:- Principal of Management

Submited To,
Prof. Shruti Naik

-: INDEX :Sr. No.

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Particulars
Introduction of Henry Fayol
14 Principal of Management
Introduction of Management
Defination of Management
Introduction of Amul co.
History of Amul co.
About GCMMF
Profitability of Amul co.
Level of Management
References

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Introduction of Henry Fayol :Henri Fayol (Istanbul, 29 July 1841 Paris, 19 November 1925) was a French mining
engineer and director of mines who developed a general theory of business administration
that is often called Fayolism. He and his colleagues developed this theory independently
ofscientific management but roughly contemporaneously. Like his contemporary, Frederick
Winslow Taylor, he is widely acknowledged as a founder of modern management methods.
Fayol was born in 1841 in a suburb of Constantinople. His father (an engineer) was in the
military at the time and was appointed superintendent of works to build Galata Bridge, which
bridged the Golden Horn. The family returned to France in 1847, where Fayol graduated
from the mining academy "cole Nationale Suprieure des Mines" in Saint-tienne in 1860.
In 1860 at the age of nineteen Fayol started the mining company named "Compagnie de
Commentry-Fourchambault-Decazeville" in Commentry as the mining engineer. During his
time at the mine, he studied the causes of underground fires, how to prevent them, how to
fight them, how to reclaim mining areas that had been burned, and developed a knowledge of
the structure of the basin. In 1866 he was promoted to managing director. During his time as
director, he made changes to improve the working situations in the mines, such as allowing
employees to work in teams, and changing the division of labor. Later, more mines were
added to his duties.
Eventually, the board decided to abandon its iron and steel business and the coal mines. They
chose Henri Fayol to oversee this as the new managing director.Upon receiving the position,
Fayol presented the board with a plan to restore the firm. The board accepted the
proposal. When he retired in 1918, the company was financially strong and one of the largest
industrial combines in Europe
Based largely on his own management experience, he developed his concept of
administration. In 1916 he published these experience in the book "Administration
Industrielle et Gnrale", at about the same time as Frederick Winslow Taylor published
his Principles of Scientific Management.

Fayol's work became more generally known with the 1949 publication of General and
industrial administration,[3] the English translation[4] of the 1916 article "Administration
industrielle et gnrale". In this work Fayol presented his theory of management, known
as Fayolism. Before that Fayol had written several articles on mining engineering, starting in
the 1870s, and some preliminary papers on administration.
Henri Fayol, ca. 1900

Starting in the 1870s, Fayol wrote a series of articles on mining subjects, such as on the
spontaneous heating of coal (1879), the formation of coal beds (1887), the sedimentation of
the Commentry, and on plant fossils (1890),
His first articles were published in the French Bulletin de la Socit de l'Industrie minrale,
and beginning in the early 1880s in theComptes rendus de l'Acadmie des sciences, the
proceedings of the French Academy of Sciences.

14 Principal of Management :-

1.

DIVISION OF WORK :
Work should be divided among individuals and groups to
ensure that effort and attention are focused on special portions of the task. Fayol
presented work specialization as the best way to use the human resources of the
organization.

2.

AUTHORITY :
The concepts of Authority and responsibility are closely related.

Authority was defined by Fayol as the right to give orders and the power to exact obedience.
Responsibility involves being accountable, and is therefore naturally associated with
authority. Whoever assumes authority also assumes responsibility.

3.

DISCIPLINE :
A successful organization requires the common effort of workers.
Penalties should be applied judiciously to encourage this common effort.

4.

UNITY OF COMMAND :
Workers should receive orders from only one
manager.

5.

UNITY OF DIRECTION :
The entire organization should be moving towards a
common objective in a common direction.

6.

SUBORDINATION OF INDIVIDUAL INTERESTS TO THE

GENERAL INTERESTS :
The interests of one person should not take priority over the interests
of the organization as a whole.

7.

REMUNERATION :
Many variables, such as cost of living, supply of qualified
personnel, general business conditions, and success of the business, should be
considered in determining a workers rate of pay.

8.

CENTRALIZATION :
Fayol defined centralization as lowering the importance of
the subordinate role. Decentralization is increasing the importance. The degree to which
centralization or decentralization should be adopted depends on the specific
organization in which the manager is working.

9.

SCALAR CHAIN :
Managers in hierarchies are part of a chain like authority scale.
Each manager, from the first line supervisor to the president, possess certain amounts of
authority. The President possesses the most authority; the first line supervisor the least.
Lower level managers should always keep upper level managers informed of their work
activities. The existence of a scalar chain and adherence to it are necessary if the
organization is to be successful.

10. ORDER :
For the sake of efficiency and coordination, all materials and people related
to a specific kind of work should be treated as equally as possible.\

11. EQUITY :
All employees should be treated as equally as possible.

12. STABILITY OF TENURE OF PERSONNEL :

Retaining productive
employees should always be a high priority of management. Recruitment and Selection
Costs, as well as increased product-reject rates are usually associated with hiring new
workers.
13. INITIATIVE :
Management should take steps to encourage worker initiative, which
is defined as new or additional work activity undertaken through self direction.

14. ESPIRIT DE CORPS :

Management should encourage harmony and general good
feelings among employees.

Introduction of Management :Management is everywhere. Management is practiced in every type of

organization, whether small or large, business organization or non business organization.
However management cannot be practiced arbitrarily. Management is essential to any
organization that wishes to be efficient and achieve its aims. Without someone in a position
of authority there would be organizational anarchy with no structure and very little, if any
focus. It has been said that management has four basic functions planning, organizing,
leading and controlling. Common sense dictates that without these principles of management
being in place an organization would have trouble achieving its aims, or even coming up with
aims in the first place! A classic theory on the principles of management was written by Henri
Fayol. It seeks to divide management into 14 principles. Well take a look at these basic
principles of management and explain them in easy to understand terminology.

Defination of Management :
The term Management has been defined as :A basic generalisation that is accepted as true and that can be used as a basis of reasoning or
conduct.
According to Lawrence A Appley Management is the development of people and
not the direction of things.
According to Joseph Massie Management is defined as the process by which a
cooperative group directs action towards common goals.
In the words of George R Terry Management is a distinct process consisting of
planning, organising, actuating and controlling performed to determine and
accomplish the objectives by the use of people and resources.

Introduction of Amul co. :Amul is an Indian dairy cooperative, based at Anand in the state of Gujarat, India. The
word amul () is derived from the Sanskrit word amulya (), meaning rare, valuable .
[3]

The co-operative was initially referred to as Anand Milk Federation Union Limited hence

the name AMUL.

Formed in 1946, it is a brand managed by a cooperative body, the Gujarat Co-operative Milk
Marketing Federation Ltd. (GCMMF), which today is jointly owned by 3.6 million milk
producers in Gujarat.
Amul spurred India's White Revolution, which made the country the world's largest producer
of milk and milk products. In the process Amul became the largest food brand in India and
has ventured into markets overseas.
Dr. Varghese Kurien, founder-chairman of the GCMMF for more than 30 years (19732006),
is credited with the success of Amul.[

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History of AMUL :Amul the co-operative registered on 1 December 1946 as a respnse

to the exploitation of marginal milk producers by traders or agents of the only existing dairy,
the polson dairy, in the small city distances to deliver milk, which often went sour in summer,
to Polson. The prices of milk were arbitrarily determined. Moreover, the government had
given monopoly rights to Polson to collect milk from mikka and supply it to Bombay city.
Angered by the unfair trade practices, the farmers of Kaira approached Sardar Vallabhbhai
Patal under the leadership of local farmer leader Tribhuvandas K. Patel. He advised them to
form a

co-operative and supply milk directly to the Bombay Milk Scheme instead of

Polson (who did the same but gave them low prices). He sent Morarji Desai to organise the
farmers. In 1946, the milk farmers of the area went on a strike which led to the setting up of
the cooperative to collect and process milk. Milk collection was decentralized, as most
producers were marginal farmers who could deliver, at most, 12 litres of milk per day.
Cooperatives were formed for each village, too.
The cooperative was further developed and managed by Dr.Verghese Kurien
with H.M.Dalaya. Dalaya's innovation of making skim milk powder from buffalo milk (for
the first time in the world) and a little later, with Kurien's help, making it on a commercial
scale, led to the first modern dairy of the cooperative at Anand, which would compete against
established players in the market. Kurien's brother-in-law K.M. Philip sensitized Kurien to
the needs of attending to the finer points of marketing, including the creation and
popularization of a brand. This led to the search for an attractive brand name. In a
brainstorming session, a chemist who worked in the dairy laboratory suggested Amul, which
came from the Sanskrit word "amulya", which means "priceless" and "denoted and
symbolised the pride of swadeshi production."
The trio's (T. K. Patel, Kurien and Dalaya's) success at the cooperative's dairy
soon spread to Anand's neighbourhood in Gujarat. Within a short span, five unions in other
districts Mehsana, Banaskantha, Baroda, Sabarkantha and Surat were set up. To combine
forces and expand the market while saving on advertising and avoid competing against each
other, the GCMMF, an apex marketing body of these district cooperatives, was set up in

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1973. The Kaira Union, which had the brand name Amul with it since 1955, transferred it to
GCMMF. In 1999, it was awarded the "Best of all" Rajiv Gandhi National Quality Award.
Adding to the success, Dr. Madan Mohan Kashyap (faculty Agricultural and
Engineering Department, Punjab Agricultural University Ludhiana), Dr. Bondurant (visiting
faculty) and Dr Feryll (former student of Dr Verghese Kurien), visited the Amul factory in
Gujarat as a research team headed by Dr. Bheemsen & Shivdayal Pathak (ex-director of the
Sardar Patel Renewable Energy Research Institute) in the 1960s. A milk pasteurization
system at the Research Centre of Punjab Agricultural University (PAU) Ludhiana was then
formed under the guidance of Kashyap. The technological developments in Gujarat have
subsequently spread to other parts of India.

Milk, The inspiration behind a revolution

Over six decades ago the life of a farmer in Kaira was very much like that of
farmers anywhere else in India. His income was derived almost entirely from seasonal crops.
Many poor farmers faced starvation during off-seasons. Their income from milch buffaloes
was undependable. The milk marketing system was controlled by contractors and middlemen.
As milk is perishable, farmers were compelled to sell their milk for whatever they were
offered. Often they had to sell cream and ghee at a throwaway price. They were in general
illiterate. But they could see that the system under which contractors could buy their produce
at a low price and arrange to sell it at huge profits was just not fair. This became more
noticeable when the Government of Bombay started the Bombay Milk Scheme in 1945. Milk
had to be transported 427 kilometers, from Anand to Bombay. This could be done only if
milk was pasteurized in Anand. After preliminary trials, the Government of Bombay entered
into an agreement with Polsons Limited to supply milk from Anand to Bombay on a regular
basis. The arrangement was highly satisfactory to all concerned except the farmers. The
Government found it profitable; Polsons kept a good margin. Milk contractors took the
biggest cut. No one had taken the trouble to fix the price of milk to be paid to the producers.
Thus under the Bombay Milk Scheme the farmers of Kaira District were no better off ever
before. They were still at the mercy of milk contractors. They had to sell their milk at a price
the contractors fixed. The discontent of the farmers grew. They went in deputation to Sardar
Patel, who had advocated farmers co-operatives as early as 1942.
Sardar Patel reiterated his advice that they should market their milk through a
co-operative society of their own. This co-operative should have its own pasteurization plant.

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His advice was that the farmers should demand permission to set up such a co-operative. If
their demand was rejected, they should refuse to sell their milk to middlemen. Sardar Patel
pointed out that in undertaking such a strike there should be some losses to the farmers as
they would not be able to sell their milk for some time. If they were prepared to put up with
the loss, he was prepared to lead them. The farmers deputation readily accepted his proposal.
Sardar then sent his trusted deputy, Mr. Morarjibhai Desai, to Kaira District to organize milk
co-operative and a milk strike if necessary. Mr. Desai held a meeting in Samarkha village
on January 4, 1946. It was resolved that milk producers co-operative societies should be
organized in each village of Kaira District to collect milk from their member-farmers. All the
milk societies would federate into a Union which would own milk processing facilities. The
Government should undertake to buy milk from the Union. If this wasnt done, the farmers
would refuse to sell milk to any milk contractor in Kaira District.
The Government turned down the demand. The farmers called a milk strike.
It lasted 15 days. Not a drop of milk was sold to the milk merchants. No milk reached
Bombay from Anand, and the Bombay Milk Scheme almost collapsed. After 15 days the milk
commissioner of Bombay, an Englishman, and his deputy visited Anand, assessed the
situation and accepted the farmers demand.
This marked the beginning of the Kaira District Co-operative Milk Producers Union
Limited, Anand. It was formally registered on December 14, 1946. Its objective was to
provide proper marketing facilities for the milk producers of the district. The Union began
pasteurizing milk in June 1948, for the Bombay Milk Scheme just a handful of farmers in
two village co-operative societies producing about 250 liters a day. An assured market proved
a great incentive to the milk producers in the district. By the end of 1948, 432 farmers had
joined village societies, and the quantity of milk handled by the Union had increased to 5000
liters a day. In the early stages, rapid growth brought in its wake serious problems. Their
solution provided the stimulus for further growth. For example, as the co-operative
movement spread in the district, it was found that the Bombay Milk Scheme could not absorb
the extra milk collected by the Union in winter, when buffaloes yielded an average of 2.5
times their summer yield. Thus by 1953, the farmer-members had no regular market for the
extra milk produced in winter. They were again forced to sell a large surplus at low rate to
middlemen.
The only remedy was to set up a plant to process the extra milk into products like
butter and milk powder. The logic of this step was readily accepted by the Government of

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Bombay and the Government of India, except for a few doubting Thomases. The government
of India helped the Union to get financial help from UNICEF and assistance from the
Government of New Zealand under the Colombo Plan. Technical aid was provided by F.A.O.
A Rs.50 lakh factory to process milk powder and butter was blueprinted. Its foundation
stone was laid by the then President of India the late Dr. Rajendra Prasad on November 15,
1954. The project was completed by October 31, 1955, on which day the late Pandit
Jawaharlal Nehru, the then Prime Minister of India, declared it open. The new dairy provided
a further fillip to the co-operative movement among milk producers. The union was thus
enabled to organize more village co-operative societies and to handle more and more milk
each year. This event also brought a breakthrough in dairy technology as the products were
made processing buffalo milk for the first time in the world. Kaira Union introduced the
brand Amul for marketing its product range. The word Amul is derived from Sanskrit
word Amulya which means priceless or precious. In the subsequent years Amul made
cheese and baby food on a large commercial scale again processing buffalo milk creating a
history in the world.
1964 was the turning point in the history of dairy development programme in
India. Late Shri Lal Bahadur Shastri, the then Prime Minister of India who visited Anand on
31s October for inauguration of Amul Cattle Feed Plant, having spent a night with farmers of
Kaira and experiencing the success wished and expressed to Mr Kurien, then the General
Manager of Amul that replicating Amul model throughout our country will bring a great
change in the socio-economic conditions of the people. In order to bring this dream into
reality, 1965 The National Dairy Development Board (NDDB) was established at Anand and
by 1969-70 NDDB came out with the dairy development programme for India popularly
known as Operation Flood or White Revolution. The Operation Flood programme, even
today, stands to be the largest dairy development programme ever drawn in the world. This
saw Amul as model and this model is often referred in the history of White Revolution as
Anand Pattern. Replication of Anand Pattern has helped India to emerge as the largest
milk producing nation in the world.

AMUL (Fullform)

A ANAND
M MILK
U UNION
L LIMITED

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Hence, (ANAND MILK UNION LIMITED)

About GCMMF:Gujarat Cooperative Milk Marketing Federation Ltd. (GCMMF), is India's
largest food product marketing organisation with annual turnover (2014-15) US$ 3.4 billion.
Its daily milk procurement is approx 14.85 million lit per day from 18,536 village milk
cooperative societies, 17 member unions covering 31 districts, and 3.37 million milk
producer members.
It is the Apex organisation of the Dairy Cooperatives of Gujarat, popularly known as
'AMUL',which aims to provide remunerative returns to the farmers and also serve the interest
of consumers by providing quality products which are good value for money. Its success has
not only been emulated in India but serves as a model for rest of the World. It is exclusive
marketing organisation of 'Amul' and 'Sagar' branded products. It operates through 56 Sales
Offices and has a dealer network of 10000 dealers and 10 lakh retailers, one of the largest
such networks in India. Its product range comprises milk, milk powder, health beverages,
ghee, butter, cheese, Pizza cheese,Ice-cream, Paneer, chocolates, and traditional Indian
sweets, etc.
GCMMF is India's largest exporter of Dairy Products. It has been accorded a "Trading
House"status. Many of our products are available in USA, Gulf Countries,Singapore, The
Philippines, Japan, China and Australia. GCMMF has received the APEDA Award from
Government of India for Excellence in Dairy Product Exports for the last 16 years. For the
year 2009-10, GCMMF has been awarded "Golden Trophy" for its outstanding export
performance and contribution in dairy products sector by APEDA. In 2013-14, GCMMF took
giant strides in expanding its presence in International markets. Amuls presence on Global
Dairy Trade (GDT) platform in which only the top six dairy players of the world sell their
products, has earned respect and recognition across the world. By selling milk powders on
GDT, GCMMF could not only realize better prices as per market demand but it also firmly
established Amul in the league of top dairy players in world trade.
For its consistent adherence to quality, customer focus and dependability, GCMMF has
received numerous awards and accolades over the years. It received the Rajiv Gandhi
National Quality Award in1999 in Best of All Category. In 2002 GCMMF bagged India's
Most Respected Company Award instituted by Business World. In 2003, it was awarded the

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The IMC Ramkrishna Bajaj National Quality Award - 2003 - certificate of merit- for adopting
noteworthy quality management practices for logistics and procurement. GCMMF is the first
and only Indian organisation to win topmost International Dairy Federation Marketing Award
for probiotic ice cream launch in 2007. For the innovations, GCMMF has received AIMARK Swamy High Performance brand award 2013 and CNN-IBN Innovating for better
tomorrow award in 2014. World Dairy Innovation Awards- 2014 for Best Marketing
Campaign - "Eat Milk with Every Meal". For the tree plantation activity GCMMF has
received seven consecutive Good Green Governance award from Srishti during 2007 to 2013.
The Amul brand is not only a product, but also a movement. It is in one way, the
representation of the economic freedom of farmers. It has given farmers the courage to
dream. To hope. To live.

GCMMF - An Overview

Year of Establishment

1973

Members

17 District Cooperative Milk Producers' Unions

No. of Producer Members

3.37 Million

No. of Village Societies

18,536

Total Milk handling capacity per day

24 Million litres per day

Milk Collection (Total - 2014-15)

5.42 billion litres

Milk collection (Daily Average 2014-15)

14.85 million litres

Cattlefeed manufacturing Capacity

6340 Mts. per day

Sales Turnover -(2014-15)

Rs. 20733 Crores (US $ 3.4 Billion)

Profitability of Amul Co. :-

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With 20 per cent growth in milk procurement, Amul entered its golden
phase in 2012-13, said the Gujarat Cooperative Milk Marketing Federation (GCMMF),
which markets the Amul brand of milk and milk products.Announcing its results on Tuesday
at its Annual General Meeting, the federation said group turnover reached Rs. 19,100 crore or
$3.2 billion.
GCMMF, the apex body of milk and dairying co-operatives in Gujarat, said it
is passing through an era of simultaneous acceleration in demand and supply.The federation
procured and handled 16.6 million kg of milk during the winter months in 201213.Leveraging several marketing and technological innovations as well as its enhanced
distribution reach, GCMMF closed the year with a turnover ofRs. 13,735 crore, 18 per cent
more than the turnover of Rs. 11,668 crore in 2011-12.
Next year, said Chairman Vipul M. Chaudhary, the target is to achieve a turnover
of Rs. 17,000 crore.The Group turnover of the federation and its constituent member unions,
representing unduplicated turnover of all products sold under the Amul brand in 2012-13,
was Rs. 19,100 crore or $3.2 billion.

RAPID EXPANSION
Amuls long-life UHT milk has shown value growth of 53 per cent and sales of Amul cream
also increased by 57 per cent in value terms.
Amuls innovative milk beverages range showed quantum value growth of 27 per cent.
In ghee, the two mega-brands, Amul and Sagar, together achieved growth of 31 per cent.
Sales of Amul butter and cheese grew 18 per cent and 19 per cent, respectively, while icecream sales grew 21 per cent, said Chaudhary.Saying that rapid expansion will be the
organisations mantra for 2013-14, he said the 63 per cent growth in milk production in the
last four years was the result of the high procurement price paid to farmers.Better returns
from dairying have motivated farmers to enhance their investments in increasing milk
production.The federation is also expanding and strengthening its four distribution highways
to ensure that its products reach consumers in the remotest areas, said Chaudhary.

Level of Management :-

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The term Levels of Management refers to a line of

demarcation between various managerial positions in an organization. The number of
levels in management increases when the size of the business and work force increases
and vice versa. The level of management determines a chain of command, the amount of
authority & status enjoyed by any managerial position. The levels of management can be
classified in three broad categories:

1. Top level / Administrative level

2. Middle level / Executory
3. Low level / Supervisory / Operative / First-line managers
Managers at all these levels perform different functions. The role of managers at all the three
levels is discussed below:

LEVELS OF MANAGEMENT

1. Top Level of Management

It consists of board of directors, chief executive or managing director. The top
management is the ultimate source of authority and it manages goals and policies for
an enterprise. It devotes more time on planning and coordinating functions.
The role of the top management can be summarized as follows :-

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1) Top management lays down the objectives and broad policies of the enterprise.
2) It issues necessary instructions for preparation of department budgets,
procedures, schedules etc.
3) It prepares strategic plans & policies for the enterprise.
4) It appoints the executive for middle level i.e. departmental managers.
5) It controls & coordinates the activities of all the departments.
6) It is also responsible for maintaining a contact with the outside world.
7) It provides guidance and direction.
8) The top management is also responsible towards the shareholders for the
performance of the enterprise.

2. Middle Level of Management

The branch managers and departmental managers constitute middle level. They are
responsible to the top management for the functioning of their department. They
devote more time to organizational and directional functions. In small organization,
there is only one layer of middle level of management but in big enterprises, there
may be senior and junior middle level management. Their role can be emphasized as 1) They execute the plans of the organization in accordance with the policies and
directives of the top management.
2) They make plans for the sub-units of the organization.
3) They participate in employment & training of lower level management.
4) They interpret and explain policies from top level management to lower level.

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5) They are responsible for coordinating the activities within the division or
department.
6) It also sends important reports and other important data to top level
management.
7) They evaluate performance of junior managers.
8) They are also responsible for inspiring lower level managers towards better
performance.

3. Lower Level of Management

Lower level is also known as supervisory / operative level of management. It consists
of supervisors, foreman, section officers, superintendent etc. According to R.C. Davis,
Supervisory management refers to those executives whose work has to be largely
with personal oversight and direction of operative employees. In other words, they
are concerned with direction and controlling function of management. Their activities
include 1) Assigning of jobs and tasks to various workers.
2) They guide and instruct workers for day to day activities.
3) They are responsible for the quality as well as quantity of production.
4) They are also entrusted with the responsibility of maintaining good relation in
the organization.
5) They communicate workers problems, suggestions, and recommendatory
appeals etc to the higher level and higher level goals and objectives to the
workers.
6) They help to solve the grievances of the workers.
7) They supervise & guide the sub-ordinates.

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8) They are responsible for providing training to the workers.

9) They arrange necessary materials, machines, tools etc for getting the things
done.
10) They prepare periodical reports about the performance of the workers.
11) They ensure discipline in the enterprise.
12) They motivate workers.
13) They are the image builders of the enterprise because they are in direct contact
with the workers.

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References :1)
2)
3)
4)
5)

Amul.com
www.managementinnovations.wordpress.com
www.Scribd.com
www.thehindubusinessline.com
www.managementstudyguide.com/

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