INDUSTRIAL MANAGEMENT

Presentation By-
Anshu Singh
 After reading this chapter, you should
be able to:

 Define Management
 Feature and Importance of management
 Management as an Art or science
 Management as a profession
 Define Industry
 Explain the concept and importance of industrial
Management.
 Scope and Application of Industrial Management
 Industrial Management

 The term industrial management is composed of

Industry Management
What is Management

 Traditional Meaning of
Management

“Management is the art of getting things done through
people”
- Mary Parker Follett

“Management consists of getting things done through

others.. A manager is one who accomplishes
organisational objectives by directing the efforts of
others”
-C.S George
 Traditional Management

The traditional viewpoint about management is considered
inappropriate in the present day environment . It has been
criticized on the following grounds.
 It does not give the functions which a manger has to
perform to get results from others.
 It gives the impression of the manipulative character of
practice of the management.
 The employees are merely treated as a means for getting
results.
 The need of the worker has been ignored . The workers
are supposed to work like machines.
 Modern Definition

 Modern practitioners consider management more the just
getting things done from others. Managing involves
creating a conducive environment in organisation
whereby individuals are motivated to work efficiently
and effectively towards the attainment of organisational
goals.
 “Management is the creation and maintenance of an internal
environment in an enterprise where individuals, working in
groups, can perform efficiently and effectively towards the
attainment of group goals”.
- Harold Koontz and Cyril O’Donnell
 Some More definitions.....

 Management refers to the tasks and activities
involved in directing an organization or one of its
units: planning, organizing, leading, and controlling.
 The process of reaching organizational goals by
working with and through people and other
organizational resources.
 ”Management is work and as such it has its own
skills, its own tools and its own techniques”.
-Peter F Drucker
 Management As Process

 Management refers to a series of interrelated
functions or elements to achieve stated objectives
through the effective utilization of resources.
 It Involves five functions
1. Planning
2. Organising
3. Staffing
4. Directing
5. Controlling
 Management As Process

Resources Managerial
Functions Objectives

Planning
• Man
Organising
• Money
• Machines Staffing Goods &
• Materials Services
Directing
• Methods
• Markets Controlling
 Management As Process

 Planning : To take decisions and to prepare plans,
policies and procedure etc.
 Organising : To divide work among individuals & to
create authority and responsibility.
 Staffing : To employ people or to man various positions in
the organisations and to provide them necessary training.
 Directing : To give instructions to the subordinates.
 Controlling : To compare actual performance with the
predetermined standards and to take corrective actions.
Sequence of management Functions

Planning

Controlling Organising

Directing Staffing
 Features Of Management

 Management is goal oriented.
 Management is a continuous process.
 Management is a coordinative Force.
 Management accomplishes results through the
cooperation of the others.
 Management balances effectiveness and efficiency.
 Importance of Management

 Accomplishment of goals of the enterprise.
 Effective utilisation of resources.
 Providing Vision and Foresight.
 Accomplishment of harmony in work place.
 Help the employees in achieving personal goals.
 Development of society and nation.
 Management: Science or Art

 Science is systematized body of knowledge pertaining to
a particular field of enquiry. It contains concepts ,
theories , hypothesis and principles to explain cause and
effect relationship between two or more factors.
 Management has systematized body of knowledge
pertaining to its field. The researchers in management
uses scientific techniques to collect and analyse data
.Management also have principles & these principles have
universal application in different types of organisation in
different countries. That is why , management is called as
science.
 Although Management is not perfect science.
 Management: Science or Art

 Art signifies the application of knowledge and personal skills to
bring about desired results.
 Art has the following characters –
 Practical Knowledge: Every art requires practical knowledge
therefore learning of theory is not sufficient. It is very important to
know practical application of theoretical principles. E.g. to become
a good painter, the person not only should know about the
different colour and brushes but different designs, dimensions,
situations etc to use them appropriately.
 Personal Skill: Although theoretical base may be same for every
artist, but each one has his own style and approach towards his job.
That is why the level of success and quality of performance differs
from one person to another. E.g. there are several qualified painters
but M.F. Hussain is recognized for his style. Similarly management
as an art is also personalized.
 Management: Science or Art

 Creativity: Every artist has an element of creativity in line. That
is why he aims at producing something that has never existed
before which requires combination of intelligence &
imagination. Management is also creative in nature like any
other art. It combines human and non-human resources in an
useful way so as to achieve desired results.
 Goal-Oriented: Every art is result oriented as it seeks to achieve
concrete results. In the same manner, management is also
directed towards accomplishment of pre-determined goals.
Managers use various resources like men, money, material,
machinery & methods to help in the growth of an organization.
 Thus, we can say that management is an art therefore it requires
application of certain principles rather it is an art of highest order
because it deals with shaping the attitude and behaviour of people at
work towards the desired goals.
 Management as both Science and Art


 Management is both an art and a science. The above
mentioned points clearly reveal that management
combines features of both science as well as art. It is
considered as a science because it has an organized
body of knowledge which contains certain universal
truth. It is called an art because managing requires
certain skills which are personal possessions of
managers. Science provides the knowledge & art
deals with the application of knowledge and skills.
 It Could be said as soft science as it incorporates
features both of science and Art.
 Defining an Industry

 Industry
 A group of companies offering products or services
that are close substitutes for each other
 Competitors
 Rival companies that serve the same basic customer
needs

Industry implies those economic activities which are

concerned with extraction , production , conversion ,
processing or fabrication of products.
 Industrial Management

 Industrial management can be considered as the
management of men, materials & machines in an
industrial organisation.
 Industrial management, as a branch of engineering
facilitates creation of management systems and integrates
the same with people and their activities to productively
utilize the resources.
 The subject emphasizes studying the performance of
machines and so also the people.
 Industrial management, therefore, in the structured
approach to manage the operational activities of an
organization.
Industrial Management

Transformation
Inputs Output
Process

• Men • System Design • Growth &

• Materials • Production Expansion
• Machines planning & • Goods & Services
• Technology control • Social
• Information • Operation Responsibility
Management &
Control
 Objectives Of Industrial
Management

 Customer Service
 Efficient Utilisation of Resources.
 Coordination
 Product Quality
 Human Relations
 Process of Development of Industrial
Management
SN Orientation

Pioneered By Definition Concerned
with
1 Productivity orientation F W Taylor & JF Increased Productivity
Mee
2 Human Relations L. A. Applay & Emphasis On People
Orientation H. Knortz

3 Decision making Ross Moore & Decision making as

Orientation Stanley Vance primary management
function
4 Leadership Orientation Donald J. Leadership is the essence
Clough & Ralph of Management
C.

5 Process Orientation Dalton, & Management as process

McFarland
Development of Management


Contingency Approach
 Scientific Management Approach


 Taylor emphasized following points to achieve
organizational efficiency
 Develop scientific way of performing jobs.
 Train and develop workers to perform the job.
 Establish harmonious relation between management
and workers.
 Taylor suggested two important practices
 Piece rate incentive system
 Time and motion study
 Scientific Management
Approach

 Piece rate system rewards the workers who produce the
maximum output.
 Time study helps in determination of time required,
recording analysing and synthesizing the time elements
of each operation.
 Motion study on the other hand involves study of
movements in doing jobs in parts and eliminates wasteful
movements and retains only necessary movements. It
makes a job simpler, easier and better.
 Time and Motion Study concepts were developed by
F.W.Taylor in association with Frank and Lillian Gilberth
 Scientific Management
Approach

 Gilberth conducted research on motion studies. They had
classified 17 basic hand motions like search, select,
position, hold etc. They called this therbligs . Their
approach helps to analyse the exact elements of a
workers’ hand movement.
 Henry Gantt worked with Taylor. His contributions are
introduction of task and bonus plan, and Gantt chart. As
per his incentive plan worker gets daily wage even if he
does not complete his job, but gets bonus if the jobs is
completed in less than normal time.
 Gantt chart is used for production control indicating
progress of production in terms of time.
 Drawback of Scientific
Management Approach

 Scientific Management principles revolve around
operational level problems do not focus on
managerial issues essential for managing
organization
 This theory also ignores the human desire for job
satisfaction.
 Administrative Theory

 Administrative Theory another part of classical school of
thought focuses on principles to coordinate the internal
activities of the organization. Henry Fayol classified business
operations into 6 activities.
• Technical : Activities relating to production and manufacturing
• Commercial : Activities relating to buying selling and
exchange.
• Financial : Activities ensuring optimal use of capital.
• Security : Activities to ensure protection to employees and
property.
• Accounting: Activities concern with costs, profits, liabilities,
balance sheet.
• Managerial: It is functional approach to management. i.e.
planning, organizing, directing, coordinating and controlling
 Administrative Theory
FAYOL’s PRINCIPLE OF MANAGEMENT

1. Division of work 8. Centralization

2. Authority and responsibility 9. Scalar chain

3. Discipline 10. Order

4. Unity of command 11. Equity

5. Unity of direction 12. Stability

6. Subordination of individual interest to

the common good 13. Initiative

7. Remuneration of personnel 14. Esprit de corps

 Bureaucratic Theory

 Max Waber had advocated the necessity of a formal
organizational structure with set rules and
regulations. Weber’s concept is intended to remove
ambiguity, inefficiencies, and patronage.
 Limitations of Classical
School of Thought

 Management principles are not universally
applicable in today’s complex business situation.
 Classical school of thought ignored organizational
behaviour (leadership, motivation informal relation)
only concentrated on productivity.
 Neo Classical School of
Thought

 This school of thought lays emphasis on human elements
in an organization.
 Max Parker Follett recognized the significance of human
elements, attributed greater significance to the
functioning of groups in workplace.
 Elton Mayo father of Human Relations Approach,
conducted the study to evaluate the attitudes and
psychological reactions of workers in on the job
situations.
 Maslow’s focus was on importance of human needs
driving force for motivation.
 Neo Classical School of
Thought

 McGregor has made assumption about people
categorizing them as under
 Theory X People are by nature lazy, have little
ambition, dislike work, avoid responsibility.
 Theory Y People are more positive , innovative,
creative and do not dislike work. Chris Argyris’s
contributions are maturity –immaturity theory,
integration of individual and organizational goals.
 Modern Approaches

 These approaches are classified as
1. Quantitative School of thought
2. System Theory Approach
3. The Contingency Theory
 Quantitative School of
Thought

 Different branches of quantitative approaches are
Management Science, Operations Management, MIS.
 Management science approach or operations research
approach is used in production, scheduling human
resource planning, inventory management etc.
 Operations management is primarily concerned with
production management and related management.
 MIS approach focuses on design and implementation of
information system for management uses. It converts raw
data into information inputs to be used by management
for decision making.
 System Theory Approach

It considers organization as a whole
because of interdependent nature of
activities requiring organization to
interact with external environment
factors.
 Contingency Theory Approach


 This Approach discards the concept of universality
in management principles and determines
managerial decisions considering situational factors.
 Contingency theory and System theory together are
classified as integrative school of management
thought because these two theories integrate the
classical, behavioral and quantitative theories and
uses only the best of each approach in a given
situation.
 APPLICATION & SCOPE OF INDUSTRIAL
MANAGEMENT


 Initially the scope & application of industrial
management was restricted to manufacturing
industry. Later on it spread to non- manufacturing
activities such as construction & transportation, farm
and air- line operations and maintenance, public
utilities govt. & military operations.
 In an industry besides the production, other
departments utilizing industrial management
concepts are Marketing, Finance, Purchasing,
Industrial relations etc.
Major applications of Industrial Management


Scope of Industrial Management


 PRODUCTIVITY

 Concept and Definition
 Productivity may be defined as the ratio between output
and input.
 Output means the amount produced or the number of
items produced and inputs are the various resources
employed, e.g, land, building, equipment and machinery,
materials, labours, etc.
 According to Peter Drucker, “Productivity means a
balance between all factors of production that will give
the maximum output with smallest efforts
 ILO defines productivity as the ratio of aggregate output
to aggregate input.
 Factors Affecting Productivity

 Factors affecting National Productivity
 Human Resources : General level of education,
computing skills, motivation towards work, etc.
 Technology and Capital Investment : Adoption of
new technologies, investment in new machinery and
equipment
 Government Regulation: An excessive amount of
regulation may have detrimental effect on
productivity.
 Factors Affecting Productivity

 Factors affecting Productivity in Manufacturing and Services
Sectors
 Product and System Design : Standardization of the product
and the use of group technology are the design factors that
make possible greater productivity in the factory.
 Machinery and Equipment: The equipment used –machines.
Tools, conveyors, factory layout – all affect the productivity.
 Skill and Effectiveness of the Worker : he trained and
experience worker can do the same job in much shorter time.
 Production Volume: If the output is doubled the productivity of
support people (like Engineers Design People, Headquarter
staff or other support personnel) is doubled.
Measurement of Productivity

 The basic objectives of productivity measurement
are:
 To study performance of a system over time.
 To have relative comparison of different systems for
a given level; and
 To compare the actual productivity of the system
with its planned productivity.
Measurement of Productivity

 The most common way is to express both outputs
and the inputs in monetary terms.
 If the outputs and inputs for the period for which
productivity is measure, are expressed in rupees,
then
 Aggregate output = Gross sales= G(say); and
 Aggregate input= Cost= C (say)

Thus Total Productivity Tp = Aggregate Output

Aggregate Input
Kinds of Productivity Measurement

 Land Productivity : The productivity of land and
building is said to have increased if the output of
goods and services within that area is increased.

 Material Productivity : The productivity of the

materials becomes key factor in economic production
/ operation.
Material Productivity = Number of units produced
Cost of material
 
 Raw material productivity can be increased by:
1. Proper choice of design,
2. Better handling of materials and reduction of
rejection,
3. Recycling and reuse of materials,
4. Searching alternative cheaper material.
 Labour Productivity

 Output can be measured in total quantity produced
and labour can be measured in total man hours
required to produce that output.

 Output and labour can also be measured in terms of

their value in money value. Thus,
 Labour productivity can be
increased by

 Providing training to use best method of production
 Constantly motivating the workers by providing
financial and non-financial incentives
 Keeping high morale of the employees
 Improving working condition on the plant
Example: A worker was assembling 10 pieces of mobile
sets per hour and the same worker, by improved
methods of the work is able to produce 13 pieces of
mobile sets. The productivity is improved by 30%.
 Machine Productivity

 Output can be measured in total quantity produced
and machine can be measured in total machine hours
required to produce that output.

 Machine Productivity = Actual Output

Actual Machine Hours Utilized
 
 Machine productivity can be improved by
 Preventive maintenance
 Use of proper speed, feed, etc.
 Using method study techniques( Using best method)
 Use of skilled, properly trained workers
 Capital Productivity

 Capital Productivity = Turn Overs
Actual Machine Hours Utilized

Capital productivity can be improved by

 Better utilization of capital resources like land,
building machines etc
 Careful make or buy decision
 By using modern techniques of production,
maintenance, flexible manufacturing system, proper
plant layout etc.
 Productivity Index

 Productivity index is used to compare the
productivity during the current year with the
productivity during the base year.
 Base year is any year which the company uses for
comparative study.

 Productivity Index = Productivity during the current year

Productivity during the base year
 Sources of Information for
Productivity Index

 There are three major sources:
 Product Identification Information
 Accounting Information
 Work Measurement Information
 TYPES OF PRODUCTION SYSTEM


 Production is the process by which goods and
services are created. A typical production /
manufacturing system is depicted in
Classification of Manufacturing System


 Intermittent System

 In this system, the goods are manufactured specially
to fulfill orders made by customers rather than for
stock.
 Here the flow of material is intermittent.
 Intermittent production systems are those where the
production facilities are flexible enough to handle a
wide variety of products and sizes.
 
 Intermittent means something that starts (initiates) and
stops (halts) at irregular (unfixed) intervals (time gaps).
 In the intermittent production system, goods are
produced based on customer's orders. These goods are
produced on a small scale. The flow of production is
intermittent (irregular). In other words, the flow of
production is not continuous. In this system, large
varieties of products are produced. These products are of
different sizes. The design of these products goes on
changing. It keeps changing according to the design and
size of the product. Therefore, this system is very flexible.
 
 Following chart highlights the concept of an
intermittent production system.
 Chief characteristics of
intermittent system are:

 Most products are produced in small quantities.
 Machines and equipment are laid out by process.
 Workloads are generally unbalanced.
 Highly skilled operators are required for efficient use
of machines and equipment.
 In-process inventory is large.
 Flexible to suit production varieties.
 Job- Production or Project Type
Production

 In this system the goods are produced to definite
customer’s orders.
 There is no assurance of continuous demand for
specific items and the manufacturing depends on the
receipt of orders from customers.
 Job-order process is
characterised by

 Whole project is taken as a single operation.
 Work is to be completed on each product before
processing the next item.
 Versatile and skilled labour is needed.
 High capital investment.
 Control operations are relatively simple. .
 High unit cost of production
 Batch-Production

 The items are processed in lots or batches unlike job-
type system where one item is produced during each
production run.
 In batch-type system new batch is undertaken for
production only when the work on all items of a
batch is complete
 It is characterized by

 One can employ more specialized labour for each
operation with comparatively low investment.
 Organization and planning is more complicated in
this system.
 The irregularity in the increase of work added to the
basic material.
 Features of an
intermittent System

 Demand can be discontinuous.
 All operational stages may not be balanced.
 Elaborate sequencing and scheduling is required.
 Needs high investment.
 Planning, routing and scheduling changes with fresh
orders.
 Storage is necessary at each stage of production process.
 Can adjust to new situation and specification.
 Inspection is not in line with production
 Continuous System

 In this system the items are produced for the stocks
and not for specific orders.
 Here the inputs are standardized and a standard set
of processes and sequence of processes can be
adopted. In continuous manufacturing systems each
production run manufactures in large lot.
 Continuous System

 Continuous means something that operates
constantly without any irregularities or frequent
halts.
 In the continuous production system, goods are
produced constantly as per demand forecast. Goods
are produced on a large scale for stocking and
selling. They are not produced on customer's orders.
Here, the inputs and outputs are standardized along
with the production process and sequence.
 
 Following chart highlights the concept of a continuous
production system.

 The production system of a food industry is purely based on the demand

forecast. Here, a large-scale production of food takes place. It is also a
continuous production.
 Similarly, the production and processing system of a fuel industry is also purely
based on, demand forecast. Crude oil and other raw sources are processed
continuously on a large scale to yield usable form of fuel and compensate
global energy demand.
 Mass Production

 Standardization is the fundamental characteristic of
this system.
 Here items are produced in large quantities and
much emphasis is not given to consumers orders.
 Uniform and uninterrupted flow of material is
maintained through pre-determined sequence of
operations.
 Specialization and standardization also leads to
economies in production
 Process Production

 This system is analogous to Mass production system with
more stress on automation in production process.
 The volume of production is very high.
 Used for manufacturing those items whose demand is
continuous and high e.g. petroleum products, particular
brand of medicines, heavy chemicals industries, plastic
industries etc.
 Single raw material can be transformed into different
kinds of product at different stages of the production
process e.g. in processing of crude oil in refinery one gets
kerosene, gasoline etc. at different stages of production.
 Features of continuous type of
Manufacturing Systems

 There must be continuity of demand.
 The product must be standardized.
 Material should be per specifications and delivered in
time.
 All operational stages in the process must be balanced.
 Work must conform to quality standards.
 Appropriate plant and equipment must be provided.
 Maintenance must be by anticipation and not by default.
 Inspection must in line with production.
 Advantages

 Direct labour content is reduced.
 High accuracy
 Work in progress is at a minimum
 Storage at different stages of operation not necessary
 Reduced material handling
 Control process simple.
 Any weakness in the system is easily located
 Material requirements can be accurately planned
 Investment in material can be more rapidly translated
into income from sales
 Differences between Intermittent and
Continuous Process
Intermittent
• Same product is not produced
continuously
• Items produced for order
• Production process flexible.
• Equipment used for limited time.
• Wide range of products can be
produced.
• Smaller scale of production
• Planning and control operations
complicated and tedious

Continous
• Same product produced
continuously
• Items produced for stock
• Process not flexible
• Regular use of equipment
• Only particular type of product
is produced
• Large scale production
• Planning and control operations
simple and easy.
 INDUSTRIAL OWNERSHIP

To start a business enterprise the most important thing
required is the capital.
If the capital is provided by single individual, it is
known as Individual ownership,
If the capital is supplied by two or more persons, it
refers to partnership organization.
If the capital is provided by many persons in the
form of shares to an institute with a legal entity, it is
called a Joint Stock Company.
 TYPES OF OWNERSHIP

The different types of ownership are:-

 Single ownership (Private Undertaking).

 Partnership.
 Joint Stock Companies.
 Cooperative organization.
 State and Central Government owned.
 SINGLE OWNERSHIP

A business owned by one man is called single
ownership. It is called a single ownership when an
individual exercises and enjoys these rights in his
own interest. Single ownership does well for those
enterprises which requires little capital and lend
themselves readily to control themselves readily to
control by one person .
 ADVANTAGES OF SINGLE OWNERSHIP


a) Easy to establish as it does not require to complete
any legal formality.
b) Simplicity of organization.
c) The expenses in starting the business are minimal.
d) Owner is free to make all decisions.
e) This type of ownership is simple, easy to operate
and extremely flexible.
f) The owner enjoys all the profits.
g) Minimum legal restriction are associated with this
form of ownership.
 DISADVANTAGES OF SINGLE OWNERSHIP


 The owner is liable for all obligations and debts of the
business.
 The business may not be successful if the owner has
limited money, lacks ability and necessary experience to
run the business.
 Because of relatively unstable nature of the business, it is
difficult to raise capital for expanding the business.
 There is limited opportunity for employees as regards
monetary rewards(e.g., profit sharing, bonus, etc) and
promotions.
 If business fails , creditors can take the personal property
as well as the business property of the owner to settle
their claims.
 PARTNERSHIP

A partnership is a type of business entity in which
partners (owners) share with each other the profits
or losses of the business.

Types of partnership:-
 General partnership.
 Limited partnership.
GENERAL PARTNERSHIP

In a general partnership, each partner has full agency
powers and may bind the partnership by an act, i.e.,
each partner may act as though he were an
individual proprietor.
 ADVANTAGES OF GENERAL PARTNERSHIP


 Large capital is available to the firm.
 The firm possesses much better talents, judgment
and skills.
 Incentive for success is high.
 For all losses, there are more than one person to
share them.
 Partnership associates tax advantages with it.
 DISADVANTAGES OF GENERAL PATNERSHIP


 Danger of disagreement and distrust among the
partners.
 Authority being divided among the partners.
 Partnership may dissolve if a partner dies.
 All partners suffer due to wrong decision taken by
one partner.
 LIMITED PARTNERSHIP

 It is a partnership in which only one partner is
required to be a general partner. Limited partner
have limited liability, meaning they are only liable
on debts incurred by the firm to the extent of their
registered investment and have no management
authority.
ADVANTAGES OF LIMITED PATNERSHIP


 It permits men possessing different kinds of abilities
to unite, thereby increasing efficiency.
 It makes possible the employment of larger capital,
which, as we shall see later, contributes to increased
production.
 Limited partners share the profit but do not
participate or interfere with the control or
management of the firm.
 DISADVANTAGES OF LIMITED
PARTNERSHIP

 The limited partner, though he invests in the
business, has no voice in the management.
 The member of a partnership must share more or
less authority with others.
 Profits must be divided among the partners.
 JOINT STOCK COMPANY

A joint stock company is a type of business entity
involving two or more legal persons.
In a joint stock company the shareholders are free to
transfer their ownership interest at any time by
selling their stockholding to others.
 TYPES OF JOINT STOCK COMPANIES


 Private limited companies.
 Public limited companies
 Private limited companies

 The capital collected from private partners. Private
limited companies restrict the right to transfer
shares, avoid public to take up shares or debentures.
The numbers of members is between 2 and 50
excluding the employees and ex-employees
shareholders.
 Actually, a private joint stock companies resembles
much with partnership and has the advantages that
this big capital can be collected that could be done so
in partnership.
 Public limited companies

 In public limited company, the capital is collected
from the public by issuing shares having small face
value (Rs 50, 20, 10). The number of shares holders
should not be less than seven, but there is no limit to
their maximum number. A public limited company
has to file with the registrar of joint stock companies,
documents such as consent of the directors, list of
directors, director’s contract, etc.
 Contd….

 A public company has to issue a prospectus to the
public.
 It has to allot shares within 180 days from the date
of prospectus.
 It can only start after receiving the certificate to
commence business.
 There is no restriction on transfer of shares.
 ADVANTAGES OF JOINT STOCK
COMPANIES


 A huge sum of money can be raised.
 It associates limited liability with it.
 Shares are transferable.
 Companies life is not affected by the death of
shareholders.
 Risk of loss is divided among many shareholders.
 The company associates with it stability, efficiency
and flexibility of management.
 DISADVANTAGES OF JOINT
STOCK COMPANIES

 People can commit frauds with the companies.
 It is difficult to keep secrecy as in partnership.
 Team sprit with which partnership works is lacking.
 Divided responsibility.
COOPERATIVE ORGANISATION

 It is a form of private ownership which contains
features of large partnership as well as some features
of the corporation. The main aim of the cooperative
is to provide goods and services to the members of
the cooperative at cost. Members pay fees or buy
shares of the cooperative, and profits are periodically
redistributed to them.
 FORMS OF COOPERATIVE
ENTERPRISES

 Consumer cooperatives
 Producer cooperatives.
 Cooperative farming.
 Cooperative housing.
 Cooperative credit society
 ADVANTAGES OF COOPERATIVE
ORGANISATIONS

 Daily necessities of life can be made available at
lower rates.
 It is democratic form of ownership.
 No person can make huge profits.
 Common man is benefited by cooperatives.
 The chances of large stock holding and black
marketing is eliminated.
 Goods required can be directly purchased from the
manufactures and therefore can be sold at less rates.
 DISADVANTAGES OF
COOPERATIVE ORGANISATIONS

 Conflict may arise among the members on the issue
of sharing responsibility and enjoying authorities.
 Members who are in position may try to take
personal advantages.
 PUBLIC SECTOR

 The public sector is a part of the state that deals with
the delivery of goods and services by and for the
government, whether national, regional or
local/municipal
 OBJECTIVES OF PUBLIC
SECTORS

 To provide basic infrastructure facilities for the
growth of economy.
 To promote rapid economic development.
 To avoid concentration of economic power in a few
hands.
 To look after well-being and welfare of public.
ADVANTAGES OF PUBLIC
SECTORS

 Profits earned by public sector may be used for the
general welfare of the community.
 Public enterprise encourages industrial growth of
under-developed regions in the country.
 Capital ,raw material, fuel, power and transport are
easily made available to them.
 Public sector offers equitable opportunities to all.
 DISADVANTAGES OF
PUBLIC SECTOR

 Delay in decisions is a very common phenomena in
public enterprises.
 Incompetent persons may occupy high levels.
 There is too much interference by the Government
and Politicians in the internal affairs.
 List of Public sector
undertaking


Bharat Electronics Limited (BEL)
 Rail India Technical and Economic Services (RITES)
 Hindustan Aeronautics Limited (HAL)
 Indian Oil Corporation Limited (IOCL)
 Oil and Natural Gas Corporation (ONGC)
 Bharat Heavy Electricals Limited (BHEL)
 National Thermal Power Corporation(NTPC)
 Power Finance Corporation Limited(PFC)
 Airports Authority of India (AAI)
 Steel Authority of India Limited (SAIL)
 Bharat Sanchar Nigam Limited (BSNL)
 Bharat Petroleum Corporation Limited(BPCL)
 Hindustan Petroleum Corporation Limited (HPCL)
 Gas Authority of India Limited (GAIL)
 Mangalore Refineries and Petrochemicals Limited( MRPL )
 State Bank Of India (SBI)
 PRIVATE SECTOR

 Private sector serves personal interests and non-
government sector. It constitutes mainly consumer’s
goods industries where profit possibilities are high.
Here profit is the main objective. A private sector
does not undertake risky ventures or those having
low-profit margin. Private enterprises are run by
businessmen; capital is collected from the private
partners.
 ADVANTAGES OF
PRIVATE SECTOR

 The magnitude of profits incurred is high.
 The efficiency of the private enterprise is high.
 Wastage of material and labour is minimum.
 Decision-making is very prompt.
 There is no interference in its internal affairs by
politicians or Government.
 Competent persons occupy high levels.
 DISADVANTAGES OF
PRIVATE SECTOR

 There is exploitation motive, the workers and the
consumers may not receive fair deal.
 There is dearth of capital to expand the business.
 Private enterprise leads to concentration of wealth in
the hands of a few.
 Private enterprises lead to unbalanced growth of
industries.
 Thank U…….
