INDUSTRIAL OWNERSHIPS

Single Ownership (Proprietorship)

Companies
Partnership Companies
Joint Stock Companies
Co-operative Societies/Organizations
Public Sector Companies

SINGLE OWNERSHIP
(PROPRIETORSHIP)
The business is owned by one person
called the proprietor.
Proprietor provides the capital (money)
to start and run the business.
Business mostly depends upon the
expertise and skill of the owner.
Proprietor has absolute control over the
business
All profit goes to the proprietor.
Ownership of the company passes on to
the legal heirs of the owner.

ADVANTAGES

Easy to form the company.

Simple organization structure.
Decision making is usually fast.
Owner is motivated to give his best effort
for the business/company.
Business can be started with small
capital.
Easy to wind up business in the case of
losses.

DISADVANTAGES
Owner is fully and personally liable for all the
losses and debts of the company.
If the owner does not not have enough money,
expertise and ability, the business may
sometimes perish.
Difficult to get loans from banks.
Limited opportunity for growth of employees.
No guarantee for continuity of employment.
Low employee motivation and innovation, poor
salary and other facilities.
Inability to expand business due to lack of fund
and skill.

APPLICATION
Businesses that need small
investment like retail shops, trading,
small services business, small
engineering firms, clinics etc.
Businesses with low risk.

PERSONNEL MANAGEMENT
Every industry or business depends
upon its employees as its human
resources.
The personnel management is
concerned with acquiring and
managing these human resources in
the most efficient manner for
meeting the goals of the organization

FUNCTIONS OF PERSONNEL
MANAGEMENT

Job Evaluation
Staffing
Training
Merit Rating
Industrial Relation
Safety
Health and Welfare
Re-Training
Human Resource Development
Control over employee cost

JOB EVALUATION
Every category of job in the
organization is to be evaluated to get
a clear picture of the requirements
for every job regarding
educational/technical qualification,
experience, specialized skill
requirement, physical and mental
abilities etc.

STAFFING
Personnel management is
responsible for staffing or appointing
employees in the required number
and of the required quality as
required by different positions in the
organization. The staffing activity
includes advertising, recruitment,
testing, interviewing, selection and
placement.

TRAINING
Selected employees are to be given
adequate training to enable them to
understand the organization and
impart necessary skills, if any, to carry
out the work assigned to them. The
type and duration of training depend
upon the level at which an employee
is appointed, the skill requirements
specific to the job etc.

MERIT RATING
The performance of every employee
is to be evaluated scientifically and
periodically.
Performance is required for several
purposes like promotion, incentives,
deputation, demotion etc.
It is the responsibility of the
personnel management

INDUSTRIAL RELATION
Healthy trade union activities
Group activities like quality circles and
kaizen teams are to be implemented to
encourage employees to work in groups.
A very healthy industrial climate is to be
established and maintained by
implementing incentive schemes,
employee participation, suggestion
schemes, adequate grievance handling
procedures etc.

SAFETY
Adequate safety standards, safety
training, safe environment and
safety equipments are to be provided
to ensure good industrial safety.

HEALTH AND WELFARE

Maintaining good health of employees
is very important.
Periodic health check-ups, adequate
medical attention in case of accidents
must be provided.
Welfare facilities like canteen,
recreation facilities, sports clubs, arts
clubs, housing , transport etc are to be
provided.

RETRAINING
Technology used today may not be relevant
tomorrow.
To keep up with changing market needs,
either personnel with new skills are to be
employed or existing employees are to be
re-trained in new technology.
Retraining of existing employees is several
times better than new recruitments.
Hence, personnel management should be
adequately prepared to re-train employees.

HUMAN RESOURCE
DEVELOPMENT
Aims at the overall development of
every employee for meeting the
challenges faced by the company.
Employees are resources of the
company.
They are to be maintained at
optimum level technologically,
mentally, physically and socially.

CONTROL OVER EMPLOYEE

COST
Employee cost consists of salaries,
wages and benefits for the employee
forms a major portion of the
operational expenses of the
company.
Personnel management should
always keep the employee cost
under control.

PARTNERSHIP COMPANIES
Company is owned by more than one
person. Minimum 2 and maximum 10
persons can form a partnership company.
The partnership is started as per a
partnership agreement or partnership
deed signed by all partners.
The partnership agreement gives details
about the type of partnership, business
involvement, investment in capital etc

 General partners will have unlimited and

personal liability for the losses and debts of
the company. Limited partners have only
limited liability. The firm is not a legal
person.
Individuals with a common purpose put
together their money and expertise to
start and manage the business.
Registration of the firm with registrar of
companies is not compulsory.

TYPES OF PARTNERSHIPS

General or Equal Partnership

Limited Partnership
Active Partnership
Sleeping Partnership

TYPES OF PARTNERSHIP
All partners have equal and
unlimited liabilities. This means that
every partner is equally and
personally liable for the losses,
debts and liabilities of the firm.

LIMITED PARTNERSHIP
Limited partners will have only limited
liability to the extent of their investment
in the company.
Other partners will have unlimited
liabilities for the losses and debts of the
company. This will be clearly specified in
the partnership agreement.
Rules in some countries (India) permit
all partners to be limited partners, with
limited liability for all.

SLEEPING PARTNERSHIP
A sleeping partner does not actively
involve in managing the business
and does not participate in the
decision making process. However he
gets a share of the profit as agreed in
the partnership agreement.

ADVANTAGES

It is comparatively easy to start a

partnership firm. There are no complicated
legal procedures for starting a company.
One has to prepare a written partnership
agreement only.
Compared to single ownership companies,
partnership companies can have larger
capital and wider expertise.
Motivation among partners to succeed is
high.
Partners have full control over the business.

DISADVANTAGES
Unlimited and personal liability to all
general partners for losses and
liabilities of the company.
Wrong decision by one partner will
lead to downfall of the business
affecting all partners equally.
Partners may have disagreements.
No guarantee for continuity of stability

 Difficult to borrow money from

banks.
Death of a partner will affect the
continuity of business.
Low employee motivation, poor
salary and other facilities.
Shorter life span and low stability for
the company.

APPLICATION
Small businesses requiring
specialized skills eg law firms, small
engineering firms etc.
Quick starting of a company to take
advantage of favourable market
situation and high demand for
product or services. Eg. Software
companies.