Chapter 14: Stress and Burnout

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Title: Chapter 14: Stress and Burnout

1
UNIT - IV
Introduction to Market Pricing policies
2
Introduction to Market

It is a process of Buying and selling about
commodity
Its includes various commodities
Its includes goods and services

3
Meaning Definition

A place where buying and selling of a products is
done.
A certain place where buyers and sellers need and
exchange their goods and
services.
Market may be defined as an arrangement of
establishing effective relationship
b/w buyers and sellers of the commodities.

4
Meaning Definition (contd..)
According to professor. Chapman, The term
market refers to necessarily to a place but
always to a commodity and the buyers Sellers
who are in direct competitions with one another.
5
Features of Market

Commodity
Buyers and Sellers
Area
Relationship
Service

6
Factors governing Market Structure

Number of Sellers
Number of Buyers
Product differentiation
Conditions of Entry in the Market

7
Classification of Market
Classification
On the basis of Area
On the basis of Time
On the basis of competition
Local Market
Very Short term
Perfect Competition
Imperfect Competition
Short term
National Market
1.Monopoly 2.Monopolisic 3.Duopoly 4.Oligopoly
Long term
International Market
Very Long term
8
Perfect Competition Market

According to Bilas The Perfect Competition is
characterized by the presence of many firm. They
all sell identically same product, that is a
price taker.
According to Ferguson Perfect Competition
describes a market in which there is a complete
absence of direct competition among economic
groups.

9
Perfect Competition Market (Tabular format)
Price per unit (Rs) Demand for Sugar (Kgs) Supply for Sugar (Kgs)
5 5000 25000
4 10000 20000
3 15000 15000
2 20000 10000
1 25000 5000
10
Perfect Competition Market (Diagram)
Y
D
25000 20000 15000 10000 5000
S
D
S
O
5 10 15 20 25
X
11
Perfect Competition Market (Diagram) 1.Change
in Demand
Y
D1
D
E1
D2
P1 P P2
E
E2
D1
D
D2
O
X
M2 M M1
12
Perfect Competition Market (Diagram) 1.Change
in Supply
S2
Y
E2
S
E
P1 P P2
S1
S2
E1
S
S1
O
X
M2 M M1
13
Features of Perfect competition

Large number of buyers Sellers
Homogeneous product
Freedom of Entry Exit
Perfect Knowledge about Market
Perfect mobility
Absence of selling Transport cost
Uniform price

14
Price / Output determination in perfect
competition 1.Shot run
MC
Y
AC
ARMRPRICEAC
C
MC Marginal Cost ACAverage Cost ARAverage
Revenue MRMarginal Revenue EEquilibrium
PRICE/COST
F
E
O
X
Q
OUTPUT
15
Price / Output determination in perfect
competition 1.Long run
LMC
Y
LAC
ARMRPRICEAC
P
MC Marginal Cost ACAverage Cost ARAverage
Revenue MRMarginal Revenue EEquilibrium
LMCLong run Marginal cost LACLong run Average
cost
PRICE/COST
O
X
Q
OUTPUT
16
Differences b/w Perfect competition and Imperfect
competition
Points of Difference Perfect competition Imperfect competition
Number of Sellers Number of sellers is more than sellers in the imperfect competition Number of sellers is lesser as compared to perfect market
Price There is same price of a commodity There are different prices of the same commodity
Average Revenue AR of all firms are the same AR Revenue is different firms for different prices
Factors of production Factors of production are mobile Factors of production are not mobile
AR (price) AR price is equal to MC Price is greater than MC
Un limited of capacity In long run full capacity of the firm is utilized There is never full capacity of utilized
Selling cost Selling costs are zero or nil Selling costs quite substantial
17
Differences b/w Perfect competition and Monopoly
Points of Difference Perfect competition Monopoly
Number of Sellers There is large number of firms There is single firm
Price Taker/maker Firms are price taker Firms are price taker
MR AND AR Marginal revenue is equal to AR AR is greater than MR
Situation of MR and AR MR AR are parallel to x-axis Both MR AR down word sloping
Freedom There is freedom of entry or exit for firms There is no freedom of entry or exit for firms
MC and AR MCAR (Price) MCltAR (price)
Price discrimination Same price is charged from every customer. There is price discrimination
18
Monopoly Competition

Monopoly form of market is most commonly found in
public utility services such as transport, water
electricity supply.
Monopoly has been derived from the two Greek
words Monos Polus in this word Monos means
Single and Polus means Seller (single Seller).
Monopoly is that market situation in which a firm
has the sole right over production or sale of
product it has no competition in the market.

19
Types of Monopolies

Basically 2 types
Simple Monopoly
Discriminating Monopoly
Another 2 types
Private Monopoly
Public Monopoly

20
Causes responsible for emergence of Monopoly

Natural factors
Legal factors
Social factors
Cost factors
Heavy investment

21
Important features of Monopoly

Single producer or seller
No close substitute of the commodity
No firm can enter the market
Price Discrimination is possible
Firm can adopt independent price policy

22
Price discrimination under Monopoly competition
Y
Revenue
AR
MR
O
X
Quantity
23
Monopolistic competition

Monopolistic competition is mixture of monopoly
and perfect competition.
In this market situation both elements of
monopoly and perfect competition
Under this firm produce differentiated products
which are close substitute but not substitute

24
Features of Monopolistic competition

Many sellers
Freedom of entry or exit
Elements of both monopoly and Perfect competition
High cross elasticity of demand
Independent price policy

25
Curve analysis

Revenue Curve (under Perfect)
Revenue Curve (under Monopoly)
Revenue Curve (under Monopolistic)

26
Curve analysis (contd..)
Under perfect Market
Under Monopoly Market
Under Monopolistic Market
Y
Y
Y
R E V E N U e
R E V E N U e
R E V E N U e
AR
AR
MR
MR
O
O
O
X
X
X
Quantity
Quantity
Quantity
27
Oligopoly

Oligopoly is an important form of imperfect
competition
Oligopoly means few and poly means sellers.
Oligopoly refers only few sellers or firm.

28
Types of Oligopoly

Discriminating oligopoly
Pure oligopoly

29
Features of Oligopoly

Few firms
Nature of the product
Inter dependence of firm
Complex market structure
Selling costs

30
Duopoly

Duo means two and poly means seller
Its a two seller market
It a second important market in the imperfect
competition

31
Pricing methods

Its a part of value of commodity
Price include profitcost
Its capacity of a product or commodity in the
market

32
Meaning of Pricing

Pricing is not an exact science. Pricing
decisions, more often, are done by trial error.
Pricing include discount and concession benefit
Pricing is an important exercise. Under pricing
will result in losses.

33
Objectives of pricing

To maximize the profit
To increase sales
To increase the market share
To satisfy the customers
To meet the competition

34
Pricing policies

The firm bas to formulate pricing policies,
particularly when it deals in multiple products.
The pricing policies are intended to bring
consistency in the pricing pattern.

35
Types of pricing methods

Cost based pricing methods
1. Cost plus pricing
2. Marginal cost pricing
Competition based pricing
1. Sealed big pricing
2. Going rate pricing

36
Types of pricing methods (contd..)

Demand based pricing
1. Price discrimination
2. Perceived pricing

37
Types of pricing methods (contd..)

Strategy based pricing
1. Market skimming
2. Market penetration
3. Two part pricing
4. Block pricing
5. Commodity bundling pricing
6. peack load pricing
7. Cross subsidization pricing
8. Transfer pricing

38
Strategies of pricing

Pricing matching
Promoting brand loyalty
Time- Time pricing
Promotional pricing
Target pricing

39
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40
UNIT I11INTRODUCTION TO MARKETS AND PRICING
STRATEGIES
41
What is a Market?
Market is defined as a place or point at which
buyers and sellers negotiate their exchange of
well-defined products or services.
42
Market
Market is any area over which buyers and
sellers are in close touch with one another,
either directly or through dealers, that the
price obtainable in one part of the market
affects the prices paid in other parts. - Benham
43
MARKET CLASSIFICATION

Classification on the basis of Area covered or
location
Classification on the basis of time
Classification on the basis of degree of
competition

44
Classification on the basis of Area covered or
location Local market National
market International market
45
Classification on the basis of time very short
period market Short period market Long period
market
46
Classification on the basis of degree of
competition Perfect market Imperfect
market Imperfect market take several
forms Monopoly Duopoly Oligopoly Monopolistic
competition
47
Types of competition

Competition is of two types
Perfect competition
Imperfect competition

48
PERFECT COMPETITION
A market structure in which all firms in an
industry are price takers and in which there is
freedom of entry into and exit from the industry
is called Perfect Competition. The market with
perfect competition condition is known as
perfect market.
49
FEATURES OF PERFECT MARKET

Large number of buyers and sellers
Price taker
Homogeneous products
The firms are free to enter or leave the
industry
Perfect Mobility of factors of production
Perfect knowledge
No publicity cost
Uniform prices
AR curve is parallel to X axis

50
IMPERFECT COMPETITION
A market structure in which all the firms in
the industry are price makers and in which there
lies restrictions to enter in to the industry is
called Imperfect Competition. The market with
imperfect competition condition is known as
imperfect market
51
FEATURES OF IMPERFECT MARKET

Sellers and buyers
Nature of commodity
No uniform prices (price discrimination)
Entry is restricted
No perfect knowledge
Price maker
Publicity cost
AR curve is downward sloping MR curve is always
below AR curve

Features of MONOPOLY
Single seller large number of buyers
No close substitutes
Entry restricted
Price discrimination
AR curve is downward slowing from left to right
In monopoly firm industry are one and same.
i.e., single firm represents the whole industry.

53
Features of MONOPOLISTIC competition

In this market many firms produce differentiated
products. (e.g. Anacin, Disprin, Saridon)
Goods produced are close substitutes to each
other
No restriction to enter in to the market

54
Price out put determination in MONOPOLY

Monopoly is form of imperfect market.
No uniform prices (price discrimination)
AR curve is downward sloping MR curve is always
below AR curve

55
Cost out put relationship

Units of Output Q Total fixed cost TFC Total variable cost TVC Total cost (TFC TVC ) TC Average variable cost (TVC / Q) AVC Average fixed cost (TFC / Q) AFC Average cost (TC/Q) AC Marginal cost MC
0 60 - 60 - - - -
1 60 20 80 20 60 80 20
2 60 36 96 18 30 48 16
3 60 48 108 16 20 36 12
4 60 64 124 16 15 31 16
5 60 90 150 18 12 30 26
6 60 132 192 22 10 32 42
56
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57
PRICE OUTPUT DETERMINATION UNDER MONOPOLY
58
PRICING
Pricing is not an exact science, more often, are
done by trial error. Pricing is an important
exercise, Under pricing will result in losses and
over pricing will make the customers run away.
To determine price in a scientific manner it
is necessary to understand pricing methods
procedures.
59
PRICING OBJECTIVES

Maximize profits
Increase sales
Increase market share
Satisfy customers
Meet the competition

60
PRICING METHODS

Cost Based Pricing Methods
Cost plus pricing (full cost or mark up)
Marginal cost pricing (break even or target
profit pricing)
Competition Oriented Pricing
Sealed bid pricing
Going rate pricing
Demand Oriented Pricing
Price Discrimination (differential pricing)
Perceived value pricing

61
PRICING METHODS

Strategy Based Pricing Methods
Market Skimming
Market Penetration
Two part pricing
Block pricing
Commodity Bundling
Peak load pricing
Cross Subsidization
Transfer pricing (internal pricing technique)
Limit pricing

62
Types of Business Organizations
63
What is business?

An activity which is initiated with an objective
to earn profit is called business.
Business activity involves production, exchange
of goods and services to earn profits
Business may be defined as human activities
directed towards acquiring wealth through buying
selling goods.
L.H.Haney

64
Features of business

Entrepreneur
Exchange of goods and services
Profit motive
Risk and uncertainty
Creates utility
Utility may be
Form utility
Place utility
Time utility

65
Forms of business organizations

The following are forms of business organizations
Based on ownership
Sole trader or proprietorship
Partnership
Joint stock company
Cooperative society

66
Factors affecting the choice of form of business
organization

Before we choose a particular form of business
organization, let us study what factors affect
such a choice?
The following are the factors affecting the
choice of a business organization

Easy to start and easy to close The form of
business organization should be such that it
should be easy to start close. There should not
be hassles or long procedures in the process of
setting up business or closing the same.
Division of labour There should be possibility
to divide the work among the available owners
(specialization).
Large amount of resources Large volume of
business requires large volume of resources. Some
forms of business organization do not permit to
raise larger resources. Select the one which
permits to mobilize the large resources.

Liability The liability of the owners should be
limited to the extent of money invested in
business. It is better if their personal
properties are not brought into business to make
up the losses of the business.
Secrecy The form of business organization you
select should be such that it should permit to
take care of the business secrets.
Transfer of ownership There should be simple
procedures to transfer the ownership to the next
legal heir.

Continuity The business should continue forever
and ever irrespective of the uncertainties in
future.
Quick decision-making Select such a form of
business organization, which permits you to take
decisions quickly and promptly. Delay in
decisions may invalidate the relevance of the
decisions.
Personal contact with customer Most of the
times, customers give us clues to improve
business. So choose such a form, which keeps you
close to the customers.

Flexibility In times of rough weather, there
should be enough flexibility to shift from one
business to the other. The lesser the funds
committed in a particular business, the better it
is.
Taxation More profit means more tax. Choose
such a form, which permits to pay low tax.
These are the parameters against which we can
evaluate each of the available forms of business
organizations.

Factors affecting the choice of form of business
organization
Ease of formation and closure
Specialization/division of labor
Scope to raise large finances
Extent of liability
Transfer of ownership
Continuity
Pace of decision making
Personal contact with customers
Degree of flexibility
Degree of taxation

72
Sole trader
a sole trader is a person who carries on
business exclusively by and for himself, he is
not only the owner of the capital of the
undertaking, but is usually the organizer and
manager, takes all profits or responsible for all
losses. James Stephenson
73
Features of sole trader

Easy to start close
Unlimited liability
High degree of flexibility
Quick decisions
Limited area of operations
Direct access with customers
No continuity
Business secretes can be guarded well

74
Advantages of sole trader form of business

Easy to start and easy to close
Personal contact with customers directly
Prompt decision-making
High degree of flexibility
Secrecy
Low rate of taxation
Minimum interference from government
Transferability

75
Disadvantages of sole trader form of business

Unlimited liability
Limited amounts of capital
No division of labor
No continuity
Inadequate for growth and expansion
More competition
Low bargaining power

76
Partnership

According to section 4 of Indian partnership act
1932
The relation between two or more persons, who
have agreed to share profits of the business
carried on by all or any one of them acting for
all.

77
Features of partnership

Unlimited liability
Number of partners
Division of labor
Joint and several liability
Transfer of ownership
Dissolution
Implied authority
Utmost good faith and mutual trust

78
Partnership Deed

The written agreement among the partners is
called partnership deed.
Partnership deed contains terms conditions
governing the working of partnership

79
Contents of partnership

Names and addresses of the firm and partners
Nature of the business proposed
Duration
Profit sharing ration of partners
The amount of salary or commission payable to the
partners
Procedure to value good will of the firm at the
time of admission of a new partner, retirement of
death of a partner
Allocation of responsibilities of the partners in
the firm
Procedure for dissolution of the firm
Rights, Obligations and Liabilities of partners.

80
Kinds of partners

Active partner or working partner
Sleeping partner
Nominal partner
Partner by estoppels
Partner by holding out
Minor partner

Active Partner Active partner takes active part
in the affairs of the partnership. He is also
called as working partner.
Sleeping Partner Sleeping partner contributes to
capital but does not take part in the affairs of
the partnership.

Nominal Partner Nominal partner is partner just
for namesake. He neither contributes to capital
nor takes part in the affairs of business.
Normally, the nominal partners are those who have
good business connections, and are well placed
in the society.
On the strength of his name business may get more
credit in the market.

Partner by Estoppel Estoppel means behavior or
conduct. Partner by estoppel gives an impression
to outsiders that he is the partner in the firm.
In fact he neither contributes to capital, nor
takes any role in the affairs of the partnership.

Partner by holding out If partners declare a
particular person (having social status) as
partner and this person does not contradict even
after he comes to know such declaration, he is
called a partner by holding out and he is liable
for the claims of third parties. However, the
third parties should prove they entered into
contract with the firm in the belief that he is
the partner of the firm. Such a person is called
partner by holding out.

Minor Partner Minor has a special status in the
partnership. A minor can be admitted for the
benefits of the firm. A minor is entitled to his
share of profits of the firm. The liability of a
minor partner is limited to the extent of his
contribution of the capital of the firm.

86
Right of partners

To take part in the management of business
To express his opinion
To inspect books of accounts
To share profits as per agreement
To receive interest on capital at an agreed rate
of interest from the profits of the firm
To receive interest on loans, if any, extended to
the firm.
To be indemnified for any loss incurred by him in
the conduct of the business
To receive any money spent by him in the ordinary
and proper conduct of the business of the firm.

87
Duties of the partners

To act honest and be faithful to other partners.
To give correct information and true accounts to
fellow partners
Not to engage in any activity which competes the
firms business
Not to transfer share with consent of all other
partners.

88
Joint stock company

According to section 3 (1) of the Indian
companies act 1956 a company means a company
formed and registered under this act.
It is like a artificial person created by the
law with perpetual succession and common seal.

89
Features of joint stock company

Artificial person
Separate legal existence
Voluntary association of persons
Limited Liability
Capital is divided into shares
Transferability of shares
Common Seal
Perpetual succession
Ownership and Management separated
Winding up
The name of the company ends with limited

Artificial person The Company has no form or
shape. It is an artificial person created by law.
It is intangible, invisible and existing in the
eyes of law.
Separate legal existence it has an independence
existence, it is separate from its members. It
can sue other if they are in default in payment
of dues, breach of contract with it, if any.
Similarly, outsiders for any claim can sue it.

Voluntary association of persons The Company is
an voluntary association of persons who want to
carry on business for profit.
Limited Liability The shareholders have limited
liability i.e., liability limited to the face
value of the shares held by him.
In other words, the liability of a shareholder
is restricted to the extent of his contribution
to the share capital of the company.
The shareholder need not pay anything, even in
times of loss for the company, other than his
contribution to the share capital.

Transferability of shares In the company form of
organization, the shares can be transferred from
one person to the other. A shareholder of a
public company can sell his holding of shares at
his will. However, the shares of a private
company cannot be transferred. A private company
restricts the transferability of the shares.
Common Seal As the company is an artificial
person created by law has no physical form, it
cannot sign its name on a paper, so, it has a
common seal on which its name is engraved.
Every document or contract should be affixed by
the common seal, otherwise the company is not
bound by such a document or contract.

Perpetual succession Members may comes and
members may go, but the company continues for
ever and ever A. company has uninterrupted
existence because of the right given to the
shareholders to transfer the shares.
Ownership and Management separated The
shareholders are spread over the length and
breadth of the country, and sometimes, they are
from different parts of the world.
To facilitate administration, the shareholders or
promoters elect Board of directors, which looks
after the management of the business.

Winding up Winding up refers to the putting an
end to the affairs of the company. Because law
creates it, only law can put an end to it.
The name of the company ends with limited it
is necessary that the name of the company ends
with limited (Ltd.) to give an indication to the
outsiders that they are dealing with the company
with limited liability.

95
Formation of Joint Stock company

There are two stages in the formation of a joint
stock company. They are
To obtain Certificates of Incorporation
To obtain certificate of commencement of Business

Certificate of Incorporation The certificate of
Incorporation is just like a date of birth
certificate. It certifies that a company with
such a name is born on a particular day.
The promoters have to file the following
documents, along with necessary fee, with a
registrar of joint stock companies to obtain
certificate of incorporation
Memorandum of Association
Articles of association

Memorandum of Association The Memorandum of
Association is also called the charter or
constitution of the company.
It outlines the relations of the company with the
outsiders.
If furnishes all its details in six clause such
as
Name clause
Situation clause
Objects clause
Capital clause and
Liability clause
Subscription clause.

Articles of association Articles of Association
furnishes internal rules procedures governing
the internal conduct of the company.
The registrar of joint stock companies verifies
whether all these documents are in order or not.
If he is satisfied with the information
furnished, he will register the documents and
then issue a certificate of incorporation, if it
is private company, it can start its business
operation immediately after obtaining certificate
of incorporation.

Certificate of commencement of Business A
private company need not obtain the certificate
of commencement of business. It can start its
commercial operations immediately after obtaining
the certificate of Incorporation.
A public limited company can start its operations
only when the certificate of commencement of
Business is obtained

100

The following formalities have to be full filled
to obtain
certificate of commencement of Business
Seek permission from SEBI (to issue prospectus)
File the prospectus with the registrar
Collecting the minimum subscription
Allotting shares.

101
Advantages of Joint Stock Company

Mobilization of larger resources
Separate legal entity
Limited liability
Transferability of shares
Economics of large scale production Continued
existence
Institutional confidence
Professional management

102
Disadvantages of Joint Stock Company

Ownership and management are separated
Very difficulty in formation of a company
High degree of government interference
Delay in decision making
Higher taxes

103
Cooperative societies

A cooperative society is a society registered
under the cooperative societies act.
It is an association of the weak who come
together to uplift themselves from weakness to
strength through organized efforts.
The philosophy of the cooperatives movement is to
improve their economic conditions through
collective efforts.
The cooperative societies Act 1904, provided a
legal basis for the formation of cooperative
credit societies in the villages and urban areas
for granting loans to their respective members.

104
Features of cooperative societies

It is a voluntary association
Separate legal existence
Compulsory registration
Open membership irrespective of caste, religion
etc
Service motive, the objective is not to make
profits.

105
Public enterprise

It is a form of organization where government
participates in the business.
when the government takes part in the business
public enterprise is set up.
There are certain areas such as defense,
infrastructure, heavy industries and so on where
private participation is not possible, and hence
government had to enter in the business.

106
Objectives of Public enterprise

To accelerate the rate of economy growth
To speed up industrialization
To increase infrastructural facilities
To promote balanced regional development
To increase employment opportunities
To promote economic welfare.

107
Forms of Public enterprises
Departmental undertaking
Public corporation Government
company
108
Departmental undertaking

This is the earliest from of public enterprise.
Under this form, the affairs of the public
enterprise are carried out under the overall
control of one of the departments of the
government.
The government department appoints a managing
director (normally a civil servant) for the
departmental undertaking. He will be given the
executive authority to take necessary decisions

109

The departmental undertaking does not have a
budget of its own. As and when it wants, it draws
money from the government exchequer and when it
has surplus money, it deposits it in the
government exchequer.
Examples for departmental undertakings are Indian
Railways
Department of Posts
All India Radio
Doordarshan
Defense undertakings like DRDL, DLRL, ordinance
factories, and such.

110
Features of Departmental undertaking

Under the control of a government department It
is subject to direct ministerial control.
More financial freedom The departmental
undertaking can draw funds from government
account as per the needs and deposit back when
convenient.
Like any other government department The
departmental undertaking is almost similar to any
other government department
Budget, accounting and audit controls The
departmental undertaking has to follow guidelines
underlying the budget preparation, maintenance of
accounts, and getting the accounts audited
internally and by external auditors.

111
Public corporation

A public corporation is defined as a
body corporate created by an Act of
Parliament or Legislature and notified by the
name in the official gazette of the central or
state government. It is a corporate entity having
perpetual succession, and common seal with power
to acquire, hold, dispose off property, sue and
be sued by its name.
Examples of public corporation are
Life Insurance Corporation of India,
Unit Trust of India
Industrial Finance Corporation of India,

112

public corporation
It is also called as statutory corporation
It can formulate its own budget
It can recruit staff at different levels based on
the necessary specialization
It has total freedom in planning, management,
control of its operations

113
Government company

Section 617 of the Indian Companies Act1956
defines a government company as any company in
which not less than 51 percent of the paid up
share capital is held by the Central Government
or by any State Government or Governments or
partly by Central Government and partly by one or
more of the state Governments and includes a
company which is subsidiary of government company
as thus defined.

114
Features of government company

Like any other registered company the government
company has separate legal existence. Common
seal, perpetual succession, limited liability,
and so on. The provisions of the Indian Companies
Act apply for all matters relating to formation,
administration and winding up.

115
2. Shareholding The majority of the shares are
held by the Government, Central or State, partly
by the Central and State Government's, in the
name of the President of India. 3. Directors are
nominated by the government. 4. Subject to
ministerial control Concerned minister may act
as the immediate boss. the minister issue
directions for a company and he can call for
information related to the progress and affairs
of the company any time.
116
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117
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118
UNIT - V
BUSINESS NEW ECONOMIC ENVIRONMENT
119
Introduction to Business

Its Should be a economic activity
Its a Process of commodities
Its Relating to society
Its Concerned production, purchases, sales,
goods and services
It must have profit motive

120
Meaning and Definition

Business units have their own separate
Independent entity.
It may be managed controlled by private
entrepreneur.
According to w.o wheeler Business unit is a
concern company or a enterprise which buyer
seller, it own by one person or group of persons
it managed under specific self or operating
policies.

121
Choices of Business Organizations

Easy to start Easy to close
Division of labor
Large amount of resources
Liability
Secrecy
Transfer of ownership
Management Control
Continuity
Quick decision making
flexibility

122
Factors of Business Organization

Availability of Raw materials
Transport facilities
Communication facilities
Financial facilities
Insurance facilities
Ware house facilities

123
Forms of Business Organization

PRIVATE SECTOR
PUBLIC SECTOR
JOINT SECTOR

124
Forms of Business Organization

PRIVATE SECTOR
Sole trader
Partnership firm
Joint Hindu family
Co operative society
Joint stock company

125
Forms of Business Organization

PUBLIC SECTOR
Departmental organizations
Public corporation
Government companies

126
Forms of Business Organization

JOINT SECTOR
Private sector
Public sector

127
Characteristics of Private sector

Profit motive
No state participation
Private ownership
Independent Management

128
Characteristics of Public sector

Government control
Service motive
Separate owner
Accountability

129
Characteristics of Joint sector

Joint share capital
Combined Management
Mixed ownership

130
Sole proprietorship

According to Peterson Ti has no legal existence
a part from the proprietor himself he is the
firm.
It s also called sole trade, single ownership,
individual ownership one man business.

131
Features of Sole proprietorship

Easy formation
Limited Resources
Un limited liability
Freedom of choices of the business
Prompt decisions

132
Advantages of Sole proprietorship

Easy formation
Prompt decisions
Secretary
Economy
Personal touch
Freedom of good will

133
Disadvantages of Sole proprietorship

Limited resources
Limited managerial efficiency
Unlimited liability
Hasty decisions
Temporary existence

134
Evaluation of Sole proprietorship

Merits
Maintain the control of the business
Services of all specialists
Independent decisions
Demerits
Lack of responsibilities
Increase in expenses
Risk will not to be shared

135
Partnership Firm
According to Indian partnership act 1932- It
is relation between persons who have agreed to
share the profit of the business carried on by
all or any one of them acting for all.
136
Features of Partnership firm

Agreement b/w two more persons
Legal business
Profit motive
Unlimited liability
Utmost good faith
Mutual agency

137
Evaluation of Partnership firm

Merits
Easy formation
More resources Talents
Legal protection to minor
Personal relation
Lesser risk
flexibility

138
Evaluation of Partnership firm

Demerits
Unlimited liability
Limited resources
Lack of quick decisions
Temporary life
Slackness
Lack initiative

139
Registration of partnership firm

The Name of the firm
Place address of the firm
Names of those places where the firm intends to
work
The names full address of the all partners
The duration of the firm
Dates of which various partners joined the firm

140
Status of Minor partner

Right to share profit to the firm
Right to share the assets of the firm
Right to understand the books of accounts
Right to file suit in the court

141
Co-operative Societies

According to Seligman Co-privation in its
technical scene means abandonment of competition
in distribution production elimination of
middleman of all kind.
According to Horace Co-operative is an
association of person as usually of limited
means, who have voluntary joined together to
achieve a common economic end through the
formation of democratically controlled business
organization.

142
Features of Co-operative Societies

Registered society
Membership
Capital
Transfer of shares
Reserve fund
Mutual help
Government facilities
Equality of vote
Voluntary organization
Service motive

143
Types of Co-operative Societies

Consumer co-operative societies
Producers co-operative societies
Credit co-operative societies
Miscellaneous co-operative societies

144
Types of Co-operative Societies

Merits
Easy formation
Limited liability
Voluntary membership
Democratic management
Permanent life
Demerits
Limited capital
In efficient management
Mutual conflict
Absence of secrecy
No govt. control

145
Joint Stock Companies
According to Hancey A Joint stock company is
a voluntary association of persons for profit,
whose capital is divided in to transferable
shares and ownership is required for its
membership.
146
Types of Joint Stock Companies
On the basis of Incorporation
On the basis of Liability
On the basis of Ownership
Charted companies
Un limited

Public
Private
Government
Holding
Subsidiary
Foreign collaboration
Deemed
Other

Limited
Statutory companies

By shares
By Guarantee

Registered companies
147
Evaluation of Co-operative Societies

Merits
Permanent existence
Limited liability
Availability of large capital
Transferability of shares
Economies of large scale
Tax relief
Demerits
Excessive legal formalities
Fraud by promotes
Speculation by shares
Lack of secrecy
Evils of large scale business

148
Public Enterprise

Public enterprises or Public sector enterprises
are owned, managed controlled by the
government.
If may be central government, State government or
local body individually or Jointly.
The whole or major part of capital is contributed
by the govt.

149
Forms of Public Enterprise