This has become a very popular definition of management for several reasons. Firstly, this definition is very simple and easy to understand. Secondly, it highlights the indirect nature of a manager’s job. A manager does not operate a machine or sell a product himself. Rather he guides others in producing and selling goods and services. Thirdly, this definition reveals that a manager is the leader of people working under him. Fourthly, it states that management is basically an art or practice of achieving results. The above definition is, however, inadequate for the present day concept of management. It suffers from the following drawbacks.
(i) This definition does not reveal that management is a science. The modern concept of management is much wider than simply a skill in getting things done through other people. Since the days of F.W. Taylor management has become a science based on certain fundamental principles. (ii) The above definition does not highlight how does management get things done through people. It fails to reveal the functions of a manager and the skills used for getting things done. (iii) This definition does not recognize the role of human beings. It treats people as mere tools forgetting results and does not consider their feelings, emotions and needs.
People are inanimate objects and cannot be treated as mere tools. People have their aspirations and are not mere commodities or means to achieve certain ends. Management is certainly much more than just getting things done through others. (iv)The above definition gives an impression that management gets things done by hook or crook. Results alone are not significant. The means employed to achieve results are equally important. This definition is of man’s putative character. (v) This definition does not reveal that a formal organizational set up is needed for getting things done.
A careful analysis of the above mentioned definitions reveal the following important characteristic feature of a Joint Stock Company.
1. An artificial person: –
The company enjoys all the rights as a citizen of a country would enjoy. It ‘can own properties, enter into contracts etc.
2. Legal formation: –
The formation of a Joint Stock Company is governed by the rules and
regulations laid down in the Companies Act, 1956.
3. Voluntary organisation: –
It is formed by members voluntarily joining the organisation and contributing money or money’s worth for the business.
4. Separate legal entity: –
The Company has a separate legal existence. The owners are different from the people who manage the business. The management is however headed by owners who are elected directors. The company is separate from the persons who own it. The company cannot be held responsible for any misdeeds of the members.
5. Perpetual succession: –
Unlike Sole proprietorship and Partnership, the Company has continuous existence. The continuity of the business is not affected by the death, insolvency or insanity of any member. “Men may come and men may go, but a company will go until it is wound up.”
6. Limit to liability: –
The liability of the members of a company is restricted to the extent of the unpaid value of the shares held by him. The personal asset of a shareholder cannot be used to pay the company’s liabilities.
7. Large capital: –
A Joint Stock Company can generate huge amount of money towards capital, because the number of persons contributing towards capital are more in number when compared to Sole Proprietorship or Partnership organisation.
8. Large scale operation: –
Since huge amounts are collected as capital, the operation of the business will generally be on a large scale basis.
9. Transferability of shares: –
The shares of a Joint Stock Company are easily transferable from one person to another, since it is a Public Limited Company. The shares of a Private Limited Company or Government Company are not transferable.
10. Common seal: –
The company, being an artificial being, cannot affix its signature on the documents on its own. The common seal is used in place of a signature.
Joint Hindu Family Business is a distinct type of organisation which is unique to India. Even within India its existence is restricted to only certain parts of the country. In this form of business ownership, all members of a Hindu undivided family do business jointly under the control of the head of the family who is known as the ‘Karta’. The members of the family are known as ‘Co-parceners’. Thus, the Joint Hindu Family firm is a business owned by co-parceners of a Hindu undivided estate. Its main features are :- * It comes into existence by the operation of Hindu law and not out of contract. The rights and liabilities of co-parceners are determined by the general rules of the Hindu law.
* The membership of this form of business is the result of status arising from the birth in the family and its legality is not affected by the minority. Originally, only three successive generations in the male line ( grandfather, father and son) constituted the membership of this organisation. By the Hindu Succession Act, a female relative of a deceased member or a male relative of such a female member was made eligible for a share in the interest of the related member ( called co-parcener) at the time of his death. There is no legal limit to the maximum number of members. * Registration is unnecessary, but the rights of its members to sue third parties for claims of debt remains unaffected.
* It is managed generally by the Karta. He has the authority to obtain loans against the family property or in other ways. Other members have no right of management nor to contract loans binding on the joint-family property. * The manager or the Karta has the last word in the formulation of all policies and in their execution. He has unquestioned authority in the conduct of the family business. * The Karta has unlimited liability while the liability of the other members is limited to the value of their individual interests in the joint family. * The firm enjoys continuity of operations as its existence is not subject to the death or insolvency of a co-parcener or even of the Karta himself. Thus, it has a perpetual life like the public limited company.Advantages * Ease of formation * Continuity of operationsDisadvantages * Confined to Joint Hindu families * Relatively limited capital * Limited managerial talents * Unlimited liability of the Karta|
The concept of management is universal and very old. That is why different views have been expressed about its nature by different writers from time to time. The continuous and rapid development of management principles and practices in organization has changed the nature of management. The main points of view about the nature of management are given below:
Management as an Inborn or Acquired Ability
In the pre-scientific management period, i.e., prior to 1880 there has been a leading concept that management is an inborn ability. It is a traditional approach. The supporters of this concept believe that the hereditary characteristics, inborn talents and natural aptitudes of a man make him an efficient manager. Some people are so efficient and talented since their birth that they lead and get success in the field of business. To our mind, this concept was used when the ownership and management were not separated.
But later on the researches and development in the field of science, technology and training etc. changed this old concept. Today management is considered not only as an inborn ability but also as an acquired ability. In the words of Ordway Tead, “Managers are both born and made.” Today, in large-sized business organizations, ownership and management are separate identities. The management lies in the hands of professional managers who are educated and trained. Thus, now the management can be considered as an acquired ability.
Management as an Art, Science or Both
A lot of controversy arises whether management is an art or science or both. It is said that the management is the oldest of arts and youngest of science. This explains the changing nature of management. But to have an exact answer to this question, it is necessary to understand both these aspects separately and combinedly, as given below:
Management as an Art:
Art refers to the way of doing specific things; it indicates how an object can be achieved. In the words of George R. Terry, “Art is bringing about of a desired result through the application of skill.” Art is, thus, skilful application of knowledge which entirely depends on the inherent capacity of a person which comes from within a person and is learned from practice and experience. In this sense, management is certainly an art as a manager uses his skill, knowledge and experience in solving various problems, both complicated and non-complicated that arise in the working of his enterprise successful. In the words of Ernest Dale, “Management is considered as an art rather than science mainly because managerial skill is a personnel possession and is intuitive.”
Management as a Science:
Science may be described as a systematized body of knowledge based on proper findings and exact principles and is capable of verification. It is a reservoir of fundamental truths and its findings apply safely in all the situations. In this sense, management is a science as it has also developed some systematized knowledge. Like other sciences, management has also developed certain principles, laws, generalization, which are universal in nature and are applicable wherever the efforts of the people are to be coordinated. But management is not as exact science as other physical sciences like physic, chemistry, biology, astronomy etc. The main reason for the inexactness of science of management is that it deals with the people and it is very difficult to predict their behavior accurately. In this way, management falls in the area of ‘social sciences’. Thus, it is a social science.
Conclusion- Management is an Art and Science Both
From the above study, we conclude that management is an art and science both. According to American Society of Mechanical Engineers. “Management is the art and science of preparing, organizing and directing human efforts to control the forces and utilize the material of nature for the benefit of men. “Thus, it has now been accepted that management is an art as well as science. It has the elements of both arts and science. In the words of Dean Stanley, “Management is a mixture of an art an science – the present ratio is about 80% art and 20% science.”
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In the commercial and legal parlance of most countries, a general partnership (the basic form of partnership under common law), refers to an association of persons or an unincorporated company with the following major features: * Created by agreement, proof of existence and estoppel. * Formed by two or more persons
* The owners are all personally liable for any legal actions and debts the company may face It is a partnership in which partners share equally in both responsibility and liability.
A partnership is an arrangement where parties agree to cooperate to advance their mutual interests.
A ‘sole proprietorship, also known as the sole trader or simply a proprietorship, is a type of business entity that is owned and run by one individual and in which there is no legal distinction between the owner and the business. The owner receives all profits (subject to taxation specific to the business) and has unlimited responsibility for all losses and debts. Every asset of the business is owned by the proprietor and all debts of the business are the proprietor’s. It is a “sole” proprietorship in contrast with partnerships. Glos and Baker write that “A sole proprietorship is a business owned by one person who is entitled to all of its profits,” Reed and Conover say “The single or the sole proprietorship is a business owned and controlled by one man even though he may have many other persons working for him. A sole proprietor may use a trade name or business name other than his or her legal name.