INDUSTRIAL OWNERSHIP

INDUSTRIAL OWNERSHIP

There are several types of businesses prevailing around the world. Each business organizations have their own characteristics. They have their own advantages and disadvantages. Some of the major types of business organizations are partnership, joint stock venture, State or central government owned enterprises etc. The terms industrial ownership, business organization, forms of ownership of industry, types of business enterprise, types of ownership etc. convey the same meaning. To start a business enterprise the most important thing required is capital. 

·  Little capital is provided by single individual it is known as individual ownership, individual entrepreneur organization, single ownership, individual proprietorship etc. 

·  If the capital is provided 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 ownerships are as follows;

·  Single ownership  

·  Partnership 

·  Joint stock companies 

·  Corporations 

·  Cooperatives 

·  State or central government owned enterprises

Single Ownership:

One man owns this type of business. The business man invests capital, employs labour and machines. For example, retail-shops, workshops etc. The single owner invests, maintains and controls the entire business. Hence all gains or loss from business goes to him. It should be noted that he is fully liable for all the debts associated with the business. This type of ownership is easy to establish and simple to run with a minimum of legal restrictions.

Advantages

·        Easy formation: It is very easy to bring the business to existence.

·        Prompt decision making: Owner is prompt in decision making since there is 
to be consulted 

·        Operational flexibility: The organization is easy to operate and it is extremely flexible 

·        Maintains secrecy: Secrecy in business can be maintained by the owner

·        Easy to dissolve: The business can be dissolved at any time 

·        No coordination: There is no problem of coordination in the organization 

·        Coordination of effort and reward: efforts and rewards are directly related in this type of ownership.

Disadvantages

·        Limited Capital: The amount of capital that can be invested will normally be very limited 

·        Owner is not a Master of All: The owner of the business cannot be a master of all techniques, like management, sales and engineering etc. 

·        Expanding Business is difficult: It will be difficult to raise capital in order to expand the business 

·        Sole Responsibility: The owner is liable fore all obligations and debts of the business. 

·        Limited opportunities for employees: There will be limited opportunities for employees to get profit sharing, bonus etc. 

·        Limited Life: The firm ceases to exist with the death of the owner 

·        Unlimited Liability: When the business fails, the creditors take away the personal property as well as business property to settle their claims.

PARTNERSHIP

Partnership has been defined by the Indian partnership act 1932 as the relationship between persons who have agreed to share profit of a business concern carried on by all or any one of them acting for all. 

When 2 and up to 20 persons in the case of non-banking business and up to 10 in case of banking business enter into a contract to carry on a business allowed by law, with the object of making profit, a partnership is said to be formed.

It should be noted that every partner is liable and responsible for the acts of other partners in that business. The constitution of partnership is written in an agreement form. The partnership is usually optimal if the numbers of partners are less than 6. Lesser is always better. 

Usually persons with good ideas and experience in running a business make partnership with people who are financially sound. Thus both money and knowledge are brought together to earn profit.

Partnership comes into existence by means of an agreement. This written agreement is called a partnership deed.

Advantages 

·        Easy formation: Formation involves less legal formalities. Registration expenditure and stamp duty are considerably less. 

·        Limited government restrictions: this kind of ownership is not subjected to strict government supervision. Hence, it enjoys more freedom 

·        More capital: More capital can be raised in comparison with sole proprietorship 

·        Knowledge or skill: As the abilities and skills of each partner are different, more knowledge is available to run the business. 

·        Success pays; success of partnership pays high incentive 

·        Legal status: there is a legal status for the firm and it can borrow money quiet easily from banks.

·        Tax advantages: Partnership has tax advantages with it. As the total income is divided among partners. Each partner is assessed separately for income tax 

·        Losses are shared: for all losses, there is more than one person to share it. 

·        Consent of all: no major decisions can be taken without the consent of all partners.

Disadvantages

·        Unlimited liability: Each partner has unlimited liability, therefore risk involved is more. 

·        Limited period of existence after the death or retirement of any partners the partnership comes to an end. 

·        Limited partners means limited money: As there is a legal ceiling with respect to the number of partners, the total money that can be raised is limited when compared to a joint stock company 

·        Unstable: If anything happens to a partner, the partnership comes to a halt. Hence, partnership is unstable. 

·        Misunderstanding: Misunderstanding and friction are common among partners and this affects partnership. 

·        Mistakes affect all partners; any mistake of a partner leads to a loss for all the partners 

·        Lack of public confidence: Partnership usually does not enjoy public confidence as it lacks proper publicity of its affairs.

JOINT STOCK COMPANY

A joint stock company is an association of individuals, called shareholders, who join together for and agree to supply capital divided into shares that are transferable for carrying on a specific business other than banking business A joint stock company consists of more than 20 persons for carrying any business other than the banking business. 
There are two types of joint stock companies

1. Private limited company

2. Public limited company 

1) Private limited company 

The capital is collected from private partners; some of them may be active while others may be sleeping partners. Private limited company restricts the right to transfer shares; avoids public to take shares or debentures. The number of members is between 2 and 50, excluding employees and ex-employee share holders. The company need not file document such as consent of directors, list of directors etc with the Registrar of Joint Stock companies 

The company need not obtain from the Registrar, a certificate of commencement of business. 

The company need not circulate the Balance Sheet, profit or loss account 

A private company must get its account audited. 

A private company has to send certificate along with annual returns to the Registrar of Joint stock companies stating that it does not have shareholders more than 50 excluding the employees and ex employee share holders.

2) Public Limited Company: 

In public limited company, the capital is collected from the public by issuing shares having small face value. (Rs .50, 20,100) 

The number of shareholders 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 directors, list of director directors contract etc. along with memorandum of association of articles. 

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 start only after receiving the certificate to commence business 

It has to hold statutory meeting and to issue a statutory report to all members and also to the registrar within a certain period. 

There is no restriction on the transfer of shares. 

Directors of the company are subject to rotation. 

The public company must get the account audited every year

 This is the main document of a company which defines its objective and lays down its fundamental conditions as per which the company is allowed to be formed. It is the character of the company. The company cannot act outside the scope of the powers given to it by the memorandum. It gives information to the shareholders, creditors etc regarding the permitted range of activities of the enterprise, it cannot be changed except by following all the prescribed procedures.

Liquidation: 
If liabilities of the company become much more than the assets and when creditors press for the payment of loans it becomes difficult to run the company. At this time the company has to dissolve and this is known as liquidation .Liquidation may be voluntary or compulsory or under the supervision of the court the resources available do not permit the payment, the assets of the company are sold and the amount left after the payment is distributed among the shareholders. 

 

PUBLIC SECTOR

The industrial revolution gave birth to private capitalism. Since consumers and workers were exploited there arose the need for state intervention in the industrial field. This intervention led to the evolution of public sector or public enterprise. In India prior to independence there no public sector barring the field of transport and communication. Railways, Post and telegraph etc were managed by central government since pre independence period. Since independence a large number of public enterprises have been established by both central and state government. The Hindustan ship yard, the Hindustan steels, Hindustan Machine tools, Bharat Heavy Electricals, Indian Telephone Industries; Indian airlines Life Insurance Corporation of India etc are few examples of Public Sector.

A public sector enterprise is one that is owned by the state or managed by the state or owned and managed by the state. Public sector enterprises are controlled and operated by the state to producer and supply the goods and services required by the society. Unlimited control of public enterprises remains with the state and the state runs it with a service motto. But a public enterprise is seldom as efficient as a private enterprise. Waste and inefficiency are very common with public enterprises 

 

CORPORATION

A corporation is very similar to a joint stock company. They are brought into existence by state or central government by special law of the country defining the powers, functions and forms of management and relationship to other government departments. Corporations are fully owned by the Government and are financially self supporting .Chief executive members of the board are nominated by the government. Corporations are formed due to the changed industrial policy of India in April 1948. The manufacture of arms and ammunitions, atomic energy, railway services post and telegraph, iron and steel production, aircraft manufacturing ship building etc. have fully come under Government control and ownership. 

Types of Corporations 

Government departments: Railways, defense, post and telegraph dooradarshan etc. 

Public Corporations: LIC of India, state power corporations, Indian airlines, State road transport corporations etc. 

Government companies: HMT, BHEL, Hindustan Steel Etc.

Advantages 

·        It is an autonomous body and therefore it has the freedom of finance, management and flexibility of operation. 

·        Enjoys prompt attention and quick decisions as red tape and bureaucracy of departmental organization are avoided 

·        Ministerial directions and control ensures that the corporation is not run against public interest. 

·        Financial autonomy enables the firm to raise the required funds economically and conveniently

Disadvantages 

·        Autonomy and flexibility are only in name sake as ministers and politicians often interferer in the day today functioning of the organization

·        As the chief officers are from the government they do not take much interest in improving the functioning of the enterprise.

 

COOPERATIVE SOCIETIES

This is the most democratic form of business organization for the betterment of the general public. These cooperative societies help to protect the interest of the customers, small and independent producers and of the workers while fighting against monopolists and capitalists. The members of society supply the capital through shares; they manage the business and share the profit or loss. 

The forms of cooperative societies are listed below. 

·        Customer cooperative societies: Its main objective is to eliminate the middleman's profit by directly purchasing things at cheaper rate and then distributing among the members at reasonable price 

·        Producers' Cooperative society: This is a society for manufactured goods .The society supplies raw materials tools and other things to the producers and takes up the output for sale and for the distribution among the members 

·        Marketing Cooperative society: These are voluntary organizations of independent producers organizes for the purpose of arranging for the sale of their output. 

·        Housing Cooperative societies: These are association of persons who are interested in securing the ownership of the house of obtaining accommodation at a reasonable rate. 

·        Credit Cooperative societies: These are voluntary associations of people with an objective of extending short term loans and habit of saving among them. The funds of these societies consist of share capital contributed by members.

JOINT SECTOR

Management is a big head ache in case of a government organization. Industrial unrest, strikes and lockouts are the outcome s of ineffective management. Joint sector concept is one means to overcome these difficulties

Joint sector means participation of both the government and private industry with respect to the share capital and management of the unit. 

Joint sector aims at achieving optimal use of the resources .the government finances and the private enterprises maintains the effective working of the industry. Ex. Indian Oil Company. 

The share capital is usually in the ratio of 51:49 and in all cases the government holds 51% of the shares. 

In this set up government nominates the chairman but the managing director is from the collaborating private industry.

MOTIVATION

Do you have a high rate of absenteeism at your workplace? Your company could be in a motivation slump. If motivation is not boosted, your situation could escalate into conflicts, frustration and low productivity. A healthy environment shows in its teamwork and commitment. It is an environment in which employees enjoy challenges and are not afraid to provide input. Methods for employee motivation include boosting morale, offering rewards and recognition and simply communicating job security.

Motivation by Morale: When employees feel comfortable, happy and satisfied in their workplace environment, that sense of high morale results in motivation shown through teamwork, commitment and resolution of conflicts. The environment feels healthy and safe and productivity increases. The following tips are morale boosters through motivation for your organization: allow flexible working hours; involve all employees in decision making; and let your employees know you are listening. High motivation leads to high morale.

Motivation by Recognition: Let your employees know that what they do makes a difference. Recognition motivates employees by making them feel like they are contributing to the team. Assess whether your employees feel like they are part of the team by counting the numbers of "we's" instead of "I's" that are said in discussion. Without recognition, powerlessness is corruptive to an organization.

 

Motivation by Rewards: If properly applied, a rewards program results in team bonding, high performance and cooperation within the workplace. A rewards program can be a blend of monetary and nonmonetary reward motivators to help you achieve your goals in a cost-effective manner. A balance of team and individual rewards encourages both cooperative and competitive behaviors. Keep in mind, if rewards are misapplied, it could result in unhealthy competition and lack of cooperation, leading to severe financial consequences for the organization.

 

Motivation by Communication: Employees may be difficult to retain if their needs and concerns are not addressed. You may find them driven to other employers. Taking the time for conversation to communicate the status of the company can provide relief when there are worries about job security. Address employees' questions and complaints. Similarly, if they're asking for added responsibilities, more flexible hours or on-the-job training, it may worth considering. Motivation by communication will set fears of security aside to retain your employees.

 

LEADERS:

A leader is a person who influences a group of people towards a specific result. It is not dependent on title or formal authority. Ogbonnia (2007) defines an effective leader "as an individual with the capacity to consistently succeed in a given condition and be viewed as meeting the expectations of an organization or society." Leaders are recognized by their capacity for caring for others, clear communication, and a commitment to persist. An individual who is appointed to a managerial position has the right to command and enforce obedience by virtue of the authority of their position. Leadership can also be defined as one's ability to get others to willingly follow. Every organization needs leaders at every level.

LEADERSHIP

Successful leaders share the following characteristics or views:

Mission: Leaders know what their mission is. They know why the organization exists. A superior leader has a well thought out (often written) mission describing the purpose of the organization.

Vision: Where do you want your organization to go? A vision needs to be abstract enough to encourage people to imagine it but concrete enough for followers to see it, understand it and be willing to climb onboard to fulfill it.

Goal: How is the organization going to achieve its mission and vision and how will you measure your progress? Like a vision, goals need to be operational; that is specific and measurable.

Competency: You must be seen by your advisors, stakeholders, employees, and the public as being an expert in your field or an expert in leadership. Unless your constituents see you as highly credentialed--either by academic degree or with specialized experience and capable of leading your company to success, it will be more difficult for you to be as respected, admired, or followed.

A strong team: Realistically, few executives possess all of the skills and abilities necessary to demonstrate total mastery of every requisite area within the organization. To complement the areas of weakness, a wise leader assembles effective teams of experienced, credentialed, and capable individuals who can supplement any voids in the leader's skill set. This ability is what sets leaders apart from others. However, the leader needs to be willing to admit he lacks certain abilities and go about finding trusted colleagues to complement those deficiencies. After building the team, the entrepreneur needs to trust that team to understand issues, create solutions, and to act on them.

Communication skills: It does little good to have a strong mission, vision, and goals and even a solid budget if the executive cannot easily and effectively convey his ideas to the stakeholders inside and outside of the organization.

DUTIES AND RESPONSIBILITIES OF SUPERVISOR

It includes the following.

• Inspects products to verify conformance to specifications and directs setup and adjustments of machines.
• Studies production schedules and estimates worker hour requirements for completion of job assignment.
• Interprets company policies to workers and enforces safety regulations.
• Interprets specifications, prints, and job orders to workers, and assigns duties.
• Establishes or adjusts work procedures to meet production schedules.
• Recommends measures to improve production methods, equipment performance, and quality of product.
• Suggests changes in working conditions and use of equipment to increase efficiency of shop, department, or work crew.
• Analyzes and resolves work problems, or assists workers in solving work problems.
• Initiates or suggests plans to motivate workers to achieve work goals.

Qualification of the Supervisor: To perform this job successfully, an individual must be able to perform each essential duty satisfactorily. The requirements listed below are representative of the knowledge, skill and/or ability required. Reasonable accommodations may be made to enable individuals with disabilities to perform the essential functions.

Education and/or Experience: Associate's degree from two-year college or technical school; or two to five years related experience and/or training; or equivalent combination of education and experience.

Language Skills: Ability to read, analyze, and interpret general business periodicals, professional journals, technical procedures, or governmental regulations. Ability to write reports, business correspondence, and procedure manuals. Ability to effectively present information and respond to questions from groups of managers, clients, customers, and the general public.

Mathematical Skills: Ability to calculate figures and amounts such as discounts, interest, commissions, proportions, percentages, area, circumference, and volume. Ability to apply concepts of basic algebra and geometry.