TyroCity: Business Studies Notes

Company meeting : preliminary general meeting, annual general meeting, extraordinary general meeting

Business Studies XI Notes — Sun, 18 Aug 2013 05:41:42 +0000

Company meeting
Company is an artificial legal person. It is not capable to think or decide any important matter. But through meeting it can think and easily make any decisions. Meeting means gathering of people who are connected with the company for discussion in certain place. It can be defined as assembly of number of person for predominated purpose and by previous notice for discussion and decision on the same business matter.

Types of meeting

General meeting
The meeting of shareholders is known as general meeting. The types of general meeting are

1. First or preliminary general meeting
First official meeting of shareholder is known as first general meeting. It is also known as preliminary general meeting. It must be conducted within one year after receiving certificate of commencement of business. It occurs only once in the lifetime of public company. Its main aim is to give details of company to all shareholders about the number of shares issued. Share holders must be pre-noticed about place, time, date and agenda in advance of 21 days of conducting the meeting. Following things are discussed in the meeting.

Authorized capital
Number of share
Issued share capital of company
Paid up capital
Total amount of installment paid
Loan borrowed from any bank
Financial institution
Name and address of current director

2. Annual general meeting
It is held in each financial year within six months from the date of expiry of its financial year. It is held to inform shareholders about progress of the company, about the ongoing performance and future plan of company. Share holders must be pre-noticed about place, time, date and agenda in advance of 21 days of conducting the meeting. Following things are discussed in the meeting

Annual financial statement
Audit and directors report
Matter related to the distribution of dividends
Appointed of any directors
Appointment of any auditor

The information and report may be printed in newspaper too. If any shareholder request for the copy of annual financial statement, director’s repost and auditor report then company should provide it.

3. Extra ordinary general meeting:
If any important matter arise and it should be discussed sooner and can’t be waited till the annual general meeting then this meeting is held. It is also called special circumstances and is held when special and urgent decisions have to be made. Share holders must be pre-noticed about place, time, date and agenda in advance of 15 days of conducting the meeting. This meeting is conducted by

a. By board of directors
In case of emergency

b. By auditor

In auditing the account there can be need of shareholder’s idea and so auditor calls this meeting with a reasonable cause
In case BOD fail to call meeting then auditor may submit application to company registrar offices for stating reasons about not conducting meeting.

c. By shareholder
10% of paid up capital or at least 25% of total shareholders demand to call this meeting with reasonable cause. They request to board and submit application. If there is no meeting within 30 days then application is submitted to company registrar with reasonable reason. Then registrar office can call a meeting.
Extra ordinary general meeting is called for following purposes

Increasing authorized capital of the company
Decreasing the share capital of the company
Altering name or objective of the company
Issuing bonus shares
Selling shares at discount
Converting private company into public company or vice versa

2. Board of directors (BOD) meeting
It is also called meeting of directors. Board means collective name for directors. When directors of company come together to determine its policy and to take decisions according to its act then the meeting of BOD is called. It is held at regular interval. In public company it is held when there is attendance of 51% of total number of directors. Its main agenda are management of company about share, recommendation of dividend, appointment of officers and fixation of data. Decisions are taken by passing resolution. If any director is not satisfied with decision then s/he can write the note of dissent of proof of his rejection.

Difference between Delegation and Decentralization of Authority

Business Studies XII — Sun, 18 Aug 2013 05:41:42 +0000

Difference between delegation and decentralization of authority

Bases	Delegation of authority	Decentralization of authority
Nature	Process of transferring authority and creation of responsibility between superior and subordinates is called delegation. It can take place without decentralization	Decentralization is delegation of and dispersion of authority. It is not possible without delegation of authority
Purpose	It minimizes the burden of managers of unit, departments or plant	It prepares the organizational participants of the organization
Relationship	Relationship is between superior and immediate subordinates are indicated	Relationship is between top level, management, departments and units
Techniques	It is technique of management used to get the things done through others	It is both philosophy and technique of management
Parties	It is confined to manager and subordinates	It involves all managers at all level and relates relationship between departments, sections and units.
Responsibilities	Authority is only delegated, not responsibilities	Superior is relieved from responsibilities too
Necessity	Very important to management process	It is optional and situational as per the need
Control	Control remains in hand of superior who supervise the activities of subordinates	Control is delegated and decentralized to the departmental managers
Withdrawal of authority	It can be withdrawn by delegator at any time	Withdrawal of authority is not simple.

Techniques of motivation

Business Studies XII — Sun, 18 Aug 2013 05:41:42 +0000

1. Financial incentives: First techniques of motivation are financial incentives as money is indicator of success. Therefore, it fulfills psychological safety and status need as people satisfy their needs by money. Wages, salary motivates employees to perform better.

2. Job enlargement: Under this technique, task assigned to do job are increased by adding simile task. So the scope of job enlargement is high for the motivation of subordinates. It is also known as horizontally leading of job.

3. Job enrichment: Under this technique jobs are made challenging and meaningful by increasing responsibility and growth opportunities. In such technique of motivation, planning and control responsibility are added to the job usually with less supervision and more self evaluation. It is also called vertical leading.

4. Job rotation: it refers to shifting an employee from one job to another. Such job rotation doesn’t mean hanging of their job but only the employees are rotated. By this it helps to develop the competency in several jobs which helps in development of employees.

5. Participation: Participation refers to involvement of employee in planning and decision-making .it helps the employees feel that they are an asset of the organization which helps in developing ideas to solve the problems.

6. Delegation of authority: Delegation of authority is concerned with the granting of authority to the subordinates which helps in developing a feeling of dedication to work in an organization because it provides the employees high morale to perform any task.

7. Quality of work life: It is the relationship between employees’ and the total working environment of organization. It integrates employee needs and well-being with improves productivity, higher job satisfaction and great employee involvement. It ensures higher level of satisfaction.

8. Management by Objectives: It is used as a motivation and technique for self-control of performance. By this technique supervisor and subordinates set individual and organizational goals. Each individual’s responsibilities are clearly defined which would help identify the skill sets one has to make the best use of the same to meet organizational mission and vision. This also helps the organization function effectively.

9. Behavior modification: The last technique of motivation is behavior modification. It develops positive motivation to the workers to do the work in desired behavior in order to modify behavior.

Principles of Record Management

Business Studies XI Notes — Sun, 18 Aug 2013 05:41:42 +0000

1. Principle of purpose
While maintaining the record, the purpose of record keeping should be clear. Records without purpose are a waste of time, labor and money. The purpose of record keeping should not be unsuitable for organization.

2. Principle of verification
There must be evidence of all the documents which are preserved in an office. If the verification is not possible, it has no value as proof in court.

3. Principle of classification
All the records should be classified on the basis of nature of documents. Proper classification of records helps to avoid confusion. It helps in proper evaluation of business performance.

4. Principle of reasonable cost
While maintaining the record, the cost factor should be considered. Therefore, the valuable information should be recorded systematically and useless information should be disposed.

5. Principle of elasticity
The process of record management should be elastic in capacity i.e. it should be capable of being expanded or contracted according to requirement.

6. Principle of retention of records
The main objective of record management is to preserve the required document for future reference. The unnecessary document should be disposed. Therefore, according to value and importance of records should be preserved.

7. Principle of availability
Records are preserved for future reference. It should be protected in such a way that required information should be easily available. The records are useless if they are not available in the current time

Characteristics of public enterprises

Business Studies XI Notes — Sun, 18 Aug 2013 05:41:42 +0000

Some features of public enterprises

1. Government ownership: It is totally owned by government. Its majority shares are taken up by the government. In this enterprise, sometimes 50% of share is owned by the government.

2. Government management and control: It is one autonomous body which is managed and owned by government. Government controls and manages organization by appointing key personnel. It is like board of directors, managing directors, chairman and so on which manage the appointing, transfer of members and so on.

3. Public accountability: They are operated by government fund. It is also accountable to general public. It is carried out by the parliament and helps in providing goods and services for public.

4. Service motive: It provides service to the public. It provides goods and services to the public at reasonable price. It is guide by service motive but it can earn nominal profit.

5. Autonomous: It is one autonomous body which is managed and owned by government. It receives fund from the government. But government doesn’t interfere in the day-to-day activities of the organization.

6. Monopoly: Government has monopoly in this sector.

7. Separate legal entity: It is established under acts and is rum under a law. It can purchase and sell securities, can enter into any contract, can sue and can be sued.

8. Stability: It is generally stable and perpetual in nature.

Functions of managerial leader

Business Studies XII — Sun, 18 Aug 2013 05:41:42 +0000

Leader is true representative of the organization who represents the organization to those working for it as well as to the outside world. A leader functions as a chain between management and staff. S/he represents management before the workers and work before the management
A leader must establish organizational goals. It is the primary function of the leader. S/he also should participate with superior to get it done
When the skill and knowledge of the subordinates are not used properly a managerial leader must provide the guideline and effective path as motivational factor to them
A leader must act like a captain to the team, must win the confidence of most of the colleagues and encourage team work.
The leader must design proper system of communication and communicate authority and responsibility to its subordinates so that they can know about their work
A managerial leader must understand problems and feelings of the subordinates and try to solve them tactfully
A leader must maintain good relationship with subordinates and other people
A good managerial leader must facilitate change in the organization whenever and wherever necessary.
A leader has the responsibility to control, supervise and see different departments to achieve organizational goals
A leader should be able to evaluate the performance of subordinates. There must be provision of both reward and punishment.

Concept of cooperative organization

Business Studies XI Notes — Sun, 18 Aug 2013 05:41:42 +0000

Meaning and concept
Co-operative organization is the form of organization where in persons voluntarily associate together as business being a basis of equality for promotion of economic interest of themselves. It is a voluntary association of persons with same interest. It is guided by service motive. It is established for economical and social development of weaker section of the society. It tries to solve similar problems. In all form of business organizations, the objective of owner is to make profit. But its objective is to provide services. Its motto is all for one and one for all. It helps through mental support too. It can be defined as voluntary association of person usually of limited means forming together in equal basis for promotion of certain economic or business interest.

Retention and disposal of records

Business Studies XI Notes — Sun, 18 Aug 2013 05:41:42 +0000

Retention of records

Retention is defined as the preservation of records for future reference. It involves collection, preservation, classification and protection of records for future reference. It is maintained in files, computers etc. Every record has a life span. It is protected according to its importance. Retention of record depends upon nature of organization.

Importance

Records are preserved for future reference. The records should be accurate because human mind may forget the information but recording the records is perpetual
Hearsay records cannot be taken as record. Real records and hard copy of records should be maintained that will be helpful in the time of legal disputes.
Human minds cannot store all the information in their brain therefore records are to be maintained. They help in future reference.
Records provide various types of information which help in making decision
Retention helps to delete errors in a record.
It helps in making comparison

Procedure of record retention

1. Classification of records
It helps to determine the value and volume of all the records. It classifies the records according to its importance and usefulness

2. Determination of record retention schedule
It helps in development of retention schedule. The retention period should be pre determined. The period depends on usefulness and legal requirement

3. Transfer of records
It means transferring of records from active file to inactive files. It is useful because the less important files are transferred. The inactive records are shifted to the least expensive storage area.

4. Protection of vital of records
The important records must be protected. They should be protected from firing, damage by water, dust, insects etc.

5. Destruction of records
The useless records are destructed. The records which have values are stored and others are disposed. This helps in creating space

Disposal of records

Once created and used records must be destroyed. The destruction of useless records is called disposal. The records are not retained forever. Office manager must wisely dispose all unnecessary ad useless records. It helps in creation of space.

Winding up of company

Business Studies XI Notes — Sun, 18 Aug 2013 05:41:42 +0000

Winding up of Joint Stock Company

Winding up of Joint Stock Company is the process of bringing the existence of the company to the end. It refers to the closure of business forever. In this time company being a legal person created by law can dissolve its own business in the following way:

1. By company registrar office

According to company act, registrar office may order winding up company under following condition:

If promoters of the company makes application showing reasons for failure to commence the business of company
If company is in default in submitting office return notice, information and facts to pay fine as required by the act

2. By voluntarily

In the following condition company can wind up;

Company has become insolvent with accordance with law on insolvency
Shareholders of company can wind up the company either by adopting special resolution in general meeting
If company is able to pay its debts and other liabilities in fault.
If directors of company have after due, company makes declaration in written form that the company is able to pay its debts or other liabilities in full.

Concept and purpose of filing

Business Studies XI Notes — Sun, 18 Aug 2013 05:41:42 +0000

Meaning of filing
It is the process of classifying, arranging and storing record so that they can be located when required. It is also the process o collecting and arranging records or their copies in such a way so that whenever it is needed it could be found very easily. All office receives letters and dispatches that are kept for the future use. They are to be stored in a safe place. For that filing is required. It is an important part of management that helps to decide about anything in a legal and systematic way. It is the process of arranging and protecting records so that they may be found and delivered easily when needed for future.

Purposes:

It helps to keep all records together so the history of office can be understood.
It helps to provide safety place for storage of necessary documents in order to use and locate them when required.
To make records readily and easily available.
It can be used as evidence in case of dispute
It helps in some legal formalities.
It is shown as profit or legal evidence.
It can be presented as a legal document in court.
It helps to make future plans. Past records are the base of future records

Characteristics of Multinational Companies

Business Studies XI Notes — Sun, 18 Aug 2013 05:41:42 +0000

Characteristics of multinational companies are given below:

1. Productive organization: this organization produces various types of goods and services. It is supplies in many countries. It uses its own technology, patent right for manufacturing goods.

2. Worldwide: multinational companies operate in whole world. It extends its business worldwide. It establishes many branches in various companies. They extend their business in more than one country.

3. Ownership and control: ownership of company remains on both parent and host country. Parent company control, manage and help in the operation of all host countries. They have control in capital, high technology, and trade mark.

4. Transfer of technology: these multinational companies are establishes with hug capital and advanced technology. It also transfers the technology in the host countries that can be used for production.

5. Marketing superiority: it is large organization which has international name and fame. It has good network worldwide for distribution of goods.

6. High efficiency: these organizations operate their business with efficiency. They use advanced technology. They also involve keenly in research works. They used many trained person that helps in the production of quality goods.

Factors to be considered while selecting office machines and furniture

Business Studies XI Notes — Sun, 18 Aug 2013 05:41:42 +0000

Factors to be considered while selecting office machines and furniture are listed below:

1. Need of machines: before selecting any machine its degree of need is to be checked thoroughly. The alternates available to the machine also should be analyzed

2. Cost: cost of machine is a very important factor to be considered before selecting any machine. The machine should be within the budget of an office

3. Operating cost: capital cost and operating cost should be taken into account. Similarly, maintenance cost, repair cost, and space required for the machine also should be analyzed

4. Durability: office machine should be original, durable and lost lasting. Office machines are very expensive and it is not possible to purchase new machine every year. Therefore, the machine to be purchased must be free from problem of frequent break down. This also saves in repair cost

5. Easy to operate and flexible: office machine should be easy to operate and flexible. There shouldn’t be need of any additional training and specialization for handling of office machine. Machine should be usable for numerous purposes too

6. Servicing: office machines require regular repair and maintenance. The spare parts of the machines should be easily available in the market. Likewise, the servicing facilities should be readily available.

7. Quality and speed: office machine should be of higher quality. It should be speedy in nature.

Factors to be considered for selecting office furniture

1. Cost: cost of furniture is a very important factor to be considered before selecting any machine. The furniture should be within the budget of an office.

2. Design: design of furniture relates with height and width, color, number of drawers, and so on. No matter what, furniture should support the space and must facilitate the works done.

3. Durability: office furniture should be made up of steel rather than wood because steel furniture is compatible and lost lasting. Office furniture can be expensive and it is not possible to purchase new furniture every year because it doesn’t even support the space. Therefore, the furniture to be purchased must be free from problem of breakage.

4. Multiple uses: furniture should be usable for numerous purposes in the office.

5. Uniform: furniture in the office must have uniform quality and cost. They must have lower cost of maintenance.

6. Safety: office furniture should be safe. Glass topped and sharp cornered furniture are relatively unsafe.

7. Saving space: choice of furniture also depends upon the space occupied by furniture. Such furniture should be selected which would occupy minimum office space. Bulky and space occupying furniture indirectly add office cost.

8. Comfort: office furniture should be comfortable. Comfortable furniture will result in increased efficiency of the employees

9. Portability: the furniture being portable can be easily shifted from one room to another, one building to another and form one location to another.