Assignment Code: BTMC-132/TMA/2022-23

Course Code: BTMC-132

Assignment Name: Fundamentals of Management

Year: 2022-2023

Verification Status: Verified by Professor

Assignment A

Answer the following in about 500 words each.

Q1) Discuss the characteristics of Sole Trader Organisation and Partnership form of Organisation along with their respective merits and limitations.

Ans) Sole Trading Organisation: The oldest type of organisation is the sole trader organization, which is also called a proprietorship. It is also the most common type of organisation for small businesses even today. It is the most basic and easy to make. What is needed is for a person to decide what kind of business to start and gets the money needed to do so.

He can get the money he needs from his own savings or by borrowing from friends and family. The business can be run out of a part of his own home or in a building he rents. Most of the time, the person runs the business on his own. Therefore, a sole trader organisation is "a business run by one person using his own money, skills, and intelligence. This person is entitled to all the profits and takes on all the risks of ownership." J.L. Hanson describes it as "a type of business unit in which one person is solely responsible for providing the capital, bearing the risk of the enterprise, and running the business." In this type of business organisation, there is no difference between the business and its owner.

a) Key features

1) One man ownership

2) No separation of ownership and management

3) No separate entity

4) All profits to proprietor

5) Individual Risk

6) Unlimited Liability

7) Less Legal Formalities

b) Merits

1) Easy to start:

2) Direct motivation

3) Full control

4) Quick decisions  

5) Operations that are flexible

6) Privacy

7) Personal touch

8) Dissolving the business is easy

c) Limitations

1) Not enough money

2) Poor management skills

3) Not good for running a big business

4) Liability with no limits

5) Less stability

6) No checks and balances

7) Less opportunity for economies of scale.

Partnership form of Organisation: This involves a situation where two or more persons come together, pool their capital and skills, and organise the business. This type of business organisation is called partnership organisation. It grew essentially because of the limitations and failure of the sole proprietorships. As defined by J.L. Hanson, “a partnership is a form of business organisation in which two or more persons up to a maximum of twenty join together to undertake some form of business activity.” The people who own a partnership business are called "partners," and the business as a whole is called a "firm" or a "partnership firm." Partners agree on how much money they will put into the business and how much responsibility they will share for running it.

a) Key features

1) Plurality of persons

2) Contractual relationship

3) Profit sharing

4) Existence of business

5) Principal-agent relationship

6) Unlimited liability

7) Good faith and honesty

8) Restriction on transfer of share

b) Merits

1) Easy formation

2) More capital available

3) More diverse skills and expertise

4) Flexibility

5) Secrecy

6) Keen interest

7) Protection

8) Checks and controls over careless decisions

9) Diffusion of risk

c) Limitation

1) Limited capital

2) Unlimited liability

3) No public confidence

4) Non-transferability of interest

5) Uncertainty

6) Conflicts among partners

7) Risk of implied authority

Q2) Explain the meaning and importance of ‘Staffing’ as a management function. Describe the Internal and External sources of Recruitment.

Ans) The staffing function is making sure that the organisation has the right people working for it. It involves hiring people, giving them training and helping them grow, paying them, and giving them feedback on how they are doing. “Staffing" can be thought of as the manager's job of hiring and training people to do different managerial and non-managerial tasks in the organisation. The purpose of the function is to find, get, and use the right people to help the organisation reach its goals. Staffing also involves making members of the organisation better and more useful so that they can do a better job.

Managers are always in charge of staffing. This is because the organisation needs to keep and keep up with its employees all the time. The staffing function includes things like planning for people or human resources, hiring, picking, placing, training and development, pay, performance reviews, promotions, transfers, and so on. Most of the above tasks are taken care of by the personnel management or human resources management department in many companies. Line managers are in charge of most decisions and projects related to staffing. But the personnel management department gives line managers the expert advice they need to do their jobs better.

Manpower planning and management take care of these tasks and try to make sure that employees are paid and evaluated in the best way possible. There are two ways to hire people: from inside and outside the company. The people who work for the organisation are obviously the internal sources. Some organisations get most of their information from their own employees, while others don't. It depends on the organization's policies, preferences, the nature of the job, the quality of the employees, and the ability of their unions to negotiate.

Internal Sources of Recruitment: Most of the time, when an organisation needs to fill a position, it looks into the possibility of promoting or moving current employees.

a) Advantages

1) Familiarity with own employees

2) Better use of talents

3) Cheap Recruitment

4) Boosts morale

5) A source of motivation

b) Limitations

1) Limits the choices

2) Not enough good candidates

3) Stop competition

4) Causes arguments

5) Stagnation of skills

External Sources of Recruitment: External sources of recruitment bring in a vast number of skilled, semi-skilled, and unskilled people from outside the organisation. External requirements can be met in a number of ways, including through public and private employment agencies, labour unions, educational institutions, professional associations, former employees, and so on. Organizations may also use less formal ways to find people who want to work for them, such as talking to people they know.

a) Advantage

1) It is a more open process, so the organisation is likely to get a lot of applicants. This gives the organisation more ways to choose who to hire.

2) Access to talented candidates

3) The chance to choose the best candidates

4) Promotes healthy competition

b) Limitations

1) Costs money and takes time

2) They do not know how the organisation work.

3) Makes the current employees feel unhappy and frustrated

4) Don't encourage the people who are already working there.

Assignment B

Answer the following questions in about 250 words each.

Q3) Explain the two categories of ‘Commerce’.

Ans) There are two main parts to commerce: buying and selling goods and doing things that are necessary for the smooth flow of goods.

Trade: Trade is when people buy and sell goods and services. So, trade is the selling, giving away, or exchanging of goods and services with the goal of making money. The point of trade is to get goods to people who want them and are willing to pay for them. So, trade is a big part of putting producers and consumers in touch with each other and getting rid of people as a barrier.

People who buy and sell things are called "traders" or "middlemen.

Trade can be put into two main groups:

Internal Trade: "Internal trade" refers to trade that happens within the borders of a country.  We can divide internal trade into wholesale trade and retail trade, based on the size of the business.

External trade: This is also called "international trade" or "foreign trade. “External trade is the exchange of goods and services between countries.  We can divide international trade into three groups  import trade, export trade, and re-export trade.

Aids to Trade: Aids to trade are things that make it easier for people to trade. So, aids to trade are all the things that people do to get rid of obstacles and make it easier for goods to move from producers to consumers. They are also known as "trade accessories."

1. Transportation

2. Warehousing

3. Insurance

4. Advertising

5. Banking

Q4) Outline the main features of the Human Relations Approach and Behavioural Approach to Management, respectively.

Ans) The human relations approach to management problems is based on the idea that a modern organisation is a social system in which the behaviour of employees is affected by their environment and their relationships with each other. The Human Relations Approach developed based in the experiments done by Elton Mayo. It stresses that the relationship between authority and responsibility between bosses and subordinates should be based on how happy employees are socially and psychologically. Only by making employees happy can a company get their full cooperation, which will make the company more efficient. Management should encourage the formation of social groups at work and give people chances to get to know each other.

Managers should know how important democratic leadership is so that people can talk to each other freely and take part in making decisions.

As a follow-up to the human relations approach to management, the behavioural approach was made. The behavioural approach looked at how people act in organisations from a social and psychological point of view. Many of the conclusions of the Hawthorne studies were confirmed by later studies, but some ideas were expanded on and others were brought to the forefront by behavioural scientists. According to this theory, the way a person acts is closely tied to how the people in the group he is a part of act. As an individual, a person may be more likely to resist pressure to change how they act. By nature, most people like to work and are driven by things like self-control and personal growth.

Q5) Briefly explain any two theories of motivation.

Ans) McGregor’s Participation Theory: Based on the work that workers did, Douglas McGregor made two sets of assumptions about people. Theory X contains the first set of assumptions, and "Theory Y" contains the second set of assumptions. In McGregor's Theory X is based on the idea that the average person doesn't like to work and will try to avoid it if he can. The managers of these employees think that "most people have to be forced, paid, told what to do, or threatened with punishment to put in enough effort to reach organisational goals."

Theory X says that: People are not honest by nature.

Don't want to work at all or want to work as little as possible. Motivation

1. Don't take care of things.

2. Are not interested in achievement.

3. Can't control how they act on their own.

4. Don't care about the needs of the organisation.

5. You like to be told what to do by others.

6. If you can, avoid making decisions as much as you can.

7. Don't know much.

Maslow’s Need Priority Theory: Maslow's theory is about what people need. Maslow thought that the process of getting people to do things starts with behaviour that is at least partly aimed at meeting needs. He thought that people's needs can be put in a certain order, from the most basic to the most important. Maslow thought that the needs have a clear order of importance. Maslow says that if a person's physiological and safety needs are not met, he can't be motivated until he meets these needs first.

Assignment C

Answer the following in about 100 words each.

Q6) Differentiate between Ownership Capital and borrowed Capital.

Ans) Ownership Capital is the amount of money that a business's owners put into it. Owners have a right to the profits of a business based on how much money they put into it. Companies get money by giving out shares. By holding shares in a company, investors who put money into its share capital become its owners. Most of the time, ownership capital is used as permanent capital or capital for the long term.

Borrowed Capital or Loans are often used to meet the business's financial needs. There is also an agreement that the loan will be paid back in full when it is due. Interest on a loan is a fixed cost that has to be paid no matter how much money you make.

Q7) What are the major functions of a promoter of a company?

Ans) A promoter could be a person, a group, or a business. In their role as promoters, they do the following things to get a company started and incorporated: Promoters are usually the first people do the research that is needed to find out if starting a business is possible and profitable. Then, they form a company to get the resources they need to make the idea a reality. The company's first directors, on the other hand, are either the promoters themselves or people chosen by them. The promoters ask a few people they think would be good for the job if they would agree to be the first directors of the new company. To decide on the company's name, the promoters must ask the Registrar of Companies for permission before choosing a name.  The promoters must also choose bankers for the company who will receive the money from the shares.

Q8) Outline the points of distinction between Memorandum and Articles.

Ans) Memorandum of Association: The company's charter is the Memorandum of Association. It has to be made from scratch for each company.  It says what the company's goals are and why it is being made. The memorandum explains what a company can do and how it collaborates with other people. For registration, the founders have to give the Registrar of Companies a printed Memorandum of Association that has been signed and stamped.

Articles of Association: The Articles of Association are the rules and regulations for running the company's internal business. They also set the rules for how the company and its members interact with each other. Articles of association are important for every business.  The subscribers should also sign the articles of association separately, and a witness should sign them as well.

Q9) Describe factors which affect the Span of Control in an organisation.

Ans) The most important factors that affect the span control in an organization are:

1. The nature of the work: If the work is simple and repetitive, the span of control can be larger.

2. The manager's skills: A manager with more leadership, decision-making, and communication skills may have a wider range of control.

3. How well the organisation works: Organizations with good systems and skilled workers can have a wider range of control.

4. Staff assistants: When staff assistants are used, supervisors and subordinates can have less contact with each other and cover a wider area.

5. Time available for supervision: At the higher levels, the span of control should be smaller because top managers have less time to supervise.

6. The skills of the subordinates: When subordinates have good judgement, take the initiative, and feel like they have responsibilities, they need less help from their boss.

7. Degree of decentralisation: Executives need to learn to allocate tasks instead of doing all the work all by themselves.

Q10) What are the qualities that an effective leader should possess?

Ans) A leader cannot do his job well if he does not have certain traits in his head and heart. No matter what the manager-own leader's job responsibilities are or what style he uses, he or she will usually have a number of qualities that make them a good leader. Here is a list of the most important of these traits:

1. Good mental and physical health.

2. Empathy

3. Self-confidence

4. Aware of what other people think of him.

5. Goals

6. Knowledge and intelligence

7. Decisiveness

8. Ability to communicate.

9. Sense of purpose and responsibility

10. Other qualities: Enthusiasm, courage, sense of direction, judgement, tact, courtesy, and integrity are also regarded as necessary qualities for a leader to be effective.