1. Centralization Authority is concentrated in a few hands.
All the authority is kept by the top level management

2. DeCentralization
Authority is distributed to all the levels of management
Only essential authority is kept by the top level management

3. Centralization & DeCentralization
Sr. no.
Features
Centralization
Decentralization
Advantages
Disadvantages 1
Decision making
Decision can be made quickly
Decision can not be made quickly 2
uniformity
Uniformity of plans, policies, procedure, system
No uniformity of plans, policies, procedure, system 3
Personal leadership
Possible ,
result in high efficiency & productivity
Not possible, result in low efficiency & productivity

4. Sr. no.
Features
Centralization
Decentralization
Advantages
Disadvantages 4
emergencies
Beneficial during emergencies
Harmful during emergencies 5
Coordination
All activities can be coordinated towards the common goal
Coordination of activities is very difficult 6
Result
Employees are supervised directly, so they work carefully i.e less wastage, duplication, overlapping etc.
Employees are not supervised directly, so they don’t work carefully i.e more wastage, duplication, overlapping etc.

5. Sr. no.
Features
Centralization
Decentralization
Advantages
Disadvantages 7
specialization
Manager concentrated on thinking while employee concentrated on doing
Everyone is doing everything, therefore no specialization 8
Diagram

6. Centralization & DeCentralization
Sr. no.
Features
Centralization
Decentralization
Disadvantages
Advantages 1
Burden / pressure
Top level manager have to take all decision & supervise all the work
Top level manager take only important decision , routine and unimportant decision are taken by subordinates 2
Diversification & expansion
No time for diversification & expansion
Concentrate on diversification & expansion

7. Innovation & creativity
Sr. no.
Features
Centralization
Decentralization
Disadvantages
Advantages 3
Innovation & creativity
Manager have limited time so they can’t be creative & innovative
Manager have plenty of time so they can invent new methods, techniques, products & encourages creativity 4
Motivation & morale
Subordinate are not given power to make decision so they do not motivated to work efficiently, similarly their morale is very low
Subordinate are given power to make decision, this motivates them to increase efficiency & productivity so it increase their morale

8. Development of junior manager
Sr. no.
Features
Centralization
Decentralization
Disadvantages
Advantages 5
Development of junior manager
J. Manager are not allow to think, decide & act on their own therefore they have less opportunity
J. Manager are allow to think, decide & act on their own therefore they have good opportunity for development 6
Unity of plans and action
No unity of plans and action 7
communication
Decision, order & instruction come from very high level so they get delayed & distorted Problem in comm.
Decision, order & instruction are made at low level so this minimize comm. problem

9. Types of organization Line organization (military organization)
Functional organization
Line & staff organization

10. 1. Line organization Simple structure and easy to understand
Highest and lowest position are connected in series of intermediate
Each intermediator act as a link between subordinate & superior
Line of authority flow from top to bottom
Each step is clear cut position of superior and subordinates therefore it is called as line organization
Line of authority & responsibility flow upward like army therefore it is called as military organization

11. 1. Line Organization Structure
BOD GM
Sales manager
Purchase manager
Production superintendent
Dept.1 – foreman
workers
Dept.2 – foreman
Dept.3 – foreman
Production manager
Finance manager
Highest Authority
Lowest
Authority

12. Advantages of line organization
Simplicity
Economy
Unity of command
Fixed responsibility
Unified controls
Quick decision
Discipline
Stability
flexibility

13. Disadvantages of line organization
Overlappnig
Lack of specialization
Limited to small concerns
More wastage of resources
Applications of line organization
Suitable for small scale industry like production industries, power station, sugar mills, textiles, paper industries etc.

14. 2. Functional organization
Foreman is divided in to two parts
Office section
Production shop
Each foreman is specialist or activity incharge in a particular area

15. Functional organization structureGM
Superintendent
Office section
Route clerk
Instruction clerk
Time & cost clerk
disciplinarian
Production shop
Gang boss
Speed boss
Repaired boss
Quality inspection
Workers

16. Advantages of functional organization
Specialization
Mass production
Reduction in overload
Improve efficiency
Effective control
Improve quality

17. Disadvantages of functional organization
Lack of coordination
Indiscipline
Absence of versality
Delay in decision
Difficulty in fixing responsibility
No opportunity to worker to show their responsibility
Multiplicity of authority
Impossible to develop all rounder executives
Industrial relations become more complex
Involves large amount of money for salaries/wages

18. Application
Medium scale industry like software industries, turn key project etc

19. 3. Line and staff organization
Combine line organization with staff dept.
Multiple layer of organization
Develop step-by-step
Line manager have full authority & control works of their subordinate whereas staff performs the specialist job of functions like R&D, Quality works etc.
Suggestions of staff are directly to line manager, it is up to them whether to accept or not

20. Line & staff organization structure
Share
holders
BOD GM
Chief
Accountant
Work manager
Plant manager
Chief designer
Quality manager
Superintendent
Foreman
Forman
Workers
workers
foreman
Industrial engg.
Stores officers
Personal manager
Purchase manager
Line & staff organization structure

21. Sole proprietorship and Partnership
Sr. no
Features
Sole proprietorship
Partnership 1
Formation procedure
Easy to form,
No legal formalities, no need for registration
Agreement between the partners, registration of agreement 2
law
none
Indian partnership act, 1932 3
membership
Single ownership i.e. one man show
Min – 2
Max – 10 (banking)
20 (trading) 4
Management and control
Concentrated in the hands of proprietor
Shared among the partner 5
Commencement of new business
Any time
As per agreement of the partners

22. Sole proprietorship and Partnership
Sr. no
Features
Sole proprietorship
Partnership 6
Transfer of ownership rights
Sale of business as per desire of the owner
Sale of business with mutual consent of the partner 7
Capital raising power
Very limited. Depends on owner’s saving & his capacity to borrow
Limited, depends on the contribution of the partners 8
Distribution of profits
All profit belongs to owner
Profits are shared among the partners 9
Business secrecy
Maximum because of single owner
all transaction/ policies/ practices are known to the partners 10
suitability
Suitable for small business
For medium size business

23. JOINT STOCK COMPANY
Associated of stock holders/ share holders, who are agree to supply capital for carrying out business
Once the certificate of commencements issued, they start their business

24. Private limited company Public limited company
TYPES OF JSC
JSC
Private limited company
Public limited company

25. Private company and Public company
Sr. no
Features
Private company
Public company 1
Formation
Requires only one certificate (incorporation)
Requires 2 certificates – incorporation & trading
No need of file the documents related to directors
Consent of directors & their contracts to buy qualification shares must be filed 2
membership
Min – 2
Max – 50 (excluding employee)
Min – 7
Max – no limit 3
formalities
Only 2 members have to sign the memo & articles
Only 7 members have to sign memo & articles 4
restriction
No restriction on allotment of shares
No legal restriction on allotment of shares

26. Private company and Public company
Sr. no
Features
Private company
Public company 5
capital
Can not raise capital from the public or from open market
Can raise capital from public by issuing a prospectus 6
Meeting and file report
Neither required to hold a meeting nor file report with registrar
Must hold meeting and file report with registrar 7
BOD & MD
At least 2 directors
At least 3 directors
Director need not retire by rotation every year
Subjected to retirement by rotation
No restriction on managing directorships
Restriction on the appointment of managing directorship

27. Partnership and JSC Sr. no Features partnership JSC 1
Formation procedure
Agreement between the partners, registration of agreement
Comes in to existence only on issue of certificate of incorporation by the registrar companies 2
law
Indian partnership act, 1932
Indian partnership act, 1956 3
membership
Min – 2
Max – 10 (banking)
20 (trading)
Min – 2 (private)
7 (public)
Max – 50 (private)
no limit (public) 4
Management and control
Shared among the partner
BOD collectively who need not be owner of the company 5
liability
unlimited
limited

28. Partnership and JSC Sr. no Features partnership JSC 5
Transfer of shares
With mutual consent of partners
Shares are freely transferable 6
Continuity of life
No stability, terminable on the expiry of agreement period or will or death of any partner
Perfectly stable, unaffected by change of membership or death of shareholders & directors 7
constitution
Flexible, agreement can be change at will of the partners
Not flexible 8
Business secrecy
Limited to partner, no audit or report compulsory
Secret share with members. For public sector audit and reports are compulsory 9
Winding up
At will
Under companies act 1956

29. Govt. department & Govt. company
Sr. no
Govt. dept
Govt. company 1
Directly controlled by concerned minister through secretarial staff and whole responsibilities lies with chief executive of govt. dept.
Directly controlled by BOD, who are appointed by govt. are managing the company 2
Finance is given by govt through annual budget & revenues are paid to govt exchequer
Shares of company are purchase by govt & chairmen of BOD operates the accounts 3
Selection of personal and appointment is adopted
Selection of personal is in the hands of BOD but political influences always permits 4
The revenue/ profit is directly deposited to govt exchequer
Profit earned is retained with company account 5
Budgets, accounting & audit procedure remains same as that of other govt dept
Accounting are audited by auditors as in case of other companies