Posts Tagged ‘business forms’
An organization tries to establish an effective behavioral relationship among selected employees and in selected work places in order that a group may work together effectively. There are three kinds of work which must be performed whenever an organization comes into being, division of labor, combination of labor and co-ordination, the people and the relationship between them. These are known as fundamentals in every successful organization.
Division of labor
Since an organization of human associations for the achievement of common goals, it involves individuals and groups of individuals. When two or more individuals join together to perform certain tasks, it follows that some division of work is done. Properly or improperly, fairly or unfairly, work is divided among those who participate in a productive organization. With effective planning and organization in an enterprise, the division of labor leads to a fixing of responsibility, the delegation of authority, specialization, and other conceptual schemes which are frequently called the principles of an organization.
Private sector plays major role in capitalist or market economic system. Private investment, management and control dominate in private sector. The forms of business firms in private sector include partnership firms, sole proprietorship, private limited companies and public limited companies. The sole proprietor or sole trader is an individual who invests, owns, manages and controls the business. The individual invests his own and or borrowed capital, manages and business, bears all the risks alone, enjoys all the profits and suffers from all the losses. Thus the sole proprietor is the sole owner, manager, controller, strategist, policy maker, risk-bearer, financier all rolled in to one. The advantages of sole proprietorship form of business include ease facility of formation, quick decision making prompt, action, establishment of maximum personal contact with customers, confidentiality of business decisions, flexibility, lower costs of management etc.
The stage of economic development and the level of economic development and the level of economic activity determine the suitability of a form of business firm. In fact, a particular form of business firm play a dominant role in the economic activities at a particular stage of economic development. In other words, all forms of business firms play their due roles in the economic activities. The forms of business firms are mainly divided in to three categories like private sector, public sector and cooperative sector. When it comes to private sector, there are three forms like sole proprietorship, partnership, and joint stock companies. The two forms of public sector are departmental undertakings and statutory corporations. All the co-operative societies are comes under co-operative sector. The total business activity in the country is carried out in three sectors viz., private sector, public sector and co-operative sector.