DEPARTMENT OF QUANTITY SURVEYING, FACULTY OF

ENVIRONMENT TECHNOLOGY (FET),

ABUBAKAR TATARI ALI POLYTECHNIC, BAUCHI-NIGERIA

COURSE TITLE: PRINCIPLES OF MANAGEMENT

COURSE CODE: QUS 204

SEMESTER/ACADEMIC SESSION: 2ND/2022/2023

PRINCIPLES OF MANAGEMENT

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DEFINITIONS OF MANAGEMENT

Mary Parker Follett (1868 – 1933)

She was considered as the mother and prophet of management. One popular definition is by
Mary Parker Follett. Management, she says, is the "art of getting things done through people".
This definition is divided into two parts. The first state that management is the "art of getting
things done". Management is characterized by outstanding performance and result. The second
part believes that managerial works are executed 'through people'. Managers should see their
relationship with subordinates as teamwork.

Peter Ferdinand Drucker (1909- 2005)

Drucker is regarded as the master of Management thought and father of modern corporate
Management. In 1999, he provided the following definition: "Management is task. Management
is discipline. But Management is also people. Every achievement of Management is the
achievement of a manager. Every failure is the failure of a manager.People manage rather than
"forces" or "facts”. “Management may be defined as the process by means of which the purpose
and objectives of a particular human group are determined, clarified and effectuated
“Management is a multipurpose organ that manage a business and manages Managers and
manages Workers and work.

George R Terry (1877 - 1955)

A'Management Is a distinct process consisting of planning, organizing, actuating and controlling;

utilizing in each both science and art, and followed in order to accomplish pre-determined
objectives."

Harold Koontz (1909-1984)

"Management is the art of getting things done through others and with formally organized
groups."

Frederick Winslow Taylor ( 1856 – 1915)

"Management is the art of knowing what you want to do and then seeing that they do it in the
best and the cheapest may."

Singhry (2008)

Defined management as the art, science, and craft of getting things done through others in a
formally organized group. Management deals with the function of planning, organizing, leading,

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motivation, staffing, decision making, resource utilization, change, and control. These functions
help managers to meet financial and non-financial objectives .

PRINCIPLES OF MANAGEMENT

HENRI FAYOL'S PRINCIPLES OF MANAGEMENT

( 1841–1925)

Fayol presented 14 principles of management as general guides to the management process and
management practice.

These are as under:

1. Division Of Work

Assign each employee a task that they can become proficient at. Productivity increases as
employees become more skilled, assured and efficient. Today, experts still warn against multi-
tasking. Division of work in the management process produces more and better work with the
same effort. Various functions of management like planning, organizing, directing and
controlling cannot be performed efficiently by a single proprietor or by a group of directors.
They must be entrusted to specialists in related fields.

2. Authority and Responsibility

As the management consists of getting the work done through others, it implies that the manager
should have the right to give orders and power to exact obedience. A manager may exercise
formal authority and also personal power. Formal authority is derived from his official position,
while personal power is the result of intelligence, experience, moral worth, ability to lead, past
service, etc. Responsibility is closely related to authority and it arises wherever authority is
exercised. An individual who is willing to exercise authority, must also be prepared to bear
responsibility to perform the work in the manner desired. However, responsibility is feared as
much as authority is sought after.

3. Discipline

Discipline is absolutely essential for the smooth running of business. By discipline we mean, the
obedience to authority, observance of the rules of service and norms of performance, respect for
agreements, sincere efforts for completing the given job, respect for superiors, etc.

The best means of maintaining discipline are

(a) good supervisors at all levels,

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(b) clear and fair agreements between the employees and the employer, and

(c) judicious application of penalties. In fact, discipline is what leaders make it.

4.Unity of Command

This principle requires that each employee should receive instructions about a particular work
from one superior only. Fayol believed that if an employee was to report to more than one
superior, he would be confused due to conflict in instructions and also it would be difficult to
pinpoint responsibility to him.

5. Unity of Direction

It means that there should be complete identity between individual and organizational goals on
the one hand and between departmental goals inter-see on the other. They should not pull in
different directions.

6. Subordination

Subordination of Individual Interest to general Interest In a business concern, an individual is

always interested in maximizing his own satisfaction through more money, recognition, status,
etc. This is very often against the general interest which lies in maximizing production. Hence
the need to subordinate the individual interest to general interest.

7. Remuneration

According to Henri Fayol's principles of management The remuneration paid to the personnel of
the firm should be fair. It should be based on general business conditions, cost of living,
productivity of the concerned employees and the capacity of the firm to pay. Fair remuneration
increases workers" efficiency and morale and fosters good relations between them and the
management.

8. Centralization

If subordinates are given more role and importance in the management and organization of the
firm, it is decentralization. The management must decide the degree of centralization or
decentralization of authority on the basis of the nature of the circumstances, size of the
undertaking, the type of activities and the nature of organizational structure. The objective to
pursue should be the optimum utilization of all faculties of the personnel.

9. Scalar Chain

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Scalar chain means the hierarchy of authority from the highest executive to the lowest one for the
purpose of communication. It states superior-subordinate relationship and the authority of
superiors in relation to subordinates at various levels. As per this principle, the orders or
communications should pass through the proper channels of authority along the scalar chain. But
in case there is need for swift action, the proper channels of authority may be short-circuited by
making direct contact (called gang plank) with the concerned authority.

10. Order

To put things in an order needs effort. Disorder does not need any effort. It evolves by itself.
Management should obtain orderliness in work through suitable organization of men and
materials. The principle of "right place for everything and for every man" should be observed by
the management. To observe this principle, there is need for scientific selection of competent
personnel, correct assignment of duties to personnel and good organization.

11. Equity

Equity means equality of fair treatment. Equity results from a combination of kindness and
justice. Employees expect management to be equally just to everybody. It requires managers to
be free from all prejudices, personal likes or dislikes. Equity ensures healthy industrial relations
between management and labor which is essential for the successful working of the enterprise.

12. Stability of Tenure of Personnel

In order to motivate workers to do more and better work, it is necessary that they should be
assured security of job by the management. If they have fear of insecurity of job, their morale
will be low and they cannot give more and better work. Further, they will not have any sense of
attachment to the firm and they will always be on the lookout for a job elsewhere.

13.Initiative

Initiative means freedom to think out and execute a plan. The zeal and energy of employees are
augmented by initiative. Innovation which is the hallmark of technological progress, is possible
only where the employees are encouraged to take initiative. According to Fayol. initiative is one
of the keenest satisfactions for an intelligent man to experience, and hence, he advises managers
to give their employees sufficient scope to show their initiative. Employees should be
encouraged to make all kinds of suggestions to conceive and carry out their plans, even when
some mistakes result.

14. Esprit de Corps

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This means team spirit. Since "union is strength", the management should create team spirit
among the employees. Only when all the personnel pull together as a team, there is scope for
realizing the objectives of the concern. Harmony and unity among the staff are a great source of
strength to the undertaking. To achieve this. Fayol suggested two things. One. the motto of
divide and rule should be avoided, and two, verbal communication should be used for removing
misunderstandings. Differences grow more bitter when cleared through written communication.

FUNCTIONS OF MANAGEMENT

Forecasting

Forecasting involves predicting future events and conditions based on available information and
data. Managers use forecasting to anticipate market trends, demand for products or services, and
other factors that can impact their organization's performance. It helps in making informed
decisions and developing appropriate strategies.

Forecasting can also be described as the process of estimating future events and outcomes based
on past data, current trends, and various analytical techniques. It helps managers make informed
decisions and develop strategies to achieve organizational goals. Forecasting involves predicting
sales, market trends, demand for products/services, and other relevant factors.

Example: A retail manager uses historical sales data, market research, and economic indicators
to forecast demand for a new product. This helps in determining the appropriate quantity to order,
setting pricing strategies, and allocating resources effectively.

Planning

Planning involves setting objectives, determining the actions needed to achieve those objectives,
and developing a roadmap for the organization. It includes defining goals, formulating strategies,
outlining tasks, allocating resources, and creating timelines. Planning ensures that everyone is
working towards a common purpose and helps in achieving desired outcomes.

Example: A project manager planning a software development project creates a detailed project
plan. It includes setting specific milestones, assigning tasks to team members, estimating
resource requirements, and establishing a timeline for completion. This plan guides the team
throughout the project and ensures that everyone is working towards the desired outcomes.

Planning is the first task of management and probably the most important function. It's accurate
for one to think of planning as the Taproot of a beautiful tree, from which the branches of

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organizing, leading, and controlling grow. You have probably heard the old saying "He who fails
to plan, has planned to fail" or "by failing to prepare, you are preparing to fail". Planning makes
the future visible by bringing the future into the present so that you can do something today
about the future. Therefore, planning is taking time to:

1. Consider the possibilities that might arise as a result of something that you wish to do.
2. Understand the consequences that arise.
3. Develop actions to counter the he consequences or to maximize opportunities.

Planners must establish objectives, which are statements of what needs to be achieved and when.
Planners must then identify alternative courses of action for achieving objectives. After
evaluating the various alternatives, planners must make decisions about the best courses of action
for achieving objectives. They must then formulate necessary steps and ensure effective
implementation of plans. Finally, planners must constantly evaluate the success of their plans
and take corrective action when necessary.

There are many different types of plans and planning.

I. Strategic planning: Involves analyzing competitive opportunities and threats, as well as

the strengths and weaknesses of the organization, and then determining how to position
the organization to compete effectively in their environment. Strategic planning has a
long time frame, often three years or more. Strategic planning generally includes the
entire organization and includes formulation of objectives. Strategic planning is often
based on the organization’s mission, which is its fundamental reason for existence. An
organization’s top management most often conducts strategic planning.
II. Tactical planning: is intermediate-range (one to three years) planning that is designed to
develop relatively concrete and specific means to implement the strategic plan. Middle-
level managers often engage in tactical planning.
III. Operational planning: generally assumes the existence of organization-wide or subunit
goals and objectives and specifies ways to achieve them. Operational planning is short-
range (less than a year) planning that is designed to develop specific action steps that
support the strategic and tactical plans.

Organizing

Organizing involves structuring and arranging resources, such as people, materials, and
equipment, to accomplish the goals defined in the planning phase. It includes designing the
organizational structure, assigning tasks and responsibilities, establishing communication
channels, and coordinating activities. Organizing ensures efficiency, clarity in roles, and optimal
resource allocation.

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Organizing is also the process of structuring both human and physical resources to accomplished
organizational objectives. It is concerned with defining how tasks are to be carried out, how to
structure an organization into department, how jobs are to be divided, and how to delegate
authority to achieve specific to general objectives. Organizing lies at the heart of all managerial
activities. Without it very little can be accomplished. With it a number of employees in a firm,
soldiers on battle field, or football players in stadium will work more effectively to achieve their
objectives.

Example: The HR manager of a company organizes a recruitment drive. They define the roles
and responsibilities of the recruitment team members, establish a selection process, allocate
resources such as interview rooms and technology, and coordinate with other departments
involved. This organized approach streamlines the hiring process and ensures a smooth
experience for candidates and the company.

Motivation

Motivation is the process of inspiring and encouraging individuals to achieve their best
performance. Managers use various techniques, such as providing incentives, recognition, and
opportunities for growth, to motivate employees. Effective motivation boosts morale,
productivity, and overall organizational performance.

Example: A manager wants to motivate their team to meet a challenging sales target. They can
use various strategies, such as offering performance-based incentives, recognition, or creating a
supportive and positive work environment. By acknowledging and rewarding outstanding
performance, the manager can boost the team's motivation and encourage them to achieve the
desired results.

Controlling

Controlling involves monitoring and regulating activities to ensure they align with planned
objectives. It includes establishing performance standards, measuring actual performance,
comparing it against the standards, identifying deviations, and taking corrective actions when
necessary. Controlling helps managers keep track of progress, identify areas of improvement,
and ensure that goals are being achieved.

The managerial function of controlling should not be confused with control in the behavioral or
manipulative sense. This function does not imply that managers should attempt to control or to
manipulate the personalities, values, attitudes, or emotions of their subordinates. Instead, this
function of management concerns the manager’s role in taking necessary actions to ensure that

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the work-related activities of subordinates are consistent with and contributing toward the
accomplishment of organizational and departmental objectives.

Example: A production manager monitors the actual output of a manufacturing process and
compares it to the planned production targets. If there is a significant deviation, the manager
investigates the causes, identifies areas for improvement, and implements corrective actions such
as adjusting the production schedule, reallocating resources, or improving efficiency. This
control mechanism helps maintain quality, meet deadlines, and optimize productivity.

Communication

Communication is the exchange of information, ideas, and instructions between individuals or

groups within an organization. Effective communication is essential for sharing goals, providing
feedback, coordinating activities, and resolving conflicts. It involves both upward
communication (from subordinates to superiors) and downward communication (from superiors
to subordinates), as well as lateral communication (between colleagues).

Example: In a project meeting, a project manager communicates the project goals, objectives,
and timelines to the team members. They ensure that everyone understands their roles and
responsibilities, addresses any concerns or questions, and encourages open dialogue. By
promoting transparent communication, the project manager enables effective coordination and
keeps everyone aligned towards project success.

Leadership

Leadership involves influencing and guiding individuals or teams to achieve organizational goals.
A leader sets a vision, inspires others, makes decisions, and provides guidance. Effective
leadership involves qualities like clear communication, empathy, integrity, and the ability to
motivate and empower others.

Leadership refers to the ability to influence and guide others towards a common goal. It involves
setting a vision, providing direction, and making decisions that drive the organization forward.
Effective leaders inspire, motivate, and support their teams to achieve objectives and foster a
positive work culture.

Example: A team leader is responsible for leading a group of software developers in the
development of a new product. They provide clear instructions, delegate tasks effectively, and
offer guidance and support whenever required. By fostering a collaborative and empowering
environment, the leader ensures that the team remains focused, motivated, and on track to meet
project deadlines.

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Decision Making

Decision making is the process of selecting the best course of action from available alternatives.
Managers make decisions based on information, analysis, and judgment. They consider various
factors, such as goals, risks, resources, and potential outcomes, to make informed choices that
align with the organization's objectives. Decision making involves analyzing available options
and selecting the best course of action to achieve desired outcomes. It requires assessing risks,
evaluating alternatives, considering relevant information, and making informed choices.
Effective decision making is essential for solving problems, seizing opportunities, and driving
organizational progress.

Example: A company's executive team needs to decide whether to expand into a new market or
invest in a new product line. They gather market research data, analyze financial projections, and
assess potential risks and benefits. After careful evaluation and discussion, they make a decision
based on the available information and the organization's strategic goals.

Coordinating

Coordinating involves harmonizing and integrating the efforts of different individuals, teams, or
departments within an organization. It includes establishing relationships, facilitating
collaboration, resolving conflicts, and ensuring that activities are synchronized towards
achieving common goals. Coordinating helps in optimizing resources, avoiding duplication of
efforts, and promoting effective teamwork.

Coordinating involves bringing together various resources, activities, and individuals in a

synchronized manner to achieve organizational objectives. It includes planning, organizing, and
allocating resources effectively to ensure efficient workflow and optimal utilization of resources.

Example: A project manager coordinates a cross-functional team to launch a new marketing

campaign. They collaborate with the marketing, design, and content teams, aligning their efforts
to create a cohesive campaign strategy. The project manager assigns tasks, establishes timelines,
and monitors progress to ensure that all team members work together towards the successful
execution of the campaign.

These management functions are interconnected and interdependent, and effective utilization of
each function contributes to the overall success of an organization.

AREAS OF RELEVANCE TO THE CONSTRUCTION INDUSTRY IN THE

MANAGEMENT PROCESS

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In the management process within the construction industry, several areas play a crucial role in
ensuring successful operations. Let's explore the relevance of each area:

1. General Manager: The general manager oversees the overall operations of the construction
company. They are responsible for setting strategic goals, making major decisions, and ensuring
that the company operates efficiently and profitably. The general manager plays a crucial role in
coordinating different departments, managing resources, and overseeing project execution.

2. Finance: The finance department in a construction company manages the financial aspects of
the business. This includes budgeting, financial planning, cash flow management, financial
analysis, and risk assessment. They are responsible for tracking project costs, managing accounts
payable and receivable, preparing financial statements, and ensuring compliance with financial
regulations. Effective financial management is essential for the success and profitability of
construction projects.

3. Design: The design department is responsible for creating architectural and engineering
designs for construction projects. They work closely with clients, architects, and engineers to
develop conceptual designs, detailed drawings, and specifications. The design team considers
factors such as functionality, aesthetics, safety, and regulatory requirements. They play a crucial
role in ensuring that the construction projects are well-planned, structurally sound, and meet the
desired objectives.

4. Development: The development department focuses on identifying and acquiring new

construction projects. They conduct market research, analyze opportunities, and assess feasibility.
The development team is involved in land acquisition, negotiating contracts, obtaining permits,
and ensuring compliance with zoning and regulatory requirements. They work closely with the
design and finance departments to develop a comprehensive plan for each project.

5. Marketing: The marketing department in the construction industry is responsible for

promoting the company's services, generating leads, and building relationships with potential
clients. They develop marketing strategies, create advertising campaigns, participate in industry
events, and maintain a strong online presence. Effective marketing helps attract new clients,
secure contracts, and maintain a positive reputation in the industry.

6. Production: The production department oversees the actual construction process. They
manage the resources, materials, and equipment required for executing construction projects. The
production team coordinates with subcontractors, suppliers, and construction workers to ensure
timely project completion. They are responsible for monitoring project progress, quality control,
and adherence to safety regulations. Efficient production management is crucial for delivering
projects on time, within budget, and meeting quality standards.

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7. Maintenance: The maintenance department focuses on the upkeep and preservation of
constructed assets. They perform routine inspections, repairs, and maintenance activities to
ensure the longevity and functionality of the constructed facilities. This includes preventive
maintenance, equipment servicing, and addressing any issues that may arise after project
completion. Effective maintenance management helps in reducing downtime, extending the
lifespan of assets, and maintaining client satisfaction.

8. Personnel: The personnel department, also known as human resources (HR), manages the
company's workforce. They are responsible for recruitment, training, performance evaluation,
employee relations, and compliance with labor laws. In the construction industry, HR plays a
vital role in hiring skilled workers, managing labor contracts, ensuring workplace safety, and
promoting employee development and retention.

9. Office: The office department provides administrative support to the construction company.
They handle tasks such as record-keeping, document management, scheduling, correspondence,
and general office management. The office team may also assist with procurement, logistics, and
coordination of various administrative processes. An efficient office department ensures smooth
operations and supports the management process by maintaining accurate records and facilitating
effective communication.

10. Purchasing: The purchasing department is responsible for procuring materials, equipment,
and services required for construction projects. They identify suppliers, negotiate contracts,
manage vendor relationships, and ensure timely delivery of materials. The purchasing team
works closely with the finance department to optimize procurement processes, control costs, and
maintain an adequate inventory. Effective purchasing management is crucial for controlling
project costs, ensuring

PROCESS OF MANAGEMENT

Henri Fayol, a prominent French industrialist and management theorist, is known for his
contributions to the development of management principles. Fayol outlined major functions of
management, commonly referred to as the "POSDCORB" framework. In addition to Fayol's
principles, other management scholars have also provided valuable insights into the management
process. Let's explore these major processes in detail:

1. Planning:

Planning is the process of setting goals, defining strategies, and determining the actions required
to achieve those goals. It involves analyzing the current situation, forecasting future trends, and

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developing a roadmap for success. Key aspects of planning include establishing objectives,
formulating plans, allocating resources, and creating timelines. Effective planning ensures that
the organization is focused, proactive, and prepared for the future.

2. Organizing:

Organizing involves structuring the resources and activities of an organization to achieve its
objectives. It includes designing the organizational structure, defining roles and responsibilities,
establishing reporting relationships, and creating communication channels. Organizing also
involves grouping tasks into departments or teams, coordinating efforts, and establishing
mechanisms for decision-making and control. Effective organizing ensures efficient utilization of
resources and promotes coordination among different parts of the organization.

3. Staffing:

Staffing refers to the process of acquiring and developing a competent workforce for the
organization. It involves identifying the staffing needs, recruiting suitable candidates, selecting
and hiring employees, and providing them with appropriate training and development
opportunities. Staffing also includes performance management, promoting employee engagement,
and ensuring a positive work environment. Effective staffing ensures that the organization has
the right people with the right skills in the right positions.

4. Directing:

Directing, also known as leading, is the process of guiding and influencing employees to achieve
organizational goals. It involves providing a clear vision and direction, communicating
expectations, motivating employees, and facilitating their performance. Directing also includes
supervising and coaching employees, resolving conflicts, and promoting teamwork. Effective
directing helps align individual efforts with organizational objectives and fosters a productive
and engaged workforce.

5. Coordinating:

Coordinating involves harmonizing the activities of different individuals, departments, and teams
to ensure smooth workflow and optimal resource utilization. It includes establishing effective
communication channels, facilitating collaboration, and resolving conflicts or interdependencies.
Coordinating also involves monitoring progress, making adjustments as needed, and ensuring
that all parts of the organization work together towards common goals. Effective coordination
minimizes duplication of efforts, enhances efficiency, and promotes synergy.

6. Reporting:

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Reporting encompasses the process of gathering and disseminating information within the
organization. It involves collecting data, analyzing it, and presenting it in a format that facilitates
decision-making. Reporting provides managers with insights into the organization's performance,
highlights areas of concern, and supports strategic decision-making. Effective reporting enables
managers to make informed decisions and take appropriate actions based on accurate and timely
information.

7. Budgeting:

Budgeting involves the allocation of financial resources to different activities within the
organization. It includes estimating and forecasting revenue and expenses, setting financial
targets, and developing budgets for various departments or projects. Budgeting helps in financial
planning, cost control, and resource allocation. It provides a framework for monitoring financial
performance and ensuring financial stability.

While Fayol's principles provide a foundation for understanding the management process, other
management scholars have also contributed to the field. For example, Peter Drucker emphasized
the importance of goals and objectives, as well as the need for continuous innovation and
adaptation. W. Edwards Deming focused on the importance of quality management and
continuous improvement. These contributions, along with others, have enriched our
understanding of management and its various processes.

CONTRIBUTION OF PIONEERS AND FATHERS OF MANAGEMENT

The contribution of pioneers and fathers of management to the management process and
development are as follows:

a. Charles Babbage (1792-1871)

b. Henri Fayol (1841-1925)

c. Oliver Sheldon (1804-1915)

d. Mary Parker Follot (1864-1993)

e. Fredrick Winslow Taylor

Charles Babbage (1792-1871)

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Charles Babbage was an English mathematician, philosopher, and inventor known as the "father
of the computer." Although he did not directly contribute to the management process and
development as we understand it today, his work on the development of mechanical computers
had an indirect impact on the field.

Babbage's most significant contribution was his design for the Analytical Engine, which was a
theoretical general-purpose computing machine. Although he was unable to build a working
model during his lifetime, his concepts laid the foundation for modern computers. The Analytical
Engine introduced important concepts such as input, output, storage, and processing, which are
fundamental to the field of management information systems.

While Babbage's work focused on the technology aspect, his ideas indirectly influenced
management by enabling the automation of repetitive tasks, data processing, and information
management. The advent of computers and information systems transformed the way
organizations manage data, make decisions, and streamline processes, ultimately enhancing the
management process and development.

Henri Fayol (1841-1925)

Henri Fayol was a French mining engineer and management theorist who made significant
contributions to the field of management. Fayol is best known for his administrative theory,
which outlined the functions of management and the principles that govern effective
management.

Fayol's specific contributions to the management process and development include:

1. Functions of Management: Fayol identified five functions of management: planning,

organizing, commanding, coordinating, and controlling. These functions provided a framework
for understanding the managerial tasks and helped managers perform their roles effectively.

2. Principles of Management: Fayol proposed 14 principles of management, including division of

work, authority and responsibility, unity of command, unity of direction, equity, and esprit de
corps. These principles served as guidelines for managers to improve organizational efficiency
and effectiveness.

3. Management Process: Fayol's work emphasized the importance of a systematic management

process. He highlighted the need for managers to forecast, plan, organize, command, coordinate,
and control activities within an organization. This process-oriented approach provided a
structured way of managing organizations and achieving organizational goals.

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Fayol's contributions laid the foundation for modern management theories and practices. His
ideas influenced subsequent management thinkers and helped shape the understanding of
management as a distinct discipline.

Oliver Sheldon (1804-1915)

Oliver Sheldon divides management into three main-parts viz. administration; management-
proper and organization. Administration is the determination of policy, coordination of finance,
production and distribution, direction of organization, and ultimate control of the executive;
management-proper is the execution of policy and employment of the organization; and
organization is combining the work to be performed with the necessary faculties so their
execution provides for efficient, systematic, positive, and coordinated effort. About their inter-
relationship, Sheldon says, administration makes the design; organization is the design and
management uses the design and it is always analytical. Thus, management is inclusive of both
administration and organization.
Sheldon mentions four-factors that establish management as a separate-entity. First-factor is, the
rise of a professional-morality in management; second-factor is, due to the system of distributed-
ownership, actual-leadership of the industry depends on manager; third-factor is, growth of
industrial-legislation; and fourth-factor is, emergence of the factors of organized-labor completes
the triumph of management over capital as the primary-power. He presents seven points that
influences the complexity and responsibility of management. Firstly, the progress of industrial-
science; secondly, the post-war economic-situation; thirdly, the stirring of social conscience;
fourthly, the electrifying impulse from America; fifthly, the urgent necessity for economical-
production, sixthly, the recognition of importance of conferences; and seventhly, the continual-
growth of innovations.10 Thus, Sheldon focuses on separating management from other entities
and disciplines. Preeminent-task of management is the direction of the activities of human-
beings.
Further, Sheldon says, only science is not enough to management because “where human-factor
exists, there must always remains a field outside the province of science. When it deals with men
and women, it can only use scientific-principles to the extent that the men and women are willing
to subject themselves to them. He says, “where human-beings are concerned, scientific-
principles may be so much paper-waste.”15 He emphasizes on the human-element in
management. For Sheldon, practice of management is not a science but the human-application of
that science. He emphasizes on the use of human-faculty by stating, there is no system however
scientifically founded, can lead to success unless the human-faculty of applying that system is
sound. Management is an art because it exercises the human-faculties and governs the relations
between all the various-grades engaged in the conduct of management.
Further, Sheldon asserts, it is the art of the manager alone which will induce the man to put

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scientific-conclusions into practice. Scientific-methods are as likely to fail as to succeed. It is the
manager who tries to twist around these methods to meet the situation. Sheldon says, if
management is indeed a science, and in its practice is an art, we must not only elaborate the
science, but also provide training in the art.
Thus, Sheldon presents a totalistic-approach towards management and its logical-position in the
society. He melds the social-ethics with the practicability of scientific-management. He presents
the three principles of management,science of management and practice of management is an art.
Management is primarily a human-art to manage men for their well-being.

Mary Parker Follett (1864-1933)

Mary Parker Follett was an American social worker, management consultant, and pioneer in the
field of organizational behavior and management philosophy. Follett emphasized the importance
of cooperation and collaboration within organizations. She advocated for a more democratic and
participative approach to management, promoting the idea that power and authority should be
shared among all members of an organization rather than concentrated at the top. She believed in
the integration of different departments and functions within an organization to achieve
synergy.She made several important contributions to the management process and development:

1. Integration and Cooperation: Follett emphasized the importance of cooperation and

collaboration within organizations. She believed that conflicts and differences could be resolved
through integration rather than domination. Her ideas influenced the development of modern
management practices that focus on teamwork, collaboration, and conflict resolution.

2. Power and Authority: Follett challenged traditional views on power and authority. She
advocated for the sharing of power and the distribution of authority throughout an organization.
Her concepts of "power-with" and "power-from-within" emphasized that leadership should be
based on knowledge, expertise, and a willingness to collaborate rather than on hierarchical
positions.

3. Group Dynamics: Follett recognized the significance of group dynamics in organizational

behavior. She emphasized the importance of understanding group processes and interpersonal
relationships within teams. Her ideas contributed to the development of theories on leadership,
communication, and team dynamics. Follett's work was ahead

Frederick Winslow Taylor (1856-1915)

Frederick Winslow Taylor was an American mechanical engineer who is often referred to as the
"Father of Scientific Management." He made significant contributions to the management
process and development by introducing scientific principles and methods into the field of

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management. Taylor's ideas were revolutionary at the time and laid the foundation for modern
management practices. Here are the specific contributions of Frederick Winslow Taylor to the
management process and development:

1. Scientific Management Principles: Taylor developed a set of principles that aimed to

improve productivity and efficiency in industrial settings. He emphasized the application of
scientific methods to identify the most efficient way to perform tasks. His principles included:

a. Work Study: Taylor believed in analyzing work processes and tasks to determine the most
efficient methods. This involved breaking down tasks into smaller components and finding the
best way to perform each task.

b. Time and Motion Studies: Taylor introduced time and motion studies to identify the most
efficient way to perform a task by minimizing wasted effort and time. This involved observing
and timing workers to determine the most productive methods.

c. Standardization: Taylor advocated for standardizing tools, equipment, and processes to

ensure consistency and efficiency in operations. Standardization helped eliminate variability and
improve productivity.

d. Division of Labor: Taylor emphasized the division of work between workers and
management. He believed that managers should plan and supervise, while workers should
execute tasks based on standardized methods.

e. Incentives and Pay Systems: Taylor introduced the concept of piece-rate pay, where workers
were paid based on their productivity. He believed that financial incentives would motivate
workers to increase their output.

2. Efficiency and Productivity Improvement: Taylor's scientific management principles aimed

to improve efficiency and productivity in organizations. By analyzing work processes,
eliminating unnecessary movements, and standardizing methods, he sought to reduce waste and
maximize output. Taylor's methods helped organizations achieve higher productivity levels and
lower production costs.

3. Worker-Management Collaboration: Taylor emphasized the importance of collaboration

between workers and management. He believed that managers should work closely with workers
to understand their tasks and find ways to improve efficiency. Taylor's approach helped bridge
the gap between workers and management, fostering a more cooperative work environment.

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4. Training and Development: Taylor advocated for systematic training and development of
workers to ensure they had the necessary skills to perform their tasks efficiently. He believed that
well-trained workers would be more productive and capable of executing standardized methods.

5. Time and Cost Management: Taylor's emphasis on time and motion studies and
standardization contributed to better time and cost management in organizations. By identifying
the most efficient methods, organizations could reduce wasteful practices, save time, and
optimize resource utilization.

6. Influence on Management Theory: Taylor's ideas had a profound impact on management

theory and practice. His scientific management principles laid the groundwork for subsequent
management theories, such as administrative management and operations management. Taylor's
focus on efficiency, productivity, and worker-manager collaboration revolutionized the way
organizations approached management.

7. Widening of Management Scope: Taylor's contributions broadened the scope of

management. He shifted the focus from solely supervisory roles to include scientific analysis and
optimization of work processes. This expansion of management responsibilities led to a more
holistic approach to organizational management.

Despite the significant contributions of Frederick Winslow Taylor, his ideas also faced criticism.
Some critics argued that his approach dehumanized workers by reducing them to mere cogs in
the machine and disregarding their individuality and creativity. Nevertheless, Taylor's scientific
management principles remain influential in shaping modern management practices and continue
to be studied and applied in various industries.

SPAN OF CONTROL

The span of control refers to the number of subordinates or direct reports that a manager or
supervisor can effectively oversee and manage. A defined span of control is the predetermined or
established range within which an organization or management structure operates in terms of the
number of employees or units that report to a single supervisor.

The optimal span of control can vary depending on various factors such as the nature of the work,
complexity of tasks, level of employee autonomy, organizational culture, and management style.
In practice, the span can vary between one to forty or more subordinates. Although a better range
can be three and twenty. As one goes up the hierarchy, the number decreases. Toward the bottom
of the hierarchy, where employees are carrying out routine task, the span increases.

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The span of control refers to the number of subordinates or employees that a manager or
supervisor can effectively manage. It has a significant impact on site organization, particularly in
terms of managerial efficiency, communication, decision-making, and overall productivity.
Here's a demonstration of how the span of control can affect site organization:

1. Managerial Efficiency:

A narrower span of control with fewer subordinates allows managers to have more direct
oversight and control over their team members. They can provide more personalized attention,
guidance, and support to each individual. This close supervision can enhance performance,
identify and address issues promptly, and ensure that work is carried out efficiently. However, if
the span of control is too narrow, it may result in excessive micromanagement and create
bottlenecks in decision-making.

On the other hand, a wider span of control allows managers to oversee a larger number of
subordinates. It promotes a flatter organizational structure, reduces the number of hierarchical
levels, and empowers employees to make more independent decisions. This can lead to increased
autonomy, faster response times, and streamlined workflows. However, if the span of control is
too wide, managers may struggle to provide adequate guidance, support, and feedback to each
employee, potentially resulting in decreased managerial efficiency.

2. Communication:

The span of control affects communication within the organization. In a narrow span of control,
with fewer subordinates, communication lines are generally shorter and more direct. Managers
can easily interact with their team members, fostering open dialogue, exchanging ideas, and
providing timely feedback. This can lead to better coordination, collaboration, and a shared
understanding of goals and expectations. However, a downside could be that communication
channels may become congested or overwhelmed due to the high volume of interactions.

In a wider span of control, managers may rely more on decentralized communication channels.
They might establish teams, departments, or supervisors to facilitate communication and
coordination among subordinates. While this can promote efficient dissemination of information
and specialized communication within smaller groups, there is a risk of information distortion,
reduced clarity, and slower communication across the entire organization.

3. Decision-Making:

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The span of control also influences decision-making processes. In a narrow span of control,
managers can gather input from each team member more easily. This allows for a comprehensive
understanding of the situation and enables participatory decision-making. Managers can consult
with subordinates, seek their expertise, and incorporate their suggestions into the decision-
making process. However, this may slow down decision-making, especially if consensus is
required, and could result in decision fatigue for managers.

In a wider span of control, decision-making is often more centralized and streamlined. Managers
have the authority to make decisions quickly, without extensive consultation. This can expedite
the decision-making process, allowing for swift responses to operational challenges. However, it
may limit input from individual team members, potentially overlooking valuable insights or
alternative perspectives.

4. Overall Productivity:

The span of control plays a crucial role in overall productivity. A well-optimized span of control
ensures that managers can effectively allocate resources, monitor progress, and manage
workloads. In a narrow span of control, managers can closely monitor individual performance,
provide necessary support, and make timely interventions to address issues or obstacles. This can
enhance productivity and ensure that employees are working efficiently. However, it may result
in increased managerial workload and limited scalability.

In a wider span of control, managers can oversee a larger number of employees, resulting in a
more efficient utilization of managerial resources. It promotes autonomy and independent
decision-making among employees, fostering a sense of ownership and responsibility. This can
lead to increased productivity, especially in organizations where employees are skilled,
experienced, and capable of working independently. However, if employees require more
guidance, supervision, or training, a wider span of control may lead to decreased productivity
and potentially compromise quality.

CONCEPT OF DELEGATION

Delegation, assignment of responsibility, and accountability are important concepts in site

organization that help distribute tasks and ensure effective management. Here's an explanation of
each concept and how they affect site organization:

1. Delegation: Delegation refers to the process of assigning tasks, responsibilities, and authority
from one person (the delegator) to another person (the delegatee) to complete a specific job or

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project. Delegation involves empowering individuals or teams with the necessary authority and
resources to make decisions and take actions within their assigned tasks.

Delegation affects site organization by promoting efficiency and specialization. It allows

managers or supervisors to distribute workload among team members based on their skills,
expertise, and availability. Delegating tasks ensures that the right people are assigned to the right
jobs, maximizing productivity and achieving better results. It also encourages the growth and
development of team members by providing them with opportunities to take on new challenges
and responsibilities.

Effective delegation can have the following impacts on site organization:

 - Improved efficiency: Delegation allows tasks to be assigned to the most suitable

individuals or teams, leveraging their skills and expertise. This leads to increased
efficiency in completing tasks and achieving site objectives.
 - Empowerment and development: Delegation provides opportunities for individuals to
take on new responsibilities and develop their skills. It promotes a sense of ownership
and empowerment, leading to higher engagement and motivation among employees.
 - Time management: Delegating tasks allows managers and supervisors to focus on
higher-level responsibilities and strategic decision-making, rather than getting involved in
every operational detail.

2. Assignment of Responsibility: Assignment of responsibility involves defining and allocating

specific duties and obligations to individuals or teams within an organization. It clarifies who is
accountable for the successful completion of a task or objective.

In site organization, assignment of responsibility ensures that each team member has clear roles
and responsibilities related to their expertise. It helps establish a clear hierarchy of tasks and
facilitates effective coordination among team members. Assigning responsibilities helps prevent
confusion and overlapping of duties, allowing for better workflow and smoother operations on-
site.

The assignment of responsibility affects site organization in the following ways:

 - Clear accountability: When responsibilities are clearly assigned, it becomes easier to

hold individuals or teams accountable for their designated tasks. This promotes a culture
of responsibility and ensures that work is completed on time and to the expected
standards.

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  - Coordination and collaboration: By assigning specific responsibilities to different
individuals or teams, site organization fosters better coordination and collaboration. Each
person knows their role and can work together with others to achieve common objectives.
 - Specialization and expertise: Assigning responsibilities allows individuals or teams to
specialize in particular areas, leveraging their knowledge and expertise. This leads to
improved performance and quality outcomes in those specific areas.

3. Accountability: Accountability refers to the obligation of an individual or team to take

responsibility for the successful completion of their assigned tasks and the outcomes of their
actions. It involves answering for the results achieved and the decisions made during the
execution of responsibilities.

In site organization, accountability ensures that individuals or teams are answerable for their
performance and the impact of their work. It fosters a culture of ownership and responsibility, as
individuals understand that their actions and decisions directly influence the success of the
project. Accountability also promotes transparency, as team members are required to provide
updates, reports, and feedback on their progress and any challenges they encounter.

Overall, delegation, assignment of responsibility, and accountability play crucial roles in site
organization. They enhance efficiency, specialization, coordination, and accountability within
the team. By properly implementing these concepts, site managers can optimize resource
utilization, improve project outcomes, and create a positive work environment conducive to
achieving project goals.

Delegation, assignment of responsibility, and accountability play crucial roles in site

organization and can significantly impact its effectiveness. Here's how these factors affect site
organization:

Accountability influences site organization in the following ways:

 - Performance and results orientation: When individuals or teams are held accountable for
their responsibilities, they are more likely to focus on achieving desired results. This
drives performance and increases the likelihood of meeting organizational goals.
 - Trust and transparency: Accountability fosters a culture of trust and transparency within
the site organization. When people know that they will be held accountable for their
actions, they are more likely to communicate openly, share information, and seek help or
guidance when needed.
 - Continuous improvement: Being accountable for outcomes encourages individuals and
teams to learn from mistakes and continuously improve their performance. It promotes a
culture of learning and innovation within the site organization.

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Overall, effective delegation, assignment of responsibility, and accountability are essential for
successful site organization. They promote efficiency, coordination, collaboration, and a culture
of responsibility, leading to improved performance and achievement of organizational objectives.

UNIT OF COMMAND/ SCALAR PRINCIPLES

The "unit of command" is a concept in military organization and leadership, referring to the level
at which decisions are made and orders are given. It defines the scope and responsibility of a
commander and is a fundamental principle of military command.

Scalar principles, on the other hand, refer to the hierarchical structure within an organization. In
the context of the unit of command, scalar principles establish the chain of command, authority,
and communication channels that enable effective decision-making and execution of orders.

Here are some key scalar principles related to the unit of command:

1. Unity of Command: This principle states that each individual within a military organization
should have only one superior to whom they directly report. By ensuring clear lines of authority,
unity of command minimizes confusion, prevents conflicting orders, and promotes accountability.

The principle State that an employee should receive order from, and report only to one Superior
for any single functions. It is based upon the believed that employees work most efficiently when
they receive orders, advice and recommendation from a single boss. When two or more
Superiors give orders to a single person at the same time, the potential for confusion, disloyalty,
and conflict exist.

2. Span of Control: This principle refers to the number of subordinates that a superior can
effectively command and control. It recognizes that there is a practical limit to the number of
individuals a leader can oversee efficiently. Span of control may vary depending on factors such
as the complexity of the task, level of expertise required, and available resources.

3. Chain of Command: The chain of command outlines the formal line of authority from the
highest-ranking officer down to the lowest-ranking personnel. It provides a clear path for
communication, decision-making, and the flow of orders. Following the chain of command helps
maintain discipline, ensures efficient operations, and establishes accountability.

4. Delegation: Delegation is the process of assigning authority and responsibility to subordinates.

It allows commanders to distribute workload, empower subordinates, and leverage the expertise

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of individuals at lower levels. Effective delegation enhances decision-making speed, fosters
initiative, and develops leadership skills within the organization.

5. Span of Responsibility: This principle recognizes that commanders at different levels have
varying levels of responsibility based on the scope of their command. A higher-ranking
commander may have a broader span of responsibility, overseeing multiple units or operations,
while a lower-ranking commander may have a narrower scope of responsibility focused on a
specific unit or task.

These scalar principles help establish a clear and efficient command structure within military
organizations. By adhering to these principles, commanders can effectively lead their units,
ensure unity of effort, and achieve operational objectives.

EFFECTIVE COMMUNICATION

Effective communication is essential in all aspects of life, whether it's personal relationships,
professional settings, or even in broader social interactions. It plays a crucial role in conveying
information, expressing ideas, building relationships, and resolving conflicts. The value of
effective communication can be summarized in several key points:

1. Clarity and Understanding: Effective communication ensures that information is conveyed

clearly and accurately. When individuals can express themselves clearly and understand each
other, it minimizes misunderstandings, confusion, and misinterpretations. Clarity promotes better
decision-making, problem-solving, and collaboration.

2. Building Relationships: Good communication is the foundation of strong and healthy

relationships. It fosters trust, empathy, and mutual understanding. When people feel heard and
understood, they are more likely to form meaningful connections and build stronger bonds,
whether it's in personal relationships or professional partnerships.

3. Increased Productivity and Efficiency: In the workplace, effective communication improves

productivity and efficiency. Clear instructions and expectations ensure that tasks are performed
accurately and in a timely manner. Communication also enables effective teamwork,
coordination, and delegation of responsibilities, leading to smoother workflow and better
outcomes.

4. Conflict Resolution: Effective communication is crucial in resolving conflicts and preventing

them from escalating. By openly expressing concerns, listening actively, and finding common
ground, conflicts can be addressed and resolved in a constructive manner. Clear communication

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reduces tension, fosters compromise, and promotes collaboration to find mutually beneficial
solutions.

5. Personal and Professional Development: Effective communication skills contribute

significantly to personal and professional growth. Being able to articulate thoughts, express ideas
persuasively, and actively listen to others enhances self-confidence and assertiveness. Good
communication skills also facilitate networking, job interviews, and career advancement
opportunities.

6. Adaptability and Cultural Sensitivity: Effective communication involves understanding and

adapting to different cultural and social contexts. It enables individuals to navigate diverse
environments, respect others' perspectives, and communicate in a way that is culturally sensitive
and inclusive. This skill is especially valuable in today's globalized world, where people from
various backgrounds interact on a regular basis.

7. Positive Influence and Leadership: Effective communicators have a greater impact on others.
They can inspire, motivate, and influence people through their words and actions. Strong
communication skills are crucial for effective leadership, as leaders must convey their vision,
goals, and expectations to inspire and guide their team members.

In summary, effective communication is invaluable in personal, professional, and social

interactions. It facilitates understanding, builds relationships, resolves conflicts, enhances
productivity, and promotes personal and professional development. Developing strong
communication skills is a lifelong endeavor that leads to better outcomes, stronger connections,
and improved overall quality of life.

MEANS OF COMMUNICATION

Communication on a construction site is crucial for ensuring smooth operations, maintaining

safety, and coordinating activities among team members. Here are various means of
communication commonly used on construction sites:

1. Verbal Communication: This is the most basic form of communication, involving face-to-
face conversations or spoken instructions. Verbal communication is often used for immediate
and direct communication between workers, supervisors, and managers on the construction site.

2. Hand Signals: Hand signals are simple gestures used to convey messages or instructions
when verbal communication may not be possible due to distance, noise, or machinery. Hand

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signals are commonly used for signaling crane operators, directing heavy machinery, or
coordinating movements on the site.

3. Written Communication: Written communication involves the use of written documents,

such as reports, memos, safety guidelines, work schedules, and project plans. These documents
provide important information, instructions, and guidelines that can be referenced by various
stakeholders on the construction site.

4. Safety Signs: Safety signs and symbols are crucial for communicating important safety
information and hazards on the construction site. They include signs indicating potential dangers,
safety procedures, mandatory protective equipment, and emergency exits. Safety signs help to
promote a safe working environment and ensure that workers are aware of potential risks.

5. Two-Way Radios: Two-way radios or walkie-talkies are portable communication devices that
allow instant and direct communication between team members on the construction site. They
are particularly useful when workers are spread out across a large area or when immediate
communication is required.

6. Mobile Phones: Mobile phones have become indispensable tools for communication in
various industries, including construction. They enable workers, supervisors, and managers to
communicate quickly, share information, coordinate activities, and address any issues that arise.
Mobile phones can be used for voice calls, text messages, emails, and even video calls.

7. Project Management Software: Construction projects often involve multiple stakeholders,

including architects, engineers, contractors, and subcontractors. Project management software,
such as cloud-based platforms, allows for effective communication, collaboration, and document
sharing among team members. These tools provide a centralized platform for managing project
information, tracking progress, and addressing issues.

8. Meetings and Briefings: Regular meetings and briefings are essential for effective
communication on construction sites. They provide an opportunity for team members to discuss
project updates, address concerns, clarify instructions, and coordinate activities. Meetings also
facilitate collaboration and ensure that everyone is on the same page.

It's important to note that the means of communication used on a construction site may vary
depending on the size of the project, the complexity of the tasks involved, and the available
resources. It's crucial to select the most appropriate communication methods to ensure effective
and efficient communication among all stakeholders.

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LINE COMMUNICATION IN AN INDUSTRIAL ORGANIZATIONAL SET-UP

In an industrial organizational set-up, line communication refers to the flow of information,

instructions, and feedback within the formal hierarchical structure of the organization. It follows
the established chain of command, where communication travels vertically up and down the
organizational hierarchy, usually from superiors to subordinates and vice versa.

Line communication plays a crucial role in facilitating the smooth functioning of the
organization by ensuring that tasks and responsibilities are effectively communicated and
understood. Here are some key characteristics and aspects of line communication in an industrial
organizational setting:

1. Vertical Flow: Line communication primarily occurs vertically along the lines of authority
within the organization. It involves the transmission of information from higher levels of
management (such as top-level executives) to lower levels (such as frontline employees) and
vice versa.

2. Chain of Command: Line communication adheres to the established chain of command,

where instructions and decisions are passed down from higher-ranking individuals to those
below them. This ensures a clear and systematic flow of information, maintaining order and
accountability within the organization.

3. Formal Channels: Line communication typically follows formal channels, such as official
memos, emails, meetings, and reports. These channels provide a structured framework for
transmitting information and ensure that it reaches the intended recipients within the organization.

4. Clarity and Direction: Line communication aims to provide clear directions and guidance to
employees regarding their tasks, roles, and responsibilities. It helps align individual efforts with
organizational goals and ensures that everyone understands what is expected of them.

5. Authority and Control: Line communication reflects the hierarchical nature of an industrial
organizational set-up, where superiors exercise authority and control over their subordinates. It
enables managers and supervisors to delegate tasks, monitor progress, and provide feedback to
ensure that work is carried out effectively and efficiently.

6. Efficiency and Timeliness: Line communication emphasizes the efficient and timely
exchange of information to enable effective decision-making and problem-solving. It ensures
that critical information reaches the relevant individuals promptly, enabling them to take
appropriate actions without delays.

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7. Feedback Loop: Line communication includes a feedback loop, where subordinates provide
feedback, updates, and progress reports to their superiors. This allows for two-way
communication, enabling managers to evaluate performance, address concerns, and make
necessary adjustments to ensure organizational effectiveness.

It is important to note that line communication is just one aspect of communication within an
industrial organizational set-up. Organizations also rely on other forms of communication, such
as horizontal communication (between individuals at the same hierarchical level) and informal
communication (through informal networks or grapevine). However, line communication
remains a fundamental and structured approach for conveying information, maintaining order,
and facilitating effective coordination within the organization's hierarchy.

5.1 BUSINESS STRUCTURES

1. SOLE PROPRIETORSHIP

A sole proprietorship is a business structure where a single individual owns and operates the
business. Here are its key features:

a. Ownership: The business is owned by one person who retains full control and is
responsible for all its operations and decisions.
b. Liability: The owner has unlimited personal liability, meaning their personal assets are at
risk in case of business debts or legal issues.
c. Taxation: The business's income is typically taxed as part of the owner's personal income.
The owner reports business profits and losses on their personal tax return.
d. Decision-making: The owner has complete autonomy over decision-making, without the
need to consult partners or shareholders.
e. Management: The owner manages the business personally, or they may hire employees
to assist in day-to-day operations.
f. Life of the business: The existence of the sole proprietorship is tied to the life of the
individual owner. If the owner retires, passes away, or decides to close the business, the
sole proprietorship ceases to exist.

2. PARTNERSHIP

A partnership is a business structure where two or more individuals agree to share ownership,
responsibility, and profits. Here are its key features:

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 a. Ownership: The business is jointly owned by two or more partners who contribute
capital, skills, and expertise.
b. Liability: Partners have unlimited personal liability, similar to a sole proprietorship,
where personal assets may be at risk.
c. Taxation: Partners report their share of business profits and losses on their individual tax
returns. The partnership itself is not taxed separately.
d. Decision-making: Partners share decision-making authority, although the specifics may
be defined in a partnership agreement. Major decisions often require consensus.
e. Management: Partners may have different roles and responsibilities, and they can share
management duties based on their skills and preferences.
f. Life of the business: A partnership can continue to exist even if one partner leaves, as
long as the remaining partners agree to continue. However, if a partner withdraws or a
new partner is admitted, the partnership agreement may need to be revised.

3. COMPANY (specifically, a private limited company):

A company is a separate legal entity created by individuals or shareholders to conduct business.

A company, also referred to as a corporation, is a legal entity that is separate from its owners. It
is formed by individuals or entities who invest money or other assets into the business.Here are
its key features:

a. Ownership: Shareholders own the company through ownership of shares. Ownership can
be private or publicly traded.
b. Liability: Shareholders' liability is limited to the amount they have invested in the
company. Their personal assets are generally protected.
c. Taxation: Companies are taxed separately from their shareholders. They file their own
tax returns and are subject to corporate tax rates.
d. Decision-making: Companies have a more formalized structure, with a board of
directors elected by shareholders to make major decisions and oversee operations.
e. Management: The day-to-day operations are typically handled by the company's
management team, which may include directors, officers, and employees.
f. Life of the business: Companies have perpetual existence, meaning they can continue to
exist even if shareholders change or new shareholders are added. The death or withdrawal
of a shareholder does not dissolve the company.

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It's worth noting that there are various forms of companies, such as public limited companies
(PLCs), which have additional requirements and regulations due to being publicly traded.

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